Santo Antão Island, Cape Verde
Cape Verde (Cabo Verde) wants to diversify its economic relations, with particular focus on the “South-South” axis and on Angola and China, to reduce dependence on European countries, according to the Economist Intelligence Unit (EIU).
Because of its dependence on Portugal and Italy, countries that have experienced crises in recent years affecting the tourism sector, the Cape Verdean economy lost its momentum and the government believes it can return to it by strengthening “South-South” links.
In June, Cabo Verde and Angola signed a memorandum of understanding in Luanda to expand cooperation and bilateral investment, following a wave of Angolan investment in the archipelago, in which Isabel dos Santos, the main Angolan businesswoman, had a starring role.
According to the Economist Intelligence Unit, efforts to strengthen ties with Angola and other major African economies are “essential” to reduce “dependence” of the archipelago in relation to Europe, which is the source of almost 75 percent of tourists, and therefore of foreign currency as well as foreign aid and investment.
Given the difficulties in Europe, the Cape Verdean economy saw its external position “weakened considerably” and policy makers are now engaged in the diversification of the relationship.
Since 2008, Angolan investment began flooding into Cabo Verde, expanding from energy into telecommunications and banking.
Last March an oil terminal opened in Mindelo, an investment by Enacol (owned by Angola’s Sonangol and Portugal’s Galp Energia) valued at USD1.9 million, which should provide revenue from refueling ships.
The agreement signed in June during a visit to Luanda by the Cape Verdean Prime Minister José Maria Neves, provides for expansion of partnerships to other priority sectors, including tourism, fisheries and air and sea transport.
For several years there has been talk of a possible investment by Angolan airline Taag in Cape Verdean air carrier TACV, which the state intends to privatise, but the EIU believes that the current economic climate is not conducive to that.
According to the EIU, Cabo Verde intends to “benefit from the appetite” in Angola for investment as well as budget support at the same time as it “takes advantage of its privileged strategic position for transatlantic trade (…) especially with Brazil and China.”
These aims also extend to neighbouring West African countries, with which Cabo Verde intends to maintain existing links to develop stronger trade relations and enhance its role as a platform for the region.
In 2014, former Prime Minister Gualberto do Rosário publicly presented a plan to make Cabo Verde a “Tiger of the Atlantic” by 2023, by analogy with the “Asian Tigers” through construction of three large refineries and the installation of large US and European banks.
According to the Africa Monitor newsletter, the plan included attracting foreign investment to new sectors such as the chemical, electronics and food industries, leading to increased traffic in ports, of both passengers and goods.
The privatisation of TACV, according to the government, according to Cape Verdean weekly newspaper A Semana, was at one time followed by China’s Okay Airways, while the China Road & Bridge Corporation (CRBC) has expressed interest in building a deep water port and a cruise terminal on the Cape Verdean island of São Vicente, as well as repairing the Cabnave shipyards.
Over the next few years the largest ever foreign investment in Cabo Verde is expected to come from Macau, valued at $250 million for construction of a hotel-casino in the capital, Praia, submitted in late July by businessman David Chow.
The inauguration of the archipelago’s sports facility funded by China – the national Stadium – on the island of Santiago was held in 2014. MDT/Macauhub
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