Poverty & Equity Brief April 2025 CABO VERDE The national poverty headcount rate fell by 10.7 percentage points from 2015 to 2023, reaching 24.8 percent in 2023, down from 35.5 percent in 2015, per INE’s official estimates relying on a SWIFT imputation model (i.e., due to quality issues with the household survey from 2023, it was not possible to produce direct poverty estimates and imputations were used). This translates into almost 50,000 individuals rising out of poverty during this period. Geographical disparities in Cabo Verde persisted in 2023, despite the important gains in poverty reduction, with rural poverty rates (35.2 percent) significantly higher than in urban areas (21.3 percent). While the gap between urban and rural poverty continued to be significant in 2023, at 13.9 percentage points, it has narrowed with respect to 2015 (20.8 percentage points), due to a faster decline in rural poverty (13.6 percentage points) compared to urban poverty (6.8 percentage points). At the same time, the lower urban poverty rate disguises that, by 2023, the 65.3 percent the poor in Cabo Verde lived in urban areas (as 75.8 percent of the population is urban). Cabo Verde's economic model, heavily reliant on tourism and foreign direct investment, showed signs of weakness after the 2008 global financial crisis. The archipelago consists of fragmented islands, posing challenges in terms of connectivity and infrastructure development. The heavy reliance on the all-inclusive tourism model, and the limited integration between sectors attracting foreign direct investment and other parts of the economy, have resulted in minimal value addition. Economic activity declined in 2020 due to the pandemic's impact on the tourism industry. As a result, the poverty rate increased significantly; however, poverty alleviation resumed its downward trend after 2022. Economic activity reached 5.4 percent in 2023, with service exports stabilizing, evidenced by a record 1 million tourist arrivals (accommodation and transport contributed to 3 percentage points of growth). The momentum has continued in 2024, as growth accelerated to an estimated 7.8 percent, driven by strengthening tourism activity and a gradual recovery in agricultural activity after years of drought. In addition, inflation moderated significantly in 2024. Lower energy and food prices put average headline inflation at 1 percent, down from 3.7 percent in 2023. Easing inflation, together with activity in services and industry sectors, is expected to result in poverty rates falling further during the 2024-2027 period. Unemployment rates (individuals aged 15 or older) declined to 10.3 percent in 2023, down from 11.0 percent in 2022. Urban and rural unemployment trends diverged between 2022 and 2023, with urban unemployment decreasing by 0.9 percentage points to 10.0 percent, while rural unemployment rose by 0.5 percentage points to 11.7 percent. The service sector continued to employ most of the workforce in 2023, 68.8 percent, up from 66.8 percent in 2022. $2.15 Poverty Rate $6.85 Poverty Rate Gini Index Prosperity Gap 2015 2015 2015 2015 4.6% 50.9% 42.4 4.6 Poverty Rate Inequality 80 70 60 60 50 Poverty Rate (%) Gini Index 40 40 30 20 20 10 0 0 2000 2005 2010 2015 2020 2000 2005 2010 2015 2020 Poverty at Different Lines Poverty Line Number of Poor Rate Year (Thousands) (%)   National Poverty Line 129.3 24.8 2023         International Poverty Line ($2.15/day) 23.4 4.6 2015         Lower Middle Income Class Poverty Line ($3.65/day) 99.1 19.3 2015         Upper Middle Income Class Poverty Line ($6.85/day) 261.1 50.9 2015         Multidimensional Poverty Measure   7.6 2015         Group and Multidimensional Poverty Poverty by Group Poverty Rate (%) Multidimensional Poverty Components (% of Pop.)   Urban population 11.7 Daily income less than US$2.15 per person 4.6 Rural population 33.0 At least one school-aged child is not enrolled in school 2.7 Males 18.8 No adult has completed primary education 11.6 Females 19.9 4 No access to limited-standard drinking water 11.1 0 to 14 years old 25.0 No access to limited-standard sanitation 30.2 15 to 64 years old 16.8 No access to electricity 9.9 65 and older 15.3 Without education (16+) 23.1 Primary education (16+) 21.4 Secondary education (16+) 14.1 Tertiary/post-secondary education (16+) 1.9 Note: N/A denotes a missing/removed value, while N/A* refers to a value which was removed due to having fewer than 30 observations. The rates in the Poverty by Group table above are shown at the $3.65 lower-middle income line. Data for the Poverty by Group table is derived from a 2015 survey and data for the Multidimensional Poverty Components table is derived from a 2015 survey. Poverty Data & Methodology Cabo Verde has fielded four waves of its household income and expenditure survey, the Inquérito às Despesas e Receitas Familiares (IDRF) in 1988/89, 2001/02, 2015 and 2022/23. The two most recent rounds used a two-week food consumption diary and have similar consumption questionnaires. In addition, the Questionnaire of Basic Indicators of Well Being (QUIBB) survey was conducted in 2007 and collected consumption data, but used a shorter questionnaire and no consumption diary, so comparisons with the IDRF surveys require caution. The IV-IDRF from 2022/23 was supported by technical assistance from the World Bank in areas such as sampling design, questionnaire preparation, and CAPI design. However, access to the data during the collection process was limited, hindering monitoring efforts from third parties. Data collection concluded in December 2023, but an ex-post analysis of the collected information suggested quality issues in the consumption module of the survey. In this context, the World Bank provided technical support to the Instituto Nacional de Estatística (INE) of Cabo Verde in the implementation of the Survey of Well-being via Instant and Frequent Tracking (SWIFT) imputation approach for the estimation of poverty rates in 2023. Harmonization The numbers presented in this brief are based on the SSAPOV database. SSAPOV is a database of harmonized nationally representative household surveys managed by Sub-Saharan Team for Statistical Development. It contains more than 100 surveys covering 45 out of the 48 countries in the SSA region. The three countries not covered in the database are Eritrea, Equatorial Guinea, and Somalia. Terms of use of the data adhere to agreements with the original data producers. Africa Western & Central Poverty Economist: Eduardo Alonso Malasquez Carbonel