## _cr1409 ## Source details **Canonical URL:** [_cr1409](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2014/_cr1409.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2014/_cr1409.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2014/_cr1409.pdf.json) --- ### Preface — poverty context, government responsibility, and vision - Poverty characterized as a scourge with economic, social, political, institutional, and cultural implications. - Government assumes responsibility to steer and oversee coordinated policies to combat poverty. - Second National Poverty Reduction Strategy (NPRS-II) period: 2012-2016; intended as a binding framework for priority actions. - Medium-term vision (2012-2016) aims for a country with: - "good government and strong and credible institutions"; - "a climate favorable to sustainable and integrated economic growth with income (re)distribution"; - "well trained human resources equal to development challenges"; - "valued cultural assets and guaranteed equal opportunity for both genders". - General strategic objectives for 2012-2016: - achieve a GDP growth rate of at least 6 percent; - reduce the percentage of the São Tomean population living in poverty by 10 percent; - provide (easier and improved) access to basic social services for the entire population. ### Poverty profile, methodologies, and baseline facts - Two HCS 2010 methodologies: - average income method: - national incidence of poverty fell from 53.8 percent (2000) to 49.6 percent (2010); - depth of poverty fell from 19.2 percent (2000) to 15.9 percent (2010); - poverty line values: STD 2,638,618 (2000, relative poverty) and STD 8,680,490 (2010, relative poverty). - cost-of-basic-needs method: - 66.2 percent of the São Tomean population is poor (living on less than STD 30,000 per day per capita). - District and demographic highlights (HCS 2010 / selected): - RAP incidence: 60.1 → 58.5; depth: 24.1 → 20.6; severity: 12.1 → 9.3. - Água Grande incidence increased from 39.4 percent (2000) to 52.0 percent (2010). - Mé-Zochi incidence reduced from 58.9 percent (2000) to 38.0 percent (2010). - Poverty remains very high (>50 percent) in Caué, Lembá, and Lobata. - 2010 relative-poverty (poverty line STD 10,975,730) national indicators: P0 66.2 percent; P1 24.8; P2 12.0. - Female-headed households incidence of poverty: 71.3 percent; male-headed: 63.4 percent. - Self-employed agricultural private sector: 68.4 percent incidence of poverty. - Self-employed non-agricultural private sector: 67.7 percent incidence of poverty. - Income inequality: - Gini index fell from 49 percent (2000) to 32.9 percent (2010). ### Lessons from NPRS-I and participatory preparation of NPRS‑II - NPRS-I produced unsatisfactory results; causes: insufficient financial resources, political-institutional instability, absence of coordination and monitoring structure. - NPRS-II informed by participatory process including national, regional, district institutions, NGOs, technical and financial partners, private sector, and organized civil society. - UNDP provided support and close monitoring during design and production. ### Four strategic pillars and priority program areas (overview) - Pillar I — Reforming public institutions and strengthening good governance: - objectives include functioning institutions, political stability, transparency, accountability, public financial management reform, and improved coordination of official development assistance. - Pillar II — Promoting integrated and sustainable economic growth: - priority to restore primary sector (agriculture, livestock, fishing, tourism), generate employment and income; 66 percent of population affected by absolute poverty noted. - Pillar III — Developing human capital and improving basic social services: - strengthen education, training, and health. - Pillar IV — Strengthening social cohesion and the social safety net: - reduce social inequalities, support vulnerable groups, assist victims of disasters, and guarantee gender equality. ### Pillar I — Priority programs and measures (selected) - Restructuring government and public administration: - create national council and technical office for reform; reorganize National Assembly; computerize government services; introduce public services evaluation systems. - Promoting local governance: - revise political-administrative division; update Local Finances Law; improve local access to financial resources. - Promoting national defense and public safety: - retool security forces; decentralize military services; strengthen police training; create mechanisms to combat organized crime, human trafficking, drug trafficking. - Reforming electoral system and improving credibility/access to justice: - revise election financing laws; modernize legislative and judicial framework; increase number of judges and magistrates. - Public financial management and ODA effectiveness: - strengthen anti-fraud and AML mechanisms; redirect expenditures to poverty-reducing sectors; create integrated ODA information system; develop public debt strategy. - Information systems and citizen participation: - strengthen statistical capacity; expand ICT access; improve media legal framework; promote civil society participation. ### Pillar II — Promoting sustainable and integrated economic growth (selected programs) - Developing the primary sector: - Programs for export crops, animal production, fish production, environment protection, and food security (detailed measures: decentralize services, microcredit, processing/preservation infrastructure, sanitary controls, research centers). - Private sector and tertiary sector measures: - incentives for SMEs; revise tax and labor frameworks; create export/investment promotion agency; tourism development (hotel school, legislation, incentives). - Infrastructure: - road network maintenance; maritime infrastructures (deep-water port study budgeted at US$475,990); airport modernization including runway of at least 1,800 meters in Príncipe. - Energy and telecommunications: - increase installed capacity; pursue renewable energy projects; strengthen EMAE; fiber optics expected to modernize telecommunications starting in 2012. - Microfinance: - national committee and microfinance support fund; legal/regulatory framework for microfinance. ### Pillar III — Human capital, health, education, water, sanitation (selected programs) - Education targets and measures: - guarantee completion of basic education by 2016; expand preschool; improve teacher training; implement 12th grade across public system; expand vocational training and align to labor market. - Health and WASH: - construct/rehabilitate hospitals and health centers; train and hire medical staff; improve maternity services; rehabilitate and expand water supply networks; approve a water code; improve sanitation and construct latrines and sewer systems. - Targets include guaranteeing by 2016 that 100 percent of the population has access to quality basic health services. ### Pillar IV — Social cohesion and social protection (selected) - Objective: social inclusion for vulnerable groups, assistance in disasters, care for seniors, combat child labor and gender-based violence, promote gender equality. - Program measures: National Strategy for Social Protection; budgeted operating plan with secure financing sources; training of public service staff in social sphere. ### Macroeconomic framework and scenarios (2012-2016) - Two scenarios: - Baseline (oil) scenario: start-up of oil production and exports in 2015. - Alternative (nonoil) scenario: no oil production or exports. - Common monetary assumption: nominal exchange rate pegged to the euro at STD 24,500 to EUR 1. - Oil scenario (selected projections): - growth rises to 6 percent by 2014; GDP growth close to 25 percent in 2015 with oil start-up. - inflation: 14.3 percent (2011) → about 9 percent (2012) → about 3 percent by 2015. - government aims to stabilize domestic primary deficit at about 3 percent of GDP by 2014. - external current account deficit expected to remain large around oil start-up due to US$200 million oil-related investments. - Nonoil scenario (selected projections): - growth projection: "0.5 percent of GDP, less than under the oil scenario, in 2013-14"; long-term steady growth ~5.5 percent conditional on policies. - target domestic primary deficit: about 2 percent of GDP to 2016. - credit to private sector growth projected at about 8 percent per year (2012-2016). - gross international reserves consistent with ~4 months of imports; monetary base growth averaging about 11 percent per annum. ### Principal macroeconomic projections and key numeric indicators (selected) - GDP growth (annual %): 2007 6.0; 2008 9.1; 2009 4.0; 2010 4.5; 2011 4.9; 2012 5.5; 2013 6.0; 2014 6.0; 2015 24.9; 2016 4.1. - Consumer prices, end of period (annual % change): 2007 27.6; 2008 24.8; 2009 16.1; 2010 12.9; 2011 11.9; 2012 6.0; 2013 4.0; 2014 3.0; 2015 3.0; 2016 3.0. - Exports, FOB (US$ million): 2007 6.8; 2008 7.8; 2009 9.2; 2010 12.0; 2011 13.6; 2012 14.5; 2013 15.2; 2014 15.7; 2015 164.9; 2016 163.7. - Imports, FOB (US$ million): 2007 64.9; 2008 92.2; 2009 83.8; 2010 99.4; 2011 109.9; 2012 117.4; 2013 127.9; 2014 137.0; 2015 188.3; 2016 198.6. - Gross foreign reserves (US$ million): 2007 22.5; 2008 40.9; 2009 43.7; 2010 37.9; 2011 32.7; 2012 34.1; 2013 38.4; 2014 40.7; 2015 55.8; 2016 59.6. - Domestic primary balance (percent of GDP): 2007 -8.5; 2008 -7.0; 2009 -8.0; 2010 -4.1; 2011 -3.5; 2012 -3.4; 2013 -3.3; 2014 -3.0; 2015 -5.8; 2016 -5.8. - Total revenue (US$ million): 2007 374; 2008 451; 2009 529; 2010 698; 2011 770; 2012 895; 2013 1,012; 2014 1,138; 2015 1,311; 2016 1,418. - Total expenditure (US$ million): 2007 783; 2008 841; 2009 1,587; 2010 1,824; 2011 2,075; 2012 1,972; 2013 1,931; 2014 2,070; 2015 2,202; 2016 2,263. ### Key sectoral and social statistics (selected) - Poverty incidence: 66.2 percent (cost-of-basic-needs, HCS 2010). - Unemployment rates (selected years): 2002 16.0; 2003 15.1; 2004 15.0; 2005 14.8; 2006 14.2; 2007 14.2; 2008 13.9. - Underemployment rates (selected years): 2002 9.1; 2003 7.6; 2004 9.5; 2005 14.7; 2006 13.5; 2007 12.3; 2008 13.0. - Agriculture: contributes about 17.2 percent of GDP (average 2002-2011); share of working population directly dependent on agriculture: 26.2 percent. - Fishing: accounts for 4 percent to 4.7 percent of GDP; about 2,500 small-scale fishermen; potential estimated production: 12,000 metric tons per year. - Energy access and capacity: - EMAE network: 27,000 customers; - Electricity access: about 62 percent of residences; electricity production share hydro: 5 percent (baseline) → target 10 percent. - Tourism: accounted for 4 percent of GDP; accommodation in 2010: 517 rooms and 842 beds; number of visitors: total 7,104 in 2010; peak 15,736 in 2005. - Education indicators (selected): - Gross rate of admission to basic education: 117 (2009); - Net rate of enrollment in basic education: 118 (2010/11); - Completion rate – basic education: 86 (2010/11). - Health indicators (selected): - Infant mortality rate: 38 (IDS-STP; 2008-2009); - Mortality rate among children under 5: 63 (IDS-STP; 2008-2009); - Maternal mortality rate: 158 (IDS-STP; 2008-2009); - Proportion of births assisted by health care personnel: 94.6 (MS-SR; 2008). ### Key medium-term vulnerabilities and implementation recommendations - Risks identified: - failure to discover commercially viable petroleum in the JDZ and EEZ; - persistent financial and economic problems in Europe, especially Eurozone recession risk; - shocks in global food and fuel prices. - Implementation recommendations: - update and improve execution, monitoring, and evaluation mechanism including redefinition of organizational framework; - enhance human, material, and financial resources for the Poverty Reduction Observatory and the monitoring mechanism; - amend Decree-Law 32/2005 to incorporate Aid Coordination Unit and Budget Directorate, redefine focal points, and strengthen accountability for data collection and dissemination. - Interim evaluation scheduled in 2014 to assess alignment and degree of achievement and adjust interventions. ### Implementation, monitoring, and evaluation (institutional architecture) - Amended mechanism to include: - Ministerial Council (chaired by Prime Minister or Minister for Planning); - National Consultative Council (meets at least twice a year); - Technical Coordination Commission (meets quarterly; co-chaired by Director of the Poverty Reduction Observatory and Director of Planning); - Poverty Reduction Observatory (technical body to be strengthened); - Focal points at sector, regional (Autonomous Region of Príncipe), and district levels (meet quarterly). - Monitoring and evaluation system: - two levels: (A) higher-level strategic monitoring and (B) sector/district/regional monitoring. - dissemination channels: periodic reports; dissemination seminars; radio and television programs; publications; website updates. - results-based management principle applied across planning, implementation, monitoring, and evaluation. - Monitoring and Evaluation Framework provides numerical baselines and targets across pillars (selected examples preserved in source). *PREFACE, National Poverty Reduction Strategy II, 2012-2016* ### PREFACE ### _cr1409 - PREFACE ### Poverty context and government responsibility - Poverty is described as a scourge with economic, social, political, institutional, and cultural implications that can reproduce its causes and effects and be hard to eradicate. - The Government of the Democratic Republic of São Tomé and Príncipe assumes responsibility to steer and oversee coordinated policies to combat poverty, ensuring efforts mitigate causes of poverty and reduce effects on the most vulnerable and needy groups. - The Second National Poverty Reduction Strategy (NPRS-II) covers the period 2012-2016 and is intended as a binding framework for priority actions to gradually lower the country’s poverty indices. ### Lessons from NPRS-I and participatory preparation of NPRS‑II - The First National Poverty Reduction Strategy (NPRS-I) produced unsatisfactory results; accountability mechanisms will be activated at various levels to improve governance and attract development partner interest. - NPRS-II is informed by the participatory process that guided NPRS‑I and reconciles national aspirations with inputs from national, regional, and district public institutions; nongovernmental organizations; technical and financial partners; the private sector; and organized civil society. - Acknowledgement of support: United Nations Development Programme (UNDP) provided support and close monitoring during design and production. ### Medium-term vision and general strategic objectives (2012-2016) - Medium-term vision assumes continued government action and envisages São Tomé and Príncipe as a country with: - good government and strong and credible institutions; - a climate favorable to sustainable and integrated economic growth with income (re)distribution; - well trained human resources equal to development challenges; - valued cultural assets and guaranteed equal opportunity for both genders. - General strategic objectives for 2012-2016: - achieving a GDP growth rate of at least 6 percent (creating the conditions for consistent diversification of the economy); - reducing the percentage of the São Tomean population living in poverty by 10 percent (promoting income generating initiatives so as to improve the economy’s productive capacity); - providing (easier and improved) access to basic social services for the entire population. ### Four strategic pillars and priority program areas - Pillar I – Reforming public institutions and strengthening the strategy of good governance: - create conditions for institutions to function optimally, guarantee political stability, and ensure transparency and accountability; - cover government institutions, public administration, credibility and swiftness of justice, and public financial management; - improve coordination and management of official development assistance in compliance with the Paris Declaration. - Pillar II – Promoting integrated and sustainable economic growth: - promote sustainable economic growth to generate employment and income to reduce absolute poverty, which affects 66 percent of the São Tomean population; - restore the primary sector as the driver of domestic production (agriculture, livestock, fishing, tourism); - establish infrastructure to revitalize the productive sector and attract foreign direct investment. - Pillar III – Developing human capital and improving basic social services: - strengthen education, training, and health to produce better trained human resources for development. - Pillar IV – Strengthening social cohesion and the social safety net: - reduce social inequalities, support social integration for vulnerable groups, provide assistance to victims of catastrophes and natural disasters, assist underprivileged persons without employment, and guarantee equality of opportunity across gender lines. ### Targets, past commitments, and baseline facts - Historical targets from NPRS-I: reduce percentage of population living in poverty (53.8 percent) by half in 2010 and by two-thirds in 2015; decrease extreme poverty from 15.1 percent to 4.9 percent. - Stated current absolute poverty incidence in the Executive Summary: 66 percent of the São Tomean population. ### Macroeconomic framework and scenarios (2012-2016) - Two scenarios are presented: - Baseline (oil) scenario: projects start-up of oil production and exports in 2015. - Alternative (nonoil) scenario: projects no oil production or exports. - Common monetary assumption for both scenarios: - nominal exchange rate pegged to the euro at the rate of STD 24,500 to € 1. - Budget projections assume the government remains current on energy supply payments through strong fiscal discipline, structural reforms of the EMAE, and adoption of a mechanism to automatically adjust retail fuel prices. - Main features and fiscal targets: - Oil scenario: - growth would rise to 6 percent by 2014 then take off with the start-up of oil production and exports; - inflation would decline into the single digits; - government aims to stabilize the domestic primary deficit at 3 percent of GDP by 2014 given the available financing; - the current account deficit would therefore decrease. - Nonoil scenario: - projected growth rate is lower than in the oil scenario; - budget financing will be limited and the government will have to adopt more restrictive budget policies; - target domestic primary deficit of around 2 percent of GDP. ### Key medium-term vulnerabilities and implementation recommendations - Identified risks to coherent implementation: - slower-than-expected GDP growth; - persistent financial and economic problems in Europe; - international price shocks. - Proposed improvements to ensure compliance with programs: - update and improve the execution, monitoring, and evaluation mechanism, including redefinition of the organizational framework and enhanced human, material, and financial resources for its operation. *PREFACE, National Poverty Reduction Strategy II, 2012-2016* ### 1. Prior considerations ### 1. Prior considerations ### Background and overarching objectives of NPRS-I - São Tomé and Príncipe prepared its first National Poverty Reduction Strategy Paper in 2002 and submitted a Priority Action Program (PAP) for 2006-2008 to the Brussels Roundtable in December 2005. - The first National Poverty Reduction Strategy aimed to attain the following overall objectives: - achieving a GDP growth rate of 5 percent from 2003; - reducing the percentage of the São Tomean population living in poverty by half in 2010, and by two-thirds in 2015; - providing access to basic social services for the entire population by 2015 and fostering an improvement in living standards; - considerably reducing social and gender differences between the districts, between the districts and the Autonomous Region of Príncipe, and between urban and rural populations; - promoting institutional capacity building and a policy of good governance. - The National Poverty Reduction Strategy Paper was validated at the National Seminar on December 10, 2002, approved by decree on December 19, 2002 and promulgated by the President on January 23, 2003. - Implementation shortcomings, changing data and information, and evolving financing needs motivated preparation of an updated National Poverty Reduction Strategy (NPRS-II) to refocus poverty reduction interventions over 2012-2016. - NPRS-II was designed to reflect participatory drafting, coordinate with previous policy and planning instruments (National Long-Term Perspective Study, Priority Action Programs, Government Programs, Major Planning Options, Development Plan for the Autonomous Region of Príncipe), and align actions with the Millennium Development Goals (MDG). ### Overview of NPRS-I implementation (findings and constraints) - Although NPRS-I preparation used a participatory approach, implementation indicators show limited mobilization of the country and partners. - The NPRS-I approved in 2002 included an initial Action Plan (2003-2005) but was not effectively implemented in the following three years due to: - insufficient financial resources; - periods of political-institutional instability affecting stakeholder ownership; - absence of a coordination and monitoring structure. - Some sectoral projects in annual PIPs were partially executed and contributed to improving living conditions among the poorest segments. - In 2005 a coordination, monitoring, and evaluation structure was created by Decree 32/2005 (including a Poverty Reduction Observatory (PRO)), and a roundtable with donors improved PAP execution terms. - Sectoral roundtables were held in São Tomé in December 2006 and a Coordination Meeting in Santo António (Autonomous Region of Príncipe) in October 2007. - Key constraints that led to poor performance of PAP (2006-2008) and NPRS-I: - insufficient ownership by the government of the technical sectors; - absence of a dynamic communications strategy to disseminate NPRS-I; - dysfunctional coordination apparatus and insufficient technical and financial support for the PRO; - poor coordination between government planning and implementation instruments (NPRS-I, Government Program, Major Planning Options, General State Budget (OGE)); - some sectors lacked properly defined and coordinated sectoral strategies to ensure consistency with national objectives. ### Features of the poverty profile (methodologies and key statistics) - Two methodologies used in the second Household Consumption Survey (HCS) 2010: average income and cost of basic needs. - Using the average income method: - national incidence of poverty fell from 53.8 percent in 2000 to 49.6 percent in 2010 (a reduction of 4.2 percentage points); - depth of poverty fell from 19.2 percent in 2000 to 15.9 percent in 2010; - poverty line values reported: STD 2,638,618 (2000, relative poverty) and STD 8,680,490 (2010, relative poverty). - Using the cost-of-basic-needs method: - 66.2 percent of the São Tomean population is poor (living on less than STD 30,000 per day per capita). - District-level and regional changes (average income method): - Autonomous Region of Príncipe (RAP): incidence of poverty declined from 60.1 percent to 58.5 percent; depth from 24.1 percent to 20.6 percent; severity from 12.1 percent to 9.3 percent. - Poverty was reduced in every district except Água Grande (which increased from 39.4 percent in 2000 to 52.0 percent in 2010). - Greatest reduction occurred in Mé-Zochi (from 58.9 percent in 2000 to 38.0 percent in 2010). - Poverty remains very high (>50 percent) in Caué, Lembá, and Lobata (average-income-based poverty line STD 24,000 per person per day). - 2010 relative-poverty (poverty line STD 10,975,730) distribution (selected indicators reported): - National incidence of poverty (P0): 66.2 percent; depth (P1): 24.8; severity (P2): 12.0. - By district (incidence P0): Caué 84.5 percent, Lembá 73.7 percent, Água-Grande 68.3 percent, Lobata 67.8 percent. - Gender and household headship (HCS 2010): - Households headed by women: 71.3 percent incidence of poverty. - Households headed by men: 63.4 percent incidence of poverty. - Female-headed households are largely single mothers with little education and incomes mainly from agriculture or the informal sector; higher incidence, depth, and severity of poverty observed among female-headed households. - Socioeconomic group and employment findings: - Self-employed workers in the agricultural private sector: 68.4 percent incidence of poverty. - Self-employed workers in the non-agricultural private sector: 67.7 percent incidence of poverty. - One in every three jobs that employ poor persons has a monthly salary of less than one minimum wage (STD 822,255); for nonpoor people, one in every four jobs pays less than one minimum wage. - Unemployment rates: about 18.4 percent of the poor population and 9 percent of the nonpoor population nationally are unemployed. - Agua Grande and Mé-Zóchi have high unemployment rates; Caué (poorest district) has a low unemployment rate. - Household spending on health and education (average shares of total expenditure): - National averages: education 3.5 percent; health 2.8 percent. - By district: education shares (examples) — Água-Grande 3.7 percent, Mé-Zochi 3.4 percent, Príncipe 1.6 percent, Lembá 5.0 percent. - By district: health shares (examples) — Água-Grande 3.0 percent, Mé-Zochi 3.2 percent, Príncipe 1.0 percent, Lembá 3.8 percent. - Poorer districts tend to spend less on health and education, with some exceptions (Lobata spends a greater percentage on health and education than some equally poor districts). RAP inhabitants spend 1.5 percent on health and 1.8 percent on education on average. - Literacy rates by poverty status (HCS 2010): - National literacy: Poor 86.7 percent; Nonpoor 89.4 percent. - By gender: Male poor 93.5 percent; Male nonpoor 94.4 percent; Female poor 80.6 percent; Female nonpoor 84.5 percent. - District examples: Caué poor 77.2 percent; Lembá poor 78.5 percent. - Males have higher literacy rates than females in both poor and nonpoor groups. - Income inequality: - Gini index fell from 49 percent in 2000 to 32.9 percent in 2010, indicating improved income distribution in favor of the poor, attributed to programs promoting income-generating activities and improved productive capacity for the poor. *Source: National Poverty Reduction Strategy II, 2012-2016 (sections 1–3, HCS 2000 and 2010, INE STP)* ### 4. Overview of the current situation ### 4. Overview of the current situation ### 4.1. Good governance and management of public assets - Good governance remains a major challenge for São Tomé e Príncipe despite "considerable advances in the past 20 years" affirming democracy and commitment to principles of good governance in public asset management. - Operationalization of governance principles faces structural constraints limiting progress: maturity of the political system, greater supervision of the executive, modernization of government administration, access to justice, effectiveness and transparency in public financial management. ### 4.1.1. Political governance - Constitutional framework: "The Constitution of the Republic has a coherent frame of reference" providing prerequisites for a democratic society; multiparty elections are "being conducted satisfactorily" and freedom of press and expression exists. - Access to laws and deliberations: Citizens access laws through Diário da República; National Assembly deliberations via public seating, publication of Assembly journals on the Internet, and direct radio broadcasting. - Need for legal modernization: "The legal framework in São Tomé and Príncipe needs to be modernized in a number of areas" (examples include gender parity legislation and national legal/institutional framework for NGOs). - Political instability: - "Four changes in five years" in government over the last decade led to frequent executive changes, shifts in ministerial teams, altered priorities, and abandonment of projects, undermining continuity of reforms. - Imbalances between executive and parliament: - Parliament's legislative and oversight functions are "scarcely practiced"; most legislation is initiated by the executive. - Deliberation and approval of draft laws is slow; many bills do not reach a general vote. - Parliamentary debate on development options and oversight by specialized committees is inadequate. - Failure to monitor regulations governing deputies: - "No structure was created to guarantee compliance" with regulations on incompatibility, incapacity, ineligibility, lifting immunity, conflicts of interest. - Concerns about role boundaries since "deputies often work as civil servants as well." - Restrictions on the media: - Operational constraints include insufficient human resources, lack of equipment, unreliable financing, and absence of specific legislation classifying journalists. - Small country size and overlapping family, social, and political relationships influence freedom of expression. ### 4.1.1.1. National security and defense - Strategic need: Drug trafficking, arms smuggling, terrorism, piracy, degradation of marine resources, human trafficking, and money laundering require reorientation of defense and security policy to address new threats. - State objective: Develop an overall strategy to promote systemic changes and reforms in security and defense forces and services to meet modern challenges. - Government focus: - Managing training activities under a project "grounded in criteria geared towards the acquisition of new knowledge in different areas of police and military expertise." - Developing a retooling project tailored to existing threats and risks and their manifestations. ### 4.1.2. Judicial governance - Constitutional guarantee: The 2003 Constitution "reaffirms the fundamental principles of the rule of law and guarantees the independence of the judicial branch." - Systemic flaws: Persistent flaws negatively affect economic activity (limited capacity to enforce rights of economic operators) and citizens (hard-to-access judicial services); lack of confidence deters loans and foreign investment. - Outdated legal framework: - Many legal instruments date to the colonial era. - Recent and ongoing revisions: Commercial Code revised in 2009; Criminal Procedure Code promulgated in 2009; Civil Code, Code of Civil Procedure, Administrative Litigation Code, Court Costs Code, Penal Code (in the process of approval). - "After the national meeting on justice (November 2009), a new law on the judicial system took effect." - Several texts still require overhaul, notably the land title code (1967) and the Civil Registration Code (1969). - Deficit in the administration of justice: Causes include - (i) underequipped and understaffed courts; - (ii) organizational weaknesses and human resource deficiencies among attorneys; - (iii) frequent interference by political or economic branches in judicial processes; - (iv) weakness of existing supervisory mechanisms. ### 4.1.3. Administrative governance - Public administration characteristics: Underdeveloped, cumbersome in bureaucracy, and overly centralized despite the country's small size and repeated reform attempts. - Structural problems: - Insufficient professional training or qualifications of personnel. - Poor facilities and under-utilization of information and communication technologies. - Low salaries and no career development. - Poor distribution of human and material resources; lack of work discipline; limited use and imposition of penalties. - Excessive concentration of responsibilities and decisions. ### 4.1.4. Local governance - Decentralization history: Launched in the 1990s with framework law for local authorities; first municipal elections in December 1994. - Territorial administrative division: Six (6) districts on São Tomé (Agua Grande, Mé-Zochi, Cantagalo, Caué, Lembá, and Lobata) and an Autonomous Region for the island of Príncipe. - Deficiencies in local administration effectiveness: Reasons include - Lack of commitment by authorities to decentralization and prioritization. - For "10 more than years, local institutions had no authority"; after 1994 elections "no new elections were held until August 2006." The last local elections were held in 2010. - Local authorities lack planning and monitoring resources or instruments for drafting local development plans. - Serious shortage of financial resources and institutional capacity limits service delivery. - Specific provisions of the law on oil resource management intended to build local financial capacity remain "good intentions." ### 4.1.5. Financial governance and transparency in public financial management - Reform process: In 2005 authorities began a far-reaching process of public financial reform focused on building human resource capacity and developing an integrated computer system (SAFINHO), and modernizing the legal and regulatory framework. - Legislative outcome: Adoption in 2007 of the Law on the Government Financial Management System (SAFE), which replaced the previous organic law on public financial management dating back to (text ends). *Source: _cr1409 - 4. Overview of the current situation* ### 1986. The implementation of the SAFE-e made it possible to improve the quality of financial and ### _cr1409 - 1986. The implementation of the SAFE-e made it possible to improve the quality of financial and ### Public financial management and transparency - Implementation of the SAFE-e improved the quality of financial and budget information. - A new budget classifier and special coding to track pro-poor spending were introduced in 2008. - Reforms undertaken in cash management and cash flow planning. - Public procurement reform based on new legislation (auctions and government contracts) has begun to yield encouraging results. - Critical weaknesses persist in public financial management, with accountability the most critical point: - The Court of Audit, established in 2003, has never issued an opinion on the General Government Account because the executive branch has never submitted annual accounts at the end of the fiscal year. - Lack of transparency limits effective mobilization of resources and undermines development partner confidence. - Actions taken: - Establishment of the Public Accounting Directorate and steps to prepare and publish the General Government Account for FY 2010 and subsequent years. - Training of national experts in government accounting to improve reporting in line with internationally accepted best practices. - Capacity gaps identified: - Need to strengthen the Property Directorate to inventory nonfinancial assets. - Treasury Directorate should develop ability to present stock data on financial assets and liabilities to improve fiscal sustainability risk forecasting. ### Anti-corruption and anti–money laundering - Corruption is a growing phenomenon; São Tomé and Príncipe’s performance in the Corruption Perceptions Index is described as a very critical situation. - Specific law approved in 2008: Law 15/2008 on Money Laundering and the Financing of Terrorism. - Footnote data (2009 CPI dissemination by Transparency International): - The Corruption Perceptions Index, disseminated in 2009, ranks the Democratic Republic of STP 111th out of a list of 180 countries. - The country does not appear in the 2010 report. - Its corruption index is 3 on a scale of 0 to 10. ### Oil sector governance and transparency - Law on Oil Revenue Management approved in 2004 by the National Assembly. - Regulations governing use of revenue related to oil exploration and production activities created in 2004. - Creation of the National Petroleum Agency (ANP) also in 2004. - Despite disqualification from the Extractive Industries Transparency Initiative (EITI) for reasons beyond the country’s control, transparency has improved with: - Creation of the Petroleum Supervisory Commission (2006). - Creation of the Public Registration and Information Office (2007). ### Fiscal policy orientation and expanding the tax base - International financial crisis shifted external aid composition toward bilateral loans; recommendation to gradually replace loans with foreign private investment (non-debt financing) — not realistic in the short term. - Need to use official resources efficiently to create conditions for foreign private capital. - Urgent supply-side restructuring to attract FDI via budget policy measures to enhance incentives and investment in ports, airports, telecommunications, and energy. - Concessions to foreign private investors facilitated government port and airport investment programs. - Fiber optics expected to modernize telecommunications services starting in 2012. - Measures to privatize energy infrastructure are being considered to make water and energy supply more competitive and efficient. - Importance of property rights and safeguards to attract long-term foreign investment. - Improved business climate per Doing Business 2012; government intends to continue consolidating macroeconomic reforms to reduce country and exchange rate risk. ### Macroeconomic framework — growth and sector contributions - Overall change (last 10 years): Average real GDP growth rate of 5.2 percent. - Compared to Sub-Saharan Africa average: 4.8 percent. - Growth drivers identified: - Increase in inflows of foreign funding, especially Foreign Direct Investment (FDI), with promise of oil production. - Reallocation of resources from less productive uses (agriculture) to more productive purposes (services). - Primary sector experienced persistent decline, particularly cocoa production. - Since 2008, growth held back by international economic and financial crisis; rise in international food and petroleum prices affected household demand and domestic production costs; decrease in FDI in construction and tourism and in ODA. - Sectoral averages and contributions (2002–2011): - Tertiary sector: grew on average by 6 percent; represents 66.4 percent of GDP. - Secondary sector: represents on average 16.4 percent of GDP; grew on average by 2.6 percent. - Primary sector: grew on average by 2.3 percent; contributes 17.2 percent of GDP. - Table 6 (São Tomé and Príncipe: Real GDP growth by sector activity and sectoral contribution to GDP (%)) — selected values preserved as in source: - Primary Sector (2002–2010 row excerpt): 0.01, 2.42, 1.65, 0.72, 1.14, 10.38, 8.01, -4.10, 0.26, 2.05; Avg. (2002-2011) Contrib. to GDP (2002-2011): 17.20 - Secondary Sector (2002–2010 row excerpt): -9.89, 6.49, 5.55, -3.94, 14.75, 4.41, 0.49, 1.77, 3.30, 2.29; Contrib. to GDP: 16.36 - Tertiary Sector (2002–2010 row excerpt): 5.59, 7.36, 4.78, 3.18, 12.73, -0.91, 10.24, 6.19, 5.44, 5.46; Contrib. to GDP: 66.44 - Source for table: INE ### Inflation, monetary policy, and exchange rate - Inflation on the decline since 2009, trending toward more sustainable single-digit levels. - Less volatility in the nominal effective exchange rate provided space for the Central Bank to reduce the reference interest rate starting in 2009. - Expansionary and countercyclical monetary policy aimed at stimulating the economy during slowdown. - Decline in interest rates related to depreciation, albeit less volatile, of the NEER. - By 2009 NEER volatility was much reduced; Exchange Parity Agreement implemented in January 2010 reaffirmed narrow band of fluctuation. - Resulting REER appreciation starting in 2009 due to sufficiently high inflation despite downward trend. ### Public finance, primary balance, and fiscal sustainability - Primary deficit trended downwards since 2005; temporarily reversed in 2009 due to exceptional domestic financing/privatization resources used for countercyclical fiscal policies to stabilize social investment spending. - From that period onwards the deficit approached sustainable levels of 3 percent of GDP based on stricter resource management. - Reduction in the gap between domestic revenue and primary expenses evidenced through reduction of the primary deficit. - International financial crisis associated with a 10-percent shortage of liquidity on the domestic market. - Expansionary fiscal policy using privatization funds in 2009 further deepened the primary deficit. - In fixed exchange rate system, monetary and fiscal authorities committed to controlling inflation to safeguard competitiveness; government plans to introduce Treasury bills and finance the deficit through banks rather than the central government to preserve reserves. ### Public investment - Level of public investment declined between 2003 and 2010, with expenditure ranging from STD 200-300 million. - Since 2008, public investment rose sharply, by as much as 190 percent between 2008 and 2010. - Average (2003–2010) sector shares of public investment (descending order): - Public administration: 26.2 percent - Transport and telecommunications: 18.1 percent - Health: 13.3 percent - Education: 12.6 percent - Agriculture: 6.20 percent (noted as neglected; obtained just 3 percent of the PIP in 2010) - Table 7 (Public investment program by sector of activity) — selected values preserved as in source: - Total Public Investment (2003–2010 row excerpt): 252,296; 262,636; 200,411; 311,325; 277,179; 372,960; 884,411; 1,082,248; 455,433.3 - Percentage of total by sector examples (2003–2010 excerpts): - Public Administration: 24.65, 39.37, 31.87, 17.97, 27.28, 38.53, 11.35, 18.02, 26.19 - Agriculture: 6.85, 3.24, 7.21, 4.75, 3.53, 14.05, 7.11, 2.87, 6.20 - Water and Sanitation: 13.74, 6.65, 4.79, 3.61, 3.17, 2.39, 4.68, 2.94, 5.25 - Education: 14.15, 6.50, 4.86, 19.39, 15.20, 7.07, 8.14, 25.75, 12.63 - Energy: 2.97, 0.77, 0.00, 0.00, 0.00, 0.50, 9.70, 16.51, 3.81 - Health: 14.93, 13.86, 17.18, 20.90, 5.37, 13.09, 11.65, 9.58, 13.32 - Transport and Telecommunications: 14.63, 12.16, 20^1, 11.17, 15.03, 19.69, 37.63, 14.25, 18.11 - Source for table: DPE ### Public debt - Completion point under the HIPC Initiative in 2007 and 2008 reduced external debt from USD 359.5 million in 2006 to USD 110 million in 2008 (a reduction of USD 259.5 million). - Post-debt relief, the country needed external financing for growth and poverty reduction programs, leading to rising debt from 2009 onward. - In an international financial crisis, access to grants becomes scarcer and credit access is pro-cyclical and limited; immediate alternative has been loans—mainly bilateral—even if concessional, which increase external debt. - Despite debt creep, debt expected to trend towards more sustainable levels when normalized by domestic wealth creation; debt-to-exports ratio remains a challenge. - Factors improving fiscal space: sounder fiscal policy, debt relief in 2007 and 2008, increase in concessional component of the debt, and moderate inflation. ### Current account and external competitiveness - Inflation trending down since late 2008 aided by Exchange Parity Agreement and stricter price control policy. - Temporary reduction in the current account deficit in 2009 associated with a reduction in domestic demand for imported goods and services. - Loss of competitiveness attributed largely to rise in imported inflation from higher international raw material and food prices. - Figure references preserved in source: trends of current account balance, exchange rate volatility (NEER and REER), and reference interest rate as provided by Central Bank data. ### Employment (brief note) - Growth generally impacts employment creation. - Latest available data referenced indicate the unemployment rate declined from 16.0 percent in 2002 to [text ends in source]. *National Poverty Reduction Strategy II, 2012-2016* ### 13.9 percent in 2008. There was less of an impact on underemployment, which increased by ### National Poverty Reduction Strategy II, 2012-2016 ### Unemployment and Underemployment - Unemployment rate: 16.0 (2002), 15.1 (2003), 15.0 (2004), 14.8 (2005), 14.2 (2006), 14.2 (2007), 13.9 (2008). - Male unemployment rates by year: 11.2 (2002), 9.6 (2003), 9.6 (2004), 9.5 (2005), 13.0 (2006), 10.8 (2007), 10.7 (2008). - Female unemployment rates by year: 22.1 (2002), 22.4 (2003), 22.7 (2004), 21.1 (2005), 15.6 (2006), 18.1 (2007), 17.4 (2008). - Underemployment rate: 9.1 (2002), 7.6 (2003), 9.5 (2004), 14.7 (2005), 13.5 (2006), 12.3 (2007), 13.0 (2008). - Male underemployment rates by year: 7.1 (2002), 6.0 (2003), 10.0 (2004), 19.5 (2005), 13.2 (2006), 14.4 (2007), 15.2 (2008). - Female underemployment rates by year: 11.7 (2002), 9.7 (2003), 8.9 (2004), 9.0 (2005), 13.8 (2006), 9.9 (2007), 10.5 (2008). - Findings: - Women continue to be harder hit by unemployment than men: 17.4 percent (2008) for women versus 13.9 percent (2008) for men. - Decrease in unemployment rate was more accentuated for women than for men. - Underemployment increased by almost 40 percent above 2002 levels (aggregate statement). ### Job Creation by Sector (2003–2006) - Jobs created in the primary sector decreased by 10 percent during 2003-2006. - Jobs created in the secondary sector decreased by 23 percent during 2003-2006. - Tertiary sector grew by 14.2 percent, driven primarily by public administration and education. - Causes: - Declines in fisheries, agriculture, livestock and forestry, and wholesale and retail trading correlated with reduction in long-term investment in these sectors. ### Agriculture - Employment: more than a third of the population works in agriculture, livestock, and fisheries. - Agricultural sector contribution: about 17.2 percent of GDP. - Share of working population directly dependent on agriculture: 26.2 percent. - Land distribution to former agricultural workers lacked technical and financial resources, leading to abandonment and rural exodus, negatively impacting national agricultural production and food security. - Agricultural production (metric tonnes) for selected crops: - Cocoa: 2,883 (2000), 3,652 (2001), 3,462 (2002), 3,820 (2003), 1,900 (2006), 2,800 (2007), 1,900 (2008), 2,800 (2009). - Banana: 26,000 (2000), 27,020 (2001), 28,620 (2002), 29,050 (2003), 31,648 (2006), 32,000 (2007), 31,648 (2008), 30,744 (2009). - Taro: 26,976 (2000), 26,000 (2001), 24,650 (2002), 24,750 (2003), 9,025 (2006), 9,927 (2007), 11,019 (2008), 12,231 (2009). - Coffee: 12 (2000), 22 (2001), 25 (2002), 28 (2003), 30 (2006), 26 (2007), 30 (2008), 23 (2009). - Findings: - Banana production increased from 26,000 mt to 30,744 mt between 2000 and 2009. - Taro production decreased from 26,976 mt to 12,231 mt between 2000 and 2009 (more than a 50-percent drop). - Cocoa production declined; coffee production increased from 12 mt to 23 mt (2000–2009). - Constraints and problems: 1. Lack of coordination between agencies and operators for a coherent Agricultural Policy Charter. 2. Dearth of laws, regulations, and effective services governing agricultural and forestry activities. 3. Nonexistence of support infrastructure for agriculture. 4. Absence of farm and crop credits. - Operational measures noted: - Steps to create decentralized services in districts with technical expertise or transport facilities to train farmers. - Government unable to provide sustained technical support (training and extension services), financial support (agricultural loans), or irrigation infrastructure. ### Livestock - Livestock production suffices to meet 59 percent of consumers’ minimum requirement of 10 kg of meat per person per year (based on FAO standards). - Estimated livestock farmers: 11,000 (10,000 in São Tomé and 1,000 in Príncipe). - Livestock contribution to GDP: 4.2 percent. - Livestock numbers (head) and domestic meat production (metric tons), 2005–2010: - LIVESTOCK (HEAD) - Beef Cattle: 834 (2005), 857 (2006), 867 (2007), 870 (2008), 950 (2009), 884 (2010). - Goats: 24,506 (2005), 25,100 (2006), 25,477 (2007), 25,589 (2008), 25,686 (2009), 25,758 (2010). - Sheep: 2,249 (2005), 2,361 (2006), 2,442 (2007), 2,542 (2008), 2,621 (2009), 2,418 (2010). - Pigs: 26,452 (2005), 26,882 (2006), 26,984 (2007), 27,379 (2008), 27,985 (2009), 24,035 (2010). - DOMESTIC MEAT PRODUCTION (METRIC TONS) - Beef Cattle: 6.2 (2005), 10.4 (2006), 6.1 (2007), 5.9 (2008), 6.4 (2009), 6.1 (2010). - Goats: 2.1 (2005), 2.6 (2006), 4.5 (2007), 2.7 (2008), 2.7 (2009), 2.6 (2010). - Sheep: 0.41 (2005), 0.48 (2006), 1.6 (2007), 1.1 (2008), 1.4 (2009), 1.5 (2010). - Pigs: 339 (2005), 315 (2006), 323.2 (2007), 225.4 (2008), 320 (2009), 347 (2010). - Potential and benefits: - Sustained livestock development and efficient resource use could significantly increase animal protein production, improve diet, retain population in rural areas, reduce poverty, and reduce import burden. - Main constraints and problems: 1. Health problems (hygiene and handling). 2. Poor genetic performance of local breeds. 3. Dysfunctional infrastructure for sales of animal products. 4. Inadequate legislation and regulations. 5. Lack of technical and management expertise among livestock breeders. 6. Lack of inputs for the animals. 7. No credit policy for livestock farmers. 8. No coherent policy for the Livestock Directorate. ### Fishing - Role and employment: - Fishing is the principal activity of coastal communities and plays an important role in inputs, employment, and income generation. - Subsector accounts for 4 percent of GDP (characterized earlier as 4 percent) and elsewhere stated as 4.7 percent of GDP. - Fishing employs about 15 percent of the working population. - Sector scale: - About 2,500 small-scale fishermen. - About 16,000-20,000 persons live directly from fishing. - About 2,000 palaiês (women who work in fisheries). - Estimated number of pirogues: 1,500. - Number of small-scale fishing boats: 1,610 (2005), 1,500 (2007). - Small-scale fish catches: 4,197 (2005), 4,000 (2007). - N° of fishermen: 2,200 (2005), 2,500 (2007). - Potential: - Potential estimated production: 12,000 metric tons per year (9,000 mt from Príncipe waters and 3,000 mt from São Tomé). - Current exploitation limited to coastal waters of the EEZ; much potential underexploited. - Current catches could be doubled, improving domestic supply and incomes. - Constraints and problems: 1. No landing bridge or fishing port. 2. Lack of fishing equipment, materials, and gear. 3. No credit to the sector. 4. Lack of supervisory and enforcement capacity in maritime waters. 5. Unavailability of updated statistical data on fishing. 6. No quality control of fishery products. 7. Overfishing in areas closest to the coast. 8. Outdated and ill-equipped small-scale and semi-industrial fishing fleet. - Additional note: - Country grants fishing licenses to about 70 foreign boats annually (noted regions: European Union and Japan). ### Forestry - Importance: - Forestry resources contribute to economic development; wood is predominant construction material and major source of domestic fuel. - Since the 1990s, increased commercialization led to uncontrolled and illegal exploitation. - Cocoa and coffee shade forests and secondary forests are experiencing depletion, invasive tree felling, and shrub removal in reserves. - Deforestation contributes to increased river swelling and flooding affecting coastal communities (e.g., Ribeira Afonso and Santa Catarina). - Volume of trees felled (m3): - 2000: N° of trees felled 204; Volume of trees 848.3. - 2001: N° of trees felled 439; Volume of trees 2,380.63. - 2002: N° of trees felled 1,592; Volume of trees 9,458.34. - 2003: N° of trees felled 1,105; Volume of trees 6,026.74. - Constraints and problems: 1. Indiscriminate felling of trees with commercial value. 2. Lack of capacity for supervision and enforcement. 3. No inventory of forestry resources. 4. Limited institutional capacity of the Forestry Directorate. 5. Absence of a National Forestry Development Plan. 6. A completely informal and makeshift timber market. *Source: INE; FAO; Livestock Directorate; DGAP; Forestry Directorate (as cited in the National Poverty Reduction Strategy II, 2012-2016).* ### 7. no implementing regulations for the forestry law. ### _cr1409 - 7. no implementing regulations for the forestry law. ### Tourism - Tourism is the main component of services exports and currently a greater source of foreign exchange revenue than goods exports. - Tourism currently accounts for a mere 4 percent GDP and employs a very small segment of the working population. - Accommodation capacity in 2010: 517 rooms and 842 beds in 30 hotel establishments. - Number of visitors peaked at 15,736 in 2005 (DTH data). - Tourist origin composition in 2010: 45 percent from the European market (35 percent of whom were from Portugal), 36 percent from Africa, 10 percent from Asia, and 9 percent from the Americas. - Government objective under the Strategic Plan for Tourism Development (ILO/UNDP - 2001): attract 25,000 visitors in 2010 (objective not met). - Preconditions identified to tap potential: valuing the tourism product; reducing the cost of air transport, energy, and telecommunications; improving quality of sanitation and provision of good health services. - Sector constraints and problems: - inadequate and outdated legislation; - no professional school for tourism and the hotel industry to train the country’s existing human resources; - lack of incentives to stimulate investment in the tourism sector; - need for basic infrastructure (roads, water and electrical energy, and telecommunications) in areas of hotel construction and elsewhere; - little entertainment or tourist attractions (little nightlife, few theaters or cinemas); - high rates charged by ENASA and INAC, which impact on the prices charged by airlines; - few air and sea connections with the rest of the world either at the regional and continental level or with Europe and other continents. - Key indicators (Table 13: Entry of tourists and sightseers, 2000-2010): - Rainy season: 2002: 3760; 2004: 5735; 2005: 8901; 2006: 6556; 2007: 4042; 2008: 5840; 2009: 5125; 2010: 5148 - Dry season: 2002: 700; 2004: 1031; 2005: 1329; 2006: 704; 2007: 2223; 2008: 3584; 2009: 3062; 2010: 1956 - Total: 2002: 5757; 2004: 10792; 2005: 15746; 2006: 12266; 2007: 7601; 2008: 9424; 2009: 8187; 2010: 7104 - Source: DGT ### Commerce - Commerce represents about 28 percent of GDP. - Sector characterization and constraints: - completely disorganized; current legislation is outdated; - no mechanisms that provide consumer protection; - businesses increasingly undercapitalized; - plagued by unfair competition; - population has limited purchasing power; - difficulty implementing agreements for exporting domestic products; - high cost of transport. - Policy implication: efforts must be made to eliminate constraints that hold back development of the sector. ### Industry - Industry accounted for a mere 6.2 percent of GDP in 2010. - Few significant industries; production is often unreliable (soap, beer, bread making, etc.). - High external dependency for technology, equipment, inputs, and foreign exchange. - Limited skilled human resources to operate industries. ### Transport and communications, water and energy infrastructures - Basic economic infrastructures do not meet current needs for private sector development and growth stimulation. - Road transport: - Road network spans about 1,180 km, of which 250 are paved. - Chronic poor maintenance; condition of roads (especially beaten earth) limits competitiveness and rural quality of life. - Sea transport: - Four seaports: three in São Tomé (Ana Chaves, Fernão Dias, Neves fuel ferry port) and one in Santo António (Príncipe). - Ana Chaves port depth: 3 m on the high seas; obsolete and shallow equipment—cannot be used for international ships. - Freight process often requires loading/offloading outside port using barges; ships normally spend five to eight days in port. - Port of Príncipe cannot accommodate ships with a draft of more than 1.7 m and is poorly equipped. - Air transport: - Two airports: São Tomé and Príncipe. - ENASA is in charge of airport management. - São Tomé international Airport is in urgent need of repair and does not meet international standards for security and quality. - Air connections: eight flights per week to the continent (Luanda, Cape Verde, Lagos, Libreville, Douala, and Malabo) and two flights per week to Europe (Lisbon). ### Energy - National Water and Energy Corporation (EMAE) has a network of 27,000 customers. - About 62 percent of residences has access to 15 MW of electricity produced. - Over 2003-2010, energy received no more than 3.8 percent of total investment under the Public Investment Program (PIP). - Sector difficulties: - production far below installed capacity; - frequent outages, approximately 40 percent of which are due to obsolescence of the network; - no storage capacity; - no backup systems; - limited installed capacity; - high electricity production costs due to heavy dependence on imported fuel; - expiration of useful economic life of generators. - Consequence: many businesses use power generators, increasing operating expenses. ### Business climate - One-stop shop created to simplify procedures for starting a business. - Doing Business ranking improvements: STP moved from 174th in 2010 to 163rd in 2011. - Measures implemented targeted: starting a business, obtaining licenses, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, closing a business. - Table 14 (Business climate ranking, selected entries): - Ease of Doing Business Rank: 2012: 163; 2011: 178; 2010: 180; 2009: 176; 2008: 163 - Starting a business: 2012: 105; 2011: 177; 2010: 140; 2009: 136; 2008: 126 - Dealing with construction permits: 2012: 134; 2011: 113; 2010: 116; 2009: 113; 2008: 113 - Registering property: 2012: 160; 2011: 161; 2010: 156; 2009: 151; 2008: 146 - Getting credit: 2012: 177; 2011: 176; 2010: 167; 2009: 163; 2008: 115 - Protecting investors: 2012: 155; 2011: 154; 2010: 154; 2009: 150; 2008: 122 - Paying taxes and rates: 2012: 113; 2011: 135; 2010: 160; 2009: 151; 2008: 153 - Trading across borders: 2012: 94; 2011: 92; 2010: 90; 2009: 88; 2008: 91 - Enforcing contracts: 2012: 179; 2011: 179; 2010: 179; 2009: 171; 2008: 115 - Closing a business: 2012: 159; 2011: 183; 2010: 183; 2009: 181; 2008: 178 - Source: Doing Business 2008-2012 - Remaining challenges: weak institutions, lack of skilled human resources, poor management, corruption. - Policy implication: review and implement reforms; focus on sectors and activities where the country is most likely to be competitive to attract domestic and foreign private capital. ### Social sectors, poverty, and the Millennium Development Goals — Education - Education key to developing an innovative, knowledge-based economy. - Primary enrollment and completion increased, but quality of primary education remains a concern. - Constraints on teaching quality: - inadequate professional training and qualification of teaching staff; - lack of a professional career path; - limited incentives and salary levels; - limited time for study; - lack of manuals, laboratories, and other teaching materials; - system of triple shifts and overcrowded classes. - Preschool education: admission rate about 29 percent. - Basic education: curriculum reform to expand compulsory education to sixth grade, but system unable to provide quality basic education. - Grade repetition in basic education fell to 12 percent in 2010/2011 compared to 26.3 percent in 2007 (reduction described as "more than 100 percent" in source text). - Table 15 (Indicators of the effectiveness of basic education, 2007/2008): - Promotion rate (1st Cycle): 83%; (2nd Cycle): 61%; 7th: 50.8; 8th: 49.7; 9th: 32.7; 10th: 60.2 - Repeater rate (1st Cycle): 11%; (2nd Cycle): 26%; 7th: 32.9; 8th: 38.3; 9th: 43.1; 10th: 16.7; 11th: 47.4 - Dropout rate: 1st Cycle: 5%; 2nd Cycle: 13%; 7th: 16.2; 8th: 12; 9th: 24.2; 10th: 23.1 - % of teachers with specific training: 47.1% (basic education 1st cycle); 34.6% (basic education 2nd cycle) - % of teachers without specific training: 52.9% (1st cycle); 65.4% (2nd cycle) - % with triple shifts: 9.4% - Source: MEC Statistics Department. - Secondary education: - Close to 86 percent of youth enter seventh grade, but only 16.8 percent continue to the end of the secondary cycle. - Dropout rate: 24 percent; grade repeater rate: 20 percent. - Completion and survival rates: 11.3 percent and 15.2 percent, respectively. - Teacher qualifications: only 39.5 percent (average for all cycles) of teachers have adequate training; 100 percent of teachers under the age of 24 are not specifically trained to teach. - Technical and vocational education: - One of the least developed sectors with limited social relevance. - Facilities: Polytechnic Center—four office-workshops and four classrooms; Budo-Budo Vocational Training Center—limited physical structure and financial constraints. - Low student interest in vocational training. - Policy recommendation: decentralize vocational training centers and align training with labor market opportunities (construction, agriculture and fishing, tourism); focus on entrepreneurship and self-employment. ### Social sectors — Higher education - Higher education primarily provided abroad via scholarships. - Domestic institutions include ISP (Universidade Lusíada de STP) and IUCAI (both private). - Supply and demand limited by the limited number of training programs in technology and high fees. ### Social sectors — Health - Health care delivery improved considerably, particularly maternal and child care. - Maternal mortality fell sharply due to increased percentage of childbirths attended by qualified professionals. - Malaria incidence among under-five reduced; mortality due to malaria fell to nearly zero in 2009. - HIV prevalence among pregnant women fell from 5.4 percent in 2006 to 1.5 percent in 2009. - Health system problems: - insufficient health infrastructures; - low-quality service delivery; - insufficient and poorly distributed human resources with little motivation; - shortage of specialists; - uneven access to healthcare by region. - Coverage ratios: - approximately one physician for every 3,000 inhabitants (considering only native physicians); - one nurse for every 900 inhabitants; - one midwife for every 168 pregnant women. - Staff motivation issues: poor working conditions, inadequate availability of medications, lack of incentives, extremely low salaries. - Disease profile dominated by preventable diseases: acute respiratory diseases, diarrheal diseases, malaria, and other communicable diseases linked to environment and behaviors. - Table 16 (Summary of basic welfare indicators: health (%), QUIBB-2005): - Access: Total: 74.1; Margin of Error: 7.9; Rural: 59.0; Urban: 87.0; Agua Grande: 86.1; Other Urban: 88.9 - Need: Total: 18.7; Margin of Error: 1.7; Rural: 17.9; Urban: 19.3; Agua Grande: 19.0; Other Urban: 20.0 - Utilization: Total: 14.9; Margin of Error: 1.4; Rural: 14.7; Urban: 15.1; Agua Grande: 14.6; Other Urban: 16.1 - Satisfaction: Total: 68.6; Margin of Error: 5.0; Rural: 68.5; Urban: 68.7; Agua Grande: 69.1; Other Urban: 67.9 - Checkup and follow-up program: Total: 68.3; Margin of Error: 4.2; Rural: 71.6; Urban: 65.1; Agua Grande: 65.5; Other Urban: 64.5 - Professionally attended childbirth: Total: 85.1; Margin of Error: 2.0; Rural: 68.4; Urban: 90.7; (Agua Grande and Other Urban reported as 0.0 in source) - Source: QUIBB-2005, INE, São Tomé and Príncipe - Malaria deaths: 11 deaths reported in 2008 compared to 193 deaths recorded in 2003. - Table 17 (Infant and maternal mortality rates): - Infant mortality (IF), per 1,000 live births: 1991: 60.8; 1995: 89.1; 1999: 63.1; 2002: 60.8; 2006: 43 - Maternal mortality rate per 100,000 live births: 1991: 101.6; 1995: 100.2; 1999: 289; 2002: 151.3; 2006: 75.7; 2008: 151.4 - Source: RODM, 2008 - MDG-related notes: - Infant mortality fell from 61/1000 live births in 1991 to 43/1000 in 2006. - Maternal mortality rate was 151.4 per 100,000 live births in 2006, higher than 1991 (101.6). ### HIV/AIDS - First AIDS case reported in 1990; cumulative cases increased regularly. - HIV/AIDS prevalence affects about one percent of the population; São Tomé and Príncipe has a widespread HIV epidemic. - National Strategic Plan to Combat AIDS objectives: (i) reduce the risk of HIV/AIDS infection; (ii) reduce susceptibility to infection; (iii) reduce the impact of infection. - Demographic and Health Survey (IDS) results: prevalence among population aged 15-49: 1.5 percent overall; 1.3 percent among women; 1.7 percent among men. - Ratio of infection women to men: 0.77 (77 infected women for every 100 infected men). - Regional prevalence differences: Príncipe: 2.2 percent; northern São Tomé: 2.0 percent; lowest prevalence in southern São Tomé (percent given as "percent" in source). ### Water and sanitation - Water resources: - High water potential with more than 50 watercourses. - Water quality a concern; distribution uneven—more than 60 percent of watercourses located in southern and south-western areas. - Estimated that only four percent of total existing water volume is being used. - Rural populations largely without access to drinking water; use river water or unprotected sources. - Principal causes of deficient water quality: inadequate and degraded systems, vandalism and lack of awareness, lack of government support and insufficient investment, deficient management of water resources. - Table 18 (Rate of Access to Drinking Water, 2001-2006): - Urban access: 2001: 29 (as a %); 2006: 57.2 (as a %) - Rural access: 2001: 6.4 (as a %); 2006: 12 (as a %) - Total access: 2001: 19; 2006: 38 - Source: QUIBB, 2005 - According to 2005 QUIBB, 96.8 percent of the population has access to water (text ends at that figure in source). *Source: _cr1409 - 7. no implementing regulations for the forestry law.* ### 88.7 percent has access to piped water. However, safe access to drinking water is much lower. In ### _cr1409 - 88.7 percent has access to piped water. However, safe access to drinking water is much lower. In ### Drinking water coverage and trends - National access to piped water: 88.7 percent. - Safe access to drinking water: much lower; historical coverage: - 2001: 19 percent - 2006: 38 percent - Rural and semi-urban access to drinking water: - 2001: 6.4 percent - 2006: 12.6 percent - Urban access to drinking water: - 2001: 29 percent (average) - 2006: 57.2 percent (average) ### Sanitation: coverage, impacts, and constraints - General situation: - Sanitation is more critical than water supply. - Problems: rainwater drainage, waste removal, especially in urban areas. - Public-health consequence: contributes to spread of infectious and parasitic diseases. - Household sanitation (survey 2005): three-fourths of the population does not have an adequate excrement removal system. - Factors identified as principal reasons for deficient basic sanitation: - limited community awareness - inadequate Information, Education, and Communication (IEC) campaign - absence and insufficiency of sanitation infrastructure - limited financial resources - limited availability of water - houses with structures making it impossible to install latrines - lack of maintenance - Table 19 / coverage figures (2001, 2006, 2008-2009): - Urban access (Sanitation): - 2001 (as a %): 20.8 - 2006 (as a %): 39.1 - 2008-2009: 42.2 - Rural access (Sanitation): - 2001 (as a %): 10.2 - 2006 (as a %): 19.2 - 2008-2009: 26.6 - Environmental sanitation (national rate): - 2001: 16 - 2006: 30 - 2008-2009: 34.8 - Text restatement of 2009 sanitation coverage: - National rate in 2009: 34.8 percent - Rural population with access in 2009: 19.2 percent (compared to 10.2 percent in 2001) - Urban population with access in 2009: 42.2 percent (compared to 20.8 percent in 2001) ### Housing and urbanization pressures - Drivers of housing problems: - Dismantling of old agricultural companies and lack of employment - Deficient access to basic services and poor housing conditions - Rural-to-urban migration seeking decent housing and employment - Result: increased demand for social infrastructures, particularly housing ### Population and demographic context - Population (most recent projections cited): nearly 160,000 inhabitants - Population growth rate: 2.0 percent a year - National population policy: approach to development that integrates economic, social, cultural, environmental, and demographic factors ### Social security, youth, sports, and gender - Social security and protection: - System has various problems limiting its capacity to meet obligations; does not constitute a strong instrument of social policy. - Characterized as a strategy for fulfilling social rights but lacking political or legal meaning for full exercise of social rights. - Youth (National Youth Institute limitations): - (i) weakness of legal and regulatory framework for IJ - (ii) inadequate financial and logistical resources - (iii) coordination and sustainability problems for actions/projects - (iv) lack of its own space - Sports: distressing situation with: - deficient institutionalization of sports - lack of human, material, and financial resources - lack of and limited size of sports facilities - Gender: - Significant gender inequities affect men and women differently. - Women have less access to means of production and financial resources; bear poverty burden more and are victims of violence more often. - Under-representation in political life and decision-making bodies: currently only 10 of the 55 elected representatives are women. - Since democracy installation, number of women representatives has been far from the 30 percent of legislative seats guaranteed in the law. - NPRS emphasizes gender mainstreaming in policies and programs. ### Environment: vulnerabilities and identified problems - Natural and climate threats: vulnerability to climate change, reduced rainfall, reduced river flows, coastal erosion, floods. - Identified environmental problems: - Loss of biodiversity - Pollution of rivers, streams, and water sources by chemicals - Increased coastal erosion - Disorganized expansion of urban areas - Failure to ratify international conventions on the environment - Deforestation - Use of areas with agricultural potential for other purposes, resulting in soil degradation ### Millennium Development Goals (selected indicators and prospects) - MDG overview: country must continue efforts; many goals will not be achieved by 2015 without exceptional efforts. Financial constraints and quality of governance limit progress. - Selected indicator values (as presented in Table 20): - MDG1 indicators: - Incidence of poverty: 33 (1990), 39 (1994/1995), 53.8 (2000/2001), 0 (2009), 18 (2015) - Share of poorest quintile in national income: 0, 0, 5.2, 0 - Employment to population ratio (15+): 0, 0, 27.7, 30.1 - Vulnerable employment as % of total employment: 27, 0 - Prevalence of underweight children under 5: 0, 0, 10.1, 0 - Prevalence of malnutrition as % of population: 15, 15, 8, 0 - MDG2 (education): - Net enrollment rate in grades 1-4 (%): 0, 0, 69, 98, 100 (Probable; Strong Degree of Commitment) - Percentage of children who reach grade 5: 55, 0, 55, 100 - Literacy rate of 15-24 year olds (%): 94, 0, 94, 95.4, 100 - Literacy rate older than 25 (%): 73, 0, 83, 88, 100 - MDG3 (gender): - Ratio girls to boys in primary education: 101 (noted as Weak / Reasonable) - Ratio girls to boys in secondary education: 112 - Ratio girls to boys in tertiary education: 93 - Share of women in wage employment in non-agricultural sector: 32.1, 33, 46.1 - Proportion of women representatives: 12/55, 7/55, 9/55, 7/55, 17/55 - MDG4 (child mortality): - Under 5 mortality rate (per 1000): 120, 138, 101, 63, 40 (Probable; Strong) - Infant mortality rate (per 1000): 89, 61, 38, 20.3 - Proportion of one-year-olds immunized against measles: 69, 70, 84, 99 - MDG5 (maternal health): - Maternal mortality rate (per 100,000): 69, 224, 189, 94, 17 (Probable; Reasonable) - Births attended by skilled health personnel (%): 79, 82 - Contraceptive prevalence rate (women 15-49 years): 29, 34 - Contraceptive use (% women 15-49): 29, 34 - Adolescent fertility rate (women 15-19 years): 87, 93 - Pregnant women receiving prenatal care (%): 91, 98 - Unmet need for family planning: 37, 95 - MDG6 (diseases): - Death rate due to malaria (per 1000 inhab.): 0.14, 0 - Incidence of malaria (per 1000 inhab.): 20.4, 4 - Children w/ malaria receiving anti-malarial treatment (% under age 5): 61, 100 - Incidence of tuberculosis /100,000 inhab.: 135, 124, 114, 77 - Tuberculosis case detection rate (all forms): 11, 26, 61, 41 - Prevalence of HIV/AIDS among pregnant women ages 15-24 (%): 1, 0.7 - HIV/AIDS prevalence, total (% pop. 15-49 years): 1.50% - MDG7 (environmental sustainability): - Forest cover (% of total area): 30, 30, 30, 30, 30 - CO2 emissions (kg per capita per $ of GDP): 0.6 - CO2 emissions (metric tons/inhab.): 0.6, 0.6, 0.6 - Protected land area (% of total surface): 0, 30, 30 - % of population with access to piped water: 19, 89 - % of homes with septic tank or connected to sewer (%): 16, 26, 58 - MDG8 (global partnership): - Debt service (PPG and only IMF, as a % of exports, excl. emigrant transfers): 29, 22, 10 (Unlikely; Weak) - Telephone lines/100 inhab.: 2, 2, 3, 5 - Mobile telephone subscription/100 inhab.: 0, 0, 0, 31 - Internet access/100 inhab.: 0, 0, 4.6, 15.5 - Net public assistance per capita (US$): 466, 657, 249, 294 ### Medium-term vision (2012-2016) and strategic objectives - National context: small island nation highly dependent on official assistance; new challenges require policies to create income opportunities, facilitate accessibility, improve delivery of basic social services, and ensure assistance/protection for the most vulnerable. - Medium-term vision influenced by National Long-Term Perspectives Study ("tlábá só cá dá tê") emphasizing: - opportunities for harmonious economic and social development - need to overcome ineffective governance, lack of continuity, weak civil-society participation, and lack of entrepreneurial spirit - transformation into a model with good governance and political stability - Medium-term vision aims to make São Tomé and Príncipe a country that: - (i) is well-governed with strong and credible institutions; - (ii) has an environment favorable to sustainable and integrated economic growth and (re)distribution of income; - (iii) has well-trained human resources up to development challenges; - (iv) values cultural heritage and guarantees gender equality and equal opportunity - Strategic objectives for 2012-2016: - Achieve a growth rate of at least six percent (creating conditions for consistent diversification of the economy); - Reduce by ten percent the percentage of São Tomé and Príncipe’s population living in poverty (promoting income-producing initiatives and improving productive capacity); - Ensure that the entire population has (facilitated and improved) access to basic social services. - Implementation challenges noted: - NPRS-I had low average execution rate of activities and limited effectiveness. - Mobilization of financial resources was generally low, particularly 2003-2005. - Implementation mechanism did not function efficiently; poorly coordinated efforts and lack of convergence of programs/projects. - Need to define realistic, achievable objectives with anticipated impact on citizens’ living conditions and poverty reduction. - Special emphasis: priority actions targeting the Autonomous Region of Príncipe, considering territorial separation and distinct natural, social, and cultural characteristics. *Source: National Poverty Reduction Strategy II, 2012-2016 (excerpts provided in the supplied content).* ### 6. Five-year strategy and priority programs ### 6. Five-year strategy and priority programs ### Overview and objectives - Five-year period: 2012-2016. - Context: consolidate gains of the last decade and reduce poverty that now affects 66.2 percent of São Tomé and Príncipe’s population. - Key challenges identified: - Ensure macroeconomic stability. - Facilitate access and lending credibility to justice. - Increase growth of the productive sector. - Improve basic economic infrastructures. - Ensure access to education and health. - Guarantee basic sanitation and access to drinking water. - Promote food and nutritional security. - Four strategic pillars of intervention: - (i) Reform of public institutions and strengthening of good governance policy; - (ii) Promotion of sustainable and integrated economic growth; - (iii) Development of human capital and improvement of basic social services; - (iv) Strengthening of cohesion and social protection. - Strategic objectives: - Achieve a PIP growth rate of at least 6%. - Reduce the proportion of the population living in poverty by 10%. - Ensure that the entire population has access to basic social services. - Implementation approach: - Priority Actions Program document to detail and quantify indicative programs. - Planning and execution of program-budgets with support from cooperation and development partners. - Reorganization of government actions to increase efficiency, visibility of results, and transparency. ### Pillar I — Reform of government institutions and strengthening of good governance policy Rationale for intervention: - Government organization and operations must be reviewed to modernize institutions, reengineer institutional structures, and simplify infrastructures. - Public administration reform must cover all government institutions, including the National Assembly and regional and local authorities. - Good governance requires proper operation of institutions, reform of government finance management, transparency in bidding and contracting, disclosure of contracts and external audits, improved monetary management, and improved management of public finances and public debt. Specific objectives for the five-year period: - Adapt and modernize the government apparatus according to the country’s needs and resources. - Promote participatory involvement by the private sector and civil society in the design and implementation of measures to combat poverty. - Guarantee efficiency and quality in the delivery of government services. - Renew the framework of dialogue and consultation with development partners based on the Paris Declaration. Programs and policy measures 7.1 Consolidation of government authority and strengthening of good governance 7.1.1 Program: Restructuring government and public administration - Redefine the role of government, restructure and adjust the size of the government apparatus, reform public administration, and strengthen standards for protecting citizens’ rights. - Policy measures: - Create a national council and a multidisciplinary technical office for governmental reform. - Reorganize and modernize the National Assembly. - Computerize government services. - Streamline services and simplify procedures. - Rationalize resources and increase labor productivity and efficiency. - Introduce public services evaluation systems. 7.1.2 Program: Promoting local governance - Decentralization and regionalization to improve accountability and citizen involvement. - Policy measures: - Promote initiatives to revise the political-administration division. - Update the Local Finances Law and other legal instruments not in keeping with the current needs of local government. - Improve local authorities’ access to financial resources and promote efficient and effective management of those resources. 7.1.3 Program: Promoting national defense - Objectives: preserve territorial integrity; combat cross-border insecurity and crime and proliferation of light weapons; develop military engineering; participate in peace-keeping. - Policy measures: - Decentralize services of military units by rehabilitating infrastructures and building new ones. - Promote human capital through domestic and foreign instruction and training actions with support from cooperation partners in rescue operations and maritime security. - Promote participation of the armed forces in humanitarian assistance operations under the United Nations, AU, ECCAS, and NEPAD. - Adopt mechanisms to facilitate armed forces participation in multinational operations to combat piracy at sea and armed assaults on ships and oil platforms. - Expand area of surveillance and control at sea to protect resources and rescue operations. - Implement mechanisms for effective control of weapons, munitions, and other explosive devices, proceeding to seize illegal items. 7.1.4 Program: Guaranteeing public safety - Objectives: guarantee security of persons and property; bring police closer to the people; combat organized crime, human trafficking, and drug trafficking; improve police reputation. - Policy measures: - Promote human capital in law enforcement. - Strengthen security of individuals and government property. - Intensify proactive interventions and strengthen local policing measures. - Create conditions for preventing and combating fires and other disasters. 7.1.5 Program: Reforming the electoral system - Aim: consolidate electoral system and strengthen transparency in financing of candidates and elections. - Policy measures: - Revision of law on elections and the financing of political parties and electoral campaigns. 7.1.6 Program: Improving the credibility of and access to justice - Objective: modernize judicial mechanisms to provide more expeditious and better quality services and improve performance and accessibility of the legal and judicial system. - Policy measures: - Update and adapt the legislative framework of São Tomé and Príncipe to reflect current realities. - Improve the organization and operation of the courts and other judicial institutions. - Give the courts and the Public Prosecutor’s Office a sufficient number of judges and magistrates, based on service complexity and in accordance with the new Basic Law of the Judicial System. - Create a Criminal Investigation Police (PIC) in the Autonomous Region of Príncipe. 7.1.7 Program: Ongoing training for human resources in public administration - Address lack of ongoing training; adopt modern human resources management methods. - Policy measures: - Create a national training fund for civil servants. - Create a central unit responsible for civil service training. - Develop a national training program for civil servants. - Revise and update the Civil Service Statute. - Develop and implement a positions, careers, and salaries schedule. - Promote occupational retraining for excess personnel. - Introduce civil service evaluation systems based on specific objectives and merit. - Urgently develop studies analyzing and describing functions and positions in all sectors of central government administration. - Develop studies with a view to changing current civil service working hours. - Proceed to revise the civil service compensation system. 7.2 Promoting responsible and transparent management of public finances 7.2.1 Program: Public financial management - Address lack of culture of accountability and weak application of procurement rules. - Policy measures: - Strengthen mechanisms for combating fraud, smuggling, and money laundering. - Guarantee effectiveness and transparency in the use of resources, redirecting expenditures to sectors with direct impact on reducing poverty. - Use social communication media and other outlets to publicize the importance of responsibility, transparency, and accountability in managing public affairs. - Strengthen mechanisms for preparation, development, approval, and execution of the general government budget, ensuring budgetary choices impact strategic poverty-reduction actions. - Promote responsibility and regular accountability in agencies that collect government revenues. - Develop the medium-term expenditure framework. 7.2.2 Program: Improving the effectiveness of Official Development Assistance - Note: ODA averages 75 percent to 80 percent of the annual volume of the public investments program; recent decline in foreign aid funds for poverty reduction actions. - Policy measures: - Improve mechanisms for mobilizing and managing foreign resources. - Align ODA with national development priorities to leverage development. - Strengthen collaboration among the Office for Coordination and Management of Assistance, International Cooperation Directorate, General Planning Directorate, Budget and Treasury Directorate for better coordination of planning, mobilization, implementation, and control of foreign resources. - Create an integrated information system on ODA and public debt. - Develop a policy on public aid for development to guide mobilization of finances, methodologies, objectives, procedures, and negotiation. - Develop a public debt strategy. 7.2.3 Program: Improving the information and public policy guidelines system - Objective: improve socioeconomic information systems to guide central and regional government policy decisions benefiting the poor. - Policy measures: - Guarantee and support collection and processing of economic, social, and demographic statistics and monitoring of poverty indicators and the MDGs. - Ensure statistical coordination and dissemination of survey and census results. - Monitor and evaluate the country’s overall and sectoral strategies. - Provide a system of reliable economic, social, demographic, technical, and other data. - Improve production and dissemination of statistical information. 7.3 Promoting access to information and knowledge and citizen participation 7.3.1 Program: Accessibility of Information and Communications Technology (ICT) - Aim: expand acquisition and management of information and knowledge to enable informed citizen participation and entrepreneurial initiatives, especially among youth. - Policy measures: - Provide infrastructures necessary for expanded access to ICTs. - Promote use of ICTs in government services, particularly in education and health sectors. - Ensure sharing of experiences and bilateral and multilateral cooperation in ICTs. - Provide widespread use of ICTs in central, regional, and local governments to reduce case processing time and stationery expenses. 7.3.2 Program: Promoting the mass media - Policy measures: - Improve legal and regulatory framework for the practice of journalism. - Strengthen institutional capacities of social communications agencies. - Facilitate initiatives for creating private social communication agencies. - Support creation of and provide incentives for cultural, educational, and science and technology dissemination programs. 7.3.3 Program: Promoting civil society and its participatory involvement - Aim: strengthen organized civil society and promote its involvement in good governance in partnership with government and private sector. - Policy measures: - Improve dialogue with organized civil society, particularly on issues requiring consensus for strengthening good governance. - Continue efforts to strengthen technical capacities and organization of civil society representatives through technical, material, and financing support. - Develop an NGO partnering strategy on priority interventions in the poverty reduction strategy. - Promote greater participation and involvement by organized civil society in developing legal instruments and public policies and their implementation, monitoring, and evaluation. *Source: National Poverty Reduction Strategy II, 2012-2016 — Chapter 6 and Pillar I program descriptions (sections 6–7.3) from the provided content unit.* ### 8. Pillar 2: Promoting sustainable and integrated economic growth ### 8. Pillar 2: Promoting sustainable and integrated economic growth ### Rationale and strategic priorities - Reassess the primary sector (agriculture, livestock, fishing) and tourism; create infrastructure conditions to relaunch productive sectors on a sustainable basis and promote private sector development. - Laws must be revised to reflect the current socioeconomic context; government must provide economic infrastructures to support private sector activity. - Two guiding principles across sectors: diversification and export promotion. - Family farming emphasized as a development model linking export-crop diversification (particularly cocoa, coffee, peppers and other crops), food-crop production, and integration of farming and livestock activities. - Medium-sized agricultural companies to be restructured via redistribution/merger of abandoned plots and incentives for extensive livestock and export-oriented agricultural activities. - Rural roads rehabilitation and improvements in rural housing are preconditions for increased production. ### Key socioeconomic observations (preserve numeric values exactly) - 2010 IOF – 84 percent of those who identify themselves as poor pointed to the lack of employment as the principal cause. - Poor strata represent 66.2 percent of the population. - Close to 85 percent of families use wood or charcoal for cooking. - Maritime transport serves 90 percent of inter-island trade and trade between the archipelago and the rest of the world. - Housing deficit amounting to 60 percent. - Technical-financial viability study for construction of the deep water port in Fernão Dias budgeted at US$475,990. - Construct a new runway at least 1,800 meters long in Príncipe. - Oil exploration prospects pointed to start in 2015 or 2016 (effects on macroeconomic aggregates unknown). ### Specific objectives to be achieved over the five-year period - Promote development of the primary sector to increase national production, create employment, and relaunch the economic sector. - Halt the exodus from rural areas and improve socioeconomic conditions of rural populations. - Develop basic infrastructures to support economic development. - Improve the business environment to attract private investment. - Ensure environmental sustainability. ### Programmatic structure and policy measures 8.1 Developing the primary sector - Goal: increase and diversify production to reduce import dependence; give priority to family farming and link production, manufacturing, and tourism. 8.1.1 Program: Promoting production and productivity of export crops - Policy measures include: - Decentralize governmental agriculture services; - Improve supply network for factors of production; - Develop processing and preservation structures; - Promote and organize marketing channels for chain farmers; - Consult on legislative measures to combat theft on agricultural properties; - Restart control of land use under agrarian reform; - Promote production and guarantee quality of national plant products; - Rehabilitate and construct infrastructures to support agricultural production; - Strengthen the existing research center for scientific and technical monitoring; - Promote microcredit policy for the agricultural sector; - Adopt integrated pest and disease control system; - Foster agricultural cooperatives; - Strengthen land ownership title rights. 8.1.2 Program: Increasing and improving the quality of animal production - Policy measures include: - Strengthen institutional capacity of the Livestock Directorate (DP); - Include livestock in agricultural diversification; - Provide technical support to breeders and promote zootechnical/veterinary inputs; - Promote animal breeding techniques via special microloans; - Incentivize raw materials production for domestic animal feed manufacturing; - Stimulate family livestock production; - Maintain sanitary control and national epidemiological surveillance; - Establish a research center for livestock development; - Regulate livestock breeding nationally; - Develop processing and preservation structures for animal products; - Promote a microcredit policy for the livestock sector. 8.1.3 Program: Increasing and improving the quality of fish production - Policy measures include: - Renegotiate industrial fishing agreements with the EU and Japan for greater advantages; - Strengthen technical capacities and fish analysis laboratories; - Update the Health Law to lift the health embargo on fishing products in the European market; - Reorganize fishermen and fishmongers (palaiês) associations and encourage cooperatives; - Promote small-scale and semi-industrial fishing, introduce new technologies and fish-aggregating devices; - Strengthen institutional capacity of the Fisheries Directorate; - Create a competent authority for sanitary control of fish production; - Create an information system on fish (socioeconomic, biological, statistical, community development); - Improve supply network for production factors and increase microfinance policies; - Create logistical conditions to develop fishing in Príncipe. 8.1.4 Program: Promoting a healthy environment and rational use of natural resources - Observations: - Major environmental concern: deforestation driven by close to 85 percent of families using wood or charcoal for cooking and widespread wood use in buildings/furniture. - Policy measures include: - Protect and preserve ecosystems; - Promote sustainable economic development; - Improve the Climate Monitoring Network; - Strengthen environmental institutions; - Implement actions consistent with international conventions (flora, fauna, water resources, biodiversity, soils, ecosystems); - Implement management plan for the Ôbo national parks of São Tomé and Príncipe; - Build sanitary landfills. 8.1.5 Program: Guaranteeing food security - Policy measures include: - Define agricultural policies making basic family farming a priority; - Support food processing and preservation and consumption of nutrient-rich foods; - Support regular community-level nutritional education. 8.2 Improving the environment for the private sector and strengthening tertiary sector performance 8.2.1 Program: Promoting the private sector - Context: limited market size, infrastructure, weak domestic savings, and maladapted credit system deter business projects. - Policy measures include: - Foster free enterprise and a favorable environment for private initiatives; - Promote incentives for micro-, small and medium-sized enterprises by reducing bureaucracy and simplifying procedures; - Encourage company creation in districts, rural and disadvantaged areas; - Revise institutional and legal frameworks supporting the sector; - Develop attractive tax benefits; - Revise institutional framework for trade and investment; - Revise labor code to increase labor market flexibility; - Create an agency to promote exports and investments; - Create an electronic visa assignment/obtainment system. 8.2.2 Program: Promoting tourism and related activities - Policy measures include: - Create appropriate legislation for tourism development; - Provide incentives for tourism investments in rural areas; - Promote tourism training (creation of hotel school); - Create better material and human conditions for the tourism sector; - Highlight natural and sociocultural architectural heritage; - Develop laws governing hotel tourism and similar activities; - Implement tourism statistics and tourism satellite account services; - Increase hotel occupancy rates, extend tourists’ average length of stay, and improve tourism services (car rentals, recreational boats, bars, nautical amusements, cultural events, handicraft sales). 8.2.3 Program: Integrating the economy subregionally and multilaterally - Policy measures include: - Create a National Trade Negotiation Commission; - Consolidate negotiations with regional organizations while protecting emerging industries; - Continue adapting and modernizing trade legislation; - Promote international trade partnerships and commit to regional/international trade facilitation instruments; - Design and implement actions for WTO membership. 8.2.4 Program: Developing the oil industry - Notes: Exploration expected in 2015 or 2016; production prospects not yet evaluated. - Policy measures include: - Secure national interests in the ZDC; - Establish development strategies for exploration and production in the ZEE and ZDC; - Consolidate and strengthen the ANP-STP as the petroleum regulatory agency; - Reevaluate geological potential of the ZEE. 8.2.5 Program: National program to support microfinance - Objectives: expand access of poor/low-income families and micro and small entrepreneurs to sustainable microfinance; create viable institutions integrated into the national financial market. - Institutional outcomes expected: national committee to promote microfinance and a management unit, among other bodies. - Policy measures include: - Support creation of permanent financial institutions to ensure access to financial services; - Ensure consistency in microfinance interventions and identify complementarities/linkages; - Facilitate adoption/application of code of ethics on good microfinance practices; - Develop and implement legal and regulatory framework; - Facilitate implementation of a national microfinance policy; - Create a microfinance support fund; - Create institutional framework and mechanism for a national microfinance program; - Create a microfinance office. 8.3 Developing transportation networks and infrastructures - Deficient transport and communications infrastructure hampers competitiveness, raises transport costs, limits foreign/domestic investment, and hinders growth. 8.3.1 Program: Road transport infrastructure - Policy measures: - Reorganize public transportation network; - Maintain and preserve road network; - Improve activities of the Road Maintenance Interest Group (GIME); - Develop and implement roadway mobility plan. 8.3.2 Program: Maritime transport infrastructures - Rationale: maritime transport serves 90 percent of inter-island and international trade; a deep-water port could transform São Tomé and Príncipe into a regional services center. - Policy measures: - Strengthen technical/operational capacity of the port of Ana Chaves in São Tomé; - Construct a new port in the Autonomous Region of Príncipe; - Prepare a study for coastal shipping development; - Construct a deep-water port. - Note: Technical-financial viability study for the deep water port in Fernão Dias budgeted at US$475,990; agreement signed in July 2007 with Terminal Link; construction has not begun. 8.3.3 Program: Airport modernization and expansion - Policy measures: - Improve infrastructures to receive and handle larger airplanes; - Lengthen airstrips and widen aprons (taxiway); - Expand passenger terminal; - Improve fire-fighting, communication and navigation support services; - Improve recertifying airway capacity management; - Provide INAC with modern legislation; - Equip airports with security equipment and IT; - Attract other airline companies to serve STP; - Improve user service quality; - Construct a new runway at least 1,800 meters long in Príncipe. 8.4 Strengthening access to infrastructures to support development 8.4.1 Program: Providing reliable and low-cost energy - Goals: increase energy production and efficiency, reduce dependence on imported fuel, increase share of hydroelectric power, improve EMAE capacity, and study alternative energy potential (biomass, wood, wind, solar). - Policy measures: - Increase installed capacity and production of electrical energy; - Improve transmission and distribution grid; - Improve and expand energy services to populations; - Strengthen EMAE management capacities and increase management autonomy; - Rehabilitate and secure network conditions; - Organize and regulate the energy market; - Implement renewable energy generation projects (solar, hydro, wind); - Involve private sector in electricity production. 8.4.2 Program: Promoting and developing the telecommunications network - Policy measures: - Develop universal services, with particular impact on basic telephone services in rural regions; - Define sectoral legal and regulatory framework to promote investments and clarify objectives for government and operators; - Develop new ICT-provided services. 8.4.3 Program: Land use planning and urban planning - Policy measures: - Develop a National Land Use Plan; - Create a Geographic Information System (SIG); - Continue ESPERG-IPAD project for national mapping formation/updating; - Conduct topographical surveys in expansion areas and design integrated soil-use and occupancy plans; - Update city topographical plans for local social infrastructure installation; - Develop basic laws on land use planning, registry, and mapping; - Develop urban planning with regional government and district chambers; - Promote technical-vocational training for geographic/registry services and local government staff. 8.4.4 Program: Constructing low-cost housing - Context: housing deficit amounting to 60 percent; no general construction regulations. - Policy measures: - Give IHI qualified human and financial resources; - Create an ad hoc multisectoral committee including IHI, local governments, and cooperation partners; - Create do-it-yourself construction brigades or construction cooperatives in all districts; - Update registry of government properties and adopt collection measures or utilize banking system; - Create a housing promotion fund structured for social housing with revenue collection through real estate; - Encourage private real estate investment; - Create new integrated neighborhoods with social housing, recreation, schools, health centers, etc.; - Plan and build social housing at low cost for current categories; - Develop a national policy and Strategic Housing and Real Estate Plan; - Establish housing investment priorities for low-income groups (large family groups), with gender and disability considerations; - Develop a basic housing promotion law. 8.5 Mainstreaming climate change issues in development policies - São Tomé and Príncipe is susceptible to natural threats (hydrometrical, geological, biological) and man-made threats (technological, environmental). - Based on international objectives outlined in the Kyoto Conference on climate change, the country must instill a culture of prevention and response, mainstream climate change issues in sectoral planning to minimize biodiversity losses. *National Poverty Reduction Strategy II, 2012-2016 — Chapter 8: Pillar 2* ### 1. More effective integration of disaster risk analysis in sustainable development policies, plans, and ### _cr1409 - 1. More effective integration of disaster risk analysis in sustainable development policies, plans, and ### Integration of disaster risk analysis and climate change into development policy - Call for: More effective integration of disaster risk analysis in sustainable development policies, plans, and programs at all levels, based on prevention, mitigation, and disaster prevention as well as on reducing vulnerability. - Institutional focus: Creation and strengthening of institutions, mechanisms, and capacities that are able to contribute systematically to increased resilience against threats, at all levels, particularly the community level. - Urgent measures to reduce food [insecurity] and vulnerability: - (a) Mandatory inclusion of the “Climate Change” dimension in sectoral and national diagnostic assessments in order to minimize and restore the environmental costs of development policies; - (b) Creation of competence and knowledge regarding the importance of climate change in the country’s sustainable development process; - (c) Mainstreaming of climate change issues in national and sectoral plans; - (d) Advocacy actions with decision-makers on the harmful effects of climate change; - (e) Promotion of awareness campaigns to inform the population concerning the harmful effects of climate change; - (f) Training of sectoral experts and civil society regarding the basic concepts of climate change, as well as its harmful effects. - (g) Urgent preparation of a guide on integrating climate change issues in the instruments of development policy, as well as in their implementation. ### Pillar 3 — Developing human capital and improving basic social services: rationale and strategic objectives - Rationale: Human capital development is central to substantially reducing poverty; requires capacities and skills across multiple fields to produce effective results. - Commitment: Improve human resources education and training through basic education and vocational training; continue programs to combat AIDS and control the malaria vector; improve health services delivery. - Strategic objectives: - Develop quality education and promote vocational training in priority development areas; - Guarantee by 2016 that all children and school-aged youth complete basic education; - Guarantee by 2016 that 100 percent of the population has access to quality basic health services. ### Education programs and policy measures (9.1 and subprograms) - General objective: Improve access, equity, and quality in education and training; extend basic education to six years; respond to MDGs and EFA goals. - 9.1.1 Program – Preschool education: - Revise and update the curriculum for preschool education; - Create standards for preschool education; - Rehabilitate and build children’s institutions; - Regulate the activities of all teaching staff; - Carry out training activities for all teaching staff, managers, inspectors, and supervisors in preschool education. - 9.1.2 Program – Basic education: - Strengthen system capacities to ensure widespread access to school and a full six years of basic schooling; - Strengthen school canteens and make them generally available in basic education; - Effectively implement the vocational career plan; - Expand educational supply; - Update the legislative framework; - Define the school management regime; - Train human resources. - 9.1.3 Program – Secondary education: - Implement a vocational career plan; - Expand educational supply; - Strengthen institutional capacity; - Update the legislative framework; - Define the school management regime; - Train human resources; - Implement 12th grade across the board throughout the public system. - 9.1.4 Program – Special education: - Update the legislative framework; - Revise and update the strategy and curriculum; - Expand access to the district capitals; - Train human resources. - 9.1.5 Program – Higher education: - Instruct and train human resources in diverse areas to meet labor market and development needs; - Expand the supply of training services in various areas in order to meet current demand. - 9.1.6 Program – Technical vocational education: - Develop and approve the law governing vocational training; - Strengthen the capacity of institutions involved in vocational training; - Create a technical and vocational education department; - Increase and diversify the supply of quality vocational training; - Include young people in vocational training structures and create conditions for the formation of microenterprises of young boys and girls. - 9.1.7 Program – Continuing education/literacy: - Eradicate illiteracy among youth older than age 15 and among adults; - Promote education for young people and adults in coordination with income-producing activities and incorporate in job market. ### Health, water, and sanitation programs (9.2 and subprograms) - Objective: Improve access to and equity in preventive and curative healthcare services and improve access to drinking water and basic sanitation. - 9.2.1 Program: Equitable access to and use of healthcare and viability of the healthcare system: - Construct new hospitals to reduce travel time for patients/users; - Train and hire medical staff; - Improve and restore existing hospitals and health centers; - Improve the country’s existing maternity services; - Improve the quality of health care services so as to reduce waiting time at hospitals; - Develop specialty services at hospital centers; - Regulate, encourage, and supervise the development of the private health sector. - 9.2.2 Program: Rehabilitation, expansion, and improvement of water supply systems: - Promote the rational use of water resource services; - Rehabilitate water supply, transport, and distribution networks; - Construct dams and reservoirs in agricultural areas where water is most scarce; - Consolidate studies of river basins as well as of the potential of São Tomé and Príncipe; - Rehabilitate the water supply system; - Renovate and expand the water supply system to meet growing demand; - Improve the sector’s institutional apparatus; - Approve a water code. - 9.2.3 Program: Improving access to basic sanitation: - Properly inventory all wetland areas in São Tomé and Príncipe so that a consistent wetland policy can be defined; - Rehabilitate the old sewer systems for rainwater disposal in the city of São Tomé and Príncipe and construct new systems; - Promote a broad campaign to encourage healthy habits and lifestyles; - Construct improved latrines; - Promote policies for building houses with bathrooms in urban areas. ### Pillar 4 — Strengthening social cohesion and social protection - Rationale: Social cohesion mitigates poverty and supports inclusive society; persistent social inequalities impede citizenship rights and affect children, seniors, persons with disabilities, young people, and women heads of household. - Programmatic intent: Improve living conditions via social inclusion programs for vulnerable groups; provide care for victims of disasters and natural catastrophes; assist needy seniors; combat child labor, sexual abuse and exploitation of minors, and domestic violence; promote gender equality. - Strategic objectives: 1. Promote the national identity and develop the country’s cultural heritage 2. Guarantee equality and gender equity 3. Promote initiatives for the effective protection of vulnerable or disadvantaged social groups with policies of support and social inclusion ### Social citizenship, culture, gender, youth, and social protection programs (10.1–10.2) - 10.1.1 Program: Developing and preserving the historical and cultural identity of São Tomé and Príncipe: - Define and prepare an inventory of the national cultural heritage in close collaboration with district chambers and the Autonomous Authority of Príncipe; - Take urgent action at the archives of São Tomé and Príncipe to conserve and preserve existing assets, including the mandatory incorporation of relevant documentation of a historic nature into the Historic Archives of São Tomé and Príncipe; - Record the general history of São Tomé and Príncipe; - Develop historical memory by erecting statues and monuments of major figures and role models from the history and culture of São Tomé and Príncipe; - Promote cultural manifestations threatened by extinction (quiná and others); - Promote greater interconnection between traditional and scientific medicine to take advantage of the development potential offered by the country’s flora; - Salvage ethical and moral values by strengthening the national cultural identity; - Improve the linkages between the cultural sector, cultural sponsors, and producers of culture; - Create networks of cultural groups, and men and women of culture; - Promote creativity and revitalize the culture of São Tomé and Príncipe; - Promote research in various areas of culture in order to gain a better knowledge of the country’s social, cultural, and historical reality; - Preserve historic sites and build historic monuments and landmarks; - Build the institutional capacity of the Directorate of Culture; - Develop and preserve colonial architecture, chiefly in rural areas, in view of its advanced condition of deterioration. - 10.1.2 Program: Promoting gender equality and equity: - Improve women’s access to decision-making positions; - Create conditions to ensure greater access for girls to the various levels of education; - Accustom children (girls and boys) to participate equally in all tasks – at home and at school; - Promote actions to eliminate all forms of violence. - 10.1.3 Programs: Promoting youth and sport: - Reinforce the legal framework and regulate the Youth Institute; - Develop and implement the National Youth Plan. - 10.2.1 Program: Development of the social protection system: - Develop a National Strategy for Social Protection that brings all programs under one conceptual umbrella and serves as a guide for the development of an efficient and effective system of social protection; - Budget for an operating plan to implement the strategy that includes secure sources of financing and clearly identifies partners for cooperation; - Develop a lobbying plan to obtain the fiscal space for financing the operating plan; - Develop a plan for the development of public service staff in the social sphere. ### Priority intervention areas - Identified priority areas for action to ensure macroeconomic stability and access to basic goods: - (i) Good governance, judicial credibility, and macroeconomic stability: - Redefine the mission of the Government; adapt human and material resources; reorganize government operations; revamp government management; - Legal reforms to improve judicial credibility and swiftness, modernize the legislature, strengthen and train judges, introduce legal inspection, ensure universal access to justice and compliance with obligations and contracts; - Public financial management reforms: improve regulatory framework, government accountability, public procurement and contracting, information systems, tax and revenue collection; integrate services and institutions within a single information systems platform. - (ii) Recovery, promotion, and diversification of production: - Prioritize agriculture, livestock, and fishing to boost employment, reduce hunger and poverty, and stabilize rural populations. - (iii) Strengthening and upgrading of basic economic infrastructure: - Transportation: rehabilitation and maintenance of roads and rural tracks, construction and rehabilitation of port and airport facilities; - Electric energy: improve management capacity of the Water and Electricity Corporation (EMAE), increase access to energy for the national grid to meet consumer demand, develop and update electricity sector legislation, establish energy efficiency programs, rehabilitate electricity transport and distribution systems (medium and low tension). - (iv) Development of human capital and social solidarity: - Improve education and occupational training, prioritize health, sanitation, and safe water supply; - Improve workings and performance of the health care system; improve access and quality for primary and specialized health care services; promote communication campaigns to change behaviors; strengthen capacity to train health care workers; - Pursue efforts to prevent vertical transmission of HIV/AIDS; reduce infant mortality and under-five mortality; improve availability of medicines and inputs (anti-malarial, anti-retroviral, tuberculostatic drugs, impregnated mosquito nets, screening tests, and diagnostic equipment and supplies); pursue campaigns to combat malaria and non-contagious diseases; - Upgrade sanitary infrastructure; improve access and coverage for safe water and basic sanitation: information, education, and communication on water management, construction of drainage systems and treatment of sewers, construction and rehabilitation of water capture systems, rural water supply, and strengthen institutional and legal framework for the water and sanitation sector; - Strengthen social safety nets for the neediest, including setting up day care centers and centers to serve children at risk. *Excerpted from National Poverty Reduction Strategy II, 2012-2016.* ### 12. Macroeconomic prospects for 2012-2016 ### 12. Macroeconomic prospects for 2012-2016 ### 12.1 International macroeconomic prospects - Global output: decline of 0.7 percent in 2009; growth of 5 percent in 2010 and 4 percent in 2011. Recovery expected to continue in 2012 at a similar rate as in 2011 (IMF calculations). - Commodities (energy): - Brent crude oil: US$63.21 per barrel in 2009; increased to US$93.21 per barrel (year not specified in text). - Brent price projections: US$95.34 per barrel in 2012 and US$119.34 in 2016. - Commodities (food): - FAO food price index: 211 points in December 2011, 5.5 percent lower than December 2010. - FAO projects a continued drop in food prices for most of 2012. - United States: - Real GDP growth: close to 3 percent in 2010 and 1.5 percent in 2011. - IMF projection: real GDP growth of 1.8 percent in 2012. - Inflation: described as stable and moderate. - Eurozone: - Recession in 2009: -4.3 percent. - Growth: 1.8 percent in 2010 and 1.7 percent in 2011. - Projection: growth of 1.1 percent in 2012. - HCPI inflation: 1.6 percent in 2010, 2.5 percent in 2011, projection of 1.5 percent in 2012. - Sub-Saharan Africa: - Growth decline from 7.2 percent in 2007 to 2.7 percent in 2009. - Recovery: growth of 5.4 percent in 2010 and 5.2 percent in 2011. - Projection for 2012: expansion of 5.8 percent. - Inflation: 7.5 percent in 2010 and 8.4 percent in 2011. - China: - Growth: surpassed 9 percent in 2009; verging on 10 percent in 2010 and 2011. - Projection for 2012: around 9 percent. - Inflationary pressures: increased due to rising food prices. - Japan: - Recession in 2009: -6.3 percent. - Growth of 4 percent in 2010. - Recession in 2011: -0.5 percent (after earthquake and tsunami). - Projection for 2012: growth of 2.3 percent. ### 12.2 Domestic macroeconomic prospects — framework and scenarios - Two scenarios: - Base scenario: assumes petroleum production and exports will start up in 2015. - Alternative (nonoil) scenario: assumes no petroleum production and exports. - Common assumptions: - Nominal exchange rate indexed to the euro at STD 24,500 to EUR 1. - Government will continue timely energy payments via strong budget discipline, EMAE structural reforms, and automatic indexing of retail fuel prices. - Broad comparative outcomes: - Petroleum scenario: - Growth rises to 6 percent by 2014 and takes off after oil start-up. - Inflation will fall to single digits. - Domestic primary deficit held steady at about 3 percent of GDP until 2014; expected to decline on current account. - Non-petroleum scenario: - Lower growth than petroleum scenario due to absence of oil-related investment and revenues. - Government targets domestic primary deficit of around 2 percent of GDP. - More restrictive budget policies and limited budget financing. ### 12.2.1 Base scenario — external environment and macro projections - External environment: - Benefits from public investment program: tourism, telecommunications, and oil sector investments. - Oil prices projected to remain high or sufficient to attract investment through the medium term. - Country highly dependent on imports; world commodity prices and euro-dollar exchange rate have major impact on domestic inflation. - Expected moderation in oil and food prices should offset projected weakening of the euro and the dobra (STD) versus the dollar (US$). - Growth in imports expected to fall with declining world commodity prices. - Growth and sectoral projections: - Medium-term (2012-2016) GDP growth: - Close to 5.5 percent in 2012. - 6 percent until 2014. - Oil production will take GDP growth to close to 25 percent in 2015. - Growth drivers: drilling in the Joint Development Zone (JDZ) with Nigeria, potential drilling in the Exclusive Economic Zone (EEZ) (blocks 2, 3, and 4), construction (transportation infrastructure, energy, telecommunications), social investment funded by international donors, improvements promoting tourism and external transport services. - Inflation projections: - Average inflation: 14.3 percent in 2011. - Projected: about 9 percent in 2012, declining to about 3 percent by 2015. - Assumed support from parity vis-à-vis the euro and economic diversification. - Public finances: - Objective: stabilize domestic primary deficit in line with non-debt-generating financing. - Total revenues excluding oil: STD 0.8 billion (17.5 percent of GDP) in 2011 rising to STD 1.4 billion (16 percent of GDP) in 2016. - Revenue growth mainly from tax revenues—chiefly direct taxes—projected to increase about 1 percentage point of GDP in the medium term via improved tax and customs administration. - Government plans to prioritize spending on goods and services and transfers compatible with resources. - Overall primary deficit: improve to 3 percent of GDP by 2014, rising to close to 6 percent of GDP as oil production and exports begin and the public investment program is implemented. - Financing: budget support grants expected from the World Bank, European Union, and regional partners; Government transfers from the National Petroleum Account; from 2015 financing mainly from oil revenues. - External sector and debt prospects: - External current account deficit not expected to improve significantly with oil start-up because large oil-related investments in 2015-2016 (on the order of US$200 million) will boost imports. - Export spike from oil in 2015 largely offset by increased imports and worsening net factor services (profit remittances and cost recovery). - Pre-oil export growth driven by cocoa production, fuel re-exports for air and sea transport, and tourism expansion. - External financing: private flows (FDI) to support oil investment; grant financing share expected to diminish as country transitions from grants to loans under AID. - Debt sustainability: - Even with oil start-up, São Tomé and Príncipe presents a high risk of overindebtedness. - Recent DSA (IMF and World Bank) shows NPV of debt to exports ratio remains above the indicative threshold for an extended period. - External debt indicators high in the short term but should begin to fall after oil production commences in 2015. - Projected debt profile consistent with a high but manageable debt dynamic; country expected to meet current obligations. - Monetary projections: - Credit to the private sector: projected to rise about 10 percent per annum during 2012-2016 with a spike in 2015 when oil revenues enter. - Monetary base expansion: consistent with maintaining gross international reserves equivalent to approximately 4 months of imports, averaging 13.5 percent per annum. - Currency circulation speed: about 2.7 percent until oil production commences. - International reserves: - About 3.5 months of imports at end-2011. - About 4 months of imports at end-2014 due to FDI inflows for petroleum preparation. - About 5 months of imports in the medium term after oil production begins in 2015. - Exchange rate: nominal exchange rate linked to the euro at STD 24,500 to EUR 1, supported by a line of credit from the Portuguese treasury; dobra and euro expected to depreciate gradually vis-à-vis the dollar. - Bank supervision measures: periodic inspection visits; regular monitoring of bank solvency indicators (e.g., loans-to-deposits ratio); review of bank business plans; implementation of a liquidity management framework. ### 12.2.2 Alternative scenario (nonoil) - External environment: - Assumes oil reserves in the ZDC and ZEE not commercially viable. - Need to diversify export base; donor assistance critical to modernize infrastructure and train economic management capacity. - Growth and inflation prospects: - Growth projection: 0.5 percent of GDP less than under the oil scenario in 2013-14 (text: "It is assumed that growth in real GDP will be 0.5 percent of GDP, less than under the oil scenario, in 2013-14"). - Long-term growth: steady growth in the range of 5.5 percent, close to historic norm, conditional on sound macro policies, improved investment climate, and successful tourism strategy. - Growth drivers without oil: tourism, agriculture, and fishing. - Investment funding: financed by grants in absence of oil. - Inflation projections: remain unchanged from base scenario (influenced primarily by external factors and exchange parity). - Public finances: - More limited budget financing without oil revenues. - National Petroleum Account resources scarcer; lower economic activity leads to lower tax revenues. - Target domestic primary deficit: about 2 percent of GDP up to 2016, requiring adjustment of close to 1.5 percentage points of GDP in medium term. - Government plans to increase revenue mobilization; total revenues expected to rise to close to 17 percent of GDP in 2016 through tax administration measures and expanded tax base. - Spending restraint: limit non-priority spending and keep payroll at same level in real terms. - Continued dependence on grants from development partners for budget support. - External sector and debt prospects: - External current account deficit (excluding official transfers) projected to fall from about 48 percent of GDP in 2011 to near 30 percent of GDP in 2016 due to decline in imports without petroleum projects. - Capital investment of about US$24 million via concessional loans in 2013-2014 would need deferral to avoid unsustainable debt dynamics. - To maintain debt sustainability, external indebtedness needs reduction in 2012-2015 by about 3 percent of GDP per annum. - FDI flows in absence of oil: fall to about 6.5 percent of GDP (consistent with sub-Saharan average). - Grant financing: expected near historical norms; additional grants could offset lower borrowing for capital investments. - Debt risk: continued high risk of overindebtedness in the medium term; debt-to-GDP ratio would increase steadily to more than 30 percent before gradually declining with fiscal discipline and GDP growth. - Monetary projections: - With lower oil-sector investment, demand for currency and foreign exchange deposits at commercial banks soften. - Monetary base growth: compatible with gross usable international reserves of approximately 4 months of imports, averaging about 11 percent per annum (versus 13.5 percent per annum under oil scenario). - Lower growth in monetary base and net external assets reduces growth in net domestic assets. - Credit to private sector: projected to rise about 8 percent per year between 2012 and 2016 (versus 10 percent with oil start-up). ### 12.3 Risks - Major medium-term vulnerabilities: - Slower GDP growth from failure to discover commercially viable petroleum in the JDZ and EEZ or financial problems in developed countries. - Continued financial and economic problems in Europe, especially a high risk of recession in the developed world, could deteriorate the presented outlook. - Problems in the Eurozone—Portugal as a key example—could immediately reduce external aid, financial flows, and remittances to São Tomé and Príncipe. - Shocks in global food and fuel prices could: - Raise inflation by increasing the effective real exchange rate. - Reduce competitiveness. - Have an enormous adverse impact on the poor. *Source: National Poverty Reduction Strategy II, 2012-2016 — Chapter 12, "Macroeconomic prospects for 2012-2016".* ### 13. IMPLEMENTATION, MONITORING, AND EVALUATION MECHANISM ### 13. IMPLEMENTATION, MONITORING, AND EVALUATION MECHANISM ### Rationale and objectives - A functional structure for implementation, monitoring, and evaluation of the National Poverty Reduction Strategy is required to ensure effective implementation of planned actions. - Experience with the monitoring mechanism for the first PRSP revealed weaknesses and deficient functionality owing to limited commitment at the sector and national levels, and distortions in horizontal and vertical relationships among institutions responsible for programming, execution, and monitoring. This impacted performance, data quality and dissemination, the evaluation of actions taken, and assessment of their impact. - One of the main pillars of the Five-Year Strategy is to strengthen the existing mechanism so it can fully implement, monitor, and evaluate the strategy based on the programs set up. ### Amendments to Decree-Law 32/2005 (objectives) - Create conditions for the regular functioning of the implementation, monitoring, and evaluation mechanism; - Incorporate the Aid Coordination Unit (ACU); - Provide for the participation of the Budget Directorate; - Strengthen the role of the Poverty Reduction Observatory and define the institutional framework for its relationships with the other institutions involved, specifically the Planning Directorate and the National Statistics Institute; - Redefine the focal points for the various sectors as well as regional and local decision-making bodies; - Clarify the forms of participation (whether monitoring or contribution) for technical and financial partners; - Ensure that the institutions involved, at the central, regional, and district levels, are accountable for the process of collecting, systematizing, and disseminating information and data relating to the process of implementing and monitoring the programs provided for, as well as the evaluation of their respective results and impact. ### Organization figure for implementation, monitoring, and evaluation - The amended mechanism will restructure and include the following bodies: - (i) Ministerial Council; - (ii) National Consultative Council; - (iii) Technical Coordination Commission; - (iv) Poverty Reduction Observatory; - (v) Focal points. #### Ministerial Council - Role: supervision and oversight agency for poverty reduction actions; facilitate implementation of programs; take decisions and measures to improve institutional framework and the system for monitoring and evaluating policy impact, activity implementation, and results. - Composition and convening: - Brings together all members of the Government as needed to evaluate realization of the National Poverty Reduction Strategy. - Meetings convened by the Minister for Planning. - Chaired by the Prime Minister and Head of Government or, in the latter’s absence or inability to attend, the Minister for Planning. - Experts and technicians directly involved in implementation may be invited as needed. #### National Consultative Council - Role: expanded consultative body that presents proposals and initiatives, provides opinions, formulates recommendations, and contributes to appropriation of the Strategy at higher-level decision-making bodies. - Composition: - Directors of Planning and Budget and of the National Statistics Institute; - Aid Coordination Unit; - Poverty Reduction Observatory; - Focal points at sector, regional, and district level; - Delegates from institutions representing the private sector and organized civil society. - Meetings: - Meets at least twice a year under the chairmanship of the Minister for Planning; special meetings as needed. - May hold special meetings co-chaired by the Ministers for Planning, Finance, Cooperation, and Foreign Trade with participation of technical and financial partners for monitoring and consultation on cooperation and partnership issues. #### Technical Coordination Commission - Role: standing technical body coordinating implementation, monitoring, evaluation, and updating/revision of the National Poverty Reduction Strategy. - Responsibilities: - (i) Promote institutional relations among all parties involved in implementation, monitoring, and evaluation of the Five-Year Strategy; - (ii) Ensure workings of horizontal institutional relations to ensure the flow of information on regional, district, and sector contributions to execution of the Five-Year Strategy; - (iii) Provide ongoing technical assistance to decision-making bodies in connection with evaluation of the execution of the Five-Year Strategy; - (iv) Evaluate results of performance by the various focal points for monitoring purposes; - (v) Contribute to the production and presentation of summary reports on the contributions by member institutions; - (vi) Propose revisions or updates to the Strategy based on developments in the poverty situation. - Composition and meetings: - Members: Directors of Planning and Budget and of the National Statistics Institute, the Aid Coordination Unit, and the Poverty Reduction Observatory. - Any focal points may be invited for consultation; meets quarterly; special meetings at request of any member. - Meetings co-chaired by the Director of the Poverty Reduction Observatory and the Director of Planning. #### Poverty Reduction Observatory - Role: technical body responsible for monitoring and evaluation of implementation of the National Poverty Reduction Strategy; ensures interaction among agencies in the implementation, monitoring, and evaluation mechanism. - Institutional strengthening: - Must be granted authority and jurisdiction necessary to fulfill its mandate. - Should be strengthened in human resources, material, and financial resources to prioritize analysis and evaluation components and use results to inform future programming. - Provisions of Decree-Law 32/2005 should be revised accordingly. #### Focal points - Role: technical agencies supporting the Poverty Reduction Observatory; ensure coordination of interventions by organizations implementing programs/projects under the Strategy; central to reliability and flow of monitoring and evaluation data and information. - Intervention levels: - (i) Technical or sector ministries and autonomous central institutions; - (ii) The Autonomous Region of Principe; - (iii) Districts. - Sector focal points: - Services responsible for research and planning within sector ministries and autonomous central institutions or services tasked with planning, programming, implementation of policies, programs, and budgets, and their monitoring. - Regional focal point: - The Regional Commission for the National Poverty Reduction Strategy at the level of the Autonomous Region of Principe, composed of representatives of the Regional Government and Regional Assembly, the Central Government of the Region, the private sector, and regional civil society organizations. - Meets quarterly under the chairmanship of the President of the Regional Government; special meetings as needed. - District focal points: - District Commissions for Poverty Reduction for each district, composed of representatives of the District Chambers and District Assemblies, the Central Government of the District, and representatives of the private sector and civil society organizations present in the district. - Each District Commission meets quarterly under the chairmanship of the President of the District Chamber; special meetings as needed. - Representation: - Focal points at various levels will be represented by the respective responsible parties or by technicians designated by them at meetings of the National Consultative Council. - Responsibilities: - Maintain institutional relations with the Poverty Reduction Observatory for coordinating monitoring and evaluation activities on implementation of the Strategy; - Compile data and information to enable monitoring of physical and financial execution of poverty reduction programs and projects, taking into account sector or institutional specificities; - Produce periodic reports on activities carried out and results obtained, as well as respective impact on evolution of the poverty situation, considering the strategic pillars set forth in the Strategy. ### Implementation and monitoring arrangements - Principle: results-based management will be applied at every stage in planning, implementation, monitoring, and evaluation of sector programs. - Programming instruments: - Priority Action Program (PAP); - Regional and District Operating Plans (PORD). - PAP: - Should include all investment and priority actions inherent in the strategic pillars. - Represents conversion of the National Poverty Reduction Strategy into programs and projects. - Should be consistent with the Public Investment Program (PIP), based on the Program Budgets for the sectors, and serve as a link between the Strategy and the General Government Budget, which is the main instrument for implementation of the Strategy. - Ministries: - Each ministry required to organize and operate to optimize structuring of sector programs, obtain resources for implementation, and instruments for monitoring and evaluation. - Regional and district authorities: - Strategy operationalized in accordance with Operating Plans, taking into account strategic pillars and investment priorities in the Strategy and accompanying action plan. - Local community development: - Implemented with involvement of communities through or in liaison with local authorities to promote capacity-building and better evidence-based focus of interventions. - Technical and financial partners: - Need to harmonize country programs and interventions with the Strategy, in accordance with the Paris Declaration on Aid Effectiveness. - Programs and projects proposed by development partners will be analyzed and evaluated to ensure alignment with the Strategy’s objectives and priorities prior to implementation. ### Interim evaluation - In 2014, an interim evaluation will be carried out to: - Assess the degree of alignment of the various interventions with the Strategy’s objectives and priorities; - Assess the degree of achievement of the Strategy; - Adjust the interventions as needed to contribute to improving the performance and implementation of the Strategy. *National Poverty Reduction Strategy II, 2012-2016 — Chapter 13, IMPLEMENTATION, MONITORING, AND EVALUATION MECHANISM* ### 13.3 Monitoring and evaluation system ### 13.3 Monitoring and evaluation system ### Purpose and objectives - Ensure effectiveness of the poverty reduction strategy by monitoring proposed interventions. - Objectives of the monitoring and evaluation system: - (i) Strengthen human and institutional capacity in the areas of planning, monitoring, and evaluation. - (ii) Coordinate the implementation of interventions and the circulation of information. - (iii) Monitor and evaluate the results. ### Two levels of monitoring - (A) Higher-level or strategic monitoring: - Collect and process data on the physical and financial execution of sector programs, focusing on indicators measuring outputs and results on sectors with direct links to poverty. - Collect, record, analyze, and disclose in a specific report to be produced periodically the evolution of the indicators included in frameworks adopted previously. - Produce a periodic monitoring report on the implementation of the National Poverty Reduction Strategy, for submission to the various agencies included in the mechanism. - (B) Sector, district, and regional monitoring: - Sector monitoring: provided by the Sector Focal Point (SFP), represented by the sector planning services (SPS), with a mandate to ensure consistency in planning of interventions and coordinate implementation and monitoring of sector actions. - Regional monitoring: provided by the Regional Focal Point (RFP), represented by a representative of the Regional Government, with a mandate to coordinate implementation and monitoring of actions in the field at the regional level. - District monitoring: provided by the District Focal Point (DFP), represented by a representative of the District Chamber, with a mandate to coordinate implementation and monitoring of actions in the field at the district level. ### Dissemination of information for monitoring and assessment of results (13.4) - Role of disclosure: - Monitoring and evaluation feed information back to political decision-makers and society on the performance of institutions and the impact of existing policies and programs. - Dissemination of information is the means whereby monitoring and evaluation results will be disclosed so they may be taken into account in sound and timely decision-making. - Results are to be disseminated extensively to ensure the broadest possible use, consolidating the system and reinforcing a culture of results-based management. - Communication strategy and communicators: - (Re)define a communication strategy that takes into account the needs of different users: decision-makers, program managers, technical and financial partners, the media, and the public at large. - Identify communicators possessing the skills and vocation to disseminate appropriate, structured information tailored to target consumers. ### Ways and means of disseminating information - Publication of periodic reports. - Organization of dissemination seminars. - Sector meetings with technical personnel. - Radio and television programs. - Publications in the written press. - Meetings at educational establishments and communities. - Distribution of pamphlets and brochures. - Website promotion with updated information. ### Implementation, Monitoring, and Evaluation Mechanism - An organizational figure is included in the source describing the Implementation, Monitoring, and Evaluation Mechanism for PRSP II (structure for coordination across levels). ### Monitoring and Evaluation Framework — selected indicators and targets (excerpted) - Pillar I – Reforming public institutions, strengthening good governance: - % of births recorded in less than one month nationwide: 100 (baseline). - Number of sectors with strategic planning instruments: 8 (Data available in 2011-DGP) → target 10. - Number of FP units connected to SAFE: 0 → targets 15, 15, 15 (entity: INIC/DTEI). - GDP/inhabitant: US$1,017 (INE) (2010). - Annual rate of inflation: 6 (INE (2011)) → targets 4, 3, 3, 3. - Human Development Index: 0.488 (Human Development Report (2010)). - Real rate of growth in GDP: 4.9 (INE (2011)) → targets 5.5, 6, 6, 25, 4.1 (as listed). - Public investment expenditure as a % of GDP: 62.5 (IMF (2011)) → 34.6. - Annual rate of inflation: 13 (INE (2010)) → 8.0. - Foreign exchange reserves (months of imports): 4.3 (BCSTP (2010)). - APD as a % of GDP: 29 (DT (2010)). - Unemployment rate: 13.9 (INE (2010)). - Effective rate of demographic growth: 1.77 (STP Demographic Projections to 2025) → 1.83, 1.8, 1.7, 1.72, 1.69 (2012–2016 sequence). - Pillar II – Promoting integrated and sustainable economic growth: - % agriculture sector in GDP: 11.6 (STP_INE_2009) → target 15 (MPD-DGA). - Trend of cocoa production (Ton): 2302.63 (STP_INE_2010) → target 3000. - Trend of coffee production (Ton): 12.8. - Trend of pepper production (Ton): 1.7 → target 7.6 ton. - Fish capture (Ton): 4827 (Statistical bulletin-Trend of STP fish capture 2001-2010). - % active population living from fishing: 6.8. - Small-scale/ semi-industrial fishing (Ton): 4000 → target 4000. - Industrial fishing (Ton): 2300 → target 2300. - Exports (Ton) (80% industrial fishing): 1840 → target 1840. - Per capita consumption (kg): 24.5 → target 31, 31 (MPD-D Fisheries/MSAS-DCS). - No. of Small-scale fishermen: 2500 → targets 2800, 2800 (MPD-D Fisheries). - Fish capture per vessel (Ton): 1.9 → target 2.3. - No. of jobs created in the sector: 3948 → target 5000. - % share of industrial sector in GDP: 9.5 (STP_INE_2009) → target 10. - Number of tourists visiting São Tomé and Príncipe: 7962 (Migration and border services-2010) → targets 10,828; 14,726; 20,027; 27,336; 37,177 (2012–2016). - No. of tourist facilities graduated: 20 (DTH report-2011) → target 25. - No. of financial institutions in the country: 8 (BCSTP) → 8 each year (BCSTP). - Country ranking in the "Doing Business" report: 163 (Doing Business 2012). - % share of the commerce sector in GDP: 25 (STP_INE_2009) → 24.1. - Growth rate of imports (%): 7.6 (STP_INE_2010). - Growth rate of exports (%): 5.7 (STP_INE_2010). - Km of national roads paved: 8.42 (INAE (2006)). - Km of national roads rehabilitated: 1.7 (INAE (2006)). - Km of rural roads built: 1.1 (INAE (2006)). - Km of rural roads rehabilitated: 27 (INAE (2006)). - Km of roads maintained by the GIME: 1100 (INAE (2009)). - No. of electricity customers (thousand): 25 (EMAE Financial Report -2011) → targets 27.0; 29.2; 31.5; 34.0; 38.0. - Electricity coverage rate (%): 60.7 (INE (2009)) → target 70.0 (EMAE). - % of urban population with access to electricity: 72.9 (INE (2009)). - % of rural population with access to electricity: 48.1 (INE (2009)). - Share of hydroelectricity in total energy produced (%): 5 (EMAE Financial Report -2011) → target 10 (MOPRN). - % of production in assured renewable energies: 5 → target 12 (MOPRN). - Pillar III – Developing human capital and improving basic social services: - Gross rate of admission to basic education: 117 (STP MECF 2009). - Net rate of enrollment in basic education: 118 (Statistics Directorate (2010/11)) → targets 114, 111, 107, 104, 100 (2012–2016). - Dropout rate – basic education: 2 (Pillar III-2009-2010) → targets 2, 1, 1, 0, 0. - Completion rate – basic education: 86 (Statistics Directorate (2010/11)) → targets 89, 92, 94, 97, 100.0. - Repeater rate – basic education: 12 → targets 11, 10, 8, 7, 6. - Promotion rate – basic education: 87 → targets 88, 89, 91, 92, 94. - % of teachers with specific training – basic education: 40 (Statistics Directorate (2010/11)) → targets 52, 64, 76, 88, 100. - Enrollment rate for girls – basic education: 50 → targets 50, 50, 50, 50, 50. - Gross rate of admission – secondary education: 84 → targets 86, 87, 89, 90, 92. - Gross rate of enrollment – technical education: 590 → targets 772, 954, 1136, 1318, 1500. - Promotion rate – secondary education: 56 → targets 60, 65, 69, 74, 78. - % repetition – secondary education: 20 → targets 18, 17, 15, 14, 12. - Student-class ratio – secondary education: 54 → targets 52, 49, 47, 44, 42. - % drop-outs – secondary education: 24 → targets 21, 18, 16, 13, 10. - Illiteracy rate: 89.1 (INE (2005)) → target 98 (MECF). - Number of students receiving bursaries for domestic study in higher education: 253 → targets 5, 752, 1001, 1251, 1500. - Number of students receiving bursaries for study abroad: 708 → targets 586, 465, 343, 222, 100. - Students in higher education per 100,000 inhabitants: 956 → targets 1085, 1214, 1342, 1471, 1600. - Gross enrollment rate – higher education: 766 (STP MECF 2009). - Number of occupational training establishments: 5 → targets 6, 7, 8, 9, 10. - % of expenditure on education in OGE: 11.6 (STP_MPF_2009) → baseline 7.6 and targets 10, 10. - Mortality rate among children under 5: 63 (IDS-STP; 2008-2009) → targets 58%, 50%, 45%, 40%, 40%. - Infant mortality rate: 38 (IDS-STP; 2008-2009) → targets 30%, 25%, 20%, 20%, 20%. - Maternal mortality rate: 158 (IDS-STP; 2008-2009) → target 120. - Proportion of births assisted by health care personnel: 94.6 (MS-SR; 2008) → targets 94.6%, 95%, 95%, 95%, 96%. - % of health care units offering at least five health care services (first aid, pre- and post-natal care, STD prevention, and GBV management): 86.4 (Planning and Monitoring Instrument) → targets 88%, 88%, 90%, 90%, 90%. *Source: _cr1409 - 13.3 Monitoring and evaluation system* ### 75.6 STP info 81% ### _cr1409 - 75.6 STP info 81% ### Health service access and coverage - % of the population with access to health care services at < 30 minutes: 74.1 QUIBB-2005 - Neighborhood coverage rate: 77 (IDS-STP; 2008-2009) - Targets/values: 80%; 82%; 82%; 84%; 85% - % of health care units (at district level) offering quality basic obstetric care: 75 - Targets/values: 75%; 75%; 80%; 90%; 90% - Health care units providing maternal health care: 72.9 (STP info) - Targets/values: 90; 90; 90; 92; 92 - % of health care units offering voluntary counseling and testing (VCT): 91.8 (STP info) - Targets/values: 98%; 98%; 99%; 100%; 100% ### Health workforce - % of health care personnel by district and by health care clinic having benefited from at least one training activity: 97 (STP info) - Values: 98%; 98%; 98%; 98%; 98% - Number of community health care workers oriented and actively providing services: 170 (STP info) - Values: 172; 192; 200; 210; 220 - Ratio of doctors to inhabitants: - 2300 MS-SR; 2008 - 2926 - 2743 - 2587 - 2452 - 2334 - Ratio of nurses to inhabitants: - 908 MS-SR; 2008 - 461 - 368 - 368 - 352 - 320 ### Maternal and reproductive health - Total fertility rate: 3.7 (STP Demographic Projections Horizon 2025) - 3.63; 3.56; 3.49; 3.41; 3.34 - % of pregnant women testing HIV-positive: 98 (STP info) - Values: 98%; 98%; 98%; 99%; 99% - % of HIV-infected pregnant women receiving anti-retroviral (ARV) treatment to reduce the risk of mother-to-child transmission: 70 (STP info) - Targets/values: 75%; 85%; 90%; 99%; 100% ### Communicable disease incidence, prevalence, and mortality - Incidence of malaria: 22.3/1000 (IDS-STP; 2008-2009) - Additional figure: 4/1000 MSAS - Mortality rate – malaria: 0.14/1000 (IDS-STP; 2008-2009) - Incidence of tuberculosis: 77 (MDG6-2009) - Mortality rate – tuberculosis: 0,04 (STP INE 2007) - Prevalence of tuberculosis: (no numeric value provided in source) - Prevalence of HIV/AIDS among pregnant women attending pre-natal check-ups: (no numeric value provided in source) ### HIV/AIDS services - Number of providers of HIV prevention services: 105 (STP info) - Targets/values: 120; 130; 140; 150; 150 - Number of providers of AIDS treatment services: 22 (STP info) - Targets/values: 25; 25; 30; 35; 40 *Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2014/_cr1409.pdf* ### 0.6 STP_CPAP_2009 1.5 1.5 ### _cr1409 - 0.6 STP_CPAP_2009 1.5 1.5 ### Health and social indicators - Number of associations and NGOs active in combating HIV/AIDS: 8 (STP info; targets: 10, 10, 12, 12, 15) - Proportion of persons following ART treatment: 50% - Prevalence of contraception: 38.5 (STP info) - Prevalence of HIV-positive persons alive after 12 months of ART treatment: 12% (European Union MDGs Initiative target: 95%) - Life expectancy at birth: 67.2 (STP INE 2008); subsequent point estimates: 68.3, 68.6, 68.9, 69.2, 69.4 - % of health care expenditure on OGE: 10% (repeated across years) - Chronic malnutrition rate among children under 5: 8.5 (IDS-STP;2008-2009); target 3 (MSAS/MPD) ### National Poverty Reduction Strategy II — Pillar IV (Strengthening social cohesion and protection): selected indicators and baselines/targets - Unemployment rate (M/W) baseline: 13.9 (STP INE 2008) - Number of beneficiaries of the social pension: n.a. - Number of students from needy families benefiting from training: n.a. - Number of community associations and NGOs supported: n.a. - Number of day care centers / shelters supported: n.a. - Number of social workers trained and operational: n.a. - Number of children at risk sheltered at institutional care providers: n.a. - Number of cases of complaints of children’s rights violations received: n.a. - Number of institutions sheltering children at risk created and functioning: n.a. - % of women-headed families living below the poverty line: 66.2 (STP INE 2006) - % of women-headed families (IOF 2010): 38 - Coverage of latrines and basic sanitation (%): 29.7 (QUIBB-2005) - % of the population with access to improved sanitation facilities: 26 (Participatory Strategy for Water STP for and Sanitation in STP 2030 (2010)); target: 58.0 - % of the population with access to a source of safe drinking water at home or within a reasonably accessible distance, in rural areas: 12; target: 53.0 - % of the population with access to a source of safe drinking water at home or within a reasonable accessible distance, in urban areas: 57; target: 75.0 - % of the population having a septic tank or connection to the sewer system: n.a.; noted value 80 in table context ### Principal Economic Indicators, 2007–2016 (selected actuals, estimates, projections) - GDP in constant prices (annual % change): 2007: 6.0; 2008: 9.1; 2009: 4.0; 2010: 4.5; 2011: 4.9; 2012: 5.5; 2013: 6.0; 2014: 6.0; 2015: 24.9; 2016: 4.1 - Consumer prices, end of period (annual % change): 2007: 27.6; 2008: 24.8; 2009: 16.1; 2010: 12.9; 2011: 11.9; 2012: 6.0; 2013: 4.0; 2014: 3.0; 2015: 3.0; 2016: 3.0 - Exports of goods and nonfactor services (annual % change): 2007: -20.5; 2008: 29.4; 2009: 12.1; 2010: 21.3; 2011: 9.2; 2012: 10.2; 2013: 11.7; 2014: 12.5; 2015: 477.1; 2016: 0.6 - Imports of goods and nonfactor services (annual % change): 2007: -5.4; 2008: 35.7; 2009: -9.5; 2010: 29.8; 2011: 4.3; 2012: 7.9; 2013: 9.5; 2014: 7.5; 2015: 43.5; 2016: 5.6 - Exchange rate (dobras per US dollar; end of period): 2007: 14,362; 2008: 15,228; 2009: 16,814; 2010: 18,336; 2011: 19,008 - Base money (annual % change): 2007: 50.0; 2008: 18.9; 2009: 22.3; 2010: -7.9; 2011: -15.4; 2012: 31.8; 2013: 15.7; 2014: 12.3; 2015: 15.9; 2016: 14.4 - Broad money (M3) (annual % change): 2007: 38.1; 2008: 36.8; 2009: 8.2; 2010: 25.1; 2011: 17.5; 2012: 11.7; 2013: 13.8; 2014: 11.9; 2015: 15.5; 2016: 14.0 - Credit to the economy (annual % change): 2007: 33.9; 2008: 22.8; 2009: 39.1; 2010: 40.0; 2011: 12.3; 2012: 9.2; 2013: 7.6; 2014: 7.6; 2015: 16.0; 2016: 9.7 ### Government finances (selected ratios and levels) - Total revenue, grants, and oil signature bonuses (Percent of GDP): 2007: 165.5; 2008: 45.4; 2009: 31.2; 2010: 38.1; 2011: 30.9; 2012: 37.7; 2013: 27.2; 2014: 26.6; 2015: 35.5; 2016: 33.2 - Of which: tax revenue (% of GDP): 2007: 16.4; 2008: 15.2; 2009: 14.5; 2010: 16.6; 2011: 15.9; 2012: 16.2; 2013: 16.2; 2014: 16.3; 2015: 14.4; 2016: 14.7 - Grants (% of GDP): 2007: 126.6; 2008: 28.7; 2009: 14.6; 2010: 19.3; 2011: 12.4; 2012: 11.1; 2013: 9.6; 2014: 8.9; 2015: 5.0; 2016: 3.8 - Oil signature bonuses (% of GDP): 2007: 19.8; 2011: 0.8; 2012: 9.0 - Total expenditure and net lending (% of GDP): 2007: 40.1; 2008: 31.2; 2009: 49.8; 2010: 49.1; 2011: 47.4; 2012: 38.7; 2013: 33.5; 2014: 32.2; 2015: 26.7; 2016: 25.8 - Personnel costs (% of GDP): 2007: 8.9; 2008: 8.1; 2009: 7.9; 2010: 8.3; 2011: 8.3; 2012: 8.2; 2013: 8.2; 2014: 8.2; 2015: 7.1; 2016: 7.3 - Capital expenditure covered by the Treasury (% of GDP): 2007: 1.1; 2008: 1.3; 2009: 4.0; 2010: 2.3; 2011: 1.8; 2012: 2.0; 2013: 2.0; 2014: 2.0; 2015: 5.6; 2016: 6.0 - Capital expenditure covered by donors (% of GDP): 2007: 10.4; 2008: 6.9; 2009: 24.5; 2010: 26.3; 2011: 25.9; 2012: 17.6; 2013: 12.3; 2014: 11.2; 2015: 4.8; 2016: 3.6 - Domestic primary balance (percent of GDP): 2007: -8.5; 2008: -7.0; 2009: -8.0; 2010: -4.1; 2011: -3.5; 2012: -3.4; 2013: -3.3; 2014: -3.0; 2015: -5.8; 2016: -5.8 - Overall balance (commitment basis, percent of GDP): 2007: 125.4; 2008: 14.2; 2009: -18.6; 2010: -11.0; 2011: -16.5; 2012: -1.1; 2013: -6.3; 2014: -5.6; 2015: 8.8; 2016: 7.5 ### Balance of Payments (selected items, 2007–2016) - Current account balance including official transfers (US$ million): 2007: -50.7; 2008: -41.0; 2009: -50.4; 2010: -67.5; 2011: -81.5; 2012: -89.1; 2013: -100.0; 2014: -107.0; 2015: -122.2; 2016: -138.9 - Current account balance excluding official transfers (US$ million): 2007: -66.0; 2008: -96.4; 2009: -84.3; 2010: -111.5; 2011: -113.5; 2012: -121.7; 2013: -132.4; 2014: -140.7; 2015: -146.9; 2016: -157.5 - Exports, FOB (US$ million): 2007: 6.8; 2008: 7.8; 2009: 9.2; 2010: 12.0; 2011: 13.6; 2012: 14.5; 2013: 15.2; 2014: 15.7; 2015: 164.9; 2016: 163.7 - Of which oil exports (US$ million): 2015: 149.4; 2016: 146.0 - Imports, FOB (US$ million): 2007: 64.9; 2008: 92.2; 2009: 83.8; 2010: 99.4; 2011: 109.9; 2012: 117.4; 2013: 127.9; 2014: 137.0; 2015: 188.3; 2016: 198.6 - Official transfers (net) (US$ million): 2007: 15.3; 2008: 55.4; 2009: 33.9; 2010: 44.0; 2011: 31.9; 2012: 32.6; 2013: 32.4; 2014: 33.7; 2015: 24.8; 2016: 18.6 - Balance of capital and financial account (US$ million): 2007: 68.7; 2008: 72.1; 2009: 71.5; 2010: 58.0; 2011: 85.4; 2012: 114.1; 2013: 96.8; 2014: 104.0; 2015: 184.0; 2016: 189.0 - Foreign direct investment (US$ million): 2007: 58.4; 2008: 79.0; 2009: 20.9; 2010: 24.6; 2011: 20.0; 2012: 47.5; 2013: 30.0; 2014: 33.9; 2015: 119.4; 2016: 122.2 - Gross foreign reserves (US$ million): 2007: 22.5; 2008: 40.9; 2009: 43.7; 2010: 37.9; 2011: 32.7; 2012: 34.1; 2013: 38.4; 2014: 40.7; 2015: 55.8; 2016: 59.6 - Months of imports of goods and nonfactor services (reserves): 2007: 3.5; 2008: 6.9; 2009: 5.7; 2010: 4.4; 2011: 3.5; 2012: 3.5; 2013: 3.7; 2014: 3.9; 2015: 5.1; 2016: 5.2 - Debt service ratio (percent of exports): 2007: 68.7; 2008: 49.2; 2009: 18.9; 2010: 11.2; 2011: 13.8; 2012: 12.6; 2013: 13.7; 2014: 13.2; 2015: 2.7; 2016: 2.4 - National Oil Account (millions of U.S. dollars): 2007: 14.9; 2008: 12.1; 2009: 9.8; 2010: 7.9; 2011: 8.4; 2012: 30.7; 2013: 24.8; 2014: 20.0; 2015: 68.2; 2016: 115.1 - GDP (millions of U.S. dollars): 2007: 137; 2008: 182; 2009: 194; 2010: 201; 2011: 236; 2012: 266; 2013: 307; 2014: 347; 2015: 441; 2016: 466 ### Financial operations of the central government (levels, US$ million; 2007–2016) - Total revenue and grants (US$ million): 2007: 3,233; 2008: 1,225; 2009: 995; 2010: 1,417; 2011: 1,352; 2012: 1,918; 2013: 1,568; 2014: 1,710; 2015: 2,931; 2016: 2,918 - Total revenue (US$ million): 2007: 374; 2008: 451; 2009: 529; 2010: 698; 2011: 770; 2012: 895; 2013: 1,012; 2014: 1,138; 2015: 1,311; 2016: 1,418 - Tax revenue (US$ million): 2007: 320; 2008: 411; 2009: 462; 2010: 617; 2011: 697; 2012: 822; 2013: 932; 2014: 1,050; 2015: 1,191; 2016: 1,289 - Grants (US$ million): 2007: 2,471; 2008: 774; 2009: 466; 2010: 719; 2011: 545; 2012: 563; 2013: 557; 2014: 572; 2015: 409; 2016: 334 - Oil signature bonuses (US$ million): 2007: 387; 2011: 37; 2012: 459 - Total expenditure (US$ million): 2007: 783; 2008: 841; 2009: 1,587; 2010: 1,824; 2011: 2,075; 2012: 1,972; 2013: 1,931; 2014: 2,070; 2015: 2,202; 2016: 2,263 - Current expenditure (US$ million): 2007: 506; 2008: 569; 2009: 646; 2010: 737; 2011: 831; 2012: 943; 2013: 1,062; 2014: 1,178; 2015: 1,297; 2016: 1,380 - Capital expenditure (US$ million): 2007: 226; 2008: 219; 2009: 907; 2010: 1,066; 2011: 1,209; 2012: 994; 2013: 830; 2014: 852; 2015: 866; 2016: 843 - Domestic primary balance (US$ million): 2007: -166; 2008: -188; 2009: -254; 2010: -152; 2011: -152; 2012: -173; 2013: -191; 2014: -194; 2015: -477; 2016: -512 - Overall fiscal balance (commitments basis) (US$ million): 2007: 2,449; 2008: 383; 2009: -592; 2010: -408; 2011: -723; 2012: -54; 2013: -363; 2014: -360; 2015: 729; 2016: 655 - Overall fiscal balance (cash basis) (US$ million): 2007: 2,475; 2008: 430; 2009: -555; 2010: -465; 2011: -723; 2012: -54; 2013: -363; 2014: -360; 2015: 729; 2016: 655 ### Central bank accounts and monetary survey (selected aggregates) - Net external assets (central bank, billions of dobras): 2007: 857; 2008: 1,199; 2009: 1,228; 2010: 998; 2011: 891; 2012: 1,367; 2013: 1,298; 2014: 1,243; 2015: 2,429; 2016: 3,412 - Net international reserves (billions of dobras): 2007: 699; 2008: 1,019; 2009: 1,192; 2010: 942; 2011: 861; 2012: 1,336; 2013: 1,268; 2014: 1,214; 2015: 2,399; 2016: 3,381 - Gross reserves (of which NOA noted separately) (billions of dobras): 2007: 775; 2008: 1,111; 2009: 1,284; 2010: 1,052; 2011: 1,148; 2012: 1,634; 2013: 1,547; 2014: 1,470; 2015: 2,638; 2016: 3,600 - Of which: National Oil Account (NOA) (billions of dobras): 2007: 212; 2008: 183; 2009: 163; 2010: 145; 2011: 157; 2012: 625; 2013: 467; 2014: 372; 2015: 1,275; 2016: 2,167 - Base money (billions of dobras): 2007: 417; 2008: 496; 2009: 606; 2010: 558; 2011: 472; 2012: 622; 2013: 720; 2014: 809; 2015: 937; 2016: 1,072 - Broad money (M3) (billions of dobras): 2007: 764; 2008: 1,045; 2009: 1,130; 2010: 1,415; 2011: 1,662; 2012: 1,855; 2013: 2,111; 2014: 2,363; 2015: 2,729; 2016: 3,110 - Credit to the economy (billions of dobras): 2007: 638; 2008: 784; 2009: 1,090; 2010: 1,526; 2011: 1,713; 2012: 1,872; 2013: 2,014; 2014: 2,166; 2015: 2,513; 2016: 2,757 - Velocity (GDP/average M3): 2007: 2.6; 2008: 2.6; 2009: 2.8; 2010: 2.6; 2011: 2.6; 2012: 2.7; 2013: 2.7; 2014: 2.7; 2015: 3.0; 2016: 2.8 ### Nonoil scenario highlights (selected projections and ratios) - GDP at constant prices (annual % change, nonoil scenario): 2007: 6.0; 2008: 9.1; 2009: 4.0; 2010: 4.5; 2011: 4.9; 2012: 5.5; 2013: 5.5; 2014: 5.5; 2015: 5.5; 2016: 6.0 - Exports of goods and nonfactor services (annual % change, nonoil): 2007: -20.5; 2008: 29.4; 2009: 12.1; 2010: 21.3; 2011: 9.2; 2012: 3.1; 2013: 7.2; 2014: 6.7; 2015: 4.6; 2016: 5.3 - Balance of current account including official transfers (percent of GDP, nonoil): 2007: -36.9; 2008: -22.5; 2009: -26.1; 2010: -33.6; 2011: -34.6; 2012: -32.2; 2013: -27.7; 2014: -24.3; 2015: -25.5; 2016: -25.3 - Total revenue, grants, and oil signature bonuses (percent of GDP, nonoil): 2007: 165.5; 2008: 45.4; 2009: 31.2; 2010: 38.1; 2011: 30.9; 2012: 37.3; 2013: 27.0; 2014: 26.6; 2015: 26.5; 2016: 26.1 - Total expenditure and net lending (percent of GDP, nonoil): 2007: 40.1; 2008: 31.2; 2009: 49.8; 2010: 49.1; 2011: 47.4; 2012: 38.4; 2013: 33.2; 2014: 31.9; 2015: 31.5; 2016: 30.3 - Domestic primary balance (percent of GDP, nonoil): 2007: -8.5; 2008: -7.0; 2009: -8.0; 2010: -4.1; 2011: -3.5; 2012: -3.4; 2013: -3.3; 2014: -2.7; 2015: -2.4; 2016: -1.8 - Gross international reserves (US$ million, nonoil scenario): 2007: 22.5; 2008: 40.9; 2009: 43.7; 2010: 37.9; 2011: 32.7; 2012: 34.2; 2013: 36.8; 2014: 40.7; 2015: 46.4; 2016: 52.0 - National Petroleum Account (US$ million, nonoil scenario): 2007: 14.9; 2008: 12.1; 2009: 9.8; 2010: 7.9; 2011: 8.4; 2012: 30.7; 2013: 24.8; 2014: 20.0; 2015: 16.3; 2016: 13.4 *Source: São Tomé and Príncipe authorities and IMF staff estimates and projections (extracted from the provided IMF PDF content).* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2014/_cr1409.pdf_