The World Bank in Sao Tome and Principe

São Tomé and Príncipe (STP) has been a multiparty, semi-presidential, democratic system since its independence, and it has been a model for the democratic transition of power in Central Africa. The Independent Democratic Action (ADI) party, which holds 30 out of 55 parliamentary seats, has been mandated to govern from 2022 to 2026.

Economy

Although GDP per capita is about $3,400, socio-economic vulnerabilities persist. In 2024, 13% of the population lived below the international poverty line ($3/day in 2021 PPP), with high income inequality (Gini index of 40.7) and limited job opportunities fueling emigration.

Economic growth has relied on externally financed public spending, but this model is increasingly unsustainable due to the decline in ODA. A shift toward private sector-led growth is needed, supported by investments in human capital, infrastructure, and business climate reforms.

In 2024, the economy grew by 1.1%, supported by improved electricity supply and tourism. Real GDP per capita fell by 0.9% and only 21% of those aged 15+ are employed. Growth is expected to reach 2.5% in 2025 and average 3.7% in 2026–2027, driven by energy reforms, tourism, and agriculture.

Inflation averaged 10.7% in Jan.-July 2025. The central bank maintained a tight monetary policy, controlling excess liquidity through the issuance of Certificates of Deposit. Inflation is projected to ease to around 10% in 2025 and 6% by 2027, supported by supply-side reforms and monetary discipline.

The external sector improved, with the current account deficit narrowing from 12.5% of GDP in 2023 to 4% in 2024, due to reduced goods imports and stronger tourism exports. The trade deficit widened in the first half of 2025, and the current account is expected to increase to 4.3% of GDP by 2027. Reserves rose to $71 million by mid-2025, from $39 million a year earlier.

Fiscal performance improved, with a surplus of 0.3% of GDP in 2024 and debt fell to 43.6% of GDP. Energy reforms are expected to enhance fiscal sustainability and growth, but social protection will be needed to protect low-income households. The international poverty rate is projected to decline to 12.8% by 2027.

Last Updated: Sep 29, 2025

The current World Bank portfolio, funded by the International Development Association (IDA), has 12 projects with a total net commitment of $246.6 million.

Sao Tome and Principe is a small, lower-middle-income island nation with a population of around 240,000 and an area of 960 square kilometers. Despite its rich biodiversity and potential for nature-based tourism, STP faces structural challenges typical of small, remote islands. Limited land and population constrain economic diversification, while geographic isolation raises trade costs and vulnerability to external and climate shocks.

The business environment suffers from weak infrastructure, particularly costly and unreliable electricity, fragile institutions, limited connectivity, and climate risks. Public finances are strained by high service delivery costs, low domestic revenue, and declining official development assistance (ODA).

Risks include delays in energy reforms, weak social protection, reduced donor support, commodity price volatility, and climate shocks.

São Tomé and Príncipe Economic Update, August 2025: Reforming State-Owned Enterprises for Increased Private Sector-Led Growth and Job Creation

Last Updated: Sep 29, 2025

World Bank Group engagement in the country is defined under the latest Sao Tome and Principe Country Partnership Framework (CPF) FY2024–2029, endorsed by the World Bank Group Board in January 2024.

The strategy has five pillars: 1) Improve access to more affordable and greener electricity; 2) Strengthen public financial management; 3) Improve access to education and skills; 4) Strengthen road and digital connectivity; and 5) Increase the climate resilience of coastal communities.

Through a highly selective and sequenced set of engagements focusing on the energy, digital, road transport, and education sectors, the World Bank Group aims to address critical constraints to sustainable and inclusive growth and development in STP.

Last Updated: Sep 29, 2025

The Digital STP Project is supporting  modernization of the legal and regulatory framework for telecommunications laws and regulations, capacity building of its regulator, cybersecurity functions, and creation of an integrated data protection management platform. The project is also supporting the government pilot of a digital ID, rolling out in January 2026 with a service portal/app to bring public services closer to the citizen and increasing efficiency.

Because, on average each year, around 30,000 people (13% of the population) are affected by flooding, adaptation options, including protection, accommodation, and relocation, were implemented to reduce exposure to flooding in 12 coastal communities through the West Africa Coastal Areas Resilience Investment Project. Since the completion of construction, households report that their houses and other property (animals, canoes, and stocks of wood) are now protected, with flooding being shorter and making less impact.

The Girls Empowerment and Quality Education for All Project has supported STP to equip girls with life skills and improve all student learning outcomes. Results achieved:

• 1,316 students participated in one of the 75 adolescent clubs in 15 secondary schools, gaining life skills and strengthening sexual and reproductive health education
• Rehabilitation of WASH facilities started in 13 out 15 selected schools
• The first international learning assessment was conducted, with students in grades 2 and 6, with results published and disseminated.

The Social Protection and Skills Development Project provided youth with training in tourism and entrepreneurship, also reaching women and safety net program beneficiaries. 15,325 households (30% of the country) benefited from social safety net programs, ; more than 80% were female-led.

The Hospitality and Tourism School was established and expanded access to industry relevant TVET programs with 1,887 participants successfully completing relevant courses (60% were women).

Last Updated: Sep 29, 2025