Cape Verde

Cabo Verde benefits from reduced tariffs granted under the GSP+ since January 2012 and has successfully maintained ratification of the 27 core international conventions on human and labour rights, environmental standards and good governance as required by GSP+. Cabo Verde is a lower-middle income economy with a per-capita income of $3.950 in 2022. In recent years, the island state experienced rapid economic transformation and solid economic growth, mainly driven by private consumption, exports and the service sector. The EU is the main trading partner for Cabo Verde and cumulative imports amounted to about €70 million in 2022, of which about 86% made use of GSP+ duties.

What is the GSP+?

The GSP+ is a special incentive arrangement for Sustainable Development and Good Governance that supports vulnerable developing countries. Next to fulfilling the eligibility requirements of the Standard GSP, GSP+ countries are required to ratify 27 international conventions on human rights, labour rights, environmental protection and climate change, and good governance. In order to ensure effective implementation of the conventions as well as compliance with reporting obligations, the EU engages in monitoring activities with the GSP+ countries. GSP+ beneficiaries can benefit from complete duty suspensions for products across approximately 66% of all EU tariff lines.

Cape Verde flag

At a glance: GSP+ beneficiaries' preferential imports to the EU

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593,15 K

Population

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Parliamentary Republic

Government

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17.10%

GDP Growth

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2.00%

Inflation

money

$ 2,23 B

GDP

92 -

Freedomhouse index

- ^

ITUC Global Rights Index

41.9 ^

Environmental Performance Index

Facts about Cabo Verde's economy

Island Economy

Cabo Verde is a small island economy with limited natural resources and arable land which explains the country's high dependence on the service sector.

Export Products

Cabo Verde's main export products are prepared or frozen fish (e.g. tuna, mackerel, skipjack, or squid) and other products made of fish like flours, meals, or pellets.

Trade Partners

Cabo Verde is highly dependent on the EU both as a destination for exports and as a source for imports. Total trade with the EU accounts for 69% of total trade, leaving the country vulnerable to economic fluctuations on the European market. Other international partners are Argentina, China and the US. Their trade shares, however, are below 10%.

Economic Structure

Cabo Verde's GDP is dependent on the service sector, particularly the tourism industry, which contributes more than 57% to the GDP. Industry (17%) and agriculture (4%) only contribute a smaller share. With almost 12% of the GDP, remittances play an important role for the West African country.

Usage of GSP+ Preferences

Cabo Verde uses trade preferences granted under the GSP+ for 75% of its total exports. The preference utilisation rate, which represents the ratio of preferential imports to GSP+ eligible imports, currently stands at over 93%.

Trade with the EU

Total trade with Cabo Verde summed up to €584 million in 2021. The EU is by far the most important trading partner and accounted for a share of over 60%. More than 80% of products from Cabo Verde are exported to the European market.

Cabo Verde and the EU (2022)

Imports from Cabo Verde by product section

Imports from Cabo Verde over time (in € m)

CABO VERDE AND THE EU’s GSP

Economic Impact

Cabo Verde's economy concentrates on a small number of products which is reflected in the country's diversification score of 97.1% (2019). The minimum diversification threshold currently stands at 75%. In addition, Cabo Verde can be considered a vulnerable economy. The vulnerability score stood at 0.1 in 2019 with the threshold standing at 7.4%.

93%

A large share of Cabo Verde's current exports to the EU are eligible for tariff reductions under the GSP. In fact, Cabo Verde is the GSP+ country with the largest share of eligible imports.

86%

Cabo Verde has a very high preference utilisation rate of 86% and, thus, makes significant use of its preferential access to the European market.

Preference utilisation and export diversification

Cabo Verde's imports to the EU

Preference Utilisation vs. total eligible imports

Cabo Verde's preference utilisation rate was well above 90% for most of the regarded period. This makes the country one of the highest users of GSP+ preferences and more than 90% of all imports from Cabo Verde benefit from preferential GSP+ duties. However, in 2022 the utilisation rate dropped by 8% in comparison to 2020. The most important product sections - fish and fish products - make particular high use of the preferential access to the European market. This is also valid for the apparel and footwear sector in which more than 99% of imports make use of the preferences granted under GSP+. While overall imports from Cabo Verde have increased constantly in recent years, there have been fluctuations in GSP eligible imports. This can mainly be explained by a decline in GSP eligible imports in the fish and crustaceans section (01b).

The largest product sections under the GSP+

These statistics indicate that the usage of preferences is highly concentrated in the fishery sector. Currently, about 84% of all preferential imports from Cabo Verde are fish products followed by a minor share of textile and footwear products. Between 2016 and 2018, total imports of processed fish products have increased by more than 60% which indicates that Cabo Verde makes an effort to tap higher value chains. However, since 2020 the overall GSP utilisation dropped by 10%. Overall, further diversification remains a challenge given the geographic and structural restrictions of Cabo Verde.

SUSTAINABLE DEVELOPMENT AND MONITORING PRIORITIES

The COVID-19 pandemic hit the Republic of Cabo Verde (Cabo Verde) severely. The small archipelagic country is highly dependent on the tourism sector, and in 2020 the pandemic led to the worst drop in GDP in its history. The crisis reversed the substantial progress achieved on important economic and social development indicators and severely impacted the country’s public finances, placing Cabo Verde among the most indebted countries in the world. During the pandemic, Cabo Verde ensured a successful health policy and vaccination campaign. It also designed and timely implemented efficient measures to preserve the country’s economic and social fabric, which were adopted in close cooperation with international partners.

Monitoring priorities during the reporting period 2024-2025

Anti-discrimination legislation

Protection against child labour and exploitation

Collective bargaining

Labour non-discrimination

Equal remuneration

Combating drug trafficking

Implementation of environmental conventions

Combating corruption and money laundering

For the reporting period 2024-2025, the EU has focussed its monitoring activities on eight priority areas. Despite the difficult context, Cabo Verde maintained the effective implementation of international conventions and good rates in human rights and corruption perception indexes. Elections (local, parliamentary, and presidential) between October 2020 and October 2021 fully complied with international standards, including on transparency and peaceful acceptance of results.

EU-Cabo Verde Bilateral Development Assistance

DG INTPA

Access all info about EU-Cabo Verde relations on the International Partnerships website: https://international-partnerships.ec.europa.eu/countries/cabo-verde_en

Opportunities in Cape Verde

  • Further opportunities in the fisheries sector, mainly in tuna and lobster fishing as well as in through addressing logistical bottlenecks
  • Cabo Verde aims at supplying 100% of its electricity from renewable sources by 2025 according to the "sustainable energy for all" agenda which requires substantial investments in respective technologies
  • The strong tourism sector brings opportunities to related sectors, particularly for the local food supply chains and handicrafts sectors
  • Stable political environment

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