Cape Verde is an interesting place to do business because there are many facets which makes this place so unique. If you ever find yourself looking for new challenges and an opportunity to make an impact, Cape Verde could well be the place to do it. The country is small, therefore the impact of one person can be significant. But what can you expect from starting a business here? And what kind of opportunities and problems should you look out for? Let´s go through that in a loosely defined PESTEL format…
Cape Verde is generally known for its political stability (1). According to the World Press Freedom Index by Reporters Without Borders, Cape Verde ranked in the top 3 African nations in 2016 (#32 in world), meaning the press are mostly free to report as they want (but naturally limited to what they do say due to the largest employer being the government).
The political stability makes it more interesting for foreign investors to also consider Cape Verde as an investment opportunity, it being safe from political turmoil. As a place to live, it is therefore also relatively peaceful. With a poor level of natural resources, there`s hardly much to fight over other than pecking order which we`ll cover in more detail in social value and culture.
In terms of economic opportunities, I think its best to look at what niches there are that can be occupied. Mushrooms are just one example. Another example would be starting a Thai restaurant on the islands since none exist. These ideas relate mostly to my personal experience and expertise, but figure out what gets your blood flowing and follow that.
Cape Verde is an island group, so there are many ways niches can be exploited because there just isn`t a lot of competition if you introduce something `new`. Ideas established into viable industries abroad still need time to even seed here. The following industries have been receiving heightened attention (as is my experience with foreign investment involving the Dutch government):
- Maritime Transport
- Renewable Energy
Keep in mind though that Cape Verdeans spending power is relatively low, and you won`t make the kind of fortunes you can make elsewhere if economic gains are your only incentive. Cape Verde has its own kind of fortune which is its lifestyle, especially with a moderate salary. From an outsiders perspective, it is likelier easier to come up with new ideas as you can mix and match the culture you know with what`s on the ground. Which brings us to the Cape Verdean social value and culture.
Social values and culture
Cape Verde is a Portuguese speaking country, where the official-unofficial language is Kriolo (Cape Verdean Creole). You would do best if you speak one of these at the least, since not many people speak English. You´d probably have a better chance getting around speaking French. I personally learned to speak basic Portuguese/Kriolo on the fly. It is a relatively easy language to learn, although I have personally yet to master it. I myself am live proof of the fact that with a basic skill sets, you can get quite far. … although I´m lucky that I have a special someone now doing a lot of interpretation and translation for me (beijo querida) 😉
According to the Geert Hofstede Cultural Dimensions on Cape Verde, the country ranks as follows in terms of cultural dimensions (scores are out of 100):
- Power Distance: 75
- Individualism: 25
- Masculinity: 15
- Uncertainty Avoidance: 40
- Long Term Orientation: 12
- Indulgence: 83
You can click on the link above to read about what all that means (and heck, compare it to your own/another country!). The reasoning for where I think these cultural traits come from I explain in my personal blog, as it deviates from the theme of this site.
My point here is, as an outsider, your culture is going to be different and you can use that to your advantage. It might also work to your disadvantage, however, depending on the situation. Either way, culture is an opportunity for oneself to learn and adapt, but also an opportunity to exploit.
A high Power Distance means that as an entrepreneur, you´re most of the time needed to steer your workers. There´s a low level of own initiative and people tend to prefer an autocratic leadership style. Cultures with a higher sense of independence and freedom naturally positions a person from these cultures in more of a leadership role from the get-go. You will need to get comfortable giving orders. You may also need to micromanage a lot of tasks and know that your presence alone will boost morale significantly.
For me, the trick has been to identify leaders and give them responsibility of task groups. If it´s also possible, try to get people to copy and paste the same tasks so they get into a flow. Repetition is key. If possible, go around supervising all aspects that require attention and create pressure in this form when needed.
Low Individualism relates to work flow as well, as people prefer to work in groups. Promotion isn´t based on individual merit, but on in-group status. ´Belonging´ therefore plays a more important role for the Cape Verdean, and ´going against the grain´ is much easier for an outsider to do than an incumbent citizen. ´Going against the grain´ is where I believe innovation lies however, and is where new markets and business opportunities can be found.
A low Masculinity score means a high Femininity score, which means that Cape Verde cares more about quality of life than competition. This dimension also correlates to a high level of Indulgence, meaning that Cape Verdeans place a high importance on leisure time. This is something to keep in mind, as productivity and efficiency might not be the highest priority for employees. Again, supervision is key here and putting on pressure where needed. However, it is also sometimes important to step back and relax a little because things are not going to go as you want them to. Most tasks generally take longer and are done with no sense of urgency. So just chill and enjoy Cape Verde, just like everyone else is doing 😉
My take-away for a medium-low score for Uncertainty Avoidance is that ¨there is a larger degree of acceptance for new ideas, innovative products and a willingness to try something new or different, whether it pertains to technology, business practices, or food. ¨. I believe this can be relevant to the entrepreneur looking to open a new market. It is relevant in my case and I hope that the cultural dimension is right and that the local population takes towards my introduced product.
A low Long Term Orientation means that Cape Verde is rooted strongly in its traditional knowledge. Societal change is viewed with suspicion. It is therefore important that your introduced product or service integrates with the existing culture rather than impose itself by trying to rationalize its usefulness. For example, the introduction of Facebook here has seamlessly integrated into Cape Verdean culture by enhancing already existing values (deep connections with friends/family; belonging to an in-group) with that of technological innovation. Facebook is a great example because it allows spur-of-the-moment type of decisions as well, which also reflects a low level of long term orientation.
It is often very hard to pinpoint appointments based on a time schedule because it doesn´t seem to exist, or exists very loosely in people´s minds (lack of long term orientation). I have encountered plenty of exceptions to the rule in which case I´m always pleasantly surprised. Don´t expect anything to start ´on time´ however.
Technological innovations can be welcomed in many forms, especially in the industries previously mentioned (Maritime Transport, Fishing, Agriculture, Tourism, Renewable Energy).
According to the World Bank, 43.02% of the population is using internet (2015) and there seems to be a steady increasing pattern, meaning there`s opportunity on this front as well. Having taken an inside tour of Cape Verde´s Jean Piaget University Technology Department, I can conclude that internet innovations are on their way. Peer to peer sharing platforms are being thought up, the Cape Verdean version of eBay/gumtree/marktplaats is being developed, though the question remains if these developers will have the push that´s needed to propel it into a working business model. An outsider may be able to provide the cutting edge needed to do just that.
Facebook is very popular amongst people here, and it´s pretty much used for everything. Most businesses won`t have a website, but they`ll have a Facebook page, where they´ll also post their calendar and events. Also, services usually offered by sites like eBay/gumtree/marktplaats are provided using Facebook as a platform (buy/sell groups). Facebook Messenger and Viber are more used as a messaging platform than anything else.
Cape Verde is prone to drought and has little arable land. It is therefore vital that water and land resources are used intelligently. Through the now widespread use of drip irrigation, Cape Verde has been able to make steps towards more conservative water use. Polycultures of maize, corn and squash/pumpkin (3 sisters) are also popularly grown on any arable land, providing effective and sustainable use of it. This is often combined with a multitude of other species such as banana trees, papaya trees, and sugarcane just to name a few. Innovations in agriculture which help to conserve water (aquaponics), or increase productivity per square meter (greenhouse systems/food forest systems) can also help to improve the environment, bearing in mind not to sacrifice long term soil health for short term gains.
Cape Verde`s geography also provides an interesting opportunity/problem. Since it is an archipelago, many of the island`s necessities are imported. Whatever can be locally produced will therefore be better at stimulating a local economy, and can become more appealing to the local population in the long run, mostly in terms of cost. Hence the idea of locally produced mushrooms… but locally produced anything really.
Cape Verde is generally quite relaxed with its laws although they do have a very bureaucratic system behind it. Try to go with the flow and give them the papers they want. Unless your goal is to change the system, in which case I wish you the best of luck and give you my blessings. Cooperation, compliments and smiles, however, go a long way and they may overlook minor discrepancies if they like you.
The point of everything in Cape Verde is it´s about people. If you know people on the inside, that´s going to help you. If they owe you a favour or know that you can do one for them at some point, that´s even better. If you come in as an outsider or as a regular citizen not knowing anyone, you´ll find many processes are slow, tedious and involve a lot of waiting. Often, you´ll need to put on pressure several times through calling or by being physically present, otherwise your case will stay frozen in its current state.
I find that for many things there is a facade of order and structure, but where the rubber meets the road, there just isn´t a lot of traction. For example, a compulsory medical exam involves about 99.9% waiting for administration and bureaucratic processes, when the actual check-up takes less than a minute, and involves checking your breathing with a stethoscope and a measurement of blood pressure; a joke if you´ve got a real medical problem.
Its not always like this however, and I feel that some parts of Cape Verde are adapting to a modern world. For example, today, I went to find information about registering the company and started this process. It went incredibly smooth. The government has a policy of promoting micro and small enterprises, which could be the reason for this. They seem to be starting to streamline and digitize these processes, so looking forward to these kind of developments for everything else.
Cape Verde has its problems, but those problems can be turned into solutions for the budding entrepreneur. If you recognize the niches present, you may be able to flourish in that with the outside knowledge and insights you bring to the table. You want to come to Cape Verde for the lifestyle more than anything. You can breathe fresh air, eat locally grown tropical fruits, and wear your shorts 365 days of the year. You may sometimes get frustrated by bureaucracy and inefficiency, therefore you need a lot of patience with people and processes. Cape Verde is about enjoying the simple things in life, and if you come with something to offer, you may find yourself staying here for a while. See you around 😉