The report outlines support provided by the IMF’s Institute for Capacity Development to the Ministry of Finance, aimed at improving public debt projections and analysis using the Public Debt Dynamics Tool (DDT). The assistance comes as Cabo Verde faces a moderate risk of debt distress and seeks to strengthen the analytical foundations of its fiscal policy framework.
According to the IMF, the authorities identified a key institutional gap: no single unit within the Ministry of Finance was fully responsible for producing comprehensive public debt projections, even though the National Directorate for Planning consolidates and publishes debt data. Limited technical capacity across departments was found to be constraining effective policy discussions, including engagement with international partners.
To address this, the IMF worked with officials from the National Directorate for Planning, the Directorate of the Budget and the Directorate of the Treasury to build shared capacity around the DDT. The support programme combined virtual engagements, preparatory work and an in-person mission held from October 7 to October 11 in 2024.
The report notes that a gradual, step-by-step approach was adopted to ensure ownership and practical uptake of the tool. Officials were trained to populate the DDT using macroeconomic data and to assess different debt scenarios. Despite initially low participation in online training, asynchronous learning and follow-up support helped broaden understanding across teams.
IMF staff report that the technical assistance met its objectives, with officials demonstrating stronger capacity to analyse debt dynamics and assess fiscal risks. The authorities have committed to continuing the use of the DDT and plan to publish its results in the next Macroeconomic Report, expected in the first half of 2025. The tool is also set to inform the preparation of the 2026 Budget.
However, risks remain. The IMF warns that heavy workloads could hinder the institutionalisation of the new framework. To mitigate this, Cabo Verde has committed to assigning dedicated staff across key departments to coordinate debt analysis.
Looking ahead, the IMF recommends integrating DDT outputs into the Medium-Term Fiscal Framework and further strengthening macroeconomic forecasting.
–IMF/ChannelAfrica–
