The uninhabited islands were discovered and colonized by the Portuguese in the 15th century; Cabo Verde subsequently became a trading center for African slaves and later an important coaling and resupply stop for whaling and transatlantic shipping. The fusing of European and various African cultural traditions is reflected in Cabo Verde’s Crioulo language, music, and pano textiles. Following independence in 1975, and a tentative interest in unification with Guinea-Bissau, a one-party system was established and maintained until multi-party elections were held in 1990. Cabo Verde continues to sustain one of Africa's most stable democratic governments. Repeated droughts during the second half of the 20th century caused significant hardship and prompted heavy emigration. As a result, Cabo Verde's expatriate population is greater than its domestic one. Most Cabo Verdeans have both African and Portuguese antecedents. Cabo Verde’s population descends from its first permanent inhabitants in the late 15th-century – a preponderance of West African slaves, a small share of Portuguese colonists, and even fewer Italians, Spaniards, and Portuguese Jews. Among the nine inhabited islands, population distribution is variable. Islands in the east are very dry and are only sparsely settled to exploit their extensive salt deposits. The more southerly islands receive more precipitation and support larger populations, but agriculture and livestock grazing have damaged their soil fertility and vegetation. For centuries, the country’s overall population size has fluctuated significantly, as recurring periods of famine and epidemics have caused high death tolls and emigration.
Western Africa, group of islands in the North Atlantic Ocean, west of Senegal
salt, basalt rock, limestone, kaolin, fish, clay, gypsum
Population - distribution
among the nine inhabited islands, population distribution is variable; islands in the east are very dry and are only sparsely settled to exploit their extensive salt deposits; the more southerly islands receive more precipitation and support larger populations, but agriculture and livestock grazing have damaged the soil fertility and vegetation; approximately half of the population lives on Sao Tiago Island, which is the location of the capital of Praia; Mindelo, on the northern island of Sao Vicente, also has a large urban population
Portuguese (official), Crioulo (a blend of Portuguese and West African words)
PRAIA (capital) 145,000 (2014)
- Conventional long form
- Republic of Cabo Verde
- Conventional short form
- Cabo Verde
- Local long form
- Republica de Cabo Verde
- Local short form
- Cabo Verde
- Geographic coordinates
- 14 55 N, 23 31 W
- Time difference
- UTC-1 (4 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; accepts ICCt jurisdiction
Cabo Verde’s economy is vulnerable to external shocks and depends on development aid, foreign investment, remittances, and tourism. The economy is service-oriented with commerce, transport, tourism, and public services accounting for about three-fourths of GDP. Tourism is the mainstay of the economy and depends on conditions in the euro-zone countries. Cabo Verde annually runs a high trade deficit financed by foreign aid and remittances from its large pool of emigrants; remittances as a share of GDP are one of the highest in Sub-Saharan Africa.
- External debt stocks
- US$ 1,520,142,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -61,768,106
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 1,127,609,221
- Exports of goods and services
- US$ 749,958,791
- Total Merchandise Trade
- FDI, net inflows
- US$ 119,202,394
- Commercial Service Exports
- US$ 572,792,376
bananas, corn, beans, sweet potatoes, sugarcane, coffee, peanuts; fish
food and beverages, fish processing, shoes and garments, salt mining, ship repair
- fuel (re-exports), shoes, garments, fish, hides
- Australia 83.1%, Spain 8.6% (2015)
- foodstuffs, industrial products, transport equipment, fuels
- Portugal 29.8%, Australia 26.4%, Netherlands 11.2%, Spain 5.6%, China 5.6% (2015)
- Country Risk Rating
- Political and economic uncertainties and an occasionally difficult business environment can affect corporate payment behavior. Corporate default probability is appreciable.
- Business Climate Rating
- The business environment is mediocre. The availability and the reliability of corporate financial information vary widely. Debt collection can sometimes be difficult. The institutional framework has a few troublesome weaknesses. Intercompany transactions run appreciable risks in the unstable, largely inefficient environments rated B.
- Tourism potential
- Fisheries resources
- Efficient banking and telecommunications service sectors
- Political stability
- Quality of governance
- High level of public debt
- Poor transport infrastructure
- Food and energy wholly imported
- Dependence on international aid, the diaspora, and tourism
- High unemployment (12%, 28% among young people)
Cape Verdean activity is gradually building momentum, but structural constraints limit the outlook for an economy dominated by tourism. Despite efforts aimed at diversifying the tourist source countries, most tourists are from Europe. Sluggish growth in the EU and the uncertainties over the impact of BREXIT (the United Kingdom is the main source country for tourists to Cabo Verde) is expected to weigh on the development of the sector, which accounts for about one quarter of GDP. The confirmation, at the end of 2016, of the first cases of infection caused by the Zika virus could also adversely affect tourism.
A tighter fiscal policy, following the 2016 election year, is likely to result in reduced spending on public investment. In contrast, private investment is likely to be encouraged, given the government's plan to develop the private sector, not only as regards tourism but also agriculture, fishing and services to businesses.
Inflation, chiefly determined by imported food and energy products (oil represents about 20% of the country's imports), could be fueled by the depreciation of the escudo, pegged to the euro, if the European currency's exchange rate weakens against the dollar. However, price rises are likely to remain moderate in 2017.
The fiscal deficit is expected to reduce in 2017 following the spending increase prior to the elections at the end of 2016. The government is likely to cut its investment spending and take steps (fiscal in particular) to support the private sector. Better management of state-owned enterprises, in particular capping the remuneration of their executives, should bring down spending. However, the financial position of a number of public companies (notably the airline company, Transportes Aéreos de Cabo Verde- TACV) could continue to put pressure on the public finances.
Public debt is expected to stabilize at a very high level, provided there is no deterioration in the public balance. The risk of default remains contained as the debt is chiefly composed of concessional and long-term loans. The public debt dynamics are, however, a source of vulnerability in a context of weak growth.
The current account balance, structurally in deficit because of the country's dependence on food and energy imports, could benefit from a slowdown in infrastructure projects and so a drop in imports of capital goods. Exports, dominated by fish products (fish, seafood and processed products), as well as services (tourism and associated transport services) are unlikely to increase much due to weak growth in external demand. The current account deficit will continue to be financed mainly by concessional loans from international institutions and FDIs, which will remain fairly substantial.
The banking sector is dominated by European, particularly Portuguese, banks. The Central Bank has taken steps to enhance the soundness of the sector, but the ratio of non-performing loans remains high (17% in June 2016) and could continue to rise against a backdrop of weak economic growth, further weakening the sector.
Cabo Verde is an established democracy. The cohabitation between the two main parties, the African Party for the Independence of Cabo Verde (PAICV, the largest party in the Assembly since 2011) and the Movement for Democracy Party (MPD, party led by President Jorge Carlos Fonseca), ended in 2016. This is because the MDP won the parliamentary elections in March 2016 and its presidential candidate, the outgoing president, was re-elected to the head of the country for a second term during the first round of presidential elections of 2 October 2016, with a large majority of votes cast (73%), but with a very low participation rate (35.5% compared with 50% at the previous presidential poll). The end to cohabitation should ensure the adoption of structural reforms and the introduction of measures favorable to private investors.
Cabo Verde is among the top-ranked countries in sub-Saharan Africa according to World Bank indicators, in particular on combating corruption (45th out of 214 countries).