Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). Find Out

Skip to Main Navigation

Overview

  • Located 500 kilometers off the west coast of Africa, Cabo Verde is an archipelago of 10 islands. The country has an estimated population of 520,500 spread across nine islands that are scattered within a large water area, which constitutes a major constraint to growth and development. Only 10% of its territory is classified as arable land, and the country possesses limited mineral resources. 

    Cabo Verde's economy is driven by tourism grounded in year-round attractive weather, beautiful beaches, stable democracy, limited security risks and proximity to Europe. Its limited economies of scale create significant connectivity issues, as well as challenges for service delivery including energy, water, education, and health.  

    Despite the challenges associated with being a small island economy, Cabo Verde witnessed spectacular social and economic progress between 1990 and 2008, driven mainly by the rapid development of inclusive tourist resorts 

    Political Context 

    Politics in Cabo Verde have been largely consensus-oriented, and since its independence from Portugal in 1975, Cabo Verde has not experienced a single coup d’état. Elections are considered free and fair, and parties in power alternate regularly. 

    The current Government of Cabo Verde has been in office since the presidential and parliamentary elections of 2016, which led to a change with the victory of the opposition Movimento para Democracia (MpD) after 15 years of government under the Partido Africano da Independência de Cabo Verde (PAICV). These two parties dominate Cabo Verde’s political scene and are both fairly centrist. The next legislative and presidential elections are scheduled for the first half of 2021. 

    Economic Overview 

    During the period of 2009-2015, economic growth decelerated significantly, a result of the protracted impact of the global financial crisis. Countercyclical fiscal measures did not restore growth and instead led to a sharp increase in the stock of public debt. 

    Gross domestic product (GDP) growth recovery started in 2016 and reached 5.5% in 2019 (4.2 in per capita terms), well above the potential growth rate of 3.6%. On the demand side, growth was driven by high consumption (public and private) and strong export performance. On the supply side, construction, retail, transport, and tourism services contributed to the dynamism of the economy. Tourism and travel-related industries represent 25% of GDP and drive around 40% of overall economic performance. The primary fiscal balance stood at 0.7% of GDP in 2019, turning positive for the first time in a decade. The overall fiscal deficit declined from 2.8% of GDP in 2018 to 1.9% in 2019. Improved fiscal performance is due to central government consolidation efforts combined with the reforms of state-owned enterprises (SOEs).  However, the risk of external debt distress remains high.  

    The unfolding COVID-19 crisis will reduce economic growth, delay fiscal consolidation, halt public debt decline, and slow poverty reduction in Cabo Verde. GDP growth is expected to have the largest contraction on record in 2020, The country relies heavily on tourism that is the hardest hit sector. Tourism receipts alone are expected to decline by 70% compared to 2019. The crisis opened a large fiscal financing gap in 2020, which has been filled mainly by concessional borrowing and grants from Development Partners. The World Bank has responded to this crisis with three operations: the COVID-19 Emergency Response Project; the Cabo Verde Disaster Risk Management Development Policy Financing with CAT-DDO; and the Second State-Owned Enterprises (SOEs) Reform and Fiscal Management Development Policy Financing (DPF) that is under preparation. The latter operation supports reforms to strengthen the foundations for economic recovery and resilience in the context of the COVID-19 crisis.  

    Last Updated: Sep 18, 2020

  • World Bank Group Engagement in Cabo Verde 

    The work conducted by the World Bank Group in Cabo Verde is determined by a partnership framework designed to respond to the country’s challenges.  

    The World Bank's portfolio grew strongly from $ 82.5 million in 2015 to $ 106 million in 2019. The sector focus of the portfolio is dominated by the transport sector with about 46% of funding but was fairly balanced with 19% of funding going to the human development in areas such as education and social protection. 19% went to the finance and competitiveness sector and 19% to the governance sector. The current portfolio of six projects is relatively young with an average age of 1.7 years. 

    IFC, the private sector arm of the World Bank Group, had aggregated commitments of $5.8 million.  

    Last Updated: Sep 18, 2020

  • Cabo Verde - State Owned Enterprises Related Fiscal Management Project

    Since the project effectiveness in October 2018, the SOE Project supported the Cabo Verde National Air Transport Company (TACV) restructuring, paving the way for its successful privatization. 

    • The Cabo Verde National Air Transport Company (TACV) privatized, a major milestone to achieving the Cabo Verde ambition of being a hub economy in the region.  

    • Fiscal risk related to SOEs significantly reduced thanks to the reforms.

    Cabo Verde – Social Inclusion Project

    • 32,165 beneficiaries of social safety net programs

    • 32,165.00 Beneficiaries of unconditional cash transfers

    • 32,165 beneficiaries of Safety Nets programs - Unconditional cash transfers 

    • All beneficiaries of the RSI registered in the Unified Social Registry

    Competitiveness for Tourism Development Project

    • Island-specific Tourism Master Plans (TMPs) developped

    • Two Cabo Verde Investment Forums organized to catalyze private investments, contributing to the signing of investment conventions for projects worth over US$ 136 million. 

    • Support to small businesses’ certification process, working with both Chambers of Commerce and IGQPI, as a way of improving local SME’s competitiveness and capacity to access new markets. 

    Cabo Verde Transport Sector Reform Project

    The Transport Sector Reform Project (TSRP) was approved in June 2013 and received additional funding in May 2017. The TRSP has been supporting the ability to increase performance-based road maintenance to most of the national road network.

    • 90% of the national road network is maintained through performance-based contracts

    • Emergency road works have been completed on the islands of Fogo and Santiago.

    • Road rehabilitation work is ongoing in Santo Antao and Santiago islands

    • Technical assistance activities undertaken : Climate Change and Natural Hazard Vulnerability and Risk Assessment - Climate Resilience and Adaptation Strategy for the Cabo Verde Road Network.

    • Signing of a 20-year concession in 2019 to provide safe and reliable inter-island maritime transport services in 9 ports and the privatization of the national airline, Cabo Verde Airlines. 

    • Establishment of ECV- Estrada’s de Cabo Verde (Roads of Cape Verde) merging the Road Institute and the Road Fund 

    Last Updated: Sep 18, 2020

  • Cabo Verde's main bilateral donors are China, Luxembourg, Portugal, Spain, and the United States. Its major multilateral partners are the European Union, the African Development Bank, the United Nations, the World Bank and the International Monetary Fund. Cabo Verde also receives smaller commitments from Japan, Kuwait, Saudi Arabia, and Angola. Cabo Verde is strengthening South-South cooperation, especially with Brazil and China, to take advantage of its privileged strategic position for transatlantic trade. 

    Last Updated: Sep 18, 2020

Api


LENDING

Cabo Verde: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

More Photos Arrow

In Depth

Strong Policies Can Support Economic Recovery

The latest economic analysis for the region predicts predicts economic activity will decline by 3.3 percent in 2020, confirming the region’s first recession in 25 years.

CPIA Africa

Africa’s poorest countries saw little to no progress on average in improving the quality of their policy and institutional frameworks in 2018.

IDA in Africa

With IDA’s help, hundreds of millions of people have escaped poverty—through the creation of jobs, access to clean water, schools, roads, nutrition, electricity, and more.

World Bank Africa Multimedia

Watch, listen and click through the latest videos, podcasts and slideshows highlighting the World Bank’s work in Sub-Saharan Africa.

Doing Business in Cabo Verde

The Doing Business report provides objective measures of business regulations and their enforcement. See where your country ranks.

Additional Resources

Country Office Contacts

Main Office Contact
World Bank Office/United Nations Building
PO Box 62
Meio de Achada Santo Antonio
Praia, Cabo Verde
(+238) 260-96-00
(+238) 260-96-54
For general information and inquiries
Mademba Ndiaye
Sr. External Affairs Officer
+221-33-859-41-00
mademba@worldbank.org
For project-related issues and complaints
caboverdealert@worldbank.org