Cape Verde Parliament approves State Budget proposal for 2023

The parliament of Cape Verde approved this morning, after voting article by article, in the specialty, and then in the final appreciation, the draft law of the State Budget for 2023, concluding several hours of discussion.

The vote on each of the 95 articles of the proposed State Budget law for 2023, after more than two days of discussion in the National Assembly, is generally guaranteed with the votes of the majority of the Movement for Democracy (MpD, majority) , with slight changes to the original version presented by the Government, was completed after 01:15 local (02:15 Lisbon time) today.

In the final global vote, after discussion and appreciation in the specialty, the budget proposal passed with the favorable votes of 37 MPs from the MpD, 24 votes against from the African Independence Party of Cape Verde and four against from the União Caboverdiana Independente e Democrática (UCID) .

The draft law for the State Budget for 2023 is valued at 77.9 billion escudos (712 million euros), includes an increase in the lowest salaries in Public Administration and forecasts economic growth of 4.8% of the Domestic Product Gross (GDP) Cape Verde and an inflation below 4%, against more than 8% expected for this year.

Cape Verde is facing a deep economic and financial crisis, due to the sharp drop in tourist demand - a sector that guarantees 25% of the archipelago's GDP - since March 2020, due to the covid-19 pandemic.

In 2020, it experienced a historic economic recession, equivalent to 14.8% of GDP, followed by growth of 7% in 2021 driven by the recovery in tourist demand. For 2022, due to the economic consequences of the war in Ukraine, namely the rise in prices, the Cape Verdean government lowered its growth forecast in June from 6% to 4%, which, however, was revised again, now to more than 8 %.

The increases in salaries in the Cape Verdean civil service, announced by the Government for 2023, according to the budget proposal, will cover half of the workers, with the lowest salaries, a measure that will cost the State coffers more than 780 thousand euros.

In a projection by the Government that appears in the supporting documents for the proposed State Budget law for 2023, in addition to more than almost 11,000 workers, more than 6,500 pensioners will also benefit from these increases.

In October, the Cape Verdean Prime Minister announced an increase in the national minimum wage from 13,000 to 14,000 escudos (117 to 126 euros) in 2023 and salary increases from 1 to 3.5% for civil servants and pensioners with lower incomes, according to contained in the proposed State Budget Law.

“ It is a budget that is truly people-oriented and with a human face ”, said Ulisses Correia e Silva, in a statement to the country from the Government Palace, in Praia, to present the main measures and priorities of the proposed State Budget for 2023.

According to Lusa's calculations, 10,938 workers will receive salary increases in 2023, as well as 6,561 pensioners. Without raises next year, 10,371 workers and 3,091 pensioners will remain, based on official estimates.

Thus, civil service salaries and pensions for pensioners from the National Social Security Institute (INPS) from 15,000 to 33,000 escudos (135 to 296 euros) per month will increase by 3.5% in 2023, covering 5,253 workers and 4,499 pensioners.

Salaries and pensions above 33,000 escudos and up to 51,000 escudos (296 to 458 euros) will increase by 2%, covering 1,141 civil servants and 1,086 pensioners, and from 51,000 escudos to 69,000 escudos (458 to 619 euros) will rise by 1% , benefiting 4,544 workers and 976 pensioners.

Overall, the increases in the civil service represent an increase in annual expenditure on salaries, according to the Government's forecast, of 86,424,518 escudos (782 thousand euros) while the updates in the lowest pensions total 44,511,001 escudos (403 thousand euros).

According to Government data, the Cape Verdean Civil Service also has 6,513 workers who earn between 69,001 and 87,000 escudos (624 to 787 euros), and 1,069 pensioners in the same range. Still 2,492 workers whose monthly salary ranges from 87,001 to 123,000 escudos (787 to 1,112 euros), as well as 1,349 pensioners, and 1,366 who earn more than 123,001 escudos (1,112 euros) per month, in addition to 673 pensioners in the same step, but in these cases without any salary update.

“At this stage, we must protect the lowest incomes directly and the highest incomes are protected indirectly through the measures we are taking to stop the galloping rise in prices”, previously clarified the Deputy Prime Minister and Minister of Finance. , Olavo Correia, about this option.