The Cape Verdean authorities consider it a priority to strengthen debt management.
Notable progress has already been made:
• Debt sustainability analyses (DSAs) are now conducted annually. The Ministry of Finance and the Bank of Cape Verde (BCV) recently conducted a joint DSA applying the Bank-Fund Debt Sustainability Framework. The exercise benefited from assistance from Debt Relief International (DRI) and UNDP. The next DSA will be conducted in early 2009 at the beginning of the preparation of the 2010 budget to help determine the borrowing envelope consistent with debt sustainability.
• Internal controls have been substantially improved. Software from the Commonwealth Secretariat was upgraded and now records state guarantees as well as debt. With the assistance of the Crown Agents, the system will be fully operational by year-end. The software will allow for currency decomposition of the debt stock, be linked to the Government’s Financial Control Network (SIGOF), and allow for compilation of debt data in the new chart of public accounts (PNCP).
The authorities intend to further strengthen their debt management practices:
• The institutional framework for debt management will be adapted. The organic law of the Ministry of Finance will be amended to give the debt management office a clear mandate, and the budget execution law will be changed to allow the Treasury to manage debt efficiently.
• A new debt management strategy will be embedded in the procedures manual of the debt management office.
• The domestic market for Treasury securities will be developed. With MCC financing, Treasury securities will be easily available for purchase by nonbanks to make the market more efficient and liquid and reduce borrowing costs.
• Capacity in the debt office will be reinforced. A new financial analyst was hired in September, and another will be hired in 2009. Portugal trained four staff in debt management in September.
Source;Cape Verde: Fifth Review Under the Policy Support Instrument - Staff Report