This paper highlights Cabo Verde’s First Review Under the Policy Coordination Instrument (PCI) and Request for Modification of Targets. Performance under the PCI-supported program has been strong. All reform targets were met, with some measures put in place ahead of schedule; and all end-September 2019 quantitative targets were met, except for the floor on tax revenue, missed by a narrow margin due to lower-than-projected taxes on international trade. Economic prospects for 2020 are clouded by the expected impact of coronavirus disease 2019 (COVID-19), resulting from the global economic downturn and travel restrictions which adversely affect tourism flows, foreign direct investment and remittances. Coordinated support from Cabo Verde’s development partners will be needed to support the authorities’ efforts in addressing the economic and social impact of COVID-19. The medium-term outlook remains positive although risks are tilted to the downside. Growth is expected to rebound in 2021 and return to the pre-COVID-19 medium-term trajectory of about 5 percent as the global economy recovers, and the authorities maintain their structural reform efforts to improve the business environment and build the economy’s resilience to adverse shocks.
As use of macroprudential policy tools is growing, the IMF has initiated an annual survey on macroprudential policy with its membership. The resulting new database provides information on policy measures taken by IMF member countries as well as on the institutional arrangements in place to support macroprudential policy. This paper provides detail on the design of the survey and a description of the results from the first edition of the survey, based on responses received from 141 jurisdictions. It reviews institutional arrangements in place across the membership, provides an initial description of the types of measures reported across regions, and describes recent changes in macroprudential policy settings reported by member countries.
This 2018 Article IV Consultation highlights that the economic recovery in Cabo Verde is gaining momentum, reflecting a more favorable external environment and the payoff of ongoing economic reforms. In 2017, the economy is estimated to have expanded by 4 percent supported by the double digit-growth in tourist arrivals, the recovery in credit to the private sector, and stronger consumer and business confidence. These factors are expected to boost growth further to 4.3 percent in 2018. Over the medium term, real GDP growth is projected to stabilize at about 4 percent. Financial stability indicators have improved but the level of nonperforming loans remains elevated.
This Selected Issues paper offers policy recommendations for Senegal to reach high and sustained growth with the goal of exiting low-income country status. For Senegal to reach Plan Sénégal Emergent (PSE) objectives, reforms under the PSE need to create space for small and medium-sized enterprises and foreign direct investment to thrive. Reform of Senegal’s business environment needs to be accelerated. Macrostructural reforms should be stepped up in the energy sector, in which Senegal still ranks 170th in the world. Progress in the electricity sector can be achieved by continuing to improve reliability of supply and reduce electricity costs. Reform of the taxation system, by simplifying procedures and optimizing the tax rates, is another macro-critical area in which Senegal needs to make significant strides.
Only a minority of countries have succeeded in establishing a developed financial system, despite widespread financial liberalization. Confronted with this finding, the political institutions view claims that sustained financial deepening is most likely to take place in institutional environments where governments effectively impose constraints on their own powers in order to create trust. This paper identifies over 200 post-1960 episodes of accelerations in financial development in a large cross-section of countries. We find that the likelihood of an acceleration leading to sustained financial development increases greatly in environments that have high-quality political institutions.
This paper evaluates the nature and extent of, and possible responses to, two of the central challenges that globalization poses for revenue mobilization in Sub-Saharan Africa (SSA): from corporate tax competition, and from trade liberalization. It does so using a new dataset with features needed to meaningfully address these issues: a distinction between resourcerelated and other revenues, and a disentangling of tariff from commodity tax revenue. Countries' experiences vary quite widely, nonresource revenues have been essentially stagnant. Corporate tax revenues have held up, despite a reduction in rates and evidence of substantial base-narrowing-something of a puzzle-and trade tax revenue reductions have been largely offset by other measures. Options for dealing with the continuation and intensification of the challenges, which the present crisis is likely to accelerate-including through regional cooperation-are discussed.
This report focuses on the Observance of Standards and Codes for the Financial Action Task Force 40 (FATF) recommendations for antimoney laundering (AML) and nine special recommendations for combating the financing of terrorism (CFT) in Cape Verde. The assessment reveals that Cape Verde has taken a number of measures to establish an AML framework but is less advanced with initiatives to establish an effective CFT regime. There is scope for strengthening the framework for the criminalization of money laundering and a clear need to criminalize the financing of terrorism.
This report provides a summary of the antimoney laundering (AML) and combating the financing of terrorism (AML/CFT) measures in place in Cape Verde. It sets out Cape Verde’s levels of compliance with the Financial Action Task Force (FATF) 40 recommendations. The assessment reveals that Cape Verde has a comprehensive framework that addresses the freezing, seizing, and confiscation of the proceeds and instrumentalities of crimes including money laundering or assets of corresponding value. There are also adequate provisions to protect the rights of bona fide third parties.
The report provides the IMF's projections and estimates of Cape Verde on selected economic and financial indicators, 2001–05; social and demographic indicators, 2001–04; consumer prices; gross domestic product sources and uses of resources; gross domestic product by industry at current prices; and at constant 1980 prices; central government revenue; monetary survey; merchandize exports and imports, 2001–05; international trade in services; direction of trade; summary of the tax systems; private and government transfers; government external debt; summary accounts of the Bank of Cape Verde; commercial banks; interest rate structure during 2001–05, etc.