CAPE VERDE business report

8/13/2019 CAPE VERDE business report

1/9

cape verdebusiness report |01

DEC 10

2013INVESTMENT INFORMATIONA SUPPLEMENT FOR KHALEEJ TIMES

CAPE VERDE

businessreport Overcomingnatural

obstacles

JOS MARIANEVES06OVERVIEW05

Stronger tieswith the

Middle East

08 MARITIME ECONOMY

Lookingseaward

A growing hub forservices in the Atlantic


2/9

cape verdebusiness report |03

OVERVIEW

INDEX

PRODUCED BY

SOUTH COMMUNICATIONSKEMP HOUSE, 152 160

CITY ROAD LONDON EC1V 2NXTEL: +44 20 3 195 3852

FAX: +44 20 7566 3935

WWW.SOUTHCOMMUNICATIONS.COMPRINTED AT GALADARI

PRINTING & PUBLISHING LLC

DUBAI, UNITED ARAB EMIRATES

INFRASTRUCTURE07

Water for life

INFOGRAPHICS04Inside data

AIRTRANSPORT10

Te sky is the limit

FRANKLIMSPENCER09

Federating the

maritime economy

MARIOPAIXO11

Soaring aviation

EDUCATION14People come first

TOURISM12A gem for

island-hoping

Cape Verde ranks third on the Ibra-him index of African governance,coming in just behind Mauritius

and Botswana, and the countrys econo-my has been growing at an average rate ofover 5% since 2000. It also ranks fourthbest in Africa in terms of Information andCommunication echnologies and in2008 was removed from the Least Devel-oped Countries list to become a MiddleIncome Country. he question now onevery- bodys lips is: How did a small is-land in the middle of the Atlantic, with-out natural resources, become a regionalmodel for development?

he answer is good governance. CapeVerde gained its independence in 1975 andafter 15 years of single-party rule it be-came clear to the countrys leaders that itsfuture prosperity would rely on its people.Only by investing in education and health-care, by fighting poverty and strengthen-ing democracy could a country with barelyhalf a million inhabitants and reliant onimports for practically all its needs take itsplace among modern nations.

In ten years, Cape Verde has almost dou-bled the number of secondary schoolteachers. Life expectancy has risen from

48 years in the 60s to a current high of 71years, and the African DevelopmentBank now defines Cape Verde as a re-gional model of good governance, politi-cal rights and civil liberties. he eco-nomic development owes mainly totourism, a sector which now accountsfor almost 25% of GDP and for 65% ofservice sector revenues.

However, not all is rosy for this littlecountry. Foreign investment has plum-meted since the outbreak of the financialcrisis in 2008, and the volume of interna-tional aid received has declined steadilysince 1999, putting the continuity of so-

cial policies at risk. Unemployment nowstands at 16.8% and 26% of the popula-tion still lives in poverty.

Wagering on its strategic position be-tween Europe and South America, andwith a keen eye on the United States, thearchipelago aims to become a gateway toWestern Africa. he countrys interna-tional stability and governance ratingsshould also help to convince investorsthat Cape Verde is an attractive place to dobusiness. As Finance Minister CristinaDuarte says, At the end of the day, insti-tutions do matter.

Good governancerewarded

RECOGNIZED AS A MODEL OF DEMOCRACY IN AFRICA,CAPE VERDE BUILDS ON INTERNATIONAL CREDIBILITY

Investment in education allows more than 60,000 students every year to attend secondary school classes.


3/9

cape verdebusiness report04| |05

OVERVIEW

Overcoming naturalobstacles

DISPERSED TERRAIN ANDSCARCE RESOURCES HAVE STIMULATED

NEW DEVELOPMENT IDEAS IN CAPE VERDE

Geography has alwayschallenged industrialgrowth in Cape Verde.

Only half a million people arescattered across nine inhabitedislands and there are not manynatural resources. he coun-trys economic activity, basedmainly on light manufactur-ing, depends heavily on im-ports and contributes onlymoderately to the countryswealth. Te combination of in-sularity and reduced marketsize does not provide the nec-essary scale for foreign indus-trial investment either.

In light of these natural con-straints, many skeptics doubtedof the viability of the countrybefore its independence. Butthe future proved them wrong.

Cape Verde gained internationalcredibility and bet on the ser-vices sector development.ourism now accounts for al-most one quarter of the coun-trys GDP.

Only four of the archipelagosten islands have sufficient ara-ble land for agriculture, andtheir combined production ac-counts for less than 10% of thenational economy. In response,the Government has built fourdams and, in the coming years,

up to 17 more will contribute toenhanced self-sufficiency. Tiswill lighten the load of imports,which currently account for al-most 75% of all food consumedin the country.

Te subsoil is devoid of gas or oil

and contains only small quanti-

ties of minerals. However, CapeVerde has boldly sought in thesky what it doesnt have under-ground. he Cabelica wind-farm project was awarded the2011 Best Renewable Project inAfrica. Cape Verde has alsosigned a memorandum of un-

derstanding with Germany for

the development of furtherwind and solar facilities, withthe aim of attaining 100% ener-gy green status by 2050.

he Government is currentlylooking to access the worldmarkets, especially through theEconomic Community of WestAfrican States. Being a memberof the West African MonetaryUnion would give Cape Verdeaccess to a market of 300 mil-lion consumers, making thecountry far more attractive tothe foreign investors. In 2011Cape Verde became the first Af-rican nation to sign up to theEuropean Unions GSP+ (Gen-eralised Scheme of Preference),a general preferential marketaccess. Te country also enjoystrade preference agreement

with the U.S. and is a memberof the Community of Portu-guese Speaking Countries.

Cape Verde has more people liv-ing outside their own countrythan in it, and their combinedremittances amount to morethan 9% of GDP. he Govern-ment is striving to make greaterpossibilities available to thepeople of Cape Verde, in orderto reverse the tendency andmake the country self-suffi-cient as soon as possible.

IMPORTS EVOLUTION COMPARED TO GDP

Landscape of

Cha das Caldeiras, at

the foot of the volcano,

on Fogo Island.

GDP($million) Imports($million)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2.000

1.800

1.600

1.400

1.200

1.000

800

600

400

200

0

INLAND POPULATION DIASPORA

523.568 834.500

DIASPORA BY COUNTRY

CAPE VERDEinside data

1 U.S. 500.000

2 PORTUGAL 150.000

3 ANGOLA 45.0004 SO TOM AND PRINCIPE 25.000

5 SENEGAL 25.000

6 FRANCE 25.000

7 NETHERLANDS 20.000

8 SPAIN 12.500

9 ITALY 10.000

10 ARGENTINA 8.000

11 LUXEMBOURG 7.000

TOURISTSthousands of people

ACCOMODATIONthousands of nights

REVENUES$million

TOURISM

2012

2011

2010

5343.185

422

4282.704

349

3362.218

276

RibeiraGrande

ILHU BRANCO

ILHU RASO

PORTUGAL

SENEGAL

Santa Maria

ATLANTIC OCEAN

N

LEEWARD ISLANDS

WINDWARD ISLANDS

SANTO ANTO

SO VICENTE

BOA VISTA

MAIO

SANTIAGOFOGO

BRAVA

SALSANTA LUZIA

SO NICOLAU

Sal Rei

Vila do Maio

Praia

Assomada

So FilipeVila Nova

Sintra

Tarrafal

Ribeira Brava

ATLANTICOCEAN

CAPE VERDE

Mindelo

BRAZIL

UNITEDSTATES

EXTERNAL PUBLIC DEBT EVOLUTION COMPARED TO GDP

2010 2011 2012

GDP $millionExternal Public Debt $million

1.734 1.901 1.897

8811.080

1.385

$1 = CVE 80EXCHANGE RATE

Exchange rate on 15/11/2013

cape verdebusiness report


4/9

06| |07

At the end of 2014, six damswill be operational in the

islands of Santiago, SantoAnto and So Nicolau with

a capacity of irrigation ofalmost 500 hectares.

INFRASTRUCTURE

Water for life

17 NEW DAMS WILL SUPPLY THOUSANDS OF FARMERSAND SUPPORT STABLE ARGRICULTURE

Cape Verde is working around irreg-ular natural water supply. Troughthe years cyclical droughts in the

country have caused famine and hard-ship. Unsuitable agricultural methodswere introduced in the 18 thcentury, ag-gravating the problem. Ever since, any-thing water-related takes on a greater sig-

nificance, in a country with no rivers,lakes or any other large bodies of water.

Rainfall occurs only three months everyyear. July, August and September areusually wet months, but occasionally anentire year may pass without any rain atall. When this happens, agricultural ac-tivity and, consequently, the well beingof the countrys inhabitants are endan-gered. Additionally, even in wet monthsthe effects of relatively heavy rain arequite short-lived, as due to the nature ofthe terrain most of the water runs offinto the sea.

From the mid-70s to the mid-90s, thecountry compensated for its scarcity ofwater resources by means of the Frentesde Alta Intensidade de Mo de Obra, la-bour-intensive public works schemeswhich additionally trained and relocatedthousands of unemployed country labour-ers in other sectors of the economy. Nev-

ertheless, the new millennium will requiremore stable long-term solutions.

Te country has been constructing a seriesof major new water infrastructures since2004, as part of the Governments Agricul-tural Water Mobilisation scheme. Poilo,the first of 17 new dams to be in operationby 2017, was built in the heart of Santiago,and holds up to 1.7 million cubic metres ofwater, supplying up to 2,600 families or15,000 inhabitants.

Further improvements have also beenplanned for Poilo. Te installation of solar

and wind-powered pumping stations willbenefit a further 10,000 inhabitants, in-creasing the total of irrigated hectaresfrom 160 to 623.

Reaching four crops per year

Faveta, Salineiro and Saquinho dams inSantiago island are the most recentachievements of the Governments ef-forts. All were inaugurated between Juneand November 2013, and will provide ir-rigation for 187 hectares and thousands ofpeople in the area. Canto Cagarra dam, onSanto Anto, will join them in t he comingmonths, bringing total annual capacityup to 2.3 million cubic metres in a firstphase. hey will irrigate more than 230hectares with a cost of almost $27 million.

Another two dams will also be inaugurat-

ed in 2014: Figueira Gorda on Santiagoand Banca Furada on So Nicolau Island.When operative, Figueira Gorda will bethe biggest dam in the country and bene-fit 480 local farmers.

he Water Mobilisation Programme alsoincludes the construction of new pump-ing stations, reservoirs, distribution net-works, dykes and flood routing. In con-

ju nct ion wit h the new dam s, the seinfrastructures should allow for an uptakeof more than 75 million cubic metres ofrainwater yearly.

Tis will mean that land, which at presentcan only be worked for a few months each

year, will now yield up to four crops an-nually. New plant varieties are also beingcultivated, including some fruit species.Supplying the markets with local prod-ucts also means prices can be controlled,and drip irrigation means enormous sav-ings in water resources.

Another crucial strategy is desalination,which currently provides drinking waterfor more than half of the Cape Verdeanpopulation. In 2012, more than 4 millionsof cubic metres of desalinated water weredistributed in Praia and on So Vicenteand Sal Islands.

Saquinho dam, a new infrastructure

inaugurated on Santiago Island in

November 2013.

OVERVIEW

"We have a strong interestin developing relationswith the Middle East"

participation in the tourismmarket and also in the interna-

tional market. With the clusterof agribusiness, on which weare stubbornly working, withthe mobilisation of water, wealso expect to develop the live-stock and food industries.

Another important pro-

gramme is Casa para todos

(Home for All).

Home for All is an ambitiousprogram, conceived to broad-en access to affordable hous-ing,. In our first phase we arebuilding 8,500 houses. Morethan 6,500 are already builtand we are also establishing aset of financial instruments forthe continuity of this process.And with the sale of the flats atcontrolled costs, we will forman investment fund to buildnew homes.

The 2008 financial crisis has

resulted in a decrease in in-

ternational financing.

What is the impact of this in

terms of financial stress on

Cape Verde?

Te impact has been great, butfortunately we have managedto withstand the crisis despitean increase in unemploymentand some pressure on some so-cial indicators. Even prior tothe classification of Cape Verdeas a middle-income country,we were taking a set of meas-ures to address the substantialreduction of Official Develop-

CAPE VERDE INVESTS IN ITS STRATEGIC GEOGRAPHYAND THE DEVELOPMENT OF ITS INFRASTRUCTURE

TO CONFRONT ITS GROWTH CHALLENGES

The PrimeMinister talks

to South Com.about hisambitious visionfor the countrystransformation.

JOS MARIANEVES

ment Assistance, but we mustmake an effort. Tere is no set-

back in the achievements madein education, health and thefight against poverty. Ofcourse, the big challenge isgrowth, job creation and pov-erty eradication.

The Middle East, unlike the

rest of the world, finds itself

in a situation of excess of

capital and seeks to invest

more in Africa. What is the

extent to which the govern-

ment of Cape Verde directs

its economic diplomacy to-

wards these markets?

We have a strong interest in de-veloping economic and businessrelations with the Middle East.Cape Verde have establishedcontacts; we have begun a pro-cess of accreditation of ambas-sadors in several countries in theMiddle East and we will contin-ue these efforts so that we canarrive at having closer relations

with the Middle East.

You are in your last term,

with two years still ahead.

What are your main objec-

tives for this period?

Our goals are to ensure the sta-bility of economic fundamen-tals, have an environment con-ducive for business, have moreinvestment opportunities herein Cape Verde, lead the countryto growth, create jobs, and havethe conditions to carry out asuccessful post-2015 agenda.

The sea cluster and, in par-

ticular, the construction of a

container terminal in PortoGrande is one of the pillars of

the national strategy. What

do you expect from it?

We would like to become amaritime transportation hub,not only in terms of cargotransportation but also passen-ger. We are building somecruise terminals but we alsowant to have cargo containerterminals. When speaking of adeepwater port we are basicallyreferring to a container plat-form. Te project is movingforward and, whilst the "seacluster" is not limited to thiscontainer platform, this is afundamental cornerstone forthe development of the sector.

An important initiative

of this government is the

water collection programme.

What is its impact?

Water mobilisation is the most

important programme we cur-rently have in progress: theconstruction of dams and res-ervoirs, drilling, water desali-nation or the treatment and col-lection of wastewater. We wantto move millions of cubic me-ters of water to supply to farm-ers. Tis will allow, on the onehand, the public private part-nership of the sector and, on theother, the development of newactivities. Particularly we pointto the processing of agriculturalproducts and ensuring better

We want tobecome a maritimetransportationhub, not only interms of cargotransportation butalso passenger




5/9

|0908|

Looking seaward

PORTO GRANDE, THE FAMED PORT OF SAO VICENTE ISLAND,IS SPEARHEADING THE COUNTRYS TRANSFORMATION

INTO A MARINE HUB

Cape Verdeans see the surroundingocean as a vast economic sourceof wealth. Te sea cluster, super-

vised by the Ministry of Infrastructuresand Marine economy, federates all therelated activities ranging from p orts,fisheries, ship repair, to transport. In re-cent years, Cape Verde has invested inexpanding and modernising seven of thearchipelagos nine ports. Te upgrade of

the ports systems has already reducedoperating costs by up to 70%.

Te cluster has its centre on the island ofSo Vicente. Porto Grande is the largestport in the country and one of the best inthe region in terms of natural conditions.With more than two kilometres of docks,Porto Grande is a major asset to trans-form Cape Verde into a leading shippinghub for the western coast of Africa.

As part of an overall scheme, valued ataround $816 million, the construction ofa container terminal is planned in Porto

Grande, to supply ships operating be-tween Africa, America and Europe. Oc-cupying 19.4 hectares, the new facilitywill handle a flow of 1 million twenty-foot equivalent units each year.

Recently the concession to exploit thenational shipyard Cabnave, servingfleets operating in the international wa-ters, was given to a Chinese operator.Under the deal, Cabnave should repairannually 10 to 15 times more ships t hanat present.

Besides, the Netherlands is funding theconstruction of a cruise terminal in Min-delo. Te project, considered strategic to

increase the country's share of this seg-ment of the tourism market, is estimatedat about $40 million and the Dutch part-ner will provide $13.4 million. he re-maining funding should be achievedthrough public-private partnerships.

Te cruise terminal will have a quay 250metres long and 11 metres deep, andtrain stations and multi-car parks willbe built. For its size, the facility will havecapacity to receive about 95% of the ves-sels on Cape Verdes cruise tourism mar-ket. he strategy is to become a regularstop on the route of the cruises and takea bigger share of this juicy market.

Improvements in Praia

Te port of Praia, the countrys capital,supplies the entire island of Santiago,home to over half of the Cape Verdeanpopulation. Investments here have in-

cluded the construction of a breakwaterto protect the bay from the calema, aheavy swell that rendered half of theports facilities unusable during approx-imately 10 months of the year. he ef-fects of the improvements are alreadybeing felt on the island. Recently, for thefirst time in the history of the port, threemid-sized cruise ships were docked inPorto da Praia at the same time. Te oc-casion also provided ideal conditions totest coordination between the port andthe capital's airport, and over 1,500tourists were moved smoothly in just afew hours.

The Netherlands will fund35% of the constructionof a cruise terminal at theport of Mindelo estimatedat $40 million.

MARITIME ECONOMY MARITIME ECONOMY

International Business Centre of Lazaredeis less than one kilometre from the portand five from the airport.

The cold storage complex and northern

access to Porto Grande are also impor-

tant challenges.

Te cold storage complex is already 25%complete and will be ready in June 2014,with a capacity to store 2,000 tons at

What is the relevance of the sea cluster?Te sea is the most talked about economicpotential of Cape Verde. Fisheries employaround 5,000 people, which means 1% ofthe population of the country. Enapor rep-resents another 1,300 employees, directlyor indirectly. Te cluster has a holistic per-spective and offers unexplored opportuni-ties for investment: scientific research, en-ergy production, water sports We alsostarted work on the development of cruisetourism. Te port of So Vicente now han-dles about 300,000 passengers per year.

What are the strengths of Cape Verde?

We have the deepest port in the entire re-gion, at 16 meters, and a privileged geo-graphical area, with ports and airports at adistance of less than eight kilometres. Te

E

ven though fishing ac-counts for only around1% of the Cape Verdean

GDP, fish and shellfish still ac-count for almost 40% of thecountrys exports and, mostimportantly, are a livelihoodfor many families. Developingthe marine market is key to thefuture welfare of a countrywithout land natural resources.

Instead of limiting its market tolocal fishermen, since 1990Cape Verde secured a stablesource of revenues for thecountry by opening its watersto foreign fleets. he current

agreement with the EU, validuntil August 2014, is worth$581,500 and allows Portu-

guese, Spanish and Frenchfleets to fish for the regionsprized tuna, among other spe-cies. European ships are al-lowed to fish up to 5,000tonnes per year.

wo years ago, with the objec-tive to increase the yield of arti-san fishers, the Governmentinstalled around the islandsmore than one hundred fishaggregating devices (FAD).hese devices tethered to theocean floor act as a mooring for

plankton, a breeding site forsmall fishes that attract in turnlarger fish species. Te positive

results of the system have con-vinced the fishermen, whohave enjoyed bigger catchesand reduced workloads. OnMaio Island, yields have in-creased up to 30% thanks tothe FADs, which also allows lo-cal fishers to operate closer tothe coast. Nevertheless, prob-lems in keeping up with main-tenance are now endangeringthe continuity of a system thatmeasurably improves the qual-ity of life for a large part of thelocal population.

-22C. Te north entrance to Porto Grandeshould be finished in February 2014 andwill provide new services for receiving,storage and delivery of goods: a new su-per-modern structure in 2014-2015.

How will you face these investments?

Nowadays, the ports serve as industrialplatforms. We built the infrastructure andnow it is time for the private sector tocome in and provide the added value:products, services, leisure. Since 2004,Cape Verde has been determined to con-sign all activities. Enapor owns and man-ages the infrastrutures, while private al-ternatives are to be found for the operationof commercial services.

Who would be the ideal partner?

We are looking for a partner with 'know-

how', financial ability and, above all, ca-pacity to catalyse other investors for stim-ulating the development of the port sectorat a much higher rhythm than what wehave seen.

Do you think the Middle East could

become a partner?

Te Middle East has positioned itself as aconnection between Asia and Europe; weare located the same distance between Eu-rope, South America and the UnitedStates. Our strategy is to leverage the sameadvantages as the Emirates for Cape Verdeand we are in the position to do so becausewe offer excellent conditions for businessdevelopment. Our main shortfall will be atthe level of financial products but, in thistoo, they can be partners.

Te cluster has a holisticperspective and offers unexplored

opportunities for business

We built the portinfrastructure; we now

call in the private sectorto provide the added valuein products and services

FRANKLIM SPENCERThe president of ENAPOR explainsto South Com. the new challengesof the ports network, now openfor private investment.

Cruise ship Costa Magica

docking in Porto Grande

while its 3.500 passengers

visit Mindelo. Cabe Verde

received 54 cruise ships

and more than 38.000

passengers in 2013.

Revivingartisan fishing




6/9

10| |11

In 2012, we had two millionpassengers and we will invest

$88 million in our terminals

We built a new passenger terminal inSo Nicolau, to complete our nationalnetwork.

How would you assess the concept of

an aviation hub for western Africa?

Our poets defined the islands as small andlost in the middle of the Atlantic, but theworld today recognises the importance ofthe Cape Verde in the region and its suc-cessful development. Africa is very poorlyserved in terms of aviation; all civil avia-tion international organizations have com-mented on the issue. Te business is inef-ficiently organized so far and here lies anopportunity for us. We belong to the Eco-nomic Community of West African Statesand we have privileged relations with theEuropean Union and the United States.Tere is an enormous business potentialand it is worth betting on.

ASA manages a strategic airspace. How

does it manage this responsibility?

We manage the Europe-South America

corridor that is travelled by over ten mil-lion passengers per year. We were pioneersat implementing the CNS/AM, a new airtraffic control system, in 2004, with suc-cessive upgrades. Te Air France crash in2009 awakened everyone to the issue ofsurveillance. After that, we implementedthe ADS/CPDLC, a system of satellite datacommunication, allowing to control air-planes from origin to destination. Ourmission is to ensure safety, thats whywe say When you travel, we take care ofyou. We invest in new technology, airtraffic controllers and pilot training fora better global security.

Tell me about ASAs contribution to the

growth of tourism in the country.

Until 2005, we had only one internationalairport on Sal Island. We built internationalairports in Praia in 2005, Boa Vista in 2007and So Vicente in 2009. In 2012, we han-dled nearly two million passengers, almost500,000 tourists.

In what ways do you plan to improve

the airports to meet growing de-

mands?

We have projects for the passenger termi-nals at Sal, Boa Vista and Praia airports.We will bring more comfort and beauty,and invest close to $88 million, whichwill be financed by the African Develop-ment Bank.

What are the expectations for the de-

velopment of tourism?

ourism has come to stay. We have goodgovernance, political and social stabilityand no public health risks nor religiousconflicts. It feels like an oasis of safetyhere. Tere is natural beauty and a mildclimate throughout the year. ourism isessentially based on sun and beach, buttheres a growing demand for adventureand hiking in mountainous islands suchas Santo Anto, So Nicolau and Fogo.

Cape Verde is seenas an oasis for the traveller.Our mission is to ensuresafety, thats why we say:

When you travel, we takecare of you

MARIO PAIXOThe President of ASA talks to South Com.about the enormous responsibilityof air control, the enhancementof the airports and the new perspectivesfor civil aviation in Africa.

AIR TRANSPORT

Aviation hubfor Western

Africa

Located in the mid-At-lantic Ocean, the CapeVerde islands are an

hour and a half by air fromSenegal, three and a half hoursfrom Spain or Brazil, and sixand a half hours from the Unit-ed States. Te country now hasambitious plans to convert itsfour international airports intoa civil aviation hub capable ofproviding much needed con-

nections to and within Africa.At present the regional sector isso poorly organised that trav-ellers flying between Africannations are sometimes forcedto stop over in Europe. o makematters worse, a number ofAfrican airlines have beenblacklisted in the EuropeanUnion for not complying withinternational safety standards.

In view of this reality, CapeVerde aims to leverage its privi-leged position to serve flightsbetween West Africa and Eu-rope, and also between Africancountries. Te concept was in-spired by the successful rolethat Dubai provides for air traf-fic in the Middle East and theconstruction of the new Sal Is-land Oceanic Control Centre in2009 is a first step in that direc-tion. Nonetheless, questionsmarks remain. Can a country

operating within such an insu-lar context compete successful-ly at international level? Provenorganizational and operationalcapabilities are just two of theadvantages Cape Verde cancapitalise in order to meet thisambitious goal. Nevertheless,outside funding will also beneeded, and the Cape VerdeanGovernment is currently devel-oping a strong offensive in Eu-rope and the Middle East to at-tract foreign investors.

ASA assigned $55 millionto upgrading existinginfrastructures in theperiod 2009-2014. The

country also continues toinvest in state-of-the-art airtraffic control systems.

Te sky is the limit

AVIATION EXPANSION IS AN IMPORTANT PART OFCAPE VERDES MODERN HISTORY. THE CHALLENGE TODAY

IS TO ACCOMMODATE THE RISE OF MASS TOURISM

Just like the rest of the country, CapeVerdes airports have come a longway. Te first airport was inaugurat-

ed during the Second World War, whenthe country was still a Portuguese colony.Built with Italian funds on the Island ofSal, the small facility initially served as arefuelling station for flights betweenRome and South America. From small be-ginnings, the Cape Verdean aviation sec-tor has grown and adapted to changingcircumstances. Te advent in 1960 of theDC-8-30, a series of aircraft capable ofnon-stop Atlantic crossings, made the re-fuelling scale in Cape Verde suddenly

surperfluous. It was not until the late 80s,with the rise of global tourism, that CapeVerde finally became a destination perse, pushing the Government to investand expand the infrastructures.

Because of the countrys insularity, heremore than anywhere else aviation is both anecessity and a development opportunity.Along with domestic airports on the is-lands of Maio, Fogo and So Nicolau, CapeVerde now boasts four international air-ports, on Sal, Santiago, So Vicente andBoa Vista. Tis last one was practically de-serted until the opening, in 2007, of the in-

ternational terminal. Since then, it becamethe favourite destination for foreigners andthe hotel resorts installed here have creat-ed hundreds of jobs.

Existing infrastructures are evolving tomeet the new challenges. Proof of thetourism success, Lonely Planet, a tourismguides publisher, has ranked Cape Verdeamongst the worlds best destinations for2014. Easing passenger congestion is whatforeign tour operators, the aiports' biggestclients, claim right now for.

Cape Verdes airport management compa-ny, Empresa Nacional de Aeroportos e Se-gurana Area (ASA), has assigned over$55 million to upgrading existing infra-structures in the period 20092014. heinauguration of a new terminal in the smallisland of So Nicolau in 2013 marked thecompletion of the countrys airport net-work. Nevertheless further investment isyet to come, especially on the upgrade ofthe passenger terminals, in order to pro-vide an enhanced experience to travellers.

In spite of the world financial crisis, in thefirst half of 2013 international flights in andout of Cape Verde increased 8.8% over thesame period last year. Te possibility to flydirect to any of the archipelagos four in-ternational airports has undoubtedly con-tributed to this success. However, defi-ciencies in domestic flights connections,

handled exclusively by loss-making na-tional airline ransportes Areos de CaboVerde, are still to be solved.

In addition to passenger services, ASA alsocontinues to invest in state-of-the-art airtraffic control systems and pilot training,to guarantee flight safety. Along with theInternational Air ransport Association,the company has also implemented theiFlex program, which shortens air routes toreduce fuel burn and carbon emissions.With these measures, Cape Verde aims toleverage even further the enormous poten-tial of the aviation sector.

AIR TRANSPORT

Sal airports state-of-the-art air

raffic management system can

determine the position of planes

without using radars.




7/9

|1312|

TOURISM

Island-hoppingin Cape Verde

WITH DESERT MOUNTAINS, CRYSTAL CLEAR WATERS,VOLCANOES, WELCOMING LOCALS AND

AN ENCHANTING PIRATEBEDECKED HISTORY,CAPE VERDE WAS DESTINED FOR TOURISM

Cape Verde is a natural enigma fortourists. Visitors are immediatelystruck by a mystic contrast in land-

scape. he harsh majesty of the islandsmountains is matched large flat expansesof sun-drenched arid land, as if naturewished to assign different moulds to eachof the 'enchanted isles' of the Atlanticwhile designing the archipelago. Unitingthe entire mosaic, the sea, blue and warmall year round, forms the perfect backdropto the white or black coastal sands. Mag-nificent long beaches and clear, calm wa-ters await those who explore the islands.

ourism first came to Cape Verde in the60s, when a Belgian couple, Gaspard Vy-nckier and Marguerite Massart, built thefirst vacation homes on the Island of Sal,then little more than uninhabited desert.Up to then, the island had served only as arefuelling stop for trans-Atlantic flights.Shortly afterwards, South African Airwaysasked the couple to provide improved ac-commodation for its crew members,which is how the Hotel Morabeza, todayone of the most luxurious and welcomingon the archipelago, came into existence.

Santo Anto is the northernmost of the is-ands and the most mountainous. It is also

home to a small spit of land called Ponta doSol, where the sun goes down on Africa.Beyond the horizon, the American conti-nent is a vast mirage. Like this little spot,Cabo Verde hides numerous charmingplaces ready to surprise the visitor.

he islands are marked by their past as aslave trading centre and a headquarters for

infamous pirates, including Francis Drake,the controversial British corsair who terri-fied Spanish fleets in the 16 thcentury. Al-though the clear waters of the archipelagoushered in some of the darkest moments inhistory, Cape Verde now offers an oasis fortravellers. Politically stable and free of reli-gious conflicts, in recent years the islandshave captured a flow of tourists wary ofspending their holidays in North Africa af-ter the events of the Arab Spring.

Dreamlike beaches are not all the islandshas to offer. Activities such as hiking, surf-ing, kite-surfing are a great way to enjoythe country, along with a biodiversity thatattracts researchers from around the globe.he islands also delight the ears, in addi-tion to the eyes, with their music, a blendof Portuguese, African, Brazilian and An-tillian sounds. Food lovers must try thepastry with evil inside, a spicy pastrywith a filing of tuna, onion and tomato.

Ten destinations in one

Visitors to So Vicente will take away thememory of its Creole cosmopolitanism, itsbuoyant cultural life and its welcomingpeople. he singer Cesaria Evora, possiblyCape Verdes most international and belov-ed person, was from here, and every Febru-ary, Mindelo hosts one of the biggest andmost colourful carnivals in the archipelago,

TOURISM

24.3%Tourisms contribution to

the countrys economy in

2012 raised nearly a quarter

of total GDP. Hotel sector

activity in the first trimester

of 2013 increased by 18.5%

over the same period of

previous year"

a truly tropical display ofdancing and partying.

Boa Vista, with kilometresof pristine white-sandbeaches, is the newest ad-dition to the Cape Verdetourism offer. Known asturtle island, its shoresare the main spawningground of the loggerheadsea turtle, which lays itseggs on the beaches of Er-vatao, Curral Velho,Lacaca and Santa Monica.More than 3,000 animals are estimated tovisit the northern part of the island eachyear, making Boa Vista the worlds secondlargest nesting site for these creatures, af-

ter Florida, in the United States.

Te Island of Fogo is home to Cape Verdesmost impressive natural feature, the Pico deFogo volcano, which last erupted in 1995and forced the evacuation of the entire pop-ulation of Ch das Caldeiras, a village stand-ing within the crater. At 2,829 metres high,the peak rises majestically from the 20-kil-ometre long and almost 1,000 metre highsemi-circular rocky ridge that protects thetown. Visitors will also fall in love with theislands coffee and its wine, made with theparticularly tasty local grapes.

Santiago is the largest island and the site ofthe countrys capital, Praia. With more than150,000 inhabitants, Praia is home to al-most one third of the entire population ofthe archipelago. he mountainous islandalso testifies to Cape Verdes historical her-itage, particularly in the old city of RibeiraGrande. Formerly called Cidade Velha, thisis where Cabo Verdes first Catholic church-es were built, as headquarters for the massevangelization of Africa and the Americas.

Windward or leeward, hilly or flat, desert-ed or inhabited, Cape Verdes islands canbe described in many different ways, butthey are united by one common element:they will never cease to captivate visitors.

Te tourist sector is the major provider ofemployment in Cape Verde, and has cre-ated more than 9,000 jobs over the lastfew years. With 534.000 entries in 2012,the tourists outnumbered the local popu-lation for the first time. Tey spent a total$410 million over the 3.2 million nightsenjoyed in the country.

he contribution oftourism to total GDP

jum ped from 15.9% in2010 to 24.3% only twoyears later and in thefirst trimester of 2013hotel sector activity in-creased by 18.5% overthe same period of theprevious year. Accord-ing to the World ourismO r g a ni s a t i o n, Ca peVerde enjoyed the larg-est increase in tourismarrivals in all of Sub-Sa-

haran Africa, an enviable 27%.

Much of Cape Verdes public investmentstrategy is directed at this sector in the

form of new airport terminals and im-provements in cruise traffic handling,with the aim of making the archipelago amore attractive tourist destination. As aresult, in 2013 Cape Verde hopes to wel-come a further 38,000 passengers fromthe 54 liners scheduled to dock at the is-lands ports.

The price of success

However, so much tourist activity also hasits downside. In Sal, the main destinationfor foreigners since the 80s, large hotelsand resorts have taken over the islandscoastline. his is particularly evident inSanta Maria, where tourism clashes withthe local way of life. Some experts believethat irreversible damage has already beendone to the fragile ecosystem by the un-checked construction of hotels and theheavy demands of a growing tourist popu-lation. If tourist numbers continue to in-crease at the current rate, they will soonexceed the number of persons the islandscan ecologically sustain.

Whatever the case, Cape Verde needs tour-ism if it wants to secure the future of the is-lands and ensure the welfare of a societythat has virtually no natural resources be-yond its landscape. Te challenge to CapeVerde is to develop tourism in an environ-mentally friendly and sustainable manner,so that todays bounty is not merely ashort-term bubble. Te solution requires asolid source of long-term revenues and abusiness-model that traces a better futurefor all its inhabitants when what CapeVerde needs is a solid source of long-termrevenues and a business-model that tracesa better future for all its inhabitants.

Splashes of colour

adorn the old colonial

style buildings in

Mindelo, Sao Vicente.

Skimboarder jumps

waves along

Sal Islands

turquoise waters.

Majestic mountains

in Santo Antao island,

are premiere destina-

tions for hikers.

With 534.000 entries in 2012,the tourists outnumberedthe local population for thefirst time, spending a total$410 million.




8/9

cape verdebusiness report|01514|

In 1975, the leaders of thenewly independent CapeVerde found themselves

with empty public coffers andan unemployment rate of over50%. Illiteracy stood at 63%and droughts aggravated an al-ready delicate situation. With-out major resources, the coun-try had to build a society fromthe ground up and survived onnternational aid for decades.

From the beginning, CapeVerde has steadfastly investedn its population, the coun-

trys most valuable resource.Human capital was the onlytool available to compensatefor the archipelagos naturaldeficiencies, and has been thecountrys main focus through-out almost 40 years of inde-pendence. Nowadays, with al-most 15,000 teachers in thecountrys educational system,lliteracy has dropped to 17%

and some 13,000 students areenrolled in the archipelagospublic and private universi-ties. Another 5,000 youngpeople are studying abroad,thanks to university coopera-tion agreements with Portu-gal, Brazil, Cuba, China, Rus-sia and other countries.

Over the past four decades,Cape Verdes leaders havestriven to provide the countrywith a healthcare system thattends to its peoples needs.Child vaccination rates fordiphtheria, whooping coughand tetanus have risen from

23% in the 80s to 90% at pre-sent. Over the same periodmortality in children agedl e s s tha n f i v e y e a r s ha sdropped from 12% to close to2%. Per capita public spend-ing on healthcare has morethan doubled this millenni-

um, from less than $60 in2000 to almost $150 in 2012.

With an unemployment rate of16.8%, the government is alsofighting a war on poverty. Tepoverty rate has more thanhalved from 49% in 1990,while per capita income hasgrown from $1,700 in 2000 toalmost $3,700 at present. Teseadvances go hand-in-handwith government programmesto ensure the welfare of thepopulation, such as the Homefor All project. Conceived togive the poorer classes accessto affordable housing, the planis implemented jointly with ahousing insurance fund, pro-viding surety for those whoneed to take out loans.

hanks to these and otherprogressive social policies,Cape Verde is now a stable,peaceful democracy, anotheradvantage when seeking inter-national partners. Since theoutbreak of the internationalfinancial crisis in 2008 theresan increased pressure to con-trol public expenses, but theunderlying philosophy re-mains the same: In Cape Verde,people come first.

Primary school

students lining up for

class in Cape Verde.

EDUCATION

People come first

EDUCATION, PUBLIC HEALTH CAREAND COMBATING POVERTY HAVE BEEN

PERMANENT PUBLIC PRIORITIES FOR DECADES

HIGHSCHOOL EVOLUTION

Secundary school students (thousands)

1980 1984 1988 1992 1996 2000 2004 2008 2011

100

90

80

70

60

50

40

30

20

10

0



9/9

cape verdebusiness report016|

CAPE VERDE business report

Documents

Transcript of CAPE VERDE business report