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Sao Tomé and Príncipe

Author(s):
International Monetary Fund
Published Date:
July 1995
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Basic Data

São Tomé and Príncipe
Area, population, and GDP per capita
Area1,092 square kilometers
PopulationTotal (1994)125,000
Growth rate (1994)2.3 percent per annum
GDP per capita in 1994 (in U.S. dollars)231
1988198919901991199219931994

Est.
Production and prices(In units indicated)
GDP at market prices (in millions of dobras)4,2215,7407,75010,81313,83216,83721,200
Cocoa production (in metric tons)4,8003,7073,6403,6073,6884,3053,392
Cocoa exports (in metric tons)6,4153,7973,3254,7594,3633,7253,160
Consumer price index (annual average; 1990 = 100)49.270.3100.0146.5195.8245.8311.3
Government fiscal operations(In millions of dobras)
Revenue and grants1,3832,2432,4233,3954,2647,10212,329
Current expenditure-1,250-1,711-2,335-3,213-4,408-6,673-11,284
Capital expenditure-1,054-2,946-3,568-4,596-5,942-7,309-15,136
Net lending-6
Overall fiscal deficit (commitment basis) 1/-928-2,413-3,481-4,415-6,086-6,880-14,092
Net change in arrears (decrease −)273353024013522,0623,633
Overall fiscal deficit (cash basis) 1/-901-2,078-3,179-4,014-5,734-4,818-10,459
Financing9012,0783,1794,0145,7344,81810,459
Net foreign financing1,0482,1802,3412,4763,7224,2676,873
Net domestic financing-147-1028381,5382,0115523,586
Of which: banking system(-171)(-90)(564)(886)(1,846)(552)(3,586)
Monetary survey (end of period)
Net foreign assets-3,249-4,999-8,898-17,936
Net domestic assets7,1789,47014,84031,445
Net domestic credit9,88210,55911,80818,524
Claims on the Government (net)3,2355,0815,6339,220
Counterpart funds (nonbudgetary)-2,974-4,736-5,527-7,426
Credit to the economy9,62210,21311,70216,731
Other items (net)-3,813-1,0883,03212,921
Money and quasi-money2,8214,4725,94213,509
Balance of payments(In millions of U.S. dollars)
Exports, f.o.b.10.95.94.46.05.46.66.5
Of which: cocoa(10.3)(5.0)(3.7)(5.1)(4.2)(4.2)(5.0)
Imports, f.o.b.-21.1-26.8-21.3-24.5-22.5-25.5-24.3
Trade deficit-10.2-20.9-16.9-18.5-17.0-19.0-17.9
Services and income (net)-15.6-14.4-21.6-21.2-18.0-16.9-16.3
Transfers (net)9.213.116.212.214.013.019.7
Current account deficit, excluding grants-25.9-35.6-38.4-39.1-33.9-34.4-30.8
Current account deficit, including grants-16.7-22.2-22.3-27.5-21.1-22.9-14.5
Medium- and long-term capital (net)4.913.18.811.213.18.85.4
Short-term capital and errors and omissions4.10.7-7.1-3.2-3.1-1.21.4
Overall balance-7.7-8.4-20.7-19.4-11.1-15.3-7.7
Financing7.78.420.719.411.115.37.7
Change in net foreign assets (increase -)-2.9-1.00.42.42.04.7-2.1
Change in arrears (reduction -)9.67.519.015.36.19.2-2.0
SAF (net)1.0-0.1
Debt relief0.90.91.21.73.11.411.9

Including grants.

Including grants.

1988198919901991199219931994

Est.
(In millions of U.S. dollars, unless otherwise specified)
Gross foreign reserves
End of period12.812.510.713.814.6
In months of following year's imports, c.i.f.5.05.34.05.45.5
External public debt
Medium- and long-term debt (disbursed and outst;114.712531302155.8178.5197.4214.1
Debt service ratio (as percent of exports of goods and services)
Before rescheduling71.3100.8137.1129.4114.3110.096.2
After rescheduling64.392.6122.3113.384.698.393.7
Effective exchange rate indices
(trade-weighted; 1987=100)
Nominal58.046.440.533.220.518.913.4
Real65.065.768.572.554.054.841.4
Social indicators1/
Life expectancy at birth (in years, 1994)68
Population (1994)125,000
Rural(69,875)
Urban(55,125)
Women(63,250)
Men(61,750)
Population age structure (in percent, 1985)
0-1446
15-6449
65 and above5
Crude birth rate (per thousand, 1988)36.7
Crude death rate (per thousand, 1988)112
Population per physician (1992)1,890
Access to safe water (in percent of the population, 1985)42

World Bank estimates.

World Bank estimates.

I. Recent Economic and Financial Developments

1. Structure of the economy

São Tomé and Príncipe is a small island developing economy with some 125,000 inhabitants and a GDP of around US$30 million. The Government has been the principal player in the cocoa-based economy ever since independence from Portugal in 1975. Agricultural production is concentrated in 15 state enterprises, and the rudimentary industrial base consists mostly of a few key public enterprises. Activity in the embryonic financial system, composed of three banks, is dominated by the Government’s budgetary and extrabudgetary operations. As a result of the country's limited productive base, the budget greatly depends on taxes on international trade. The country has been receiving extensive foreign aid, notably in the form of food and project-related grants and loans.

São Tomé and Príncipe's economic and financial imbalances are severe. Expansionary fiscal and monetary policies set the stage for the low GDP growth, high rates of inflation, and continued deterioration of the external position which were observed in recent years. Consumption has remained above 100 percent of GDP, and the fiscal and external current account deficits (before official transfers) have averaged some 75 percent of GDP. The stock of outstanding external debt is a multiple of GDP and, on a per capita basis, amounts to some US$2,000. At the root of these difficult circumstances has been the shrinking production of cocoa, the main export product; the deterioration of the external terms of trade; and the dependence on imports of food. Cocoa production has been on a declining trend since the mid-1970s. It amounted to some 10,000 tons a year during 1970-75, averaged only 4,200 tons during 1985-89, and fell further to an average of 3,700 tons during 1990-94 (Chart 1). As a result, the standard of living of the population has been declining, with per capita GDP diminishing from some US$400 in 1988 to only US$230 in 1994.

CHART 1SAO TOME AND PRINCIPE: PRICES AND PRODUCTION OF COCOA, 1970–94

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

The Government has taken steps since the mid-1980s toward dismantling the centralized economic structure and strengthening macroeconomic policies, but much remains to be done. In 1987, the Government launched a structural adjustment program, which was supported by a structural adjustment credit and a cocoa rehabilitation project from the World Bank. The program aimed at promoting a market-oriented economic system, enhancing the country's productive base, and accelerating economic growth. In that connection, since 1988, the Government has been preparing annual three-year rolling public investment programs (PIP), with a view toward improving the quality of investment projects and their sectoral allocation. Emphasis has traditionally been placed on infrastructure (transport, telecommunications and energy) and agriculture (cocoa farm reform and crop diversification). More recently, social projects (education, health, and water and sewage) have gained prominence. Expenditures under the PIP have averaged US$20 million a year, with financing notably from the African Development Bank (AfDB) and the World Bank. Since 1992, the Government has sought to strengthen the implementation of growth-oriented adjustment policies through annual programs elaborated with the assistance of Fund staff and with financial support from the World Bank and other donors. Some progress has been made on the structural front, including a reduction in the size of the public sector, liberalization of the domestic trade and price system and, more recently, the floating of the exchange rate. However, failure to rein in expansionary fiscal and monetary policies has continued to severely undermine economic and financial performance.

On the political front, there has been a significant liberalization. In 1991, the country elected President Miguel Trovoada, as well as a new Parliament, for a five-year term. In the wake of a political crisis in 1994, a caretaker government was in office during the period July-October 1994. Parliamentary elections were held in October of that year, and a new Government was sworn in on October 25, 1994.

The statistical data base in São Tomé and Príncipe is very weak. In particular, the monetary accounts, the national income accounts, and the consumer price data need improvement. In addition, transactions regarding counterpart funds and other donor aid have been inadequately reflected in the fiscal accounts.

2. Developments in 1994

São Tomé and Príncipe's economic and financial performance deteriorated sharply during 1994, owing to excessively expansionary fiscal and monetary policies. Although real GDP grew virtually at the same rate as in 1993, inflation almost doubled. The fiscal deficit increased markedly compared with 1993, and was financed to a much greater extent than in the past by net credit from the banking system. Uncontrolled lending to the private sector by the National Savings and Credit Institution (CNPC) had contributed to a surge in monetary expansion and pressures on the national currency, the dobra, which had depreciated by 56 percent against the U.S. dollar by end-1994. Nonetheless, the balance of payments improved, primarily owing to higher inflows of private and official unrequited transfers. The stock of external payments arrears remained virtually unchanged, as debt relief was offset by new accumulation of arrears.

a. Production and prices

Real GDP is estimated to have grown by only 1.5 percent in 1994 (Table 3). Although data by economic sector are not available, indications are that the production of cocoa contracted by 15 percent, owing to adverse climatic conditions and the declining yield of the aging cocoa trees (Table 7).

Inflation, as measured by the official consumer price index, reached 38 percent at end-1994, compared with 22 percent at end-1993 (Table 14 and Chart 2). 1/ Utility tariffs and food prices, which account for 70 percent of the total index, showed the largest increases--48 percent and 42 percent, respectively. Utility tariffs increased because electricity rates were raised, while food products rose in part because of a relative reduction in supplies, linked to a shortage of foreign exchange (Table 13). On December 2, 1994, the Government raised the retail price of fuel by 38 percent, to Db 580 (US$0.57) per liter of gasoline, equivalent to US$2.20 per gallon. 2/

CHART 2SAO TOME AND PRINCIPE: OUTPUT, PRICES, SAVINGS, AND INVESTMENT, 1988–94

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

b. Fiscal developments

Government finances deteriorated considerably in 1994, owing to substantially higher domestically financed expenditures than had been budgeted. The overall deficit after grants surged to 67 percent of GDP (on a commitment basis), while the primary overall deficit reached 48 percent of GDP (Table 16). 3/ Even though total revenue and grants increased to 58 percent of GDP, domestic revenue remained virtually unchanged in terms of GDP. At the same time, extrabudgetary expenditures rose markedly, and, as a share of GDP, total expenditures rose from 83 percent in 1993 to 125 percent in 1994. The overall fiscal deficit after grants (Db 14.1 billion) was financed primarily by project loans, an accumulation of domestic and external arrears, and net credit from the banking system. The latter increased by 60 percent of beginning-of-period money stock. The net accumulation of domestic arrears of Db 629 million, or 3 percent of GDP, took the form mostly of unpaid consumption of electricity. The external arrears were the interest due on the external debt.

Selected Fiscal Indicators, 1991–94(In percent of GDP)
1991199219931994

Est.
Total revenue and grants31.430.842.258.2
Tax revenue10.914.115.817.1
Nontax revenue6.47.26.15.6
Grants14.29.520.235.4
Total expenditure72.274.883.0124.6
Current expenditure29.731.939.653.2
Of which: wages and salaries(4.4)(3.7)(4.0)(4.1)
interest due
on external debt(11.7)(11.6)(13.9)(18.8)
Capital expenditure42.543.043.471.4
Of which: foreign-financed(38.4)(38.6)(40.1)(67.9)
Overall balance 1/-40.8-44.0-40.9-66.5
Memorandum item:
Primary current balance 2/-0.81.0-3.8-11.7
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Including grants.

Excluding interest obligations and grants.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Including grants.

Excluding interest obligations and grants.

(1) Revenue and grands

Total revenue and grants are determined by a few elements: taxes on international trade—import taxes, export taxes, and consumption taxes on imported products—which together account for some 50 percent of total domestic revenue; transfers from public enterprises (primarily the fuel importing company, ENCO); fishing royalties; and project grants (Chart 4).

CHART 3SAO TOME AND PRINCIPE: COMPOSITION OF GDP, 1988–93

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

CHART 4SAO TOME AND PRINCIPE: GOVERNMENT BUDGET, AND MONEY AND CREDIT, 1991–94

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

1/ End of period.

2/ In percent of beginning-of-period broad money.

In 1994, tax and nontax revenue remained at around 22 percent of GDP, as in 1993 (Table 17). Tax revenue increased its share somewhat, reflecting mainly the depreciation of the dobra on international trade taxes. However, import tax exemptions increased, and the implicit import tax rate declined to 15 percent, from 17 percent in 1993. Direct tax collection increased on the basis of reforms undertaken with technical assistance from the Fund, while the higher export tax revenues stemmed from enhanced tax collection and higher export prices for cocoa, which more than offset the 15 percent decline in export volume. Nontax revenue grew by only 10 percent compared with 1993, mostly because of reduced transfers from the fuel importing company, ENCO. The enterprise saw its cash profits cut as a result of a new compensation system adopted by the Government. 1/

Budgetary grants from abroad doubled in U.S. dollars compared with 1993, solely on the basis of higher project grants, as nonproject grants recorded in the budget declined. Project grants, notably from the European Union and France, increased because of efforts by the Government to improve the grants/loan ratio. Overall, grants accounfppted for almost two thirds of total revenues and grants in 1994, compared with 48 percent in 1993.

(2) Expenditure

Total expenditure increased by 42 percentage points of GDP in 1994, reaching 125 percent of GDP, and amounted to Db 26.4 billion (equivalent to US$36 million) (Table 18). Interest due on the external debt and foreign-financed capital expenditure accounted for the bulk of that increase, reflecting the impact of the depreciation of the dobra. However, the collapse of budgetary controls, in part reflecting the political crisis of 1994, caused noninterest domestically financed expenditure to increase to 38 percent of GDP, from 29 percent of GDP in 1993.

Current expenditure rose from 40 percent of GDP in 1993 to 53 percent of GDP, mainly on account of outlays on travel and the parliamentary elections of October 1994. Furthermore, personnel expenditure increased to 9 percent of GDP, from 7 percent in 1993, in large part owing to unbudgeted per diem payments linked to travel. The large increase in goods and services reflected the presentation of outlays for the consumption of electricity on a commitment basis, which was not done in 1993. Transfers reached 4 percent of GDP, primarily because of salary payments on behalf of agricultural enterprises whose restructuring had been delayed. Expenditure on defense, included in “other” current expenditure, increased to 2 percent of GDP, from 1 percent in 1993, related to the political events of 1994. Finally, interest due on external debt amounted to 19 percent of GDP, or more than one third of total current expenditures.

Capital spending in 1994 rose to the equivalent of US$21 million (71 percent of GDP), and, as in 1993, was mostly financed from abroad (Table 20). The 20 percent increase, in U.S. dollar terms, was due to work related to the completion of several large projects, notably in the education and transport sectors. Foreign grants and loans each accounted for 48 percent of total capital expenditure; the remainder was financed from domestic resources. 2/

c. Monetary developments

Broad money grew by 127 percent in 1994, four times the increase registered in 1993 (Table 24 and Chart 4). This acceleration was sparked in part by a 57 percent increase in net domestic credit, equivalent to 113 percent of the beginning-of-period money stock, reflecting the banking system's financing of the fiscal deficit, as well as the unrestrained expansion of credit to the private sector, in particular from the National Savings and Credit Institution (CNPC) (Table 26).

The increase in credit to the private sector resulted in a drawdown of excess reserves deposited with the Central Bank and, in the case of the CNPC, reflected the nonobservance of the 15 percent required reserve ratio for dobra-denominated deposits. By year-end, the Central Bank's holdings of reserve deposits had fallen to less than 7 percent of total dobra-denominated deposit liabilities. Identifiable lending activities in 1994—principally those of the International Bank of São Tomé and Príncipe (BISTP)—were by and large in support of commercial operations (Table 28).

Monetary Developments, 1991–94(Changes in Percent of broad money at end of previous year; after valuation adjustment)
1991199219931994
Estimates
Net foreign assets-22.2-22.7-45.2-47.7
Net domestic assets50.881.385.785.7
Net credit to Government34.365.412.460.4
Counterpart funds (nonbudgetary)-39.2-62.4-17.7-32.0
Credit to tha economy33.021.033.384.6
Other items (net)22.757.350.1-27.3
Money and quasi-money28.658.532.9127.3
Sources: Central Bank of São Tomé and Príncipe; and staff estimates.
Sources: Central Bank of São Tomé and Príncipe; and staff estimates.

Net foreign assets of the banking system increased during 1994 by 42 percent of the beginning-of-period money stock. While net foreign assets of the Central Bank deteriorated by some US$1 million, the BISTP strengthened its position by some US$3 million.

Average lending rates became negative in real terms over the course of 1994, as inflation accelerated. On September 9, 1994, the Central Bank raised the discount rate by 2 percentage points, to 32 percent per annum, but this was still below the rate of inflation (Table 29). 1/

d. External sector developments

(1) Balance of payments developments

Increases in private and official unrequited transfers contributed to lowering the current account and overall balance of payments deficits; the latter declined to US$8 million in 1994, from US$15 million in 1993 (Table 30). Export earnings decreased only slightly, as the lower cocoa export volume—and slackening demand from neighboring countries for nontraditional exports, in the wake of the January 1994 devaluation of the CFA franc—were almost fully offset by a 40 percent rise in cocoa export unit values (Table 31). Imports were slightly lower, while private transfers increased in response to the liberalization of the exchange and trade regime. Official transfers rose by some US$5 million as a result of higher project-related disbursements. The lower capital account surplus—which fell owing to a decrease in nonproject loans and direct foreign investment—was partly offset by some short-term capital inflows. The banking system accumulated international reserves of US$2 million, putting gross reserves at end-1994 at the equivalent of some five months of imports of goods and nonfactor services (Table 23). The overall balance of payments deficit was financed primarily by nonpayment of current external obligations, equal to US$10 million.

São Tomé and Príncipe's external competitiveness seems to have improved in 1994, thanks to a strengthening of the terms of trade (Table 35) 2/ and a further decline of the real effective exchange rate, based on official data. However, for currency depreciation to have produced the intended effect on that and the balance of payments, fiscal and monetary policies should have been tightened at the same time.

(2) External debt

São Tomé and Príncipe's disbursed and outstanding external debt increased further in 1994. Medium- and long-term debt grew by some 8 percent, to US$214 million, while the total outstanding stock, including short-term debt, reached US$261 million by end-1994, almost 15 times GDP (Table 36). The amount owed to multilateral organizations rose to some 50 percent at end-1994, because of the project-related loans obtained in recent years. The stock of external payments arrears decreased by US$2 million, reflecting the net effect of two debt reduction agreements and new arrears accumulation. In August 1994, the Government concluded a US$10.6 million debt buy-back operation financed by the World Bank, which offered commercial creditors, mainly Portuguese banks, a 90 percent discount on their short-term claims. An agreement with the Government of Angola eliminated arrears of US$1.3 million on the medium- and long-term debt.

Scheduled debt service obligations in 1994 amounted to US$12 million, equivalent to 96 percent of exports of goods and services, with one fourth of the obligations owed to multilateral creditors (Table 38 and Chart 6). The relatively low ratio of current maturities to the debt stock, at 5 percent, reflects both the high degree of concessionality of the debt and the large stock of arrears. Cash settlements during 1994 amounted to US$2 million, equivalent to 16 percent of exports of goods and services.

CHART 5SAO TOME AND PRINCIPE: BALANCE OF PAYMENTS, 1988–94

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

1/ The ratios are based on a dollar GDP calculated from changes In real GDP and the GDP deflator for the United States (base year=1992).

CHART 6SAO TOME AND PRINCIPE: PUBLIC SECTOR EXTERNAL DEBT, 1991–94

Sources: Date provided by the São Tomé and Príncipe authorities; and staff estimates.

1/ Includes IMF.

2/ Includes arrears.

(3) Exchange and trade system

The expansionary financial policies in 1994 put pressure on the exchange rate, and, by year-end, the currency had depreciated by 56 percent against the U.S. dollar (Table 39 and Chart 7). Even though the authorities accelerated the pace of depreciation of the official exchange rate during the second half of 1994, they did not succeed in reducing the average premium in the parallel market rate to below 25 percent. The parallel market also had a premium over the bureau de change rate, averaging 10 percent during the year. This premium existed because the bureaux de change in practice did not sell foreign exchange, preferring instead to use it to support their trading activities. Also, the BISTP sought to fully back its foreign-exchange-denominated liabilities with liquid assets held abroad (see Chapter III), ultimately leaving the parallel market as the only channel where foreign exchange could be freely purchased. In response to these pressures, on December 2, 1994 the new Government allowed the official rate to float freely, which brought it initially into line with the average bureau de change rate. 1/

CHART 7SAO TOME AND PRINCIPE: EXCHANGE RATES AND TERMS OF TRADE

Sources: Data provided by that São Tomé and Príncipe authorities; WEO; and staff estimates.

The Government also liberalized the external trade system. It abolished the annual import plan, under which heretofore foreign exchange had been allocated to meet the country's import needs, and eliminated advance import registration vouchers. 2/ Registered traders could henceforth obtain import licenses routinely. Furthermore, the Chamber of Commerce took over the function, previously performed by the Ministry of Commerce, of channeling official foreign exchange to the private sector. It has been allocating the funds to those traders that submitted the lowest prices for imports.

II- Public Enterprise Reform

1. Background

At independence in 1975, the Government faced a critical lack of management talents and skilled manpower, which was accentuated by the departure of virtually all expatriate labor. At about the same time, the Government nationalized the bulk of the productive base, which centered on the cocoa sector. Some 10,000 tons per annum of cocoa were being produced on some 45 medium- to large-scale farms, covering most of the country's arable land. The farms were consolidated into 15 agricultural enterprises, which also began to cultivate other agricultural crops, and the Government endeavored to attract foreign labor for these enterprises, principally from Cape Verde. In addressing the skilled manpower shortages in other sectors of the economy, the Government established state-owned trading and manufacturing enterprises.

The Government's economic development strategy that was being pursued resulted in a progressive decline of cocoa production and industrial output. Poor management was compounded by factors such as lack of new investment and inadequate maintenance. The effects of the fall in cocoa production were aggravated by the sharp decline in world prices in the second half of the 1980s and an increasingly overvalued currency. As a result, large operating deficits emerged in the public enterprises, which placed an increasingly heavy burden on public finances.

The Government's structural adjustment program that has been in place since 1987 has aimed primarily at rehabilitating the parastatal sector through the privatization, liquidation, or leasing of most public enterprises. In 1989, the monopoly trading enterprises (ECOMIN and ECOMEX) were liquidated, allowing for a substantial liberalization of trading, pricing, and distribution mechanisms. In particular, controls on retail prices have been eliminated, except for fuel prices and utility tariffs. By 1994 several key industrial and trading enterprises had been liquidated or privatized, reducing the burden on the budget and allowing a larger segment of the economy to operate efficiently. However, fewer than half of the agricultural enterprises had been restructured, in large part because of the failure to attract foreign partners.

2. Agricultural public enterprises

The agricultural sector consists of two distinct subsectors: the state enterprise sector and smallholders. The 15 state enterprises cover some 60,000 hectares, of which about 50 percent is being cultivated, while smallholders occupy some 10,000 hectares. Since 1988, the state-owned cocoa estates have been relying heavily on government financial support to help pay wages, because they have not sufficiently reduced employment in the face of the declining cocoa production.

During 1987-88, four agricultural enterprises were brought under private management contracts, and lease contracts were signed for three others (Table 4), which altogether account for about 50 percent of the cocoa production area. Improved management techniques maintained the average yield per hectare in those enterprises, whereas the average yield per hectare on other state farms dropped by some 50 percent during the four-year period because of aging cocoa trees (Table 7). The replacement of old trees, a key aspect in improving production, has made good progress, but effects are delayed since new trees need eight years before producing fruit.

The management contracts, however, offered few incentives for management firms to decrease operational costs, since the responsibility of the firms was limited to the technical implementation of the rehabilitation program. In order to increase the efficiency of the privately managed enterprises, in 1994 the management contracts of Uba Budo and Bela Vista were converted into lease contracts, and negotiations began for renewal of the lease contracts with Agostinho Neto and Diogo Vaz. The lease contracts involved taking over not only the technical management but also the full financial responsibility of the enterprises.

3. Nonagricultural public enterprises

Following diagnostic studies in 1988-89 on the viability of the approximately 40 public enterprises then in operation, an action plan was adopted in collaboration with the World Bank. The Government began to privatize those nonagricultural enterprises that could be commercially viable, liquidate those that were clearly nonviable, and restructure those that provided essential goods and services but had few prospects for privatization. However, implementation was slow and, to help speed up the process, the Government created the Privatization Commission in 1992.

Since 1988, 11 major parastatals have been privatized or liquidated. During the four years 1989-92, the poultry-breeding enterprise (EMAVE), the fisheries (EMPESCA), and the two trade and distribution enterprises (ECOMIN and ECOMEX) were liquidated; the ceramics factory (EMCERA II) and the telecommunications company (formerly ENATEL, now CST) were transformed into joint ventures with majority foreign participation; and the electricity and water utility (EMAE) was rehabilitated and put under a private foreign management contract. More recently, the publishing parastatal (EMAG) was sold to its employees in September 1993; the automotive repair shop (ATELIER CENTRAL) was privatized in November 1993; the construction enterprise (CONSTRUCTORA) was liquidated during the second half of 1994; and the brewery (ROSEMA) was privatized in early 1995.

Comprehensive data on the financial position of public enterprises are not available, in part because of accounting deficiencies. However, as a result of the Privatization Commission's efforts since 1992, some information has been compiled (Table 21). In February 1995, the Government agreed with the World Bank on an action plan to restructure the remaining enterprises, of which six are to be privatized or liquidated by end-1995. To that end, the Government is undertaking management and accounting audits of two parastatals with assistance from the World Bank.

4. The water and electricity parastatal (EMAE) and the fuel importing parastatal (ENCO)

Two public enterprises of particular importance are the electricity and water utility (EMAE) and the fuel importing company (ENCO). They are important both because of their size (together they account for 45 percent of all public enterprise assets) and their impact on the budget, each in its own way. EMAE has the potential for large operating deficits, which the government budget had to cover in the past, while ENCO has been the only public enterprise to realize significant profits in recent years, of which 80 percent are, by law, to be transferred to the government budget.

a. The water and electricity parastatal (EMAE)

Since 1989 EMAE has been managed by a private foreign company, and the generation of electricity has been increasing steadily since 1990 (Table 10). Collections improved, and by the second half of 1991 about 60 percent of commercial consumers were billed regularly, with about one half of those bills being paid. However, EMAE's operating deficit grew again in 1992, as production lagged, owing in part to a shortfall in power generation because of faulty equipment. During 1993-94 EMAE's deficit narrowed as collections improved again; the cash deficit in 1994 amounted to Db 24 million (US$33,000), equivalent to 3 percent of revenues.

However, during 1993-94 the recorded deficits would have been much larger had the authorities not opted for a compensation system involving the Government, EMAE, and ENCO, rather than for direct budgetary subsidies. EMAE issued vouchers, instead of paying cash, for most of the diesel fuel it needed to run its generators. In return, EMAE was not paid for most of the Government's consumption of electricity. As a result, since ENCO was not receiving cash, its transfers to the budget were greatly reduced. In addition to its lack of transparency, this system made budget implementation difficult, because, on the one hand, the Government was projecting transfers from ENCO on the basis of profits from total sales, disregarding the shortfalls in cash receipts, while, on the other hand, it was projecting expenditures for the consumption of electricity on a cash rather than a commitment basis. Accordingly, this system was discontinued in early 1995. 1/

b. The fuel importing parastatal (ENCO)

ENCO is a fuel importing and distribution monopoly, engaging in the purchase, storage, and distribution of petroleum products at the wholesale and retail levels within Sao Tome and Principe. Fuel is primarily purchased from Angola at a discount over the Platt Mediterranean index for petroleum products; the discount is largest for kerosene (Table 11). The petroleum price structure incorporates relatively high taxes for gasoline and diesel, which are used to cross subsidize the low price for kerosene, a sensitive mass consumption fuel (Table 12). The structure ensures large profits for ENCO, but in 1994, in view of the shortfalls in cash payments by EMAE, actual transfers to the budget accounted for only 2 percent of total government revenue and grants. Given the new policy of frequent retail price adjustments adopted in February 1995, as well as the elimination of the compensation scheme, ENCO's transfers to the budget in future years should increase significantly.

III. Financial Sector Reform and Monetary Policy

1. Introduction

Until 1993, São Tomé and Príncipe's financial sector was dominated by the National Bank of São Tomé and Príncipe (BNSTP), which served as the central bank and main commercial bank, and provided the bulk of domestic credit. The People's Credit Institution (Caixa Popular de Crédito, CPC), until then the only other financial institution in the country, had been established in 1981 as an arm of the BNSTP to mobilize small-scale savings and channel them primarily toward small business development and housing construction.

Under this system, however, there was no systematic supervision of the commercial banking and development lending activities of the BNSTP, just as there was effectively no surveillance of the CPC. Standard accounting and administrative procedures were not being observed, particularly in the CPC, and staff often lacked the training to discharge their functions properly. In such a context, credit ceilings, reserve requirements and other instruments of monetary policy were difficult to enforce, and nonperforming loans increased steadily.

The severity of the structural weaknesses led the Government to embark on a reform of the banking sector beginning in 1990. Plans were drawn up to establish a central bank proper and a separate, privately managed commercial bank, involving the liquidation of the BNSTP, the restructuring of the CPC, and the strengthening of banking supervision. At the same time, the Government aimed at improving the banks' deficient accounting systems in order better to implement monetary and credit policies. Accordingly, in late 1991, a new regulatory framework for the operation of commercial banks and financial institutions was promulgated, which, following a period of preparation, led to the overhaul of the banking system in March 1993.

2. The reform of the banking system in March 1993

At the core of the reformed financial system is the new Central Bank of São Tomé and Príncipe (BCSTP), which was established in August 1992 and began operations in early 1993. On March 3, 1993, the commercial banking and development lending departments of the BNSTP were placed under liquidation, as was the CPC. A liquidation commission was established as an autonomous agency under the tutelage of the Ministry of Planning and Finance, and entrusted with the responsibility of distributing the assets and liabilities of the former financial entities by mid-1994. Simultaneously, two new financial institutions, the International Bank of São Tomé and Príncipe (BISTP) and the National Savings and Credit Institution (CNPC), commenced operations, assuming many of the assets and liabilities of the old institutions.

The BISTP is a joint venture of the Government of São Tomé and Príncipe and Portuguese banks, which, as majority shareholders, manage the bank in accordance with a 1991 protocol. The BISTP took over most of the private sector's dobra- and foreign-exchange-denominated deposits of the BNSTP, amounting to some Db 2.6 billion. On the asset side, the BISTP was credited with a reserve position equal to the acquired deposits, allowing it to amply satisfy reserve requirements. Furthermore, after negotiations, the BISTP took over many of the BNSTP's private sector loans in good standing.

The CNPC is wholly owned and managed by the Government. About half of the CPC's Db 200 million loan portfolio was transferred to the CNPC, as the loans were secured by mortgages and therefore deemed recoverable. The other half was submitted for collection by the liquidation commission. The remainder of the CNPC's assets were in the form of reserve deposits with the new Central Bank. Regarding liabilities, the CNPC received the deposits of the CPC (some Db 500 million), and, more importantly, assumed from the BNSTP deposits liabilities to the private sector and the Government, amounting to Db 2.9 billion.

The distribution scheme described above left the BCSTP with very large commercial bank reserve liabilities. As it turned out, during 1994 the BISTP and the CNPC used their excess reserves for credit operations, which contributed to the major expansion in the money supply. As described below, this was made possible because credit ceilings were not enforced. The BCSTP liabilities also included Db 7.1 billion in nonbudgetary counterpart fund deposits from the BNSTP that had resulted from earlier balance-of-payments support loans. On the asset side, the BCSTP received some Db 11 billion in loans, mostly nonperforming claims on public enterprises. Only a small portion of these loans had been recovered by end-1994.

3. Operational policies of the financial institutions

Central to the restructuring of the financial sector was the development of a second tier of the banking system, namely, a privately managed commercial bank. The operations of the BISTP have been characterized by high levels of liquidity and foreign exchange intermediation, owing primarily to the sizable excess reserves on its opening balance sheet and to its position as the only commercial bank engaging in foreign exchange transactions. The limited pool of creditworthy borrowers have also influenced the BISTP's policy of not on-lending its foreign currency deposits, so that its credit portfolio has been limited primarily to private sector short-term trade operations in local currency. At end-1994, the BISTP's domestic assets amounted to less than 50 percent of its domestic liabilities.

Thus, the intermediation of foreign exchange was the principal source of profit for the BISTP. Since March 1993, a 70 percent foreign exchange surrender requirement has been in place for export proceeds, with the exporters permitted to hold the remainder as foreign currency deposits at the BISTP. the BISTP, in turn, has to deposits 50 percent of those funds with the Central Bank. Since September 1993, the BISTP has also bought and sold foreign exchange, for which it has set its own rate in the context of the bureau de change market. The growth of sight deposits and net purchases of foreign currency have allowed the BISTP to build a highly liquid position abroad, a policy pursued deliberately in order to ensure full cover for foreign-currency-denominated deposit liabilities, in light of problems experienced in reclaiming foreign exchange reserves from the BCSTP.

In contrast to the BISTP, the CNPC engaged only in domestic currency activities and pursued an active credit policy. At end-1993, the ratio of private sector loans to deposits was above 80 percent, with many of the loans granted at rates of interest that were negative in real terms. Data regarding the sectoral distribution of CNPC credit are not available, but indications are that loans were primarily granted either to permit the purchase of housing or to support agricultural production in “priority areas,” with the latter being the principal beneficiaries of subsidized credits. 1/ As a result of this active lending policy, credit expanded much faster than warranted during 1994, and the CNPC rapidly accumulated nonperforming loans. In early 1995, the Government halted the credit operations of the CNPC. It now wants to ensure that the CNPC operate along commercial lines, and, to that end, intends to sell the institution or convert it into a joint venture.

Even in the restructured financial system, monitoring credit and monetary aggregates during the period 1993-94 was encumbered by several factors. The previously existing problems of weak technical skills in the Central Bank and the CNPC were not overcome, which led to continued late and inaccurate monetary data for these two institutions. In particular, the quality of the monetary data were compromised by balance sheets from the CNPC that were below standard, and by a weak accounting department at the Central Bank. Also, the liquidation process of the old financial institutions was not completed within the envisaged time frame, leaving residual accounts on the ledgers of the BNSTP that further complicated the Central Bank's data compilation. In order to help resolve these problems, the Central Bank recently received technical assistance under Fund auspices.

a. Credit policy

The BCSTP has retained quarterly credit ceilings as the principal means of domestic credit control. A weighted scheme determines the resources that each of the two financial institutions can lend in a given quarter, with any excess lending from a previous quarter being counted against the current ceiling. However, in practice, and owing in part to data collection problems, the BCSTP has been setting ceilings with significant lags, and consequently has not been influencing credit developments as intended. In addition, deliberate violation of credit ceilings is not sanctioned, as in the case of the CNPC, primarily because the Central Bank still cannot supervise banks effectively. As a result, the BCSTP was unsuccessful in preventing the doubling of the outstanding stock of credit to the private sector in both 1993 and 1994.

The dismal failure to control credit expansion has also been the result of lax enforcement of reserve requirements. The required reserve ratio is 15 percent for dobra-denominated deposits, but the CNPC has been de facto exempted from this.

b. Interest rate policy

None of the foreign- and local-currency-denominated bank deposits have been remunerated since 1993. Credit ceilings, unremunerated excess reserves, and the absence of domestic interest-bearing financial instruments, left the banking system with no incentive to remunerate deposits. Thus, time deposits had virtually disappeared by end-1993.

In the context of the 1993 reform, the authorities have been relying on two instruments to influence lending rates: adjusting the central bank discount rate, and setting a minimum interest rate for lending activities. The discount rate has been raised three times since 1993 in response to accelerating inflation, but the increases have tended to lag rather than anticipate inflation, resulting in a negative discount rate in real terms during the second half of 1994. Because commercial banks looked to the discount rate as the reference rate, lending rates also became negative. Furthermore, the highly liquid starting position of the new financial institutions and the lack of absorption by the Central Bank of commercial bank loanable resources allowed them to finance credit expansion with their own resources, without recourse to central bank refinancing. The 22 percent floor for lending rates established in 1993 has been well below the discount rate; moreover, it was not observed for some credits extended by the CNPC. On March 6, 1995, however, the discount rate was raised to 50 percent per annum, and the rest of the banking system followed suit. Based on the inflation rate of the previous 12 months, this again made interest rates positive in real terms; they had been negative since September 1994.

IV. Social Issues

1. Overview

After independence in 1975, covering fundamental social needs was mostly entrusted to public enterprises, as the Government assumed a primary role in economic activities. The enterprises provided housing and social services, such as education and medical assistance for workers and their families. Entire communities were established within their boundaries, and half the population has been residing there ever since. Given this broad range of activities of public enterprises and other sectors of government, public sector reforms have had a particularly large social impact in São Tomé and Príncipe. In order to mitigate the impact of the new policies, the Government strengthened social programs in three main areas: the privatization process and smallholder development in the agricultural sector; the reform of the public administration; and measures to safeguard the social safety net.

2. Social Impact of agricultural sector reform

The primary sector constitutes the backbone of São Tomé and Príncipe's economy. It accounts for some 30 percent of GDP, 95 percent of merchandise export earnings (US$6 million), and 40 percent of the labor force. These indicators are primarily determined by the weight of the activities in the cocoa sector. However, the domestic agricultural sector provides only about 55 percent of domestic food requirements in caloric terms.

Since the mid-1980s, the Government has recognized that the traditional cocoa farm structure could no longer maintain the living standards of the population, given the decline in international prices and low labor productivity. As an initial step to making the agricultural sector more efficient and reducing the role of the state, the Government launched a cocoa sector rehabilitation project aimed at increasing productivity in the plantations; promoting crop diversification; encouraging smallholder development; and providing assistance for the preparation of agricultural studies and strategies.

The most important element in the new strategy was land reform, which aimed at encouraging small farmers to produce nontraditional crops. In 1991, the National Assembly passed a comprehensive land law, which established the modalities for obtaining usufruct and/or ownership rights of public land, as well as for transferring these rights. In particular, the law set the criteria and procedures to distribute land to smallholders and to medium-sized enterprises. At the same time, regulations were revised to improve labor relations in the private sector. The reciprocal rights of employees and employers were clarified, and criteria for retrenching employees were established; previous regulations had not allowed layoffs. Furthermore, in 1992, the Government stepped up the privatization of the state-owned agricultural estates and the promotion of smallholders, launching the Agricultural Privatization and Smallholder Development project with financial support from the World Bank. The project aimed at alleviating rural poverty, establishing technical and financial support services for the private farms, and protecting the environment. Under this project, scheduled for completion in 1997, the Government is to distribute about 20,000 hectares of arable land to 3,000 smallholders (each cultivating less than 10 hectares) and 150 medium-sized enterprises (each cultivating 10-15 hectares); lease the commercially viable estates and agro-processing centers to the private sector; and strengthen agricultural support services. In 1994, after open bidding, two private enterprises were selected to provide support services to smallholders, notably to supply imported inputs and act as intermediaries in commercializing and exporting the crops. By end-1994, 6,300 hectares had been distributed, against a target of 9,000 hectares.

Land reform introduced major changes in the country's social and economic structure, affecting virtually half of the population. In the early 1990s, the Government was confronted with substantial upheavals on the labor front. On the one hand, it faced significant opposition from those segments of the population that had become accustomed to subsidized social services. On the other hand, the changes themselves uprooted many workers and their families, leaving them to face an uncertain future. In particular, the privatization process, once completed, would affect 8,850 state employees in the agricultural sector. However, during 1993-94, the reform has been moving ahead more smoothly. By 1997, the Government expects 4,200 of those to settle on private plots under the land distribution scheme, 2,100 to find employment in privatized agricultural enterprises and agro-processing centers, 1,450 to seek employment in other sectors of the economy, and the remaining 1,100 employees to retire.

3. Reform of the public administration

The Government also took steps to raise the public administration's capacity, technical competence, and efficiency. In 1991, it created the National Center for Administrative Reform (CENRA), under the tutelage of the Secretary of Justice, Labor and Public Administration. CENRA's role was to coordinate all aspects of the reform of the public administration, including proposing and implementing projects. In 1992, CENRA obtained funds from the United Nations Development Program (UNDP) to finance the Administrative Reform Program. The program targeted human capacity building, and rationalization of methods and procedures. It was reformulated in 1994 to focus on four main objectives: (a) human resource management, including a census of the public administration and the establishment of a data base; (b) reorganization of the structure of ministries and other public entities; (c) training of civil servants; and (d) elaborating a new Civil Service Statute, comprising inter alia a reclassification of functions, positions, grades, and salaries; rules for selecting and hiring civil servants; criteria for evaluating performance; and policies for retrenching employees.

The results of the Administrative Reform Program have been encouraging. The census of the public administration established an initial data base, so that the downsizing of the civil service could proceed. By end-1994, 370 civil servants had been retrenched, or 9 percent of the total. 1/ Furthermore, the number of ministries has been reduced to 9, from some 15 in the late 1980s; training programs of civil servants has taken place; and a Civil Service Statute has been submitted to the Council of Ministers for approval. The program is expected to be completed by end-1995, when the data base is to be fully in place to monitor future downsizing of the public administration in the context of the new Statutes.

4. Social safety nets

In view of the social implications of these reforms, the Government has strengthened social measures to ease the transition to a private sector environment. This assistance has taken the form of temporary food subsidies; retraining and relocation for laid-off public sector employees; and small projects in social infrastructure.

a. Food subsidies

More than half of São Tomé and Príncipe's food imports are financed by grants from the World Food Program (WFP) and other donors, for the equivalent of US$4 million in 1994 (Table 32 and Chart 5). Food aid is sold to targeted sectors of the population at highly subsidized prices (on average, 17 percent of the import price). The main beneficiaries are current as well as laid-off workers of state-owned agricultural enterprises and private farmers during their first year on redistributed land. These subsidies allow workers to remain on cocoa farms even under present conditions of low productivity, and help ensure that private farmers can feed their families while developing their plots. The WFP also provides free school lunches to pupils. The counterpart funds generated by the sale of food aid have been used to finance certain social services, such as schooling and medical attention, which were previously provided by the public enterprises.

The Government, however, recognizes that providing subsidized food to almost half the population severely decreases the incentives to produce food locally. Therefore, it is selectively and progressively reducing food subsidies pari passu with the progress made in implementing the land distribution scheme.

b. Social dimensions of adjustment

The Government is intent on protecting vulnerable groups during the ongoing economic transition to a market economy. To that end, it has approached donors to help partially offset the fall in incomes resulting from the reforms. In particular, the Government is keen on helping workers in the initial period following retrenchment by making available targeted income supplements, retraining, and improved health conditions.

The African Development Bank's (AfDB) Social Dimensions of Adjustment Project, focusing on compensation and retraining, is financing the redeployment of retrenched civil servants and workers from state-owned agricultural enterprises. Under the scheme, agricultural workers who voluntarily leave their employment receive a cash grant equivalent to 150 percent of their legal severance payment. Laid-off workers who become private farmers receive severance pay averaging 75 percent of their last annual salary. At present, the Government is discussing with the AfDB ways to accelerate disbursements under the project.

The World Bank's Health and Education project aims at improving the efficiency of services and strengthening the planning process in health and education. The major component of this project is the eradication of malaria, which is one of the main causes of job absenteeism and low productivity; half of the medical consultations in the country are malaria related.

c. Small projects in social infrastructure

The Social and Infrastructure Fund (SIF) was created in 1988. Its objectives are to mobilize resources from the international donor community; act as executing agency for projects in the basic infrastructure and social sectors; and provide technical assistance for private sector projects. Under the World Bank's Multisector I and II projects, the SIF has promoted and implemented several infrastructure projects, including water supply, hydroelectric and road rehabilitations, and the development of two retail markets. The SIF has also supported social sector projects, such as school textbook printing and distribution, education planning and management, and malaria and endemic disease control. Until recently, the SIF also financed private sector projects, such as a bakery, a shoe factory, cooperative housing, and agricultural activities. However, under the new Statutes adopted in 1994, such direct financing has ceased, and the SIF now concentrates on helping micro-enterprises present projects to the banking system for financing.

APPENDIX I
São Tomé and Príncipe: Summary of Tax System, 1994
TaxNatura of TaxExemptions or DeductionsRates
1. Taxes on Income, Profits, and Capital Gains
1.1 Individual
1.1.1 Income tax (Imoposto sobre salários) (Decree-Law 11/93, 1993)Levied on all domestically earned income, in cash and in kind. The tax is withheld at source and payable within the first eight days of the month after the income was paid. It is levied on all individuals, including nonresidents who earn income in the country.Earned annual income up to Db 60,000.



Salary supplements, up to 10 percent of the fixed monthly salary.



Expense allowances, per diem and representation allowances, up to the limits set for government employees.



Income of clergy from exercise of their spiritual functions.



Personnel of diplomatic and consular missions or in the service of international or foreign organisations.
Four rate brackets for monthly income of Db 5,001-25,000 with progressive rates from 5 percent to 12 percent; flat 15 percent rate thereafter. Each bracket has a specific deductible amount.
1.2 Corporate
1.2.1 Profit tax (Imposto sobre o rendimento) (Decree-Law 9/93, 1993)Levied on all domestic income from any commercial, industrial, or agricultural business or profession, even if occasional or temporary.Profits from investment of dividends from mutual aid societies.



50 percent of taxable profit assessed for enterprises and entrepreneurs.
Flat 30 percent rate on taxable profit from commercial, industrial, agricultural, service activities, and related activities.



Five-bracket schedule applicable to taxable profit of independent professionals, with:



a. progressive rates from 7 percent to 28 percent for taxable profit of Db 60,001-3,000,000; and



b. flat rate of 30 percent for taxable profit above Db 3,000,000, plus 15 percent surcharge on portion of taxable profit in excess of Db 3,000,000.
2. Taxes on Property
2.1 Urban property tax (Contribucão predial urbane)(Legislative Act 450 of September 8, 1954; Decree-Law 57/81 of November 28, 1981; Decree-Law 16/93 of March 5, 1993; and Decree-Law 45/93 of August 10, 1993)Levied on all urban property, including:



a. Permanent buildings intended for housing, commercial, or industrial purposes other than exploitation of land, and the land on which the buildings are located;



b. Permanent buildings that are complementary or subsidiary to any agricultural activity, provided they are not located within boundaries of the land where the agricultural activity is carried out; and



c. Structures intended as housing in rural properties for the owners or their legal agents.
Central government properties.



For 2 years, permanent buildings for use as dwellings by owners or their families, including buildings replacing demolished buildings, provided the construction period does not exceed 24 months.



Owners of property whose total income does not exceed Db 2,000.



All property owned by religious entities pursuant to their purposes.
15 percent on registered value actualized according to the following factors:



a. Factor of 8 for property registered before Dec. 31, 1970;



b. Factor of 4 for property registered between Jan. 1, 1971 and Dec. 31, 1980;



c. Factor of 2 for property registered between Jan. 1, 1981 and Dec. 31, 1990;



d. Factor of 1.5 for property registered between Jan. 1, 1991 and Apr. 30, 1993; and



e. Factor of 1 for property registered after May 1, 1993.
2.2 Motor vehicle tax (Imposto sobre veículos) (Decree-Law 13/93 of March 5, 1993)Levied on motor vehicles and engines with displacement greater than 50cc, either ragistered in the country or starting 180 days within entry into the country, which circulate or are parked in public thoroughfares or places.The Central Government and any of its agencies, organisations, or services, except state-owned and mixed enterprises.



Citizens of countries giving reciprocal treatment.



Personnel of diplomatic and consular missions, pursuant to agreements.



International or foreign organizations, pursuant to agreements.



Driver training vehicles.



Duly ragistered rental vehicles.



Duly registered boats used in artisanal fishing.



New vehicles purchased after October 31.



Farm tractors.



Motorcycles used for transporting freight.
Specific taxes are levied annually, according to the age of the vehicle, at the following rates:



a. Vehicles over 50cc up to 500cc: Db 500 if up to 6 years old, Db 1,000 if over 6 years old;



b. Vehicles over 5J0cc up to l,300cc: Db 2,500 if up to 6 years old, Db 4,000 if over 6 years old;



c. Vehicles over l,300cc up to l,900cc: Db 4,000 if up to 6 years old, Db 6,000 if over 6 years old;



d. Vehicles over l,900cc: Db 6,000 if up to 6 years old, Db 10,000 if over 6 years old;



e. Recreational boats up to 25hp: Db 500 if up to 6 years old, Db 1,000 if over 6 years old; and



f. For each 10 hp or fraction over 25hp: additional Db 500 for boats up to 6 years old, Db 1,000 for boats over 6 years old.
3. Domestic Taxes on Goods and Services
3.1 Excise tax (Imposto sobre o consumo) (Decree-Law 20/76 of June 30, 1976; Decree-Law 14/93 of March 5, 1993; and Decree 41/93 of July 27, 1993Levied on the velum of goods listed in the schedules annexed to Decree-Lawn 14/93 and 41/93, with the following valuation metheds:



a. The factory gate selling price of locally produced goods not distributed by an associated or subsidiary enterprise;



b. The distributor’s selling price less 20 percent. if the producer is associated with the distributor or the subsidiary enterprise;



c. The domestic value, in the case of imports; and



d. If the producer sells his goods directly to consumers, the factory gate price cannot, for purposes of the excise tax, be less than the price charged to the consumer less 20 percent.



The tax is chargeable to:



a. The producer, in the case of locally produced goods; and Gasoline for aircraft and other aviation equipment serving the public.



b. The importer, in the case of imports.
Locally produced goods exported or re-exported directly from the industrial establishment.



Raw materials, equipment, and finished or semifinished products, whether locally produced or imported, for use in industrial, agricultural, or fishing activities, including artisanal fishing, or for incorporation into locally produced items.



Imported or locally produced materials for packaging of agricultural exports.



Alcohol needed in industrial processes.



Gasoline for vehicles of diplomats, subject to reciprocity, and of officials of international organizations.
Variable ad valorem rates as listed in the schedules annexed to Decree-Laws 14/93 and 41/93.
3.2 Transaction tax (Contribuçâo industrial) (Legislative Act 2 of January 20, 1925)Chargeable to entities and individuals covered by Schedule A annexed to the decree. Schedule A includes two categories:



a. Domestic or nationalised goods; and



b. Imported goods.
Petroleum products.Single rate of 8 percent.
4. Taxes on International Trade and Transactions
4.1 Import duty (Direitos de importaçâo) (Legislative Act of December 5, 1966)Levied on the customs value of imports determined on the assumption that:



a. The goods are delivered to the buyer at the port of entry;



b. The seller's price includes all costs related to the sale of the goods and their delivery at the port of entry;



c. The buyer pays the applicable duty and any other taxes, which are excluded from the base price. If the price varies with quantity, the price applicable to the quantity of the transaction is used. If the goods beings valued are manufactured under a patented process of registered design or mark, or bear a foreign trademark or brand name, or are imported to be sold under the same trademark even after additional finishing, the base price includes the royalty for use of the patent, registered design or model, or trademark or brand name. Specific duties levied on the weight of goods are calculated on the basis of their gross, net, or actual weight, as stated in the tariff and its instructions.
Goods imported by official agencies as spacified in Decree 41024 of March 23, 1957 are exempt. Examples are:



a. Aircraft and aircraft engines for use in civil aviation;



b. Equipment, machinery and accessories for use by the Ministry of Agriculture and Forestry;



c. Fixed plant and rolling stock for railroads, hoists, and floating docks and cranes imported by the port and railroad agencies;



d. Electrical equipment for postal, telegraph, and telephone stations;
A mix of ad valorem and specific rates depending on the nature of the product. Examples are:



a. Wheat (exempt);



b. Dry meat (8.85 percent);



c. Fresh meat (Db 3.43 per kilo);



d. Live animals (7.35 percent);



e. Butter (Db 102.78 per kilo);



f. Milk (5.9 percent);



g. Cereals (Db 2.57 per kilo);



h. Oil (Db 6.42 per kilo);
e. Construction materials and electrical equipment, machinery and apparatus imported by the Government for use in water and elactricity distribution system or sewer systems or by public works agencies for carrying out work on such systems or any other work required for the country’s development and the equipping of ports; and



f. Fertilizers and seeds imported by agricultural agencies.



Enterprises engaged in the production of items included in the preceding list are also exempt from duty. Also exempt are products for use by new industries of strategic economic interest.



The Government may exempt goods under temporary import or reimport arrangements. There are many personal exemptions negotiated bilaterally between the Administration and taxpayers.



Imports of immigrants may also be exepted.
i. Fresh fruit (10 percent);



j. Coffee (20 percent);



k. Tea (Db 32.98 per kilo);



l. Wine (Db 137.06 per kilo);



m. Alcoholic beverages (Db 1096.45 per kilo);



n. Tobacco (Db 564.22 per kilo);



o. Most mineral and chemical products (3-6 percent);



p. Gasoline (86 percent) ;



q. Perfumes (30 percent);



r. Most textile products (15-30 percent);



s. Most metals (7-20 percent);



t. Electric equipment (20 percent);



u. Cars and buses (Db 0.17 per kilo);



v. Motorcycles and trucks (15-20 percent); and



w. Tractors (Db 4.28 per kilo).
4.2 Customs duty (Emolumentos gerais aduaneiros) (Decree 43/99 of September 29, 1950; Decree 47666 of June 24, 1967)Levied on imports.The Government may exempt certain imports, such as capital goods and certain basic foodstuffs.Single rate of 3.5 percent.
4.3 Export tax (Imposto geral de exportaçâo) (Decree-Law 17/93 of March 5, 1993)Levied on all agricultural exports.Exports whose customs value does not exceed Db 20,000.Flat ad valorem rates:
a. Cocoa10 percent;
b. Copra9 percent;
c. Palm kernels8 percent; and
d. Other15 percent;
4.4 Lighthouse tax (Imposto de farolagem) (Legislative Act 25 of December 26, 1933)Levied on all ships entering domestic harbors and used to defray the costs of lighthouses, lighted beacons, and light buoys. The tax is administered by the National Port Enterprise (ENAPORT); its budgetary significance is virtually nil.None.Rates range from Db 150 to Db 650 per ship, depending on nationality of ship and time of day.
5. Other Taxes
5.1 Inheritance and gift tax (Impoato sobre as sucessões e doações) (Decree of June 22, 1988)Levied on all conveyance of movable or real property or livestock. Chargeable to the recipient.Transfers of less than Db 5,000. Also exempt is the gratuitous conveyance of movable or real property to descendants or to nonprofit organizations.



The tax base is determined by the value of the conveyed goods or property, after deduction of the transferor's debts and other costs set forth in the regulations.
Several progressive rates, based on the value of the goods or property conveyed and the degree of kinship between the descendant and the heirs.
5.2 Real estate transfer tax (Sisa sobre a transmlssão da imobiliários por tíulo oneroso) (Decree of June 22, 1988)Levied on all onerous conveyances of real estate and chargeable to the purchaser.



All real estate conveyance transactions are subject to this tax, including specifically:



a. Selling or bartering real property, subject to prior authorisation of the Planning Minister under Article 1 of Decree-Law 48/75 of June 19, 1975;



b. Acquisitions of shares in companies other than business corporations which own real property, if through such acquisition one partner becomes the holder of at lesst 75 percent of the company's capital or the number of partners is reduced to two and the two are husband and wife married with community property; and



c. Purchases of freehold of lesseholders and redemptions of property seized in tax enforcement proceedings. The tax base is the value of the conveyance or the assessed income from the property as shown in the real property register, whichever is higher, or determined through direct assessment.
The State.
Rural property14 percent;
Onerous conveyance24 percent; and
Barter deeds7 percent.
5.3 Stamp tax (Imposto da selo) (Decree-Law 12/76 of April 19, 1976 and annexed schedule)Levied through:



a. Revenue stamps (estampilhas fiscaís);



b. Stamped forms (panel selado):



c. Stamped bills (letras seladas):



d. Revenue stamps (selos de verba):



e. Collection advice stamps;



f. Customs stamps;



g. Check stamps;



h. Pharmaceutical stamps; and



i. Miscellaneous stamps.



The State has a claim on the stamp tax upon assessment and payment, when It Is due on acts and contracts subject to it, and when products subject to it are exhibited or sold.
The State;



Religious institutions;



Some items in the schedule annexed to the Regulations.
Examples:



Stamped forms - Db 50; and



Stamped bills - Db 2.50 per Db 1,000.
5.4 Special tax (Imposto especial) (Decree-Law 22793 of June 30, 1933)Surtax on the total amount of the following taxes, fees, and other government revenues:



a. Import tax;



b. Rural property tax;



c. Justice, port, and custom's duties;



d. Enforced collection proceeds; and



e. Tax violation proceeds.
None.Single rate of 20 percent.
Source: Information provided by the Sao Tome and Principe authorities.
Source: Information provided by the Sao Tome and Principe authorities.
APPENDIX II: Exchange and Payments System

(As of December 31, 1994)

1. Exchange arrangement

The currency of São Tomé and Príncipe is the São Tomé and Príncipe dobra, which is freely floating. The official exchange rate is calculated as the weighted average of the bureau de change, commercial bank, and parallel exchange rates of the previous day. The intervention currency for the dobra is the U.S. dollar. On December 31, 1994, the exchange rate for the U.S. dollar (the middle rate) was Db 1,185.31 per US$1. Rates for certain other currencies are determined on the basis of the exchange rates of the U.S. dollar for the currencies concerned.

Foreign exchange transactions are divided into three categories for the purposes of assessing charges on purchases and sales of foreign exchange—namely, import payments, transactions in foreign checks, and collection of export proceeds.

On import-related exchange transactions, the arrangements are as follows: when a letter of credit is opened, a charge of 1.125 percent of the import value is payable, with an additional commission to the Central Bank of 0.5 percent. A stamp duty of 0.35 percent is also payable, as well as a postage levy of Db 140. Any change to the letter of credit carries a further charge of Db 250.

On foreign checks for collection, a commission is applied in favor of the foreign correspondent, varying according to the particular bank. In addition, the Central Bank charges a postage levy of Db 90 for each transaction, together with an endorsement stamp fee of Db 30. For collection of export proceeds, a commission of 0.25 percent is charged when the letter of credit is opened and a fee of 0.125 percent when the funds are received. A postage levy of Db 1,200 is also charged. There are no arrangements for forward cover against exchange risk operating in the official or the commercial banking sector.

2. Administration of control

All foreign exchange transactions come under the control of the Central Bank, which applies the exchange controls flexibly and permits exceptions to the stated limits on an ad hoc basis. All foreign exchange proceeds must be surrendered to the Central Bank, and all exchange payments must be made through this bank, with the exception of a 30 percent retention of earnings by producer-exporters for import payments purposes (see Section 6, Exports and export proceeds). Import and export licenses are freely granted by the Directorate of External Commerce.

3. Prescription of currency

The Central Bank may prescribe the currency in which foreign exchange transactions shall be made.

A bilateral payments agreement is maintained with Cape Verde. Transactions under this payments agreement have normally covered São Tomé and Príncipe's imports from Cape Verde, as well as receipts and payments for various services and transfers. The agreement provides for the central banks of the two countries to grant each other reciprocal noninterest credits of $200,000; it also states that, should this balance be depleted and a debit balance persist for more than six months, the imbalance will be redressed by appropriate trade transactions between the two parties.

4. Imports and import payments

Registered importers (including all productive entities) holding approved import licenses are permitted to engage in import activity. When importers open letters of credit, they are required to lodge a non-interest-bearing deposit in domestic currency, equivalent to 40 percent of the value of the letters of credit. Prepayment for imports is permitted only through the opening of letters of credit.

5. Payments for invisibles

Payments for invisibles related to authorized imports are not restricted. Payments for other invisibles are approved within limits established by the Central Bank. These limits, which allow for additional amounts in justifiable cases, include those on: (1) transfers for medical treatment abroad when local facilities are inadequate; (2) transfers of remittances to students; (3) transfers of savings from earnings under technical cooperation agreements with the Government; and (4) transfers for payment of fares, freight, and costs of communication with foreign countries. Purchases of foreign exchange by residents for tourism are limited, although air fares may be paid in domestic currency. Transfers of profits by foreign companies established in São Tomé and Príncipe before independence have been suspended. There are no limitations on remittances for subscriptions to periodicals and books, or on the payments of interest on external debt.

Foreign exchange allowances for medical purposes are permitted up to the equivalent of Db 1,000,000. Payments for technical assistance and other services in the national interest are allowed. At the beginning of the school year, a student is granted permission to transfer up to the equivalent of Db 150,000 a month, or Db 425,000 a quarter, for expenses related to courses taken abroad; additional amounts may be granted if approved by the Ministry of Education and Culture.

All payments related to invisibles are subject to a stamp tax of 0.5 percent. A postage levy of US$2 for clients, and US$4 for others, is payable on all transactions.

6. Exports and export proceeds

All exports require an export license, as set out in Advance Export Registration Bulletins, which specify the quantity and c.i.f. or f.o.b. value of the export. All export proceeds must be collected through the Central Bank. However, producers of exported goods may retain 30 percent of export proceeds in accounts with other banks, including abroad if they are correspondent banks of the Central Bank abroad to meet their import requirements.

7. Proceeds from invisibles

Travelers may bring in any amount of foreign exchange.

8. Capital

Inward foreign investments are governed by the Investment Code, which took effect on October 15, 1992. Such investments are permitted on the same basis as domestic investment. Prospecting and extraction of hydrocarbons and other mining industries are excluded. Repatriation of profits is permitted on an annual basis as long as it does not exceed 15 percent of the investment. Transfers are permitted for repayment of financing under agreements with the Government and for the amortization of private sector investments in activities considered to be in the national interest. Personnel under technical assistance programs are allowed to transfer their savings in accordance with the terms of their contracts.

9. Gold

Exports and imports of gold require special authorization from the Central Bank.

10. Changes during 1994

a. Exchange arrangements

December 2. The authorities abandoned the peg to the U.S. dollar and allowed the dobra to float freely.

b. Imports and import payments

January 1. The authorities eliminated the annual import plan as well as the advance import registration vouchers.

APPENDIX III
Table 1São Tomé and Príncipe: Grots Domestic Product and Expenditure at Current Prices, 1988–94(In millions of dobras, unless otherwise specified)
1988198919901991199219931994

Est.
Primary sector1,2201,6602,3253,1703,8524,663
Agriculture1,0381,4302,0002,7603,3214,000
Fisheries182230325410531663
Secondary sector4536157751,2011,7842,296
Manufacturing and energy2933654356899331,326
Construction159250340512851970
Tertiary sector2,5493,4654,6506,4428,1969,878
Commerce and transport1,2901,6952,2503,0623,8014,642
Public administration9721,3471,8002,4153,1953,870
Other services2864236009651,2001,366
Gross domestic product4,2215,7407,75010,81313,83216,83721,200
Consumption4,5176,4249,25612,61616,43419,89024,205
Private2,7394,6725,87710,61313,30915,00115,565
Public1,7781,7533,3792,0033,1254,8898,641
Gross fixed capital formation8291,5142,1084,9367,06210,01018,022
Gross domestic expenditure5.3467.93811.36317.55223.49629.90042.227
Resource balance-1,126-2,198-3,613-6,739-9,664-13,063-21,027
Exports of goods and nonfactor services1,2431,3193,1682,1753,3335,1179,031
Imports of goods and nonfactor services-2,369-3,517-6,781-8,915-12,997-18,180-30,058
Memorandum items:
Gross domestic savings-296-684-1,506-1,803-2,602-3,053-3,006
GDP deflator (annual percentage change)37.831.938.137.526.020.224.1
Nominal GDP (annual percentage change)40.536.035.039.527.921.725.9
Real GDP (annual percentage change)2.03.1-2.21.51.51.31.5
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Table 2São Tomé and Príncipe: Gross Domestic Product and Expenditure at Current Prices, 1988–94(In percent of GDP)
1988198919901991199219931994

Est.
Primary sector28.928.930.029.327.827.7
Agriculture24.624.925.825.524.023.8
Fisheries4.34.04.23.83.83.9
Secondary sector10.710.710.011.112.913.6
Manufacturing and energy6.96.45.66.46.77.9
Construction3.84.44.44.76.25.8
Tertiary sector60.460.460.059.659.358.7
Commerce and transport30.629.529.028.327.527.6
Public administration23.023.523.222.323.123.0
Other services6.87.47.78.98.78.1
Gross domestic product100.0100.0100.0100.0100.0100.0100.0
Consumption107.0111.9119.4116.7118.8118.1114.2
Private64.981.475.898.296.289.173.4
Public42.130.543.618.522.629.040.8
Gross fixed capital formation19.626.427.245.751.159.585.0
Gross domestic expenditure126.7138.3146.6162.3169.9177.6199.2
Resource balance-26.7-38.3-46.6-62.3-69.9-77.6-99.2
Exports of goods and nonfactor services29.423.040.920.124.130.442.6
Imports of goods and nonfactor services-56.1-61.3-87.5-82.4-94.0-108.0-141.8
Memorandum items:
Gross domestic savings-7.0-11.9-19.2-16.7-18.8-18.1-14.2
Gross national savings4.27.21.3-5.62.10.934.8
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Table 3.São Tomé and Príncipe: Gross Domestic Product and Expenditure at Constant Prices, 1991–94
1991199219931994

Est.
(In millions of 1991 dobras)
Gross domestic product10,81310,97511,11811,385
Consumption12,61612,43312,72312,141
Private10,61310,0699,5967,807
Public2,00323643,1274334
Gross fixed capital formation4,93643354,9625,084
Change in inventory-221-66-52
Gross domestic expenditure17,33116,10217,63317,225
Resource balance-6,739-5,793-6,568-5,941
Exports of goods and nonfactor services2,1752,1622,4372,524
Imports of goods and nonfactor services-8,915-7,955-9,005-8,465
(Annual percentage change)
Gross domestic product1.51.31.5
Consumption-1.52.3-4.6
Private-5.1-4.7-18.6
Public18.032.338.6
Gross fixed capital formation-12.214.52.5
Gross domestic expenditure-3.65.6-2.3
Resource balance14.0-13.49.5
Exports of goods and nonfactor services-0.612.73.6
Imports of goods and nonfactor services10.8-13.26.0
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Table 4.São Tomé and Príncipe: Area of the Agricultural State Enterprises, 1990–94(In hectares)
19901991199219931994
Total areaCultivated

area
Total areaCultivated

area
Total areaCultivated

area
Total areaCultivated

area
Total areaCultivated

area
Santa Catarina 1/7,1062,0277,1062,0277,1062,0277,1062,0276,7542,027
Diogo Vaz 1/4,0481,9054,0481,9054,0481,9054,0481,9053,7251,582
Ponta Figo3,7792,4853,7792,4853,7792,4853,6222,3283,3472,053
Agostinho Neto 1/6,0243,8946,0243,8946,0243,8945,6653,6355,9203,440
Beia Vista 1/2,1572,1572,1572,1572,1572,1572,0972,0972,0972,097
Santa Margarida 1/1,8361,8361,8361,8361,8361,8361,8361,8361,8361,836
Monte Café 1/4,2291,8034,2291,8034,2291,8034,2291,8034,2291,803
Milagrosa1,4211,4211,4211,4211,4211,4211,2661,266538538
Uba Budo 1/2,9062,2122,9062,2122,9062,2122,5171,8232,5171,823
Agua Izé4,6844,5684,6844,5714,6844,5714,4204,3173,6493,546
Colónia Açoriana2,4071,7732,4071,7732,4071,7732,1281,6941,6281,194
Ribeira Peixe1,9681,7401,9681,7401,9681,7401,9681,7401,9681,740
Porto Alegre10,2162,17210,2162,17210,2162,17210,2162,10210,2162,102
Sundy3,9631,9773,9631,9773,9631,9773,8651,8273,3811,379
Porto Real8,6252,9748,6252,9748,6252,4268,5112,2267,9841,799
Total65,36834,94365,36834,94665,36734,39863,49432,62559,78928,958
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Under private management.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Under private management.

Table 5São Tomé and Príncipe: Cultivated Area of the Agricultural State Enterprises, 1990–94(In hectares, unless otherwise specified)
19901991199219931994

Est.
Area cultivated34,94334,94634,39832,62528,958
Perennial crops34,61634,61934,39832,62528,958
Cocoa 1/22,24322,24322,24320,51116,901
Coconut palms7,2507,2507,1006,9006,800
Oil palms3,8573,8573,8573,8573,857
Coffee9629841,19813571,400
Other285285
Annual crops327327
Memorandum items:
Total area covered by the enterprises65,36865,36865,36763,49459,789
Area cultivated (in percent of total area)53.553.552.651.448.4
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Includes bananas and breadfruit grown among cocoa trees for shade.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Includes bananas and breadfruit grown among cocoa trees for shade.

Table 6São Tomé and Príncipe: Production of Principal Agricultural Crops, 1988–94(In metric tons)
1988198919901991199219931994

Est.
Export crops
Cocoa4,8003,7073,6403,6073,6884,3053,392
Copra1,7351,7001,231679678872
Palm oil382691969521,0251,041700
Coffee3163711142424
Food crops 1/
Bananas1,4551,2501,2451,11010,25013,00013,650
Breadfruit3261411291021,5001,8001,500
Taro8068505,0007,0008,500
Maize1681034,0004,0004,300
Source: Data provided by the São Tomé and Príncipe authorities.

For 1988-91, data on nonmonetized subsistence production are not available.

Source: Data provided by the São Tomé and Príncipe authorities.

For 1988-91, data on nonmonetized subsistence production are not available.

Table 7.São Tomé and Príncipe: Indicators of Cocoa Production and Exports, 1988–94
1988198919901991199219931994

Est.
(In hectares)
Area under cultivation24,16224,16226,07626,07626,07626,07626,076
Public enterprises under rehabilitation9,9289,92810,23210,23210,23210,23210,232
Other public enterprises15,33415,33412,01112,01112,01110,2796,669
Private sector3,8333,8333,8335,5659,175
(In metric tons)
Production volume4,8004,2123,6403,6073,6884,3053,392
Public enterprises under rehabilitation2,6152,2311,8782,3432,3412,4201,939
Other public enterprises1,9501,4811,481519848794614
Private sector2355002817455001,091839
(In kilograms per hectare)
Average yield19917410711012212398
Public enterprises under rehabilitation263225210229229237189
Other public enterprises127975443717792
Private sector735213019691
(In dobras per kilogram)
Minimum producer price, annual average
Pine cocoa98143143145240300620
Choice cocoa6187878787100220
(In metric tons)
Export volume6,4153,7973,3254,7594,3633,7253,160
(In U.S. dollars per kilogram)
Export unit value1.611.331.121.070.971.121.57
(In percent of total export earnings)
Export earnings95.185.485.084.677.963.476.8
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Table 8São Tomé and Príncipe: Production of Meat and Animal Products, 1988–94
1988198919901991199219931994

Est.
(In metric tons)
Fish2,8733,4903,5722,2212,3142,3341,696
Beef11.212.611.010.012.010.020.0
Pork34.371.6200.0305.0220.010.030.0
Sheep and goats0.61.050.055.060.025.036.0
Poultry32.610.9271.080.0105.0100.0126.0
Honey0.90.71.00.31.30.50.5
(In thousands of units)
Eggs3191,3819001,7352,0001,5001,600
(In thousands of liters)
Milk7.110.58.53.01.0
(In millions of dobras)
Production value3604195236257261,0581,197
(In millions of U.S. dollars)
Production value4.23.33.73.12.32.41.0
Source: Data provided by the Sao Tom6 and Principe authorities.
Source: Data provided by the Sao Tom6 and Principe authorities.
Table 9São Tomé and Príncipe: Production of Principal Manufactured Products, 1988–94
Unit1988198919901991199219931994
Est.
(In units specified)
Production volume
Bakery productstons2,1732,1232,6002,7003,0003,2923,582
Palm oil1,000 liters97365179231,2611,100650
Soft drinks1,000 liters1,875314512368253222
Beer1,000 liters2,9802,4891,6971,6912,4751,9451,306
Ceramicsin units6,0002,00030303040
Soaptons327473288135111134157
Clothes1,000 pieces115102110121130156736
Printing1,000 pieces6,7796,6995,7736,1706,3008831,073
Icetons322510
Lumbercubic meters3,0003,4442,5002,660
(In thousands of dobras)
Production value
Bakery products236245273299325
Palm oil314552220182
Soft drinks5141306
Beer278339538408628
Ceramics49697577
Soap29128108131154
Clothes13278104520604
Printing87182324
Ice
Lumber216288299328
Total7641,1481,4801,9752,328
Source: Data provided by the São Tomé and Príncipe authorities.
Source: Data provided by the São Tomé and Príncipe authorities.
Table 10.São Tomé and Príncipe: Imports and Consumption of Petroleum Products, 1989–1994
1988198919901991199219931994

Est.
(In thousands of kilowatt-hours)
Electricity production 1/15,06018,36016,98119,11219,55120,18120,564
Hydroelectricity8,0007,0007,5717,1646,2826,7684,894
Thermoelectricity7,06011,3609,41011,94813,26513,41315,670
Electricity consumption10,22913,63010,18911,46711,60712,452
Reridential4,9986,4105,5026,1925,5676,226
Industrial and other 2/5,2317,2204,6875,2756,0406,226
(In millions of dobras)
Electricity production 1/448.4619.8925.61,029.3
Hydroelectricity225.1
Thermoelectricity394.7
Electricity consumption268.9544.9571.1
Residential145.3193.4217.0
Industrial and other 2/….123.7351.5354.1
(In dobras per kilowatt-hour)
Electricity production23.531.745.950.1
Hydroelectricity35.8
Thermoelectricity29.8
Electricity consumption23.546.945.9
Residential23.534.734.9
Industrial and other 2/23.558.256.9
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Production exceeds consumption owing to losses in distribution.

Including the Government.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Production exceeds consumption owing to losses in distribution.

Including the Government.

Table 11.São Tomé and Príncipe: Imports and Consumption of Petroleum Products, 1989–1994
198919901991199219931994

Est.
(In thousands of liters)
Volume of imports
Gasoline3,6764,3664,2194,0193,2983,414
Diesel6,66810,5218,5147,9207,2378,410
Jet/Kerosene 1/2,0282,7854,2634,0343,7532,217
Consumption
Gasoline4,3884,5954,1283,2243,2603,721
Diesel8,0047,9998,6268,5287,9908,696
Kerosene1,6861,6321,5711,5641,2391,756
Jet3,1112,1112,1851,6131,1881,081
(In millions of U.S. dollars)
Value of imports, c.i.f.1.33.22.42.72.32.2
Gasoline0.40.90.70.60.50.6
Diesel0.61.91.11.51.21.3
Jet/Kerosene 1/0.20.40.60.60.60.4
(In dobras ver lita)
Average retail price
Gasoline58.4671.13177.00300.00370.00434.17
Diesel36.5646.8895.50167.70230.00285.83
Kerosene32.7542.8867.5097.00100.00108.75
Jet48.2254.0078.72143.21239.90200.00
(In U.S. dollars per liter)
Average retail price
Gasoline0.470.500.880.940.860.59
Diesel0.290.330.470.520.540.39
Kerosene0.260.300.330.300.230.15
Jet0.390.380.390.450.560.27
World price, c.i.f
Gasoline0.190.200.170.140.150.20
Diesel0.190.210.170.170.170.19
Jet/Kerosene0.200.220.180.180.180.20
Import price, c.i.f
Gasoline0.110.210.160.150.150.16
Diesel0.100.180.130.190.160.16
Jet/Kerosene0.110.150.150.150.160.16
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Excluding re-exports of Jet A-1 fuel.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Excluding re-exports of Jet A-1 fuel.

Table 12.São Tomé and Príncipe: Cost Structure of Petroleum Products, 1994
GasolineDieselKeroseneJet A-1
In percent

of c.i.f cost
Dobras per literIn percent

of c.i.f cost
Dobras per literIn percent

of c.i.f cost
Dobras per literIn percent

of c.i.f cost
Dobras per liter
Cost c.i.f.1.00109.51.00108.81.00105.11.00105.1
Import duty0.8694.20.3437.00.1414.70.1414.7
Sales tax1.30142.40.6065.30.1515.80.1515.8
ENCO margin0.2224.10.2223.90.1818.90.1818.9
Wholesale margin0.3032.90.088.70.099.50.099.5
Retail margin0.066.00.055.60.044.40.044.4
Other0.1010.5
Profit transfer to the Government0.1011.00.2830.8-0.65-68.30.2021.2
Retail price as of June 30,19943.8420.02.6280.00.9100.01.9200.0
Memorandum items:(In thousands of items)
Consumption3,7218,6961,7561,081
(In millions of dobras)
Total profit transfer to the budget40.9267.8-119.922.9
Total implicit profit1,1551,489-9103
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Table 13.São Tomé and Príncipe: Consumer Price Index, 1989–94(1990=100; end of period)
Weight198919901991199219931994
Food products0.657101.7142.5179.1233.4272.8388.2
Lodging and utilities0.03745.456.7134.1148.4140.8208.6
Housing, transportation, communications0.14637.059.5187.4212.2300.3410.8
Education and health0.04645.870.6173.7294.5415.3516.3
Clothing and other0.11442.351.0135.2152.8187.4207.6
General index1.00080.8113.5173.3220.7268.8370.2
Source: Data provided by the São Tomé and Príncipe authorities.
Source: Data provided by the São Tomé and Príncipe authorities.
Table 14.São Tomé and Príncipe: Monthly Movements in the General Consumer Price Index, 1989–94
198919901991199219931994
(1990=100)
January57.784.5112.1175.4225.5273.8
February60.788.3125.0178.6229.2278.5
March63.191.0141.1185.1232.8282.9
April65.493.4138.3186.3237.7285.6
May68.496.8143.8190.7240.3294.7
June71.0100.3146.8194.6242.9300.4
July71.9101.9149.1195.7247.6305.3
August74.2104.5152.2197.3249.2318.6
September75.1106.1154.9202.1254.7329.7
October77.4109.8159.7208.6258.5343.3
November78.2110.0161.3214.9263.1353.2
December80.8113.5173.3220.7268.8370.2
Annual average70.3100.0146.5195.8245.8311.3
(Annual percentage change)
Rate of inflation
End of period44.840.452.727321.837.7
Annual average46.042.246.533.725.526.6
Source: Data provided by the São Tomé and Princípe authorities.
Source: Data provided by the São Tomé and Princípe authorities.
Table 15São Tomé and Príncipe: Wages and Employment, 1988–93
198819891990199119921993
(In thousands of dobras)
Average wage, total5.76.69.09.09.09.2
Primary sector4.85.67.37.37.37.3
Of which: agriculture(4.8)(5.5)(7.2)(7.2)(7.2)(7.3)
Secondary sector5.78.010.510.510.510.5
Tertiary sector7.29.612.712.712.717.7
Of which: commerce(7.8)(10.2)(13.4)(13.4)(13.4)(18.3)
government(7.1)(7.8)(10.6)(10.6)(10.6)(10.6)
(Number of employees)
Total employment32.28432.67033.62034.06836.90839.392
Primary sector12,82612,81913,20013,59213,92414,550
Of which: agriculture(9,826)(10,819)(11,200)(11,743)(12,024)(12,550)
Secondary sector5,3005,8505,1824,6456,0926,280
Tertiary sector14,15814,00115,23815,83116,89218,562
Of which: commerce(6,350)(6,500)(5,000)(4,451)(5,451)(5,850)
government(4,058)(4,109)(4,158)(4,086)(4,032)(3,952)
(In percent of total employment)
Structure of employment
Primary sector39.739.239.339.937.736.9
Of which: agriculture(30.4)(33.1)(33.3)(34.5)(32.6)(31.9)
Secondary sector16.417.915.413.616.515.9
Tertiary sector43.942.945.346.545.847.1
Of which: commerce(19.7)(19.9)(14.9)(13.1)(14.8)(14.9)
government(12.6)(12.6)(12.4)(12.0)(10.9)(10.0)
(In units indicated)
Memorandum items:
Total active population (persons)43,05045,20247,48249,21651,67854,260
Unemployed workers (persons)10,76812,53213,84215,14814,76814,888
Unemployment rate (in percent) 1/25.027.729.230.828.627.4
Source: Data provided by the São Tomé and Príncipe authorities.

Unemployed workers divided by the total active population.

Source: Data provided by the São Tomé and Príncipe authorities.

Unemployed workers divided by the total active population.

Table 16.São Tomé and Príncipe: Financial Transactions of the Central Government, 1988–94(In millions of dobras)
1988198919901991199219931994

Est.
Total revenue and grants1,3832,2432,4233,3954,2647,10212,329
Tax revenue5956447731,1751,9462,6693,626
Of which:import taxes(208)(275)(310)(414)(755)(975)(1,275)
export taxes(142)(113)(50)(79)(101)(66)(207)
Nontax revenue3834955176881,0011,0251,191
Of which:transfers from enterprises(181)(303)(273)(332)(573)(596)(415)
Grants4051,1041,1321,5321,3183,4087,512
Total expenditure and net lending2,3104,6565,9037,81010,35013,98226,421
Current expenditure1,2501,7112,3353,2134,4086,67311,284
Personnel costs5307096868321,0471,0931,878
Of which:wages and salaries(331)(381)(452)(479)(518)(680)(867)
Goods and services1611471872344885231,334
Interest due on external debt3143977291,2621,6012,3473,982
Interest due on internal debt60
Transfers186242362382526493854
Other current expenditures2163684777002,1773,158
Redeployment fund326484179
Capital expenditure1,0542,9463,5684,5965,942730915,136
Recorded by the Treasury151320545444606564733
Foreign-financed9032,6263,0244,1535,3366,74514,403
Net lending6
Overall fiscal balance

(commitment basis, including grants)
-928-2.413-3.481-4.415-6.086-6.881-14.092
Change in arrears (net; reduction -)273353024013522,0623,633
External arrears (net; reduction - )423203024013522,0083,004
Domestic arrears (net; reduction -)-151554629
Overall fiscal balance (cash basis)-901-2,078-3,179-4,014-5,733-4,819-10,459
Financing9012,0783,1794,0145,7334,81910,459
External (net)1,0482,1802,3412,4763,7224,2676,873
Disbursements (projects)1,1012,4442,4172,6214,0194,3857,202
Amortization due-227-264-254-494-1,314-715-9,040
Scheduled-453-707-910-1,550-2,293-3,263-4,586
Net change in arrears (reduction -)2274436561,0579782,547-4,453
Debt relief1741783491,0185978,711
Domestic (net)-148-1028381,5382,0115523,586
Banking system-171-905648861,8465523,586
Other24-12274651165
Residual gap
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Table 17.São Tomé and Príncipe: Central Government Revenue, 1988–94(In millions of dobras)
1988198919901991199219931994

Est.
Total revenue and grants1,3832,2432,4233,3954,2647,10212,329
Tax revenue5956447731,1751,9462,6693,626
Direct taxes99120152190197328517
Profit taxes4679918263119148
Income taxes2219316492128324
Other28192744428145
Indirect taxes4965246219851,7492,3413,109
Import taxes2082753104147559751,275
Export taxes142113507910166207
Consumption taxes1211032204408151,0601,272
On imported goods79781473416297151,123
On domestic goods422573100186345149
Other2634415178240355
Nontax revenue3834955176881,0011,0251,191
Transfers from enterprises181303273332573596415
Fishing royalties5879130142268338535
Other14411311421316091241
Grants4051,1041,1321,5321,3183,4087,512
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Table 18.São Tomé and Príncipe: Central Government Expenditure, 1988–94(In millions of dobras)
1988198919901991199219931994

Est.
Total expenditure and net lending2,3104,6565,9037,81010,35013,98226,421
Current expenditure1,2501,7112,3353,2134,4086,67311,284
Personnel costs5307096868321,0471,0931,878
Wages and salaries331381452479518680867
Local281319408473509528695
Embassies496245691837
Bonuses and allowances 1/134135
Travel85230141157246278519
Family allowances5443221
Other personnel expenditures94514013224494443
Social security payments15424862364049
Goods and services1611471872344885231,334
Durable goods234915231835
Nondurable goods476882124253227389
Petroleum products326168104
Other92192158285
Services90759696212278910
Of which:electricity65557549600
transport and communications4084149141
Interest due on external debt3143977291,2621,6012,3473,982
Interest due on internal debt60
Transfers186242362382526493854
Public entities1111214862118172269
Public enterprises1119213205201130255
Private sector82114237252112
Private institutions31545865
Individuals5610186447107
External55818893135138217
Other current expenditures2163684777002,1773,158
Embassies61636689145228
Defense199278256413
Extraordinary expenditures1,4501,725
Other155305212333502792
Redeployment fund326484179
Capital expenditure1,0542,9463.5684,5965,9427,30915,136
Recorded by the Treasury151320545444606564733
Foreign - financed9032,6263,0244,1535,3366,74514,403
Net lending6
Memorandum item:
Total expenditure and net lending, excluding
foreign -financed capital expenditure1,4072,0312,8803,6575,0147,23712,017
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Bonuses and allowances are included in other personnel expenditures before 1993.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Bonuses and allowances are included in other personnel expenditures before 1993.

Table 19São Tomé and Príncipe: Fiscal Indicators, 1988–94
1988198919901991199219931994
Est.
(Annual percentage change)
Total revenue and grants24.462.38.040.125.666.573.6
Tax revenue101.68.320.152.065.637.235.9
Direct taxes15.621.127.225.23.566.258.0
Indirect taxes136.65.818.558.577.633.932.8
Of which: import taxes(187.3)(22.8)(29.8)(65.2)(83.3)(22.1)(41.9)
export taxes(159.2)(-20.0)(-55.5)(56.4)(27.6)(-35.0)(215.8)
Nontax revenue-4.729.54.433.045.52.416.1
Of which: transfers from enterprises(-21.1)(67.2)(-9.9)(21.8)(72.3)(4.0)(-30.4)
Grants24.6172.32.635.3-14.0158.7120.4
Total expenditure46.9102.126.832.332.535.189.0
Current expenditure24.236.936.537.637.251.469.1
Of which: wages and salaries(8.6)(15.2)(18.7)(5.9)(8.1)(31.3)(27.5)
goods and services(97.3)(-8.3)(27.2)(24.7)(108.6)(7.2)(155.2)
interest due on external debt(94.6)(26.4)(83.7)(73.2)(26.8)(46.6)(69.6)
Capital expenditure87.6179.427.928.829.323.0107.1
(In percent of total revenue and grants)
Total revenue and grants100.0100.0100.0100.0100.0100.0100.0
Tax revenue43.028.731.934.645.637.629.4
Direct taxes7.15.36.35.64.64.64.2
Indirect taxes35.923.425.629.041.033.025.2
Of which: import taxes(15.0)(12.2)(12.8)(12.2)(17.7)(13.7)(10.3)
export taxes(10.3)(5.1)(2.1)(2.3)(2.4)(0.9)(1.7)
Nontax revenue27.722.121.420.323.514.49.7
Of which: transfers from enterprises(13.1)(13.5)(11.3)(9.8)(13.4)(8.4)(3.4)
Grants29.349.246.745.130.948.060.9
(In percent of total expenditure)
Total expenditure100.0100.0100.0100.0100.0100.0100.0
Current expenditure54.236.739.641.142.647.742.7
Of which: wages and salaries(23.0)(15.2)(11.6)(10.7)(10.1)(7.8)(7.1)
goods and services(7.0)(3.2)(3.2)(3.0)(4.7)(3.7)(5.0)
interest due on external debt(13.6)(8.5)(12.3)(16.2)(15.5)(16.8)(15.1)
Capital expenditure45.863.360.458.957.452.357.3
(In percent of GDP)
Total revenue and grants32.839.131.331.430.842.258.2
Tax revenue14.111.210.010.914.115.817.1
Total expenditure54.681.176.272.274.883.0124.6
Current expenditure29.629.830.129.731.939.653.2
Capital expenditure25.051.346.042.543.043.471.4
Primary current balance 1/2/2.4-3.0-4.1-0.81.0-3.8-11.7
Primary overall balance 1/3/-13.0-35.1-35.5-29.2-32.4-26.9-47.7
Primary overall balance 1/2/-22.6-54.4-50.1-43.3-42.0-47.2-83.1
Overall balance 3/-21.8-42.0-44.9-40.8-44.0-40.9-66.5
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Excluding interest obligations.

Excluding grants.

Including grants.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Excluding interest obligations.

Excluding grants.

Including grants.

Table 20.São Tomé and Príncipe: Public Investment Program, 1988–94
1988198919901991199219931994
Est.
(In millions of U.S. dollars)
Total investment12.123.624.922.918.117.320.7
Public administration0.30.41.5140.60.20.8
Agriculture7.29.08.99.18.39.28.5
Water and sewage 1/0.30.82.60.20.20.91.3
Education1.41.51.70.60.81.63.7
Energy 1/0.3121.2
Housing0.48.60.90.10.30.20.2
Fisheries0.40.80.20.10.20.20.3
Health0.50.41.81.50.40.60.6
Transport and telecommunications1.62.17.39.97.1134.0
Financing12.123.624.922.918.117.320.7
Foreign10.020.820.319.816.315.719.7
Grants4.38.67.16.83.95.59.8
Loans5.711213.213.012.410.29.8
Domestic2.12.94.63.01.81.51.0
Counterpart funds0.40.30.80.80.12/
Budget1.72.63.82.21.71.51.0
(In percent of total investment)
Total investment100.0100.0100.0100.0100.0100.0100.0
Public administration2.51.76.06.13.11.03.6
Agriculture59.538.135.739.745.852.941.1
Water and sewage 1/2.53.410.40.90.85.26.4
Education11.66.46.82.64.39.317.7
Energy 1/1.41176.0
Housing3.336.43.60.41.51.11.0
Fisheries3.33.40.80.41.01.31.5
Health4.11.77.26.62.33.43.0
Transport and telecommunications13.28.929.343.239.113.119.5
Financing100.0100.0100.0100.0100.0100.0100.0
Foreign82.687.981.586.590.090.595.2
Grants35.236.228.629.721.631.747.6
Loans47.351.751956.868.458.947.6
Domestic17.412.118.513.110 08.94.8
Counterpart funds3.31.33.23.50.60.2
Budget14.110.815.39.69.48.94.8
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Until 1992 the energy sector was included in the water and sewage sector.

Less than US$ 0.05 million.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Until 1992 the energy sector was included in the water and sewage sector.

Less than US$ 0.05 million.

Table 21.São Tomé and Príncipe: Status of Nonagricultural Public Enterprises, 1994(In millions of dobras, unless otherwise specified)
1994
Government ownership

(in percent of total)
Value of

sales
Total assetsNumber of employeesNet profitsStatus as of December 1994
Transcolmar (transport)10016123785To be liquidated.
EMAE (water and electricity)1006934,471318-24Private management.
ENCO (petroleum products)1002,0611,6236769Strategic public enterprise.
EMCERA-II (ceramics)408316540-12Mixed enterprise.
EMOLVE (edible oil)100Strategic public enterprise.
COMPENSADORA100383220-20To be privatized.
(insurance)
ROSEMA (brewery)10065182313911International bidding.
CST (telecommunications)491,8013,295180192Mixed enterprise.
ENASA (air traffic security)100160815107102Strategic public enterprise.
ENAPORT (ports)1002321,0611354Strategic public enterprise.
ENCAR (meat distribution)100To be privatized.
Agua Grande (textiles)359795501381Mixed enterprise.
ENAMED1005015414-11To be privatized.
(pharmaceuticals)
Hotel Miramar1006821.16312124To be privatized.
Optics Nacional10031-1To be liquidated.
(eye glasses)
Air São Tomé (national35Mixed enterprise.
airline)
Loja Franca (supermarket)33To be privatized.
Pousada Boa Vista (hotel)Mixed enterprise.
Source: Data provided by the São Tomé and Principe authorities.
Source: Data provided by the São Tomé and Principe authorities.
Table 22São Tomé and Príncipe: Monetary Survey, 1991-94 1/(In millions of dobras)
1991199219931994
Estimates
Stocks: end of period
Net foreign assets-3,249-4,999-8,899-17,936
Foreign assets3,5054,0027,12517,311
Foreign liabilities-6,754-9,001-16,023-35,247
Net domestic assets7,1789,47014,84031,445
Net domestic credit9,88210,55911,80818,524
Net credit to Government3,2355,0815,6339,220
Claims4,4918,3478,65310,750
Deposits-1,256-3,266-3,020-1,531
Counterpart funds (nonbudgetary)-2,974-4,736-5,527-7,426
Credit to the economy9,62210,21311,70216,731
Public enterprises7,4058,4558,3078,307
Other2,2171,7583,3958,424
Other items (net)-3,813-1,0883,03212,921
Revaluation accounts4,8425,9517,83019,526
Other-8,655-7,039-4,798-6,605
Money and quasi-money2,8214,4725,94213,509
Money2,3414,2225,93413,508
Currency in circulation9101,3041,7403,221
Demand deposits1,4312,9184,19510,287
Quasi-money48025081
(Flows: after valuation adjustment)
Net foreign assets-487-641-2,0212,476
Net domestic assets1,1142,2923,4915,091
Net domestic credit6156761,2506,716
Net credit to Government7531,8465523,586
Counterpart funds (nonbudgetary)-861-1,761-792-1,899
Credit to the economy7235911,4895,029
Other items (net)4991,6162,241-1,625
Money and quasi-money6271,6511,4707,567
Currency in circulation2093944361,482
Deposits4181,2571,0356,093
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Consolidated from the accounts of the former National Bank, the Central Bank, the National Savings and Credit Institution, and the International Bank.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Consolidated from the accounts of the former National Bank, the Central Bank, the National Savings and Credit Institution, and the International Bank.

Table 23.São Tomé and Príncipe: Foreign Assets and Liabilities, 1993–94(In millions of U.S. dollars)
19931994
Dec.Mar.JuneSept.Dec.
Est.Estimates
Net foreign assets-17.22-17.28-15.58-13.87-15.13
Gross foreign assets13.7913.9314.6717.2514.60
Central Bank6.026.015.927.355.80
Claims on nonresidents4.634.634.545.964.42
Demand deposits abroad4.503.703.655.133.43
Time deposits abroad0.780.780.780.78
Checks in transit and letters of credit0.000.000.000.000.00
Other claims0.130.140.100.04020
Foreign bank notes and coins0.120.080.070.040.10
Travelers' checks0.010.060.020.000.10
Credit agreements1.351.351.351.351.35
IMF quota0.040.040.040.040.04
International Bank7.777.928.759.908.75
Claims on nonresidents5.455275.746.716.03
Other claims2.322.653.013.192.72
National Bank
CNPC0.05
Claims on nonresidents0.05
Gross foreign liabilities31.0131.2130.2531.1229.74
Central Bank4.564.854.995.065.09
Credit agreements1.651.651.651.651.65
Liabilities owed to residents2.913.203.343.413.44
International Bank7.617.536.427.225.81
Demand deposits4.354.604.154.894.84
Checks and payment orders0.000.000.050.020.00
Other liabilities3.262.932.212.310.98
National Bank18.8418.8418.8418.8418.84
Checks and payment orders1.231.231.231.231.23
Other liabilities15.2315.2315.2315.2315.23
Direct bank financing2.382.382.382.382.38
CNPC
Memorandum items
Net foreign assets-17.22-17.28-15.58-13.87-15.18
Central Bank 1/-17.38-17.67-17.91-16.55-18.12
International Bank0.160.402.332.682.94
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Includes the National Bank of São Tomé and Príncipe.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Includes the National Bank of São Tomé and Príncipe.

Table 24.São Tomé and Príncipe: Variations in Monetary Aggregates, 1991–94 1/
1991199219931994
Estimates
(Annual percentage change; after valuation adjustment)
Net foreign assets-34.8-19.7-40.427.8
Net domestic assets18.431.956.734.3
Net domestic credit6.66.811.856.9
Net credit to Government30.357.110.963.7
Counterpart funds (nonbudgetary)-40.7-59.2-16.7-34.4
Credit to the economy8.16.114.643.0
Other items (net)5.418.730.8-53.6
Money and quasi-money28.658.532.9127.3
(In percent of broad money at end of previous year, after valuation adjustment)
Net foreign assets-22.2-22.7-45.2-41.7
Net domestic assets50.881.378.185.7
Net domestic credit28.024.027.9113.0
Net credit to Government34.365.412.460.4
Counterpart funds (nonbudgetary)-39.2-62.4-17.7-32.0
Credit to the economy33.021.033.384.6
Other items (net)22.757.350.1-27.3
Money and quasi-money28.658.521.2127.3
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Consolidated from the accounts of the former National Bank, the Central Bank, the National Savings and Credit Institution, and the International Bank.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Consolidated from the accounts of the former National Bank, the Central Bank, the National Savings and Credit Institution, and the International Bank.

Table 25.São Tomé and Príncipe: Central Bank Summary Accounts, 1991–94 1/(In millions of dobras; end of period)
1991199219931994
Estimates
Net foreign assets-3,249-4,999-8,981-21,481
Foreign assets3,5054,0023,1096,875
Foreign liabilities-6,754-9,001-12,090-28,356
Net domestic assets5,6118,91015,27425,941
Net domestic credit9,44010,05912,42313,505
Net credit to Government3,2355,0817,65910,750
Claims4,4918,3478,65310,750
Deposits-1,256-3,266-994
Counterpart funds (nonbudgetary)-2,974-4,736-5,477-7,426
Claims on nonfinancial public enterprises7,4057,8888,1968,196
Claims on private sector1,7201,7582,0441,984
Claims on financial institutions5567
Other items (net)-3,829-1,1482,85112,436
Revaluation accounts4,8425,9517,83019,634
SDR liabilities-141-323
Other-8,672-7,099-4,838-6,875
Assets = Liabilities2,3623,9126,2934,461
Money and quasi-money 1/2,3623,912
Money2,1183,662
Currency in circulation9231,333
Demand deposits1,1952,329
Quasi-money244250
Base money 1/6,2934,461
Currency liabilities1,9493,760
Reserve deposits4,344701
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

In March 1993, the National Bank (BNSTP) divested itself of its commercial banking functions and began operations as the Central Bank (BCSTP).

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

In March 1993, the National Bank (BNSTP) divested itself of its commercial banking functions and began operations as the Central Bank (BCSTP).

Table 26.São Tomé and Príncipe: Summary Accounts of the National Savings and Credit Institution (CNPC), 1991–94 1/(In millions of dobras; end of period)
1991199219931994
Estimates
Net foreign assets61
Foreign assets61
Foreign liabilities
Net domestic assets4725891,8457,025
Reserves51662,7101,141
Cash on hand132925185
Deposits in the Central Bank 2/3837621418
Deposits in other financial institutions2,064537
Deposits of other financial institutions-725-140
Credit from the Central Bank-55-67
Net domestic credit497567-1,3592,678
Net credit to Government-2,026-1,531
Counterpart funds-50
Credit to the economy4975677174,209
Other items net-21231,2183,346
Money4725891,8457,086
Sight deposits2375891,8457,086
Public enterprises
Private sector2375891,8457,086
Time deposits235
Public enterprises
Private sector235
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Until March 1993, the CNCP was known as the People's Credit Institution (CPC).

Data as reported by the Central Bank.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Until March 1993, the CNCP was known as the People's Credit Institution (CPC).

Data as reported by the Central Bank.

Table 27São Tomé and Príncipe: Summary Accounts of the International Bank (BISTP), 1993–94 1/(In millions of dobras; end of period)
1991199219931994
Net foreign assets833,483
Foreign assets4,01610375
Foreign liabilities3,9326,891
Net domestic assets2,275-282
Reserves1,73113
Cash on hand184353
Deposits in the Central Bank2,909283
Deposits in other financial institutions70218
Deposits of other financial institutions-2,064-642
Credit from the Central Bank
Net domestic credit7442342
Net credit to Government
Credit to the economy7442342
Other items net-200-2,637
Money2,3583,202
Sight deposits2,3503,201
Time deposits81
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

The International Bank began operations in March 1993.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

The International Bank began operations in March 1993.

Table 28.São Tomé and Príncipe: Sectoral Distribution of Bank Credit, 1988–94 1/
198819891990199119921993

Est.
1994

Est.
(In millions of dobras: end of period)
Agriculture and livestock 2/1,0081,4041,5141,7151,7151,7151,715
Fishing46.8474761616161
Domestic trade5045645796681,0461,6352,341
Foreign trade 3/2,4252,6512,6766,0506,0506,0506,103
Transport and communications43464661616161
Housing87110254459504
Other1511411551781774681,365
Unspecified2102356347798491,2524,582
Total4,3895,0875,7379,62210,21311,70116,731
(In percent of total)
Agriculture and livestock23.027.626.417.816.814.710.3
Fishing1.11.00.80.60.60.50.4
Domestic trade11.511.110.16.910.214.014.0
Foreign trade55.352.146.662.959.251.736.5
Transport and communications1.01.00.80.60.60.50.4
Housing1.51.12.53.93.0
Other3.42.82.71.91.74.08.2
Unspecified4.84.611.18.18.310.727.4
Total100.0100.0100.0100.0100.0100.0100.0
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Includes credit extended by the National Bank.

Reflects credits granted prior to 1992 by the National Bank to agricultural public enterprises, which to date have remained in the balance sheet of the Central Bank.

The large increase in 1991 reflects the reclassification of assets not previously categorized as bank credit.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Includes credit extended by the National Bank.

Reflects credits granted prior to 1992 by the National Bank to agricultural public enterprises, which to date have remained in the balance sheet of the Central Bank.

The large increase in 1991 reflects the reclassification of assets not previously categorized as bank credit.

Table 29.São Tomé and Príncipe: Structure of Interest Rates, 1988–95(In percent per annum; end of period)
198819891990199119921993 1/19941995
March
Deposits
Sight deposits
Term deposits
30-90 days10.014.014.030.030.0
90-180 days12.016.016.035.035.0
180-365 days14.018.018.039.039.0
Over 1 year16.020.020.0
Credits
Commercial and industrial credits
30-90 days18.018.018.037.037.037.030.052.0
90-180 days20.020.020.037.037.037.030.052.0
180 - 365 days22.022.022.040.040.040.030.052.0
Over 1 year24.024.024.044.044.044.030.052.0
Short-term crop credit18.012.0-24.012.0-24.036.036.036.030.052.0
Housing loans15.015.015.040.040.040.025.052.0
Medium-term investment credit
and other6.012.0-24.012.0-24.0
Discount rate25.025.025.045.045.030.032.050.0
Memorandum items:
Deposits of 180-365 day's maturity
(in real terms) 2/-27.2-18.5-16.0-9.09.2
Commercial and industrial credits
of 180-365 days'maturity
(in real terms) 2/-19.2-15.7-13.2-8.39.915.0-5.6
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Since November 12, 1993, commercial banks have been free to set their lending rates, subject to a 22 percent minimum.

Real interest rates calculated on the basis of end-of-period rates of inflation as measured by the official consumer price index.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Since November 12, 1993, commercial banks have been free to set their lending rates, subject to a 22 percent minimum.

Real interest rates calculated on the basis of end-of-period rates of inflation as measured by the official consumer price index.

Table 30.São Tomé and Príncipe: Balance of Payments, 1988–94(In millions of U.S. dollars)
1988198919901991199219931994
Est.
Trade balance-10.2-20.9-16.9-18.5-17.0-19.0-17.9
Exports, f.o.b.10.95.94.46.05.46.66.5
Cocoa10.35.03.75.14.24.25.0
Other0.50.90.60.91.22.41.5
Imports, f.o.b.-21.1-26.8-21.3-24.5-22.5-25.5-24.3
Food-7.1-6.2-6.1-4.7-4.6-5.6-5.2
Investment goods-5.6-14.6-9.3-10.7-7.5-9.1-9.8
Petroleum products-1.3-1.2-2.6-1.9-2.2-1.8-1.8
Other-7.1-4.8-3.3-7.2-8.1-9.0-7.5
Services and income (net)-15.6-14.4-21.6-21.2-18.0-16.9-16.3
Exports of services1.64.64.04.85.05.45.9
Travel and tourism2.22.7
Other services3.13.2
Imports of nonfactor services-13.6-14.8-20.4-19.7-18.1-16.8-16.7
Freight and insurance-5.3-6.7-5.3-6.1-5.6-6.4-6.1
Technical assistance-3.0-2.6-9.1-6.4-5.5-3.8-4.6
Other-5.3-5.5-6.0-7.2-6.9-6.6-6.0
Interest due 1/-3.7-4.3-5.1-6.3-4.9-5.5-5.5
Private transfers (net)-0.0-0.30.10.61.11.53.4
Current account (net) before official transfers-25.9-35.6-38.4-39.1-33.9-34.4-30.8
Official transfers (net)9.213.416.111.612.811.516.3
Project-related4.38.57.66.83.95.59.8
Food aid4.24.94.63.73.73.54.0
Other (net)0.73.91.13.32.42.5
Current account (net) after official transfers-16.7-22.2-22.3-27.5-21.1-22.9-14.5
Medium- and long-term capital (net)4.913.18.811.213.18.85.4
Project loans5.712.213.213.012.410.29.8
Nonproject loans4.47.22.05.96.42.20.1
Direct foreign investment1.34.01.8
Amortization-5.2-6.3-6.4-7.7-7.0-7.6-6.3
Short-term capital and errors and omissions4.10.7-7.1-3.2-3.1-1.21.4
Overall balance-7.7-8.4-20.7-19.4-11.1-15.3-7.7
Financing7.78.420.719.411.115.37.7
Net change in reserves (increase -)-2.9-1.00.42.42.04.7-2.1
Medium- and long-term arrears (net; decrease -)4.04.56.37.24.17.26.6
Short-term arrears (net; decrease -)5.63.012.78.12.02.0-8.5
SAF (net)1.0-0.1
Debt relief0.90.91.21.73.11.411.9
Memorandum items:
Debt service ratio (before debt relief) 2/3/71.3100.8137.1129.4114.3110.096.2
Debt service ratio (after debt relief) 2/3/64.392.6122.3113.384.698.393.7
Debt service actually paid 2/4/28.826.421.015.8
Current account (in percent of GDP) 5/-34.1-48.3-41.3-51.3-48.9-58.5-50.2
Current account (in percent of GDP) 5/6/-46.7-57.8-56.9-66.5-48.9-51.3-31.4
Current account 2/5/-133.8-211.1-267.9-255.0-203.0-192.5-117.8
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Includes late interest.

In percent of exports of goods and services.

Includes obligations to the IMF; excludes arrears.

Includes obligations to the IMF and cash settlement of arrears.

After grants.

These ratios arc based on a dollar GDP calculated from changes in the real GDP and the GDP deflator for the United States (base year - 1992)

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Includes late interest.

In percent of exports of goods and services.

Includes obligations to the IMF; excludes arrears.

Includes obligations to the IMF and cash settlement of arrears.

After grants.

These ratios arc based on a dollar GDP calculated from changes in the real GDP and the GDP deflator for the United States (base year - 1992)

Table 31.São Tomé and Príncipe: Composition of Exports, 1988–94
1988198919901991199219931994

Est.
(In millions of U.S. dollars)
Value10.865.894.386.025.436.556.47
Cocoa10.335.033.745.094.234.154.97
Copra0.430.340.040.330.331/
Coffee0.090.050.050.05
Other0.100.520.600.510.822.351.45
(In metric tons)
Volume
Cocoa6,4153,7973,3254,7594,3633,7253,160
Copra1,6431,4505001,3501,35014
Coffee4022
Other686368375383785
(In U.S. dollars per kilogram)
Unit value
Cocoa1.611.331.121.070.971.121.57
Copra0.260.230.080.240.240.04
Coffee2.252.27
Other0.151.411.601.261.04
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Less than US$0.005 million.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Less than US$0.005 million.

Table 32.São Tomé and Príncipe: Composition of Imports, 1988–94
1988198919901991199219931994

Est.
(In millions of U.S. dollars)
Total imports, c.i.f.26.433.526.630.628.132.030.4
Foodstuffs8.97.87.65.95.87.16.5
Of which: grants(4.2)(5.7)(4.6)(3.7)(3.7)(3.5)(4.0)
Petroleum products1.61.53.32.42.82.22.2
Investment goods7.018.211.613.39.411.412.2
Other8.96.04.19.010.111.39.4
(In percent of total)
Total imports, c.i.f.100.0100.0100.0100.0100.0100.0100.0
Foodstuffs33.723.328.519.320.622.121.5
Of which: grants(15.9)(17.0)(17.3)(12.1)(13.1)(11.1)(13.1)
Petroleum products6.14.512.47.810.06.97.2
Investment goods26.554.343.643.533.535.740.2
Other33.717.915.429.436.035.431.0
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.
Table 33São Tomé and Príncipe: Destination of Exports, 1988–94
1988198919901991199219931994

Est.
(In millions of U.S. dollars)
Total exports, f.o.b.10.95.94.46.05.46.66.5
China, People's Republic of0.90.90.40.10.2
Germany6.63.62.01.10.8
Netherlands2.80.21.43.91.84.35.7
Portugal0.20.30.10.10.11/1/
Other0.30.90.60.82.52.30.8
(In percent of total)
Total exports, f.o.b.100.0100.0100.0100.0100.0100.0100.0
China, People's Republic of8.414.58.82.13.5
Germany60.761.144.818.815.1
Netherlands25.94.231.164.733.965.188.2
Portugal2.14.41.61.01.90.70.6
Other2.915.813.713.445.634.211.2
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Less than US$0.05 million.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Less than US$0.05 million.

Table 34.São Tomé and Príncipe: Origin of Imports, 1988–94
1988198919901991199219931994

Est.
(In millions of U.S. dollars)
Total imports, c.i.f.26.433.526.630.628.132.030.4
Angola1.61.93.23.01.32.31.5
Belgium0.51.12.21.51.22.12.3
China, People's Republic of1.40.70.20.50.50.50.3
France2.52.11.61.91.92.03.1
Gabon1.10.80.90.90.92.00.6
Germany1.40.50.10.10.10.40.8
Italy0.312.10.10.10.11.70.5
Japan1.30.91.82.12.03.11.6
Netherlands1.20.60.50.91.00.30.7
Portugal11.510.610.510.910.911.38.6
Spain0.30.23.31.71.90.20.1
United Kingdom0.10.10.40.3
Russian Federation1/1/
Other3.11.92.17.26.45.910.0
(In percent of total)
Total imports, c.i.f.100.0100.0100.0100.0100.0100.0100.0
Angola6.35.612.19.84.57.34.8
Belgium1.83.38.34.84.26.57.6
China, People's Republic of5.42.00.81.51.91.60.9
France9.56.26.26.36.76.310.1
Gabon4.22.43.42.93.26.41.8
Germany5.21.60.50.20.31.22.6
Italy1.036.10.20.30.25.31.7
Japan4.82.86.76.87.29.85.4
Netherlands4.61.82.02.93.51.02.4
Portugal43.631.739.535.638.735.428.3
Spain1.30.512.35.56.80.50.4
United Kingdom0.40.30.21.1
Russian Federation0.10.1
Other11.85.68.023.422.818.632.8
Source: Data provided by the São Tomé and Príncipe authorities.

Less than US$0.05 million.

Source: Data provided by the São Tomé and Príncipe authorities.

Less than US$0.05 million.

Table 35.São Tomé and Príncipe: Export, Import, and Terms of Trade Indices, 1988–94 1/(1987 = 100)
1988198919901991199219931994
Est.
Export unit value index103.985.572.369.062.671.9101.6
Import unit value index 2/106.7105.5115.9116.7119.6110.4113.8
Terms of trade97.481.062.459.252.365.289.2
Annual percentage change-2.7-16.8-23.0-5.1-11.524.536.9
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

In U.S. dollar terms.

Calculated using export unit value indices of partner countries.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

In U.S. dollar terms.

Calculated using export unit value indices of partner countries.

Table 36.São Tomé and Príncipe: Indicators of External Public Debt, 1990–94 1/
19901991199219931994
Est.
(In millions of U.S. dollars)
Disbursed medium- and long-term debt outstanding,
end of period130.2155.8178.5197.4214.1
Of which: arrears(26.1)(33.3)(37.4)(44.6)(51.2)
Short-term debt outstanding, end of period43.751.853.855.847.3
Of which: arrears(43.7)(51.8)(53.8)(55.8)(47.3)
Total external debt outstanding, end of period173.2207.6232.3253.2261.4
Of which: arrears(69.8)(85.1)(91.2)(100.4)(98.5)
Debt service due on medium- and long-term debt11.414.011.913.111.8
Interest5.16.34.95.55.5
Amortization6.47.77.07.66.3
Debt relief 2/1.21.73.11.411.9
(In percent of exports of foods and services)
External debt service
Before rescheduling137.1129.4114.3110.096.2
After rescheduling122.3113.384.698.393.7
Cash settlements 3/28.826.421.015.8
(In percent of GDP)
Total external debt outstanding, end of period
(including arrears)316.4537.6630.7777.01,461.5
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Includes IMF.

Current maturities and arrears rescheduled, refinanced, or forgiven.

Includes arrears.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Includes IMF.

Current maturities and arrears rescheduled, refinanced, or forgiven.

Includes arrears.

Table 37.São Tomé and Príncipe: Outstanding External Medium- and Long-Term Public Debt, 1990–94 1/(In millions of U.S. dollars)
19901991199219931994
Est.
Total 2/130.2155.8178.5197.4214.1
Of which: arrears(26.1)(33.3)(37.4)(44.6)(51.2)
Multilateral creditors 2/68.289.0108.4122.4136.1
Of which: arrears(1.8)(3.1)(0.1)(1.1)(2.4)
World Bank21.527.232.038.346.7
African Development Bank Group 3/31.746.060.566.872.2
Arab Bank for Economic
Development of Africa8.38.48.58.68.6
Other 2/6.77.47.58.78.6
Official bilateral creditors33.337.039.342.844.1
Of which: arrears(8.3)(10.5)(12.7)(14.4)(15.9)
China, People's Republic of5.25.35.35.46.0
France4.76.47.78.69.1
Germany10.010.511.012.212.7
Russian Federation7.48.18.68.99.0
Other6.06.66.77.77.3
Financial institutions23.824.725.526.227.5
Of which: arrears(11.2)(14.6)(19.2)(23.1)(26.5)
Portugal23.324.525.326.227.5
Other0.50.20.2
Suppliers' credits4.95.25.46.06.4
Of which: arrears(4.8)(5.1)(5.4)(6.0)(6.4)
Portugal1.01.01.11.31.3
Other3.94.24.34.85.0
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Debt with maturity of over one year.

Includes IMF.

Includes African Development Fund.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Debt with maturity of over one year.

Includes IMF.

Includes African Development Fund.

Table 38.São Tomé and Príncipe: Debt Service Due on Outstanding External Public Debt, 1994–97(In millions of U.S. dollars)
1994199519961997
EstimateProtectionProjectionProjection
AmortizationInterestTotalAmortizationInterestTotalAmortizationInterestTotalAmortizationInterestTotal
Multilateral creditors 1/1.910.932.841.881.143.022.4053.672.511.383.89
Of which: BADEA 2/(122)(005)(126)(122)3(1.26)(122)3 5(126)(1.25(0.03)(1.25)
AfDB 3/(0.18)(0.48)(0.66)(0.18)(0.55)(0.73)(0.59)(0.61)(1.20)(0.62)(0.65)(1.27)
OPEC(0.27)(0.01)(0.28)(0.04)(0.01)(0.05)(0.04)(0.01)(0.05)(0.04)(0.01)(0.05)
IDA(-)(0.32)(0.32)(0.18)(0.43)(0.61)(0.18)(0.49)(0.67)(0.33)(0.55)(0.88)
Bilateral creditors2.350.632.992.250.522.771.550.411.961.460.361.82
Of which: Germany(0.90)(0.18)(1.09)(0.90)(0.14)(1.05)(0.90)(0.09)(0.99)(0.90)(0.05)(0.95)
Russian Federation(1.42)(0.13)(1.55)(1.31)(0.08)(1.39)(0.48)(0.04)(0.52)(0.37)(0.03)(0.40)
Financial institutions2.000.172.171.000.021.021.241.240.830.83
Of which: Portugal(2.00)(0.17)(2.17)(1.00)(0.02)(1.05(-)(124) 4/(124)(-)(0.83) 4/(0.83)
Total scheduled 1/6.261.748.005.131.686.813.952.926.873.962.576.54
Interest on arrears and residual gaps3.703.703.013.013.243.243.503.50
Total debt service 1/6.265.4411.705.134.699.823.956.1610.113.966.0710.04
Memorandum item:
IMF0.110.040.150.230.050.280.230.050.280.230.030.26
Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Excluding obligations due the IMF.

Arab Bank for Economic Development in Africa.

Includes African Development Fund.

Payments arising from the March 1995 agreement with the Government of Portugal restructuring the stock of debt previously owed to Portuguese financial institutions.

Sources: Data provided by the São Tomé and Príncipe authorities; and staff estimates.

Excluding obligations due the IMF.

Arab Bank for Economic Development in Africa.

Includes African Development Fund.

Payments arising from the March 1995 agreement with the Government of Portugal restructuring the stock of debt previously owed to Portuguese financial institutions.

Table 39.São Tomé and Príncipe: Exchange Rates, 1986–95
Nominal effectiveOfficial rate,Bureau de change rateParallel market rate,Differential between
exchange rateDb/US$;Db/US$;Db/US$;the official and
index 1/period averageperiod averageperiod averageparallel market
(1987 = 100)rates 2/
Annual
1986125.238.6150288.6
1987100.053.5200273.8
198858.086.3188117.8
198946.4124.718246.0
199040.5143.320744.5
199133.2201.625627.0
199220.5320.43303.0
199318.9429.955529.1
199413.4732.6812.990423.4
Quarterly
1987Q1131.535.9
Q2134.835.0
Q372.467.1217223.4
Q461.375.9217185.9
1988Q162.075.1207175.6
Q262.875.8193154.6
Q354.696.518793.8
Q452.797.816568.7
1989Q149.1111.816749.4
Q246.1125.017237.6
Q347.2125.219757.4
Q443.4137.019340.9
1990Q142.1140.719236.5
Q240.7146.9212443
Q339.4145.921043.9
Q439.9139.821553.8
1991Q141.0142.921550.5
Q237.4173.823032.3
Q331.3214.726724.4
Q423.0275.031313.8
1992Q122.1291.83158.0
Q221.2308.33152.2
Q319.4323.53250.5
Q419.4358.03631.4
1993Q119.5389.346318.9
Q219.0406.255035.4
Q318.7446.860435.2
Q418.3477.2592.260125.9
1994Q116.4585.4648.865712.2
Q215.4624.6749.879226.8
Q311.9788.5858.01,00026.8
Q410.1932.0994.91,16725.2
1995Q11,337.61,333.71,4004.7
Sources: Data provided by the São Tomé and Principe authorities; and staff calculations.

Trade-weighted.

In percent of the official rate.

Sources: Data provided by the São Tomé and Principe authorities; and staff calculations.

Trade-weighted.

In percent of the official rate.

Because of deficiencies in the construction of the consumption basket, on which the official index is based, inflation is believed to be understated.

Prices were raised again in February 1995, to Db 750 per liter of gasoline (US$0.58), and the Government adopted a mechanism to ensure frequent adjustments of fuel retail prices consistent with changes in import costs.

The overall deficit is underestimated in that the Government is not charged interest on its credit from the Central Bank.

For a description of the compensation system, see Chapter II, Public Enterprise Reform.

See also Section 3 on the public investment program.

On March 6, 1995, the discount rate was raised to 50 percent per annum.

In spite of a 37 percent increase in the terms of trade, the index was still some 10 percent below its 1988 level.

Beginning in February 1995, the official rate has been set at the average of the preceding day's commercial bank, bureau de change, and parallel market exchange rates.

See also Appendix II, Exchange and Payments System.

In the 1994 fiscal accounts, budgetary expenditures for electricity consumption are shown on a commitment basis, implying an accumulation of domestic arrears for the amounts not paid.

Small-scale farms producing nontraditional export crops, such as tubers and bananas, were targeted as priority areas. This policy was intended to complement the Government's land redistribution efforts by facilitating the utilization of uncultivated land.

An additional 300 employees are to be retrenched during 1995.

Other Resources Citing This Publication