Realizing Dreams, Transforming Lives: Cabo Verde’s Ambitious Plan to Break the Cycle of Extreme Poverty by 2026

The country has long been seen as an example of democracy and champion for poverty reduction in Africa. The proportion of its population living in extreme poverty (with less than USD 1.90 per day) fell from 22.6% in 2015 to 11.1% in 2022 due to greater investment in social protection policies. Despite the progress, Cabo Verde’s poverty reduction trajectory was interrupted by the economic recession resulting from the COVID-19 pandemic.

In response, the country has developed a National Strategy for the Eradication of Extreme Poverty (ENEPE) 2022-2026 that provides a blueprint to address the root causes of extreme poverty and empower communities across the archipelago. Achieving this ambitious goal requires a comprehensive approach:  building sustainable infrastructure, providing education and vocational training, supporting local businesses, and ensuring critical livelihood assistance for the most vulnerable.

The World Bank is actively collaborating with Cabo Verde on these fronts. Below are four examples – among many others – of how we are working together to help the nation achieve its poverty alleviation objectives and foster sustainable and equitable growth for its people.

From Isolation to Prosperity: A Road Project Unlocks Opportunities for Ribeira dos Picos 

In our¹ last story in 2021, the residents of Riberia dos Picos were hopeful that road rehabilitation efforts supported by the Transport Sector Reform Project would provide new opportunities for their community. With the works complete, we returned to hear how the road has changed lives.

Long-term resident Gualdino Tavares vividly recalls the challenges the community faced. The old road was impassable during the rainy season, hindering transport of agricultural products to national markets. Education and healthcare also suffered, requiring residents to climb the mountain to take children and pick them up from school, or carry sick community members on their backs to a doctor.

The new road is a game-changer, reducing travel time from an hour to 15 to 20 minutes. “This community went from one of the most isolated, to one of the most connected” says José Varela, a civil engineer who worked on the project. “Thanks to the new road, Ribeira dos Picos can supply markets on multiple islands and farmers can sell their products year-round”.

The road has opened doors to education too. Gualdino's seven children have pursued higher education and meaningful careers, taking advantage of the improved accessibility. One of his sons established a company that markets the community's products, boosting income and prosperity.

With the new road comes newfound hope for the future. “We are already mobilizing our children to take responsibility for this road, so that there will be a better economy later on,” says Gualdino.

Empowering Small Businesses for Job Creation and Growth

Amilcar Rodrigues, once unemployed, borrowed $45 from his sister to start selling coconut water on the streets of Santa Cruz. Today, he's a thriving businessman known as the "Coconut King.” “Now I own my own shop, and I’ve been able to expand beyond coconuts to selling fruits and vegetables,” says Amilcar.

His transformation was made possible by the $25 million Access to Finance for Micro, Small, and Medium-Sized Enterprises (MSMEs) Project. Through bank guarantees, credit information systems improvement, and technical assistance targeted at MSMEs, the project supports entrepreneurs like Amilcar.

Similarly, Keven Gonçalves, a former university teacher, established "Afreecana," Cabo Verde's first artisanal brewery with a focus on showcasing local fruits, flowers, and spices. “The business support and loan provided by the project has allowed me to expand production. I now employ 10 youth,” Keven explains with pride.

Small business owners like Amilcar and Keven form 98% of private firms in Cabo Verde and employ 40% of the workforce. However, they face credit access challenges due to high collateral requirements from banks. To address this, the World Bank is helping to increase availability of finance. As of today, tthe MSME project has granted close to 2200 credit guarantees, with women-led businesses accounting for 46% of the recipients.

Eradicating Extreme Poverty Through Productive Social Inclusion

Andresa Tavares, a 45-year-old "mother-courage," supports her six children through her agri-business in Ribeira do Picos valley, cultivating papaya, strawberries, and bananas on a 500 square meter plot and selling the produce locally. Her income provides her family with a dignified life.

In 2018, Andresa's life changed when she received support from a World Bank-funded productive inclusion program. After enrolling in the social register, she was invited to participate in a training course that empowered her to set up her business. Alongside a water storage tank for irrigation, she received monthly cash transfers of 5,500 CVE (around $50). "Thanks to this money I was able to send my children to school and develop my business," she says. 

Andresa is not alone. Over 150,000 people, 87% of them women, representing 28,000 poor households have improved their living conditions through the social inclusion program. Since 2020, 86.6% of the poorest households on the Social Registry in group 1 have been assisted through regular two-year cash transfers or an emergency modality to cope with the economic impacts of the COVID-19 pandemic. In addition, 44.4% of households in group 2 have been assisted through the emergency modality.

Social protection is a central pillar of Cabo Verde’s development strategy to combat extreme poverty. The results of the productiveinclusion program have led to its institutionalization, with plans to expand coverage nationwide.

The program aims to assist an additional 7,000 households to reach every extremely poor household by 2026 signaling a determined step towards eradicating extreme poverty from the archipelago.

Unlocking Cabo Verde’s Potential Through Education and Skills Development

“The training gave me confidence and courage to open my own salon,” says Patricia Monteiro, a 29-year-old hairdresser and mother of three. “I have more income to benefit my children, especially in terms of schooling and their well-being.”

Patricia is one of the 855 women beneficiaries of the Skills and Education Enhancement Project. Through a scholarship program, she trained to be an esthetician and now owns her own salon in Assomada, a small town of 14,000 inhabitants.

Like her, 2167 young people aged 18 to-30 have also benefited from the project. With $2 million in financing, the project has provided participants with grants and scholarships to pursue their dreams and contribute to the country’s development.

While Cabo Verde has made significant progress in expanding access to education – achieving nearly universal access to primary education – learning outcomes remain low and skills development opportunities often do not meet the needs of the economy. A high number of students leave school before graduation, entering the job market without sufficient qualifications.

In response, the Skills and Education Enhancement Project aims to strengthen foundational skills and tackle rising youth unemployment. It has met the goals for general employability (70%) and gender equality with women accounting for 54% of beneficiaries. Through the project, Cabo Verde has fostered a diverse range of skills among its people to prepare them for the future.

“My life is better,” says Patricia. “When you have your own business, you earn more money. I want to expand to have a bigger network of salons in Assomada, Praia, and who knows, even in Europe!”

People First

Cabo Verde’s vision is one of equitably shared economic growth that transcends territorial inequalities. Inclusive growth is being promoted by enabling the transition, formalization, and access to credit for micro and small businesses; supporting households through essential safety nets to ensure that no citizen falls below the extreme poverty line; and supporting training measures and investing in universal education.

It is clear from the voices of the beneficiaries in these stories that Cabo Verde’s journey to poverty eradication lies in putting its people first and enabling them to live fulfilled, productive, and self-sufficient lives. By focusing on sustainable infrastructure, education, support for local businesses, and livelihood assistance, the nation is laying the groundwork for a more prosperous and equitable society.

According to the latest estimates, extreme poverty currently affects 13.1% of the population. As the clock ticks towards 2026, the world eagerly anticipates witnessing Cabo Verde's transformation where every citizen can thrive, opportunities are abundant, and extreme poverty becomes a thing of the past. Through every step of the way, the World Bank stands ready to help the country enact its vision and set an example for other countries in the region and beyond.

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¹ During a retreat in May 2023, external affairs colleagues from the Western and Central Africa regional team conducted site visits to learn more about how these projects are transforming lives in Cabo Verde.