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CAPE VERDE MINISTER FOR ECONOMY

Posted on 21st February 2009 4:08pm by Gary

Cape Verde: building an Island of Prosperity in the Atlantic - Jose Brito
Minister of the Economy, Competitiveness & Growth

The idea of transforming Cape Verde is as old as the republic. It galvanized the nation to seek independence despite the resource challenges. National strategy, immediately following independence from Portugal in 1975, focused on building a thriving state based on a solid socioeconomic base: health care, education, good governance, equal opportunity, and a viable economy.

With the success of various reforms, from entrenching and building a democratic culture to deepening of the market economy, over the years, we can surely say that Cape Verde is today on its way. In fact, a new Cape Verde is emerging. Global perception is changing and Cape Verde is becoming known as destination for tourists and investors. Our desire is to nurture and build on what we have done so far. Our vision is socioeconomic transformation. We are working towards building a more modern and more prosperous country. In short, we want to build an island of prosperity in the Atlantic.

Our focus now is on advancing our agenda for national transformation which is centered on building core sectors-high value added tourism, fisheries processing and marketing, offshore services (information technology outsourcing and financial hub), and transport hub (passengers and cargo)-that will be globally competitive. These sectors as planned will be the anchors of a transformed Cape Verdean economy. The objectives are to enlarge the productive base and build a shared prosperity for all Cape Verdeans while protecting our environment and ensuring that we develop in a sustainable manner.

The implementation of the agenda for transformation in the Cape Verde is creating business opportunities for local entrepreneurs and foreign investors, alike. The challenges, however, are that Cape Verde is yet to be fully discovered by international investors and local investment capital is limited. These challenges are however opportunities for early investors.

Where are we today?

Cape Verde is today an oasis of peace and tranquility. We have made tremendous progress on several fronts since independence that we will officially graduate from the list of less developed countries (LDC) to middle income countries (MDC) in 2008. We are a democratic state, with peaceful transitions between governments and political parties. Crime is very low compared to international standards. We have about 100 percent enrollment in primary schools and our life expectancy is above 70 years.

We have managed to build a dynamic nation with free markets and productive workforce. According to a recent study by the World Bank which is to be released later this year:
Our per capita Gross Domestic Product (GDP) per capita in purchasing power parity (PPP) adjusted terms in 2004 is US$5,715.
GDP growth between 2000 and 2005 averaged 5.7 percent and reaching 6.3 percent in 2005.
The fastest growing sectors are hotels (15 percent annual growth between 2000 and 2003), commerce (10 percent), construction (9 percent), and transportation and communication (7 percent). Agriculture (2 percent) and industry (0 percent) have been growing more slowly
Our Labor productivity is relatively high. For example, manufacturing enterprises in Cape Verde are more productive than similar enterprises in the other lower middle income comparator countries.
Unemployment here is dropping; it is down 3.3% from 2005 to 2006 and continuing to lower this year - which is in no small way attributable to the growth of our construction and tourism trade.
Indeed, between 1998 and 2003, the number tourists visiting our islands almost tripled from 52,000 to 141,000 or an annual average growth rate of 22%. Economically and financially, the growth of tourism during the nineties and early 2000 has had a significant impact on our economy. The tourist sector's share of our Gross Domestic Product (GDP) has quintupled since 1996 to reach 10.2% of GDP in 2002. Likewise, in 2002, tourism accounted for 42.2% of Cape Verde's balance of payments receipts. Despite this impressive growth, significant opportunities continue to abound in the tourism and other sectors of the economy from fisheries, offshore services to transport.

We are privileged to have benefited from international support by way of foreign investment/grant aid ($600m in 2006) but this is being implemented carefully so that we drive the delivery major infrastructure programmes in accordance with our needs. This will bring about major improvements in accessibility to our islands through the completion of our new international airports at Boa Vista, which will be opened this summer, and Sao Vicente, which will open before the end of this year, and development of new routes in accordance with international demand. We will also see the enlargement and modernization of the port in SAL, which is due to start shortly and the enlargement of the Santiago port.

We are also concentrating on improving our inter-island transport system and have appointed a US management consulting company to take over the running of TACV for one year to bring it up the standards required by the modern competitive air line business. Due to the demand for inter island transport a private airline - Halycon Airways - will start in April, with daily flights from Sal to the main islands of Sao Vicente, Santiago, Boa Vista and to Fogo.

We have also liberalized our telecoms market, from January 1st this year; have developed new waste treatment facilities; bought out the remainder of our State-run electricity supply service to ensure we have absolute autonomy in terms of provision of this vital service. We are also working on liberalizing the energy sector to allow independent producers and are undertaking a major push for renewable energy such as wind and solar.

What are the next steps?

We are building a new administration and government. We have embarked on a state reform agenda to ensure that we build a government that is able to lead the development process, support the private sector and deliver services to the people and its clients. This is why we have launched a state reform program with the goals of building smart government with an efficient, effective, innovative, and service oriented administration.

We intend to continue and deepen the reforms to make it easy to do business in Cape Verde and to build a supportive business environment. We have also established the University of Cape Verde and are building a school for tourism and hospitality, and in general strengthening the educational system as we intend to ensure we have the skilled workers that we need to build the economy.

Conclusion

Quite simply, we are carefully building for our future through extensive reforms and strategic investments across a broad range of services. We are carefully building for our future so that you, the tourist, can come here and enjoy the unique and tropical cultural experience of Cape Verde in luxury or you, the investor, can freely do business in Cape Verde. We are carefully building for our future but still preserving our past. And, most of all, we are carefully building for our future so that we, the people of Cape Verde, have the best possible future.

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