International Trade in Cape Verde

News Related to International Trade in Cape Verde

Business outline for Cape Verde

Economic Overview

With an average yearly growth of more than 6% during the decade preceding the global economic crisis, Cape Verde showed consistently good economic performance.  After falling 3% in 2009 due to the effects of the global crisis, the country resumed growth, reaching 4.1% in 2011. According to estimates, this trend should continue in 2011. The economic growth of Cape Verde is drawn by the income generated from tourism, and maintained by the international aid and the transfers of the immigrants.

The ambitious objective of the government is to make of Cape Verde an international trade center and service provider, a regional financial place and a recreational center. The main challenges that the country must overcome are its debt and the improvement of its tax system. THe IMF has approved an accord in 2010 as a means of supporting economic policy. In order to consolidate economic stability and ensure strong growth, the program consists namely in a careful management of hte public debt through eliminating non-priority spending, supporting welfare measures to help the most vulnerage parts of the population and a strenghtening of the banking system.

Cap Verde has recently been reclassified, from the least developed countries to middle-income countries. Despite the good economic results, poverty affects a large part of the population of Cape Verde and unemployment is over 25% of its active population, representing almost a third of young workers.

FDI in Figures

After growing steadily for several years, FDIs into Cape Verde slowed down in 2009 due to the global economic crisis. They have stabilized since the beginning of the recovery and should continue their upward trend.

Cape Verde enjoys remarkable political and economic stability, as well as solid institutions. Moreover, the growth in sectors such as public works, tourism and fishing have created new opportunities. However, its dependence on exports, the high level of its debt, the rigidity of its job market, limited natural resources, dilapidated infrastructures and geographical isolations constitute some of the country's barriers to investment. 

Tourism is the sector that attracts most of FDI. Italy, Portugal, Spain and Hong Kong are the main investing countries in Cape Verde.

Foreign Trade Overview

The economy of Cape Verde is one of  Africa's most open after Botswana. Foreign trade represents 90% of the country's GDP. Cape Verde became a member of the WTO in 2008 and enjoys preferential access to American and European markets, as part of the framework of the African Growth and Opportunity Act (AGOA) and the treaties of Lome and Cotonou. The country has also signed a free-trade agreement with China. 

Cape Verde offers incentive policies to exporting companies in order to encourage the development of foreign trade in the country. 

The trade balance is structurally in deficit, a trend which should continue during the coming years.

Exports of Cape Verde are essentially garments, fresh fish and footwear. The main clients are Spain, Portugal and France. Cape Verde main imports are airplanes, diesel oil, vehicles, iron, steel and cement. Its main importing partners are Portugal, Netherlands and Spain.