Overview
Cabo Verde has reported 349 confirmed COVID-19 cases and 3 deaths as of May 20, 2020. The cases are located in the islands of Boa Vista (56), Santiago (290) and São Vicente (3). Prevention measures taken by the authorities include: installation of body temperature scans in airports, suspension of official travel and flights to China and other heavily affected countries, preparation of quarantine areas in hospitals, suspension of flights from European countries affected by COVID-19, the United States, Brazil, Senegal and Nigeria, as well as maritime traffic (with few exceptions), and quarantine of the island of Boa Vista where the community spread started inside a resort hotel . The authorities have also prepared a contingency plan and put in place a rapid response team. In late March, they declared the state of emergency, put in place social distancing measures, restricted travel between the nine inhabited islands, and put the country in lockdown for non-essential activities.
Official Resources
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Travel Restrictions
Flights to Cape Verde are suspended.
- This does not apply to special, repatriation and humanitarian flights.
Source : IATA Timatic
Economic Measures
Reopening of the economy. On May 14, the government extended the State of Emergency for the island of Santiago until the end of May and removed the state of emergency for Boa Vista. The state of emergency was removed for all other islands on April 26 and São Vicente on May 2. However, inter-island air and maritime passenger travel remain prohibited.
Key Policy Responses
FISCAL
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The authorities stand ready to reprioritize spending, notably through a revised budget to be tabled in parliament by June. However, the likely fall in revenue from the expected economic contraction in 2020 will further constrain fiscal space. In the meantime, they have taken measures to support the private sector, including loan guarantees and tax obligations facilities as follows: loan guarantees of up to 50 percent for large companies in all sectors (CVE 1 billion, about €9 million); up to 80 percent for companies in the tourism and transport sectors (CVE 1 billion); up to 100 percent for small-and medium-sized enterprises in all sectors (CVE 300 million, €2.7 million) and for micro-enterprises in all sectors (CVE 700 million CVE, about €6.7 million). Other measures include faster settlement of invoices and VAT refunds, extension of the tax payment period, payment in installments for VAT and other withholding taxes, cancellation of contributions to the Pension Fund for three months, and funding of an emergency plan with CVE 76 million through the reallocation of budgetary appropriations, to cover additional expenses for personnel, training and medical equipment.
For the most vulnerable, mitigating measures are estimated at CVE 2.2 billion (1.2 percent of GDP). They comprise: (i) income compensation to provide financial support to individuals operating in the informal sector; (ii) social inclusion emergency measures for vulnerable people without income; (iii) social inclusion income, with support from the World Bank ; (iv) support to microfinance institutions to support interest-free loans to vulnerable households and; (v) care for the elderly with food assistance and other financial support.
MONETARY AND MACRO-FINANCIAL
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In late March, the central bank decided to loosen the monetary policy stance and to increase liquidity in the banking system. Key measures included a reduction in rates as follows: the policy rate by 125 basis points to 0.25 percent, the minimum reserve requirements from 13 to 10 percent, and the overnight deposit rate by 5 basis points to 0.05 percent; and the setting up at the central bank of a long-term lending instrument for banks. The central bank (BCV) also called on banks to grant a moratorium on loans obligations to borrowers in good standing with their payment record as of end-March 2020.
On April 1, the authorities introduced a moratorium on insurance payments and loans repayment during April-September 2020 for household, companies, and non-profit associations, as well as the SMEs.
The BCV also implemented prudential measures, including the reduction in capital adequacy ratio and provision for banks depending on requests by borrowers to place a moratorium or forbearance on loan repayment for three months.
EXCHANGE RATE AND BALANCE OF PAYMENTS
Source : IMF & WB
Civic Freedom Tracker
STATE OF EMERGENCY AND CURFEW
The government declares a nationwide "state of emergency" until April 17, on account of the coronavirus. Measures to be taken include instructing all individuals to remain at home with limited exceptions for essential activities and health care. (See primary source or citation here)
Type: order
Date Introduced: 1 Apr 2020
Issue(s): Emergency, Movement
Source : ICNL
