The grass is greener in Cape Verde

Recent positive figures from the Heritage Foundation and the Wall Street Journal's Index of Economic Freedom have revealed that the Cape Verde's economy is heading in the right direction...

The archipelago is now the 77th freest economy in the world and ranked in the top ten when compared with its fellow 45 sub-Saharan nations.

And there has been further good news for island paradise- The World Bank's political risk insurance arm - the Multilateral Investment Guarantee Agency (MIGA) - has announced a new agreement with the African Development Corporation (ACD). The deal means $150 million (£103.3 million) will be invested into small businesses in the sub-Saharan region to ensure it survives the current economic downturn.

Unprecedented move

Under the terms of the contract, the $150 million promised by Miga is a maximum aggregate liability for future guarantees against problems such as war and civil disturbance, expropriation and transfer restriction.

An unprecedented move by the two organisations, the political risk coverage will be used by the ACD to boost its planned small-scale investments in the sub-Saharan region. Businesses in the real estate, information technology, banking, agriculture, telecommunications and service industries will be included in the deal.

This cash injection may encourage potential Cape Verde property investors, particularly as the prospects for the country was outlined by Dirk Harbecke, the chief executive officer of the ADC. "We believe there is significant high-growth potential in sub-Saharan Africa and we are in this for the long term," he said.

Furthermore, Mr Harbecke outlined the expertise the ADC will bring to the region's small business projects, stating: "Transferring technical expertise and best practices in management and corporate governance to our investee projects is a fundamental aspect of our mission."

Innovation and growth

And Hal Bosher, an underwriter for Miga, further highlighted the positive effect the deal will bring, remarking: "ADC's value-added is that they invest substantial know-how together with capital. These are the types of investments that will help drive innovation and growth."

Competitiveness and growth are already part of ongoing projects on Cape Verde that have received support from the World Bank. In August 2006 the bank had approved 21 initiatives for the archipelago worth a total of $237.9 million, with $207 million already having been disbursed.

Such figures suggest that Cape Verde could certainly be well situated to ride the economic storm out better than most.

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