WASHINGTON, March 30, 2012 – The World Bank Board of Executive Directors approved yesterday (March 29, 2012) an International Development Association grant in the amount of US$4.2 million equivalent (about 2 percent of GDP) to the Democratic Republic of São Tomé and Príncipe (STP).
This amount will be utilized to support the first in a series of three single-tranche operations under the designation of Governance and Competitiveness Development Policy Operations, which aims to strengthen the institutional framework to mitigate the effects of and build resilience to internal and external shocks, raise the efficiency and transparency of public expenditures, and improve the policy environment to promote competitiveness and employment opportunities.
“Notwithstanding prospects of oil, this is the time to accelerate structural reforms to diversify the economy and support broad-based growth,” said Laurence Clarke, World Bank Country Director for Angola, Mozambique, and Sao Tome and Principe. “Through the fiscal reforms supported by this program and in coordination with other donors, the Government will be able to maintain its public expenditure programs in priority sectors, including education, health, and agriculture, which aim to deliver basic services to the population. I want to salute the Government of STP for their vision and commitment to this process.”
Specific STP policy objectives supported by this DPO series include: (i) strengthening economic governance, with a focus on improving the transparency and monitoring of public and natural resources, improving the management and reporting of public finances, promoting fiscal stability, and strengthening public debt management; and (ii) supporting broad-based growth by improving the investment climate, with a focus on simplifying business regulations and reducing the cost of trading across borders, and by raising tourism prospects.
This operation is specially designed to support the implementation of STP’s Government Program for 2010-14, and it is consistent with the approach in the World Bank Group’s Interim Strategy Note for 2011-12, discussed by the Board in May 2011, and is fully aligned with the Bank’s Africa Region Strategy. It also abides by the evaluation of the previous Country Assistance Strategy with STP and focuses on a limited set of multi-sectorial activities to catalyze policies for faster growth, a more competitive economy with employment opportunities, and a better delivery of public services.
In addition to this operation, current Bank funded operations in STP include a US$4.15 million Global Environment Facility grant for Adaptation to Climate Change project; and a US$8.6 million for the Government’s Social Sector Support.