Country FilesWestCountry Profile 2014: CAPE VERDE

Sat,18Nov2017

Posted on Saturday, 08 February 2014 20:02

Country Profile 2014: CAPE VERDE

Sharing Europe’s doldrums

Cape Verde has hosted a divided government since elections in August 2011. President Jorge Carlos Fonseca represents the Movimento para a Democracia (MpD), while Prime Minister José Maria Neves is from the Partido Africano da Independência de Cabo Verde (PAICV) and is the head of government. The PAICV has 37 out of the 72 seats in the national assembly, but there have not been many cases where the MpD and PAICV have had to work together on laws that require a two-thirds majority.

 

 

TABLE OF CONTENTS:

TOP CAPE VERDEAN COMPANIES

TOP CAPE VERDEAN BANKS

 

ar-infographie-cape-verde-2014 Sharing Europe’s doldrums

Prime Minister Neves says he has no intention of running in the 2016 election

The national debt was due to rise to 95% of GDP by the end of 2013

Cape Verde has hosted a divided government since elections in August 2011. President Jorge Carlos Fonseca represents the Movimento para a Democracia (MpD), while Prime Minister José Maria Neves is from the Partido Africano da Independência de Cabo Verde (PAICV) and is the head of government. The PAICV has 37 out of the 72 seats in the national assembly, but there have not been many cases where the MpD and PAICV have had to work together on laws that require a two-thirds majority. The MpD has called for more consensus and cooperation between the parties, and PAICV secretary general Júlio Correia said in October 2013 that consensus would be necessary if constitutional and other reforms are to be achieved in 2014.

The most important issues of the political debate into 2014 related to the impact of the country’s weak economic performance. The national budget for 2013 introduced changes to the tax regime, with a value-added tax increase from 6% to 15% in the tourism sector and tax hikes on telecommunications, electricity, water and public transport.

LABOUR RIGHTS

The government is now preparing changes to the labour law in order to increase working hours and make it easier for companies to fire workers, which unions have opposed. They have instead proposed creating unemployment insurance. According to the Instituto Nacional de Estatística (INE), the percentage of people unemployed rose from 12.7% in 2011 to 16.8% in 2012.

The two major parties held their conventions in 2013. For the ruling PAICV, there were no major changes in leadership. Neves announced, however, that he would no longer be a candidate for the prime minister’s post in elections planned for 2016. The PAICV will choose a new leader and prime ministerial candidate either in 2014 or 2015. Felisberto Vieira, Janira Hopffer Almada and Cristina Fontes Lima are among the politicians seeking to replace Neves. In the opposition, long-serving leader Carlos Veiga left the presidency of the MpD and handed over to Praia’s mayor Ulisses Correiae Silva. He won the internal elections unopposed in June.

Cape Verde has recently received attention for its role in the international drug trade. The country’s courts found nine of 15 defendants guilty in the Lancha Voadora (Flying Boat) case–which is related to drug trafficking and money laundering that involved public figures and several prominent companies in 2011 – in late June 2013, but several of them have since appealed their convictions. In May 2013, the government asked the European Union (EU) to extend its special relationship to the field of security.

Neves’s government has developed a strategy of “economic diplomacy” that he hopes will attract more international investment, but that will not help as much in the short term. Weakness in the eurozone has led to lower remittances from many Cape Verdeans working in Europe.

HOPE FOR TOURISM SECTOR

Although the weakness of EU economies has contributed to slow growth, the government expected tourist arrivals to rise slightly to 514,000 in 2013. Investors are still showing confidence in the tourism sector, and construction on the country’s first Hilton hotel began in June 2013 on Sal Island. Work on a new terminal at Praia’s Nelson Mandela International Airport is expected to begin in 2014.

In April, the rating agency Fitch down graded the country’s local currency default rating from BB- to B+, saying that gross domestic product (GDP) growth was significantly weaker than expected. The INE released revised statistics for the 2007/10 period that showed GDP growth was not as high as the government had reported. Banco de Cabo Verde revealed that national debt should reach 95% of GDP by the end of 2013, which the government downplayed.

Fitch and the central bank are not alone in seeing a weakened economy. The International Monetary Fund (IMF) has advised the Cape Verdean government to improve significantly its tax revenue collection system and to avoid investments that do not contribute to the improvement of the productive sector. The IMF expected the budget for 2014 to include reduced spending,but the draft 2014 budget introduced in October 2013 included a fiscal deficit of 7.4% of GDP.

 

TOP CAPE VERDEAN COMPANIES

No companies from Cape Verde featured in The Africa's Report's Top 500 Companies in Africa 2013.

 

TOP CAPE VERDEAN BANKS

Rank 2012Rank 2011Bank nameCountryTotal assetsNet interest incomeLoansDeposits
156142BANCO COMERCIAL DO ATLNTICO*CAPE VERDE778,40244,722477,389660,139
 


 

 



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