Cabo Verde: FDI in H1 up 70 pct on year; investors from Portugal drive growth

Foreign Direct Investment (FDI) in Cabo Verde in the first half of this year was up over 70% from the same period of 2020, at €45.5 million, with the growth driven by investment from Portugal, according to official figures analysed on Thursday by Lusa. 

A statistical report from the Bank of Cabo Verde (BCV), released this month, states that the archipelago between January and June captured over 5.042 billion escudos (€45.5 million) in foreign investment – about half of it in the tourism sector – against just under 2.927 billion escudos in the same period of 2020, when the effects of the crisis caused by the Covid-19 pandemic were first being felt. 

FDI in Cape Verde, which also includes the taking of minority stakes, reinvested profits and other capital, was again led in the first half of 2021 by investors based in Portugal, with 1.246 million escudos, also mostly in tourism.

Portugal is followed by Spain, which in the first half of this year invested 566 million escudos, in tourism, industry and construction, and then Italy, from which new investment in the same period totalled 119 million escudos, according to the BCV data. 

Overall, FDI in Cabo Verde last year fell 32.5% from 2019, to about 7.080 billion escudos, largely due to the pandemic.

Portugal also led in FDI in Cabo Verde in 2020, going from negative figures (that is, net divestment) in 2019 to 1.478 billion last year, of which 730.8 million had been in tourism and tourism property, according to the previous report from the BCV.

In 2019 FDI from Spain had soared 39% year-on-year to over 1.249 billion, while that from Angola slipped to 242.1 million and that from China fell to 215.8 million.

Portugal and Spain had led in terms of FDI in Cabo Verde for several years.

According to data from Portugal’s Agency for Investment and Foreign Trade, AICEP, the Portuguese community in Cape Verde is active in several sectors, including food and beverage distribution, hotels and restaurants, construction and metal construction.

Spanish investments in the archipelago are mainly in the fishing and hotel sectors.