Pandemic reduced 30% of Cape Verdean companies turnover

In 2020, the first year of the economic crisis caused by the covid-19 pandemic, the number of active companies in Cape Verde fell by only 0.5% compared to 2019, to 11,115, employing 71,371 workers, down 0.7% in one year.

The small decrease in the number of active companies and workers in service is explained by the various business protection and support measures adopted since April 2020 by the Cape Verdean government, including the simplified ‘lay-off’ regime.

However, the turnover generated by these companies was CVE 237 billion (US$2.1 billion), a drop of 29.9% compared to CVE 338 billion in 2019.

In the history made available by Cape Verde’s National Institute of Statistics (INE), there is no record of a lower turnover, the lowest being in 2016: CVE 262 billion.

On the islands of Sal and Boa Vista, which concentrate tourism activity in the archipelago — which in turn represents 25% of Cape Verde’s Gross Domestic Product (GDP) and employment — the reduction in turnover of companies from 2019 to 2020 was, respectively, 48.1% and 49.3%.

The year 2020 in Cape Verde, due to the effects of international travel restrictions on the industry, ended with an economic recession of 14.8% and an unemployment rate growing from 11.3% in 2019 to 14.5%.

Cape Verdean hotels received just over 207,000 guests in 2020, essentially in the first quarter, while a record 819,308 were recorded in 2019 and nearly 766,000 the previous year.

The archipelago is still facing a deep economic and financial crisis stemming from the sharp drop in tourism demand since March 2020 due to the covid-19 pandemic.

After the historic economic recession in 2020, equivalent to 14.8% of GDP, this was followed by a 7% growth in 2021 driven by the recovery of tourism demand.

For 2022, due to the economic consequences of the war in Ukraine, namely escalating prices, the Cape Verdean government lowered the growth forecast from 6% to 4%.

With information from Lusa