Cabo Verde Faces Institutional Challenges as Economic Impact of COVID-19 Pandemic Takes Toll

Praia, Cabo Verde - The small island nation of Cabo Verde is facing a perfect storm of challenges as the economic impact of the COVID-19 pandemic strains its institutions, increasing the risk of corruption and organized crime.

Challenging Institutional Environment

Despite having a high level of trust in institutions, particularly the armed forces and the office of the president, Cabo Verde’s judicial system is grappling with capacity issues, access to justice, and the protection of citizens’ legal rights. The country’s economy has experienced its largest contraction on record, leading to an economic slowdown and recession.

International Cooperation

Cabo Verde relies heavily on international cooperation to address various challenges, including combating drug trafficking and strengthening maritime monitoring. The country has collaborated with partners such as Portugal, Spain, the UK, and the US, receiving training for law enforcement agencies, sharing intelligence, and conducting joint maritime operations.

Economic Impact of COVID-19

The pandemic has taken a significant toll on the economy, leading to an increase in corruption and organized crime. Criminal entities are employing various methods to launder illicit funds, including cross-border cash movement, real estate transactions, and the use of banks.

Challenges Implementing Anti-Money Laundering and Countering Financing Terrorism Measures

The government has proposed legislative amendments to enhance measures against money laundering, terrorism financing, and weapons proliferation, but implementing anti-money laundering (AML) and countering financing terrorism (CFT) have proved challenging due to limited resources. The country’s informal sector accounts for over a quarter of its overall economy, contributing to a lack of transparency and increasing the risk of money laundering.

Economic Outlook

The government has suspended plans to privatize state-owned enterprises to address the high level of public sector debt resulting from the pandemic. Private business owners often encounter legal and bureaucratic inefficiency as well as corruption, which can pose challenges to their operations. The country’s economic outlook is closely tied to the global economic recovery and the government’s ability to implement appropriate economic policies and reforms.

Addressing Human Trafficking

Cabo Verde has implemented measures to identify and protect victims of trafficking, including the adoption of a manual of operational procedures and training programmes for victim identification. However, witness protection programmes are not yet established, and there are currently no shelters specifically for trafficking victims.

Civil Society and Press Freedom

Civil society in Cabo Verde remains alert and active, especially in prevention, but there has been a decline in press freedom over the years. The government still appoints directors of state-owned media outlets, leading to a prioritization of government policies.

Conclusion

Cabo Verde must navigate these challenges to ensure the stability and prosperity of its institutions and citizens. The country’s economic outlook is closely tied to the global economic recovery and the government’s ability to implement appropriate economic policies and reforms.