CAPE VERDE J U L Y 2 0 1 3

INTERNATIONAL SUPPORT KIT OF OPPORTUNITIES The Country's Economic Context

Industry Structure

IilTdBillTdihPldOiiInternational Trade, Bilateral Trade with and Opportunities

BES Group’s Internationalisation Support: International Premium Unit

BES Group's International Offering

Contacts

ISKO Intenational Premium Unit / ES Research – Sectoral Research CAPE VERDE Business environment and key factors

BiBusiness envi ronment

Ease of doing business 122/185 (Doing Business 2013 ranking)

Starting a business 129/185 Cross-border trade 63/185 Contract fulfilment 38/185

Econ omic Fr eedom 65/177 (Economic Freedom 2012 ranking)

Competitiveness 122/144 (Global Competitiveness Index 2012-2013 ranking)

Basic Requirements 100/144 Infrastructure 114/144 Institutions 57/144

Efficiency Enhancers 128/144

Innovation and Sophistication 119/144

Cosec (Risk group) 5 Grade 1 (lowest risk) to 7 (highest risk)

Standard & Poor’s (Rating) Capital: Praia Official Language: Portuguese (AAA rating (lowest risk) to D (highest risk, default)) Population (Thousands): 534 (2013) Surface Area: 4 033 km2 (10 islands) Long-term debt in local currency B+ Time Zone: GMT - 1 Currency: Cape Verde Escudo (CVE, fixed Long-term debt in foreign currency B+ exchange rate EUR/110.3 CVE) Outlook Negative Type of Government: Semi-presidential Republic Religion: Christian Majority (Catholics, 95%) Sources: IMF, W orld Ban k, INE C ab o V erd e, COSEC , WldEWorld Econom iFic Forum, GlblHitGlobal Heritage, Bloom berg.

ISKO Cape Verde 03 International Premium Unit / ES Research – Sectoral Research CAPE VERDE Macroeconomic Indicators

2011 2012 2013E 2014E 2015E

GDP 1.4 1.5 1.6 1.8 1.9 Current prices EUR billion

GDP real growth rate 5.0 4.3 4.1 4.5 4.7 Percentage

10. 0 10. 0 10. 0 Unemployment Rate 9.0 9.0 Percentage of working population

4.5 4.0 3.3 Inflation Rate 2.5 2.8 Percentage

110.3 110.3 110.3 110.3 110.3 Exchange Rate EUR/CVE

Current Account Percentage of GDP -16.0 -11.1 -13.2 -11.4 -8.3

Fiscal Balance -2.2 Percentage of GDP -7.3 -7.5 -7.6 -5.8

E Estimates Sources: INE Cabo Verde, Banco de Cabo Verde, IMF.

ISKO Cape Verde 04 International Premium Unit / ES Research – Sectoral Research CABO VERDE Economic Summary (I)

Cape Verde is a small open economy, which is very dependent on the international economy given its high reliance on imported food and energy and on capital inflows from overseas (e.g. emigrants remittances and foreign aid). It has an economy based on services (including tourism), which account for around 75% of GDP. The industrial base is not well developed (being essentially limited to the textile, footwear and fishing industries). Cape Verde’s economy, despite a slight slowdown, has shown remarkable resilience in the context of a world economy marked by a high level of uncertainty, in particularasaresultoftheEuroZonedebtcrisis,whichhashad an impact on foreign investment flows and on the performance of several European economies with close relations with Cape Verde (Portugal and Spain account for over 50% of the islands’ foreign trade). In April 2013, following its regular review of the Cape Verdean economy within the terms of Article IV, the International Monetary Funds (IMF) lowered its growth outlook for Cape Verde’s economy in 2013, forecasting a growth rate of 4.1%, 0.2 pp lower than the growth rate recorded the in prior year. Indeed, aslowdowninCape Verde’s economy was already evident in 2012, whentherateof growth declined to 4.3%, from 5%, in 2011. The IMF again drew attention to the situation in the international economy and a slowdown in internal demand as factors which are leading to a decline in the growth rate, in spite of the good performance posted by the tourism sector. In 2012, the number of overnight stays increase by 18% in relation to the prior year. The World Travel and Tourism Council (WTTC) forecasts an average annual increase in tourism receipts of approximately 10% (6.7% in real terms) over the next ten years. Economic indicators continue to point to a contraction in internal demand and an expansion in external demand (contributing positively to net external demand). A lower propensity to consume and, in particular, to import capital goods – a decline is particularly evident in machinery and construction – allied to an acceleration in the rate of growth of tourism receipts is allowing net external dddemand to stilimulate growth inthe economy. The authorities have committed themselves to developing the fisheries sector, to positioning Cape Verde as a transatlantic hub and to expanding the financial and telecommunications sectors. Over the next few years, the key public investment projects will be centred on infrastructure. Almost 50% will be related to the energy, water, transport and maritime logistics sectors. The public investment programme also includes a social dimension, the development of human capital and intervention in specific sectors in order to increase competitiveness.

Sources: IMF, OECD, BCV, ES Research – Sectoral Research.

ISKO Cape Verde 05 International Premium Unit / ES Research – Sectoral Research CAPE VERDE Economic Summary (II)

In 2014 and 2015, inflation is seen stabilising around 3%, following an expected acceleration in 2013, when prices are seen rising by 4%. The tdtrend in fiforeign reserves has also been fblfavourable, whic h has guarantdteed amarginof comftfort inmaitiiintaining an appropriate level of intervention in the foreign exchange market to guarantee the stability of the framework which involved a peg of the Cape Verde escudo (CVE) to the Euro (EUR=CVE 110.265). An increase in emigrants’ remittances has contributed decisively to the rise in foreign exchange reserves. In this context, the BCV ( of Cape Verde) has maintained its key instruments unchanged, with the rediscount, marginal lending and liquidity absorption rates stable at 9.75%, 8.75% and 3.25%, respectively. In a visit carried out in December 2012, the IMF dedicated part of its analysis to the sustainability of the country’s public finances in the medium term and advised Cape Verde’s authorities to implement measures to consolidate the budget, starting in 2013, by rationalising expenditure in order to forestall possible difficulties in financing the economy. At the time, the mission classified the budget as expansionary, proposing that expenditure should be adjusted in accordance with revenues. In the visit conducted in April 2013, the Fund highlighted the increase in public debt, drawing attention to the issue of sustainability in the medium term. This was precisely one of the key aspects identified by the rating agency Fitch when it lowered the rating on the country’s long-term foreign currency rating from BB- to B+, while maintaining aBrating on short-term foreign currency debt. However, the IMF’s most recent evaluation ended in a controversial manner, when it initially estimated public debt to be equivalent to 97% of GDP, only to later acknowledge that the actual level is equal to 83% of GDP. Subsequently, Standard & Poor’s maintained Cape Verde’s sovereign rating at B+, revised its outlook from stable to negative, explicitly drawing attention to the high public and external debt as factors limiting Cape Verde’s ability to withstand potential external shocks. Despite a less favourable macroeconomic environment, Cape Verde continues to be held in high regard by the main international institutions. The World Bank’s ease of doing business index, Doing Business 2013 (DB 2013), rates the country 122nd out of 185 economies surveyed and 2nd in Central and West Africa. Cape Verde is one of the leading “medium human development” countries, according to the United Nations’ Human Development Index. In 2012, Cape Verde ranked sixth in Sub-Saharan Africa. As regards the Ibrahim African Governance Index, Cape Verde ranks second out of 52 African countries surveyed, surpassed only by Mauritius.

Sources: IMF, OECD, BCV, ES Research – Sectoral Research.

ISKO Cape Verde 06 International Premium Unit / ES Research – Sectoral Research CAPE VERDE International Integration (I)

CPLP – Community of Portuguese-Speaking Countries Comprising Portugal, Angola, Brazil, Cape Verde, Guinea-Bissau, Mozambique, Saint Thomas and Prince and East Timor, it seeks to harmonize political and diplomatic relations in terms of international foreign policy, namely in the defence and ppp,promotion of common interests and in relation to specific issues, promote cooperation, particularly in economic, social, cultural, legal, technical and scientific fields, and implementation of programs to promote and spread the Portuguese language. www.cplp.org

ECOWAS – Economic Community of West African States ECOWAS isaregilional economic itintegrati on organitiization for WtWest Afri can countries, comprising around 230 million consumers in 15 member states, including Cape Verde and Guinea-Bissau. Santo Antão www.ecowas.int São Vicente Santa Luzia Sal São Nicolau AfDB – African Development Bank

Founded in 1964, this financial institution emerged from 3 Africa development Boavista

funds. Its objective is to promote sustained economic development and reduce Atlântico poverty in the African continent. Portugal is a non-regional member as of 1982. Norte www.afdb.org Maio São Tiago Tiago

Macaronesia/EU Brava Political and development cooperation initiative between the archipelagos of the Fogo Praia Azores, the Canaries, Cape Verde and Madeira, who have established a partnership as ultra peripheral regions of the EU. On 9 December 2011, the European Union granted the Generalized System of Preferences + (()GSP+) status to Cape Verde, which was the first African country to achieve this status1.

1 When Cape Verde ceased to have United Nations “Less Developed Country “status in December 2007, it was conceded a transition period, which expired on 31 December 2011. The GSP+ is a Economic Partnership Agreement (EPA) which guarantees better access to European markets for Cape Verdean products and services, as long as there is an effective commitment to implementing the 27 most important international conventions relating to respect for human and labour rights, the environment and good governance. Sources: AfDB, EU, CIA, ECOWAS, AICEP, CPLP, ES Research – Sectoral Research .

ISKO Cape Verde 07 International Premium Unit / ES Research – Sectoral Research The Country's Economic Context

Industry Structure

IilTdBillTdihPldOiiInternational Trade, Bilateral Trade with Portugal and Opportunities

BES Group’s Internationalisation Support: International Premium Unit

BES Group's International Offering

Contacts

ISKO Cape Verde Intenational Premium Unit / ES Research – Sectoral Research CAPE VERDE GDP Sectoral Structure

Cape Verde is a services-based economy (75% of GDP in 2011). The tourism sector is the main driver of growth in the archipelago.

GDP breakdown by sector (2011)1

3.5% Electricityyg, gas, 34%3.4% Manufacturing industry and water services

3.4% Extractive Industry

7.2% Financial sector, real estate 26.0% Tourism and commerce and services to companies

8.2% Agriculture, forestry, fishinggg and hunting

10.7% Construction

23.6% Transports and communications

13.9% Public administration, education and health

1 Information gathered from OECD databases in May 2013, which was subsequently withdraw by that source. International institutions, namely the IMF, in its most recent Statement at the Conclusion of an IMF Staff Visit to Cape Verde (Press Release No. 13/204, June 7, 2013) point to the existence of problems with Cape Verde’s GDP statistics from 2101 onwards: “There is considerable uncertainty as the lack of actual real GDP data since 2010 poses serious challenges for monitoring and analanalyzingyzing economic developments and for formulating policy responses. Strengthening of the national accounts statistics should be a priority.” Sources: OECD (May), ES Research – Sectoral Research.

ISKO Cape Verde 09 International Premium Unit / ES Research – Sectoral Research CAPE VERDE The Economy ’ s Sectoral Structure (I)

Following a significant expansion in 2010, when 4 new banks began operating, 2011 was marked by greater stability. Presently,Cape Verde’s financial system comppgrising 8 bank in the onshore market and 14 in the offshore market. This expansion has led to an increase in the branch network and in related financial services. The presence of Portuguese capital is very significant in some of the key financial institutions in Cape Verde: Espirito Santo Group (BES Cabo Verde), Caixa Geral de Depósitos Group (BCA and Banco Interatlântico), BANIF Group (BCN), Geocapital (Caixa) and Banco Português de Gestão. In 2013, the acquisition of BPN IFI Cabo Verde by BIC (Angola) was announced. The Banco Central de Cabo Verde’s monetary policy, in particular in relation to limiting credit expansion, has been centred on preserving the financial strength of the retail banks. Due to a less favourable economic environment, the ratio of non-performing loans to total loans rose from 7.2%, in 2011, to 9.3%, in 2012. Credit risk, in particular in relation to mortgages, construction and consumption, represent the main risk for the banking system.

FINANCIAL SYSTEM Commercial banks operating in Cape Verde, 2012

Total assets (CVE millions) Banco Comercial do Atlântico - BCA 69. 9 1 Caixa Económica de Cabo Verde – Caixa 42.1 Banco InterAtlântico 18.4 BES Cabo Verde 15.1 1 Banco Caboverdiano de Negócios – BCN 12.6 1 Banco Africano de Investimentos – BAI 7.7 1 Ecobank 0.6 1 Novo Banco 0.4 Sources: Banco Nacional de Cabo Verde, Annual Reports and Accounts of Retail Banks – 2011 and 2012, ES Research – Sectoral Research. 1Data for 2011

ISKO Cape Verde 010 International Premium Unit / ES Research – Sectoral Research CAPE VERDE The Economy ’ s Sectoral Structure (II)

The IMF’s projections for tourism receipts, in terms of Balance of Payments, for the period 2009-2016, illustrate that the growth already witnessed is expected to accelerate sharply over the next few years. Indeed, between 2009 and 2016, tourism receipts are expected to double, exceeding EUR 380 million in 2016 and representing over 40% of exports of goods and services. The World Travel and Tourism Council’s forecasts also point in the same direction, predicting average annual growth of tourism receipts of around 6.8 over the next ten years, 2013-2023. The sector already directly contributes 14% of total employment. Tourism is the leading sector in Cape Verde’s economy and according to the WTTC its direct contribution to GDP was equal to 15.3% in 2012 (total contribution equal to 44.1%). The sector has succeeded in attracting new niches relating to cruise ship travel and sailing. ENAPOR estimates that, once necessary infrastructure is in place, such as the cruise ship terminal at the Port of Mindelo (São Vicente), the number of cruise ship tourists at Cape Verde’ s ports could double by 2020 (22 thousand tourists in the first four months of 2013).

TOURISM (I) Tourism Receipts, 2009-2016P (EUR Millions) 387 355 325 298 253 280 200

2010 2011 2012 2013 2014 2015 2016 Sources: IMF, ES R esearch – StSectoral lR Researc h. P FtForecasts.

ISKO Cape Verde 011 International Premium Unit / ES Research – Sectoral Research CAPE VERDE The Economy ’ s Sectoral Structure (III)

There has been an exponential increase in the number of overnight stays which, in 2000, totalled 685 thousand and, in 2012, already exceeded 3.3 million. Over this period, the average annual increase in overnight stays in hotel establishments in the country was equal to around 14%, while, last year, the number increased by 17.9% in relation to 2011. This performance is partly due to the country’s ability to attract tourists from beyond the Euro Zone, in particular from the United Kingdom, which more than compensated for the reduction in tourists from these countries. There continues to bestrong reliance on fiforeigntourism - over 95% of overnihightstays-almost exclusively represented by European markets. The most important markets in 2012 were: the United Kingdom, 31.7%; Germany, 14.9%; Portugal, 9.5%; and France, 9.0%. The islands of Boavista and Sal stand out clearly as being the destinations most capable of attracting tourists, representing 90% of overnight stays; 47.4% on the island of Boavista and 42.2% on the island of Sal.

Overnight stays in hotel establishments in Cape Verde, 2000-2012 TOURISM (II) (Thousands)

3334 2828 2342 2022 1827 1368 1433 903 865 936 685 806 694

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

FtFontes: ItittNiInstituto Nacional ldEttíti(CbVd)Diã de Estatística (Cabo Verde), Direcção-GldTiGeral de Turismo (CbVd)ESR(Cabo Verde), ES Researc h – StSectoral RhResearch.

ISKO Cape Verde 012 International Premium Unit / ES Research – Sectoral Research CAPE VERDE The Economy ’ s Sectoral Structure (IV)

Cape Verde is ranked tenth worldwide in terms of the importance of tourism to the country’s economy. This situation reflects the growing expansion in hotel accommodation in the archipelago and the improved quality of infrastructure and human resources available. In 2011, accommodation capacity comprised 195 establishments and over 14 thousand beds. The number of available beds continues to be most significant on the island of Sal, 44.7%; followed by the islands of Boavista, 31.1%; Santiago, 9.6%; and São Vicente, 6.9%. In May 2013, Cape Verde announced that five gaming zones would be established, instead of the three initially planned. In addition to the originally planned gaming zones on the islands of Sal, Santiago and São Vicente, the government will also set up the Boa Vista and Maio zones. The gaming zone on Santiago Island is already being implemented and a concession contract for the zone on Sal Island has been signed with the Casino Ro yal compan y. The casino is to operate in the Hilton Hotel on Santa Maria Beach. Construction of the hotel is due to begin this summer and the hotel and casino are expected to open to the public at the beginning of 2015. TOURISM (III) Distribution of accommodation Accommodation capacity in Cape Verde, 2005 - 2011 capacity on the islands, 2011 (Number of establishments) (% of total)

195 Outras 173 178 S. Antão 158 4 142 150 S. Vicente 3.7 132 6.9

Santiago Sal 9.6 44.7

Boavista 2005 2006 2007 2008 2009 2010 2011 31.1

Sources: ItittNiInstituto Nacional ldEttíti(CbVd)Diã de Estatística (Cabo Verde), Direcção-GldTiGeral de Turismo (CbVd)ESR(Cabo Verde), ES Researc h – StSectoral lR Researc h.

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 13 CAPE VERDE The Economy ’ s Sectoral Structure (V)

Despite the limited size of its surface area, Cape Verde benefits from a vast Exclusive Economic Zone – EEZ: 789 . 4 thousan d km2, around 9. 4% o f the EEZ o f the w ho le o f Su b Sa haran Afr ica. AditlblAccording to global benchmarks, Cape Verde’s fish stocks are not substantial, but do include migratory species of commercial value, such as tuna fish, as well as small pelagic fish (e.g. mackerel, jack macherel, herring), some demersal fish (e.g. seabream, red mullet and red seabream) and lobster. The overall level of employment in the fishinggy industry and related activities in the public sector re present about 5% of the total workforce. Following a contraction in 2009 and 2010, there was a recovery in production in the industry in 2011 which yielded 22.5 thousand tons. This sector, which is of great social and strategic importance for the country, is expected to contribute over 50% of merchandise exports in 2012. This contribution is to be sustained by the growing importance of the canning industry, particularly with the future implementation of cold storage and fish processing facilities at Mindelo, on the island of São Vicente .

FISHERIES (I) Fishing output (catch), 2002 - 2011 (tons)

24 588 23 819 22 500 21 617 21 048 19 113 19 500500

10 396 81458 145 8 103103

Sources: FAO 2012 , ES R esearch – StSectoral lR Researc h. 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 14 CAPE VERDE The Economy ’ s Sectoral Structure (VI)

Cape Verde enjoys access to EU markets with exemption from customs dues with regard to products entirely originating from fishing and is a member of the International Commission for the Conservation of Atlantic Tunas and of the Subregional Commission on Fisheries. Cape Verde maintains fishing agreements with China, the EU, Guinea-Bissau, Japan, Mauritania and Senegal. These agreements allow more than 100 foreign vessels to fish in Cape Verde’s waters. The fishing agreement between Cape Verde and the European Union, within the terms of Council Decision 2011/679/EU of 10 October 2011, will last for three years and authorises 11 pole-and-line tuna fishing vessels, 28 tuna seiners and 35 surface longliners from the European Union to operate in Cape Verdean waters, including nine Portuguese vessels, two more than in the previous agreement. The European vessels can capture a quota of five thousand tons per annum, Cape Verde being entitled to financial compensation of around EUR 1.3 million. FISHERIES (II) CVdCape Verde - UE Agreemen t Fishi ng O pport uniti es

Tuna pole-and-line Tuna pole-and-line Tuna seiners Tuna seiners Surface longliners Surface longliners Member State vessels vessels (2007/2011) (2011/2014) (2007/2011) (2011/2014) (2007/2011) (2011/2014)

Spain 12 16 41 26 7 7

France 13 12 0 0 4 4

Portugal 0 0 7 9 - -

Total/vessels 25 28 48 35 11 11

Sources: ECiiESRhEuropean Commission, ES Research – StSectoral lR Researc h.

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 15 CAPE VERDE The Economy ’ s Sectoral Structure (VII)

As a result, the country’s authorities have made efforts to position Cape Verde as a competitive ocean hbhub in the SthSouth Atlanti c bibringi ing tthtogether the bdtbroadest possibleset of capabilities. There are many examples of initiatives which characterise the ongoing and persistent efforts of the authorities in Cape Verde to rigorously implement and to attract different assets needed to build a coordinated set of services, involving public, private and corporate entities, capable of meeting demands originating in the South Atlantic or dddirected tooadwardsthereggoion. CapeVerde’s sea cluster aims to aggrega te a response to these needs, based on a privileged location in the region, determination and a range of initiatives in key areas, as follows:

Oceanographic Fishing and fish research distribution INFRASTRUCTURE AND SEA CLUSTER Maritimes logistics Services for merchant marine and international Sea cluster fishing sectors

Energy Shipbuilding and repair

Nautical tourism Salt production Water catchment

Source: ES R esearc h – StSectoral lR Researc h.

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 16 CAPE VERDE The economy ’ s sectoral structure (VIII)

Globalization confers Cape Verde an increased centrality in its economic region, ECOWAS, CEMAC e CEEAC – member states where it has an unique opportunity to impose itself. Cape Verde is geographically located in the centre of important trade routes which link Afri ca and E urope t o mark et s i n S outh and North America. Cape Verde’s full regional integration, namely as a member of ECOWAS (Economic Community of West African Mauritania Mali States, comprising 230 million Niger ATLANTIC Senegal citizens in 15 member states) and Gambia Chad GATEWAY given its close relationship with Cabo Verde G. Bissau B.Faso Guineia Benin TO AFRICA other member states of CPLP – S.Leone Togo Nigeria C. Ivoire Central Ghana (I) the Community of Liberia African Portuguese-Speaking Countries, Cameroon Republic and with countries that are part of Equatorial G. other regional communities on the S.T.P. Gabon Rwanda West African Coast: Angola, Saint R.Congo Burundi Thomas and Prince and D. R.Congo Equatorial Guinea (members of Cape the Economic Community of Verde Angola Central African States – CEEAC and also, in the case of Equatorial Guinea, of the Economic and Monetary Community of Central Africa - CEMAC). Sources: ECOWAS, CEMAC, CEEAC , ES R esearch – StSectoral lR Researc h. ECOWAS – EiCitfWtAfiSttEconomic Community of West African States CEMAC - Economic and Monetary Community of Central Africa ISKO Cape Verde CEEAC - Economic Community of Central African States International Premium Unit / ES Research – Sectoral Research 17 The Country's Economic Context

Industry Structure

Int ernati ona l T rad e, Bil at eral T rad e with P ort ugal and O pport uniti es

BES Group’s Internationalisation Support: International Premium Unit

BES Group's International Offering

Contacts

ISKO Cape Verde Intenational Premium Unit / ES Research – Sectoral Research CAPE VERDE International Trade – Partners

Cape Verde’s imports by country, 2012 Cape Verde’s exports by country, 2012

Share2012 TCMA Share2012 TCMA Ranking País 07-12 Ranking País 07-12 (EUR Milhões) Milhões) (%) (%) (EUR Milhões) Milhões) (%) (%)

1 Portugal 233.9 40.3 1.7 1Espanha 31.2 76.3 32.4

2 Portugal 6.5 16.0 -18.5 2 Holanda 73.5 12.7 3.6

3EUA 54.4 9.43 45.5 El Salvador 2.0 4.9 29.8

4 Espanha 45.0 7.84EUA 12.7 0.5 1.3 33.6

5Brasil 23.9 4.15 -6.4 São Tomé e Príncipe 0.2 0.5 ---

6 China 17.7 3.06 15.4 Líbia 0.2 0.5 ---

7Malta 13.4 2.37 67.5 Holanda 0.1 0.2 -64.9

8 Japão 13.4 2.38 -7.3 Guiné-Bissau 0.1 0.1 32.3

9Bélgica 11.1 1.99 -4.7 Angola 0.0 0.1 54.1

10 Itália 10.8 1.910 -13.2 Itália 0.0 0.1 -61.4

Source: UNComtrade.

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 19 CAPE VERDE International Trade – Goods Imports and Exports (World)

Cape Verde Top 10 imports, 2012 Cape Verde Top 10 exports, 2012

2012 Share TCMA 2012 Share TCMA Produtos (N.C. 4) 07-12 Produtos (N.C. 4) 07-12 (EUR Milhões) (%) (%) (EUR Milhões) (%) (%) 2710 - Óleos de petróleo ou de minerais betuminosos 1604 - Preparações e conservas, de peixes; caviar e (excepto óleos brutos); preparações contendo, em peso 95.5 12.7 6.8 22.8 40.9 160.3 seus sucedâneos preparados a partir de ovas de peixe = > 70% de óleos de petróleo ou de minerais 8802 - Veículos aéreos com propulsão a motor (por 303 - Peixes congelados (excepto os filetes de peixes e exemplo: helicópteros e aviões); veículos espaciais 57.6 7.6 2.8 20.2 36.2 16.2 outra carne de peixes da posição 0304) (incluídos os satélites) e seus veículos de lançamento e 6406 - Partes de calçç,ado, incluídas as partes su periores , 2523 - Cimen tos hidr áu licos, inc lu ídos c imen tos n ão 23.6 3.1 -4.8 mesmo fixadas a solas que não sejam as solas 4.3 7.8 7.1 pulverizados, denominados clinkers, mesmo corados exteriores; palmilhas amovíveis, reforços interiores e 2201 - Águas, incluídas as águas minerais, naturais ou 1006 - Arroz 22.3 3.0 5.4 artificiais, e as águas gaseificadas, não adicionadas de 3.2 5.7 119.3 açúcar

402 - Leite e nata, concentrados ou adicionados de 16.3 2.2 -2.9 6109 - T-shirts e camisolas interiores, de malha 1.1 1.9 2.1 açúcar ou de outros edulcorantes

8703 - Automóveis de passageiros e outros veículos 306 - Crustáceos, mesmo sem casca, vivos, frescos, automóveis principalmente concebidos para transporte 15.7 2.1 -6.3 refrigerados, congelados, secos, salgados ou em 1.1 1.9 23.1 de pessoas (excepto os autocarros da posição 8702), salmoura 7214 - Barras de ferro ou aço n ão liga do, s imp lesmen te 6107 - Cuecas, cerou las, cam isas de no ite, p ijamas, forjadas, laminadas, estiradas ou extrudadas, a quente, 12.8 1.7 -5.8 roupões de banho, robes e semelhantes, de malha, de 0.8 1.4 -9.0 incluídas as que tenham sido submetidas a torção após uso masculino (excepto camisolas interiores) 2208 - Álcool etílico não desnaturado, com um teor 2711 - Gás de petróleo e outros hidrocarbonetos 12.2 1.6 0.7 alcoólico em volume < 80% vol; aguardentes, licores e 0.7 1.2 1.7 gasosos outras bebidas espirituosas 6203 - Fatos, conjuntos, casacos, calças, jardineiras, 207 - Carnes e miudezas, comestíveis, frescas, 12.0 1.6 6.9 calças curtas e calções (shorts), de uso masculino 0.7 1.2 -30.2 refrigeradas ou congeladas, das aves da posição 0105 (excepto de malha, assim como, blusões e 3004 - Medicamentos (excepto os produtos das posições 8704 - Veículos automóveis para transporte de 11.7 1.5 -10.9 3002, 3005 ou 3006) constituídos por produtos 0.3 0.5 194.4 mercadorias, incluídos chassis com motor e cabine misturados ou não misturados, pppreparados para fins Source: UNComtrade.

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 20 CAPE VERDE International Trade – Bilateral relations with Portugal (I)

Portugal’s trade balance with Cape Verde, 2007, 2011 and 2012 (EUR millions)

Compound Annual Growth Rate (CAGR) Surplus CAGR of exports = -2.2% 07-12 EUR 199 million In 2012, CAGR07-12 of imports = 1.8% 2 819 companies exported goods to Cape Verde

27th 95th (share: 0.5%) (share: 0.02%) 327 301 Exports 269 52 Services (19%) -3.8%

217 Goods 77 64 70 (81%) Imports Services In 2011, 61 (87%) 2 930 companies exported 9 goods to Cape Verde Goods 2007 2011 2012 2012 2012 (13%) Exports of goods and services Imports of goods and services

Rank and share as a customer of and supplier to Portugal (goods) Sources: INE, Banco d e Por tugal .

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 21 CAPE VERDE International Trade – Bilateral relations with Pl(I)Portugal (I)

Top 10 Portuguese imports from Cape Verde, 2012 Top 10 Portuguese exports to Cape Verde, 2012

2012 Share TCMA 2012 Share TCMA Produtos (N.C. 4) 07-12 Produtos (N.C. 4) 07-12 (EUR Milhões) (%) (%) (EUR Milhões) (%) (%) 6406 - Partes de calçado, incluídas as partes superiores, 2523 - Cimentos hidráulicos, incluídos cimentos não mesmo fixadas a solas que não sejam as solas 3.6 47.9 8.0 10.9 5.0 -2.1 pulverizados, denominados clinkers, mesmo corados exteriores; palmilhas amovíveis, reforços interiores e

1507 - Óleo de soja e suas fracções, mesmo refinados, 6109 - T-shirts e camisolas interiores, de malha 1.0 12.7 2.7 7.6 3.5 25.7 mas não químicamente modificados

0306 - Crustáceos,,,,, mesmo sem casca, vivos , frescos, refrigerados, congelados, secos, salgados ou em 0.8 10.4 20.5 3004 - Medicamentos 5.0 2.3 -0.4 salmoura 6107 - Cuecas, ceroulas, camisas de noite, pijamas, 7214 - Barras de ferro ou aço não ligado, simplesmente roupões de banho, robes e semelhantes, de malha, de 0.7 8.8 -11.1 forjadas, laminadas, estiradas ou extrudadas, a quente, 4.9 2.2 80.3 uso masculino (excepto camisolas interiores) incluídas as que tenham sido submetidas a torção após 2208 - Álcool etílico não desnaturado, com um teor alcoólico em volume < 80% vol; aguardentes, licores e 0.2 2.3 -4.4 2203 - Cervejas de malte 4.5 2.1 -5.2 outras bebidas espirituosas 7308 - Construções e suas partes (pontes e elementos 0303 - Peixes congelados (excepto os filetes de peixes e 0.1 1.9 -14.4 de pontes, comportas, torres, pórticos, pilares colunas, 3.9 1.8 -7.1 outra carne de peixes da posição 0304) armações, extruturas para telhados, portas e janelas) 6203 - Fa tos, con jun tos, casacos, ca lças, jar dine iras, 9403 - Móveis e suas partes, não especificadas nem calças curtas e calções (shorts), de uso masculino 0.1 1.5 -19.8 3.9 1.8 -1.3 compreendidas noutras posições (excepto de malha) 8517 - Aparelhos eléctricos para telefonia ou telegrafia, 8537 - Quadros, painéis, consolas, cabinas, armários e por fios, incluídos os aparelhos telefónicos por fio, 0.1 1.1 -19.7 outros suportes, com dois ou mais aparelhos das 3.9 1.8 25.0 combinados com auscultadores sem fio posições 8535 ou 8536, para comando eléctrico ou 1905 - Produtos de padaria, de pastelaria ou da indústria 8544 - Fios e cabos, incluídos os cabos coaxiais, e de bolachas e biscoitos, mesmo adicionados de cacau, 0.1 1.0 11.1 outros condutores, isolados para usos eléctricos; cabos 3.7 1.7 -6.7 hóstias, cápsulas vazias para medicamentos de fibras ópticas

7204 - Desperdícios, resíduos e sucata de ferro fundido, 0401 - Leite e nata, não concentrados nem adicionados 0.1 1.0 7.7 3.3 1.5 25.9 ferro ou aço de açúcar ou de outros edulcorantes

Sources: INE, Banco de Portugal.

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 22 CAPE VERDE Goods export opportunities (I)

Set of products (goods) identified as needs (imports) of Cape Verde for which Portugal has production and export capacity, thus representing opportunities to increase the volume of Portuguese exports to Cape Verde.

Top 10 export opportunities to Cape Verde

7310 - Tanks, casks, drums, cans, boxes and similar containers, of iron or steel

2103 - Sauce and preparations therefor; mixed condiments and mixed seasonings; mustard flour and meal, whether or not prepared, and mustard 7217 - Wire Of Iron Or Non-Alloy Steel, In Coils (Excl. Bars And Rods) 4011 - New pneumatic tyres , of rubber

9401 - Seats, whether or not convertible into beds, and parts thereof, N.E.S. (excl. medical, surgical, dental or veterinary of heading 9402)

2204 - Wine Of Fresh Grapes, Incl. Fortified 1006 - Rice Wines; Grape Must, Partly Fermented

0207 - Meat and edible offal of fowls of the species gallus domesticus, ducks, geese, turkeys and guinea fowls, fresh, chilled or frozen

1701 - Cane or beet sugar and chemically pure sucrose, in solid form 0402 - Milk and cream, concentrated or containing added sugar or other sweetening matter

Sources: UNCom tra de, ES R esearc h – StSectoral RhResearch.

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 23 CAPE VERDE Goods export opportunities (II)

Top 10 export opportunities to Cape Verde (Amount and rank of Cape Verde world imports)

2006 2011 CAGR06-11 Share Products (H.S. 4) Rank 2011 (EUR Million) (EUR Million) (%) (%)

1006 - Rice 10.3 18.1 11.9 32.6

402 - Milk And Cream, Concentrated Or Containing Added Sugar Or Other Sweetening Matter 10.2 13.9 6.3 42.0

1701 - Cane Or Beet Sugar And Chemically Pure Sucrose, In Solid Form 6.1 12.2 14.7 91.8

207 - Meat And Edible Offal Of Fowls Of The Species Gallus Domesticus, Ducks, Geese, Turkeys And Guinea Fowls, Fresh, Chilled Or Frozen 5.0 8.9 12.2 15 1.3

2204 - Wine Of Fresh Grapes, Incl. Fortified Wines; Grape Must, Partly Fermented 3.4 4.2 3.9 30 0.6

9401 - Seats, Whether Or Not Convertible Into Beds, And Parts Thereof, N.E.S. (Excl. Medical, Surgical, Dental Or Veterinary Of Heading 9402) 2.4 3.0 4.5 43 0.4

4011 - New Pneumatic Tyres, Of Rubber 1.8 3.0 10.7 44 0.4

2103 - Wire Of Iron Or Non-Alloy Steel, In Coils (Excl. Bars And Rods) 0.5 1.4 20.9 97 0.2

7310 - Sauce And Preparations Therefor; Mixed Condiments And Mixed Seasonings; Mustard Flour And 060.6 111.1 11.0 0 114 020.2 Meal, Whether Or Not Prepared, And Mustard

7217 - Tanks, Casks, Drums, Cans, Boxes And Similar Containers, Of Iron Or Steel 0.2 1.0 37.2 117 0.2

Sources: UNComtrade, OECD, ES Research – Sectoral Research.

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 24 CAPE VERDE Goods export opportunities (III)

Cloud of Export Opportunities to Cape Verde

Agricultural and food products Other sectors

2002 - Tomatoes prepared or preserved (except in 1509 - Olive oil and its fractions obtained from the fruit vinagre or acetic acid) of the olive tree solely by mechanical or other physical 6302 - Bedlinen, table linen, toilet linen and kitchen means under conditions that do not lead to 2004 - Vegetables prepared or preserved otherwise linen of all types of textile materials (excl. floorcloths, deterioration of the oil, whether or not refined, but not polishing cloths, dishcloths and dusters) than by vinegar or acetic acid, frozen chemically modified 2208 - Undenatured ethyl alcohol of an alcoholic 0406 - Cheese an d cur d strength of < 80%; spirits, liqueurs and other spirituous 4016 – Articles of vulcanised rubber (excl. Hard beverages rubber), N.E.S

3212 - Pigments, incl. Metallic powders and flakes, dispersed in non-aqu eou s media, in liqu id or paste form, of a kind used in the manufacture of paints; stamping foils of A kind used in the printing of book bindings or hatband leather; colorants and other Machinery and tools colouring matter, N.E.S. put up for retail sale

8464 - Machine tools for working stone, ceramics, 8419 - Machinery, plant or laboratory equipment concrete, asbestos-cement or like mineral materials or whether or not electrically heated, for the treatment of 3004 – Medicaments for cold-working glass (excl. Machines for working in materials involving a change of temperature the hand) 2505 - Natural sands of all kinds, whether or not 8410 - Hydraulic turbines, water wheels, and coloured (excl. gold- and platinum-bearing sands, regulators therefor (excl. Hydraulic power engines and zircon, rutile and ilmenite sands, monazite sands, and motors of heading 8412) tar or asphalt sands)

Sources: UNCom tra de, ES R esearc h – StSectoral RhResearch.

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 25 The Country's Economic Context

Industry Structure

IilTdBillTdihPldOiiInternational Trade, Bilateral Trade with Portugal and Opportunities

BES Group’s Internationalisation Support: International Premium Unit

BES Group's International Offering

Contacts

ISKO Cape Verde Intenational Premium Unit / ES Research – Sectoral Research CAPE VERDE BES Group' s Internationalisation Support (I)

BES is the Portuguese bank with the largest international presence and the best international offering: for the 7th consecutive year it has won the “The Best Trade Finance Bank” award.

Luxembourg: Italy: Poland: Strategic United Kingdom: France: Spain: Branch Banco delle Tre BES and Triangle: Branch BES and Subsidiary: BES Vénétie Venezie BESI Subsidiaries Africa - Brazil – BESI Branches Iberian Peninsula

New York: BES and China: BESI Branches Representative Office

USA Miami: Subsidiary: ES Bank Hong Kong: of Florida, BESI Subsidiary

Macao: Mexico: BES Oriente Representative Subsidiary Offices: BES and Mumbai: BESI BESI Venezuela: Branch

Brazil: Cape Verde: Morocco: Algeria: Libya: South Africa: Angola: Mozambique: Subsidiária BES Cabo Banque Banque Subsidiary: BES Subsidiary: Moza Banco BESI Verde Marocaine du Extérieur Aman Bank Representative BES Angola Commerce d'Algérie Office Extérieur

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 27 CAPE VERDE BES Group' s Internationalisation Support (II)

BES Cape Verde is committed to supporting the development of the business community in Cape Verde, investment by foreign companies in the country and the identification of internationalisation internationalisation opportunities opportunities for BES Group customers .

▪ BES is present in Cape Verde since 2006, by means of a local branch, followed by the setting up of a local bank, in July 2010

▪ Activity is focused on the Corporate segment (Portuguese companies, top-tier Cape Verdean companies and multinationals), private and affluent banking. (more than 1400 customers in July 2013)

▪ Current branch network equal to 2 (on Santiago and Sal Islands), with a 3rd branch expected to open on S Vicente Island, in 2013

▪ Wide range of products in Corporate banking, including: ▪ Trade Finance solutions. Examples: ▪ Credit line to support exports to Cape Verde (BES CV opens LCs and BES confirms LCs)

▪ Discounting of export revenues: discount of LCs; ▪ Financing for infrastructure projects and treasury management

▪ Transactional banking services in the domestic and international markets

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 28 CAPE VERDE BES Group' s Internationalisation Support (III)

International Premium Unit (IPU) offers Portuguese companies specialized services to aid and support their internationalization process (exports or foreign direct investminvestment),ent), finding solutions for multiple requests in various foreign markets.

IPU is organised in 5 international desks, geographically specialised and consisting of experienced, multi-skilled international managers.

Eastern Mature Europe, Markets & Asia & China Middle East

Latin North Africa & America Turkey

Africa

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 29 The Country's Economic Context

Industry Structure

IilTdBillTdihPldOiiInternational Trade, Bilateral Trade with Portugal and Opportunities

BES Group’s Internationalisation Support: International Premium Unit

BES Group's International Offering

Contacts

ISKO Cape Verde Intenational Premium Unit / ES Research – Sectoral Research CAPE VERDE BES Group' s International Offering

A Global and Innovative Offer to Support the Internationalisation of the Portuguese Companies

ES Research: Investment Banking Multipessoal Group MktDtMarket Data

Macroeconomic surveys Project Finance Recruitment of specialists (M Search) Sectoral surveys M&A Outsourcing, temporary work, training and consulting services with presence in Angola Market research Corporate Finance and Spain

Commercial Banking Venture Capital Tranquilidade

Business Development Support as partner in internationalisation International Transport Insurance projects Support to Account Opening / KYC Support to treasury monitoring / centralisation ES Ventures FX Ri s k H e dg ing Support to Exports/Imports; Trade Finance; ES Capital Import Financing Bank Guarantees / Stand By Letters of Credit 2bCapital International Factoring – agreement to use Eurofactor’s European network Espírito Santo Rockefeller Global Energy Support to business partners’ search Fund

ISKO Cape Verde International Premium Unit / ES Research – Sectoral Research 31 The Country's Economic Context

Industry Structure

IilTdBillTdihPldOiiInternational Trade, Bilateral Trade with Portugal and Opportunities

BES Group’s Internationalisation Support: International Premium Unit

BES Group's International Offering

Contacts

ISKO Cape Verde Intenational Premium Unit / ES Research – Sectoral Research Disclaimer

This document was prepare d by Banco EíiEspírito Santo an d/or any o f i ts su bs idiar ies (“BES”) and i s i ntend ed sol el y f or rel ease b y BES to qualifi e d investors. Its use is restricte d to qua lifie d investors, an d t he ir representatives. All information contained in this document was compiled in good faith by BES, using sources of public information considered reliable, although its accuracy cannot be guaranteed. Accordingly, with the exception of information about BES makes no representation as to the accuracy or completeness of such information. The opinions expressed in this document reflect BES’s point of view as of the date of its release and may be subject to change without prior notice. BES does not assure the update of this document. This document is not a research report, neither represents any kind of advisory, nor is an offer to buy or sell or intends to solicit an order to buy or sell. The prices of any instruments described in this document are indicative prices only and do not constitute firm bids or offers. BES may choose to make a market for any instruments referred in this document, but are not obliged to do so. Any such market-making activities may be discontinued at any time without notice. The prices of any financial instruments described in this document are indicative prices only and do not constitute firm bids or offers. BES may trade for their own account or of their clients any instruments that may be referred to in this document, as well as they may have any business relationship with the entities referred on it. BES may act as market-makers of any instruments referred to in this document, although they are not obliged to do so and, if they do it, they may terminate that activity at any moment. BES may act as placement agent, advisor, lender or in other capacities in with respect to financial instruments or issuers referenced in this document. BES may trade for its own account and may also engage in securities transactions in a manner inconsistent with this document and with respect to financial instruments covered by this document. BES has no obligation to update, modify or amend this document or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Prices and availability of financial instruments are also subject to change without notice. This document is provided for informational purposes only. BES will not accept any responsibility for any loss resulting from the use of the information or opinions referred in this document. The financial instruments discussed in this document may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. If a financial instrument is denominated in a currency other than an investor’s currency, a change in exchange rates may adversely affect the price or value of, or the income derived from the financial instrument, and such investor effectively assumes currency risk. In addition, income from an investment may fluctuate and the price or value of financial instruments described in this document, either directly or indirectly, may rise or fall. Furthermore, past performance is not necessarily indicative of future results. The financial instruments discussed herein may be subject to restrictions with regard to certain persons or in certain countries under national regulations applicable to said persons or in said countries. It is each investor’s resppyonsibility to ensure that it is authorized to invest in those financial instruments. This document is confidential and addressed to a restricted number of entities. If you are not an addressee of this document, you should immediately destroy it. The dissemination or copy, in total or in part, of this document is not allowed. Additional information is available upon request.

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The enclosed document does not constitute any kind of research report or any kind of offer to sell any of the financial instruments discussed herein, nor is it soliciting an offer to buy such financial instruments. The financial instruments issued by Companies that may be discussed herein may be subject to restrictions with regard to certain persons or in certain countries under national regulations applicable to said persons or in said countries. It is each investor’s responsibility to ensure that it is authorized to invest in those securities. The financial instruments discussed in this material may not be suitable for all investors. Investors should make their own assessment of the risks from a legal, tax and accounting perspective prior to investing in such products. Past performance is no guarantee to future performance. This document is being distributed to, and is intended solely for the use of, institutional investors. Notwithstanding the generality of the preceding sentence, this document is intended solely for the use of the ins titu tiona l inves tor to w hic h it has been sen t by BES an d suc h rec ip ien t’s agen ts, emp loyees, a dv isors an d represen ta tives. If you hidthidtihave received this document in error, you are urge dtdtittitd to destroy it or return it immediately to BES. The prices of any financial instruments described in this document are indicative prices only and do not constitute firm bids or offers. BES or its affiliates may choose to make a market for any such financial instruments, but neither BES nor any of its affiliates has an obligation to do so. Any such market-making activities may be discontinued at any time without notice. Certain information contained in this document has been derived from public sources that BES deems to be reliable. Neither BES nor any of its affiliates, however, have independently verified such publicly available information nor do they take responsibility for its accuracy or completeness. Anyyp U.S. person receivin g this document and wishin g to effect transactions in an y financial instruments discussed herein should do so,,pp, if applicable, throu gh BES and not throu gh an y non-U.S. affiliate of BES.

ISKO Cape Verde 33 International Premium Unit / ES Research – Sectoral Research International Premium Unit

Head Ricardo Bastos Salgado [email protected] Head Miguel Frasquilho [email protected]

Francisco Mendes Palma Head Sectoral Strategist fl@[email protected]

Susana Barros [email protected] Marta Mariz International business and Luís Ribeiro Rosa [email protected] financial institutions Director [email protected] Paulo Talhão Paulino [email protected]

Conceição Leitão [email protected] Research Sectorial Desk Africa João Pereira Miguel [email protected]

Patrícia Agostinho [email protected]

Salvador Salazar Leite [email protected] BPiBruno Pereira bi@[email protected] Head of Desk Miguel Bidarra [email protected] José Manuel Botelho [email protected]

Celina Luís [email protected]

ISKO Cape Verde 34 International Premium Unit / ES Research – Sectoral Research