Cape Verde’s real GDP growth increased to 3.6% in 2015 from 1.8% in 2014 and 0.8% in 2013 as tourism receipts increased, domestic demand improved and energy prices remained low. While government deficit has narrowed from previously high levels, fiscal consolidation remains a priority to reduce the risk of debt distress, reassure investors and safeguard macroeconomic stability. Cape Verde’s economic recovery remains feeble due to the weak global economy and domestic vulnerability. Tourism and tourism-related foreign investment, including construction, continue to be the main engines of growth. In 2016 and 2017, growth is expected to recover to an average rate of 4%, below the rate of the boom years before the global financial crisis.
Why invest in Cape Verde?
- Strong and growing economy
- The local currency is fixed to the Euro further increasing economic stability.
- Safe and affordable destination
- Stable democracy which actively encourages foreign investment
- Property is protected by national laws ensuring the same rights for foreign investors as for locals
- Low living costs and property prices
Cape Verde’s strengths are its political and social stability. There have never been any political or religious conflicts. In recent years there have been some incidences of strikes, promoted by labour unions, but all peaceful and law abiding.
Cape Verde has a total population of 514,000 and has achieved a literacy rate exceeding 85% making the population easy to train.
About 65% of the total population of the country live in urban areas. The high rate of urbanisation is mainly due to rural-urban migration.
Doing business in
The highlights of World Bank score of doing business in Cape Verde are summarised as follows;
|Topics||World Bank 2017 Rank||World Bank 2016 Rank||Change in Rank|
|Starting a Business||100||89||
|Dealing with Construction Permits||108||106||
|Protecting Minority Investors||162||162||–|
|Trading across Borders||113||111||-2|
The government is the in process of creating conducive environment for doing business.
Standard & Poor’s credit rating for Cape Verde stands at B with stable outlook. Fitch’s credit rating was last reported at B negative watch.
Cape Verde liberalized its exchange operations and in 1998 signed an Exchange Cooperation Accord with Portugal that establishes a fixed parity between the Cape Verde Escudo with the Portuguese Escudo, and consequently later the Euro (Resolution nº 81/V/98 of 11 May). The rate of exchange is 1 Euro to110.265 CVE. Under the terms of the Accord, Cape Verde commits itself to adopting macroeconomic guidelines that safeguard this fixed parity. An investor can 100% transfer of foreign investment capital as long as the foreign investor is registered with the Bank of Cape Verde and is authorized by the Minister of Finance and Planning to carry out foreign investment operations (Law nº 89/IV/93 of 13 December). There are no restrictions on opening bank accounts in foreign currency, and BCV’s authorization is not required to obtain currency to import merchandise valued at up to 5,000,000.00 CVE (Decree Law nº 25/98 of 29 June) and to pay interest on loans or credits previously authorized by the same institution. CVE is not a convertible currency so that you cannot lawfully take it out of the country and you cannot change it abroad.
Disputes between foreign investors and the government will be settled either by recourse to a single referee or an arbitration commission. Referees may be foreigners without necessarily being of the same nationality as the parties involved in the dispute. Should there be difficulty in reaching an agreement over the nomination of the referees, referees may be appointed by a recognized national body or international organization, with the ultimate authority. The decision of the referee is final.
Key development challenges
- A small open economy makes it quite vulnerable;
- The small size of the country rules out the economies of large scale operations;
- Diversification within and beyond the tourism sector is still a challenge;
- Managing the fragmentation nine inhabited islands;
- Labour is expensive;
- The country faces inadequate infrastructure challenges;
- The country is vulnerable to climatic changes and
- The climatic conditions reduce the potential for agriculture.
Cape Verde is ranked number 38 least corrupt nation out of 175 countries and scored 59 points out of 100 on the 2016 Corruption Perceptions Index reported by Transparency International.
Cape Verde is quite safe for travellers but travellers should take the necessary precautions to avoid taking the good security situation for guaranteed.
Unemployment and skilled labour
According to Trading Economics unemployment Rate in Cape Verde increased to 15 percent in 2016 from 12.40 percent in 2015. Unemployment Rate in Cape Verde averaged 14.56 percent from 1990 until 2016, reaching an all time high of 20.20 percent in 1990 and a record low of 10.70 percent in 2010.
Attitude to Foreign Direct Investment
The focus for foreign investment in Cape Verde has been mainly in the areas of tourism and light manufacturing. The government has been improving the conditions for foreign investment through promoting a transparent and competitive economic environment. The government has created Cabo Verde Invesimentos as its official agency to promote national and foreign investments and exports. The government accords equal treatment for both local and foreign investors. The government extends to foreign investors that have been pre-qualified by Cabo Verde Investimentos important guarantees such as privately managed foreign currency accounts and undisputed repatriation of dividends, profits and capital from foreign investment operations.
Restrictions on Foreign investment
No known restrictions.
Intellectual Property (IP) Rights.
For the protection of property rights Cape Verde Islands is a member of the following international agreements:
- Berne Convention (since 1997)
- Rome Convention (since 1997)
- WIPO Convention (since 1997)
- WTO/TRIPS (since 2008)
The following laws or resolutions are in place for the protection of intellectual property;
- Statutes of the Intellectual Property Institute of Cape Verde (2010)
- Resolution No. 25/2010 of May 24, 2010, establishing the Institute for Intellectual Property of Cape Verde (IPICV) (2010)
- Decree-Law No. 1/2009 of April 27, 2009, revising the Law on Copyright (2009)
- Decree-Law No. 13/2008 of April 7, 2008, establishing the Cultural Creation Grant and Approving its Regulations (2008)
- Decree-Law No. 33/2007 of September 24, 2007, regulating the Use of Digital Signatures (2007)
- Industrial Property Code (approved by Decree-Law No. 4/2007 of August 20, 2007) (2007)
- Law No. 8/VII/2007 of March 26, 2007, concerning the Establishment of the Legal Regime Applicable to the Promotion and Protection of Industrial Property Rights and its Regulations (2007)
- Resolution No. 16/2006 of May 22, 2006, approving the Government Programme for the 7th Legislature 2006-2011 (2006)
- Legislative Decree No. 10/93 of June 29, 1993, governing the Exercise of the Broadcasting Activity (1993)
The country has limited natural resources that include salt, pozzolana (a volcanic rock used in cement production), and limestone.
Investment Climate in Cape Verde has been summarized to include the following
Sources of information