Initial settlement through land grants destined the majority of Cape Verdeans to varying states of poverty, destitution, and dependence. The island of Santiago was divided between Diogo Gomes and its codiscoverer, Antonio di Noli; their families retained rights over the island for 130 years. While initial settlement took place upon discovery, it was through slavery that the islands became populated. The first capital was Ribeira Grande (now known as Cidade Velha), abandoned with the economic decline and the self-liberation of slaves on Santiago. Praia, on the island of Santiago, became the capital. Slaves (domestic servants and plantation workers) escaped into the interior, especially on Santiago. They established communities that traded with white settlers. In the mid-nineteenth century freed slaves became small peasants on marginal land and landless laborers. Famines ravaged the population in 1770, 1830, and a generation later. Each time between 40 and 50 percent of the population perished. At the turn of the twentieth century, another drought struck with accompanying famine, killing 25 percent of the population.
The first settlements were created on Santiago in 1462. Sugar plantations were planned, modeled after those of the island of Madeira. Santiago residents were granted exclusive rights to the slave trade along the section of the Guinea coast nearest to the island because their lands were unable to produce sugar for the export market. Portuguese colonial landlords and merchants on the African mainland prevented Cape Verdean economic expansion. Cape Verdean smuggling developed as an important social and economic activity in response to this trade restriction.
Lançado merchants were active along the Guinea coast. Initially they were primarily Jews and then increasingly mulattoes. They also settled along the Gambia River and in Sierra Leone.
Piracy and attacks by foreign flotillas destroyed coastal towns, forcing many of those who survived to flee and settle in the interior.
Droughts shaped Cape Verdean settlement patterns, forcing people to move to areas of relative plenty. Furna, a town on Brava, was created in such a fashion. Droughts forced peasants into cities to obtain alms or public relief, creating shantytowns. Droughts also were responsible for longterm labor migration, following the extension of the Portuguese Empire. For example, Cape Verdean men and women went to the notorious labor camps in the cacao plantations of Sao Tome and Principe.
Sharecropping patterns have changed little since emancipation from slavery and, since independence in 1975, have been defined by absentee landlordism. In practice, though no longer by law, civil authorities usually reinforced traditional patterns of race and class differentiation. The black or mulatto peasant or laborer was as vulnerable to brutality from the police, under the direction of the administrator, as from the landlords. About 90 percent of the Cape Verdeans work as peasants, laborers, or fishers.