AfDB approves €17.7m loan to advance Cabo Verde’s digital governance reforms

By targeting both digital acceleration and sound public financial management, the AfDB-supported programme aligns with Cabo Verde’s broader vision for a resilient, innovation-driven economy capable of competing in the global digital landscape.

The African Development Bank Group (AfDB) has approved a €17.71 million loan to support the second phase of Cabo Verde’s E-Governance and Public Financial Management Reform Programme, marking another step forward in the island nation’s bid to modernize its economy through digital transformation and stronger public financial governance.

Approved by the AfDB Board of Directors on Monday, the financing builds on support provided in 2024 and reinforces Cabo Verde’s long-term strategy to harness digital technologies for economic growth, private-sector expansion, administrative efficiency, and fiscal sustainability.

Advancing Digitisation and Private-Sector Competitiveness

According to Abdoulaye Coulibaly, Director of the Governance and Economic Reforms Department at the Bank, the programme aims to stimulate inclusive growth through digitisation and competitiveness while deepening public sector reforms.

The first component will accelerate key digital reforms, including:

• E-Justice rollout to digitise judicial processes and improve efficiency, transparency and case management.

• A call for proposals to attract private operators to Cabo Verde’s expanding technology park under the digital nomads programme.

• Establishment of clear admission criteria for digital nomads and high-growth tech firms seeking to operate in the archipelago.

• Expansion of digital infrastructure to support innovation-driven entrepreneurship and remote-work industries.

These reforms aim to position Cabo Verde as a competitive digital services hub in West Africa and draw foreign investment into its emerging technology ecosystem.

Strengthening Governance, Transparency and Fiscal Sustainability

The second component focuses on modernising public administration and consolidating fiscal discipline. Planned reforms include:

• Strengthening public resource management systems, including revenue administration, transparency and compliance.

• Developing and publishing a comprehensive action plan to rationalise tax expenditures, improving oversight and reducing inefficiencies in the tax system.

• Publishing full estimates of annual tax expenditures in the 2026 national budget, enhancing fiscal transparency and accountability.

• Conducting a Public Expenditure and Financial Accountability (PEFA) assessment in early 2026, financed through the Middle Income Countries Grant, to identify gaps and guide future reforms.

These measures support Cabo Verde’s efforts to improve governance, enhance investor confidence and ensure long-term fiscal sustainability.

Broad Institutional Impact Across Priority Sectors

The programme’s main beneficiaries include:

• Ministry of the Digital Economy – advancing national digitisation priorities

• Central Bank of Cabo Verde – strengthening financial system governance

• Institute for Gender Equality and Equity – ensuring digital reforms support inclusive development

• National Directorate of State Revenue – improving tax transparency and administration

• Public Procurement Regulatory Authority – strengthening procurement efficiency and oversight

By targeting both digital acceleration and sound public financial management, the AfDB-supported programme aligns with Cabo Verde’s broader vision for a resilient, innovation-driven economy capable of competing in the global digital landscape.