Economic Overview & Business Opportunities – Cape Verde
Cape Verde, one of the African countries, is an archipelago that consists of nine inhabited islands, one uninhabited island, and various islets. Bordering Gambia, Guinea-Bissau, Mauritania, and Senegal, Cape Verde is situated 500 kilometres off the west coast of Africa. Spanning over 4,033 square kilometres of land, Cape Verde is the 177th largest nation (in terms of land area) and home to the population of around 550 thousand.
Economic Overview
Cape Verde’s stable democracy and its proximity to Europe are among the important reasons make Cape Verde an attractive business place. Cape Verde is well known to foreign investors due to its preferential access conditions to markets such as the European Union (“EU”), Economic Community of West African States (“ECOWAS”), and Canada (Memorandum of Understanding on LDC Initiatives). Ranked 131 among 190 economies in the ease of doing business (according to the latest World Bank annual ratings), Cape Verde is also the world’s 73rd freest economy with the score 63.1 in the economic freedom score.
Cape Verde is always referred to as one of the best places for winter sun due to its pleasant weather and beautiful beaches. Indeed, tourism thrives in Cape Verde where it is also the biggest growth sector of the gross domestic product (“GDP”). Cape Verde’s economy is primarily service oriented in which service sector contributed to approximately 90% of GDP.
In addition to that, exports and investments are the other two main pillars that drive Cape Verde’s GDP growth. The combined value of exports and imports accounted for a large portion of the GDP. While agriculture is the significant source of employment in Cape Verde, the agriculture sector only contributed to approximately 12% of GDP due to year-long drought. In Cape Verde, maize and beans are the majority of crops grown in the country, whilst bananas and coffee are the main exported crops. Though a majority of Cape Verde’s population work in agriculture sector, the country still imports around 90% of food supplies.
Why Investing in Cape Verde
- Economic and Political Stability
- Free from political, ethnic or religious conflicts;
- A country with stable social and economic indicators.
- Strategic geographic Location
- Easy access to nearby markets such as EU and ECOWAS.
- Well trained labour
- Good facilities
- Equipped with international seaports and airports;
- Efficient information and communication technology;
- Business-friendly government policies
- Non-discriminatory policy,
- Reduced corporate tax rates for the first 5 years in business.
- Investors are entitled to 100% repatriation of all legally earned profits in hard currency;
Cape Verde’s economy is expected to maintain real GDP growth, with a projection of growth at 4.1% in 2019 and 4.8% in 2020, respectively. Remittance inflows, manufacturing, tourism, as well as increased public infrastructure spending, are expected to be the main drivers of the growth. On top of that, private investment backed by good domestic credit conditions will also contribute to the economic growth in the country. If you are looking for a good investment destination in the region, Cape Verde could be on your bucket list!
