CAPE VERDE: Cape Verde seeks investment to take it to the next level
Thomas Cromwell

Sam Vaknin

A small archipelago of islands the size of Rhode Island, located some 300 miles west of Senegal, Cape Verde was uninhabited until the 15th century, when the Portuguese began to settle there. Its location off the coast of Africa made it an ideal place for refueling and transshipment, and it became the first base for the African slave trade with Europe and America. Today, its great location is a plus for more legitimate shipping activities, and for long-haul flights to and from southern Africa needing a place to refuel. Not surprisingly, the 415,000 island natives are a mixture of Portuguese and African stock.

With only 10 percent of the land arable, and the archipelago often hit by crippling droughts, Cape Verdeans have often struggled to survive, and emigration over the years has resulted in a larger portion of the population living abroad than on the islands.

But, as ambassador to Washington Jose Brito pointed out to DiplomaticTraffic in a recent interview, Cape Verde has emerged as a model of relative success in a continent too often associated with failure.

For one, democracy works very well there. Proof of this came in the 2001 presidential elections, when the victor won by a mere 12 votes! There were no riots or other manifestations of instability. The country is also virtually free of corruption and has one of the highest human indicators in Africa.

Second, the economy has steadily been developed to the point that per capita GDP, a mere $200 at independence in 1975, now stands at $1,400. Ambassador Brito says it has achieved this through good governance and investment in its people. The service sector accounts for 60 percent of GDP, which is high for a country that has depended primarily on agriculture and fishing for its income.

Cape Verde’s good governance and disciplined economy enabled it to be the first to put in a request to the Millennium Challenge Corporation, the Bush administration’s program to reward qualified countries with additional economic support. It received $73 million to support projects to increase agricultural production, in particular through the development of micro-irrigation schemes.

The ambassador points out that 70 percent of rainfall runs into the sea and that developing agriculture depends on capturing as much of the rainfall as possible and using it for irrigation. This is especially important when you consider that Cape Verde has had only two years of good rainfall in the last ten. What’s more, this year it was one of the African countries beset by locusts.

Already, the country produces all its market garden needs, but it still has to import grains and other food products.

However, ultimately, Ambassador Brito says, Cape Verde’s greatest development potential lies in its strategic location. It wants to become a major shipping and air hub, both as a gateway to Africa and as a crossing point for trade across the Atlantic. Companies in countries like Brazil and the United States can use Cape Verde to reach markets in Europe and Africa, while European and African companies can trade with each other and across the Atlantic, through Cape Verde.

The country has a good airport with a long runway, as well as sea ports. Its road system is in good condition and its telephone system is plugged into one of the main fiber-optic lines linking Africa to Europe. Its islands are also linked together with fiber-optic cable. But, Brito says, it needs about $300 million to upgrade infrastructure further.

One area it wants to develop is tourism. Currently there are some 60,000 tourists that visit each year, mainly from Europe. And Cape Verde has a lot that is of interest to show visitors, including striking diversity among its islands. Also, it is known internationally for its unique music and other cultural offerings.

The ambassador says his country is making efforts to mobilize the large expatriate community. Next April, Washington will be the venue for a gathering of Cape Verdeans from around the world. Some 1000 participants are expected. The main theme will be how they can plug into the development of Cape Verde today.

Ambassador Brito says he hopes this event will help put his country on the map, at least a little. He calls Cape Verde an “unknown country.” He sees something of a problem in his country having been successful. He says he is told that Cape Verde is “too rich now’” that it is “taking off and no longer will be qualified for aid.” However, when a plane takes off it needs more fuel, not less, he points out. The country hopes that it can get that fuel through attracting private investment.

He admits that financial services in Cape Verde are “very weak” right now, but says a package will be adopted by the parliament to improve the financial sector and attract investors to it.

But Cape Verde is not concerned with nation-building, as are so many African states. The ambassador points out that it was a nation before it became a state, and that it is now engaged in building its institutions.

Nevertheless, Cape Verde wants to break free of African stereotypes of failure, of the view that African states cannot succeed. It has come a long way in convincing skeptics that it can succeed, and all the indicators point to its continued growth in all key areas of importance to its future as a nation.