From luxury resorts to eco-lodges – toward a diversified tourism sector in Cabo Verde

Cabo Verde, a small island nation situated off the western coast of Africa, comprises 10 volcanic islands and boasts picturesque landscapes with pristine coastlines, white sandy beaches and turquoise waters. Aside from its scenery, Cabo Verde also holds a unique geopolitical position. Being one of the most politically stable countries in Africa, coupled with its location off the western coast of the continent, Cabo Verde is often viewed as the ‘gateway’ to Africa, as it unites the Lusophone world through its positioning between Brazil and Lusophone Africa. As a result, Cabo Verde’s stunning beaches and secure political environment culminates in a thriving tourism industry. However, the spectre of climate change looms, presenting the Cabo Verdean market with distinctive challenges. 

Climate change  

Tourism and climate change intersect in Cabo Verde. The tourism sector holds the greatest weight in Cabo Verde’s economy, accounting for around 20% of its GDP. In addition, coastal tourism accounts for around half of all employment. Cabo Verde’s geography renders the island more vulnerable than most to the impact of climate change. Rising sea levels threaten its coastlines, increased droughts harm its agriculture, and warming oceans endanger its fishing sector, which accounts for around 70% of the island’s exports. The World Bank estimates that climate change could shrink Cabo Verde’s GDP by up to 3.6% by 2050, while tourism revenues could fall by as much as 10%. As such, climate change directly threatens Cabo Verde’s tourism industry and wider economy. The country’s heavy reliance on tourism underpins Cabo Verde’s efforts to diversify the sector away from resort-based tourism towards ecological and sustainable alternatives. 

Mitigating the Risks  

Cabo Verde’s efforts to be more sustainable are extremely well evidenced. Cabo Verde is one of 57 small island developing states (SIDS) which are considered highly vulnerable to climate-induced disasters, such as rising sea levels, and their economic and social repercussions. The island state has taken tangible steps towards a more sustainable tourism sector. For example, Cabo Verde has produced the Cabo Verde Country Climate and Development Report (CCDR) and the Grand Strategic Plan Options for Sustainable Tourism Development for 2018-2030 (GOPEDS-Tourism 2018-2030). The CCDR outlines how resilience and sustainability must underline Cabo Verde’s economy. The country has set itself the goal of achieving 100% renewable energy penetration by 2040. Achieving this goal seems promising, as in September 2024 Cabo Verde opened its largest solar plant in Santa Maria, Sal.  

The CCDR highlights an imperative need to transition away from ‘sun-and-beach' tourism through investments in ecological as well as creative and cultural tourism. Furthermore, GOPEDS-Tourism 2018-2030 identified other sectors that are strongly linked to tourism, such as energy, utilities, and food and beverages. Such policy developments are being reflected in the legal market, which is increasingly involved in transactions relating to renewable energy and eco-tourism projects. Key figures in the legal market also note that there is a turn towards privatisation in Cabo Verde. One source noted: 

"In the last few years Cabo Verde's governmental policy has been changing as the country is diversifying and privatising. The government is privatising ports, as well as its aviation and transport sectors. They're trying to make Cabo Verde a transport hub. They're also trying to diversify the tourism industry, so that it is no longer just resort-related."  

As a result of these trends, lawyers in the market are seeing ever-more significant deals between state institutions and private international companies who are establishing a presence in Cabo Verde by acquiring state companies. In addition, privatisation and renewable energy projects mark an optimistic shift toward diversification through the creation of new jobs in different sectors, thus reducing the reliance on tourism for employment opportunities. For example, the government’s aim to transform the island into a maritime hub through the privatisation of ports is expected to generate 35,000 jobs by 2030.  

Investments in local and eco-tourism are welcomed with open arms, as economic activity is thriving, with the island seeing high consumption rates amongst its population. Lawyers who operate in Cabo Verde frequently note that resort-based tourism is often administered by international companies. According to one interviewee, this means that "tourism is a bit of a fallacy for the local market. The resorts are owned by international companies, so the money doesn't actually enter Cabo Verde because tourists pay for resorts through tourism agencies that aren't based there." As a result, the trend towards local eco-tourism will – it is hoped – generate greater wealth for the domestic economy through the establishment of new businesses, increased employment and consequently, further economic activity and economic consumption across the islands.  

In summary, the likes of the CCDR and GOPEDS represent a strong attempt to mitigate the risks of climate change without damaging the country’s economic growth. The CCDR exemplifies how government and the private sector can work together to make the right investments and design effective policies to create a sustainable tourism industry. Cabo Verde thus may act as a blueprint for other nation states to develop further policy interventions to be more sustainable. Cabo Verde tells a story of resilience as well as resistance to the most detrimental and existential effects of the climate crisis in its attempt to safeguard its future by creating a climate-resilient market.  

Sources 

Frontline of Climate Change: How Cabo Verde is Leveraging INFFs to Fund its NDC Targets (2024); https://sdgfinance.undp.org/news-events/frontline-climate-change-how-cabo-verde-leveraging-inffs-fund-its-ndc-targets   

Ambitious climate action will reap large dividends for Cabo Verde (2025); https://www.worldbank.org/en/country/caboverde/publication/ambitious-climate-action-will-reap-large-dividends-for-cabo-verde#:~:text=Energy%20is%20only%20part%20of,another%20cornerstone%20of%20the%20strategy 

Country programming support and sustainable tourism planning for Cabo Verde (2022); https://www.greenclimate.fund/document/country-programming-support-and-sustainable-tourism-planning-cabo-verde#:~:text=At%20the%20national%20level%2C%20Cabo,a%20programmatic%20sustainable%20tourism%20planning. 

Paulino Baptista: Shaping a sustainable Future for coastal tourism in Cape Verde (2024); https://ace.aau.org/paulino-baptista-shaping-a-sustainable-future-for-coastal-tourism-in-cape-verde/#:~:text=Amidst%20the%20captivating%20vistas%20of,%2C%20Governance%2C%20and%20Social%20Resilience.  

Tourism in Cape Verde: An Ocean of Opportunity; https://www.vpqadvogados.com/xms/files/RECURSOS/Newsletters/Tourism_in_Cape_Verde_an_ocean_of_opportunity_-EN-.pdf   

Cape Verde construct its largest solar power plant (2024); https://constructionreviewonline.com/construction-projects/cape-verde-construct-its-largest-solar-power-plant/ 

Cabo Verde Blue Economy Sustainable Ports FL (2024);
https://www.eib.org/en/projects/pipelines/all/20220860