Cape Verde Basic Information

By | July 21, 2022

How to successfully enter the Cape Verdean market? We bring verified information exclusively directly from Cape Verde from the employees of the ministries and the PaulTrade agency.

Cape Verde Basic Information

Republic of Cape Verde (República de Cabo Verde)

Official name of the state, composition of the government

The President of the Republic of Cape Verde is Jorge Carlos Fonseca, who was elected for a second five-year term in 2016. Check cancermatters to learn more about Cape Verde political system.

Composition of the government as of 5/29/2020:

  • José Ulisses de Pina Correia e Silva – Prime Minister
  • Rui Alberto de Figueiredo Soares – Deputy Prime Minister for Regional Integration
  • Olavo Avelino Garcia Correia – Deputy Prime Minister and Minister of Finance, Coordination of Economic Policies and Reforms
  • Luís Felipe Tavares – Minister of Foreign Affairs and Minister of Defense
  • Carlos Jorge Duarte Santos – of tourism and transport
  • Paulo Lima Veiga – Minister of Marine Economy
  • Alexandre Monteiro – Minister of Industry, Trade and Energy
  • Paulo Augusto Costa Rocha – Minister of the Interior
  • Fernando Elísio Freire – Minister of Parliamentary Affairs, Minister of Sports, Chairman of the Council of Ministers
  • Janine Lélis – Minister of Justice and Labour
  • Maritza Rosabal Peña – Minister of Education, Minister of Family and Social Inclusion
  • Abraão Vicente – Minister of Culture and Creative Industries
  • Arlindo do Rosário – Minister of Health and Social Security
  • Gilberto Silva – Minister of Agriculture and Environment
  • Eunice Silva – Minister of Infrastructure, Spatial Planning and Construction

Demographic trends: Population, average annual increase, demographic composition (including nationalities, religious groups)

Area: 4,033 km 2 (176th in the world)
Population: 583,255 people (2020)
Note: However, a similar number of Cape Verdeans live abroad – in the USA, Portugal, Italy, France and other countries.
Population density: 134 people/km 2 (2018)

Age structure (2020):

  • 0-14 years – 27.9%
  • 15 – 64 years – 66.7%
  • over 65 – 5.4%

Number of economically active population: 255,762 (2016)
Annual population increase: 1.28% (2018)

Main ethnic groups:

  • mixed race 71%
  • blacks 28%
  • Europeans 1%

Major religious groups (2018):

  • Roman Catholics 77.3%
  • Protestants 4.6%
  • Muslims 1.8%
  • unspecified 16.3%

Basic macroeconomic indicators for the last 5 years (nominal GDP/cap., development of GDP volume, inflation rate, unemployment rate). Expected development in the territory with an emphasis on the economic sphere.

Basic macroeconomic indicators
2015 2016 2017 2018 2019
GDP/population (USD) 3,043 3,086 3,213 3,564 3,578
GDP development (%) 1.1 3.9 4.6 5.5 5.7
Inflation (%) 0.1 -1.4 0.8 1.0 1.9
Unemployment (%) 12.4 15 12.2 12.2 8.5

Source: Banco de Cabo Verde

The Cape Verdean economy began to grow more dynamically in 2016, which was also confirmed by the following three years, when the GDP grew by an average of around 5% per year. The main drivers of growth were domestic consumption and better export performance. Among the other sectors, energy, water management, tourism, finance and manufacturing contributed significantly to the growth. However, the high foreign debt is a permanent burden on the economy.

Strong GDP growth of 5.7% was recorded in 2019, with industries, fisheries, trade and tourism contributing the most to this result. However, the impact of public investment on growth has still not reached its potential due to inefficiencies in the public sector, resulting in high public debt. As part of the fight against debt, fiscal consolidation has been carried out in recent years, including a cap on domestic loans of 3% of GDP. These measures began to bear fruit, as the fiscal deficit fell below 3% of GDP in 2018, when it was financed by concessional loans and government bond issues. Public debt fell from 128.4% of GDP in 2016 to 123.9% in 2018 and is projected to fall to 98.5% of GDP in 2023. Check prozipcodes for Cape Verde defense and foreign policy.

Monetary policy is consistent with maintaining the exchange rate indexation to the euro and, combined with real exchange rate appreciation, helped keep inflation below 2% in 2019. The reduction of public investment as a result of fiscal consolidation has the effect of limiting investment in infrastructure and thus greater support for economic diversification. The lack of connectivity between individual islands makes it difficult for local firms to compete effectively in global value chains. High electricity rates – about $0.25/KWh compared to $0.19/KWh in Mauritius, for example – are also hampering the growth of industrial production, as most firms depend on expensive diesel power.

In recent years, thanks to stable growth, the poverty level has been significantly reduced (from 58% in 2001 to 35% in 2015).

The main challenges for the future are the consolidation of economic results as a middle-income country and the creation of suitable conditions for reducing poverty and strengthening shared prosperity. As a small open economy, Cape Verde is vulnerable to the economic development of major global players. With the domestic currency pegged to the euro, it will be crucial for the country to manage to generate budget surpluses to cover future shocks. Greater diversification of the tourism and other sectors would help, as would greater liberalization of the labor market. The global Covid-19 pandemic will have a major impact, as a result of which Cape Verde is losing significant tourism benefits.