Between 2004 and 2007, Cape Verde had an average GDP growth of 7% and inflation was 6.8% in 2008. The country managed to control its budget deficit (1.2% of GDP in 2008) and debt (41.5% of GDP for external debt and 15.8% for domestic debt in 2008). The country’s drivers of growth include the tourism industry, its investment rate which rose to 48% of GDP in 2008, remittances from its Diaspora (it is estimated that over one million Cape Verdeans live abroad), Foreign Direct Investment (FDI) and Official Development Assistance( ODA).
Even after taking a hit from the global crisis, remittances amounted to 132 million euros ($172 million) in 2009, having averaged 12.3 percent of GDP between 1999-2008, according to the AfDB.
Tourism has just overtaken remittances as the biggest contributor to the economy at around 20 percent of GDP: “This is an important shift.”
“Here is evidence that no matter how bad the initial conditions, with good governance, solid institutions, and a peaceful political and social climate, take-off is possible,” Donald Kaberuka, AfDB group president, said during a visit.