Cape Verde reinforces openness to foreign investment

Mindelo, Cape Verde

Cape Verde, the Portuguese-speaking African country with the highest level of development and greatest political and economic stability, is preparing a set of measures to further open up the archipelago to foreign investment, according to a recent publication.

Recent developments and prospects for this year in the Cape Verde archipelago are the focus of the first of the Africa Reports, a new publication launched this month, joining Africa Monitor Intelligence, Legis-PALOP, a legal knowledge and information sharing platform and Eupportunity, a consultancy specialized in European affairs.

Among the main trends identified in Cape Verde for the coming months are privatizations, pending the presentation by the government of a program that includes the management of ports and airports, energy and water, ship repair, air transport, production and sale of drugs and the financial restructuring of public enterprises, in particular airline TACV and real estate company Imobiliária Fundiária e Habitat (IFH), which is in a weak financial situation due to the risks of its largest housing project (House for All).

Other trends identified include improving the business climate “one of the government’s big short term goals,” as the “reduced margin for public investment” means the private sector, especially when related to foreign investment, “has to assume a more prominent role as a driver of growth and employment, based on the considerable expansion of infrastructure in recent years.”

“The tax reform package is ambitious, as are the aims of creating conditions to promote financing of the economy. Similarly, measures are expected for greater flexibility of the labor market and education and training initiatives, to further reduce a mismatch of skills, which affects productivity,” says the report.

The second half of the year will be also marked by regionalization, mooted in January, including a “government” and a deliberative assembly on each island as well as the deepening of relations with the European Union.

The report includes information on international development assistance from various international institutions funds – including the European Union, the European Investment Bank, the World Bank and the African Development Bank – and also data on the foreign investment regime, including guarantees for investors and setting up companies with foreign capital.

The report also highlights the top five figures in Cape Verde in recent months, including Ulisses Correia da Silva, elected prime minister in 2016, with an absolute majority, breaking a 15-year cycle of governance by left-wing party PAICV.

The political hegemony conquered in 2016 by his party, MpD, gives Ulisses, “unique conditions to impose its agenda, in stark contrast to the governments (of former Prime Minister) José Maria Neves: administrative decentralization, reduction of the state’s role in the economy, more private enterprise, improving the business climate to attract investments to the tourism sector and beyond this,” the report said.

“The high debt burden inherited from the previous government, together with the weak financial situation of the major public companies are urgent problems to be solved,” it said.  MDT/Macauhub