Poverty and employment

The development efforts undertaken by Cabo Verde, leading to its reclassification in 2007 as a middle-income country are clear from the marked improvement in the key indicators of the wellbeing of the population. With a human development index of 0.646 in 2014, compared to 0.534 in 2010, Cabo Verde is one of two countries in the subregion (with Ghana) in the medium human development index category. This development performance is reflected in the quality of the livelihoods of the people, compared to other countries in the subregion. Cabo Verde was the first country in the subregion to have achieved Millennium Development Goal 1 on reducing poverty. According to the Instituto Nacional de Estatísticas, the poverty incidence was estimated at 25 per cent in 2011 (compared to 26.6 per cent in 2007 and 49 per cent in 1990), less than half its level for the subregion, estimated at 60 per cent (ECA, 2015). This rate was estimated, in 2011, at 13.2 per cent in the urban areas and 44.3 per cent in the rural areas, reflecting a sharp disparity in the living conditions of households in rural and urban areas. Santa Catarina do Fogo island was identified to be the poorest (59 per cent of poor people), and Sal island, the tourism area, with the least number of poor people (4 per cent).

This major improvement in the living conditions of households was maintained by a buoyant GDP from 1993 to 2008, with an annual average of 7.3 per cent (INS, 2016) and significant investment in human capital (AfDB, 2014). It also stems from a decline in income inequalities, as illustrated by the drop in the Gini index and a sharp rise in individual incomes of the people, as shown by GDP growth per capita during the period 2000-2007 (figure 10). This growth, however, was truncated by the effects of the global economic and financial crises, because of the country’s high dependence on the outside from tourism activities.

Improvement in the level of employment creation was maintained by the cumulative effects of major investments made during the past decade, with the implementation of the public

COUNTRY PROFILE - CABO VERDE

investment programme and by a dynamic private sector, sustained by a boost in credits to the economy and private investment, including the substantial attraction of foreign direct investments. The construction and public works sector was the key beneficiary of these investments, mostly for development of the tourism sector (INE, 2015). In terms of sectoral distribution in 2014, the tertiary sector, with a highly commercial subsector, dominated employment with 65.5 per cent, followed by the secondary sector and the tertiary sector with 17.8 per cent and 16.7 per cent respectively (INE, 2015). The sheer size of the informal sector within the tertiary sector is the reason for its large share in employment, especially in trading activities.

The unemployment rate was 12 per cent in 2014 (BCV, 2015). The rate among young people is quite alarming. According to Instituto Nacional de Estatísticas estimates, the unemployment rate among young people (14-24 years continues to rise – from 34.6 per cent in 2013 to 50.8 per cent in 2014.

4.3 Health

Cabo Verde has made great strides in health, especially in curbing infant and maternal mortality.

The infant mortality rate in 2013 was 21.4 deaths to 1,000 live births, compared to 22.9 in 2010. Neonatal mortality rose from 11.2 deaths per 1,000 live births to 13.4 in 2013, while the mortality rate for under-five children dropped from 26.3 to 23.6 deaths per 1,000 live births during the same period. The maternal mortality rate fell from 49.1 deaths per 100,000 live births in 2010 to 37.9 in 2013 (INE, 2015). While these indicators may be by far the lowest in the subregion, the Government must still make more effort to improve health delivery. In 2013, 7.1 per cent of the national budget was allocated to the health sector, compared to 5.7 per cent in 2010, well below the 15 per cent stipulated by the Abuja Declaration. Moreover, Instituto Nacional de Estatísticas data show that infections and parasites are some of the main Figure 9: Poverty rate versus GDP per capita and Gini index

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

GINI index & poverty rate

Per capita GDP growth

Year

GINI Index Poverity Rate Per capital GDP Growth (%)

Sources: Instituto Nacional de Estatísticas, statistics directory, 2015; World Bank, Global development indicators, 2016, and the Ministry of Finance and Planning, growth and poverty reduction strategy (GPRSP, 2012-2016)

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causes of death among children under age one. The Government must therefore improve the water supply and sanitation system, and educate people in public health

4.4 Education

Cabo Verde achieved all the Millennium Development Goal targets for education before the 2015 deadline. These achievements were made in formal and informal education. This was as a result of the free and compulsory universal primary education instituted by the Government (AfDB and others, 2014). Instituto Nacional de Estatísticas data show in 2014, that only 8.3 per cent of the population declared not to have been to school, compared to 12.9 per cent in 2010. The rates for women was 11.4 per cent and for men, 5.1 per cent in 2014. According to Instituto Nacional de Estatísticas 2015 annual statistics, the net enrolment rate for primary was 92.9 per cent in 2014 (91.3 per cent for girls and 94.5 per cent for boys); the secondary enrolment rate was 70.1 per cent (74.8 per cent for girls and 65.5 per cent for boys). In the informal sector, Cabo Verde ranks fifth in Africa (after Libya, South Africa, Botswana and Mauritius) in literacy rates. The literacy rate among young people aged 15-24 was estimated in 2014 at 97.8 per cent (98.3 per cent for girls and 97.4 per cent for boys), compared to 96.3 per cent in 2010.

In 2013, nearly 15 per cent of total government expenditure was allocated to the education sector, a level comparable to that of the rest of Africa, with the exception of North Africa, which posted 16 per cent (WDI, 2016). In terms of the quality of the education system, while progress was made in primary, the high dropout rate among the 15-24 age group is quite alarming. The rate of survival in the fifth year was 90 per cent in 2010, compared to an average 73.8 per cent for the ECOWAS subregion (UNICEF, 2014). On the other hand, for secondary and higher education, the dropout rate was relatively high. In 2014, it was 40.7 for 15-19 year olds and 54.3 per cent for 20-24 year olds (INE, 2015).

Figure 10: Neonatal, infant, under-five and maternal mortality rates

35.5 Source: Instituto Nacional de Estatísticas, statistics yearbook 2015.

COUNTRY PROFILE - CABO VERDE