Front Matter

Front Matter Page

IMF Country Report No. 16/175

DEMOCRATIC REPUBLIC OF SÃO TOMÉ AND PRÍNCIPE

SELECTED ISSUES

June 2016

This Selected Issues paper on the Democratic Republic of São Tomé and Príncipe was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the Democratic Republic of São Tomé and Príncipe. It is based on the information available at the time it was completed on May 20, 2016.

Copies of this report are available to the public from

International Monetary Fund • Publication Services

PO Box 92780 • Washington, D.C. 20090

Telephone: (202) 623-7430 • Fax: (202) 623-7201

E-mail: publications@imf.org Web: http://www.imf.org

Price: $18.00 per printed copy

International Monetary Fund

Washington, D.C.

© 2016 International Monetary Fund

Front Matter Page

DEMOCRATIC REPUBLIC OF SÃO TOMÉ AND PRÍNCIPE

SELECTED ISSUES

May 20, 2016

Approved By

The African Department

Prepared By Maxwell Opoku-Afari, Dalmacio F. Benicio, Jehann Jack, and Luiz Felipe Almeida (all AFR), Burcu Hacibedel (FIN), Dorothe Singer, and Julian Casal (all World Bank) with production assistance from Estanislao Rengifo.

Contents

  • TOURISM COMPETITIVENESS IN SÃO TOMÉ AND PRÍNCIPE: CHALLENGES AND STRATEGY

  • A. Tourism Competitiveness

  • B. Challenges and Strategy

  • FIGURES

  • 1. Tourist Arrivals, 1995–2014

  • 2. Relative Tourism Competitiveness Index, 1999–2009

  • 3. Tourism Performance on Select Origin Markets

  • 4. Select Indicators of Bottlenecks to Tourism

  • 5. Volatilities of GDP and of Tourist Arrivals in TDSS, 2000–14

  • 6. Indicators of Policy Buffers

  • TABLE

  • 1. Top Five Major Tourist Origins in the Last Five Years

  • References

  • MAINSTREAMING MACRO-FINANCIAL LINKAGES

  • A. The Landscape of the Financial System

  • B. Financial Sector Stability Analysis

  • C. Macro Financial Linkages

  • D. Macro Stress Tests

  • E. Policy Implications

  • FIGURES

  • 1. Key Financial Sector Indicators

  • 2. Asset Quality of Banks

  • 3. Dispersion of NPLs/Total Loans by Banks (2015)

  • 4. Trends in Interest Rates

  • 5. Total Credit

  • 6. Loans by Sector

  • 7. Expenses vs. Profitability (2011–15)

  • 8. Macro-Financial Linkages in São Tomé and Príncipe

  • 9. Loan and NPLs by Sector

  • 10. Loan Distribution by Type of Borrower

  • 11. Simulated Financial Sector Impact on the Budget

  • 12. Effects of Shocks to NPLs on Capital Adequacy

  • 13. Credit Risk: Impact of Sectoral Increases in NPLs on Capital Adequacy

  • 14. Concentration Risk

  • TABLES

  • 1. Key Developments in Banks Balance Sheet

  • 2. Breakdown of Bank Profitability

  • 3. Sectoral Impact of Shocks to NPL

  • PROMOTING GROWTH AND PRIVATE SECTOR DEVELOPMENT IN SÃO TOMÉ AND PRÍNCIPE

  • A. Introduction

  • B. Sources of Growth

  • C. Constraints to Growth and Private Sector Development

  • D. Policy Recommendations

  • E. Conclusion

  • FIGURE

  • 1. Sources of Growth

  • TABLE

  • 1. Sources of Real GDP Growth, 1960–2012

  • References

  • SMALL FINANCIAL SYSTEMS: SOME STYLIZED FACTS

  • A. Countries with Small Financial Systems

  • B. Some Stylized Facts of Small Financial Systems

  • FIGURES

  • 1. Size of Financial System (M2) in 170 Countries

  • 2. Private Credit by Banks (Percent of GDP) vs. M2

  • 3. Three Bank Asset Concentration vs. M2

  • 4. NPL (Percent total loans) vs. M2

  • 5. Overheads (Percent total assets) vs. M2

  • 6. Interest Rate Spread vs. M2

  • TABLES

  • 1: Countries with Financial System Size (M2) of Less than US$1 billion

  • 2: Countries with Small Financial Systems

  • 3. Financial System Size and Financial Depth

  • 4. Banking System Structure by Financial System Size

  • 5. Capital and Asset Quality by Financial System Size

  • 6. Financial Performance Indicators of Banks by Financial System Size

  • 7. Access Indicators by Financial System Size

Democratic Republic of São Tomé and Príncipe: Selected Issues
Author: International Monetary Fund. African Dept.