A Time Domain Electromagnetic (TDEM) survey was carried out in and around the caldera of the Fogo volcano, Cape Verde Islands, to detect the low resistive structures that could be related to groundwater. A sign reversal in the sounding curves was encountered in central-loop measurements for the soundings located in the centre of the caldera along three main radial profiles. The negative transients are recorded in the early channels between 6.8 and 37 μs. Negative values in an early time transient is an unusual field observation, and consequently the first step was to check the data to ascertain their accuracy and quality. In the second step, three-dimensional (3D) effects are evaluated and ruled out in this zone, while an Induced Polarization (IP) phenomenon is observed using Direct Current (DC) sounding measurements. In the third step, the IP effect is called upon to explain the TDEM distortions; a Cole-Cole dispersive conductivity is found to be adequate to fit the field data. However, the more relevant one-dimensional (1D) model is recovered when both central-loop and offset-loop data are jointly taken into account, thus indicating that an effect of dispersive conductivity is necessary to explain the field data. The 1D electrical structure exhibits four layers, with decreasing resistivity with depth. Only the first layer is polarizable and its Cole-Cole parameters are m=0.85, c=0.8 and τ=0.02 ms for chargeability, frequency dependence and time constant, respectively. However, the Cole-Cole parameters deduced from TDEM forward modelling remain different from those deduced from DC/IP sounding. In this volcanic setting, this IP effect may be caused by the presence of small grains of magnetite and/or by the granularity of effusive products (lapillis). As a conclusion, it is shown that a modelling using different TDEM data sets is essential to recover the electrical structure of this area.