The World Bank has approved an International Development Association credit in the amount of US$30 million for the five-year Resilient Tourism and Blue Economy Development in Cabo Verde Project. Complementary co-financing of US$5 million will be provided through a grant from the Global Program for the Blue Economy Multi-Donor Trust Fund.
Cabo Verde’s tourism sector has seen exceptional growth in the last two decades and is a crucial driver of growth and job creation, reaching an estimated 25 per cent of GDP. The Covid-19 pandemic represented a major setback with arrivals collapsing by 75 per cent in 2020, affecting tourism and ancillary sectors particularly hard.
In addition to the unparalleled economic shock, the pandemic also highlighted structural challenges in the tourism sector, including overconcentration of arrivals in two islands and a single market segment, weak local supply chain linkages, and environmental sustainability issues-particularly in coastal areas.
As authorities pursue a “build back better” motto, there is a real opportunity to address these challenges. In this context, the proposed project supports the national vision and strategies -namely the Tourism Operational Program and the National Investment Plan for the Blue Economy – to promote sustainable tourism and conservation of natural resources with benefit to local communities.
The project will thus contribute to critical objectives, namely improving the diversity of the tourism sector’s offerings across more islands and market segments (measured by an increase in average daily tourism spending and overnight stays in the targeted emerging destinations), as well as enabling greater participation and linkages of local communities in the positive economic spillovers brought about by tourism (measured by additional product and service supply contracts by local businesses in the hospitality value chain).
The selected integrated and cross-sectoral project interventions for this first phase will span destinations in four islands (Santiago, Santo Antão, São Vicente and Sal) and will include: i) the development of selected resilient tourism and blue economy infrastructure (upgrading of trekking trails, heritage sites, seafront promenades, fishing piers and market, and a critical access road), ii) support to the local SME sector and women-led enterprises to provide demand-driven and sustainable services and products to the tourism value chain, leveraging particularly the potential associated with the blue economy in Cabo Verde; and iii) support to the enabling environment (including international destination marketing, enhanced policy and territorial planning, improved statistics collection, enhanced sustainability and management of tourism sites and services, and support to gender-informed mainstreaming and policies).
“The World Bank is thrilled to support Cabo Verde’s vision and strategy for economic recovery and diversification by unlocking the combined potential of tourism and blue economy activities. The targeted investments in resilient infrastructure, as well as the complementary interventions aimed at strengthening SMEs, are designed to catalyze increased economic spillover from tourism across islands and market segments, all the while enabling better and more sustainable linkages and value-added for local communities and businesses,” said Eneida Fernandes, Resident Representative for Cabo Verde.