Context

1. The COVID-19 pandemic is taking a heavy toll on São Tomé and Príncipe, a fragile, small, remote island state, with 67 percent of its 200,000-population living in poverty. A state of emergency declared in late March led to strict confinement measures, including a suspension of all commercial flights. The fledgling tourism sector has come to a standstill, externally financed projects are being delayed, and shipments of supplies are disrupted. By end-June, the country had 714 officially confirmed cases of COVID-19 and 13 deaths, but the number of new cases has now declined to about 1 per day and 236 had recovered with only 5 patients hospitalized. With the help of the World Health Organization, a field hospital has been set up, and a laboratory began testing in mid-June. In addition, the medical team is being reinforced, including with doctors from China, Cuba, and Portugal. The authorities ended the state of emergency on June 17 and started a phased removal of the confinement, aiming for a reopening of the economy by end-July. Measures have been established for prevention of contamination from the airport opening, and work is underway to qualify hospitality enterprises for certification of “Clean and Safe.”

2. An RCF disbursement (61 percent of quota) was approved in April 2020 to meet the urgent needs caused by the pandemic. The priorities set out in the Letter of Intent for the RCF request are to combat the pandemic, provide assistance to the most vulnerable, enact countercyclical measures, and ensure transparency and accountability in public spending.

Recent Economic Developments

3. Growth in 2019 was weighed down by delays in externally financed projects, power outages from dilapidated generators, and fuel shortages. Project implementation slowed during the transition to a new government, but after long delays, strategic plans for tourism, the energy sector, revenue mobilization, and large infrastructure projects were completed with donors’ support. Changes in rainfall patterns and a shortage of pesticide damaged cultivation of cocoa, a key export. Consequently, economic growth further slowed to 1.3 percent in 2019. On the positive side, tourism grew by 5 percent in 2019, inflation subsided to 7.7 percent by end-2019 from 9 percent at end-2018, and a private palm-oil producer started to export in late 2019 and accounted for 40 percent of exports in the first quarter of 2020.

4. The balance of payments improved in 2019. After falling sharply by about US$16 million in 2018, gross international reserves (GIR) rose by US$5 million to US$40.4 million in 2019 or 3.4 months of pre-crisis (2019) imports.¹ Strong fiscal consolidation as discussed below and higher budget support grants helped raise GIR. Meanwhile, the current account deficit was largely unchanged at 12.5 percent of GDP in 2019 but worsened in the first quarter of 2020 due primarily to a 30 percent fall in tourism revenues relative to the first quarter of 2019 and a 10 percent drop in remittances.

São Tomé and Príncipe: Recent Macroeconomic Developments, 2016–19

Citation: IMF Staff Country Reports 2020, 232; 10.5089/9781513552118.002.A001

Sources: São Tomé and Príncipe authorities and IMF staff estimates.

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São Tomé and Príncipe: Recent Macroeconomic Developments, 2016–19

Citation: IMF Staff Country Reports 2020, 232; 10.5089/9781513552118.002.A001

Sources: São Tomé and Príncipe authorities and IMF staff estimates.

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São Tomé and Príncipe: Recent Macroeconomic Developments, 2016–19

Citation: IMF Staff Country Reports 2020, 232; 10.5089/9781513552118.002.A001

Sources: São Tomé and Príncipe authorities and IMF staff estimates.

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5. Strong revenue and spending measures cut the domestic primary deficit (DPD) from 4.2 percent of GDP in 2018 to 1.8 percent of GDP in 2019, outperforming the target by 0.3 percent of GDP (Text Table 1). Higher oil excise and telecommunications sales taxes in advance of the introduction of the VAT, combined with cuts in tax allowances, public consumption, non-priority transfers, and capital expenditure helped achieve the strong performance. Other non-tax revenue and other current expenditure both increased relative to program projections following a more comprehensive incorporation of some autonomous entities’ accounts into Treasury accounts.

^{Text Table 1.}

Fiscal Performance in 2018 and 2019

(Percent of GDP)

Sources: São Tomé and Príncipe authorities’ data and IMF staff projections.

¹The outturn in 2019 was higher than the programed because some autonomous entities were brought into the Treasury’s accounts.

²Excludes oil related revenues and ENCO debt repayment, grants, interest earned,. scheduled interest payments, foreign-financed capital outlays,and capitalization of regional organizations per definition in TMU.

^{Text Table 1.}

Fiscal Performance in 2018 and 2019

(Percent of GDP)

					2018	2019	2019
						ECF	Prel.
Total revenue (ex. oil and payment to ENCO)					13.4	13.7	15.2
		Tax revenue			12.9	12.5	12.6
			Import taxes		5.6	5.4	5.1
			Other taxes		7.1	7.1	7.5
		Nontax revenue			3.1	1.8	3.3
			of which: oil revenue		2.5	0.6	0.8
				Fishing royalties	0.0	0.3	0.1
Total domestic primary expenditure (ex. capitalization)					17.6	15.8	17.0
	Current expenditure				16.7	16.1	17.5
		Personnel costs			9.3	9.2	9.2
		Interest due			0.4	0.6	0.7
		Goods and services			3.0	2.5	2.5
		Transfers			3.2	3.1	2.9
		Other current expenditure1			0.8	0.6	2.2
	Capital spending fin. by the Treasury and HIPC				1.6	0.3	0.2
Domestic primary balance2					-4.2	-2.1	-1.8
Memorandum items:
	Payment to ENCO				...	0.0	0.0

Sources: São Tomé and Príncipe authorities’ data and IMF staff projections.

¹The outturn in 2019 was higher than the programed because some autonomous entities were brought into the Treasury’s accounts.

²Excludes oil related revenues and ENCO debt repayment, grants, interest earned,. scheduled interest payments, foreign-financed capital outlays,and capitalization of regional organizations per definition in TMU.

View Table

^{Text Table 1.}

Fiscal Performance in 2018 and 2019

(Percent of GDP)

					2018	2019	2019
						ECF	Prel.
Total revenue (ex. oil and payment to ENCO)					13.4	13.7	15.2
		Tax revenue			12.9	12.5	12.6
			Import taxes		5.6	5.4	5.1
			Other taxes		7.1	7.1	7.5
		Nontax revenue			3.1	1.8	3.3
			of which: oil revenue		2.5	0.6	0.8
				Fishing royalties	0.0	0.3	0.1
Total domestic primary expenditure (ex. capitalization)					17.6	15.8	17.0
	Current expenditure				16.7	16.1	17.5
		Personnel costs			9.3	9.2	9.2
		Interest due			0.4	0.6	0.7
		Goods and services			3.0	2.5	2.5
		Transfers			3.2	3.1	2.9
		Other current expenditure1			0.8	0.6	2.2
	Capital spending fin. by the Treasury and HIPC				1.6	0.3	0.2
Domestic primary balance2					-4.2	-2.1	-1.8
Memorandum items:
	Payment to ENCO				...	0.0	0.0

Sources: São Tomé and Príncipe authorities’ data and IMF staff projections.

¹The outturn in 2019 was higher than the programed because some autonomous entities were brought into the Treasury’s accounts.

²Excludes oil related revenues and ENCO debt repayment, grants, interest earned,. scheduled interest payments, foreign-financed capital outlays,and capitalization of regional organizations per definition in TMU.

6. However, the end-March indicative DPD target was missed due to policy slippages. Overall domestic revenue continued to perform well, supported by the adoption of electronic invoicing, and notwithstanding 0.3 percent of GDP in tax arrears still owed by the oil importer, ENCO. However, personnel costs exceeded program projections by 1.1 percent of annual GDP largely due to the hiring of teachers to alleviate crowding when donor-financed new schools were completed, as well as the implementation of longstanding promotions in the health and security sectors (MEFP ¶7). As a result, the end-March DPD reached 1.2 percent of annual GDP, missing the (adjusted) ECF indicative target by 0.8 percent of annual GDP. Meanwhile, difficulties in setting up the IT system and the onset of the epidemic delayed the planned introduction of the VAT in March 2020.²

7. Credit to the economy continued to be anemic. While excess liquidity fell by approximately 4 percentage points in 2019, it rose by 7.4 percentage points to 24 percent by April (Text Figure 2), of which about 4 percentage points was due to the cut in the reserve requirement ratio by 4 percentage points in early April in response to anticipated liquidity pressures from COVID-19 (MEFP ¶23). System-wide financial soundness indicators changed slightly from end-2018 (Table 5), with the overall share of non-performing loans (NPL) at 26.5 percent and the capital adequacy ratio at 31.1 percent in March 2020 (Text Figure 3). Implementation of the recommendations from an independent asset quality review (AQR) required significant reclassification and provisioning for some small banks. Meanwhile, the private owners of some of the small banks needing recapitalization have committed to do so by end-2020.

^{Table 1.}

São Tomé and Príncipe: Selected Economic Indicators, 2016–24

(Annual change in percent, unless otherwise indicated)

Sources: São Tomé and Príncipe authorities’ data and IMF staff estimates and projections.

¹Central Bank (BCSTP) mid-point rate.

²Excludes oil related revenues, grants, interzest earned, scheduled interest payments, and foreign-financed capital outlay.

³Total public and publicly guaranteed debt as defined in DSA, which includes EMAE’s debt to ENCO (and excludes the government’s arrears to EMAE due to consolidation).

⁴Percent of exports of goods and nonfactor services.

⁵Gross international reserves exclude the National Oil Account and commercial banks’ foreign currency deposits at the BCSTP in order to meet reserve requirements, for new licensing, and for meeting capital requirements.

⁶Imports of goods and nonfactor services, excluding imports of investment goods and technical assistance.

^{Table 1.}

São Tomé and Príncipe: Selected Economic Indicators, 2016–24

(Annual change in percent, unless otherwise indicated)

				2016	2017	2018	2019		2020		2021	2022	2023	2024
							ECF Req.		ECF Req.	Proj.	Proj.	Proj.	Proj.	Proj.
National income and prices
National income and prices
	GDP at constant prices			4.2	3.9	3.0	2.7	1.3	3.5	-6.5	3.0	5.5	4.5	4.5
	GDP deflator			5.1	2.0	2.6	3.7	5.7	3.5	3.5	3.0	3.0	2.9	2.8
	Consumer prices (End of period)			5.1	7.7	9.0	7.8	7.7	10.0	8.0	8.0	5.0	4.0	3.0
	Consumer prices (Period average)			5.4	5.7	8.3	3.4	8.4	8.9	7.9	3.0	5.9	3.5	3.0
External trade
	Exports of goods and nonfactor services			8.9	-10.8	13.9	10.5	-1.8	11.0	-52.7	53.1	44.9	7.5	8.7
	Imports of goods and nonfactor services			-0.4	5.5	4.3	1.8	-5.3	6.7	-17.9	2.2	15.1	4.4	5.9
	Exchange rate (new dobras per US$ end of period)1			23.4	20.7	21.5	21.7	22.0	...	...	...	...	...	...
	Real effective exchange rate (period average, depreciation = -			5.7	4.9	8.7	...	5.7	...	...	...	...	...	...
Money and credit
	Base money			5.0	-9.6	0.8	-0.5	-7.4	2.6	-4.6	6.1	8.7	...	...
	Broad money (M3)			-4.8	-0.4	14.3	0.0	2.2	7.1	-0.6	5.1	8.7	...	...
	Credit to the economy			6.6	2.5	-1.6	-6.7	3.2	0.6	0.1	2.7	3.6	...	...
	Velocity (GDP to broad money; end of period)			2.8	3.1	3.0	3.0	3.0	3.0	3.0	3.0	3.0	...	...
	Central bank reference interest rate (percent)			10.0	9.0	9.0	...	9.0	...	...	...	...	...	...
	Average bank lending rate (percent)			19.6	19.6	19.9	...	19.1	...	...	...	...	...	...
Government finance (in percent of GDP)
	Total revenue, grants, and ail signature bonuses			28.2	24.9	24.1	21.0	22.5	23.6	24.6	22.7	22.8	23.4	23.2
		Of which: tax revenue		12.3	12.7	12.8	12.5	12.6	13.0	12.9	13.2	13.9	14.5	14.6
		Nontax revenue		2.3	1.7	3.1	1.8	3.3	1.8	2.4	2.8	2.8	2.7	2.9
		Grants		13.5	10.5	8.3	6.7	6.6	8.9	9.3	6.7	6.1	6.1	5.7
	Total expenditure and net lending			32.4	27.6	26.0	21.9	22.5	23.9	29.2	26.4	24.3	24.1	23.8
		Personnel costs		8.9	8.3	9.3	9.2	9.2	8.3	11.0	10.3	9.8	9.6	9.6
		Interest due		0.4	0.5	0.4	0.6	0.7	0.6	0.7	0.5	0.5	0.5	0.4
		Nonwage noninterest current expenditure		8.0	6.9	7.0	6.3	7.6	6.3	8.4	3.2	7.7	7.5	7.5
		Treasury funded capital expenditures		0.7	0.7	1.4	0.1	0.1	0.2	0.2	0.3	0.3	0.4	0.6
		Donor funded capital expenditures		14.2	11.0	7.8	5.5	4.8	7.8	5.5	5.9	5.9	5.9	5.5
		HIPC Initiative-related capital expenditure		0.2	0.2	0.1	0.2	0.1	0.2	0.2	0.2	0.2	0.3	0.3
		COVID-19 spending		...	...	...	...	...	...	3.1	1.0	...	...	...
	Domestic primary balance 2			-4.1	-2.4	-4.2	-2.1	-1.8	-1.7	-6.3	-3.9	-1.5	-0.8	-0.7
	Net domestic borrowing			2.8	1.8	3.4	0.7	-1.5	1.2	-0.9	3.1	1.2	0.4	0.8
	Overall balance (commitment basis)			-4.2	-2.7	-1.9	-0.9	-0.1	-0.3	-4.6	-3.7	-1.5	-0.3	-0.7
	Public Debt3			80.9	84.3	96.2	94.2	97.7	93.8	105.2	105.1	100.3	95.0	90.1
		Of which; EMAE’s debt to ENCO		16.1	19.3	23.3	23.2	26.4	...	32.7	34.4	34.1	33.0	31.9
External sector
	Current account balance (percent of GDP)
		Including official transfers		-6.1	-13.2	-12.3	-11.5	-12.5	-9.0	-17.0	-11.9	-9.3	8.2	-7.6
		Excluding official transfers		-20.0	-24.3	-21.0	-18.2	-19.0	-17.9	-26.3	-18.6	-15.4	-14.3	-13.4
	PV of external debt (percent of GDP)			31.5	26.5	27.1	25.6	27.2	24.0	33.8	33.9	32.8	31.5	29.9
	External debt service (percent of exports)4			3.3	3.8	2.6	5.1	4.5	5.3	9.5	8.8	79	7.3	8.9
	Export of goods and non-factor services (US$ millions)			96.6	86.1	98.0	108.6	96.3	120.5	45.5	59.7	101.0	108.6	118.0
	Gross international reserves5
		Millions of U.S. dollars		55.9	51.4	35.1	35.0	40.4	40.0	54.1	58.8	65.3	67.5	71.2
		Months of imparts of goods and nonfactor services 6		4.9	4.2	3.0	3.3	4.5	3.6	6.0	5.6	6.0	5.9	5.9
			In months of 2019 imports	...	...	...	...	3.4	...	4.6	5.0	5.5	...	...
	National Oil Account (US$ millions)			11.5	11.3	19.5	18.5	18.8	17.3	15.2	12.4	10.1	8.2	6.7
Memorandum Item
Gross Domestic Product
	Millions of new dobra			7,698	8,154	8,619	9,333	9,230	9,997	8,933	9,477	10,298	11,077	11,897
	Millions of U.S. dollars			347.5	375.8	415.6	429.8	421.8	462.6	398.4	426.1	462.7	496.6	532.5
	Per capita (in U.S. dollars)			1,738	1,842	1,989	1,999	1,980	2,111	1,828	1,911	2,038	2,141	2,247

Sources: São Tomé and Príncipe authorities’ data and IMF staff estimates and projections.

¹Central Bank (BCSTP) mid-point rate.

²Excludes oil related revenues, grants, interzest earned, scheduled interest payments, and foreign-financed capital outlay.

³Total public and publicly guaranteed debt as defined in DSA, which includes EMAE’s debt to ENCO (and excludes the government’s arrears to EMAE due to consolidation).

⁴Percent of exports of goods and nonfactor services.

⁵Gross international reserves exclude the National Oil Account and commercial banks’ foreign currency deposits at the BCSTP in order to meet reserve requirements, for new licensing, and for meeting capital requirements.

⁶Imports of goods and nonfactor services, excluding imports of investment goods and technical assistance.

View Table

^{Table 1.}

São Tomé and Príncipe: Selected Economic Indicators, 2016–24

(Annual change in percent, unless otherwise indicated)

				2016	2017	2018	2019		2020		2021	2022	2023	2024
							ECF Req.		ECF Req.	Proj.	Proj.	Proj.	Proj.	Proj.
National income and prices
National income and prices
	GDP at constant prices			4.2	3.9	3.0	2.7	1.3	3.5	-6.5	3.0	5.5	4.5	4.5
	GDP deflator			5.1	2.0	2.6	3.7	5.7	3.5	3.5	3.0	3.0	2.9	2.8
	Consumer prices (End of period)			5.1	7.7	9.0	7.8	7.7	10.0	8.0	8.0	5.0	4.0	3.0
	Consumer prices (Period average)			5.4	5.7	8.3	3.4	8.4	8.9	7.9	3.0	5.9	3.5	3.0
External trade
	Exports of goods and nonfactor services			8.9	-10.8	13.9	10.5	-1.8	11.0	-52.7	53.1	44.9	7.5	8.7
	Imports of goods and nonfactor services			-0.4	5.5	4.3	1.8	-5.3	6.7	-17.9	2.2	15.1	4.4	5.9
	Exchange rate (new dobras per US$ end of period)1			23.4	20.7	21.5	21.7	22.0	...	...	...	...	...	...
	Real effective exchange rate (period average, depreciation = -			5.7	4.9	8.7	...	5.7	...	...	...	...	...	...
Money and credit
	Base money			5.0	-9.6	0.8	-0.5	-7.4	2.6	-4.6	6.1	8.7	...	...
	Broad money (M3)			-4.8	-0.4	14.3	0.0	2.2	7.1	-0.6	5.1	8.7	...	...
	Credit to the economy			6.6	2.5	-1.6	-6.7	3.2	0.6	0.1	2.7	3.6	...	...
	Velocity (GDP to broad money; end of period)			2.8	3.1	3.0	3.0	3.0	3.0	3.0	3.0	3.0	...	...
	Central bank reference interest rate (percent)			10.0	9.0	9.0	...	9.0	...	...	...	...	...	...
	Average bank lending rate (percent)			19.6	19.6	19.9	...	19.1	...	...	...	...	...	...
Government finance (in percent of GDP)
	Total revenue, grants, and ail signature bonuses			28.2	24.9	24.1	21.0	22.5	23.6	24.6	22.7	22.8	23.4	23.2
		Of which: tax revenue		12.3	12.7	12.8	12.5	12.6	13.0	12.9	13.2	13.9	14.5	14.6
		Nontax revenue		2.3	1.7	3.1	1.8	3.3	1.8	2.4	2.8	2.8	2.7	2.9
		Grants		13.5	10.5	8.3	6.7	6.6	8.9	9.3	6.7	6.1	6.1	5.7
	Total expenditure and net lending			32.4	27.6	26.0	21.9	22.5	23.9	29.2	26.4	24.3	24.1	23.8
		Personnel costs		8.9	8.3	9.3	9.2	9.2	8.3	11.0	10.3	9.8	9.6	9.6
		Interest due		0.4	0.5	0.4	0.6	0.7	0.6	0.7	0.5	0.5	0.5	0.4
		Nonwage noninterest current expenditure		8.0	6.9	7.0	6.3	7.6	6.3	8.4	3.2	7.7	7.5	7.5
		Treasury funded capital expenditures		0.7	0.7	1.4	0.1	0.1	0.2	0.2	0.3	0.3	0.4	0.6
		Donor funded capital expenditures		14.2	11.0	7.8	5.5	4.8	7.8	5.5	5.9	5.9	5.9	5.5
		HIPC Initiative-related capital expenditure		0.2	0.2	0.1	0.2	0.1	0.2	0.2	0.2	0.2	0.3	0.3
		COVID-19 spending		...	...	...	...	...	...	3.1	1.0	...	...	...
	Domestic primary balance 2			-4.1	-2.4	-4.2	-2.1	-1.8	-1.7	-6.3	-3.9	-1.5	-0.8	-0.7
	Net domestic borrowing			2.8	1.8	3.4	0.7	-1.5	1.2	-0.9	3.1	1.2	0.4	0.8
	Overall balance (commitment basis)			-4.2	-2.7	-1.9	-0.9	-0.1	-0.3	-4.6	-3.7	-1.5	-0.3	-0.7
	Public Debt3			80.9	84.3	96.2	94.2	97.7	93.8	105.2	105.1	100.3	95.0	90.1
		Of which; EMAE’s debt to ENCO		16.1	19.3	23.3	23.2	26.4	...	32.7	34.4	34.1	33.0	31.9
External sector
	Current account balance (percent of GDP)
		Including official transfers		-6.1	-13.2	-12.3	-11.5	-12.5	-9.0	-17.0	-11.9	-9.3	8.2	-7.6
		Excluding official transfers		-20.0	-24.3	-21.0	-18.2	-19.0	-17.9	-26.3	-18.6	-15.4	-14.3	-13.4
	PV of external debt (percent of GDP)			31.5	26.5	27.1	25.6	27.2	24.0	33.8	33.9	32.8	31.5	29.9
	External debt service (percent of exports)4			3.3	3.8	2.6	5.1	4.5	5.3	9.5	8.8	79	7.3	8.9
	Export of goods and non-factor services (US$ millions)			96.6	86.1	98.0	108.6	96.3	120.5	45.5	59.7	101.0	108.6	118.0
	Gross international reserves5
		Millions of U.S. dollars		55.9	51.4	35.1	35.0	40.4	40.0	54.1	58.8	65.3	67.5	71.2
		Months of imparts of goods and nonfactor services 6		4.9	4.2	3.0	3.3	4.5	3.6	6.0	5.6	6.0	5.9	5.9
			In months of 2019 imports	...	...	...	...	3.4	...	4.6	5.0	5.5	...	...
	National Oil Account (US$ millions)			11.5	11.3	19.5	18.5	18.8	17.3	15.2	12.4	10.1	8.2	6.7
Memorandum Item
Gross Domestic Product
	Millions of new dobra			7,698	8,154	8,619	9,333	9,230	9,997	8,933	9,477	10,298	11,077	11,897
	Millions of U.S. dollars			347.5	375.8	415.6	429.8	421.8	462.6	398.4	426.1	462.7	496.6	532.5
	Per capita (in U.S. dollars)			1,738	1,842	1,989	1,999	1,980	2,111	1,828	1,911	2,038	2,141	2,247

Sources: São Tomé and Príncipe authorities’ data and IMF staff estimates and projections.

¹Central Bank (BCSTP) mid-point rate.

²Excludes oil related revenues, grants, interzest earned, scheduled interest payments, and foreign-financed capital outlay.

³Total public and publicly guaranteed debt as defined in DSA, which includes EMAE’s debt to ENCO (and excludes the government’s arrears to EMAE due to consolidation).

⁴Percent of exports of goods and nonfactor services.

⁵Gross international reserves exclude the National Oil Account and commercial banks’ foreign currency deposits at the BCSTP in order to meet reserve requirements, for new licensing, and for meeting capital requirements.

⁶Imports of goods and nonfactor services, excluding imports of investment goods and technical assistance.

^{Table 2a.}

São Tomé and Príncipe: Financial Operations of the Central Government, 2016–24

(Millions of new dobra)

Sources: São Tomé and Príncipe authorities’ data and IMF staff estimates and projections.

¹Revenue is measured on a cash basis.

²‘Non-tax revenue’ and ‘other current expenditure’ exhibit a hike in 2019 as some autonomous entities were brought into the Treasury’s accounts.

³Excludes oil related revenues and a fraction of the oil surcharge for ENCO debt repayment, grants, interest earned, scheduled interest payments, foreign- financed capital outlays. and capitalization of regional organizations per definition in TMU.

⁴Includes loan from Angola in 2016 and 2017.

⁵Includes use of IMF program support.

⁶Does not include the expected budget support grants for 2020 from the WB and AfDB (equalling D224 each), which are shown as filling the financing gap.

^{Table 2a.}

São Tomé and Príncipe: Financial Operations of the Central Government, 2016–24

(Millions of new dobra)

							2016	2017	2018	2019		2020		2021	2022	2023	2024
										ECF Req.		ECF Req.	Proj.	Proj.	Proj.	Proj.	Proj.
Total revenue and grants1							2168	2034	2081	1956	2073	2362	2201	2153	2350	2588	2756
	Total revenue						1130	1174	1365	1335	1468	1472	1369	1522	1717	1907	2076
		Tax revenue					949	1036	1099	1166	1160	1297	1152	1255	1427	1603	1732
				Import taxes			371	388	406	502	472	547	535	551	551	583	632
					Of which: payment to ENCO		...	....	...	0	0	32	22	22	22	22	22
				Other taxes			578	647	613	664	689	750	617	704	876	1020	1100
		Nontax revenue 2					181	138	266	170	308	176	217	266	290	304	344
				of which: oil revenue			74	51	212	61	70	61	2	2	2	2	2
	Grants						1038	860	715	621	605	889	832	631	633	681	679
		Project grants					891	594	557	366	333	635	471	397	399	429	415
		Nonproject grants 6					81	198	125	182	186	182	277	160	160	172	185
		HIPC Initiative-related grants					65	67	33	73	86	72	83	74	74	79	79
Total expenditure							2494	2253	2243	2042	2079	2390	2608	2502	2506	2671	2836
	Of which: domestic primary expenditure						1370	1316	1536	1472	1568	1550	1910	1868	1849	1970	2133
	Current expenditure						1334	1287	1436	1503	1616	1569	1798	1800	1852	1943	2082
		Personnel costs					684	681	798	856	848	875	980	980	1005	1059	1137
		Interest due					34	43	34	60	66	61	66	48	51	51	49
		Goods and services					249	253	260	236	235	243	255	260	274	204	305
		Transfers					282	234	273	290	268	325	318	318	327	347	372
		Other current expenditure2					84	76	71	61	199	65	179	194	194	203	218
	Capital expenditure						1141	952	795	522	454	799	513	583	634	697	722
		Financed by the Treasury					50	58	122	13	9	20	20	26	28	46	69
		Financed by external sources					1090	894	673	509	445	779	493	557	605	651	653
	HIPC Initiative-related capital expenditure						19	15	12	17	9	22	22	23	20	31	32
	COVID-19 spending						...	...	...	...	...	...	274	95	...	...	...
			Financed by the Treasury				...	...	...	...	...	...	136	66	...	...	...
			Financed by external sources				...	...	...	...	...	...	138	29	...	...	...
Domestic primary balance3							-314	-193	-362	-198	-170	-170	-565	-370	-157	-87	-81
Overall fiscal balance (commitment basis)6							-326	-219	-162	85	-6	-28	-407	-349	-156	-04	-80
Net change in domestic arrears							0	6	76	0	-100	-66	-70	-23	-23	-23	-23
Float and statistical discrepancies							0	-53	-24	0	251	0	0	0	0	1	2
Overall fiscal balance (cash basis)6							-30	-215	-111	-85	145	-94	-477	-372	-179	-106	-101
Financing							30	215	111	85	-145	94	24	372	179	107	103
	Net external						62	103	67	0	-20	-11	47	37	28	38	-6
		Disbursements 4					143	160	116	143	96	143	161	190	206	222	238
		Program financing (loans)5					32	37	16	...	...	...	...	...	...	...	...
	Net domestic						-32	112	44	85	-125	104	-23	335	151	69	110
		Net bank credit to the government					-32	112	44	85	-125	137	-1	358	174	92	132
				Banking credit (net, excluding National Oil Account)5			-5	103	210	61	-142	117	-83	292	121	49	97
						Of which: central bank on-lending of IMF resources	...	...	...	58	59	114	394	118	0	0	0
				National Oil Account			-27	9	-167	24	17	20	82	66	53	43	35
		Nonbank financing					0	0	0	0	0	-32	-22	-22	-22	-22	-22
Financing gap							0	0	0	0	0	0	-453	0	0	1	2
	World Bank (budget support)						...	...	...	...	...	...	224	...	...	...	...
	AFDB (budget support)						...	...	...	...	...	...	229	...	...	...	...
Memorandum items
EMAE loss							438	285	349	...	388	...	...	...	...	...	...

Sources: São Tomé and Príncipe authorities’ data and IMF staff estimates and projections.

¹Revenue is measured on a cash basis.

²‘Non-tax revenue’ and ‘other current expenditure’ exhibit a hike in 2019 as some autonomous entities were brought into the Treasury’s accounts.

³Excludes oil related revenues and a fraction of the oil surcharge for ENCO debt repayment, grants, interest earned, scheduled interest payments, foreign- financed capital outlays. and capitalization of regional organizations per definition in TMU.

⁴Includes loan from Angola in 2016 and 2017.

⁵Includes use of IMF program support.

⁶Does not include the expected budget support grants for 2020 from the WB and AfDB (equalling D224 each), which are shown as filling the financing gap.

View Table

^{Table 2a.}

São Tomé and Príncipe: Financial Operations of the Central Government, 2016–24

(Millions of new dobra)

							2016	2017	2018	2019		2020		2021	2022	2023	2024
										ECF Req.		ECF Req.	Proj.	Proj.	Proj.	Proj.	Proj.
Total revenue and grants1							2168	2034	2081	1956	2073	2362	2201	2153	2350	2588	2756
	Total revenue						1130	1174	1365	1335	1468	1472	1369	1522	1717	1907	2076
		Tax revenue					949	1036	1099	1166	1160	1297	1152	1255	1427	1603	1732
				Import taxes			371	388	406	502	472	547	535	551	551	583	632
					Of which: payment to ENCO		...	....	...	0	0	32	22	22	22	22	22
				Other taxes			578	647	613	664	689	750	617	704	876	1020	1100
		Nontax revenue 2					181	138	266	170	308	176	217	266	290	304	344
				of which: oil revenue			74	51	212	61	70	61	2	2	2	2	2
	Grants						1038	860	715	621	605	889	832	631	633	681	679
		Project grants					891	594	557	366	333	635	471	397	399	429	415
		Nonproject grants 6					81	198	125	182	186	182	277	160	160	172	185
		HIPC Initiative-related grants					65	67	33	73	86	72	83	74	74	79	79
Total expenditure							2494	2253	2243	2042	2079	2390	2608	2502	2506	2671	2836
	Of which: domestic primary expenditure						1370	1316	1536	1472	1568	1550	1910	1868	1849	1970	2133
	Current expenditure						1334	1287	1436	1503	1616	1569	1798	1800	1852	1943	2082
		Personnel costs					684	681	798	856	848	875	980	980	1005	1059	1137
		Interest due					34	43	34	60	66	61	66	48	51	51	49
		Goods and services					249	253	260	236	235	243	255	260	274	204	305
		Transfers					282	234	273	290	268	325	318	318	327	347	372
		Other current expenditure2					84	76	71	61	199	65	179	194	194	203	218
	Capital expenditure						1141	952	795	522	454	799	513	583	634	697	722
		Financed by the Treasury					50	58	122	13	9	20	20	26	28	46	69
		Financed by external sources					1090	894	673	509	445	779	493	557	605	651	653
	HIPC Initiative-related capital expenditure						19	15	12	17	9	22	22	23	20	31	32
	COVID-19 spending						...	...	...	...	...	...	274	95	...	...	...
			Financed by the Treasury				...	...	...	...	...	...	136	66	...	...	...
			Financed by external sources				...	...	...	...	...	...	138	29	...	...	...
Domestic primary balance3							-314	-193	-362	-198	-170	-170	-565	-370	-157	-87	-81
Overall fiscal balance (commitment basis)6							-326	-219	-162	85	-6	-28	-407	-349	-156	-04	-80
Net change in domestic arrears							0	6	76	0	-100	-66	-70	-23	-23	-23	-23
Float and statistical discrepancies							0	-53	-24	0	251	0	0	0	0	1	2
Overall fiscal balance (cash basis)6							-30	-215	-111	-85	145	-94	-477	-372	-179	-106	-101
Financing							30	215	111	85	-145	94	24	372	179	107	103
	Net external						62	103	67	0	-20	-11	47	37	28	38	-6
		Disbursements 4					143	160	116	143	96	143	161	190	206	222	238
		Program financing (loans)5					32	37	16	...	...	...	...	...	...	...	...
	Net domestic						-32	112	44	85	-125	104	-23	335	151	69	110
		Net bank credit to the government					-32	112	44	85	-125	137	-1	358	174	92	132
				Banking credit (net, excluding National Oil Account)5			-5	103	210	61	-142	117	-83	292	121	49	97
						Of which: central bank on-lending of IMF resources	...	...	...	58	59	114	394	118	0	0	0
				National Oil Account			-27	9	-167	24	17	20	82	66	53	43	35
		Nonbank financing					0	0	0	0	0	-32	-22	-22	-22	-22	-22
Financing gap							0	0	0	0	0	0	-453	0	0	1	2
	World Bank (budget support)						...	...	...	...	...	...	224	...	...	...	...
	AFDB (budget support)						...	...	...	...	...	...	229	...	...	...	...
Memorandum items
EMAE loss							438	285	349	...	388	...	...	...	...	...	...

Sources: São Tomé and Príncipe authorities’ data and IMF staff estimates and projections.

¹Revenue is measured on a cash basis.

²‘Non-tax revenue’ and ‘other current expenditure’ exhibit a hike in 2019 as some autonomous entities were brought into the Treasury’s accounts.

³Excludes oil related revenues and a fraction of the oil surcharge for ENCO debt repayment, grants, interest earned, scheduled interest payments, foreign- financed capital outlays. and capitalization of regional organizations per definition in TMU.

⁴Includes loan from Angola in 2016 and 2017.

⁵Includes use of IMF program support.

⁶Does not include the expected budget support grants for 2020 from the WB and AfDB (equalling D224 each), which are shown as filling the financing gap.

Table 2b.

São Tomé and Príncipe: Financial Operations of the Central Government, 2016–24

(In percent of GDP)

Sources: São Tomé and Príncipe authorities’ data and IMF staff estimates and projections.

¹Revenue is measured on a cash basis.

²‘Non-tax revenue’ and ‘other current expenditure’ exhibit a hike in 2019 as some autonomous entities were brought into the Treasury’s accounts.

³Excludes oil related revenues and a fraction of the oil surcharge for ENCO debt repayment, grants, interest earned, scheduled interest payments, foreign-financed capital outlays. and capitalization of regional organizations per definition in TMU.

⁴Includes loan from Angola in 2016 and 2017.

⁵Includes use of IMF program support.

⁶Does not include the expected budget support grants for 2020 from the WB and AfDB (equalling 5 percent of GDP), which are shown as filling the financing gap.

Table 2b.

São Tomé and Príncipe: Financial Operations of the Central Government, 2016–24

(In percent of GDP)

							2016	2017	2018	2019		2020		2021	2022	2023	2024
										ECF Req.		ECF Req.	Proj.	Proj.	Proj.	Proj.	Proj.
Total revenue and grants1							28.2	24.9	24.1	21.0	22.5	23.6	24.6	22.7	22.8	23.4	23.2
	Total revenue						14.7	14.4	15.8	14.3	15.9	14.7	15.3	15.1	15.7	17.2	17.5
		Tax revenue					12.3	12.7	12.8	12.5	126	13.0	12.9	13.2	13.9	14.5	14.6
			Import taxes				4.8	4.8	5.5	5.4	5.1	5.5	5.0	5.8	5.4	5.3	5.3
				Of which: payment to ENCO			...	...	...	0.0	0.0	0.3	0.2	0.2	0.2	0.2	0.2
			Other taxes				7.5	7.9	7.1	7.1	7.5	7.5	5.9	7.4	8.5	9.2	9.2
		Nontax revenue 2					2.3	1.7	3.1	1.8	3.3	1.8	2.4	2.8	2.8	2.7	2.9
			of which: oil revenue				1.0	0.6	2.5	0.6	0.8	0.6	0.0	0.0	0.0	0.0	0.0
	Grants						13.5	10.5	8.3	6.7	6.6	8.9	9.3	6.7	5.1	5.1	5.7
		Project grants					11.5	7.3	6.5	3.9	3.5	5.4	5.3	4.2	3.9	3.9	3.5
		Nonproject grants6					1.1	2.4	1.5	2.0	2.0	1.8	3.1	1.7	1.5	1.5	1.6
		HIPC Initiative-related grants					0.8	0.8	0.4	0.8	0.9	0.7	0.9	0.8	0.7	0.7	0.7
Total expenditure							32.4	27.6	26.0	21.9	22.5	23.9	29.2	26.4	24.3	24.1	23.8
	Of which: Domestic primary expenditure						17.8	16.1	17.8	15.8	17.0	15.5	21.4	19.7	18.0	17.8	17.9
	Current expenditure						17.3	15.8	16.7	151	17.5	15.7	20.1	19.0	18.0	17.5	17.5
		Personnel costs					8.9	8.3	9.3	9.2	9.2	8.8	11.0	10.3	9.8	9.6	9.6
		Interest due					0.4	0.5	0.4	0.5	0.7	0.5	0.7	0.5	0.5	0.5	0.4
		Goods and services					3.2	3.1	3.0	2.5	25	2.4	2.9	2.7	2.7	2.6	2.6
		Transfers					3.7	2.9	3.2	3.1	2.9	3.3	3.5	3.4	3.2	3.1	3.1
		Other current expenditure2					1.1	0.9	0.8	0.5	2.2	0.6	2.0	2.0	1.9	1.8	1.8
	Capital expenditure						14.8	11.7	9.2	5.6	4.9	8.0	5.7	6.2	6.2	6.3	6.1
		Financed by the Treasury					0.7	0.7	1.4	0.1	0.1	0.2	0.2	0.3	0.3	0.4	0.6
		Financed by external sources					14.2	11.0	7.8	5.5	4.8	7.8	5.5	5.9	5.9	5.9	5.5
	HIPC Initiative-related capital expenditure						0.2	0.2	0.1	0.2	0.1	0.2	0.2	0.2	0.2	0.3	0.3
	COVID-19 spending						...	...	...	...	...	...	3.1	1.0	...	...	...
			Financed by the Treasury				...	...	...	...	...	...	1.5	0.7	...	...	...
			Financed by external sources				...	...	...	...	...	...	1.5	0.3	...	...	...
Domestic primary balance3							-4.1	-24.	-4.2	-2.1	-1.8	-1.7	-6.3	-3.9	-1.5	-0.8	-0.7
Overall fiscal balance (commitment basis)6							-4.2	-2.7	-1.9	-0.9	-0.1	-0.3	-4.6	-3.7	-1.5	-0.8	-0.7
Net change in domestic arrears							0.0	0.1	0.9	0.0	-1.1	-0.7	-0.8	-0.2	-0.2	-0.2	-0.2
Float and statistical discrepancies							0.0	-0.7	-0.3	0.0	2.7	0.0	0.0	0.0	0.0	0.0	0.0
Overall fiscal balance {cash basis)6							-0.4	-2.6	-1.3	-0.9	1.6	-0.9	-5.3	-3.9	-1.7	-1.0	-0.9
Financing							0.4	2.6	1.3	0.9	-1.6	0.9	0.3	3.9	1.7	1.0	0.9
	Net external						0.8	1.3	0.8	0.0	-0.2	-0.1	0.5	0.4	0.3	0.3	-0.1
		Disbursements4					1.9	2.0	1.3	1.5	1.0	1.4	1.8	2.0	2.0	2.0	2.0
		Program financing (loans)5					0.4	0.5	0.2	...	...	...	...	...	...	...	...
		Scheduled amortization					-1.5	-1.2	-0.8	-1.5	-1.3	-1.5	-1.3	-1.6	-1.7	-1.7	-2.1
	Net domestic						-0.4	1.4	0.5	0.9	-1.4	1.0	-0.3	3.5	1.5	0.6	0.9
		Net bank credit to the government					-0.4	1.4	0.5	0.9	-1.4	1.4	0.0	3.8	1.7	0.8	1.1
			Banking credit (net, excluding National Oil Account)5				-0.1	1.3	2.4	0.7	-1.5	1.2	-0.9	3.1	1.2	0.4	0.8
					Of which: central bank on-lending of IMF resources		...	...	...	0.5	0.6	1.1	4.4	1.2	0.0	0.0	0.0
			National Oil Account				-0.3	0.1	-1.9	0.3	0.2	0.2	0.9	0.7	0.5	0.4	0.3
		Nonbank financing					0.0	0.0	0.0	0.0	0.0	-0.3	-0.2	-0.2	-0.2	-0.2	-0.2
Financing gap							0.0	0.0	0.0	0.0	0.0	0.0	-5.1	0.0	0.0	0.0	0.0
World Bank (budget support)							...	...	...	...	...	...	2.5	...	...	...	...
AFDB (budget support)							...	...	...	...	...	...	2.5	...	...	...	...
Memorandum items
EMAE loss							5.8	3.7	3.8	...	4.2	...	...	...	...	...	...
Nominal GDP (Millions of new dobra)							7,698	8,154	8,619	9,333	9,230	9,997	8,933	9,477	10,298	11,077	11,897

Sources: São Tomé and Príncipe authorities’ data and IMF staff estimates and projections.

¹Revenue is measured on a cash basis.

²‘Non-tax revenue’ and ‘other current expenditure’ exhibit a hike in 2019 as some autonomous entities were brought into the Treasury’s accounts.

³Excludes oil related revenues and a fraction of the oil surcharge for ENCO debt repayment, grants, interest earned, scheduled interest payments, foreign-financed capital outlays. and capitalization of regional organizations per definition in TMU.

⁴Includes loan from Angola in 2016 and 2017.

⁵Includes use of IMF program support.

⁶Does not include the expected budget support grants for 2020 from the WB and AfDB (equalling 5 percent of GDP), which are shown as filling the financing gap.

View Table

Table 2b.

São Tomé and Príncipe: Financial Operations of the Central Government, 2016–24

(In percent of GDP)

							2016	2017	2018	2019		2020		2021	2022	2023	2024
										ECF Req.		ECF Req.	Proj.	Proj.	Proj.	Proj.	Proj.
Total revenue and grants1							28.2	24.9	24.1	21.0	22.5	23.6	24.6	22.7	22.8	23.4	23.2
	Total revenue						14.7	14.4	15.8	14.3	15.9	14.7	15.3	15.1	15.7	17.2	17.5
		Tax revenue					12.3	12.7	12.8	12.5	126	13.0	12.9	13.2	13.9	14.5	14.6
			Import taxes				4.8	4.8	5.5	5.4	5.1	5.5	5.0	5.8	5.4	5.3	5.3
				Of which: payment to ENCO			...	...	...	0.0	0.0	0.3	0.2	0.2	0.2	0.2	0.2
			Other taxes				7.5	7.9	7.1	7.1	7.5	7.5	5.9	7.4	8.5	9.2	9.2
		Nontax revenue 2					2.3	1.7	3.1	1.8	3.3	1.8	2.4	2.8	2.8	2.7	2.9
			of which: oil revenue				1.0	0.6	2.5	0.6	0.8	0.6	0.0	0.0	0.0	0.0	0.0
	Grants						13.5	10.5	8.3	6.7	6.6	8.9	9.3	6.7	5.1	5.1	5.7
		Project grants					11.5	7.3	6.5	3.9	3.5	5.4	5.3	4.2	3.9	3.9	3.5
		Nonproject grants6					1.1	2.4	1.5	2.0	2.0	1.8	3.1	1.7	1.5	1.5	1.6
		HIPC Initiative-related grants					0.8	0.8	0.4	0.8	0.9	0.7	0.9	0.8	0.7	0.7	0.7
Total expenditure							32.4	27.6	26.0	21.9	22.5	23.9	29.2	26.4	24.3	24.1	23.8
	Of which: Domestic primary expenditure						17.8	16.1	17.8	15.8	17.0	15.5	21.4	19.7	18.0	17.8	17.9
	Current expenditure						17.3	15.8	16.7	151	17.5	15.7	20.1	19.0	18.0	17.5	17.5
		Personnel costs					8.9	8.3	9.3	9.2	9.2	8.8	11.0	10.3	9.8	9.6	9.6
		Interest due					0.4	0.5	0.4	0.5	0.7	0.5	0.7	0.5	0.5	0.5	0.4
		Goods and services					3.2	3.1	3.0	2.5	25	2.4	2.9	2.7	2.7	2.6	2.6
		Transfers					3.7	2.9	3.2	3.1	2.9	3.3	3.5	3.4	3.2	3.1	3.1
		Other current expenditure2					1.1	0.9	0.8	0.5	2.2	0.6	2.0	2.0	1.9	1.8	1.8
	Capital expenditure						14.8	11.7	9.2	5.6	4.9	8.0	5.7	6.2	6.2	6.3	6.1
		Financed by the Treasury					0.7	0.7	1.4	0.1	0.1	0.2	0.2	0.3	0.3	0.4	0.6
		Financed by external sources					14.2	11.0	7.8	5.5	4.8	7.8	5.5	5.9	5.9	5.9	5.5
	HIPC Initiative-related capital expenditure						0.2	0.2	0.1	0.2	0.1	0.2	0.2	0.2	0.2	0.3	0.3
	COVID-19 spending						...	...	...	...	...	...	3.1	1.0	...	...	...
			Financed by the Treasury				...	...	...	...	...	...	1.5	0.7	...	...	...
			Financed by external sources				...	...	...	...	...	...	1.5	0.3	...	...	...
Domestic primary balance3							-4.1	-24.	-4.2	-2.1	-1.8	-1.7	-6.3	-3.9	-1.5	-0.8	-0.7
Overall fiscal balance (commitment basis)6							-4.2	-2.7	-1.9	-0.9	-0.1	-0.3	-4.6	-3.7	-1.5	-0.8	-0.7
Net change in domestic arrears							0.0	0.1	0.9	0.0	-1.1	-0.7	-0.8	-0.2	-0.2	-0.2	-0.2
Float and statistical discrepancies							0.0	-0.7	-0.3	0.0	2.7	0.0	0.0	0.0	0.0	0.0	0.0
Overall fiscal balance {cash basis)6							-0.4	-2.6	-1.3	-0.9	1.6	-0.9	-5.3	-3.9	-1.7	-1.0	-0.9
Financing							0.4	2.6	1.3	0.9	-1.6	0.9	0.3	3.9	1.7	1.0	0.9
	Net external						0.8	1.3	0.8	0.0	-0.2	-0.1	0.5	0.4	0.3	0.3	-0.1
		Disbursements4					1.9	2.0	1.3	1.5	1.0	1.4	1.8	2.0	2.0	2.0	2.0
		Program financing (loans)5					0.4	0.5	0.2	...	...	...	...	...	...	...	...
		Scheduled amortization					-1.5	-1.2	-0.8	-1.5	-1.3	-1.5	-1.3	-1.6	-1.7	-1.7	-2.1
	Net domestic						-0.4	1.4	0.5	0.9	-1.4	1.0	-0.3	3.5	1.5	0.6	0.9
		Net bank credit to the government					-0.4	1.4	0.5	0.9	-1.4	1.4	0.0	3.8	1.7	0.8	1.1
			Banking credit (net, excluding National Oil Account)5				-0.1	1.3	2.4	0.7	-1.5	1.2	-0.9	3.1	1.2	0.4	0.8
					Of which: central bank on-lending of IMF resources		...	...	...	0.5	0.6	1.1	4.4	1.2	0.0	0.0	0.0
			National Oil Account				-0.3	0.1	-1.9	0.3	0.2	0.2	0.9	0.7	0.5	0.4	0.3
		Nonbank financing					0.0	0.0	0.0	0.0	0.0	-0.3	-0.2	-0.2	-0.2	-0.2	-0.2
Financing gap							0.0	0.0	0.0	0.0	0.0	0.0	-5.1	0.0	0.0	0.0	0.0
World Bank (budget support)							...	...	...	...	...	...	2.5	...	...	...	...
AFDB (budget support)							...	...	...	...	...	...	2.5	...	...	...	...
Memorandum items
EMAE loss							5.8	3.7	3.8	...	4.2	...	...	...	...	...	...
Nominal GDP (Millions of new dobra)							7,698	8,154	8,619	9,333	9,230	9,997	8,933	9,477	10,298	11,077	11,897

Sources: São Tomé and Príncipe authorities’ data and IMF staff estimates and projections.

¹Revenue is measured on a cash basis.

²‘Non-tax revenue’ and ‘other current expenditure’ exhibit a hike in 2019 as some autonomous entities were brought into the Treasury’s accounts.

³Excludes oil related revenues and a fraction of the oil surcharge for ENCO debt repayment, grants, interest earned, scheduled interest payments, foreign-financed capital outlays. and capitalization of regional organizations per definition in TMU.

⁴Includes loan from Angola in 2016 and 2017.

⁵Includes use of IMF program support.

⁶Does not include the expected budget support grants for 2020 from the WB and AfDB (equalling 5 percent of GDP), which are shown as filling the financing gap.