## National Strategy for Poverty Reduction — content unit _cr05334

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### 1. Previous considerations and ENRP objectives
- Sao Tomé and Príncipe reached the Point of Decision on the HIPC Initiative in December of 2000 and received HIPC resources from January 2001.
- HIPC resources were channeled to priority poverty-reduction projects.
- Two conditions to reach the HIPC Point of Conclusion in 2006:
  - i. the consolidation of adequate efforts at the macroeconomic level;
  - ii. the establishment of a national strategy for poverty reduction through a participative process and satisfactory implementation.
- Government’s five principal axes in the ENRP:
  - Reform of public institutions, capacity reinforcement and the promotion of a good governance policy;
  - Accelerated and redistributive growth;
  - Creation of opportunities for growth and diversification of income for the poor;
  - Human resource development and access to basic social services;
  - Adoption of mechanisms for follow-up, evaluation and strategies for updating.
- Global ENRP targets (timeframes preserved):
  - Reach an average growth rate of 8% of GDP starting 2005 to achieve the millennium goals;
  - Reduce by half the percentage of the population living at the poverty level by 2010, and to less than 1/3 by 2015;
  - Reach by 2015 universal access to all basic social services;
  - Considerably reduce differences by social class and gender, among districts and within Príncipe, and rural/urban populations;
  - Promote and reinforce institutional capacities and a good governance policy.
- ENRP validation and approvals:
  - Validated: National Symposium, December 10, 2002;
  - Approved by decree of the advise ministries: December 19, 2002;
  - Approved by the President: January 23rd, 2003.
- The present document is an addendum to the ENRP introducing updates reflecting institutional, political, social and economic developments.

### 2. Changes and updates — key developments
- Updated information provided on:
  - Public Debt; Rural and urban unemployment; Fluctuations in the price of cocoa; Tourism growth; Telecommunications development; Oil resources management; Education and health expenditure; Macroeconomic context; ENRP implementation roadmap; Plan of action; Result indicators; Budget prevision.

### 2.1 Foreign public debt and HIPC fund effects (values preserved)
- Foreign public debt (millions of U.S. dollars):
  - 2000: Amount of Foreign Debt 302; Multilateral 175.4; Bilateral 126.6
  - 2001: Amount of Foreign Debt 305.1; Multilateral 179; Bilateral 126.1
  - 2002: Amount of Foreign Debt 309.88; Multilateral 181.05; Bilateral 128.83
  - 2003: Amount of Foreign Debt 306.5
  - Until November of 2004 (estimate): Amount of Foreign Debt 317.5
- Observations:
  - Accumulated foreign debt increased from $302.00 million (USD) in 2000 to $306.5 million (USD) in 2003.
  - In 2004 the government contracted two new loans of $10,000,000 (USD) and $1,000,000 (USD) with Nigeria and Angola, respectively, contributing to an estimated foreign debt of $317.5 million (USD) in November 2004.
- Historical context:
  - Negotiations with the IMF in 1999 led to a Poverty Reduction and Economic Growth program enabling the HIPC Point of Decision in December 2000.

### 2.2 Urban and rural unemployment (values preserved)
- Spatial concentration:
  - Água Grande is the only urban zone and accounts for 48.5% of the total unemployed population.
- Unemployed population by district and gender (2003; values preserved):
  - Total Men & Women: Água Grande 4350 48,5%; Mé-Zóchi 2517 28,1%; Cantagalo 475 5,3%; Caué 399 4,4; Lembá 276 3,1; Lobata 776 8,7%; Paguê 175 2%; Valor Total 8968 100%
  - Men: Água Grande 1815 55,8%; Mé-Zóchi 479 14,7%; Cantagalo 202 6,2%; Caué 126 3,9%; Lembá 176 5,4%; Lobata 403 12,4%; Paguê 50 1,6%; Total 3251 100%
  - Women: Água Grande 2535 44,3%; Mé-Zóchi 2038 35,7%; Cantagalo 273 4,8%; Caué 273 4,8; Lembá 97 1,7; Lobata 376 6,5; Paguê 124 2,2; Total 5715 100%
- National unemployment trends (Graph 1 values):
  - Urban: 2000 12.7% ; 2001 16.6% ; 2002 18.5% ; 2003 18.8%
  - Rural: 2000 16.4% ; 2001 14.7% ; 2002 17.2% ; 2003 13.7%
  - STP (national): 2000 14.4% ; 2001 15.7% ; 2002 17.6% ; 2003 16.4%
- Additional indicators:
  - Urban unemployment variation rate 2000–2003: 48%.
  - Rural unemployment variation rate 2000–2003: 16.5% (interpreted as a decrease).
  - The unemployment decrease nationally in 2003 vs 2000 attributed to rural decline by a proportion 13 times greater than the urban increase (- 20.3% compared to 1.6%).

### 2.3 Cocoa price fluctuations and farmer economics (values preserved)
- Exports (2001–2003):
  - 2001: Total kilograms 2,603,050; Price per kilogram in dobras 7,407.1; Total in dobras 19,280,981,659; Price per kilogram in USD 0.837; Total in USD 2,180,586
  - 2002: Total kilograms 3,274,590; Price per kilogram in dobras 12,778.8; Total in dobras 41,845,207,707; Price per kilogram in USD 1.4; Total in USD 4,603,828.2
  - 2003: Total kilograms 3,356,056; Price per kilogram in dobras 17,203.9; Total in dobras 57,737,417,170; Price per kilogram in USD 1.84; Total in USD 6,176,723.5
- Volume changes:
  - Increase 2001–2002: 25.8%.
  - Increase 2002–2003: 2.5%.
- Domestic versus export price:
  - Internal price of fresh cocoa did not surpass 2,000.00 dobras.
  - Differentials between export dry cocoa price and fresh internal price: 5,407.1 (2001), 10,778.8 (2002), 15,203.9 (2003).
  - Fresh cocoa sold at less than 2,000.00 dobras does not cover input and labor costs.
- Input costs example (one hectare, 1,111 cocoa plants; annual needs; values preserved):
  - Sulfate 224.000,00
  - Limestone 120.000,00
  - Tenax 140.000.00
  - Total 480.000,00
- Implication:
  - A grower must produce 240 kilograms of cocoa to cover fertilizer costs alone; low fresh-cocoa prices contribute to land abandonment and substitution to other activities.

### 2.4 Tourism growth and infrastructure (values preserved)
- Passenger entries by continent (1999–2004*; *1st semester of 2004):
  - Europe: 1999 3,763 ; 2000 4,060 ; 2001 3,586 ; 2002 5,429 ; 2003 6,709 ; 2004* 3,625
  - America: 1999 - ; 2000 - ; 2001 - ; 2002 260 ; 2003 638 ; 2004* 280
  - Africa: 1999 526 ; 2000 1,143 ; 2001 1,683 ; 2002 1,851 ; 2003 4,747 ; 2004* 2,687
  - Others: 1999 - ; 2000 - ; 2001 - ; 2002 1,790 ; 2003 1,556 ; 2004* 823
  - Total: 1999 4,289 ; 2000 5,203 ; 2001 5,269 ; 2002 9,330 ; 2003 13,650 ; 2004* 7,415
- Growth:
  - Tourism influx grew by an annual average rate of 36.5% between 1999 and 2003.
  - 2003 recorded the highest entry with a variation of 46.3% relative to the same period.
- Accommodation infrastructure (1998–2003; values preserved):
  - Hotels (Establishments): 1998 6 ; 1999 7 ; 2000 7 ; 2001 7 ; 2002 7 ; 2003 7
  - Hotels (Rooms): 1998 184 ; 1999 198 ; 2000 198 ; 2001 198 ; 2002 214 ; 2003 228
  - Hotels (Capacity for lodging): 1998 325 ; 1999 353 ; 2000 353 ; 2001 353 ; 2002 397 ; 2003 425
  - Motels (Establishments): 1998 6 ; 1999 7 ; 2000 7 ; 2001 7 ; 2002 7 ; 2003 7
  - Motels (Rooms): 1998 38 ; 1999 42 ; 2000 42 ; 2001 42 ; 2002 42 ; 2003 42
  - Residences (Establishments): 1998 4 ; 1999 4 ; 2000 4 ; 2001 4 ; 2002 4 ; 2003 4
- Key point:
  - From 1998 to 2003 there was no investment in hotel infrastructure despite rising tourist entries — identified as a basic condition for attracting tourists.

### Tourism strategy and telecommunications liberalization
- Tourism strategy and targets:
  - Envisioned target: increase tourist influx by 7.5% per year.
  - Strategic Plan: Plano Estratégico de Desenvolvimento do Tourismo (PEDT), horizon to 2008/2010.
  - Sector objective: increase contribution to PIB (excluding oil) from 5% to 7% starting 2005.
  - Sectoral goals: promote tourism as a medium-term engine, develop direct employment, value patrimony, develop ecotourism and resort tourism, ensure private enterprise conditions.
- Liberalization of telecommunications:
  - Directive Plan of Telecommunications elaborated in 1989; CST created 1990; concession contract dated December 1st, 1989 with Companhia Portuguesa Radio Marconi granted 20-year exclusivity.
  - Exclusivity stipulated to prevail only until December 31st of 2005 in recent negotiations.
  - Law 3/04 (published Diário da República no. 6 of July 2, 2004):
    - Defines rules for establishment, management and exploration of national telecommunication networks and services.
    - Recognizes telecommunications as key for economic development and seeks progressive opening to competition.
    - Establishes creation of a Regulation Authority and licensing framework: licenses for public networks; authorizations for independent networks; declarations for services utilizing third-party networks.

### Oil resources management and legal framework (values and dates preserved)
- Public concern: prudent management of oil resources is central.
- Uncertainty: potential and commercial viability unknown with certainty.
- Border negotiations: delimitation with Gabon and Equatorial Guinea to be carried out at the right time.
- Joint development timeline:
  - October of 2003: first bidding of blocs in the Zone of Joint Development organized in S. Tome.
  - Projected January of 2005: signing of the first joint contract related to bloc 1.
  - Second bidding expected December of 2004 in Abuja, projected to lead to signing new joint contracts encompassing five blocs.
- Regional cooperation:
  - July of 2004: Sao Tome and Principe and Nigeria signed the Declaration of Abuja on transparency and good governance in the Zone of Joint Development.
- Law on Oil Revenues:
  - Approved by National Assembly on November 26, 2004; ratified by the President on December 29, 2004.
  - Created the National Oil Account for all oil revenues.
  - Deposits allowed only in State National Treasury Account or specially opened accounts authorized by National Assembly.
  - Introduces quantitative and qualitative limits on oil revenues channeled to annual budget expenditures; No. 5 of article 8 foresees an annual figure to conform with inflation goals.
  - Annual figure determined by the minister of Planning and Finance in consultation with the Central Bank, considering economy’s absorption capacity.
  - Prohibits State loans using current or future oil revenues as guaranty.
  - Transparency measures: two annual audits of oil accounts (one by the National Accounting Court, one by an internationally reputable audit firm); mandatory registry and advertising of sector documents; broad access to information.
  - Created a Permanent Fund of Sao Tome and Principe (sub-account of reserve) with strongly limited utilization; management assigned to a committee acting as a prudent investor.
  - Created a commission for Oil Fiscalization with independence and administrative and financial autonomy.
  - Sets incompatibilities and increases sanctions (at least one third) for violations.

### Education and health expenditure (ENRP programming and PIP accomplishments; values preserved)
- ENRP allocation for 2005-2007: Total $26,517 millions (USD).
  - Health $14,050 million (USD) (53%); Education $12,458 million (USD) (47%).
- ENRP Programming (2005–2007; Table 6):
  - Education: 2005 3,752,880; 2006 4,176,245; 2007 4,529,765; Total 12,458,890.
  - Health: 2005 4,686,170; 2006 4,686,170; 2007 4,686,170; Total 14,058,510.
  - Total (USD): 2005 8,439,050; 2006 8,862,415; 2007 9,215,935; Total 26,517,400.
- Observed patterns:
  - Education expenditures grow across the three years.
  - Health projection shows equal distribution across years (PIP-2005 base).
- PIP accomplishments (2003–2004, Table 7):
  - Education: 2003 3,795,599; 2004 (1st Semester) 6,839,845.
  - Health: 2003 4,006,939; 2004 (1st Semester) 1,364,299.
  - Total: 2003 7,802,538; 2004 (1st Semester) 8,204,144.
- Performance indicators:
  - Education growth 2003→2004 (1st Semester): 80.2%.
  - Health sector growth 2003→2004 (1st Semester): -65.95%.
  - Combined growth for both sectors: 5.14% during 2003 and 2004 (1st semester).

### Macroeconomic context, fiscal developments, and vulnerabilities (values preserved)
- 2000–2003 aggregates:
  - Real GDP growth accelerated, reaching 4.5 percent by 2003.
  - Inflation remained stable at around 9 percent.
  - Investment averaged 36 percent of GDP.
- Structural change:
  - Economy shifted toward services; tourism became the principal foreign exchange earner.
  - Agricultural diversification: pepper and vanilla cultivation planned for commercialization and export.
  - Privatization program prepared; new investment code to be presented to National Assembly.
- Reforms implemented:
  - Privatization of public enterprises; semi-automatic petroleum pricing; civil service reform 2001 (downsizing by 320 public and 158 utility employees); single computerized civil service and payroll system.
- HIPC completion triggers satisfied:
  - Transparent petroleum legislation; technical petroleum unit since 2002; National Committee on Petroleum; National Petroleum Agency; Fiscal Tribunal operational since mid-June 2003.
- Fiscal administration reforms: updated accounting and budgeting systems, modernized tax code, adoption of SYDONIA, decentralization of Ministry of Planning and Finance services.
- Fiscal deterioration and vulnerabilities:
  - Policy setbacks in 2001; fiscal situation worsened in 2003 after July 2003 coup due to increased expenditure.
  - Fiscal imbalances widened in 2004 from expenditure pressures anticipating oil signature bonuses that did not arrive.
  - Provisional primary fiscal deficit: 22 percent of GDP in 2004, up from 12 percent of GDP in 2003.
  - External debt arrears continued to accumulate.
  - Conclusion: economy remains fragile with significant internal and external vulnerabilities.

### Program objectives and macro projections (2005–2007; values preserved)
- Program measures 2005–2007 aim to correct macro imbalances via:
  - fiscal consolidation;
  - monetary stabilization;
  - structural reform implementation;
  - improvement of external debt sustainability.
- Program support sought from Bretton Woods institutions.
- Projections and targets:
  - Real GDP growth: program aims at realizing real GDP growth of 5.5 percent by 2007.
  - GDP growth expected to slow in 2005 due to tight financial policies.
  - Inflation projected to return to single digits by end-2007.
  - Maintain gross international reserves at around 3 ½ months of imports.
  - Current account deficit to be contained with expected fiscal improvements.
- Structural reform priorities include public enterprise reform (notably EMAE), opening telecom market after January 2006, land tenure reform commission; continued donor dependence anticipated.

### HIPC completion conditions and ENRP implementation structure
- HIPC completion point expected in second half of 2006 if program performance satisfactory.
- Government conditions for achieving macro objectives:
  - Peace and political stability; prudent macroeconomic and financial management; transparency in oil sector; strong investment in social spending and poverty reduction; economic diversification; expansion of trade via regional integration and renegotiated trade agreements; improved communication and transportation; public enterprise reform; further structural reforms.
- ENRP implementation structure:
  - Ministerial Council (chairs, composition, convening frequency preserved).
  - Consulting Council (NGOs, civil society, private sector participation).
  - Poverty Reduction Observatory (Observatório da Redução da Pobreza, ORP) with Multi-Sector Technical Commission and Coordinator.
  - Focal Points (Antennas) in ministries/institutions for coordination and follow-up.
- ORP mandate (selected functions preserved):
  - Ensure ENRP Plan of Action implementation and goal accomplishment;
  - Update and adjust ENRP;
  - Align ENRP goals with the millennium development goals;
  - Analyze debt reduction initiatives and promote coordination;
  - Promote surveys and reliable database for periodic poverty profiling;
  - Elaborate periodic implementation and evaluation reports.
- ORP organization: Multi-Sector Technical Commission, Coordinator named by consulting minister, technical staff subject to approval; ministries must designate Focal Points; ORP to cooperate with planning institutions and INE.

### Implementation risks, awareness raising, and monitoring
- Anticipated risks:
  - Post-approval period may see significant social tension and turnover of officials; risk of sizeable resources used outside defined strategy.
  - Urgent need to create Focal Points (Antennas) in ministries and institutions for systematic information exchange and evaluation.
- Planned awareness-raising meetings:
  - Symposium on role of military and paramilitary forces in poverty reduction;
  - Symposium on contribution of social communication organisms;
  - Meetings among leaders/representatives to create Focal Points;
  - Seminar preparing Focal Points on methodology and procedural manual.
- Plan of Action revised to reflect new implementation periods; indicators included for periodic verification; synthesized information and indicators listed in appendix.

### Budget programming and resource allocation (values preserved, thousands of U.S. dollars)
- Table 8 — Programming Organized by Goals and Priorities (2003–2010 Totals; 2005–2007 Period):
  - 1-Institutional Reform and Rehabilitation and Good Governance
    - 2003-2010 Totals: 2109.4 (1.0%)
    - 2005-2007: 1160.8 (1.4%)
    - Justice: 919.4 (0.4%) ; 525.4 (0.6%)
  - 2-Economic and Redistributive Growth
    - 2003-2010 Totals: 45165.4 (21.5%)
    - 2005-2007: 10368.1 (12.4%)
    - Energy: 29252 (13.9%) ; 3865 (4.6%)
    - Water and sanitation: 11226.8 (5.3%) ; 4676.2 (5.6%)
  - 3-Opportunities for Revenue
    - 2003-2010 Totals: 106999.4 (50.9%)
    - 2005-2007: 45259 (54.0%)
    - Agriculture, livestock, fishing, forestry: 52921.2 (25.2%) ; 21349.5 (25.5%)
    - Infrastructures: 54078.2 (25.7%) ; 22699.5 (27.1%)
  - 4-Access to Basic Social Services
    - 2003-2010 Totals: 54068.8 (25.7%)
    - 2005-2007: 26523.2 (31.7%)
    - Education: 22836.7 (10.9%) ; 12458.9 (14.9%)
    - Health, Nutrition and Population: 27639.1 (13.1%) ; 14058.5 (16.8%)
    - Employment, Training and Solidarity: 3593 (1.7%) ; 1086.8 (1.3%)
  - 5-Analysis, Follow-Up and Evaluation
    - 2003-2010 Totals: 2035.6 (1.0%)
    - 2005-2007: 456.5 (0.5%)
  - Total:
    - 2003-2010 Totals: 210378.6 (100.0)
    - 2005-2007: 83767.6 (100.0)
- Short-term 2005–2007 highlights:
  - Actions creating revenue (infrastructure and primary sector) absorb 66.4% of resources.
  - Access to Basic Social Services: 31.7% of total resources during 2005–2007.
  - Only 39.8% of total programmed actions are concentrated in 2005–2007.
- Table 9 — Programming by type of resources (2003–2010 Totals; 2005–2007):
  - 1-Civil Constructions
    - 2003-2010 Totals: 110900.25 (52.7%)
    - 2005-2007: 43191.35 (51.5%)
    - Classrooms: 12056.2 (5.7%) ; 7150 (8.5%)
    - Health Infrastructures: 7714.35 (3.7%) ; 5029.35 (6.0%)
    - Various Infrastructures: 49308.7 (23.4%) ; 20826.5 (24.9%)
    - Water and Sanitation: 12673.4 (6.0%) ; 4753.2 (5.7%)
  - 2-Goods
    - 2003-2010 Totals: 39686.365 (18.9%)
    - 2005-2007: 15644.0 (18.7%)
    - Vegetable Materials: 13353 (6.3%) ; 5395 (6.4%)
    - Nutritional Goods: 1159.7 (0.6%) ; 643.9 (0.8%)
    - Manuals and Equipment for Education: 1030.5 (0.5%) ; 579.5 (0.7%)
    - Medicines, Equipment and health materials: 8194.865 (3.9%) ; 4636.7 (5.5%)
  - 3-Services
    - 2003-2010 Totals: 26323.8 (12.5%)
    - 2005-2007: 9296.4 (11.1%)
    - National Technical Assistance: 15318 (7.3%) ; 5090.9 (6.1%)
    - International Technical Assistance: 7026.7 (3.3%) ; 2343.4 (2.8%)
    - Studies: 1539.6 (0.7%) ; 391.5 (0.5%)
    - Legislation: 705.3 (0.3%) ; 202.5 (0.2%)
    - Information Systems: 1734.1 (0.8%) ; 1088 (1.3%)
  - 4-Training
    - 2003-2010 Totals: 9136.985 (4.3%)
    - 2005-2007: 4268.585 (5.1%)
    - Teacher Training: 2022.7 (1.0%) ; 839.1 (1.0%)
    - Professional Training: 6872.0 (3.3%) ; 2182.3 (2.6%)
  - 5-Other resources not distributed by category
    - 2003-2010 Totals: 24331.2 (11.6%)
    - 2005-2007: 11367.3 (13.6%)
  - Total:
    - 2003-2010 Totals: 210378.6 (100)
    - 2005-2007: 83767.6 (100)
- Expenditure emphasis:
  - Civil Construction receives 51.5% of resources during 2005–2007, reflecting reliance on imported raw materials priced in foreign currencies.

### PIP financing sources for 2005 and financing requirement (values preserved)
- PIP financing sources for 2005 (000 US$):
  - State Treasury: 2,909.1 (9.54%)
  - HIPC funds: 3,363.6 (11.03%)
  - Secured Foreign Credits: 5,486 (18%)
  - Secured Donations: 18,725 (61.43%)
  - Total: 30483.7 (100%)
- Financing requirement:
  - Completion of programmed activities for 2005 requires the mobilization of $30,483,700 USD, to be provided according to the distribution above.

### Appendix — central government financial operations (headline figures preserved)
- Headline Db series (selected):
  - Total revenue and grants: 248.8, 245.6, 321.0, 358.9, 622.3, 729.8, 832.0, 937.3, 483.9, 560.5
  - Oil revenue 1/: 0.0, 0.0, 1.1, 13.7, 3.6, 7.4, 11.3, 15.3, 16.7, 17.8
  - Non-oil revenue (tax and nontax) and Grants (project, nonproject, HIPC-related) reported in sequence as in source.
  - Total expenditure and net lending and subcomponents (current, capital, HIPC-related social expenditure) reported as in source.
- Fiscal balances, arrears and financing (Db):
  - Overall fiscal balance (commitment basis): -86.1, -83.6, -93.8, -165.6, 497.7, 469.9, 432.4, 384.9, -126.7, -101.6
  - Change in arrears (net; reduction -): 3.8, 48.8, 28.3, 39.8, -97.7, -174.7, -174.7, -176.6, 0.0, 0.0
  - Overall fiscal balance (cash basis): -82.3, -34.8, -65.5, -125.7, 400.0, 295.2, 257.6, 208.3, -126.7, -101.6
  - Financing (Db) and breakdown (external net, domestic net, oil reserve fund flows, reschedulable arrears) preserved as in source.
- Memorandum and ratios (selected):
  - Domestic primary balance (commitment basis) 9/10/: -54.5, -21.1, -65.7, -142.8, -31.6, -45.8, -73.1, -108.8, -75.1, -48.9
  - Overall balance (commitment basis, excluding Oil Signature Bonuses) 9/10/: -86.1, -83.6, -93.8, -165.6, -39.8, -67.6, -105.2, -152.6, -126.7, -101.6

### Action Plan and sectoral targets (selected, values and dates preserved)
- Poverty measurement and targets:
  - Conduct national surveys every three years; first national inquiry in 2005; reduce poor population from 53.8 percent to less than 1/3 by 2015.
- Pillar 1 (Governance): constitutional revision, Council of State and Constitutional Council creation (2005/2006), justice sector reforms, anticorruption legislation, decentralization laws and local elections in 2005, public administration modernization and civil service reforms (2005–2007).
- Pillar 2 (Growth): promote private sector and diversify production; reach GDP growth over 5 percent (2005/2007); monetary and fiscal tightening; maintain current external deficit/GDP < 3.6 percent; primary deficit/GDP (including HIPC) of 7 percent of GDP; open financial sector; agriculture and tourism targets.
- Energy, transport, telecommunications, water and sanitation, environment, land management, agriculture, forestry, fisheries, rural infrastructure, education, health, nutrition and population—detailed sectoral objectives, priority periods (2005–2010), and performance indicators preserved as in source.
- Health priorities include malaria, STDs/HIV/AIDS, tuberculosis, childhood survival and integrated care with timelines 2005–2010 and associated indicators.
- Analysis, monitoring and evaluation:
  - Establish NPRS coordination unit (2005); database on poverty (2005); update CPI weights (2005); household living conditions survey (ICVF) 2005; periodic indicators and studies on poverty dimensions (2005–2007).

*Source — National Strategy for Poverty Reduction (ENRP) addendum, content unit _cr05334 (excerpts).*

### 1.     PREVIOUS     CONSIDERATIONS ............................................................................. 3

### National Strategy for Poverty Reduction — 1. PREVIOUS CONSIDERATIONS

### 1. PREVIOUS CONSIDERATIONS
- Since Sao Tomé and Príncipe reached the Point of Decision on the HIPC Initiative in December of 2000, it has benefited from financial aid from this Initiative.
- HIPC resources have been channeled to fund projects considered priority for poverty-reduction.
- Two conditions established with the World Bank and the International Monetary Fund to reach the Point of Conclusion of the HIPC Initiative in 2006:
  - i. the consolidation of adequate efforts at the macroeconomic level;
  - ii. the establishment of a national strategy for poverty reduction through a participative process with the engagement of all active agents of the country and the satisfactory implementation of these.
- The government projected five principal axes in the National Strategy for Poverty Reduction (NSPR / ENRP):
  - Reform of public institutions, capacity reinforcement and the promotion of a good governance policy;
  - Accelerated and redistributive growth;
  - Creation of opportunities for growth and diversification of income for the poor;
  - Human resource development and access to basic social services;
  - Adoption of mechanisms for follow-up, evaluation and strategies for updating.
- Global objectives envisaged through the ENRP (timeframes preserved as in source):
  - To reach an average growth rate of 8% of the gross domestic product (GDP) starting 2005 in order to achieve the millennium goals;
  - To reduce by half the percentage of the Sao Tomean population living at the poverty level by 2010, and to less than 1/3 by 2015;
  - To reach by 2015 universal access to all basic social services, and to promote an improvement of the population’s quality of life;
  - To considerably reduce differences along social class and gender, among districts and within the Autonomous Region of Príncipe, as well as among rural and urban populations;
  - To promote and reinforce institutional capacities and a good governance policy.
- ENRP validation and approvals:
  - Validated in the National Symposium on December 10, 2002;
  - Approved by decree of the advise ministries on December 19, 2002;
  - Approved by the nation’s president on January 23rd, 2003.
- The present document constitutes an addendum and an integral part of the ENRP, introducing updates to reflect institutional, political, social and economic developments and to readjust reconceived goals.

### 2. CHANGES AND UPDATES — Overview
- Updates were required because of new information and developments; the document presents updated information on:
  - Public Debt;
  - Rural and urban unemployment;
  - Fluctuations in the price of cocoa;
  - Tourism growth;
  - The development of telecommunications;
  - Oil resources management;
  - Education and health expenditure;
  - Macroeconomic context;
  - National roadmap for the implementation of the ENRP;
  - Plan of action;
  - Result indicators for the short and medium term;
  - Budget prevision.

### 2.1 The foreign public debt and the effects on the resources from the HIPC fund
- Foreign public debt evolution (in millions of U.S. dollars) — Table 1 values as presented:
  - 2000: Amount of Foreign Debt 302; Multilateral 175.4; Bilateral 126.6
  - 2001: Amount of Foreign Debt 305.1; Multilateral 179; Bilateral 126.1
  - 2002: Amount of Foreign Debt 309.88; Multilateral 181.05; Bilateral 128.83
  - 2003: Amount of Foreign Debt 306.5
  - Until November of 2004 (estimate): Amount of Foreign Debt 317.5
- Source cited: Statistical Bulletins of the Central Bank and the Cabinet of Treasury.
- Key observations:
  - The accumulated foreign debt increased from $302.00 million (USD) in 2000 to $306.5 million (USD) in 2003.
  - In 2004 the government contracted two new loans of $10,000,000 (USD) and $1,000,000 (USD) with Nigeria and Angola, respectively, contributing to an estimated foreign debt of $317.5 million (USD) in November of 2004.
- Historical context:
  - Negotiations with the IMF in 1999 led to accords for a Poverty Reduction and Economic Growth program intended to satisfy conditions for HIPC debt relief.
  - Achievement of that program enabled reaching the HIPC Point of Decision in December 2000 and access to HIPC assistance starting January 2001.

### 2.2 Urban and Rural Unemployment
- Spatial concentration of unemployment:
  - The district of Água Grande is considered the only urban zone and accounts for 48.5% of the total unemployed population registered in the country.
- Gender distribution (Table 2: Unemployed Population by Gender and District (2003); values preserved):
  - Total Men & Women: Água Grande 4350 48,5%; Mé-Zóchi 2517 28,1%; Cantagalo 475 5,3%; Caué 399 4,4; Lembá 276 3,1; Lobata 776 8,7%; Paguê 175 2%; Valor Total 8968 100%
  - Men: Água Grande 1815 55,8%; Mé-Zóchi 479 14,7%; Cantagalo 202 6,2%; Caué 126 3,9%; Lembá 176 5,4%; Lobata 403 12,4%; Paguê 50 1,6%; Total 3251 100%
  - Women: Água Grande 2535 44,3%; Mé-Zóchi 2038 35,7%; Cantagalo 273 4,8%; Caué 273 4,8; Lembá 97 1,7; Lobata 376 6,5; Paguê 124 2,2; Total 5715 100%
  - Source: INE, Survey of Active Employed and Unemployed Population – 2003.
- Trends 2000–2003:
  - Urban unemployment variation rate between 2000 and 2003: 48%.
  - Rural unemployment variation rate between 2000 and 2003: 16.5% (interpreted in the source as a decrease of that same level).
  - National unemployment levels (from Graph 1 values):
    - Urban: 2000 12.7% ; 2001 16.6% ; 2002 18.5% ; 2003 18.8%
    - Rural: 2000 16.4% ; 2001 14.7% ; 2002 17.2% ; 2003 13.7%
    - STP (national): 2000 14.4% ; 2001 15.7% ; 2002 17.6% ; 2003 16.4%
  - The unemployment level in the urban region registered from 2000 to 2003 evolved almost three-fold of the average observed in the entire country (48% compared to 14%).
  - The decrease in national unemployment in 2003 compared to 2000 is attributed to a decrease in rural regions by a proportion 13 times greater than the unemployment growth registered in the urban region during the same period (- 20.3% compared to 1.6%).

### 2.3 Fluctuations in the price of cocoa
- Export volumes and prices (Table 3: Volume and Price of Exported Cocoa (2001-2003); values preserved):
  - 2001: Total kilograms 2,603,050; Price per kilogram in dobras 7,407.1; Total in dobras 19,280,981,659; Price in kilograms in USD 0.837; Total in USD 2,180,586
  - 2002: Total kilograms 3,274,590; Price per kilogram in dobras 12,778.8; Total in dobras 41,845,207,707; Price in kilograms in USD 1.4; Total in USD 4,603,828.2
  - 2003: Total kilograms 3,356,056; Price per kilogram in dobras 17,203.9; Total in dobras 57,737,417,170; Price in kilograms in USD 1.84; Total in USD 6,176,723.5
  - Source: INE, 2004.
- Changes in volume:
  - Increase in kilograms was 25.8% between 2001 and 2002.
  - Increase between 2002 and 2003 was 2.5%.
- Domestic price vs. export price:
  - Internal price of fresh cocoa did not surpass 2,000.00 dobras; differentials between export dry cocoa price and fresh internal price were reported as 5,407.1, 10,778.8, 15,203.9 for 2001, 2002, 2003 respectively.
  - Fresh cocoa sold at less than 2,000.00 dobras does not provide benefit to growers once input and labor costs are considered.
- Input costs example for one hectare with 1111 cocoa plants (annual needs; values preserved):
  - Sulfate 224.000,00
  - Limestone 120.000,00
  - Tenax 140.000.00
  - Total 480.000,00
- Implication:
  - A grower must produce 240 kilograms of cocoa to cover fertilizer costs alone; additional labor and other costs make low fresh-cocoa prices unprofitable, contributing to abandonment of lands and conversion to other activities (palm wine extraction, sugar cane for spirits).

### 2.4 Tourism Growth
- Passenger entries by continent (Table 4: Entry of passengers into national territory according to country of origin; values preserved):
  - Europe: 1999 3,763 ; 2000 4,060 ; 2001 3,586 ; 2002 5,429 ; 2003 6,709 ; 2004* 3,625
  - America: 1999 - ; 2000 - ; 2001 - ; 2002 260 ; 2003 638 ; 2004* 280
  - Africa: 1999 526 ; 2000 1,143 ; 2001 1,683 ; 2002 1,851 ; 2003 4,747 ; 2004* 2,687
  - Others: 1999 - ; 2000 - ; 2001 - ; 2002 1,790 ; 2003 1,556 ; 2004* 823
  - Total: 1999 4,289 ; 2000 5,203 ; 2001 5,269 ; 2002 9,330 ; 2003 13,650 ; 2004* 7,415
  - Source: Tourism and Hotel Directory/Migration and Frontier Service. *1st semester of 2004.
- Growth observation:
  - Tourism influx grew by an annual average rate of 36.5% between 1999 and 2003.
  - 2003 recorded the highest entry of tourists with a variation of 46.3% relative to the same period.
- Accommodation infrastructure (Table 5 – Major indicators of Tourism; values preserved):
  - Hotels (Establishments): 1998 6 ; 1999 7 ; 2000 7 ; 2001 7 ; 2002 7 ; 2003 7
  - Hotels (Rooms): 1998 184 ; 1999 198 ; 2000 198 ; 2001 198 ; 2002 214 ; 2003 228
  - Hotels (Capacity for lodging): 1998 325 ; 1999 353 ; 2000 353 ; 2001 353 ; 2002 397 ; 2003 425
  - Motels (Establishments): 1998 6 ; 1999 7 ; 2000 7 ; 2001 7 ; 2002 7 ; 2003 7
  - Motels (Rooms): 1998 38 ; 1999 42 ; 2000 42 ; 2001 42 ; 2002 42 ; 2003 42
  - Motels (Capacity for lodging): 1998 69 ; 1999 73 ; 2000 73 ; 2001 73 ; 2002 73 ; 2003 73
  - Residences (Establishments): 1998 4 ; 1999 4 ; 2000 4 ; 2001 4 ; 2002 4 ; 2003 4
  - Residences (Rooms): 1998 37 ; 1999 37 ; 2000 37 ; 2001 37 ; 2002 37 ; 2003 37
  - Residences (Capacity for lodging): 1998 69 ; 1999 69 ; 2000 69 ; 2001 69 ; 2002 69 ; 2003 69
- Key point:
  - From 1998 to 2003 there was no investment in hotel infrastructure (hotels, motels, inns) despite rising tourist entries — identified as a basic condition for attracting tourists.

_Italic: Source — National Strategy for Poverty Reduction (ENRP) addendum, sections "1. PREVIOUS CONSIDERATIONS" and "2. CHANGES AND UPDATES" (extracted content)._

### 34. As one of the envisioned goals in the Strategy for the Promotion of Tourism and

### _cr05334 - 34. As one of the envisioned goals in the Strategy for the Promotion of Tourism and

### Tourism strategy and targets
- Envisioned target: increase of tourist influx to 7.5% per year.
- Strategic Plan referenced: Plano Estratégico de Desenvolvimento do Tourismo (PEDT).
- PEDT horizon: from now until the year 2008/2010.
- Sectoral objective: increase the contribution of the sector to the PIB (excluding the oil sector) from 5% to 7%, starting 2005.
- Sectoral development goals:
  - Promote tourism as one of the principal engines of increase for the medium term.
  - Develop direct employment in the sector and maximize its revolving effect.
  - Value natural, architectural and socio-cultural patrimonies.
  - Develop ecotourism and resort tourism.
  - Ensure private enterprises have necessary conditions for development.
- Policy implication: competent entities should create incentives and competition to achieve the 7.5% annual tourist influx target.

### Liberalization of telecommunications
- Historical framework:
  - Directive Plan of Telecommunications elaborated in 1989 and subsequently readapted.
  - Companhia Santomense de Telecomunicaçoes (CST) created in 1990 as an entity of mixed economy.
  - Concession contract dated December 1st, 1989 with Companhia Portuguesa Radio Marconi granted a 20-year exclusivity.
- Exclusivity status:
  - More recent negotiations stipulated exclusivity would prevail only until December 31st of 2005.
- Legal/regulatory reform:
  - Law 3/04 approved; defines rules for establishment, management and exploration of national telecommunication networks and services.
  - Law 3/04 published in Diário da República no. 6 of July 2, 2004.
  - Law 3/04 recognizes telecommunications as key for economic development, recognizes state monopoly aspects, and seeks progressive opening of the market to competition.
  - Law 3/04 establishes creation of a Regulation Authority to favor emergence of an open market, extend coverage, and favor implantation of public posts.
- Licensing framework established by law: licenses for public networks; authorizations for independent networks; declarations for services utilizing third-party networks.

### Oil resources management and legal framework
- Public concern: mindful management of oil resources is central to citizens’ concerns.
- Uncertainty: potential and commercial viability of existing hydrocarbons not known with certainty.
- Border negotiations: delimitation of marine borders with Gabon and Equatorial Guinea to be carried out at the right time.
- Joint development arrangements and timeline:
  - October of 2003: first bidding of blocs in the Zone of Joint Development organized in S. Tome.
  - Projected January of 2005: signing of the first joint contract of production related to bloc 1.
  - Second bidding expected during the last trimester of 2004 (December of 2004) in Abuja, projected to lead to signing of new joint contracts encompassing five blocs.
- Regional cooperation: July of 2004 Sao Tome and Principe and Nigeria signed the Declaration of Abuja outlining transparency and good governance in the Zone of Joint Development.
- Law on Oil Revenues:
  - Approved by National Assembly on November 26, 2004; ratified by the president on December 29, 2004.
  - Created the National Oil Account where all oil revenues should be directly deposited.
  - Allows deposits only in a State National Treasury Account or specially opened accounts authorized by the National Assembly.
  - Introduces quantitative and qualitative limits on oil revenues channeled to annual budget expenditures; No. 5 of article 8. foresees an annual figure to conform with inflation goals.
  - Annual figure determined by the minister of Planning and Finance in consultation with the Central Bank, taking into consideration the economy’s absorption capacity.
  - Prohibits the Santomean State from making loans using current or future oil revenues as guaranty.
  - Transparency measures: two annual audits of oil accounts (one by the National Accounting Court (Tribunal de Contas), one by an internationally reputable audit firm); mandatory registry and advertising of documents and information related to the sector; broad access to information.
  - Created a Permanent Fund of Sao Tome and Principe (sub-account of reserve) for part of oil revenues with strongly limited utilization (revenues used only from applications of the Fund once resources are depleted).
  - Management assigned to a committee for management and investments acting as a prudent investor.
  - Created a commission for Oil Fiscalization with independence and administrative and financial autonomy.
  - Sets incompatibilities and increases sanctions (at least one third) for violations of the law.

### Education and health expenditure (ENRP programming and PIP accomplishments)
- ENRP allocation for 2005-2007:
  - Total allocated for health and education for 2005-2007: $26,517 millions (USD).
  - Distribution: health $14,050 million (USD) (53%); education $12,458 million (USD) (47%).
- Table 6 figures (ENRP Programming for the 2005-2007 period, source ENRP, PIP-2005):
  - Education: 2005 3,752,880; 2006 4,176,245; 2007 4,529,765; Total 12,458,890.
  - Health: 2005 4,686,170; 2006 4,686,170; 2007 4,686,170; Total 14,058,510.
  - Total (USD): 2005 8,439,050; 2006 8,862,415; 2007 9,215,935; Total 26,517,400.
- Observed patterns:
  - Education sector expenditures show a trend of growth across the three years.
  - Health sector projection for 2005-2007 demonstrates equal distribution across years, based on PIP-2005 reference base.
- PIP accomplishments 2003–2004 (Table 7, source Planning Directive – PIP, 2003 and 2004):
  - Education accomplishments: 2003 3,795,599; 2004 (1st Semester) 6,839,845.
  - Health accomplishments: 2003 4,006,939; 2004 (1st Semester) 1,364,299.
  - Total (USD): 2003 7,802,538; 2004 (1st Semester) 8,204,144.
- Performance indicators:
  - Education sector achieved growth of 80.2% between 2003 and 2004 (1st Semester).
  - Health sector growth was negative (-65.95%) during the same period.
  - Combined growth for both sectors: 5.14% during the years 2003 and 2004 (1st semester).

### Macroeconomic context and fiscal developments
- Growth and inflation 2000–2003:
  - Real GDP growth accelerated, reaching 4.5 percent by 2003.
  - Inflation remained stable at around 9 percent.
  - Investment averaged 36 percent of GDP.
- Structural change and diversification:
  - Economy shifted toward services; tourism became the principal foreign exchange earner.
  - Agricultural diversification: cultivation of pepper and vanilla; plans for commercialization and export.
  - Privatization program prepared; a new investment code to be presented to the National Assembly.
- Structural reforms implemented (with World Bank and IMF assistance):
  - Privatization of public enterprises.
  - Adoption of a semi-automatic pricing mechanism for petroleum products.
  - Civil service reform in 2001: downsizing by 320 public and 158 utility employees; establishment of a single computerized civil service and payroll management system.
- HIPC Initiative completion point triggers satisfied:
  - Transparent legislation for petroleum management approved by National Assembly.
  - Establishment of technical petroleum unit since 2002 and National Committee on Petroleum (NCP).
  - Creation of National Petroleum Agency (NPA).
  - Social area triggers and creation of the Fiscal Tribunal (Tribunal de Contas) functional since mid-June 2003.
- Fiscal administration reforms 2000–2003:
  - Updated accounting and budgeting systems toward international standards.
  - Modernization of tax code; simplification of customs rates.
  - Adoption of the SYDONIA information system.
  - Decentralization of Ministry of Planning and Finance services into directorates (Treasury; Budget; Tax; Planning).
  - Revised tax code and package of tax reform to be submitted to the National Assembly.
- Fiscal deterioration and vulnerabilities:
  - Policy implementation setbacks in 2001 due to fiscal and structural reform slippages.
  - Fiscal situation worsened in 2003 after the July 2003 military coup as government increased expenditure.
  - Fiscal imbalances widened further in 2004 due to expenditure pressures in anticipation of expected oil signature bonuses that did not arrive.
  - Provisional data: primary fiscal deficit of 22 percent of GDP in 2004, from 12 percent of GDP in 2003, reflecting rapid growth in government expenditure (wage bill, goods and services, transfers).
  - External debt arrears continued to accumulate.
  - Conclusion: the economy remains fragile with important internal and external vulnerabilities.

*National Strategy for Poverty Reduction — content unit _cr05334*

### 59. Recognizing  that  the  large  imbalances  caused  by  the  high  expenditure  are

### _cr05334 - 59. Recognizing  that  the  large  imbalances  caused  by  the  high  expenditure  are

### Program objectives and macroeconomic projections (2005-2007)
- The government will implement a package of measures over the period 2005-2007 to correct widening macroeconomic imbalances, aiming at:
  - fiscal consolidation;
  - monetary stabilization;
  - implementation structural reform;
  - improvement the sustainability of the country’s external debt.
- The program is seeking support of the Bretton Woods institutions.
- Growth and inflation projections:
  - Real GDP growth: program aims at realizing real GDP growth of 5.5 percent by 2007.
  - GDP growth is expected to slow down in 2005 in response to tight financial policies.
  - Inflation is projected to return to single digits by end-2007.
- External sector and reserves:
  - Maintain gross international reserves at around 3 ½ months of imports.
  - Current account deficit will be contained in response to the expected improvement in the fiscal sector.

### Structural reforms and sectoral measures
- Structural reform priorities:
  - Reform of public enterprises to improve financial position, notably the utility enterprise EMAE.
  - Communication sector: exclusivity agreement of telecom parastatal CST will continue only until January 2006; after that the market will be open for competition.
  - Establish a commission to address land tenure reform.
- Emphasis on continued donor dependence over the medium term.

### HIPC completion and conditions for achieving macro objectives
- Satisfactory program performance would allow São Tomé and Príncipe to reach the completion point under the HIPC initiative in the second half of 2006.
- Government view: macro-economic objectives achievable under the following conditions:
  - Peace and political stability
  - Prudent macroeconomic and financial management
  - Transparency in oil sector activity
  - Strong investment in social spending and toward poverty-reduction
  - Further diversification of the economy
  - Expansion of trade through regional integration and renegotiation of new trade agreements
  - Improved communication and transportation
  - Reform of public enterprise to improve efficiency and make these enterprises more commercially oriented
  - Implementation of further structural reforms

### Implementation structure for the National Strategy for Poverty Reduction (ENRP)
- ENRP establishes an implementation, follow-up, and evaluation mechanism; creation of an implementation structure with these components:
  - A Ministerial Council
  - A Consulting Council
  - A Poverty Reduction Observatory (Observatório da Redução da Pobreza, ORP)
  - Focal Points (Antennas)
- Ministerial Council:
  - Will orient and supervise activities related to ENRP’s Plan of Action.
  - Will convene at least twice a year under the chairmanship of the Prime Minister and the chief of government; in their absence the minister of planning should chair.
  - Members: ministers responsible for planning, cooperation, education, youth, health, labor, solidarity, social communication, agriculture and rural development.
  - Other government members with programs/projects in ENRP’s Plan of Action may be invited.
- Consulting Council:
  - Will listen to NGOs, civil society organizations, and private sector representatives and emit recommendations about periodic reports before submission to the Ministerial Council.
  - Will meet at least twice a year at request of the presiding minister responsible for planning.
  - Participants include local officials, the Federation of NGOs, the Sao Tome Women’s Forum, youth organizations, labor unions, private sector, professional associations, churches and civil society in general.

### Observatory of Poverty Reduction (ORP): mandate and organization
- Core capabilities and functions of ORP:
  - a. ensure the implementation the ENRP’s Plan of Action and the accomplishment of the defined goals;
  - b. update and adjust the ENRP;
  - c. the make compatible the goals of strategic poverty reduction with the goals of the development of the millennium;
  - d. analyze all the debt reduction initiatives in the country and promote the coordination of these;
  - e. promote surveys and inquiries that will allow the collection of data and information about the evolution of poverty;
  - f. establish a reliable database envisioning a periodic update of the country’s poverty profile and to develop studies about its different dimensions;
  - g. elaborate periodic reports about the process of implementation, follow-up procedure and evaluation of the government;
  - h. carry out any other functions determined by a superior power.
- Organization and functioning subject to self-regulation to be approved by the consulting minister; will contemplate:
  - The Multi-Sector Technical Commission
  - The Coordinator
- Multi-Sector Technical Commission:
  - Will meet with the presiding consulting minister to analyze ORP functioning and plan activities.
  - Will include specialists/technicians of the Observatory, focal points of ministries, representatives of the National Institute of Statistics, and institutions responsible for planning together with the Ministry of Planning and Finance.
- Coordinator:
  - Named by the consulting minister.
  - Will represent ORP before public or private entities and coordinate all ORP activities.
  - Responsibilities include presenting plans and reports and organizing meetings of the Ministerial and Consulting Councils and the Multi-Sector Technical Commission.
- Technical staff of ORP subject to approval by the consulting minister taking into consideration the availability of the Economic Planning Directive.
- Ministries and institutions responsible for ENRP Plan of Action must indicate respective Focal Points (Antennas) for coordination and follow-up.
- ORP activities will be carried out as often as necessary in close collaboration with the assigned institution for economic and social planning, the ministry responsible for planning, and the National Institute of Statistics, all obligated to cooperate.

### Expected awareness-raising meetings and implementation risks
- Anticipated social dynamics:
  - The period following ENRP approval will experience episodes of significant social tension and changes in officials or representatives responsible for implementation.
  - Risk that quantitatively superior resources could be used outside of the defined strategy.
- Creation of Focal Points (Antennas) in ministries and institutions is urgent to enable systematic exchange of information and evaluation.
- Anticipated consciousness-raising meetings:
  - A symposium on the role that the military and paramilitary forces will play in poverty reduction;
  - A symposium about the contribution social communication organisms to inform, raise consciousness and mobilize the public on the issue of poverty reduction;
  - Meetings among leaders and/or representatives of institutions directly involved in the creation of information about the need for Focal Points (Antennas);
  - A seminar for the preparation of Focal Points (Antennas) about the importance of their participation in the methodology of the procedure manual to be elaborated.

### Plan of Action monitoring and indicators
- The Plan of Action was revised to account for new implementation periods and records the actual situation of programs and projects whose completion was projected for 2003 and 2004.
- Indicators associated with priorities or measures were included to allow periodic verification of progress.
- The Plan of Action includes synthesized information of the current situation, as well as a list of indicators (contained in appendix).

### Budget programming and resource allocation (values indicated in thousands of U.S. dollars)
- Table 8: Programming Organized by Goals and Priorities (2003-2010 Totals; Period from 2005-2007)
  - 1-Institutinal Reform and Rehabilitation and Good Governance
    - 2003-2010 Totals: 2109.4 (1.0%)
    - Period from 2005-2007: 1160.8 (1.4%)
    - Justiçe: 919.4 (0.4%) ; 525.4 (0.6%)
  - 2-Economic and Redistributive Growth
    - 2003-2010 Totals: 45165.4 (21.5%)
    - Period from 2005-2007: 10368.1 (12.4%)
    - Energy: 29252 (13.9%) ; 3865 (4.6%)
    - Water and sanitation: 11226.8 (5.3%) ; 4676.2 (5.6%)
  - 3-Oportunities for Revenue
    - 2003-2010 Totals: 106999.4 (50.9%)
    - Period from 2005-2007: 45259 (54.0%)
    - Agriculture, livestock, fishing, forestry: 52921.2 (25.2%) ; 21349.5 (25.5%)
    - Infrastructures: 54078.2 (25.7%) ; 22699.5 (27.1%)
  - 4-Access to Basic Social Services
    - 2003-2010 Totals: 54068.8 (25.7%)
    - Period from 2005-2007: 26523.2 (31.7%)
    - Education: 22836.7 (10.9%) ; 12458.9 (14.9%)
    - Health, Nutrition and Population: 27639.1 (13.1%) ; 14058.5 (16.8%)
    - Employment, Training and Solidarity: 3593 (1.7%) ; 1086.8 (1.3%)
  - 5-Analysis, Follow-Up Procedures and Evaluation
    - 2003-2010 Totals: 2035.6 (1.0%)
    - Period from 2005-2007: 456.5 (0.5%)
  - Total:
    - 2003-2010 Totals: 210378.6 (100.0)
    - Period from 2005-2007: 83767.6 (100.0)
- Short-term (2005-2007) allocation highlights:
  - Actions leading to creation of revenue (basic infrastructures and primary sector activities, including energy, water and sanitation, agriculture, livestock, fishing, forestry and infrastructures) will absorb 66.4% of the resources.
  - Access to Basic Social Services represents 31.7% of total resources during 2005-2007.
  - Only 39.8% of total programmed actions are concentrated during the 2005-2007 period.
- Table 9: Programming by type of resources (2003-2010 Totals; 2005-2007 Period)
  - 1-Civil Constructions
    - 2003-2010 Totals: 110900.25 (52.7%)
    - 2005-2007: 43191.35 (51.5%)
    - Classrooms: 12056.2 (5.7%) ; 7150 (8.5%)
    - Health Infrastructures: 7714.35 (3.7%) ; 5029.35 (6.0%)
    - Various Infrastructures: 49308.7 (23.4%) ; 20826.5 (24.9%)
    - Water and Sanitation: 12673.4 (6.0%) ; 4753.2 (5.7%)
  - 2-Goods
    - 2003-2010 Totals: 39686.365 (18.9%)
    - 2005-2007: 15644.0 (18.7%)
    - Vegetable Materials: 13353 (6.3%) ; 5395 (6.4%)
    - Nutritional Goods: 1159.7 (0.6%) ; 643.9 (0.8%)
    - Manuals and Equipment for Education: 1030.5 (0.5%) ; 579.5 (0.7%)
    - Medicines, Equipment and health materials: 8194.865 (3.9%) ; 4636.7 (5.5%)
  - 3-Services
    - 2003-2010 Totals: 26323.8 (12.5%)
    - 2005-2007: 9296.4 (11.1%)
    - National Technical Assistance: 15318 (7.3%) ; 5090.9 (6.1%)
    - International Technical Assistance: 7026.7 (3.3%) ; 2343.4 (2.8%)
    - Studies: 1539.6 (0.7%) ; 391.5 (0.5%)
    - Legislation: 705.3 (0.3%) ; 202.5 (0.2%)
    - Information Systems: 1734.1 (0.8%) ; 1088 (1.3%)
  - 4-Training
    - 2003-2010 Totals: 9136.985 (4.3%)
    - 2005-2007: 4268.585 (5.1%)
    - Teacher Training: 2022.7 (1.0%) ; 839.1 (1.0%)
    - Professional Training: 6872.0 (3.3%) ; 2182.3 (2.6%)
  - 5-Other resources not distributed by category
    - 2003-2010 Totals: 24331.2 (11.6%)
    - 2005-2007: 11367.3 (13.6%)
  - Total:
    - 2003-2010 Totals: 210378.6 (100)
    - 2005-2007: 83767.6 (100)
- Expenditure category emphasis:
  - Most resources will be channeled toward Civil Construction (51.5%) during 2005-2007; this reflects reliance on imported raw materials priced in foreign currencies.

### PIP financing sources for 2005 (values in 000 US$)
- State Treasury: 2,909.1 (9.54%)
- HIPC funds: 3,363.6 (11.03%)
- Secured Foreign Credits: 5,486 (18%)
- Secured Donations: 18,725 (61.43%)
- Total: 30483.7 (100%)

*Source: National Strategy for Poverty Reduction (ENRP) excerpts contained in the supplied content unit.*

### 87. The completion of the programmed activities for 2005 (Table 9) requires the

### _cr05334 - 87. The completion of the programmed activities for 2005 (Table 9) requires the

### Financing requirement
- The completion of the programmed activities for 2005 requires the mobilization of $30,483,700 USD.
- Financing is to be provided with a distribution of the financing sources as illustrated in the source (Table 9).

*Source: _cr05334 - 87. The completion of the programmed activities for 2005 (Table 9) requires the*

### 3. APPENDIX

### 3. APPENDIX

### Financial operations of the central government — headline figures (Db, in billions)
- Total revenue and grants: 248.8, 245.6, 321.0, 358.9, 622.3, 729.8, 832.0, 937.3, 483.9, 560.5
- Oil revenue 1/: 0.0, 0.0, 1.1, 13.7, 3.6, 7.4, 11.3, 15.3, 16.7, 17.8
- Non-oil revenue: 89.2, 113.4, 140.4, 156.5, 42.6, 90.5, 141.4, 196.4, 229.7, 263.6
  - Tax revenue: 77.2, 95.0, 114.2, 138.2, 38.0, 79.0, 125.3, 176.8, 206.3, 237.8
  - Nontax revenue: 12.0, 18.4, 26.2, 18.2, 4.6, 11.4, 16.1, 19.6, 23.4, 25.9
- Grants: 159.5, 132.2, 179.4, 188.8, 38.5, 94.4, 141.8, 188.1, 223.1, 257.0
  - Project grants: 120.9, 110.0, 142.1, 137.7, 27.3, 76.9, 115.4, 153.9, 185.8, 217.2
  - Nonproject grants: 17.3, 0.5, 2.4, 20.4, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0
  - HIPC Initiative-related grants 2/: 21.4, 21.8, 35.0, 30.6, 11.2, 17.5, 26.4, 34.2, 37.3, 39.8
- Oil signature bonuses: ... ... ... ... 537.6, 537.6, 537.6, 537.6, ... ...
- Total expenditure and net lending: 334.9, 329.2, 414.8, 524.5, 124.6, 259.9, 399.6, 552.4, 610.7, 662.1
  - Current expenditure: 121.5, 160.4, 183.3, 280.2, 71.9, 132.1, 208.0, 296.9, 313.4, 324.4
    - Personnel costs: 40.5, 43.6, 55.0, 74.5, 22.2, 44.5, 66.7, 89.0, 93.8, 98.7
    - Goods and services: 18.8, 26.7, 43.9, 86.9, 11.8, 19.9, 34.5, 54.1, 56.7, 59.2
    - Interest on external debt due: 23.2, 29.5, 26.1, 30.1, 8.3, 17.3, 25.6, 34.5, 39.0, 39.3
    - Interest on internal debt due: 1.1, 0.0, 0.0, 0.0, 0.6, 1.3, 1.9, 2.5, 2.5, 2.5
    - Transfers: 13.1, 40.7, 35.9, 63.4, 21.9, 37.4, 60.0, 89.1, 91.8, 93.4
      - Of which: Regular transfers: 13.1, 9.4, 13.4, 37.3, 13.1, 26.3, 39.4, 52.6, 54.0, 55.1
      - Foreign-funded scholarship program: ... ... 1.1, 13.7, 3.8, 7.6, 11.5, 15.3, 16.7, 17.8
      - Domestically-funded scholarship program: ... ... ... 10.8, 5.5, 11.0, 16.5, 21.9, 21.9, 21.9
      - Joint Development Agency 3/: ... 31.3, 22.6, 26.0, 8.8, 11.1, 20.6, 36.5, 37.9, 38.4
      - Other: 24.8, 20.0, 22.4, 25.3, 6.9, 11.9, 19.4, 27.8, 29.6, 31.3
  - Capital expenditure: 194.3, 140.0, 197.9, 214.7, 44.1, 110.6, 166.0, 221.3, 260.0, 297.8
    - Financed by the treasury: 29.4, 12.3, 38.0, 40.2, 6.6, 13.2, 19.7, 26.3, 29.4, 32.8
    - Financed by external sources: 164.9, 127.7, 160.0, 174.5, 37.6, 97.5, 146.2, 194.9, 230.6, 265.0
  - HIPC Initiative-related social expenditure: 17.2, 22.5, 33.6, 35.0, 8.6, 17.1, 25.7, 34.2, 37.3, 39.8
  - Public service restructuring 4/: 1.9, 6.3, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0
  - Net lending: 0.0, 0.0, 0.0, -5.5, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0

### Fiscal balances, arrears, and financing (Db, in billions)
- Overall fiscal balance (commitment basis): -86.1, -83.6, -93.8, -165.6, 497.7, 469.9, 432.4, 384.9, -126.7, -101.6
- Change in arrears (net; reduction -): 3.8, 48.8, 28.3, 39.8, -97.7, -174.7, -174.7, -176.6, 0.0, 0.0
  - External arrears 5/: 3.8, 14.8, 9.4, 13.8, 4.0, -73.0, -73.0, -74.8, 0.0, 0.0
  - Domestic arrears: 0.0, 34.0, 18.8, 26.0, -101.7, -101.7, -101.7, -101.7, 0.0, 0.0
    - Joint Development Agency 3/: ... 31.3, 22.6, 26.0, -101.7, -101.7, -101.7, -101.7, 0.0, 0.0
- Overall fiscal balance (cash basis): -82.3, -34.8, -65.5, -125.7, 400.0, 295.2, 257.6, 208.3, -126.7, -101.6

- Financing (Db): 82.3, 34.8, 65.5, 125.7, -400.0, -295.2, -257.6, -208.3, 126.7, 101.6
  - External (net): 46.9, 32.9, 49.8, 107.5, -10.8, -161.7, -176.7, -174.8, -41.6, -50.2
    - Disbursements (projects): 42.9, 17.7, 17.9, 36.8, 10.3, 20.5, 30.8, 41.1, 44.8, 47.8
    - Program financing (loans): 25.8, 0.0, 30.8, 50.3, 0.0, 12.9, 12.9, 26.7, 28.6, 30.5
    - Short-term loans (Nigeria and Angola) (net) 6/: ... ,45.0, 46.7, 58.7, 0.0, -10.7, -10.7, -10.7, 0.0, 0.0
      - Disbursement: ... ,45.0, 46.7, 58.7, 51.5, 51.5, 51.5, 51.5, 0.0, 0.0
      - Amortization: ... ... ... 0.0, -206.2, -216.9, -216.9, -216.9, 0.0, 0.0
      - Rescheduling of Nigeria loan: ... ... ... 0.0, 154.6, 154.6, 154.6, 154.6, 0.0, 0.0
    - Long-term loans amortization (net): -21.7, -29.8, -45.7, -38.2, -21.0, -184.4, -209.6, -231.9, -115.0, -128.5
      - Scheduled: -36.7, -59.1, -70.8, -73.2, -31.9, -49.5, -74.7, -97.0, -115.0, -128.5
      - Net change in arrears (reduction -): 15.0, 29.3, 25.1, 34.9, 10.8, -134.9, -134.9, -134.9, 0.0, 0.0
    - Debt relief: 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0
  - Domestic (net): 35.4, 1.9, 15.7, 18.3, -103.5, -60.6, -25.2, 3.8, 0.0, 0.0
    - Bank credit (net): 17.3, -0.3, 29.7, 18.3, -103.5, -60.6, -25.2, 3.8, 0.0, 0.0
      - Of which: HIPC Initiative account: -4.3, 0.7, -4.1, 4.4, -2.7, -0.4, -0.7, 0.0, 0.0, 0.0
    - Nonbank financing: 18.1, 2.2, -14.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0
  - Oil reserve fund flows (net): 0.0, 0.0, 0.0, 0.0, -285.7, -285.7, -285.7, -285.7, 55.0, 58.6
  - Reschedulable arrears (Paris Club) 8/: 0.0, 0.0, 0.0, 0.0, 0.0, 212.8, 230.0, 248.4, 70.0, 76.3
  - Financing gap: 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 0.0, 43.3, 16.8

### Memorandum and ratios (selected)
- Capital expenditure (in millions of U.S. dollars): ... ,15.4, 21.2, 22.0, 4.3, 10.5, 15.5, 20.2, 21.8, 23.4
  - (Annual percentage changes): ... ... ... 3.7 ... ... ... 0.3, 7.7, 7.4
- Domestic primary balance (commitment basis) 9/10/: -54.5, -21.1, -65.7, -142.8, -31.6, -45.8, -73.1, -108.8, -75.1, -48.9
- Overall balance (commitment basis, excluding Oil Signature Bonuses) 9/10/: -86.1, -83.6, -93.8, -165.6, -39.8, -67.6, -105.2, -152.6, -126.7, -101.6
- External debt service paid: 41.2, 44.5, 62.4, 54.6, ... ... ... 92.9 ... ...

Sources note excerpts contained in table: During 2004-07, includes US$1.4 million in re-exports of oil arising from aid in kind from Nigeria; Savings from assistance under the HIPC Initiative; arrangement with Nigeria could defer JDA contributions until first oil signature bonus; severance packages financed by EU grant in 2001-02; interest arrears on Paris Club debt; short-term loans from Nigeria and Angola and rescheduling details; for 2006-10, drawings from the oil fund equivalent to 20 percent of the fund at end-2004; for 2004 reflects Paris Club arrears; includes HIPC Initiative-related social expenditure; exclusions for domestic primary balance calculations.

---

### National Strategy for Poverty Reduction — Action Plan and key targets

- Poverty measurement and targets
  - Conduct national surveys to determine and periodically assess poverty every three years.
  - Achievement provision: first national inquiry in 2005 on the poverty profile update; indicator: National inquiry carried out on the poverty profile update.
  - Study the relationship between family size and structure and poverty: 2005; indicator: Report elaborated on the poverty profile.
  - Reduce the percentage of the poor population (below the poverty line) from 53.8 percent to less than 1/3 by 2015.
  - Conduct a study on the urban and suburban poverty situation: 2005; indicator: Study carried out on urban and suburban poverty.

- Poverty reduction program implementation
  - Implement priority actions under the National Poverty Reduction Strategy (NPRS): 2005/2006; indicator: Percentage of actions carried out; Report elaborated on the implementation of the ENRP.

- PILLAR 1: Reform of public institutions, capacity building, and good governance (selected actions)
  - Revise the Constitution; constitutional examination took place in 2003; revised Constitution takes effect in 2006.
  - Establish the Council of State and the Constitutional Council: 2005/2006; indicators: State Council created and in full function; Constitutional Council created and in full function.
  - Revise composition of legislative branch and parliamentary bylaws: from 2006; indicators: Study carried out on National Assembly reform; Regiment reviewed.
  - Strengthen procedures for control of public assets, accounts, and budget: 2005; technical support from the IMF and the World Bank; indicator: Report on budgetary control procedures adopted; Number of fiscal initiatives completed.
  - Organize training programs and study visits: 2004-2005; indicator: Number of training actions and study visits made.
  - Equip parliamentary library and reactivate information services: 2005; indicators: The library was equipped; Number of communiqués and periodic publications on parliamentary activities.
  - Justice sector reforms: revise Basic Law on Judicial System and Penal Code; training for magistrates and justice system staff; 2005/2006; indicators: Revision program elaborated; Program of training elaborated; Remuneration policy revised; Inspection reinforced; Accounting Tribunal installed and in operation.
  - Establish anticorruption legislation and update investment code: 2005/2006.
  - Improve management of public assets, aid coordination, and transparency: 2005-2008; actions include aid coordinating committee reformulated; annual inventory of public assets; promotion of transparency campaigns.

- Decentralization and local government
  - Revise framework laws for decentralization and local finance: 2005/2006; indicators: Framework legislation on autarquies revised; Legislation on local finances revised.
  - Hold regional and local government elections: 2005; indicator: Elections carried out.
  - Build capacity of decentralized units and establish permanent training: 2005-2007; indicators: Institutional capacity reinforced; Number of frameworks formed.

- Public administration modernization
  - Tailor public administration to mission in context of economic liberalization: 2005-2006; indicator: Adapted organigram created; Adequate training carried out.
  - Revise Civil Service Statutes and introduce civil servant assessment instruments: 2005-2007; indicators: Revised by-laws; Evaluation instruments in use.
  - Revise wage scale for civil servants: 2005; Salary table revised.

- Civil society, communication, and information
  - Restore Council on Social Consensus and organize training campaigns: 2005; indicators: Annual report on functioning; Number of training campaigns carried out.
  - Extend radio and television coverage nationwide and prepare informational programming: 2005/2007; indicators: Evaluation of degree of coverage; Number of programs carried out.
  - Install public telephone booths in remote localities: 2005; indicator: Number of functioning telephone poles placed.
  - Conduct seminar on media role in poverty reduction: 2005; indicator: Seminar carried out.

- PILLAR 2: Accelerated and redistributive growth (selected actions and targets)
  - Promote private sector, diversify production, and prioritize productive sectors (agriculture, livestock, fishing, forestry, tourism, services, trade, industry): 2005/2007; indicators: Report on private sector promotion; Number of micro-credit boxes established.
  - Revise legal and regulatory framework to stimulate access to productive services and foreign investment: 2005; indicator: Investment code approved and in application.
  - Develop economic infrastructure (energy, roads, transport, telecoms, water, sanitation): 2005/2007; indicator: Model report made for each sector.
  - Growth objective: accelerate growth and achieve a GDP growth rate of over 5 percent; diversify production: 2005/2007; indicator: Implementation report of projects (pepper and vanilla, cooperatives).
  - Give priority to credit to the economy and study integration into a monetary area: 2005/2007 and 2006/2007; indicators: Report on credits granted; Study carried out.
  - Monetary policy: stringent control of currency issues; Strengthen central bank capacity with IMF/World Bank technical assistance: 2005-2007.
  - Macroeconomic fiscal targets: increase revenue, streamline public capital and current expenditure; control wage bill; redirect public expenditure to basic social services; maintain a current external deficit/GDP ratio of less than 3.6 percent; and a primary deficit/GDP ratio, including the HIPC Initiative, of 7 percent of GDP: 2005/2007.
  - Guarantee debt sustainability and encourage periodic dissemination of external debt statistics: 2005/2007.
  - Open financial sector to other banks and finalize study on financial sector development: 2005/2007 and 2005/2006; actions include re-opening banks and establishment of new banks.
  - Stimulate saving, investment, and productivity; maintain adequate tax pressure and revise tax system: 2005/2007.
  - Execute public investments mindful of the most vulnerable: 2005/2010.
  - Agriculture targets: create sustainable rural road maintenance system; study on agricultural credit system (2005); define agricultural credit policy (2005/2006); reorganize agricultural education (2005/2007).
  - Tourism targets: substantially increase sector contribution to GDP (target of 5-7 percent in 2005); execute occupational training program (2005/2007); acquire equipment (from 2006); promotion campaigns (2005/2007).

- Energy and infrastructure (selected)
  - Rehabilitate metering center [Central de Contador]: 2005.
  - Rehabilitate low and medium tension networks: 2006/2007.
  - Update master plan: 2006.
  - Conduct feasibility studies and pursue hydroelectric projects (Abade III, Yô Grande, Rio Papagaio): 2005/2010.
  - Build new electricity plant (financial proceeds from transfer of thermal plant): 2007.
  - Build microstations in rural areas: 2008/2010.
  - Feasibility study on state divestment options in the sector: 2005.
  - Technical and economic study on fuel substitution: 2005/2007.

- Transportation and rural roads
  - Accelerated implementation of program to rehabilitate rural roads (see Agriculture): 2005/2010; compatibility with General Budget.

*Source: _cr05334 - 3. APPENDIX (tables and Action Plan) — São Tomé and Príncipe authorities; and staff estimates and projections.*

### Conclusion of the rehabilitation constructions of 88

### Conclusion of the rehabilitation constructions of 88

### Transportation — Roads, Maritime, Air
- Objectives/strategies:
  - Strengthen technical and management capacity of SENAE.
  - Strengthen São Tomé and Principe’s maritime network to ensure integrated development of the two islands.
  - Strengthen operational capacity at the port of São Tomé (lifting equipment, ship maintenance infrastructure, management capacity building, etc.).
  - Preliminary study on the sectoral transportation strategy (against the backdrop of preparing a master plan for transportation after 2002).
  - Prepare and implement standards and regulations.
  - Monitor the activity of ferry operators (inter-island and between the archipelago and the continent).
  - Develop international air and sea transportation.
  - Start updating the inventory of rural roads.
  - Develop the public service to lead the sector.
- Priority / Period / Current situation / Indicators:
  - Strengthen technical and management capacity of SENAE — 2005/2007 — In progress. With support of the European Union — Evaluation, framing and training of staff affected the auditing carried out (see final report).
  - Strengthen operational capacity at the port of São Tomé — 2005/2006 — In progress — Report on the situation.
  - Preliminary study on the sectoral transportation strategy — 2005/2006 — Study completed on a structure of management and recommendation for the establishment of a Roads Fund.
  - Prepare and implement standards and regulations — 2005 — Norms elaborated and in place.
  - Monitor the activity of ferry operators — 2005/2007 — Report on the situation.
  - Start updating the inventory of rural roads — 2005/2007 — Inventory completed of the National Roads Network (see final report).
  - Develop the public service to lead the sector — 2005/2010 — In progress — Report on the situation.
  - Diversify existing products on the market — 2005/2010 — In progress — Cf. previous.

### Telecommunications
- Objectives/strategies:
  - Extend rural telephony.
  - Develop basic telephone service in rural areas.
  - Clarify the institutional scheme for management of the radioelectric space (control of use of the radioelectric spectrum, control of industrial equipment, licensing, etc.).
  - Expand and consolidate the telecommunication network.
  - Revise tariff policy—contract between the telecommunication company (CST) and the state.
  - Reduce costs of exploration and tariffs to assist in the development of enterprises.
  - Expand the Internet accessibility.
- Priority / Period / Current situation / Indicators:
  - Extend rural telephony — 2005/2010 — In progress — Extension obtained.
  - Clarify the institutional scheme for management of the radioelectric space — 2005 — Regulatory authority created.
  - Expand and consolidate the telecommunication network — 2005/2007 — In progress — Number of operators in service; Technical report on the situation.
  - Revise tariff policy — 2005 — Tariff policy revised.
  - Expand the Internet accessibility — 2005 — In progress — Technical report on the situation.

### Water and sanitation
- Objectives/strategies:
  - Update the master plan for water.
  - Increase the level of access to community water supply systems for the population (AAP), private connections, and drinking fountains.
  - Rehabilitate drinking water supply systems in urban areas.
  - Information, education, and communication (IEC) activities for health focusing on water use and conservation.
  - Regular chemical and bacteriological control of the public water system and microsystems supplying rural areas.
  - Develop infrastructures to remove polluted water and waste in the key urban centers.
  - Improve the quality of water, and particularly at the level of the water and power distribution company (EMAE) system.
  - IEC activities in the area of sanitation (latrines and septic tanks).
  - Capacity building for the EMAE (quality control, conservation, and repair of infrastructures; and commercial and financial management).
  - Install AAP microsystems in rural areas and pursue activities to rehabilitate supply systems for agricultural communities.
  - Strengthen the capacity to protect water sources quality control.
- Priority / Period / Current situation / Indicators:
  - Update the master plan for water — 2006 — Directive plan updated.
  - Rehabilitate drinking water supply systems in urban areas — 2005/2007 — Urban network improved — Number of families who benefited.
  - IEC activities for health focusing on water use and conservation — 2005 — In progress — Number of consciousness-raising actions carried out.
  - Regular chemical and bacteriological control — 2005 — Permanent — Technical report on the situation.
  - Develop infrastructures to remove polluted water and waste in the key urban centers — 2005 — Permanent — Cf. previous.
  - Improve the quality of water / EMAE system — (no separate period listed) — Cf. previous.
  - IEC activities in sanitation — 2005 — In progress — Cf previous.
  - Capacity building for EMAE — 2005 — In progress — Cf. previous.
  - Install AAP microsystems in rural areas — 2005/2007 — In progress — Cf. previous.
  - Strengthen the capacity to protect water sources quality control — 2006 — Cf. previous.
  - Regulate the legal framework for environmental conservation while ensuring that the following texts are enforced — 2005 — Diplomas regularly approved.

### Environment — Natural resources, coastal protection, protected areas
- Objectives/strategies:
  - Protect depleted soils.
  - Preserve forests that have undergone substantial degradation as the result of uncontrolled felling of trees.
  - Apply the international conventions on biodiversity, climate change, and desertification.
  - Regulation on the Law relating to the Extraction of Inerts.
  - Protect coasts damaged by the removal of sand for use in construction.
  - Regulation on the Law on Solid Waste.
  - Decree defining protected areas in the national territory.
  - Ratify international conventions such as the one governing trafficking in wildlife species.
  - Other measures in connection with the national environmental plan for sustainable development.
- Priority / Period / Current situation / Indicators:
  - Regulation on the Framework Law on the Environment — 2005 — Perspective of the Ministry of Natural Resources and Environment — Cf. previous.
  - Apply the international conventions — 2006 — Report on the observation of the Convention.
  - Regulation on the Law relating to the Extraction of Inerts — 2006 — Diplomas regularly approved.
  - Regulation on the Law on Solid Waste — 2005 — Diplomas regularly approved.
  - Decree defining protected areas — 2005/2006 — Decrete approved.
  - Ratify international conventions such as the one governing trafficking in wildlife species — 2005 — Conventions ratified.
  - Other measures linked to the national environmental plan for sustainable development — 2005/2010 — Report on the situation.

### Land management and rural development
- Objectives/strategies:
  - Study a legal statute governing different forms of land use, ownership, and exploration.
  - Revise the current land law.
  - Promote community involvement in participatory management of rural areas and the environment.
  - Implement a rural property register.
  - Improve the framework for legislation on and distribution of government land.
  - Prepare a land use plan for rural areas with participation of the beneficiaries of government land schemes.
  - Implement the program on participatory support for family farms and artisanal fishing activity (PAPAFPA)– IFAD financing.
- Priority / Period / Current situation / Indicators:
  - Study a legal statute governing different forms of land use — 2005/2006 — Study made.
  - Revise the current land law — 2005/2006 — Land Law revised.
  - Promote community involvement in participatory management of rural areas and the environment — 2005/2007 — Report on the development of rural communities.
  - Implement a rural property register — 2006/2007 — Rural cadastre made.
  - Prepare a land use plan for rural areas — 2006 — Plan of land use made.
  - Implement PAPAFPA — 2005-2010 — In progress — Report on the structural process of the rural areas that considers development according to gender, community, association and regional federation.

### Agriculture — Support to family farms and crop programs
- Objectives/strategies:
  - Increase income and reduce poverty in rural areas.
  - Support family farms in the development of Robusta and Arabica coffee growing (3,000 ha) and improvement of the relevant processing technology.
  - Study the “coconut chain” with a view to reviving plantations and development of production.
  - Support coconut palm plantation restoration (5,000 ha).
  - Support small farmers in production and marketing of peppers.
  - Feasibility study on production of odoriferous plants on family farms.
  - Study the “cocoa chain” with a view to organizing and developing inter-professional linkages.
  - Implement the program to replant shade trees on cocoa and coffee plantations (5,000 ha).
  - Implement the cocoa replanting program on small farms (2,000 ha).
  - Implement the replanting program for cocoa plantations (4,000 ha).
  - Program to support production and technology for biological cocoa processing (1,600 ha).
  - Develop rice and horticultural production.
- Priority / Period / Current situation / Indicators:
  - Support family farms — 2005-2007 — Report on family agriculture.
  - Study the “coconut chain” — 2006-2007 — Study made.
  - Support coconut palm plantation restoration (5,000 ha) — 2005-2010 — Report on the situation.
  - Support small farmers in peppers — 2005-2010 — In progress. With partial help of the Spanish Cooperation. — Report on the production and commercialization of pepper.
  - Feasibility study on odoriferous plants — 2005 — Study made.
  - Study the “cocoa chain” — 2005 — Study made.
  - Replant shade trees on cocoa and coffee plantations (5,000 ha) — 2005/2010 — Report on the re-planting of shade trees.
  - Cocoa replanting on small farms (2,000 ha) — 2005/2010 — Report on the planting of cocoa.
  - Replanting program for cocoa plantations (4,000 ha) — 2005/2008 — Cf. previous.
  - Program for biological cocoa processing (1,600 ha) — 2005/2010 — In progress; Specialized NGOs working with approximately 20 agricultural communities in north Sao Tome — Report on the production of biological cocoa.
  - Develop rice and horticultural production — 2005/2008.

*Conclusion of the rehabilitation constructions of 88 — National Strategy for Poverty Reduction (pages 46–51).*

### Conclusion        of        the        planting    and    technical    assistance  in  the  harvest  fields

### Conclusion of the planting and technical assistance in the harvest fields

### Agriculture and Livestock
- Project to support and develop family farm horticultural production and marketing: 2005/2008 — Report on the development of the project.
- Project to support and develop fruit production: 2005-2006 — In progress. With partial support of friendly nations.
- Project to support agricultural diversification and development of roots and tubers — Concluded.
- Support for development of tubers (cassava) and roots: 2005 — Cf. previous.
- Project to support development of livestock farming — Concluded. Report on the development of the project.
- Project to support the development of livestock farming (Phase II): 2005/2008 — Yet to begin. Cf. previous.
- Poultry farming project: 2005 — In progress. Cf. previous.
- Establishment of small abattoirs in the district capitals: 2005/2007 — Number of slaughter houses constructed and in operation (indicator).
- Study on technical and economic feasibility of privatizing veterinary medicine: 2005/2006 — Study made.
- Study on expansion of exports of small ruminants to Gabon: 2005 — Cf. previous.
- Project to use draft animals in 2005 — Project elaborated.
- Program for genetic improvement and selection of traditional short cycle breeds: 2005-2007 — In progress. Report on the development of the program.
- Revision of the livestock health and sanitary code to enhance the role of health and sanitary inspectors: 2006 — Code revised of livestock sanitation.
- Program to build and/or rehabilitate roads for production in rural communities and areas (85 Km): Phase 1 — In progress. With the support of the government of France and the European Union. Report on the development of the program.

### Forestry and Fisheries
- Implement a replanting program for export quality forest species: 2005-2008 — Report on the development of the program.
- Improve sawing and waste recycling technologies: 2005/2007 — Report on the techniques used.
- National forest inventory: 2007-2008 — Forrest inventory carried out.
- Prepare and implement hunting regulations: 2006 — Regulations made and approved on the use of forest resources.
- Strengthen the corps of forest rangers: 2005-2007 — Recruitment and training of 12 forest rangers.
- Enhance the technical and financial capacity of the Forestry Directorate for preparation and monitoring of programs: 2005/2007 — Report on the function and efficiency of the sector.
- Implement the Neves Fisheries Complex — Concluded. With support of Spanish cooperation. Wharf construction 50% concluded (See Annual Report of Activities).
- Import fishing equipment — Permanent — Invetory of imported fittings.
- Extend credit to private artisanal fishermen: 2005/2010 — In progress. Balance of credits granted.
- Construct and permanently use fish concentration devices (FCDs): 2005/2007 — In progress. Operational DCPS in beaches where fishermen participated in the initiative.
- Extend use of new types of canoe: 2005 — In progress. Report on the use of new types of canoes.
- Establish a database for the fisheries sector: 2005 — In progress by the Fishing Directive. Database installed for the collection of statistical data on fishing in the pilot beaches (Santa Catatrina and Neves, Angolares, Porto Alegre and Malanza, Gamboa Beach and Ponte Velha, Messias Alves Beach and Príncipe). Conclusion and presentation on the Annual Statistical Report on Fishing.
- Improve fish preservation and marketing (purchase of freezing facilities): 2005/2007 — In progress. Report on the situation.
- Institutional support for the Fisheries Directorate: 2005/2006 — In progress. Financed by the State General Budget. Report on the functioning and efficiency of the sector.
- Support for GIEPPA, the umbrella group for fishermen and fishmongers’ associations: 2005/2008 — In progress. Cf. previous.

### Rural Infrastructure, Research, and Extension
- Study on establishing more concentrated settlements: 2005/2007 — In progress. Study elaborated (social and economic infrastructure, water, street planning, environmental sanitation, electrification of rural areas).
- Enhance management capacity (SENAE): 2005/2007 — Only for coordination and follow-up activities. Report on the functioning and efficiency of the sector.
- Program to build and/or rehabilitate asphalt roads: 2005/2008 — With partial financing from the European Union. Cf. previous.
- Build and/or rehabilitate water supply systems in rural localities and communities: 2006/2008 — Report on the situation.
- Build and/or rehabilitate environmental sanitation systems: 2005/2008 — In progress. Cf. previous.
- Program to build housing in rural communities: 2005/2010 — In progress. Number of lodgings constructed.
- Study on the use of alternative construction materials to wood: 2005 — Study made.
- Support for the Agronomy and Technological Research Center (CIAT): 2005/2007 — Made compatible with the State’s General Budget. Report on the functioning and efficiency of the sector.
- Prepare a long term national plan for agrarian research: 2005 — Plan made.
- Program on conservation and restoration of soil fertility: 2005/2008 — Report on the development of the program.
- Program on basic training in agriculture for youth and adults in rural areas: 2005/2007 — Cf. previous.
- Literacy in rural areas: 2005/2007 — In progress. With partial support from the government of Brazil. Number of people who were taught how to read.
- Rehabilitate the center for quarantine and entry control for chemicals and products of animal origin: 2005 — In progress. Center rehabilitated.
- Study on potential for production, marketing, exploiting the value, and exporting domestic food products: 2005 — In coordination with the “Integrated Framework for Trade-Related Technical Assistance” of the World Bank. Study made.
- Project in support of women for processing and marketing of agricultural, livestock, and fisheries products: 2005 — Report on the development of the project.
- Support the development and consolidation of decentralized local savings and loan associations: 2005/2010 — Number of saving accounts in operation.
- Develop pilot projects and activities to provide incentives for youth and adolescents to settle in rural areas: 2005/2010 — Report on the actions taken.
- Support associations and cooperatives for small farmers: 2005/2010 — Balance of initiatives developed.
- Promote and support participatory agricultural, livestock, and fisheries extension work: 2005 — In progress. Report on the actions developed.

### Education and Training
- Ensure that all those of school age enroll, regularly attend and stay in school: 2005 — In progress. Indicators: Gross rate of primary schooling (by region, district, age and gender); Approval rate in the 4th grade; Repproval rate.
- Prevent students from dropping out of school: 2005 — In progress. Reactivation of the Global Nutritional Program (Reactivação do projecto do Programa Alimentar Mundial – PAM); bread and milk for the schools; school manuals; school stipends. Indicator: Rate of school dropouts.
- Build and equip classrooms and kindergartens to eliminate the three-shift system: 2005/2010 — In progress. Number of classrooms constructed and equipped by region and district.
- Produce schoolbooks: 2005 — In progress. Number of school manuals produced and distributed.
- Establish closer relations between schools and communities: 2005 — In progress. Number of initiatives made to bring schools and communities together.
- Implement a management information system (establish a database): 2005 — In progress. Database created.
- Train six-year basic education instructors: From 2006 — Number of teachers trained (item listed).
- Organize retraining for basic education instructors: 2005 — In progress. Number of training organized.
- Train trainers: 2005 — In progress. Number of trainers trained.
- Enhance the system of school assessment and inspection: 2005 — In progress. Report on evaluation and inspection.
- Establish criteria for payment of registration, enrollment, and fees: 2005 — In progress. Criteria defined for tuition payment, enrollment and fees. Indicators: Gross rate of schooling at the high school level; Number of professional training programs with the support of disadvantaged students.
- Assist the underprivileged with materials and exempt them from fees (scholarships, travel grants, and housing for students): 2005 — In progress. Number of students who benefited; Number of access to student dormitories.
- Construct and equip classrooms: 2005-2010 — Seeking funding. Report on the situation.
- Implement the twelfth year of education: From 2006 — In preparation with the support of friendly nations.
- Revise the legislative framework to include explicit provisions on the functions of the various units involved: 2005 — In progress. Legislative framework revised.
- Revise the Law on the Foundations of the Education System: 2005 — Seeking funding. Base Legislation on the Educational System revised.
- Institutionalize teaching careers: 2005/2006 — In preparation. Teacher training institutionalized.
- Institutionalize São Tomé and Principe associations responsible for education: 2005 — In preparation. Report on the situation.
- Train technical experts in statistical techniques for data analysis: 2005/2007 — Seeking funding. Number of experts trained.
- Complete school mapping: 2005 — In progress. School diploma completed.
- Train personnel in programming public expenditure on education: 2005 — Seeking funding. Number of personnel trained.
- Reformulate the school curriculum: 2005 — School curriculum reformulated.
- Improve the school assessment system: 2005 — Seeking technical support and funding. School evaluation system in the process of reformulation.
- Conduct a study on the illiteracy situation with a view to implementing a national literacy program: 2005 — In preparation. Study on illiteracy carried out.
- Train teachers to eradicate illiteracy: 2005-2007 — Number of training actions carried out; Number of teachers trained; Literacy rate (global, by gender, professional category); Number of adults who were taught to read.
- Produce literacy manuals: workbooks and other educational support materials: 2005 — Number of manuals produced and distributed.
- Broadcast radio programs to combat illiteracy: 2005 — Number of programs elaborated and distributed.
- Adopt a training program for trainers: 2005 — Program adopted for training trainers.
- Promote socioprofessional training initiatives for youth: 2005 — Seeking funding. Number of initiatives carried out for professional training.
- Establish partnerships in the framework of occupational training: 2005 — Seeking funding. Partnership agreements established.
- Coordinate all existing incentives: 2005 — Coordination level verified.
- Rehabilitate and restore existing training centers: 2005-2007 — Seeking funding. Number of professional training centers rehabilitated.
- Implement specialized training activities in crafts, trade, industry, agriculture, and tourism: 2005/2007 — Number of specialized training actions in progress; Number of participants engaged in specialized training actions in progress.

### Health, Nutrition, and Population
- Implement IEC activities in schools, health services, and communities: 2005/2007 — Seeking funding. Number of IEC actions developed.
- Broadcast and promote educational messages on health protection, nutrition, sexuality, reproductive health, and gender: 2005/2007 — In progress; seeking new partners. Number of educational messages produced and divulged.
- Conduct regular community information and education campaigns on health promotion and protection: 2005 — Number of target communities for the information and education campaigns.
- Involve the communities in health issues: 2005/2007 — Report on the situation.
- Revise the Organic Law on Health: 2005 — Cf. previous.
- Prepare and implement the Basic Law on Health: 2005/2006 — Basic health legislation in place.
- Revise legislation on pharmaceuticals and health financing mechanisms: 2005 — Pharmaceutical legislation revised and adopted.
- Gradually implement health infrastructure in the districts according to the health map: 2005/2007 — In progress. Number of infrastructures constructed and revised.
- Gradually provide the various health units with the required staff and equipment: 2005/2007 — In progress. Number of technical staff trained; Health centers equipped; Manuals and forms available in all health units.
- Gradually provide health units with low-cost essential medicines: 2005/2007 — In progress. Hospitals and Regional Health Centers equipped with essential medicines.
- Provide the National Health Service with cost recovery mechanisms: 2005/20007 — In progress. Accessibility of medicines at a low cost; Cost recovery mechanisms in place.
- Promote the establishment of health insurance systems as well as social insurance and mutual systems: 2005/2007 — Report on developed actions.
- Put the health information system into operation: 2005/2007 — Cf. previous.
- Establish incentives for private medical practice and enhance access to traditional medicine: 2005 — In progress. Actions of promotion developed.
- Establish health oversight and inspection services: 2005/2007 — Auditing and inspection services created.

FIGHT AGAINST MALARIA
- Adequately manage cases of malaria at all levels (public and private): 2005-2010 — In progress. Strategic plan adopted for the reduction of malaria. Indicators: Number of malaria cases registered/treated; Mortality rate / malaria.
- Epidemiological supervision of chemoprophylaxis for pregnant women and non-immune persons: 2005-2007 — Report on the available study. Malaria prevention in progress.
- Combat vectors through environmental sanitation, larvae destruction, and use of impregnated mosquito nets: 2005/2007 — In progress. Indicators include number of sanitary brigades in operation; Distribution of mosquito nets; Number of impregnated (chemically-treated) mosquito nets distributed; Number of spraying campaigns; Report on the study of popular acceptance.

FIGHT AGAINST STDs and HIV/AIDS
- Integrate activities against STDs with various services using the syndromic approach: 2005-2007 — Actions against the DSTs developed.
- Prepare the strategic plan to fight HIV/AIDS: 2005 — Concluded. (Awaiting approval and implementation) – seeking funding. Policy document and strategic plan elaborated / adopted.
- Conduct information and awareness campaigns: 2005/2007 — Indicators: Number of radio and television programs produced / divulged; Number of communities made aware; Number of consciousness-raising campaigns made.
- Increase condom use among youth, particularly in high-risk groups: 2005/2010 — In progress. Report on the situation.
- Acquire and distribute condoms: 2005 — In progress. Seeking for new partners. Number of condoms distributed.
- Purchase and distribute anti-retrovirals and increase accessibility to HIV-positive pregnant women to reduce vertical transmission: 2005/2007 — Seeking funding. Number of HIV-positive pregnant women who are part of the project/strategy.
- Provide counseling for carriers and patients with STDs and HIV/AIDS: 2005 — In progress. Number of carriers who will avail themselves counseling services; Number of people who pass on the decease unaware that they’re HIV positive.

FIGHT AGAINST TUBERCULOSIS
- Redefine the strategy to fight tuberculosis: 2005 — In progress. Policy and strategic plan document elaborated.
- Adequately manage tuberculosis cases at the community level: 2005/2007 — Number of detected / treated cases. Reports carried out on the counseling actions.
- Strengthen epidemiological capacity and monitoring: 2005/2007 — In progress. Indicators: Quantity of medicines, equipments and consumable products acquired; Number of technical staff trained.
- Prevention through BCG immunization (included in child health programs): 2005/2007 — In progress. Rate of vaccination coverage.

CHILDHOOD SURVIVAL and INTEGRATED CARE
- Implement the Integrated Management of Childhood Illness (IMCI) strategy in all health units, including activities to fight malaria: 2005 — Seeking new partners. Actions of the AIDI strategy in progress.
- Provide health units with essential medicines and oral rehydration serum in connection with the IMCI strategy: 2005 — Report on the development of actions.
- Provide infrastructure with equipment and materials for immunization and treatment: 2005/2007 — Seeking financing. Indicator: Childhood mortality rate (of children under 5 years of age).
- Prevention through immunization against the major childhood diseases: 2005 — In progress. Number of babies delivered assisted by qualified health personnel.
- Integrated activities to develop school health in partnership with the MEJC (Maternidade Escola Januário Cicco): 2005 — In preparation. Number of actions developed.
- Provide integrated reproductive health care in health units (prenatal, postnatal, contraception, STD/AIDS, nutrition, counseling, etc.): 2005-2007 — Partial support by the United Nations – seeking new partners. Indicators: Mortality rate of mothers; Number of pregnant women who use medical facilities; Number of baby deliveries assisted in medical facilities; Fertility rates by region and district.
- Strengthen basic obstetric care in the districts and improve the supply of emergency obstetric care: 2005 — Seeking funding. Report on the situation.
- Implement the strategy of double protection to reduce unwanted pregnancy and STD/AIDS: 2005/2007 — In progress. Report on the development of the strategy.
- Promote consumption of foods rich in iron, folic acid, and vitamin A, and periodic supplements for high-risk populations: 2005/2007 — In progress. Indicator: Rate of childhood mortality due to malnutrition (of children under the age of 5).
- Epidemiological and nutritional monitoring in all health units and communities: 2005/2007 — Number of children who benefited from the support of the nutritional recuperation program.
- Promote breast feeding exclusively to six months of age: 2005 — Number of children who benefited from the vitamin A supplements.
- Multi-sectorial integration for food and nutrition security issues: 2005/2007 — Report on the integration actions developed.
- Strengthen the intervention capacity of the central hospital: 2005 — Seeking financing. Indicators: Number of infrastructures rehabilitated; Quantity of medicines, consumable products and reactive agents acquired and available; Number of enabling actions carried out; Number of enabled frameworks.
- Equip the national health service with a reference and counter-reference system: 2005 — Made compatible with the framework of the State’s General Budget of 2005. Reference and counter-reference system in use.
- Prepare standards and mechanisms to monitor drinking water supply and environmental conservation efforts: 2005/2007 — Accompanying norms to the sanitary actions in use.

### Analysis, Monitoring, and Evaluation of Poverty
- Establish an NPRS coordination unit: 2005 — Proposal elaborated for the creation of an implementation structure; Dispatch proposal submitted to be approved. Legal diploma of the institutional framework for the implementation of the strategy (ENRP) approved by the Council of Ministers.
- Establish a network of cooperation with national technical experts to conduct specific consultations in the framework of the NPRS: 2005 — After the creation of the implementation structure. Report on the situation.
- Establish and periodically update a database on poverty in São Tomé and Principe: 2005 — With support of the PNUD. Expectations of DEVINFO use. Matrix elaborated of the measures and indicators (Execution Matrix) to evaluate the ENRP’s implementation. Mechanisms for monitoring and evaluation of the NPRS.
- Promote a framework for monitoring, evaluation, and periodic updating of the NPRS.
- Promote coordination of initiatives and activities under the NPRS: 2005 — Indication and/or designation carried out of antennas in the relevant ministries and institutions to guarantee the implementation process of the ENRP.
- Use the results of the general population and housing census (RGPH/2001) to define and assess the housing regime: 2005 — Report elaborated on the housing situation.
- Conduct a three-year assessment of changes in the housing situation: Every three years — Cf. previous.
- Update the weights used in the consumer price index (CPI): 2005 — Update made.
- Survey on household living conditions (ICVF): 2005 — Survey carried out.
- Implement a system of indicators to measure changes in the country’s health situation: 2005/2006 — Seeking funding. System of indicators established.
- Conduct studies on the impact of transportation expenditure on household budget expenditure of the poor: 2005/2006 — To be prepared by the National Institute of Statistics (Instituto Nacional de Estatística, INE). Studies made.
- Conduct studies on the physical or financial capital deficit affecting material poverty and the effort required to move above the poverty line: 2005/2007 — Seeking funding. Cf. previous.
- Conduct studies on the human capital deficit affecting material poverty and the effort required to move above the poverty line: 2005/2007 — Seeking funding. Cf. previous.
- Conduct studies on the social capital deficit and trends in social ties, social integration, social exclusion, and abandonment: 2005-2007 — Seeking funding. Cf. previous.
- Produce and disseminate social indicators on poverty trends: 2005/2007 — Indicators produced and divulged.
- Conduct a study on the influence of exogenous factors on national cultural practices and values: 2006/2007 — Seeking funding. Cf. previous.
- Conduct a study on the level of citizens’ involvement in major decisions and political participation: 20005/2006 — Seeking funding. Cf. previous.
- Conduct a study on the situation of moral and ethical values in society (violence, delinquency, corruption, loss of common values): 2005 — Seeking funding. Cf. previous.

*Conclusion of the planting and technical assistance in the harvest fields — National Strategy for Poverty Reduction (extracted content).*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2005/_cr05334.pdf_