Spotlight on Cape Verde

Cape Verde, touted by many to be the next foreign investment property hotspot; enjoying fine weather year round, similar to the Mediterranean, prices and values are rising rapidly in the north Atlantic, west African archipelago according to Macanthony Realty. With direct flights from Britain due to start next month, developers and estate agents are "piling into the islands in force," according to Peter Conradi.

Political Stability

Applauded by the "international community" as "one of Africa's most stable democratic governments," in the international struggle against terrorism, Cape Verde's now finds itself a strategic player. According to the country's prime minister José Maria Pereira Neves:

the State of Cape Verde is a strategic partner in the struggle to guarantee security and stability in the West African region. The contribution of Cape Verde to the preservation and defence of world peace, particularly the security of the Atlantic is becoming ever more important. In June of this year, my Government was applauded for its role in hosting Steadfast Jaguar '06, the first NATO training exercise conducted in the African continent.

And in another controversial decision, PM Neves technically suspended Cape Verde's membership in the Economic Community Of West African States (ECOWAS), in an apparent move to forge closer ties with Europe; the main issue, illegal immigration. Although Cape Verde citizens aren't usually the malefactors, the archipelago is known to develop as one of the main departure points for the dangerous boat rides to the Canary Islands, off the coast of Spain.

Economic Growth

With a relatively impressive 5.5% GDP growth, Cape Verde does suffer from a poor natural resource base, according to the World Factbook. Serious water shortage and cycles of long-term drought are infrastructural issues that the Factbook highlight, which may impede economic development and growth. The economy is service-oriented, accounting for 66% of GDP. Nearly 70% of the country's 420,000 people live in rural areas. Yet agriculture only accounts 12% of its GDP.
Prime Minister Neves acknowledges that Cape Verde is "obliged to import as much as 85% of our food, as a result of continuous cycles of drought. We are doing our best as a people to adapt to a more competitive world and to develop our private sector. Yet, foreign direct investment (FDI) is still limited and not as responsive to our economic transformation agenda as we hoped." The Factbook reveals that fishing mostly lobster and tuna, is not "fully exploited" resulting in a "high trade deficit" for the country, financed mainly by foreign aid and remittances from emigrants.

The economic progress Cape Verde has made as a result of stringent financial management, sound economic policies, and zero corruption ironically may affect the country's eligibility for continued high level of development assistance. For example, Cape Verde is not eligible for the recent programs for debt relief decided by the G8 because we have always honored and serviced our national debts. Because we honor our commitments, Cape Verde is now compelled to spend more on servicing past debts than it does on education or health.
The trend to reduce development assistance to Cape Verde at the very moment when we need more and better targeted resources to help us confront new challenges will send a wrong message for the countries that are governing justly, investing in their people and following the rules. Yes, we are committed to freeing ourselves from foreign assistance but we will only achieve this with continuous support and targeted investments that will allow us to build the socio-economic infrastructure needed to achieve our vision for transformation.
[Neves]

All things considered, Cape Verde's growth and stability is relatively impressive for a West African nation. Coupled with the good weather, and one appreciates why so many people have their eyes on the country. We would advise the government and people of Cape Verde to borrow a page from Dubai's development strategy and to make sure that the local populous are allowed to participate in the developmental progress. Notwithstanding, serious property investors perhaps needs to pay close attention to Cape Verde as it appears as though big things are about to happen. For a look at Cape Verde development opportunities, vist Nubricks.