Updated: 5 December 2025
Cabo Verde (Cape Verde) has taken a major step in its digital transformation agenda after the African Development Bank Group (AfDB) approved a €17.71 million loan to deepen e‑governance, modernise public administration and strengthen fiscal transparency. [1]
The financing backs Phase II of the E‑Governance and Public Financial Management Reform Programme and arrives at a time when the island state is posting one of Africa’s stronger growth trajectories but remains heavily exposed to shocks in tourism and external demand. [2]
A Second Phase in a Long‑Term Digital Partnership
The AfDB Board approved the €17.71 million budget‑support operation in Abidjan on Monday, 1 December 2025, with the decision publicly announced on 4 December. [3] The loan follows a similar operation approved in 2024 and is explicitly designed to “build on the assistance provided last year” by extending support for e‑governance and economic governance reforms. [4]
This latest package is part of a much larger AfDB–Cabo Verde digital agenda:
- In 2023, the Bank approved a €14 million loan to strengthen Cabo Verde’s role as a regional tech hub, anchored around the national Technology Park. [5]
- In May 2025, Cabo Verde inaugurated the Mindelo Technology Park, the second campus of the TechPark CV project, funded by AfDB. The Mindelo facility includes a data centre, incubation hub and training centre, hosts companies from several countries and operates as a special digital economic zone targeting AI, cybersecurity, fintech and digital‑health firms. [6]
- An AfDB‑backed project has already helped turn the TechPark CV network into a fully occupied complex with more than 300 young professionals employed and over 20 companies installed across its Praia and Mindelo campuses. [7]
AfDB’s own messaging frames Cabo Verde as a test case for using digital infrastructure and governance reforms to leverage Africa’s wider digital economy, which the Bank has estimated could add around $180 billion to the continent’s GDP in the coming years. [8]
What the €17.7 Million Will Finance
According to AfDB, APA News, fundsforNGOs and other outlets that have reported on the decision since 4–5 December 2025, the programme is organised around two core components: digital reforms to boost private‑sector competitiveness, and public‑sector modernisation with a strong fiscal‑governance focus. [9]
1. Digital reforms for businesses and the justice system
The first component aims to deepen ongoing digitisation reforms that make it easier to do business and to interact with the state. Key measures include: [10]
- Launch of an e‑Justice system
Judicial processes will be digitised across the court system, allowing electronic case filing, online access to case status and potentially remote hearings. This is expected to cut backlogs, shorten resolution times and reduce costs for citizens and companies engaged in commercial disputes. - Scaling the Tech Park via a “digital nomads” programme
A call for proposals will be issued to attract private operators to Cabo Verde’s technology park infrastructure under a structured “digital nomads” scheme. Authorities will define admission criteria designed to encourage:- Remote workers seeking a stable, connected base in the Atlantic
- High‑growth tech companies in fields such as fintech, AI and digital health
- Service providers that can plug local SMEs into global value chains
- Strengthening private‑sector competitiveness
By mainstreaming digital tools into business registration, tax administration and judicial services, the programme aims to reduce red tape, clarify rules and give SMEs faster recourse when contracts are breached—long‑standing concerns highlighted in earlier governance and procurement assessments. [11]
2. Modernising the state and consolidating fiscal sustainability
The second component focuses squarely on fiscal consolidation, transparency and efficient public‑resource management. It will: [12]
- Develop and publish an action plan to rationalise tax expenditures
Cabo Verde, like many small economies, relies heavily on targeted tax incentives to attract investment, but these can erode the tax base when not properly monitored. The new action plan will:- Catalogue existing tax exemptions and incentives
- Propose criteria for keeping, reforming or phasing them out
- Prioritise incentives with clear development impact
- Disclose full annual tax‑expenditure estimates in the 2026 budget
For the first time, the government plans to include comprehensive estimates of tax expenditures in the 2026 national budget, a step that AfDB and Ecofin Agency highlight as a major transparency gain. [13] - Fund a Public Expenditure and Financial Accountability (PEFA) assessment in early 2026
The Bank will finance a PEFA review in Q1 2026, drawing on Middle Income Countries (MIC) Grant resources. [14] This should give policymakers a clearer picture of where public‑financial‑management (PFM) systems are working—and where bottlenecks such as slow payments to suppliers or weak internal audit persist. [15]
Together, these reforms are meant to improve Cabo Verde’s ability to raise and manage domestic resources—without raising headline tax rates—by reducing leakages, poorly targeted incentives and inefficiencies in spending. That aligns closely with AfDB’s broader African Economic Outlook 2025, which stresses that better tax design and PFM could unlock an additional $1.43 trillion in domestic resources across the continent. [16]
Who Stands to Benefit?
AfDB and APA identify five principal public institutions as direct beneficiaries of the programme: [17]
- Ministry of the Digital Economy – leads overall digital‑transformation strategy, coordinates rollout of e‑services and oversees the Tech Park ecosystem.
- Central Bank of Cabo Verde (BCV) – anchors payment‑system upgrades, digital‑finance regulation and cybersecurity standards for the financial sector.
- Institute for Gender Equality and Equity – ensures that new digital services are designed with inclusion in mind, closing gender gaps in access to online services, finance and digital jobs.
- National Directorate of State Revenue – central to tax‑reform implementation, especially in mapping and reporting tax expenditures and integrating digital tax systems with other government platforms.
- Public Procurement Regulatory Authority – key to digitising procurement, improving competition in tenders and addressing historical problems like late payments and limited transparency in contracting. [18]
The design signals a whole‑of‑government approach: rather than funding ICT hardware alone, the loan tries to align digital platforms, legal reforms and institutional capacity.
Cabo Verde’s Economic Outlook: Why Digital Governance Matters Now
Cabo Verde entered 2025 on a relatively strong macroeconomic footing:
- AfDB’s Country Focus Report 2025 notes that the economy grew by 7.3% in real terms in 2024, driven largely by a rebound in tourism and services after pandemic‑related disruptions. [19]
- Growth is projected to moderate to 5.3% in 2025 and 4.9% in 2026, still robust by global standards but highlighting the need to lock in structural reforms for long‑term resilience. [20]
- The AfDB’s economic‑outlook page stresses that growth remains volatile due to the country’s dependence on tourism, making diversification and improved domestic‑revenue mobilisation priorities. [21]
In that context, fiscal and governance reforms have a dual role:
- Shock‑proofing the budget – Rationalising tax incentives and improving expenditure efficiency create space to respond to external shocks—whether from global tourism cycles, climate events or financial turbulence—without over‑relying on new borrowing.
- Making digital investment sustainable – Building data centres, e‑justice platforms and digital‑service portals is expensive upfront; they only deliver value if the state can finance maintenance, cybersecurity and staff training on a recurring basis. Stable, transparent public finances are a prerequisite.
How Cabo Verde Scores on E‑Government—and What Must Improve
Recent global governance indices help show where Cabo Verde is starting from.
According to the United Nations E‑Government Survey 2024, Cabo Verde: [22]
- Achieves an E‑Government Development Index (EGDI) score of 0.6238, placing it in the “High EGDI” category.
- Ranks 111th out of 193 UN member states on EGDI.
Ecofin Agency’s coverage of the AfDB decision adds that Cabo Verde now stands 78th globally in the UN E‑Participation Index, which measures how well governments use digital channels to inform, consult and engage citizens. [23]
These metrics suggest:
- Cabo Verde has solid foundational digital capacity and connectivity, outperforming many peers in West Africa. [24]
- But it still trails higher‑performing small states and EU neighbours, indicating room to improve in areas like integrated online services, back‑office digital workflows and citizen‑participation tools. [25]
The new AfDB‑backed programme directly targets some of the gaps highlighted in these surveys: integrated e‑justice, seamless data flows between tax and budget systems, and more transparent reporting that empowers parliament, media and citizens to scrutinise government decisions.
What Commentators Are Saying on 5 December 2025
Since the AfDB announcement went public, several outlets and analysts have weighed in with early assessments and forecasts.
Official position: digitisation plus private‑sector competitiveness
In the Bank’s own press release, Abdoulaye Coulibaly, Director of the Governance and Economic Reforms Department, says the aim of the support “is to stimulate economic growth through digitisation and private‑sector competitiveness, while advancing e‑governance reforms”—while the remainder of his statement underlines the importance of modernising public administration and consolidating public finances. [26]
APA News, which carried the story on 5 December 2025, emphasises that this is sequential budget support, following a similar operation last year and signalling continued confidence in Cabo Verde’s reform track. [27]
Red94: a test case for Africa’s digital‑governance future
Business and finance outlet Red94 frames the operation as a regional bellwether:
- It highlights the approval of the €17.71 million loan on 2 December 2025 and notes that Cabo Verde sits 111th in the 2024 UN EGDI rankings, in the “high EGDI” bracket, showing solid but improvable digital‑governance capacity. [28]
- The article underlines how the e‑Justice platform and digital‑nomads programme could both strengthen contract enforcement and pull in location‑independent tech talent, improving the island’s business climate. [29]
- Its analysis section argues that, if successful, Cabo Verde’s reforms could provide a replicable blueprint for other African small states that want to combine niche digital‑services exports with tighter fiscal governance. [30]
Ecofin and fundsforNGOs: spotlight on tax transparency and accountability
Ecofin Agency’s brief focuses on the fiscal‑governance dimension, stressing that the loan will help Cabo Verde continue digital transformation “while deepening fiscal reforms”, and pointing to the publication of tax‑expenditure estimates in the 2026 budget as a landmark in budget transparency. [31]
Non‑profit news portal fundsforNGOs similarly highlights the programme’s twin pillars: a drive to use e‑Justice and digital platforms to enhance private‑sector competitiveness, and a concerted effort to strengthen public‑finance management and domestic‑resource mobilisation. [32]
Opportunities—and Risks—Behind the Headlines
While most commentary is positive, analysts also point to practical challenges Cabo Verde will have to navigate if the programme is to deliver lasting change.
1. Turning platforms into real‑world service improvements
Cabo Verde already has advanced infrastructure in the form of TechPark CV and good broadband connectivity by regional standards. [33] The next frontier is transforming citizen experience:
- Courts must actually use e‑Justice tools for case management, not just for basic filing.
- Businesses need end‑to‑end online journeys for tasks like company registration, tax filing, licensing and access to government tenders.
- Citizens will only trust digital services if they are reliable, secure and available in user‑friendly formats, including mobile.
2. Managing cybersecurity and data protection
As more core state functions go digital, cyber‑risk increases:
- Payment systems, tax databases and judicial records are attractive targets for cyber‑criminals.
- Protecting personal data and ensuring rigorous access controls will be essential, especially as more functions are outsourced or delivered via cloud‑based platforms.
AfDB’s broader technology agenda, including AI and digital‑finance initiatives across Africa, suggests that Cabo Verde can draw on continental best practices—but implementation capacity will still be a constraint for a small administration. [34]
3. Ensuring inclusiveness
One of the most interesting design choices in the Cabo Verde programme is the inclusion of the Institute for Gender Equality and Equity as a core beneficiary. [35] This reflects awareness that:
- Digital divides—across gender, age, income and geography—could limit who actually benefits from e‑services and remote‑work opportunities.
- Policy design must consider digital literacy, language, disability inclusion and the affordability of devices and connectivity.
If these issues are not addressed, digital reforms risk primarily benefiting already‑connected urban residents and international digital nomads.
What Happens Next?
Based on the AfDB and Red94 coverage, implementation is expected to roll out over 2026–2027, with clearly defined milestones. [36] Key steps to watch over the next 18–24 months include:
- The launch of the e‑Justice platform and first courts going live with digital case management.
- Publication of a comprehensive tax‑expenditure report alongside the 2026 national budget.
- The PEFA assessment in early 2026 and any follow‑up action plan agreed between the government and development partners.
- The first cohorts of digital‑nomad visa holders and tech firms establishing themselves in the Praia and Mindelo technology parks under the new admission framework. [37]
Why This Matters Beyond Cabo Verde
Cabo Verde’s €17.7 million AfDB‑backed programme is about more than a single loan:
- It cements the island nation’s role as a regional laboratory for combining digital infrastructure, governance reform and niche services exports. [38]
- It illustrates how multilateral development banks are increasingly tying budget support to concrete digital‑governance milestones, from e‑Justice implementation to tax‑expenditure reporting. [39]
- It offers an emerging playbook for small, open economies: invest in world‑class digital connectivity and tech parks, but match that with equally modern public‑finance and governance systems.
If Cabo Verde can deliver on the reforms laid out this week, the story unfolding after 5 December 2025 may not just be about one island country’s digital leap—but about a scalable model for digital‑first, fiscally responsible governance across Africa.
References
1. afdb.africa-newsroom.com, 2. www.afdb.org, 3. afdb.africa-newsroom.com, 4. afdb.africa-newsroom.com, 5. www.afdb.org, 6. afdb.africa-newsroom.com, 7. african.business, 8. afdb.africa-newsroom.com, 9. afdb.africa-newsroom.com, 10. afdb.africa-newsroom.com, 11. www.mapsinitiative.org, 12. afdb.africa-newsroom.com, 13. afdb.africa-newsroom.com, 14. afdb.africa-newsroom.com, 15. www.mapsinitiative.org, 16. afdb.africa-newsroom.com, 17. afdb.africa-newsroom.com, 18. www.mapsinitiative.org, 19. www.linkedin.com, 20. www.linkedin.com, 21. www.afdb.org, 22. publicadministration.un.org, 23. www.ecofinagency.com, 24. dig.watch, 25. publicadministration.un.org, 26. afdb.africa-newsroom.com, 27. apanews.net, 28. www.red94.net, 29. www.red94.net, 30. www.red94.net, 31. www.ecofinagency.com, 32. news.fundsforngos.org, 33. african.business, 34. afdb.africa-newsroom.com, 35. afdb.africa-newsroom.com, 36. www.red94.net, 37. afdb.africa-newsroom.com, 38. african.business, 39. afdb.africa-newsroom.com
