Skip to Main Navigation

Overview

  • The Republic of Sao Tome and Principe (STP) is a lower middle income, developing, small island state with a fragile economy. It is highly vulnerable to exogenous shocks. An archipelago divided into six districts and the Autonomous Region of Príncipe (Região Autónoma do Príncipe), it is located in the Gulf of Guinea, 350 km off the west coast of Africa. With a surface area of 1,001 sq. km, this Portuguese-speaking country has a population of more than 215,000 people, and a Gross National Income (GNI) per capita of $1,960 as of 2019. 

    Political Context

    The October 7, 2018 elections results reinforced the notion of Sao Tome and Principe being a model of democratic alternation in Central Africa. The Movement for the Liberation of Sao Tome and Principe – Social Democrat Party (MLSTP-PSD) now leads the government, thanks to a post-election agreement with the PCD-MDFM-UDD Coalition, which gives them a majority in parliament.

    The National Assembly is comprised of 55 seats, of which 25 are currently held by the Independent Democratic Action Party (ADI), 23 by the MLSTP-PSD, five by the PCD-MDFM-UDD Coalition, and two by the Sao Tome and Principe Independent Citizen Movement (MCISTP). 

    Presidential elections are scheduled for July 2021.

    Social Context

    Despite methodological issues, there is a consensus that poverty incidence has not changed significantly between the last two household surveys (2000 and 2010). Recent World Bank estimates show that about one-third of the population lives on less than the international poverty line of $1.90 per day, and more than two-thirds of the population is poor, using the World Bank higher poverty line of $3.20 per day. Urban areas and southern districts such as Caué and Lembá have higher levels of poverty incidence.

    STP performs higher than the Sub-Saharan Africa average on the United Nations Development Programme’s Human Development Index and has made progress improving other social indicators. It has a gross primary school enrollment of 110%, a life expectancy of 66 years, a mortality rate of children under five years old of 51 per 1,000 live births, access to an improved water source for 97% of the population, and access to electricity for 60% of the population.

    Economy

    STP faces challenges that are typical of small and insular states and affect its ability to deal with shocks and achieve a balanced budget. The limited number of people and workers in the country often prevent the efficient production of goods and services at the scale needed to meet the demand of both local and export markets. Its remoteness and insularity increase export costs prevent the country from diversifying its economy, making it more vulnerable to terms-of-trade shocks. The indivisibility in the production of public goods, and the difficulty of providing services to a scattered population imply a high cost of public goods and a high level of public expenditures required to provide adequate public services.

    STP’s growth in the last two decades was driven by agriculture, tourism, oil-fueled foreign direct investment, but mostly by government expenditure propelled by external aid and government borrowing.

    Gross domestic product (GDP) grew at an average rate of more than 4% between 2010 to 2019, though decelerating to below 3% in 2018-19 due to severe power outages, government arrears to local suppliers, and crowding out of domestic financing. Agriculture and fisheries were also affected by weather shocks and agricultural pests.

    The COVID-19 (coronavirus) pandemic affected STP as the country recorded a high rate of infection and the tourism industry, which had been a driver of private sector growth, has come to a halt since March 2020. The tourism industry, which in recent years has been a driver of growth, is responsible for a 5% of formal employment. However, with significant external financing, the government was able to offset tourism workers’ lost income. According the pre-liminary data, STP saw real GDP growth of 3.1% in 2020 despite the disruptions caused by the COVID-19 pandemic. Higher public expenditures on COVID-19 relief and other projects financed by exceptional international financial support are believed to be the drivers of this result. The World Bank has supported STP since the beginning of the pandemic by providing quick financial assistance, including a $2.5 million grant for the health, additional financing for social protection, and budget support operation of $10 million.

    Last Updated: Apr 22, 2021

  • World Bank Group Engagement in Sao Tome and Principe

    The World Bank Group’s Country Partnership Strategy (CPS) for Sao Tome and Principe is aligns with the country’s second Poverty Reduction Strategy (PRSP-II). The strategy has two pillars of engagement: supporting macroeconomic stability and national competitiveness; and reducing vulnerability and strengthening human capacity.  

    The current portfolio, funded by the International Development Association’s (IDA) stands at five projects, with a total net commitment of $80 million, of which nearly 28% is disbursed. There are also active trust funds that finance activities to improve power sector efficiency, the financial sector, the social protection system, the business climate, extractive industries transparency, and adaptation to climate change. 

    Last Updated: Apr 22, 2021

  • Providing quality education for all

    The International Development Association (IDA) financed the Quality Education for All project, which supports the implementation of the government’s education and training plans. The project helps the government enhance the quality of education for all by improving the system of in-service teacher training, and by strengthening education human resource management. The World Bank’s overall financing for the project amount is at $4.4 million. 

    As of mid-2017, the project had successfully completed the first phase of the in-service teacher training program which included a 150-hours of face-to-face training in basic Portuguese and mathematics delivered by ISEC (teacher training higher institute) to 558 primary and preschool teachers in all seven districts. Preparations for the second phase of this training which is a distance learning program that will count towards teacher certification have concluded. Nine training centers in various districts have been set-up to train for 515 primary education teachers and 100 supervisors/teacher trainers and activities were run from July 2018 through June 2019.

    The Education Management Information System (EMIS) has been established and initial data from all schools have been collected and entered into this new system.   

    Increasing reliable access to electricity

    Sustainable power generation has been among one of chief challenges of STP. Through a $16 million financing from IDA, the project aims at increasing renewable energy generation and improve the reliability of the electricity supply.

    All the project preparatory phases related to the rehabilitation of the Contador Hydroelectric Plant, and the related network and metering improvements are approaching to completion.

    Several major studies have just been concluded, including the design study of Contador hydropower rehabilitation that considered innovative solutions to increase capacity and availability of electricity service, as well as Least Cost Power Development Plan (LCPDP). 

    Studies have showed the need for additional financing to make Contador Hydroelectrical Plant more sustainable and to keep it apace with the current and future needs of electricity in STP.  

    Coastal communities fight against climate change

    A wide range of adaptation options which include protection, accommodation, and relocation were implemented to reduce flooding exposure in 10 coastal communities in STP. Since the completion of construction works, households that used to be affected by floods during heavy rains or storms report that their house and properties (e.g. animals, canoes, wood) are now protected, with flooding events having less impacts and the caused disturbances being shorter in time.

    Last Updated: Apr 22, 2021

  • Sao Tome and Principe is highly aid-dependent but given its size and insularity, it has a limited donor presence.

    International partners such as the World Bank, the African Development Bank, the European Commission, the International Monetary Fund, and the United Nations agencies have strengthened their coordination mechanisms in order to further the Paris Declaration and the Busan agenda in the country. Dialogue among the agencies has increased with the joint organization of a donor round table to foster private investment which was held in London in October 2015.

    Last Updated: Apr 22, 2021

Api


LENDING

Sao Tome and Principe: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

More Photos Arrow

In Depth

Mar 31, 2021

The Future of Work in Africa

Economic growth in Sub-Saharan Africa is estimated to have contracted by 2.0% in 2020, closer to the lower bound of the forecast in April 2020.

CPIA Africa

Africa’s poorest countries saw little to no progress on average in improving the quality of their policy and institutional frameworks in 2018.

IDA in Africa

With IDA’s help, hundreds of millions of people have escaped poverty—through the creation of jobs, access to clean water, schools, roads, nutrition, electricity, and more.

World Bank Africa Multimedia

Watch, listen and click through the latest videos, podcasts and slideshows highlighting the World Bank’s work in Sub-Saharan Africa.

Doing Business in São Tomé and Príncipe

The Doing Business report provides objective measures of business regulations and their enforcement. See where your country ranks.

Additional Resources

Country Office Contacts

Main Office Contact
Avenida das Nações Unidas
Prédio das Nações Unidas
C.P. 109
São Tomé
São Tomé e Príncipe
For general information and inquiries
Wilson Mbanino Piassa
External Affairs Associate
Luanda, Angola
+244 222 393 389
wpiassa@worldbank.org
For project-related issues and complaints
saotomealert@worldbank.org