Democratic Republic of Sao Tome and Principe: Request for a 40-month Arrangement Under the Extended Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for Democratic Republic of Sao Tome and Principe
São Tomé and Príncipe is a fragile, small island-state, with limited resources
and capacity. The last Extended Credit Facility (ECF) arrangement expired at end-2018
having gone off-track amid parliamentary elections, power outages, internal and external
imbalances, and high debt vulnerability. Growth slowed, inflation rose, the fiscal position
deteriorated, and foreign reserves declined sharply in 2018, while some critical structural
reforms were delayed. Higher and more inclusive growth is needed to reduce poverty
and unemployment, particularly among the large youth population.