Owing to strong political institutions and reform-driven growth, Cape Verde is one of few African countries that has gained relative stability in recent years despite limited resources.
The island country is progressing adequately against its Millennium Development Goals and is poised to achieve most targets by 2015. Poverty levels have declined from 37 percent in 2000 to 27 percent in 2010. Largely resource-deficient, Cape Verde’s economy is driven mainly by tourism, transport and remittances. Owing to a high volume of migrants to the United States and Europe, overseas remittances are estimated to account for 9 percent of Cape Verde’sgross domestic product.
Despite Cape Verde’s notable performance, several factors continue to restrain its growth. Scarce resources, harsh climate conditions and insufficient exploitable terrains have limited the country’s industrial base and revenue generating options. Further, the country’s insular topography have made transport and energy infrastructure problematic and costly to maintain.
The island country’s reliance on tourism and remittances has also had a negative impact on its economic growth. Because of the global financial downturn, tourism revenues and remittance flows to Cape Verde have been declining. These conditions have greatly undermined prospects for Cape Verde’s sustained growth beyond 2013, according to World Bank projections. The country’s economic growth has already slowed from 5 percent in 2011 to 4.3 percent in 2012.