Cape Verde plans $85 million to cushion fallout from war in Ukraine

Cape Verde’s Prime Minister Jose Ulisses Correia e Silva arrives for the first day of a European Union-African Union summit at the European Council building in Brussels, Belgium February 17, 2022. John Thys/Pool via REUTERS

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PRAIA, June 20 (Reuters) – Cape Verde will spend around $85 million this year on emergency grants and tax measures to ameliorate war-induced spikes in food and fuel prices in Ukraine, it said. Monday the government of the Atlantic archipelago.

The percentage of Cape Verdeans facing a food crisis currently stands at 9% of the population, compared to just 2% in 2020, Prime Minister Jose Ulisses Correia e Silva said during a press briefing.

Many of the country’s estimated 484,000 residents are also struggling to afford fuel since world prices soared, creating an “inflationary crisis” in the import-dependent country off the tip of West Africa.

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The government adopted a series of measures on Monday to cushion the blow, including food aid and subsidies, tax cuts and caps on fuel prices.

The total cost of implementing these “extraordinary tax measures” is 8.9 billion escudos ($84.82 million) by the end of 2022, Correia e Silva said.

Cape Verde’s tourism-driven economy is still struggling to recover from the pandemic.

Border closures and travel restrictions pushed the budget deficit to 10% of GDP and the public debt ratio to more than 155% of GDP, Correia e Silva said.

($1 = 104.9300 escudos)

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Reporting by Julio Rodrigues; Written by Sofia Christensen; Editing by Sandra Maler

Our standards: The Thomson Reuters Trust Principles.

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