Download 2 trade and investment regime

yes no Was this document useful for you?
   Thank you for your participation!

* Your assessment is very important for improving the work of artificial intelligence, which forms the content of this project

WT/TPR/S/322/Rev.1 • Cabo Verde
-9the business environment (sections 2.1 and 2.4). The majority of the programme expenditures
have been allocated to public investments in seven priority sectors ("clusters").8
1.6. Agriculture is one of the priority sectors. In Cabo Verde, farming is mainly for subsistence
and marketed agricultural production contributes only about 7% to GDP (Table A1.1). Most food is
imported. Roughly one-quarter of public investment expenditures are for agriculture and water
management to promote, amongst other things, a shift from rain-fed agriculture of basic staples
such as maize and beans, towards irrigated agriculture and higher-value crops such as fruit and
vegetables.9 The fisheries sector contributes less than 1% to GDP but makes an important
contribution to export earnings. The manufacturing industry caters mainly for the small domestic
1.7. In the energy sector, investments have been aimed at bottlenecks in electricity-generating
capacity and the distribution network by the state-owned enterprise ELECTRA. Energy policy is
directed at further promoting renewable energy (20% of electricity generation in 2013), to reduce
Cabo Verde's dependence on imported fuel. Regulatory reforms (including the tariff mechanism)
address the loss-making performance of ELECTRA (section 4.3). State-owned enterprises play an
important role in the Cabo Verdean economy (section 3.4.6).
1.8. The tourism sector contributed about 4.5% to GDP10 and 7.3% of direct employment, and
generated receipts of around €300 million in 2014. FDI in the tourism industry is supported by tax
holidays and other incentives. There are currently around 230 hotel establishments in Cabo Verde.
1.9. Maritime and air transport are priority sectors because of their linkages to tourism, and the
dispersed population. Over the last ten years, the road, port and airport infrastructure has been
modernized.11 The Government's strategy is to promote Cabo Verde as a hub between Africa,
Europe and the Americas. The port management is under restructuring from a service port to a
landlord port operated by the state-owned ENAPOR (section In air transport, a major
challenge is to enhance the efficiency and reduce the fiscal burden of the loss-making national
carrier Transportes Aéreos de Cabo Verde (TACV).
1.10. According to the annual enterprise survey of the National Statistics Institute (INE),
9,049 businesses were active in Cabo Verde in 2013, employing some 50,975 workers in total
(78% of the registered businesses and 91% of the employees were on the islands of Santiago,
São Vicente, Sal, and Boa Vista). INE surveys also indicate that enterprises with formal accounting
practices represent no more than 35% of the total number of registered businesses, yet these
enterprises provide 78% of all formal private sector employment and represent 96% of the total
business volume. Cabo Verdean enterprises are mainly engaged in wholesale and retail trade or
auto and motorcycle repair (47%), hotels and restaurants (15%), and processing
industries (10%).12
1.11. Despite considerable progress over the past two decades, unemployment remains
persistently high at 15.8% in 2014. Reforms to deregulate Cabo Verde's labour market, including
the passage of a new Labour Code, are pending.13 Cabo Verde introduced a minimum wage on
1 January 2014 (CVEsc 11,000 per month).14
1.12. The budget deficit and public debt have increased significantly since 2009, reflecting in part
the Public Investment Programme (Table A1.1). The investment programme has been financed
primarily with foreign debt, taking advantage of the last window of opportunity to secure highly
concessional long-term loans following Cabo Verde's graduation from LDC status. Total public debt
The seven clusters are agriculture, tourism, maritime economy (including fisheries), information and
communication technologies, creative economy (music and other cultural activities), financial services, and air
transport services.
World Bank (2014b), p. 22.
This estimate, which appears to be on the low side, is under review by the National Institute of
Statistics (INE).
World Bank (2014b), p. 44.
ASemana online information. Viewed at:¬ak=1.
13 The Labour Code currently in force is Legislative-Decree No. 5/2007, amended by Legislative-Decree
No. 5/2010.
Decree-Law No. 6/2014 of 29 January 2014.