Sao Tome and Principe Economy Facts
The economy of São Tomé and Príncipe is almost entirely based on cocoa cultivation for export as well as foreign aid. However, oil discoveries made offshore may turn the small country into a rich oil state.
So far, no oil has begun to be extracted commercially. Meanwhile, the foreign companies that are looking for oil are paying license money to São Tomé and Príncipe.
- Countryaah.com: Major imports by Sao Tome and Principe, covering a full list of top products imported by the country and trade value for each product category.
Kakaon’s special position as an export product has made the country’s economy dependent on weather changes and price trends on the world market. Even though the price of cocoa is favorable, exports are not long enough to cover the country’s imports of food, oil and capital goods.
The government has long sought to develop other industries. Especially tourism, but also fishing has become more important to the country’s economy.
After a long period of low growth, the trend reversed in the late 1990s and during the period 2002–2014 the economy grew by almost 5 percent on average per year. Behind the growth was a more efficient economic policy on the part of the government as well as large inflows of aid. From 2005, the oil license money also contributed.
Per capita, São Tomé and Príncipe are among the world’s largest recipients of aid. Portugal is the largest bilateral aid provider, but much assistance also comes from Taiwan.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including STP which represents the country of Sao Tome and Principe. Check findjobdescriptions to learn more about Sao Tome and Principe.
An important income in addition to aid and loans is the money that Tomeans living abroad send home to their families.
In exchange for favorable loans, São Tomé and Príncipe have implemented several so-called structural adjustment programs designed by the World Bank and the International Monetary Fund (IMF). The programs have included reduced government spending, liberalization of the economy and investments in alternative industries such as fishing and tourism.
São Tomé and Príncipe have on several occasions received their foreign debt neglected and the foreign debt now corresponds to around two-thirds of the country’s gross domestic product (GDP).
In spite of loan programs and assistance, the region has usually had a budget deficit, although the oil license money has for some years provided a temporary budget surplus.
According to the World Bank, the country has succeeded in reducing the government’s direct influence on the economy, but investments in, among other things, infrastructure are still needed to increase private investment. Another barrier to investment is the widespread corruption that exists within the country’s administrations.
To provide greater stability to the economy, São Tomé and Príncipe have linked the local currency, dobran, to the euro. One reason was to give the country financial stability and thus more easily attract foreign capital. Another was to reduce the high inflation rate in the country, which has also succeeded.
FACTS – FINANCE
GDP per person
US $ 2,001 (2018)
US $ 422 million (2018)
2.7 percent (2018)
Agriculture’s share of GDP
11.4 percent (2018)
Manufacturing industry’s share of GDP
7.4 percent (2018)
The service sector’s share of GDP
71.8 percent (2018)
US $ 262 million (2017)
US $ 16 million (2018)
US $ 133 million (2018)
– US $ 62 million (2018)
Commodity trade’s share of GDP
40 percent (2018)
Main export goods
cocoa, copra, coffee, vanilla, pepper
Largest trading partner
Portugal, Angola, Brazil, Netherlands, Belgium