- As a deep property sales crisis is hitting the country, the government of Cape Verde has seen it necessary to assist real estate agencies by renegotiating their increasing debt burden.
The decision was announced by Cape Verde's Minister of Economy, Growth and Competitiveness, Fatima Fialho, acting as spokesman for the Council of Ministers which took place on the island of Sal, the main centre of tourism in the country. It was therefore not surprising that the growing difficulties faced by the sector dominated most of the cabinet session.
"Already next week, the Ministry of Finance and Economy Ministry will begin meeting with investors to try to negotiate moratoriums," said Ms Fialho, responding to calls by the sector to help the troubled real estate market.
In addition, the Cape Verdean government said it was willing to assist the sector by accepting alternative means of down-paying state loans. Payment could be in kind, government offered, demanding in return that the sector engaged in the development of Sal Island. Property owners and agencies could, for example, contribute to the construction of access roads to resorts and participate in the set-up of public lighting.
Neither the sector nor the Cape Verdean government has wanted to publish information about the depth of the country's property market crisis, probably in an attempt not to scare off foreign investors.
Government officials have not revealed the amount of debt accumulated by the sector, however it is known that large amount of foreign but also local funds have been invested in medium sized and big property development projects, mainly aimed at tourists, which now prove difficult to sell as the financial crisis has hit European consumers hardly.
But Cape Verde's government and the property and tourism industries are trying hard to avoid that an image of crisis is spreading abroad. Only in October, the industry on Sal Island, represented by chairman Gualberto do Rosario of the Tour Operator Association of Cape Verde (UNOTUR), said there was no crisis on the archipelago and posed optimistic regarding the sector's future.
At the same Ocotber meeting, Economy Minister Fialho said she was optimistic having in mind the many new tourist complexes still being build on Sal Island and the continued interest by investors. However, she warned that the growing financial crisis would have a negative impact on the archipelago's economy, especially on the country's emerging tourism industry.
The tourism and real estate sectors, at the same time as they receive government aid to handle their debt burden, however maintains its optimistic image at foreign events. The chief executive of Cabo Verde Investimentos, António Tavares Silva, at the London Tourism Fair today claimed that government was planning for an increase in tourist arrivals from 312,000 in 2007 to 500,000 in 2009. Mr Silva was searching for investors into Cape Verde's infrastructure, pointing to this expected growth in arrivals.
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