Prime consulting Lda - UNESCO · for markets still unconquered by others, from the Marshall Islands and Kamchatka to remote villages in Romania (source adapted: Haugen, H. and Carling,

Prime consulting Lda A one stop-off tourism website

Paulo Noel Martins founded Prime Consulting in 2008 at a time when

there was no other private IT competitor company in the Cape Verdes.

Its first project was to develop a system for the elections in Cape

Verdes in 2008. This was part of the publicly funded e-government

initiative. The Cape Verdes government had just won an important aid

project called the Millennium Challenge Corporation (MCC). Prime

Consulting’s solution was a big success. It included video conferencing,

which at the time was unheard of. At that time his firm employed

about 60 people. But business has dried up since. Today he employs

around 20 people full-time, including teams abroad. He sees difficult

times ahead.

This case serves as the basis for class discussion rather than to illustrate either effective or ineffective management. The case is based on data provided by interviews with the management of Prime Consulting and Internet resources. It was prepared by Professor Peter Augsdörfer (THI Germany).

30/11/2014

[PRIME CONSULTING] 2014

| Country Information 2

PRIME CONSULTING LDA

A one stop-off tourism website

Abstract : Paulo Noel Martins founded Prime Consulting in 2008 at a time when there was no other

private IT competitor company in the Cape Verdes. Its first project was to develop a system for the

elections in Cape Verdes in 2008. This was part of the publicly funded e-government initiative. The

Cape Verdes government had just won an important aid project called the Millennium Challenge

Corporation (MCC). Prime Consulting’s solution was a big success. It included video conferencing,

which at the time was unheard of. At that time his firm employed about 60 people. But business has

dried up since. Today he employs around 20 people full-time, including teams abroad. He sees difficult

times ahead.

CONTENT

Country Information ................................................................................................................. 3

The IT Sector ........................................................................................................................... 6

Company ................................................................................................................................. 8

Markets and Products ............................................................................................................. 11

EXHIBIT .................................................................................................................................. 17

Exhibit 1 .............................................................................................................................. 17

Exhibit 2 ............................................................................................................................. 17

Exhibit 3: Communications in Cape Verde. ......................................................................... 17



COUNTRY INFORMATION1

The Cape Verde islands span an archipelago of ten volcanic islands in the central Atlantic

Ocean, about 570 kilometres off the coast of Western Africa. The capital is Praia, which is

about a one-hour flight distance form Dakar, and three hours from Brazil. The country has

around 500,000 inhabitants.

Caught in the Sahel zone, the islands

have a semi-arid climate. The area

has a very low precipitation, a very

long, prevailingly dry season and a

short rainy season (irregular rain

between August and October, with

frequent brief-but-heavy

downpours). The temperature does

not really vary. However, Cape

Verde's climate is milder than that of

the African mainland, because the

surrounding sea moderates

temperatures on the islands and cold

Atlantic currents produce an arid

atmosphere around the archipel. Therefore, the air temperature is cooler than in Senegal, but

the sea is actually warmer.

Cape Verde, or Cabo Verde, has had a sound and working democracy since gaining

independence from Portugal in 1975. It has not experienced a single coup d’état, a regional

record shared only by Senegal. The country is well governed; its macroeconomic

management is sound, trade is open and it is increasingly being integrated into the global

economy and is adopting effective social development policies.

In the mid-1990s, the government began a series of reforms that have transformed a

previously centrally-planned economy into a market-oriented economy. The number of

publicly-owned enterprises has decreased from forty to six, as of today. Privatization came

through either private sector sales or liquidation. The two main utility companies, Electra

(electricity and water) and Cape Verde Telecom; the country's three banks, and the main

1 Sources adapted: http://en.wikipedia.org/wiki/Cape_Verde and www.worldbank.org/en/country/caboverde/overview#1 and

www.state.gov/r/pa/ei/bgn/2835.htm and (map) www.cia.gov/library/publications/cia-maps-publications/Cape%20Verde.html, and (photo)

www.afropop.org/wp/10133/cape-verdean-american-story-with-marilyn-halter/ and

www.americanprogress.org/issues/security/report/2013/08/22/72557/guinea-bissau-and-the-south-atlantic-cocaine-trade/ , and

www.un.cv/files/One%20UN%20in%20Cape%20Verde.pdf ; accessed 2.10.14

Figure 1: Cape Verde



state-owned entities in the tourism sector have all been sold off. Since 2007, it has been

classified by the UN as a developing nation due to its impressive results.2

Cape Verde has few natural resources and its isolation is unfavourable for

its economy. It issubject to high unit costs for its core infrastructure and

public goods, and its relative remoteness and isolation mean transport

costs are high. Despite this, it had notable economic growth (GDP) per

capita of 7.1% during 2005-08, well above the average for Sub-Saharan

Africa, and for small island states. Unfortunately, after 2009 growth

slowed to a disappointing 0.5 % (2013). The slowdown reflects the fall in

private investment, which in turn is associated with a drop in foreign direct investment (FDI)

and tighter monetary conditions. All of which is the aftermath, to a significant extent, of drug

smugglers using the Cape Verdes as a stopover on the way from Latin America to Africa

(Guinea-Bissau). However, an anti-drugs trafficking operation started in 2008 has been very

successful.3

The economy of Cape Verde relies on a narrow

range of economic sectors. Cabo Verde consistently

runs a high trade deficit, which is bankrolled by

foreign aid and remittances from its large pool of

emigrants. Today, more Cape Verdeans live abroad

than in Cape Verde itself, and their remittances

supplement GDP by more than 20%. Its economy is

mostly service-oriented, with commerce, transport,

and public services accounting for more than 70%

of the GDP. There is a growing and successful focus

on tourism, inspired by Cape Verde’s diverse

landscape and cultural wealth, especially in music.

Tourism is estimated to account for 21% of the GDP (2013). It depends, however, very much

on the economic situation in Europe. That is why the Cape Verdean escudos (CVE) are linked

to the European euro. The construction and industry sector remains the least confident

sector, following stagnation of new investments in hotels and secondary residences since

2008 (19% of GDP in 2013). Its main industry includes food and beverages, fish processing,

shoes and garments, salt mining, and ship repair. Main export goods are fuel, shoes,

garments, fish, and hides.

2 Source: http://praia.usembassy.gov/climate-report.html

3 Since 2005, the country has cooperated with U.S. law enforcement officials to fight drug trafficking. At the same time the One UN programme and first

Millennium Challenge Corporation (MCC) compact (for $110 million) have been strengthening Cape Verde’s capacities in the Judicial Police, the Ministry

of Justice, the National Anti-Corruption Group, the Coordination Commission for Drug Control and Prevention centres and the Financial Intelligence Unit,

as well as among civil society, in the fight against transnational organized crime, drugs trafficking.

Figure 2: GDP growth (annual %)



In an attempt to increase FDI, the government gives foreign investors important guarantees.

For example: privately managed foreign currency accounts, which can be credited from

abroad or from other foreign accounts in Cape Verde. In addition, it allows undisputed

repatriation of dividends, profits and capital from foreign investment operations. The

regulatory legislation specifies that for the first five years of operation, dividends may be

freely expatriated without tax and that for the next fifteen years dividends may be expatriated

with a flat tax rate of ten percent.

Cabo Verde’s arid conditions and mountainous terrain put the country at a disadvantage for

agricultural production. Only four islands have substantial agricultural production (9% of GDP,

2013). Over 90% of all food consumed is imported. The fishing potential, mostly lobster and

tuna, is not fully exploited. Main products are bananas, corn, beans, sweet potatoes,

sugarcane, coffee, peanuts, and fish.

Overall unemployment is at around 13% (2011), however, within that percentage, youth

unemployment is particularly high at 27%. Business confidence remains pessimistic overall

and future prospects depend heavily on the maintenance of aid flows, the encouragement of

tourism, and remittances from their diaspora. Cabo Verde’s main export partners are Spain

66.9%, Portugal 13.9%, US 5% and its main import partners are Portugal 38.1%, Netherlands

21.5%, China 7.9%, and Spain 7% (2012).

There are an estimated 25,000 immigrants in Cape

Verde of whom 72% are from West Africa, 17% from

Europe and 12% from China. Chinese immigrants

come as an unsuspected surprise to people visiting the

islands. Since 1995, the Cape Verdes have experienced

a wave of Chinese entrepreneurial immigration, which

has transformed local retail significantly. All inner

cities are filled with Chinese shops.4 However, profit

margins have since fallen, because there are too many

Chinese in the Cape Verdes.

Cabo Verde's main bilateral donors are China,

Luxembourg, Portugal, Spain, and the United States.

Cabo Verde also receives smaller commitments from

Japan, Kuwait, Saudi Arabia, and Angola. The Chinese

government has given $63.5 million in development

finance. These projects include $4.4 million for

construction of the Poilão dam in the Santa Cruz area,

$22 million to build a sports stadium in Monte Vaca,

4 China pursues a policy of entrepreneurial migration, which during the past fifteen years has reached countless places off-the-beaten-track, in a search

for markets still unconquered by others, from the Marshall Islands and Kamchatka to remote villages in Romania (source adapted: Haugen, H. and

Carling, J. (2005), On the edge of the Chinese diaspora: The surge of baihuo business in an African city, in Ethnic and Racial Studies, Vol. 28, No. 4, pp.

639-662)


| The IT Sector 6

and $2.3 million in debt relief. China’s capital flows into the Cape Verdes mainly to create

business opportunities for Chinese service contractors, such as construction companies.

Figure 3: Praia Bay

THE IT SECTOR

As a small island state with few natural resources, it comes as a surprise to find that Cape

Verde’s IT structure is quite advanced. Cape Verde has had nationwide and reliable telephone

coverage since 1991. International telecommunications were secured by both submarine

cable and satellite connections. Cabo Verde Telecom (CVT) has a universal access obligation

to provide telephone and Internet on all islands. In villages, where neither electricity nor roads

exist, CVT incised the mountains to install a fibre-optical link. In addition CVT has covered

most of the country with a GSM mobile cellular network.5

Cape Verde’s international Internet connection is very good via the Atlantis-2 fibre-optic

submarine cable, which connects Portugal with Brazil offering a first class gateway to the rest

of the world.6 The biggest stumbling block to 100% Internet coverage is the fact that some

households do not have access to electricity and also, to some extent, CVT’s legal monopoly

on fixed lines and international telephone calls, which results in very high international calling

rates and expensive Internet connections. It is estimated that about 45% of Cape Verde’s

people own a PC with Internet access, yet nearly 100% have smart phones.7

Today, Cape Verde’s infrastructure is a role model for other states. The islands received initial

funding from the World Bank, the United Nations Development Programme, and a 1998

French cooperation with the subsequent ‘declared’ objective of the government using IT to

improve its services. It offered a way to overcome the nation’s communication problems

among all ten islands, resulting from their geographical dispersion.

5 www.cvtelecom.cv

6 This is a lot better than in the rest of Africa. In most countries a satellite has to be set up to get good Internet service

7 Source: Arlinda Peixoto


| The IT Sector 7

Rather than having an individual IT structure in each department the government set up an

autonomous government unit in charge of implementing technology. It was first called RAFE

(Reforma da Administração Financeira do Estado) and stands for the ‘Public Finance

Management Reform Group’, but was later re-named NOSI (Núcleo Operacional da

Sociedade de informação) and means something like ‘Operational Nucleus of the Information

Society’.8

It was intended to be a one-stop portal, uniting different activities in a single location (e-

government) and it succeeded. For example, importing and registering a car in Cape Verde

used to require you to complete almost a dozen forms, which had to be collected from

multiple locations. Now, the paperwork associated with an automobile is as easy as a mouse-

click. Extraordinarily, from its early beginnings, NOSI was given carte blanche to implement IT

systems throughout the nation’s government. Technological opportunities, rather than

political considerations, were the driving force behind building a nationwide computer

network.9

The result was a new network infrastructure, bypassing the incumbent operators. In essence,

NOSI became the de facto Internet service provider (ISP) for much of the government with its

wireless network and its own fibre-optic network offering broadband Internet access. For the

Cape Verdes citizen this was fantastic news, and explains the remarkably fast adoption of IT in

the public sector service. They had free and reliable modern communication services for

emailing and Internet. This created the momentum to build IT competences across the whole

country. In particular, it led to the creation of a small private IT sector. Whereas in 1998 the

government could not sub-contract IT tasks to private firms, because there was nobody to

subcontract to, the situation is strikingly different today. IT has become a national

competency due to NOSI’s incubator role.

Accordingly, Cape Verde today has one of the most modern e-governments in the world, and

is ranked among the ten best managed countries10. A platform for almost all services ensures

the registration of businesses and land ownership, payment of bills, etc. is quick and simple.

For example, a company can be registered (even a plc) on one and the same day. This has

taken a lot of bureaucracy out of the government’s work.

However, the private IT sector in Cape Verde is still considered underdeveloped by normal

standards. In fact, there is a bit of a dilemma. The private sector cannot really establish itself

unless NOSI opens up space for companies to be competitive. Yet private companies cannot

compete with NOSI, because, as a superagency, it has a privileged position and can develop

technical knowledge more cheaply than the market. Thus, the medium-term prospects of

Cape Verde’s private IT sector will be determined by the evolution of NOSI.7

8 For more information see: www.nosi.cv

9 http://siteresources.worldbank.org/EXTFINANCIALMGMT/Resources/313217-1196229169083/4441154-1196275288288/4444688-

1196371176805/NOSIcasestudydraft45.doc

10 Source: Doing Business Report 2011


| Company 8

COMPANY

Today, Paulo is 40 years old11. He earned a

degree in computer science from the University

of Coimbra in Portugal, where he studies form

1991-1996. His parents did not have the money

to pay for his studies, but luckily he received a

studentship from the Cape Verde state. He

added that at that time, “There were a lot more

scholarships available than today.” He

continued his studies with a post-graduate

course at Minho University, where he also

worked as a university teacher. Later he moved

on to the Science Faculty of Porto University.

During his studies, he specialized in public

sector management.

One of his professors was a very inspirational person. He taught him strategic-planning

information management and that is where he developed a passion for e-government, which

is the use of computer technologies in government administration. Paulo became his assistant

and continued working with him after his degree for another three years before returning to

Cape Verde. Around that time, he offered his services to the Lisbon embassy of the Cape

Verdes and designed a strategy for them on how to apply computer technology to Cape

Verde's public sector. Unfortunately, the idea was not taken up by the Cape Verde

government.

Back home in 1998, he started working for a Cape Verde bank consortium (four Cape Verde

banks) to produce a shared ATM system network platform (1998 – 2000), the Vinti4 project.12

The original solution came from Portugal but needed adaptation to the Cape Verde. The

objective was to slim processes with e-solutions (e.g. replace a paper bill by an e-bill). After

two years everything was finished and the job became more of a management task than an IT

skills job. That was the moment when he left.

At the time he was 25 years old and he applied to NOSI, where he worked from 2000 until

200813. The main project was to develop the concept of a ‘Casa do Cidadao’ (engl. Citizen

House). It should become a One Stop-off point for all sorts of government services. It was

called I gov, or integrated government.

11 Born in 1973 on the island of Sao Vicente in Cape Verde

12 www.vinti4.cv; Vinti4 allows the CV citizen to use different methods of payment within one platform, i.e. the CV Vinti4 card, more than 3000 Cash

points (ATM), mobile phones and Internet. It is part of the e-government solution to simplify payment for citizens.

13 At first, the new government project was called RAFE or Reforma de Administragáo Pública do Estado that was to modernize and computerize the

country's administration system. It was only later re-named NOSI.

Figure 4: Paulo Noel


| Company 9

There was a pioneering spirit amongst the people; the mood was euphoric and full of

optimism. New ideas were easily implemented as Cape Verde is a small group of islands. He is

convinced that, “As a result of NOSI’s activity Cape Verde had one of the best e-government

solutions at the time.” NOSI provided a superb vehicle for learning and experimenting, and a

number of processes being developed today are his brainchild.

In 2008 he saw a business opportunity and together with a friend founded his current

company, PRIME Consulting14. Already before, when he returned to Cape Verde in 1998 I had

set up a company. However, it did not work out but helped him to learn about

entrepreneurship. One of the lessons learnt was that having a company as a hobby doesn’t

work. This time he was prepared and it was successful. Their first project was in the area of

tourism and real estate.

The idea was to take the I gov system one step further by linking everything, from land

registration to car license and from private sector to public sector. We called it Xi gov, or

extended integrated government. The idea was to bridge the advanced public IT

infrastructure with the (delayed) private sector. Also, by that time NOSI had become a big

organisation and had lost its appeal as an exciting place to be. He said that, “There was a lot of

money around, because the Cape Verde government had just successfully won funds from the

Millennium Challenge Corporation, a USA aid for developing countries.”15 16 17 18 Today, with little

money around it works more like this: “Where the money is, there is the business opportunity!”

To become an entrepreneur was not easy and Prime had to overcome a number of problems.

Despite the fact that IT is a booming sector the Cape Verdes were dominated by foreign hard-

and software. At some stage in the late 1990s the government decided to development

indigenous solutions to IT problems. This is now generally accepted and many firms turn to

Prime for solutions. But these firms are mainly local SME's. The larger and foreign owned

firms still tend to bring their own equipment and expertise from abroad.

There are four business partners at Prime Consulting who provided the finance for the

venture. All are about the same age.

1. Roberto Barbosa is 42 years old and is a specialist in IT infrastructures of large organizations. By

education and professional experience, he is a banking expert and worked for UBS Bank and later

the World Bank. He lives permanently in Switzerland now. They met, when Roberto was working

for the World Bank in Cape Verde.

14 www.prime.cv

15 There were two Millennium Challenge Corporation programmes in existence when the Cape Verdes received financial aid to support Cape Verde’s long-

term economic transformation. One in 2008 (110 million USD) and the second in 2012 (66 million USD). The Millennium Challenge Corporation (MCC) is

an innovative and independent US foreign aid agency that is helping lead the fight against global poverty. For more information see the following

website (http://www.mcc.gov/pages/countries/program/cape-verde-compact)

16 http://www.mcc.gov/pages/press/release/release-101510-mcccompletesfirst ; accessed 21.06.2014

17 http://www.mca.cv/index.php?option=com_docman&view=docman&Itemid=138&lang=us ; accessed 21.06.2014

18 http://www.mcc.gov/pages/about ; accessed 21.06.2014


| Company 10

2. The second partner, Rodrigo Silva, is 40 years old and originally from Angola. He is married to a

woman from Cape Verde, but has gone back to Angola now, where he lives permanently. They met

while working for NOSI.

3. The most recent partner has only a small share in the firm. She joined in 2014 and is a friend. She

lives permanently in Lisbon. She is responsible for the accounting for the firm.

Paulo said it’s a fractal firm for a

fractal business. If you can test

out things in your own company

then they can work for other

customers in the Cape Verde as

well. The Cape Verde and its

islands are a fractal country.

Paulo is very patriotic and wants

the best for his country. During

his studies in Portugal, he always

thought about how he could

apply what he had learnt to

improve the situation in Cape

Verde. In the end it was this that made him go back home. He had a strong wish to come back

and improve his country’s infrastructure and processes. Whenever he learnt something about,

“how you can use IT to improve a company’s processes”, he translated it in his mind into, “how

you can use IT to improve Cape Verde’s processes.” He is a person who always has plenty of

ideas.

Today he employs people from S. Vincente, his home

island, despite the distance to the main island

Santiago. On his website19,20 he openly encourages

readers to help Cape Verdes: “Participe na construção

deste Cabo Verde - nação global.” (transl. Participate in the construction of the Cape Verde -

Global Nation). This is what drives him as an entrepreneur. “You don’t need to get rich with

your business, but one person on another island in the Cape Verdes can live from it,” said Paulo.

He is also president of the young entrepreneurs’ association of Cape Verdes. In this function

he has regular meetings with the president. He makes suggestions as to what the government

can do to help private sector business. Interestingly, his parents never encouraged him to

become an entrepreneur. For them the ideal career would be to become a civil servant and

work for the government. He himself never thought along these lines.

19 www.youtube.com/watch?v=YaTb1y01UE8

20 www.prime.cv ; accessed 21.06.2014 and 08.11. 2014

Figure 5: Prime Consulting: You tube appearance


| Markets and Products 11

MARKETS AND PRODUCTS

Prime Consulting’s main customer is the CV government. For example in 2011 it helped to

transfer online parts of the legislative text for the Cape Verdes government. Business with the

government represents about 30% of its turnover and it means essentially working on e-

government solutions. Today, working with the government has become difficult. The main

reason is unpredictability (arbitrariness) and the lack of policy for private business contracts.

The government doesn’t invite tenders (bid) but ‘distributes’ business contracts. And, most of

all, the government owns NOSI, which operates like a super IT company, encroaching on

private sector business. The relationship with NOSI is frustrating for Paulo. He will not work

with NOSI because he thinks they will only ‘steal’ his ideas. He knows that not all his

competitors think like this. Some are profiting from a good relationship with NOSI. However,

he is a man of morale and principles.

In any case, the remaining 70% of Prime

Consulting’s turnover is generated by

work for private firms and some off-the

shelf products. For example, in 2009 the

company was in partnership with

Metatheke, a Portuguese university spin-

off.21 Prime Consulting owns 60% and the

other 40% belongs to Metatheke.

Together they developed the first e-

commerce shop in the Cape Verdes,

specializing in the sale of newspaper

clips.22 Recortes digitalizes articles from

the Cape Verde printed press and makes

them available for readers anywhere. This clearly shows the advantage of being a small

nation. It was difficult to implement the software in Portugal, but in Cape Verdes all three

newspapers immediately signed up for the service. This was because Cape Verdes people help

each other. Software can be developed to the prototype stage in the Cape Verdes and then

sold internationally.

The Cape Verde government decided to focus their investment on the country's main

strategic economic sectors such as the maritime cluster, the aviation cluster, and tourism.

Although IT is not one of those sectors, all of them will need IT solutions, which offers a good

perspective for Prime Consulting.

21 http://metatheke.com/en/we

22 www.recortes.cv

Figure 6: Recortes website



In 2009 Prime Consulting tried also to expand to Angola in order to open up new markets. The

first project was in the energy sector. Because energy in Africa is expensive and unstable, they

came up with a way to reduce the energy of computers significantly. This is interesting for

organisations which use many computers. Here at Prime and at several clients they can run a

dozen work stations for less than the energy consumption of a 100 watt light bulb.

It also developed a Facebook-

like human resources

management system for the

Cape Verdes e-government.

They tried to adapt the

program for three ministries in

Angola. This was a 2 million

US$ contract. However,

Angolan law doesn’t allow

repatriation of money. They

have been struggling with this

for the last 3 years, but are confident that they will be able to do it one day.23 The firm also has

a partnership with IBM in Angola. This is because the head of IBM is from Cape Verdes.

A report by the USA embassy on the internet reads: “Obtaining the proper permits and business

licenses to operate in Angola can be time-consuming. The World Bank Doing Business in 2012

report identified Angola as one of the most time-consuming countries surveyed for establishing a

business (ranked 129 out of 183 in the survey). Launching a business typically requires 184 days,

compared with a regional average of 80 days … While no formal discrimination against foreign

investment exists, Angolan or other companies familiar with the bureaucratic and legal

complexities of the business environment hold an advantage over newcomers. The Promotion of

Angolan Private Entrepreneurs Law gives Angolan-owned companies preferential treatment in

tendering for government contracts for goods, services and public works. ... In 2009 and 2010,

however, the government fell far behind in payments to foreign companies working on

government contracts, eventually running up arrears totalling at least 6.8 billion dollars.

Repayment of these arrears began in July 2010, and they have been largely though not entirely

cleared by the end of 2011. ”24

23 The investment law passed in May 2011 guarantees the repatriation of profits for officially approved foreign investments, and investors can remit

funds through local commercial banks. However, under a separate law (Central Bank Order 4/2003), the Central Bank (Banco Nacional de Angola, or

BNA) must authorize the repatriation of profits and dividends exceeding $300,000. In addition, the Central Bank can temporarily suspend repatriation of

dividends or require that repatriation take place in installments if immediate repatriation would have an adverse effect on the country's balance of

payments. (source: http://angola.usembassy.gov/pol-econ-section/investment-climate-statement-2010.html ; accessed 21.06.2014)

24 http://angola.usembassy.gov/pol-econ-section/investment-climate-statement-2010.html ; accessed 21.06.2014



As concerns global expansion, Prime had two successful projects in Portugal. The advantage is

that there is no language barrier. However, expanding to Africa is the most promising route.

The reason is that e-government is new to Africa, but not new to other parts of the world. The

next regions where Prime Consulting is looking to expand are also Portuguese speaking

countries: St. Tomé, Guinea-Bissau, Mozambique. But they have several employees who are

fluent in French and English, ready to do business in the rest of Africa. Their most popular

export products are e-government election solutions. This is a product, which Paulo

developed in Cape Verdes. However, the political situation in Africa can change quickly. “At

least Cape Verdes is a safe place,” Paulo adds, referring to the bad situation in Mozambique.25

He has also done a workshop in Togo on e-learning.

Apart from contract work and consultancy, Prime is also working on off-the-shelf products.

One of the products is an e-tourism one-stop booking system for the Cape Verdes26. It’s a

website where tourists can book their hotel accommodation and more tourism related

services27. It’s a little bit like www.booking.com but focuses on the Cape Verdes. He thinks,

“It’s a small product with big potential once it has taken off.” Tourism is Cape Verdes biggest

source of income. The official government website states that: “Travel and tourism directly

contributed 16.2% of Cape Verde’s total GDP in 2013 and this is expected to rise to 20% of total

GDP by 2024. This places Cape Verde 40th out of 184 countries for its growth forecast in 2014,

and an impressive 10th for long-term growth over the next decade. Meanwhile, in 2013 travel

and tourism directly supported 32,000 jobs, 14.5% of total employment; by 2014 this is expected

to increase to 64,000 jobs or 23.3% of total employment.”28

The website includes a front and back end; in other words, not only can tourists book, but

operators can manage the bookings themselves or put photos on the site in real time;

something no other competitor can offer. This is possible because of cloud computing.

Everything is accessible from anywhere. They did not develop the software for the website

themselves. It’s open source software from a Belgium firm, which they have adapted. In any

case, he likes working with open source software. The company also uses Odoo, Gmail and

Facebook.

Today they have signed up 110 contractors (hotels and pensions) and they are aiming for

another 150 over all islands with the exception of Boa Vista island. Boa Vista has big hotels

25 At the time of the case, there have been armed clashes between government security forces and the armed Renamo opposition party. These clashes

have been occurring since 2013 ; source: https://www.gov.uk/foreign-travel-advice/mozambique ; accessed 22.06.2014

26 E-tourism is the generic term for all IT related travel, tourism and hospitality industries.

27 www.turismo.cv

28 http://www.governo.cv ; accessed 22.06.2014



and has the best infrastructure for tourists. That is why all the big tourist operators are there,

but they work with global e-tourism websites. When you Google the search term: ‘hotel in

Cabo Verde’, many hits are returned and competition is fierce. All the big websites such as:

www.booking.com, www.hotels.com, www.tripadvisor.com, and www.expedia.com turn up.

After these hits, there are a few

websites of smaller international

firms such as www.capeverde.com.

The first Cape Verdes website was on

page 4 and this was www.Cape

Verdesinvest.Cape Verdes.

Unfortunately, the Prime Consulting

website only appeared once the exact

address was put into the search

string. If you input the search term

‘tourism Cabo Verde’ you land on the

official website of the Ministry of

Tourism of the Cape Verdes

(www.caboverde.com/ilhas/sal/guide-

e.htm or www.capeverdeweb.com)

One of the competitors for this product is politician José Brito’s firm IHABA. José Brito used to

be the minister of foreign affairs from 2001 to 2006. Then he served as Cape Verde's

ambassador to the United States, Canada, and Mexico, before taking up the position of

minister of economy, growth and competitiveness from 2006 to 2008. IHABA has therefore a

very good network and they are in direct competition with regard to the tourism website,

however, they are not as advanced yet.29

Also NOSI and the Cape Verde investment promotion agency30 work together on a project

with the objective to develop a similar website. However, for now, the investment agency’s

website still refers to Prime Consulting’s website.

It seems very likely that all competitors have copied the idea from Prime Consulting. Cape

Verde is not a big place and news travels fast.

Another competitor, though not for this product, is ISONE, a company which with currently 30

employees is bigger than Prime Consulting. The company provides systems administration

solutions to the government, NOSI, and private companies. It is important to note that the

29 www.ihaba.net

30 www.cvinvest.cv

Figure 7: the Tourism website (www.turismo.cv)



current Prime Minister, Jose Maria Neves, is on the advisory board of ISONE. With products

very similar to Prime Consulting products, they have a strong consulting element and their

products and services are developed to meet the customer’s needs. They also have ready-

made products, but at the moment are not in competition with Prime’s products.

Paulo sees the prime minister regularly in his role as president of the Young Entrepreneurs

Association of Cape Verdes. He introduced the product to the prime minister who was very

interested. When starting the project, Paulo asked the ministry for financial help because it is

helping the country. The minister agreed, but has not paid the money yet. Paulo doesn’t know

if he will ever see any money. To him it’s a personal disappointment, but at least he will be

able to live off the percentages he receives from the bookings. Prime takes a 5% or 10% cut

from every booking transaction. Another option would be to sell his contracts to a big

payment operator, but for the moment this is not planned. He thinks, in the long run, he is

better off living from the percentages he receives, which will provide him with a steady

income. The site is managed by only one employee who is lives in S. Vincente (his home

island, of course).

When he wants his website improving, he goes to the Cape Verde’s university and offers a

design competition to the students. Whoever has the best design, best images, etc. gets on

the website. This doesn’t cost him anything. It’s a win-win situation as the students can learn

and have a reference for their CV as their name will be on the website. This is also a way to

identify potential new staff. And last, but not least, students are happy to work with him,

because jobs are rare on the Cape Verdes.

When starting the website he needed contractors to sign up. The more contractors you have

the more valuable the website becomes. In order to benefit as much as possible from network

externalities, he personally went to all the leading hotels and talked to the owners. When they

signed up, he recorded this on film, and showed it to the next owner. When they saw that

another owner had signed up, they wanted to sign up as well. Within a short period he had all

the important hotels signed up, and had good references for his advertisement campaign.

Prime Consulting has a large international network with partners in Portugal, Brazil and the

US. “This is important”, Paulo thinks, “because we need a lot of interaction with others

abroad. We can learn from foreign contacts we have. In fact, they are the only people we can

learn from, because Cape Verde does not have a strong tradition or culture of

entrepreneurship.”31 He also has plans to move and share space with another company. This is

31 http://atlantico-weekly.com/cape-verde-features/entrepreneurs-of-cape-verde/paulo-martins/



not only to save costs. He likes it when people or companies with different backgrounds talk

to each other. He thinks that cross-fertilisation provides the substrate for IT creative clusters.

One of the biggest problems for Prime is the small local market size. Very quickly you reach

limits, not even to speak of economies of scale. Another problem for a small company like

Prime Consulting is that once you have trained employees, they leave. This happened several

times and every time they take our customers with them. It is difficult to keep you staff loyal.

Prime also founded several other companies.

Beside Recortes they also set up Elearn

Solutions32 (Prime ownership at 50%) and IT

Consulting CV (also with a 50% stake). More

recently, in 2012, they founded Afolabi in

Angola, which is 100% Prime owned and run by

Rodrigo Silva, who has moved to that country.

Today, Prime spans 6 areas of activity each activity is subsumed in a separate company. They

have two or three competitors for each activity. Prime works more like a holding. This makes

it easier to sell off individual units if considered strategically useful. Prime’s office is modern in

design and very open. “When we started the business no other firm had offices like this in Cape

Verdes,” Paulo mentions not without pride. In fact, back in 2008 they even had a hard time

finding the right office. They wanted an open space, which simply was not available on the

Praia office market.

This year, he has even tried to work with Indian programmers to cut costs. However, this did

not work out very well because of communication problems. “The good times are over!” says

Paulo and is also pondering about the future of Prime Consulting. It is going to be a race

between the decline in contracts in the Cape Verdes and the efforts to increase international

business. But bigger markets mean bigger competitors. Will Prime Consulting succeed?

32 http://e-learn.cv

Figure 8: Elearn Solutions


| EXHIBIT 17

EXHIBIT

Exhibit 1 Enterprise Prime Consulting, Lda

Owner: PAULO NOEL MARTINS

Praça do Palmarejo

Rua Infante D. Henrique

Ed. Império 1-A, 21 R/C Esq

Palmarejo CP 969

Praia - Cabo Verde

www.prime.cv

Exhibit 2

CAP VERDES

Data World Bank33

Population (2013) 498 900

BIP (2013) 1.888 $ milliard

BIP Growth (2013) 0.5%

Life expectancy at birth (2012) 75 years

School enrolment, primary (% gross ; in 2012) 112%

Exhibit 3: Communications in Cape Verde34.

Telephones - main lines in use: 72 764 (2011)

Telephones - mobile cellular: 496 900 (2011)

Internet Service Providers (ISPs): 3 (2008)

Internet Users 150 000 (2011)

Internet Hosts 7 308 (2007)

33 www.worldbank.org/en/country/caboverde accessed 26/08/2014

34 Source: http://en.wikipedia.org/wiki/Telecommunications_in_Cape_Verde; accessed 11.10.2014

Documents

Prime consulting Lda - UNESCO · for markets still unconquered by others, from the Marshall Islands and Kamchatka to remote villages in Romania (source adapted: Haugen, H. and Carling,