Økonomiske studier
Sao Tome and Principe

Sao Tome and Principe

Population 0.2 million
GDP 1,707 US$
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  2013 2014 2015 (p) 2016 (p)
GDP growth (%) 4.0 4.5 4.0 5.2
Inflation (yearly average) (%) 8.1 7.0 5.8 5.0
Budget balance (% GDP) 1.8 -5.6 -5.3 -4.5
Current account balance (% GDP) -23.4 -27.7 -12.4 -15.2
Public debt (% GDP) 74.3 71.6 71.7 71.5

 (e) Estimate (f) Forecast


  • Considerable oil potential
  • Prospects for development of tourist sector
  • Supported by international donors
  • Links developed with Portugal and Portuguese speaking countries (Angola, Brazil)
  • Dobra pegged to the euro


  • Heavily depending on public aid
  • Economy still dominated by agriculture and fishing
  • Business environment shortcomings
  • Underdeveloped and weak banking sector (non-performing loans ratio 18%)


Economy boosted by the tourism sector and infrastructure projects

Growth in 2015 remained strong, driven by increased inward FDI flows, tourism and agriculture (mainly cocoa) and new projects funded by foreign donors. The country received a new IMF loan in July 2015, worth 6.2 billion dollars over three years. The first payment helped revitalise the economy after a hesitation in the first half of the year. This programme will help reduce poverty rate (66%) and continue investment policy in public infrastructures (port project planned for 2019 to create a regional hub). There should therefore be a slight speeding up of growth in 2016. The tourism and agriculture sectors should once again make a positive contribution to growth. The government has also decided to remove the visa requirement for citizens of Europe and the United States who stay for less than fifteen days, in order to improve the tourism potential.

Household consumption (accounting for almost 80% of GDP) will remain strong thanks to a drop in the rate of inflation (under 6% in 2015 compared with 16% in 2010), due in large part to the pegging of the dobra to the euro, as of 2010.


Public and external accounts remain in deficit and dependent on international aid

In 2016, the public deficit will decline, following the slipping seen in 2014. The level of public debt will however remain high. The significant level of payment arrears is also contributing to the country’s indebtedness. This means that Sao Tomé-et-Principe’s acute dependence on international aid and concessionary loans will continue. The State’s limited revenues (31.8% of GDP in 2015, but 16.7% excluding donations, compared with 40.6% of GDP for expenditure) means it cannot do without international aid. The government aims to boost public receipts through offshore operations, initially planned for 2015 but now postponed until 2018/19. In overcoming this revenue shortfall, the Government introduced tax reforms in its 2016 budget aimed at expanding the tax base and introducing VAT. A strategy of export diversification should also be submitted to parliament at the end of 2016, focused on the tourism sector and horticultural production. At the same time, spending is being cut (36.2% of GDP), mainly through a reduction in capital spending financed by external sources.

The balance of trade deficit will increase sharply in 2016 because imports are growing faster than exports (low oil prices, weak growth in the Eurozone which remains the country’s leading trading partner). The balance of services deficit however will be reduced and current transfers will increase. Overall, the large current account deficit is set to rise in 2016. Finally, the reasonable level of currency reserves (4.5 months of imports) will help keep the dobra pegged to the euro in the short term. This level is however below what would be an appropriate level of 5–6 months of imports for a poorly diversified economy with a fixed exchange rate.
The Santomean banking sector remains fragile. Most of the banks are poorly capitalised and the levels of doubtful debts are high (around 18%). In June 2016 the government, with the support of the IMF, will carry out an in-depth examination of the banks’ balance sheets.


The absolute majority achieved at the last parliamentary elections brings stability

The absolute majority won by the IDA (Independent Democratic Action) party in the Parliamentary elections in October 2014 have helped bring political stability. The party of the Prime Minister, Patrice Trovoada, could thus be the first leader of a government to complete his term of office (in 2018) since 1990. Thanks to this victory, the ADI party will be able to carry out unpopular reforms (such as the introduction of VAT) without fear of censure by parliament. The next set of elections will be the Presidential elections in July 2016. Trovoada could capitalise on the results of the parliamentary elections and stand for President.

Finally, the port construction project scheduled for 2019 (total estimated cost of USD 800 million, equal to 2.4 times GDP) will be partly funded with USD 120 million of financial support from China. There could thus be a deterioration in its relations with Taiwan, one of the country’s leading sources of donations.


Last update : January 2016

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