Cabo Verde — a small island economy subject to a fragile ecological system, natural hazards and the looming threat of climate change — can best safeguard and extend its social development progress by integrating it growth into a trade-based economy that respects the ecological boundaries of its islands.

Given its small domestic market size and structural trade deficit that marks the country’s external trade, expansion of exports, on both the intensive and extensive margins, will play a vital role.

In this regard, the African Continental Free Trade Area (AfCFTA) offers unique opportunities, particularly since Cabo Verde’s trade with the African region, especially ECOWAS, is very modest.

Additionally, global supply chains are experiencing headwinds following the Covid-19 pandemic, the ongoing war in Ukraine and the Middle East, and rising geopolitical tensions between the United States of America and China.

This report examines the economic and ecological challenges facing Cabo Verde in increasing goods exports, particularly from small- and medium-sized enterprises (SMEs) to the Africa region.

It analyzes the country’s dependence on tourism and fish (tuna) exports, highlighting the vulnerability of these sectors to a fragile environment, climate change and global economic shocks.

The report also explores the potential for expanding exports to other African countries through regional value chains, as well as developing a sustainable Blue Economy that leverages the country’s marine resources while protecting the environment and strengthening trade with other African countries.

To support these efforts, the report proposes a Blue Economy Entrepreneurial Ecosystem (BEE), a framework for supporting SMEs in Cabo Verde, and recommends specific policies for promoting sustainable development and economic diversification in a regional context.

Report by the United Nations Conference on Trade & Development