Applauding Cape Verde's graduation to middle income status, the Board of Directors of the African Development Bank Group (AfDB) on Wednesday, April 23, 2014 approved a new Country Strategy Paper designed to support the Government in its efforts to lay the foundations for more inclusive and green growth.
Cape Verde's Country Strategy Paper 2014-2018 seeks to tackle the key challenges of inclusiveness rooted in the country's geography (isolated and poorly linked islands with unequal development status) and gender disparities that are further compounded by high vulnerability to climate change which affects sustainable development.
The Republic of Cape Verde is composed of 10 volcanic islands and eight islets located in the central Atlantic Ocean, some 450 kilometres west of Senegal. It has a land area of 4,033 square kilometres, and 700,000 square kilometres Economic Exclusive Zone (EEZ). The population is estimated at 500,000, 55.7% of whom are located on the main Santiago Island.
Thus, under the strategy, the Bank's support would include infrastructure development (maritime transport and renewable energy), and improved governance. Specifically, these fall under two pillars: (i) Enhancing and Diversifying Infrastructure for Sustainable Development; and (ii) Strengthening Economic Governance in the Public and Private Sectors.
Pillar 1 will involve investment in sea ports' construction and rehabilitation, with a view to consolidating territorial integration and facilitating movement of goods and people and positioning the country as a regional hub for transshipment. This will also help improve Cape Verde's maritime connection to the West African mainland and strengthen its cooperation with the Economic Community of West African States (ECOWAS). Also, accessibility and connectivity to the larger ECOWAS markets will enable the country to address its slow growth and diversify its productive base. The Bank will also strengthen the electricity production and network, as well as support investments in renewable energy in order to promote green growth and reduce the cost of doing business in the country.
Under Pillar 2 the Bank will support measures to enhance the country's business and investment environment, stimulating private-sector competitiveness including small and medium enterprises, as well as support economic diversification. In order to cope with chronic fiscal deficits and public debt consolidation and sustainability issues and to improve the quality of infrastructure and services, the Bank will promote:
(i) Public investment program prioritization and rationalization;
(ii) Improvement and modernization of the management and operations of state-owned enterprises (SOEs). The Bank will assist the country to better leverage private-sector funding as well as innovative financing mechanisms and instruments, including mobilizing resources through PPPs. The Bank will also contribute to strengthening the national monitoring and evaluation system with an emphasis on gender, and promote policy actions that directly seek to create a better gender balance or mitigate gender disparities.
Cape Verde's successful socio-economic development during the last decade is widely recognized. Despite its vulnerability due to its isolated and fragmented territory, small population, dry Sahel climate, and scarce natural resources, the country recorded one of the most impressive socio-economic performances in Africa and graduated from the United Nations' Least-Developed Country (LDC) status in 2007.
