Cabo Verde : from island vulnerability to economic resilience

By Bylkiss Mentari

At independence in 1975, Cabo Verde faced multiple challenges: geographic isolation, limited natural resources, and an economy dominated by subsistence agriculture. With one of the lowest GNI per capita in Africa, the archipelago seemed destined for economic marginalization. However, political stability and a series of ambitious economic reforms allowed the country to gradually diversify its activities and build a more resilient economy.

“An increase of 16.8% in gross national income per capita between 2023 and 2024 reflects the country’s economic evolution. As of today, July 1, 2025, Cabo Verde will be classified as an upper-middle-income country according to World Bank criteria,” the institution stated in a press release.

Tourism: the engine of growth

In 2024, Cabo Verde’s GDP reached $2.77 billion, with an annual growth rate of 7.3%. Tourism, the main growth driver, increased by 16.5% and now accounts for nearly 25% of GDP and 55% of exports, according to Coface. The archipelago successfully attracted European markets, particularly Portugal, France, and the UK, and the arrival of low-cost airlines further boosted its appeal.

“Cabo Verde’s recovery is a testament to the resilience of its people and institutions. But to transform this rebound into lasting and inclusive prosperity, bold reforms are needed – particularly to improve SOE governance, support women’s economic participation, and diversify the economy,” said Indira Campos, World Bank Resident Representative for Cabo Verde.

Reforms and economic diversification

Economic reforms have also played a crucial role. In 2023, Cabo Verde strengthened its development plan (PEDS-II) through a partnership with the United Nations to support the post-COVID-19 recovery. These initiatives helped reduce unemployment to 10.3% and poverty to 15%. At the same time, the country encouraged economic diversification: the secondary sector accounts for about 19% of GDP, mainly in food processing and energy production, while the primary sector remains limited to 5%.

Prudent public debt management has strengthened investor confidence. In 2024, debt stood at 109.6% of GDP, controlled through careful fiscal policies, enabling access to international funding for development projects. Inflation was contained at 1%, its lowest level in years, contributing to a decline in poverty to 14.4% ($3.65/day, 2017 PPP).

Promoting inclusive growth

Despite these advances, Cabo Verde still faces challenges. Dependence on tourism exposes the economy to global fluctuations and health crises. The World Bank report also emphasizes the importance of reducing gender gaps in the labor market:

“Closing gender gaps in employment and earnings could boost GDP by up to 12.2% in the long-term. By aligning reform efforts with inclusive policies, Cabo Verde has a unique opportunity to strengthen resilience, empower more citizens – especially women – and build a more sustainable and equitable future,” said Anna Carlotta Massingue, Senior Country Economist.

Recommendations include expanding access to childcare, promoting flexible working hours, enhancing women’s skills in STEM, and tackling workplace discrimination.

An inspiring example

Cabo Verde’s trajectory shows that stable governance, coherent economic reforms, and strategic openness can transform a small island nation into a model of resilience and development in Africa. Its success offers inspiration to other countries facing similar constraints, proving that resilience, inclusion, and diversification are essential levers for sustainable growth.

Key figures:

• Real GDP growth in 2024: 7.3%
• GNI per capita: +16.8% (2023–2024)
• Inflation: 1%
• Unemployment: 10.3%
• Poverty rate: 14.4%
• Tourism share of GDP: 25%