The African Development Bank has extended a loan of €30 million ($33.3 million) to Cape Verde to help the island nation fight the COVID-19 outbreak and mitigate its impact on the economy.
A statement issued by the African Development Bank and copied to Asaaseradio.com said that the loan, approved by the executive board of the bank on 26 May, will be used to reinforce economic stability and assist the private sector.
Output to contract
As of 31 May, Cabo Verde had reported 421 novel coronavirus infections, 167 recoveries and four deaths. Only one of the country’s ten islands has been affected – Santiago, home to the capital city, Praia.
Cape Verde is focusing on gradually relaunching activity in the economy. The AfDB’s support will help the country achieve this more safely.
The bank reports that although Cape Verde has a health system noted for its quality, which was better equipped than the public health structures of many other countries in the region, it could do with additional capacity in the face of the health crisis.
COVID-19 has brought the recent strong performance by Cape Verdean economy to a halt. In 2019 its GDP grew by 5%. The country relies heavily on the blue economy and tourism, and expects its economic output to contract by 4% in 2020.
The funding from the African Development Bank will support a commitment by officials to increase the number of ventilators in isolation rooms in the country from 20 to 86, and the overall total from 35 to 130 by mid-June.
Promoting social inclusion
A social inclusion income programme will be expanded to reach a total of 8,000 vulnerable and female-led households, out of the estimated 9,000 households living in extreme poverty. Currently, 5,000 households are receiving such support.
In addition, a scheme will be established to partly fund the wages of workers laid off or sent home temporarily by businesses affected by the turbulence in the island nation’s economy. Temporarily suspended employees will receive 70% of full wages for the duration of the crisis.
The funding forms part of the AfDB’s $10 billion COVID-19 crisis response facility, approved by the board of directors on 8 April this year.
Fred Dzakpata
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