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  REPORT - CAPE VERDE. The continental crossroad
 

A MID-ATLANTIC ARCHIPELAGO WITH AN ADVANTAGEOUS CROSS-CONTINENTAL LOCATION AND HERITAGE, CAPE VERDE IS ENTERING A NEW ERA OF INVESTMENT IN INFRASTRUCTURE, TOURISM AND FINANCE TO CELEBRATE 30 YEARS OF INDEPENDENCE AND VISION FOR ITS FUTURE
A future financial center and gateway to Africa

The archipelago’s cultural blend of African roots and European heritage places it between Africa and the Western world.

Cape Verde celebrated its 30th anniversary of independence in 2005. A former Portuguese colony, this tiny archipelago of ten islands and eight islets 300 miles off the west coast of Africa has accomplished a great deal since it received the instruments of independence in 1975. It has established a unique identity among African nations, a mixture of its European heritage and African roots resulting in a separate language, culture and a style of music that is known around the globe. In spite of a poor natural resource base, the effects of severe droughts, and the subsequent emigration this caused, it has created a stable multi-party democracy and implemented open market reform and all the while managing to register consistent economic growth in each of the past three decades. It has reduced its illiteracy rate by 60% and managed to climb to the top of the United Nation’s Human Development Index for sub-Saharan Africa. Cape Verdeans now enjoy a per capita income that is well above the sub-Saharan average and Cape Verde’s economy continues to grow at nearly 5% annually.

Strong macroeconomic policies and an increased focus on good governance since President Pedro Pires’ election in 2001 have put the final icing on the cake. The fiscal deficit has been reduced from 20% of GDP to a mere 2.5% and monetary policies have drawn consistently positive reviews from the International Monetary Fund (IMF) and the World Bank, which has recently upgraded Cape Verde to middle-income country status. International reserves have grown significantly, restoring investor confidence and protecting inflows of emigrant remittances and deposits. Additionally, non-traditional sectors of the economy such as energy, construction, commerce and transport have begun to show new growth. Now the government is intent on boosting tourism and financial services, and major new infrastructure projects are under way that will lead to further diversification of the economy.

JOSÉ MARIA PEREIRA NEVES
JOÃO PEREIRA SILVA
JOSÉ MARIA PEREIRA NEVES
Prime Minister of the Republic of Cape Verde
INTERVIEW
JOÃO PEREIRA SILVA
Minister of Economy, Growth and Competitiveness

Consequently, as Cape Verde celebrated its coming of age this year and reflected on the past 30 years of its history, its future never looked brighter.

“In the next 30 years, I think that Cape Verde will change completely,” says Prime Minister José Neves (INTERVIEW). “It will be a major financial center for the region and a true gateway to Africa. It will have a real cultural agenda and will become an important business center in the region with duty-free services. I see it as a platform for transport, a highly developed tourism destination, and a center for new technologies, education and training.”

Cape Verde’s progress has not gone unnoticed by the international community. Recognized as a beacon of good governance, Cape Verde was chosen among 60 countries worldwide by the U.S. Millennium Challenge Corporation (MCC) this year to receive $110 million in development funds. The country was also given the freedom to choose which projects to invest the funds in – a sign of trust that was not awarded to any other MCC winner. “The Millennium Challenge was a very good and well-earned birthday present,” comments Minister of Economy, Growth and Competitiveness, João Silva. “I think that the fact that we won the competition for the Millennium Challenge Account the first year that the U.S. launched the program is a positive sign of how Cape Verde is perceived by the world, and a positive sign for our future. Our thirty years of independence and our graduation to middle-income status proves that we are now a mature country, and ready to take charge of our future.” According to Minister Silva, the government will invest the funds in infrastructure, agriculture and in stimulating private sector growth.

Cape Verde’s economic and social progress is leading it toward becoming a major business center and transport hub for the region

In its 2005 report, the IMF predicted growth of between 6% and 7% for Cape Verde for the next three years. This will be driven by private sector investment in tourism, public sector investment in infrastructure, and continued substantial foreign investment flows drawn by the country’s strong policy record. Meanwhile, Cape Verdeans continue to carve out a niche for themselves in the global arena based on a heritage and a history that has placed them between Africa and the Western world. The government is working to strengthen its European ties through a partnership with the European Union and has concluded the first round of negotiations for joining the World Trade Organization. Ambassador of Cape Verde in Portugal Onésimo Silveira states, “Cape Verde has a very specific identity, which is a blend of African and European cultural influences. Added to this are the cosmopolitan influences coming from the Cape Verdean diaspora around the world. All of this differentiates us from other African nations and is a very important element in our political and economic success today.”