| Summary: | This paper presents Cabo Verde’s Third Review under the Extended Credit Facility Arrangement, Request for Modification of Performance Criteria, and Request for an Arrangement under the Resilience and Sustainability Facility. Performance under the economic reform program is strong, and the authorities are taking steps to strengthen the program. Post-Covid economic activity recovered as tourism returned to the islands. The RSF will support the government’s effort to implement macro-critical climate reforms and catalyze private finance for climate adaptation and transition. Fiscal policy is anchored by an appropriate balance between fiscal consolidation to put debt on a downward path, while protecting the vulnerable and investing in key priority projects for future growth. The medium-term fiscal objectives are dependent on the progress in domestic revenue mobilization, streamlining tax exemptions, increasing the effectiveness of public investment projects, and improving debt management. The authorities are encouraged to continue with their ambitious structural reform agenda to adapt to the challenges posed by climate change, reduce the cost of doing business and accelerate public enterprise reforms
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