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Light Manufacturing and Pharmaceuticals in Cabo Verdee

Light Manufacturing and Pharmaceuticals in Cabo Verde: Export Platform Opportunities

Cabo Verde's economy is primarily service-oriented, but the government has made industrial diversification a strategic priority under its Ambition 2030 plan. The country's geographic position between Europe, Africa, and the Americas, combined with preferential market access and generous tax incentives, creates compelling opportunities for export-oriented light manufacturing—particularly in pharmaceuticals, textiles, and agro-processing. Here's what foreign investors need to know about manufacturing in Cabo Verde.

The Manufacturing Sector: Size and Growth


Current State

  • GDP contribution: 10-12% of GDP (2024), with a target to reach 15% by 2030
  • Historical baseline: Industry (excluding construction) contributed only 7.1% in 2011—showing significant growth
  • Employment: Provides approximately 15,000 formal jobs (10.6% of economy)
  • Sector growth: Manufacturing grew by 5.6% annually over the past decade, double the overall economy's 2.8% growth rate
  • 2024 performance: Total industrial output grew 8%
  • Foreign investment: Approved projects totaling €50 million in 2024 alone; 15% year-over-year FDI increase as of October 2025

These figures demonstrate genuine momentum and government commitment to industrial development as an economic diversification strategy.

Key Manufacturing Opportunities: Three Strategic Sectors

1. Pharmaceuticals: The High-Value Play

Pharmaceutical production represents one of Cabo Verde's most promising manufacturing niches, offering high margins and access to underserved regional markets.

Success Case: Inpharma

The Cabo Verdean pharmaceutical firm Inpharma serves as proof of concept, holding international certifications and successfully exporting to regional markets. The company demonstrates that Cabo Verde can meet rigorous EU and international pharmaceutical standards.

Institutional Support

The United Nations Industrial Development Organization (UNIDO) is actively supporting the sector by:

  • Developing a Good Manufacturing Practices (GMP) Roadmap for the pharmaceutical industry
  • Providing technical basis for updating local production standards
  • Helping companies adopt advanced technologies and digitalization

Market and Regulatory Environment

  • The pharmaceutical market is a regulated sector regarding sale prices, providing stability
  • 2025 tax incentive: VAT exemption for imports of health sector goods already exempt from custom duties
  • Medical tourism emerging: Cabo Verde is gradually positioning itself as a medical tourism destination, creating domestic demand for quality pharmaceuticals

Investment Potential

Pharmaceuticals represent a classic value-weight ratio opportunity: high-value, low-volume products that can economically bear shipping costs while commanding premium pricing in African markets with limited local production capacity.

2. Textiles, Garments, and Footwear: AGOA Gateway

Cabo Verde's eligibility for the African Growth Opportunity Act (AGOA) creates a duty-free gateway to the massive US market.

Current Performance

  • Manufacturing output: 20% of manufacturing sector in 2019 (up from 15% in 2015)
  • Export contribution: 12.5% of total exports in 2019
  • Major export commodity: Clothing and footwear among top export categories

Labor Cost Advantage

Typical labor compensation in textiles and garment manufacturing falls between €300-€500 per month—competitive with regional alternatives while offering better infrastructure and political stability than many West African competitors.

Strategic Position

Cabo Verde serves as a hub for accessing the larger ECOWAS market (340+ million people), Europe via preferential agreements, and the US through AGOA—creating multiple export market options from a single production base.

3. Agro-Processing and Fish Processing: Export Dominance

Food processing, particularly fish, dominates Cabo Verde's current manufacturing exports.

The Numbers

  • Food & Beverages: Account for 82% of total manufactures' exports
  • Fish and seafood: Constitute 84.8% of merchandise exports (2023)
  • Processed fish: Approximately 40% of merchandise exports by value

Major Processors

Three large fish processing plants operate:

  • FRESCOMAR (Spanish-owned, São Vicente): The largest exporter, responsible for 42% of total exports in 2011
  • ATUNLO
  • SUCLA

The Raw Material Challenge

Of approximately 19,000 tons processed and exported in 2024, only 20% used local raw materials. The remaining 80% is sourced from foreign vessels fishing outside local waters—meaning Cabo Verde essentially functions as a processing and re-export platform rather than a domestic resource-based industry.

Investment Example

A projected €10 million fish processing facility in São Vicente could potentially yield a 20% ROI within 3 years, targeting West African markets. The combination of port infrastructure, established supply chains, and preferential market access creates the business case.

Agro-Processing FDI

Cumulative FDI in agro-processing and food industries reached €25 million between 2020-2023, demonstrating sustained investor interest despite challenges.

Infrastructure: Industrial Zones

Cabo Verde has developed dedicated industrial zones to reduce setup costs and accelerate business timelines.

Location and Scale

Infrastructured industrial zones are established on São Vicente and Santiago islands, near major ports and urban centers.

Performance Metrics

  • FDI attracted: €50 million since 2010
  • Job creation: 2,500 direct jobs by 2025
  • GDP target: Boost industrial GDP from 10% to 15% by 2030

Key Facilities

  • Parque Industrial de Lazareto (São Vicente): Developed with €5 million AfDB loan
  • Expansion plans: Lazareto to expand to 50 hectares by 2027
  • Tech park: Palmarejo Grande tech park supported by €15 million from European Investment Bank

These zones provide ready infrastructure—utilities, road access, proximity to ports—eliminating typical setup delays for industrial projects.

The International Business Centre (CIN): Tax Haven for Exporters

The International Industrial Centre (CII), part of the broader CIN framework, offers extraordinary tax benefits for export-oriented manufacturers.

Corporate Income Tax Benefits

  • Standard industrial rate: 2.5-5% (compared to standard 20%)
  • Export-oriented businesses: As low as 2.5% for up to ten years
  • CIN-CV regime: Applies to operations where 80% of activity is exports
  • Historical tax holidays: 90% CIT reduction during 2011-2018; 85% during 2019-2025

Job Creation Requirement

Companies must create a minimum of five jobs to benefit from reduced CIT rates—a low threshold that most manufacturers will easily exceed.

Technology Zone (ZEET)

Entities manufacturing computer, electronic, optical products, and electrical equipment in the Special Economic Zone for Technologies benefit from 2.5% IRPC rate.

Comprehensive Tax Incentives

Beyond the CIN, Cabo Verde offers extensive incentives for industrial activities:

Corporate Income Tax Credits

  • General industry: CIT credit of up to 50% of eligible investments, carried forward for 10 years
  • Major Development Projects (PMD): 30% CIT credit on eligible investments (capped at 50% of CIT assessed)
  • R&D deduction: 40% of eligible expenses plus 50% of incremental expenses compared to prior two-year average

Customs and Import Benefits

  • Reduced customs duty: 5% rate on construction materials, equipment, machinery, and raw materials during installation phase and first year of operation
  • Customs duty exemption: Complete exemption on construction materials, machines, and raw materials used in production for projects registered in Cadastro Industrial
  • VAT exemption: Raw materials, semi-finished and finished products for incorporation into manufactured goods
  • Export exemption: Exports are exempt from duties

Investment Thresholds for Contractual Benefits

Significant projects can negotiate special benefits through an Establishment Convention:

Requirement Standard Threshold Reduced Threshold (low GDP areas)
Investment amount CVE 3 billion (€27.2M) CVE 1.5 billion (€13.6M)
Job creation 20 qualified jobs 10 qualified jobs

Qualified jobs require professional/higher education, specialized technical training, or management positions.

Preferential Market Access: The Key Advantage

Cabo Verde's strategic value lies in preferential access to major trading blocs:

European Union

  • Preferential trading status under Cotonou Agreement
  • EU-Cape Verde Special Partnership

United States

  • Eligible under AGOA (African Growth Opportunity Act)
  • Duty-exempt export of most products to US market

ECOWAS

  • Preferential access under ECOWAS Treaty
  • Elimination of customs duties and fees for products exported to ECOWAS member states (340+ million population)

African Continental Free Trade Area

  • Access to emerging pan-African market (1.3+ billion people)

This combination allows "Made in Cabo Verde" products to access markets representing over 1.8 billion consumers across three continents with preferential treatment.

Critical Constraints to Navigate

Despite opportunities, manufacturers face genuine challenges:

Quality Certification Gap

The absence of an effective national quality certification and management system is a major constraint. Only a handful of firms (Inpharma, fish processors) have successfully met high standards for EU market entry. Budget for international certification costs from day one.

Logistics Bottleneck

High costs and poor quality of internal transport services limit inter-island linkages. Plan operations on a single island rather than multi-island supply chains.

High Import Content

Cabo Verde's growth model relies on high import content—finding products without at least one imported component is structurally difficult. Factor import logistics and costs into business planning.

The Bottom Line

Cabo Verde offers a compelling value proposition for export-oriented light manufacturing: 2.5-5% corporate tax rates, duty-free access to EU/US/ECOWAS markets, and ready industrial infrastructure. The combination of AGOA eligibility, ECOWAS membership, and EU partnership creates a unique triangular market access platform.

The model works best for high-value, low-volume products (pharmaceuticals), labor-intensive goods targeting AGOA (textiles), or processing operations adding value to imported materials (fish processing). Success requires accepting high import content, investing in international quality certifications, and designing single-island operations to avoid logistics constraints.

For manufacturers seeking an African production base with exceptional market access and minimal taxation, Cabo Verde deserves serious consideration. The 15% year-over-year FDI increase and €50 million in 2024 projects suggest investors are taking notice.

Cabo Verde Light Manufacturing and Pharmaceuticals

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