AfDB Unveils Cabo Verde Report 2025, Urging Capital Optimization for Growth

The launch event, held in Praia and online on 30 July 2025, brought together top-level stakeholders from government, private sector, academia, and the international development community.

The African Development Bank Group (AfDB) has launched the Cabo Verde Country Focus Report 2025, offering a detailed roadmap for accelerating national development by optimizing capital mobilization, improving investment efficiency, and fostering inclusive, sustainable growth. The launch event, held in Praia and online on 30 July 2025, brought together top-level stakeholders from government, private sector, academia, and the international development community.

A Blueprint for Cabo Verde’s Economic Transformation

The new report provides an in-depth look at Cabo Verde’s economic recovery following the pandemic shock, highlighting the country’s impressive 7.3% real GDP growth in 2024, fueled primarily by a robust rebound in tourism and services. Economic projections remain positive, with GDP growth expected at 5.3% in 2025 and 4.9% in 2026.

Key macroeconomic indicators underscore the progress made:

• Inflation fell from 3.7% in 2023 to just 1.0% in 2024, signaling price stability.

• Public debt declined significantly from 144% of GDP in 2021 to 107.7% in 2024.

• Current account deficit narrowed to 0.9% of GDP, reflecting improved trade and investment balances.

• Foreign reserves climbed to $815.9 million, covering 7.1 months of imports.

These figures reflect Cabo Verde’s continued efforts to maintain fiscal prudence while investing in long-term resilience.

Strategic Priorities Through 2030

The report estimates that Cabo Verde will need to mobilize $163 million annually through 2030 (or 7.3% of its 2024 GDP) to meet structural transformation goals. Priority investment areas include:

• Infrastructure development: $95 million/year

• Energy systems modernization: $33 million/year

These investments are critical for enhancing connectivity, powering industry, and improving public services across the archipelago.

Strong Foreign Investment and Remittances

The report highlights key inflows that have supported Cabo Verde’s external balance:

• Foreign Direct Investment (FDI) reached $430.4 million in 2023.

• Remittances totaled $305.4 million, providing steady foreign exchange and household support.

With plans to secure $2.3 billion in climate finance by 2030, including a $160.2 million debt-for-climate swap with Portugal, Cabo Verde is leveraging innovative financing tools to support its climate resilience agenda.

Launch Event: Policy Dialogue and Strategic Vision

During the launch, Vice Prime Minister and Finance Minister Olavo Correia underscored the need for agility in multilateral project implementation, calling for faster disbursement cycles and more impactful development outcomes.

“We need to fast-track project cycles of multilateral agencies, including the African Development Bank, to achieve faster results and impact on people's lives,” Correia stated.

The event featured a high-level panel discussion with:

• José Barreto, Rector, Cabo Verde University

• Jailson Oliveira, President, Cabo Verde Investment Agency

• Teresa Henriques, Vice-Governor, Central Bank of Cabo Verde

• Eugênio Moeda, Representative, Procapital Fund

Felisberto Mateus, AfDB Country Economist, presented the key findings, followed by Joseph Ribeiro, AfDB Deputy Regional Director, who highlighted digital transformation as a powerful lever for governance and private sector growth.

Cabo Verde’s Digital and Governance Strengths

The report praises Cabo Verde’s progress on digital governance, including:

• E-procurement platforms

• Digital case management systems

These tools have enhanced transparency and efficiency in public administration. Cabo Verde also ranks 3rd out of 54 African countries on the Mo Ibrahim Governance Index, underscoring its reputation for good governance and policy discipline.

Human Capital and Private Sector Potential

Cabo Verde boasts:

• 91% adult literacy

• 96.4% primary school enrollment

• Over 6% of GDP invested in education

Despite these achievements, youth unemployment remains high at 23.9%, underscoring the need to align education and training with labor market demands.

The private sector, comprising over 51,000 registered enterprises, accounts for 47.2% of total employment. A new National Strategy for Private Sector Development is under preparation, aimed at improving access to credit, fostering value-added industries, and scaling up SMEs.

Key Policy Recommendations

To capitalize on current momentum, the AfDB recommends:

• Strengthening tax compliance and domestic revenue mobilization.

• Promoting value-added sectors, especially in fisheries and agriculture.

• Improving access to finance for SMEs and startups.

• Investing in vocational and technical education tailored to future workforce needs.

• Enhancing climate resilience through sustainable financing mechanisms.

A Model for Small Island Developing States

The Cabo Verde Country Focus Report 2025 mirrors the analytical framework of the AfDB’s flagship African Economic Outlook, offering country-specific insights to inform evidence-based policymaking. With its clear roadmap, the report serves not only as a guide for national planning but also as a model for other Small Island Developing States (SIDS) facing similar structural and geographic challenges.

By unlocking capital, strengthening institutions, and fostering innovation, Cabo Verde is poised to transition from recovery to transformation—anchored in resilience, sustainability, and inclusive growth.