Economic diversification is a priority for Cabo Verde

21 February 2018

The diversification of the Cabo Verdean economy is high on the list of priorities for the archipelago’s government, which intends to attract more investment, especially for infrastructure, to improve the business environment and to open up to emerging economies, Portuguese trade and investment promotion agency AICEP Portugal Global said recently.

The Portuguese agency responsible for investment and foreign trade in a document published in January noted that the Cabo Verdean economy is on a growth trajectory from 1.1% in 2015 to 3.9% in 2016 and 4.6% in 2017, with forecasts pointing to a slight slowdown this year, but maintaining a growth rate of more than 4.0%.

“The performance of the Euro Zone – on which Cabo Verde is heavily dependent in the areas of trade, tourism, foreign investment and emigrant remittances – will slow down compared to 2017, which will lead to lower growth in the services sector, the main driver of the Cabo Verdean economy,” said Aicep Portugal Global.

However, the diversification of the Cabo Verdean economy remains on course in terms of production base and markets.

“The policy of the Cabo Verdean government will continue to prioritise infrastructure development, using public investment and foreign investment flows, improving the efficiency of the public sector and combating unemployment,” it said.

“No less important will be the reform of the entire business environment, in the long term, the diversification of an economy that is dependent on the tourism sector, reducing its exposure to the external environment and making it less dependent on the outside, in particular on the Eurozone, seeking to establish partnerships with emerging markets, especially in Africa,” AICEP said.

Data from the International Trade Center showed that China is the only one of the country’s top five suppliers from outside the EU, with a share of 4.1% of imports, on a list led by Portugal with more than 50%.

The country’s main export customers are also from the European Union – Spain, Portugal, and Italy are the largest importers of goods and services from Cabo Verde, where tourism is the driver of the economy.

Marine projects are central to the strategy of economic diversification, in particular, the future São Vicente Special Economic Area of the Sea (ZEEM), the first facility of its kind focused on the sea, created with the support of China.

On a recent visit to the island, accompanied by the ambassador of China, the Cabo Verdean Prime Minister, Ulisses Correia e Silva, said the integrated project provides for maritime transport, port operations, fishing, specialised logistics support services as well as tourism, science and specialised education in the sea sector.

The project’s feasibility study is being prepared, he said, based on the government’s term of office, within just over three years.

The Ministry of the Maritime Economy of Cabo Verde is headquartered in the city of Mindelo, the city with the largest population on the island of São Vicente.

José Gonçalves,the minister in charge of the Ministry of the Maritime Economy – based in Sao Vicente – and the Ministry of Tourism and Transport in the capital, recently accompanied a visit by a business delegation from China to the island, saying at the end that the representatives of the Chinese company Shandong Hi-Speed Group Co. expressed “enormous interest” in participating in the development of the ZEEM. (macauhub)