african-development-bankThe Board of Directors of the African Development Bank Group on Wednesday, approved a €15-million ($24 million) general budget support loan for Cape Verde, to help the country finance its Public Corporate Governance and Investment Promotion Support Programme (PAGEPPI).

The Programme aims to help Cape Verde consolidate its macroeconomic framework and foster growth by improving public corporate governance in State-owned enterprises and promoting private investment.

The PAGEPPI’s operational objectives are to improve public corporate governance so as to streamline public expenditure and promote private investment to spur economic growth and foster job creation.

It will tackle challenges posed by fiscal deficit – a source of public indebtedness – by improving the management of State equity participation in State-owned enterprises and streamlining the public investment portfolio. It will also make the private sector the growth driver through innovative, investor-friendly and PPP-based mechanisms targeting foreign investors and local MSME project developers.

On completion, the Programme is expected to strengthen public corporate governance and improve the operational and financial performance of State-owned enterprises. This will help to reduce the burden on the State budget and corresponding risks on public finances. The Programme is also expected to clarify the State’s role as both a shareholder and a regulator as well as to implement international and local investment promotion measures that will create a more attractive environment for economic activities and private sector development.

The Programme will enhance Cape Verde’s overall development strategy which rests on economic diversification based on competitive clusters. In particular, it will support governance and private sector development reforms that constitute two main pillars of the government’s Growth and Poverty Reduction Strategy Paper (GPRSP) 2012-2016.

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