Economy of Cape Verde

Economy - overview: Cape Verde's low per capita GDP reflects a poor natural resource base, including serious water shortages exacerbated by cycles of long-term drought. During periods of normal rainfall, only 4 of 10 islands (Santiago, Santo Antão, Fogo, and Brava) support significant agricultural production. Mineral resources are salt, pozzolana (a volcanic rock used in cement production), and limestone. The economy is service-oriented, with commerce, transport, and public services accounting for almost 70% of GDP. Although nearly 70% of the population lives in rural areas, the share of agriculture in GDP in 1998 was only 13% (up from 8.9% in 1995); of the 1998 total, fishing accounts for 1.5%. About 90% of food must be imported. The fishing potential, mostly lobster and tuna, is not fully exploited. Cape Verde annually runs a high trade deficit, financed by foreign aid and remittances from emigrants; remittances constitute a supplement to GDP of more than 20%. Economic reforms, launched by the new democratic government in 1991, are aimed at developing the private sector and attracting foreign investment to diversify the economy. Since 1991, the policies the government has pursued include an open welcome to foreign investors and a far-reaching privatization program. It established as top development priorities the promotion of market economy and of the private sector; the development of tourism, light manufacturing industries, and fisheries; and the development of transport, communications, and energy facilities. In 1994-95 Cape Verde received a total of about U.S.$50 million in foreign investments, of which 50% was in industry, 19% in tourism, and 31% in fisheries and services. Prospects for 2000 depend heavily on the maintenance of aid flows, remittances, and the momentum of the government's development program.

Fish and shellfish are plentiful, and small quantities are exported. Cape Verde has cold storage and freezing facilities as well as fish processing plants in Mindelo, Praia, and on Sal.

Cape Verde's strategic location at the crossroads of mid-Atlantic air and sea lanes has been enhanced by significant improvements at Mindelo's harbor (Porto Grande) and at Sal's international airport. Ship repair facilities at Mindelo were opened in 1983, and the harbors at Mindelo and Praia were recently renovated. The major ports are Mindelo and Praia, but all other islands have small port facilities, some of which are to be expanded in the near future. In addition to the international airport on Sal, airports are located on all of the inhabited islands. The archipelago has 3,050 kilometers (1,830 mi.) of roads, of which 1,010 kilometers (606 mi.) are paved. The airport of Praia is currently undergoing expansion.

GDP: purchasing power parity - $618 million (1999 est.)

GDP - real growth rate: 5% (1999 est.)

GDP - per capita: purchasing power parity - $1,500 (1999 est.)

GDP - composition by sector:
agriculture: 13%
industry: 19%
services: 68% (1998)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices): 5% (1999)

Labor force: NA

Unemployment rate: NA%

Budget:
revenues: $188 million
expenditures: $228 million, including capital expenditures of $116 million (1996)

Industries: food and beverages, fish processing, shoes and garments, salt mining, ship repair

Industrial production growth rate: NA%

Electricity - production: 40 million kWh (1998)

Electricity - production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 37 million kWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: bananas, maize, beans, sweet potatoes, sugar cane, coffee, peanuts; fish

Exports: $38 million (f.o.b., 1999 est.)

Exports - commodities: fuel, shoes, garments, fish, bananas, hides

Exports - partners: Portugal, Germany, Spain, France, UK, Malaysia

Imports: $225 million (f.o.b., 1999 est.)

Imports - commodities: foodstuffs, industrial products, transport equipment, fuels

Imports - partners: Portugal, Netherlands, France, UK, Spain, US

Debt - external: $220 million (1998)

Economic aid - recipient: $111.3 million (1995)

Currency: 1 Cape Verdean escudo (CVEsc) = 100 centavos

Exchange rates: Cape Verdean escudos (CVEsc) per US$1 - 107.280 (December 1999), 102.700 (1999), 98.158 (1998), 93.177 (1997), 82.591 (1996), 76.853 (1995)

Fiscal year: calendar year

See also : Cape Verde