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Located 500 km off the west coast of Africa, Cabo Verde is a ten-island archipelago, nine of which are inhabited. With a population of about 491,233 (2021 Census), only 10% of its territory is classified as arable land and mineral resources are limited.

The fragmentation of its territory creates significant connectivity issues, as well as challenges for service delivery, including energy, water, education, and health. 

Cabo Verde has witnessed significant economic progress since 1990, driven in large part by the rapid development of tourism (25% of GDP), coupled with considerable social development due to strong social policies since the 1970s.

Until 2019, Cabo Verde was considered one of the champions among Sub-Saharan African countries in terms of poverty reduction and under the United Nations 2030 Agenda, reflected in the new Strategic Plan for Sustainable Development 2022-2026 (PEDS II), the Government set the goal of eradicating extreme poverty by 2026. 

Political Context

Cabo Verde is considered an example of democracy in Africa, largely due to its political stability. Electoral processes have been held regularly, with peaceful alternation of power between the two major parties. The African Party for the Independence of Cabo Verde (PAICV) responsible for colonial liberation, of leftist ideology, governed for two 15-year periods (1975-1991 and 2001-2016). The Movement for Democracy (MpD), a liberal and right-wing party was re-elected for a five-year term in the legislative elections of April 2021. The Independent and Democratic Cabo Verdean Union (UCID) represents the third political force in the country.

The PAICV-supported candidate, José Maria Neves, was elected president on October 17, 2021, and took office on November 9, 2021.

The next legislative and presidential elections will be held in 2026.

Economic Overview

In 2023, the economy experienced a deceleration in economic growth, accompanied by a decrease in inflation and an expansion of the current account deficit. Economic growth slowed to 4.8%, driven by a stabilization in service exports after the post-COVID rebound in tourism. Growth was propelled by sectors such as accommodation, transport, and commerce on the supply side, while exports and private consumption drove growth on the demand side. Inflation saw a decline to 3.7%, attributed to the moderation of international food prices and a decrease in oil prices. The current account deficit widened from 3.4% to 5.3% of GDP due to reduced exports and remittances, particularly in the tourism sector.

The fiscal deficit contracted to 0.5% of GDP in 2023 from 4.3% in 2022, supported by increased revenues. Revenue rose by approximately 20%, fueled by corporate income tax, VAT collection, and revenues linked to airport concessions. Despite a slight increase in total expenditure, public debt declined from 127.1% to 115.3% of GDP.  

Looking ahead to 2024, real GDP growth is expected to remain stable at 4.7%, with inflation projected to decrease further to 2.7%. However, there are significant downside risks to the outlook, including potential commodity price spikes, weaker external demand in tourism, and limited progress in SOE reform, which could undermine fiscal consolidation and growth. Climate-related shocks also pose a threat, given the country's susceptibility. 

Last Updated: Mar 27, 2024

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

*Amounts include IBRD and IDA commitments
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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
Marco Antonio Medina Silva
For project-related issues and complaints