Posted on Monday, 23 November 2015 10:00

Cabo Verde Country Profile 2015: Election debate heats up

By The Africa Report

altCabo Verde's political parties are preparing for national elections in 2016.

Economic management is the main topic of debate as the ruling party is liberalising labour laws and facing strikes. The government's debt levels are rising and economic growth has slowed rapidly since 2011.

The Partido Africano da Independência de Cabo Verde (PAICV) took 51% of the vote in the last legislative elections in 2011, so the opposition Movimento para a Democracia (MpD) is looking to score points ahead of the polls.

Late 2014 brought the end to a political era with the retirement of Prime Minister José Maria Neves of the PAICV. The party was set to hold leadership elections in December 2014.

The three main candidates in the race to replace Neves are youth and employment minister Janira Hopffer Almada, health minister Cristina Fontes Lima and parliamentary leader Felisberto Viera. The party will seek to forge unity after the leadership election in order to face the MpD in 2016.

Attracting investment

The opposition MpD, headed by Ulisses Correia e Silva, already has the leadership that will represent the party in the 2016 elections. The leader of the centre-right party says that its priority is job creation, attracting private investment and generating more revenue from tourism. He wants to decentralise and reform state expenditure and taxation, with a hallmark policy of eliminating taxes on savings and investment.

The reforms of the leftist PAICV in 2014 were not popular. Prime Minister Neves started the year with the announcement that the government would slow down its investment in order to reduce spending.

altAll political parties agreed in August 2014 that unemployment, estimated at about 16%, is the most pressing challenge that the country faces. Unions started the year protesting against labour law reforms that make it easier to sack workers.

Another area where the government has faced difficulties is in improvements to the management of state-owned enterprises, including electricity and water company Electra, the TACV airline and port company ENAPOR.

The government was due to produce a report on a programme of privatisation but has yet to do so. The donors that provide budget support – including the African Development Bank, World Bank, EU, Spain, Luxembourg and Portugal – are concerned that the public debt might increase to up to 108% of gross domestic product by 2016.

In an attempt to stimulate the economy, in July the central bank announced a decrease in the main interest rate from 4.25% to 3.75%.

Beaches, spa resorts

Tourism is a major economic sector, and actors in the industry have been discussing how the country's performance can be improved. After holding a tourism workshop late in the year, the government is planning to launch a national tourism council to promote the country and coordinate plans for the industry.

In the second trimester of 2014, tourist arrivals rose to 110,991 – up by 4,606 from the same period in 2013. In October, Meliá Hotels International opened the country's largest tourist resort. At a cost of €120m ($151m), the complex on the island of Sal has the capacity to host more than 3,000 tourists and is expected to create up to 1,000 jobs.

Cabo Verde's economy relies heavily on the EU, and the government is continuing to improve its relations with the region. In 2014, the government signed agreements on facilitating the issuance of visas and on the readmission of the illegal immigrants from EU countries.

Foreign policy is often a point of contention between President Jorge Carlos Fonseca of the MpD and Prime Minister Neves of the PAICV. Following a long and slow negotiation process, Praia and Brussels agreed a new deal for the fishing sector in 2014.

The accord that came into force in September 2014 allows 71 European vessels to fish in exchange for €550,000 ($693,000) per year in the first two years and €500,000 for each of the following two years.

Prime Minister Neves said he was disappointed at the low fees agreed, but that they represented a €365,000 increase over the total of the previous deal.

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