Promex - Centre for Tourism, Investment and Export Promotion of Cape Verde - July 20021 INVESTMENT...

Promex - Centre for Tourism, Investment and Export Promotion of Cape Verde - July 2002 1

INVESTMENT IN

CAPE VERDE


COUNTRY PROFILE

CAPE VERDE ISLANDS


COUNTRY PROFILE

Cape Cape VVerde:erde: an archipelago of the West Coast of an archipelago of the West Coast of Africa Africa -- 1010 islands; islands;

Land Area:Land Area: 1.557 sq miles ( 1.557 sq miles (4.033 sq Km4.033 sq Km);); Population:Population: 434.812 ( 434.812 (June 2000 censusJune 2000 census);); Main Towns: Main Towns: Praia (Praia (capitalcapital) and Mindelo) and Mindelo Language: Language: Portuguese, CreolePortuguese, Creole Time: Time: 1 hour Behind GMT1 hour Behind GMT


COUNTRY PROFILE

Republic of Cape Verde since July 5Republic of Cape Verde since July 5thth, 1975;, 1975; Legislative Branch:Legislative Branch: Unicameral Parliament Unicameral Parliament

(National Assembly);(National Assembly); President:President: Elected Head-of-State for 5 year term; Elected Head-of-State for 5 year term; Executive:Executive: Prime Ministry and Cabinet; Prime Ministry and Cabinet; Judiciary System:Judiciary System: Supreme Court of Justice and Supreme Court of Justice and

courts of first appeal; Court of Audit, Fiscal and courts of first appeal; Court of Audit, Fiscal and Customs Courts;Customs Courts;


COUNTRY PROFILE

Fiscal YearFiscal Year: January 1: January 1stst – December 31 – December 31thth

Currency:Currency: Cape Verde escudo (CVE); Cape Verde escudo (CVE);

Exchange rate Exchange rate (2001)(2001)

1 1 EUROEURO = 12 = 1233,,52 CVE52 CVE

11USDUSD = 11 = 1122,27,27 CVE CVE(source: BCV)(source: BCV)


COUNTRY PROFILE

Beautiful sceneries, impressive landscapes, as Beautiful sceneries, impressive landscapes, as valleys, green mountainsvalleys, green mountains.. Santo Antão, São Nicolau, Santo Antão, São Nicolau, Brava and Santiago island are the destination for Brava and Santiago island are the destination for those who love trekking, hiking those who love trekking, hiking expeditionexpedition and other and other adventures .adventures .

Golden sand beaches with crystal clear water perfect Golden sand beaches with crystal clear water perfect for those who love nautical sports, scuba diving, for those who love nautical sports, scuba diving, fishing (Sal, Boavista and Maio islands).fishing (Sal, Boavista and Maio islands).

Tourism Product


COUNTRY PROFILE

Tourism Product

Strong culture, handicraft, rich gastronomy, music Strong culture, handicraft, rich gastronomy, music festivals, religious activities in all islands.festivals, religious activities in all islands.


INVEST IN CAPE VERDE


POLITICAL CONDITIONS

Political SystemPolitical System: Democratic (: Democratic (mmulti-party) system ulti-party) system of government (universal suffrage); proportional of government (universal suffrage); proportional representation through electoral districts;representation through electoral districts;

Consolidated Democracy:Consolidated Democracy: mmulti-party elections ulti-party elections have been held on a regular basis since 1991. Cape have been held on a regular basis since 1991. Cape Verde already has experienced two peaceful political Verde already has experienced two peaceful political transfer of power (in 1991 and 2001).transfer of power (in 1991 and 2001).


ECONOMIC CONDITIONS

Economic System:Economic System: Private Sector oriented Private Sector oriented;;

Inflation RateInflation Rate: 3,: 3,55% (2001)% (2001);;

Major trading PartnersMajor trading Partners : EU (Portugal, France, : EU (Portugal, France,

Holland, Germany, Spain and Italy);Holland, Germany, Spain and Italy);

Excellent relationship with the World Excellent relationship with the World BBank and ank and

IMFIMF..


ECONOMIC CONDITIONS

Natural Resources - Natural Resources - Marine resources, salt, Marine resources, salt, limestone, wind and solar energylimestone, wind and solar energy

Industry: Industry: Fish and sea products, salt,construction, Fish and sea products, salt,construction, building materials, ship repair, clothing, shoes, building materials, ship repair, clothing, shoes, furniture, metal products, beveragesfurniture, metal products, beverages


ECONOMIC CONDITIONS

Exports:Exports: electronic components, shoes,electronic components, shoes, fish,fish, pharmaceutical products, clothing, services.pharmaceutical products, clothing, services.


INFRASTRUCTURAL CONDITIONS One international airport with daily connections to One international airport with daily connections to

Europe and the USAEurope and the USA Latest, competitive communication technology Latest, competitive communication technology

(including optical fibbers linking all the islands)(including optical fibbers linking all the islands) Availability of two industrial parksAvailability of two industrial parks Fish processing and storage space availableFish processing and storage space available Availability of shipping related services as naval Availability of shipping related services as naval

repair and ports with modern facilitiesrepair and ports with modern facilities


ECOLOGICAL CONDITIONS

Sahelo – Sahelo – Saharan climatic Zone: Dry and tropical, Saharan climatic Zone: Dry and tropical, rainfall is erratic and there are long periods without rainfall is erratic and there are long periods without rain, average temperature 20rain, average temperature 20 –– 2727 º ºCC

Volcano in Fogo: Volcano in Fogo: last eruption in 1995, altitude last eruption in 1995, altitude 2829 meters 2829 meters

High environmental protection standardsHigh environmental protection standards


REASONS TO INVEST IN CAPE VERDE Optimal geographic locationOptimal geographic location: Halfway between the : Halfway between the

Americas, South Africa and Europe.Americas, South Africa and Europe. Access to more than 500 million consumers: Access to more than 500 million consumers:

Preferred access of national products in some Preferred access of national products in some regions: West Africa (ECOWAS) Europe (Cotounou regions: West Africa (ECOWAS) Europe (Cotounou agreement); United States (AGOA,SGP)agreement); United States (AGOA,SGP)

privileged relationships with African Portuguese privileged relationships with African Portuguese speaking countries (Angola, Mozambique)speaking countries (Angola, Mozambique)


REASONS TO INVEST IN CAPE VERDE Fiscal Incentives: Fiscal Incentives:

• Tax exemption on dividends during the firsTax exemption on dividends during the firstt 5 5

years of operationyears of operation

• Tax exemption on dividends when reinvestedTax exemption on dividends when reinvested

• Tax exemption on amortization and interestsTax exemption on amortization and interests


REASONS TO INVEST IN CAPE VERDE Guaranties to the Investors: Guaranties to the Investors:

• Protection of investor’s rights and property;Protection of investor’s rights and property;• Free repatriation of dividends and income;Free repatriation of dividends and income;• Direct operation of foreign currency accounts;Direct operation of foreign currency accounts;• Hiring of foreign workers without restrictions; Hiring of foreign workers without restrictions;

Fiscal, customs, financial and administrative tax Fiscal, customs, financial and administrative tax incentives to exportationincentives to exportationss


INVESTMENT OPPORTUNITIES

Tourism: Tourism: • Resort Hotels, Executive Hotels, Sports fishing Resort Hotels, Executive Hotels, Sports fishing

and diving, yacht marinas, windsurf, rock-and diving, yacht marinas, windsurf, rock-climbing, golf courses,leisure spaces with climbing, golf courses,leisure spaces with restaurants, time-sharing complex and “chalets” restaurants, time-sharing complex and “chalets”



Industry: Industry: • Export oriented industries (textile and apparel); Export oriented industries (textile and apparel);

assembling industries; traditional food products assembling industries; traditional food products for the immigrant communities, marine salt for the immigrant communities, marine salt industry, ornamental stones industry, porcelain industry, ornamental stones industry, porcelain production, carpentry/joiner, packing, furniture production, carpentry/joiner, packing, furniture etcetc

Agriculture: Agriculture: floriculture, fruits, decoration plantsfloriculture, fruits, decoration plants



Services: Services: registry of ships, duty-free zones;registry of ships, duty-free zones; Teleport Teleport (data processing, telecommunications)(data processing, telecommunications) Banking off shoreBanking off shore International shippingInternational shipping Fishery and Marine resources - Fishery and Marine resources - industrial fishing, industrial fishing,

fish processing, aquaculture;fish processing, aquaculture; Cultural Industry – Cultural Industry – music, artmusic, artss & craft & craftss, others, others



PrivatizationPrivatization

ENAPOR - ENAPOR - PortsPorts CABNAVE – CABNAVE – Ship repair Services Ship repair Services EMPA - EMPA - Trading Trading EMPROFAC – EMPROFAC – Import and distribution of Import and distribution of

pharmaceutical productspharmaceutical products TACV - TACV - Airline TransportationAirline Transportation INTERBASE – INTERBASE – Seafood ConservationSeafood Conservation


GOVERNMENT GUARANTEESGOVERNMENT GUARANTEES

No discrimination equal rights for all;No discrimination equal rights for all; Protection of investor´s rights and property ;Protection of investor´s rights and property ; Free expatriation of dividends and income;Free expatriation of dividends and income; Foreign currency accountsForeign currency accounts Hiring of foreign workers, protecting their rights Hiring of foreign workers, protecting their rights

and guaranteesand guarantees


SPECIAL CONDITIONS FOR SPECIAL CONDITIONS FOR EXTERNAL INVESTORSEXTERNAL INVESTORS

Settlement Agreements – Settlement Agreements – Exceptional conditions Exceptional conditions for activities with strategic interestfor activities with strategic interest


LIMITS TO INCENTIVESLIMITS TO INCENTIVES

Do not apply to:Do not apply to: External investment and economic activities mainly External investment and economic activities mainly

oriented to internal market.oriented to internal market.

EExternal investment applicable to the financial xternal investment applicable to the financial sector, once this sector is regulated by a specific lawsector, once this sector is regulated by a specific law


CONDITIONING FACTORSCONDITIONING FACTORS

High cost of factorsHigh cost of factors

Lack of professional training;Lack of professional training;

Limited internal market.Limited internal market.


EXTERNAL INVESTMENT TREND (‘000 USD)

020.00040.00060.00080.000100.000120.000140.000160.000180.000

Industry Tourism Others

19941995199619971998199920002001


ORIGIN OF CAPITAL year 2001

Mozambique0,49%

Germany1,99%

Cape Verde0,31%

Norway5,72%

Canary Island40,36%

Italy23,48%

Portugal27,64%


EXTERNAL INVESTMENTSEXTERNAL INVESTMENTS AUTHORISED PROJECTS AUTHORISED PROJECTS Year 2001($USD)Year 2001($USD)

Source: PROMEX

0

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

12.000.000

14.000.000

Industry Agriculture and

Fishery

Services Tourism


GROWTH OF LODGING GROWTH OF LODGING INFRAESTRUCTURESINFRAESTRUCTURES

Fonte: INE/PROMEX

0

1.000

2.000

3.000

4.000

5.000

1998 1999 2000 2001

Rooms

Beds


ECONOMIC INDICATORS

GDP – 3,5%GDP – 3,5% (2001) (2001)

Unemployment Rate – 1Unemployment Rate – 155,,99%% (4º trim. 2001)(4º trim. 2001)

Inflation– Inflation– 33,,77%% ((20012001) )

(source: BCV)(source: BCV)


ECONOMIC INDICATORS

Tourism Indicators (2001)Tourism Indicators (2001)

Incomes – 39,5%Incomes – 39,5%

Contribution to GDP – 9,5%Contribution to GDP – 9,5%

Contribution to Balance of Payments – 41,1%Contribution to Balance of Payments – 41,1%



ECONOMIC INDICATORS

Tourism Demand Tourism Demand (structure in % 2001)(structure in % 2001)

Italy – 35,9%Italy – 35,9% Portugal - 24,9%Portugal - 24,9% Germany – 13,9%Germany – 13,9% France – 8,8%France – 8,8% Holland e Belgium – 1,7%Holland e Belgium – 1,7% Other countries – 14,8%Other countries – 14,8%



PERSPECTIVES

MACROECONOMIC STABILITY

PRIVATE SECTOR SUPPORT

REFORMS

• TRAINNING

• PUBLIC SECTOR


Ladies and Gentlemen

Thank You

for Your Attention

Promex - Centre for Tourism, Investment and Export Promotion of Cape Verde - July 20021 INVESTMENT...

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