IMF Executive Board Concludes Third Review Under the Extended Credit Facility for São Tomé and Príncipe
IMF News, August 27, 2021
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- Published: August 27, 2021
Immediate disbursement and program status
- The Executive Board completed the third review of the Extended Credit Facility (ECF) arrangement for São Tomé and Príncipe on August 27, 2021.
- The Board’s decision enables the immediate disbursement of SDR 1.90 million (about US$2.70 million).
- Total disbursements under the arrangement to date: SDR 9.09 million (about US$12.91 million).
- Original 40-month ECF arrangement (approved October 2, 2019): SDR 13.32 million (about US$18.15 million or around 90 percent of the country’s quota).
- Previous disbursements and approvals:
- Second review (February 2021): disbursement of about US$2.73 million.
- First review (July 2020): disbursement of about US$2.67 million and an augmentation of US$2.08 million.
- April 2020: emergency financing of US$12 million under the Rapid Credit Facility (RCF) and IMF debt service relief under the Catastrophe Containment and Relief Trust (CCRT).
Executive Board assessment — key messages and policy recommendations
- Pandemic response and outlook:
- Exceptional international support and the authorities’ swift actions have helped address health and socio-economic impacts of the COVID-19 pandemic, but uncertainties remain high.
- Adequate vaccination is critical to ensure more resilient, sustained, and inclusive green growth.
- Fiscal policy and debt sustainability:
- Addressing immediate social and economic needs while implementing gradual fiscal consolidation is key to supporting recovery and preserving debt sustainability.
- Priority fiscal measures highlighted:
- Introducing the VAT in 2021.
- Reining in spending dynamics, particularly on personnel.
- Continued reliance on grants and highly concessional loans.
- Transparency and governance:
- Authorities’ efforts to foster increased transparency are welcome.
- Review procurement legislation to enable the collection and publication of beneficial ownership information.
- Complete audit reports of COVID-19 related spending.
- Monetary and financial sector policy:
- Monetary policy should support the exchange rate peg and the recovery.
- Continue active liquidity management.
- Strengthen capacity to manage financial sector risks and vulnerabilities.
- Establish a new legal framework for the central bank and financial sector to enable modernization.
- Structural reforms and sectoral priorities:
- Accelerate reforms in the energy sector to provide lower-cost, reliable electricity, support development and growth potential, and reduce pressures on public debt and reserves.
- Press ahead with broad-based structural reforms to facilitate private investment, develop the tourism sector, and promote more resilient and inclusive growth.
Selected economic indicators and projections (highlights from Table 1)
- GDP at constant prices (annual change):
- 2017: 3,9
- 2018: 3,0
- 2019: 2,2
- 2020: -6,5
- 2021 (Proj.): 2,1
- 2022 (Proj.): 2,9
- 2026 (Proj.): 4,0
- GDP deflator:
- 2017: 2,0
- 2019: 7,0
- 2020: 5,6
- 2021 (Proj.): 2,7
- Consumer prices (Period Average):
- 2017: 5,7
- 2019: 9,9
- 2020: 9,8
- 2021 (Proj.): 5,4
- 2024 (Proj.): 4,4
- Exports of goods and nonfactor services (annual change):
- 2017: -10,8
- 2018: 13,9
- 2019: -1,9
- 2020: -47,3
- 2021 (Proj.): -46,3
- 2022 (Proj.): 61,0
- 2024 (Proj.): 48,0
- Imports of goods and nonfactor services (annual change):
- 2017: 5,5
- 2019: -5,3
- 2020: -7,2
- 2021 (Proj.): -10,4
- Money and credit:
- Base money (annual change):
- 2017: -9,6
- 2018: 0,8
- 2020: 22,6
- 2021 (Proj.): 31,0
- Broad money (M3) (annual change):
- 2017: -0,4
- 2018: 14,3
- 2019: -2,2
- 2021 (Proj.): 10,9
- Government finance (percent of GDP):
- Total revenue, grants, and oil signature bonuses:
- 2017: 24,9
- 2019: 28,2
- 2020: 25,3
- 2021 (Proj.): 25,7
- 2026 (Proj.): 23,5
- Tax revenue (percent of GDP):
- 2017: 12,7
- 2020: 14,5
- 2021 (Proj.): 13,1
- 2026 (Proj.): 15,6
- Grants (percent of GDP):
- 2017: 10,5
- 2019: 11,2
- 2020: 9,7
- 2021 (Proj.): 3,8
- Domestic primary balance 2 (percent of GDP):
- 2017: -2,4
- 2019: -1,8
- 2020: -3,2
- 2021 (Proj.): -3,9
- 2024 (Proj.): -0,2
- 2026 (Proj.): 0,6
- Net domestic borrowing (percent of GDP):
- 2017: 1,8
- 2018: 3,4
- 2019: -1,5
- 2021 (Proj.): -0,1
- Public debt (percent of GDP):
- 2017: 81,1
- 2018: 93,2
- 2019: 99,9
- 2020: 103,0
- 2021 (Proj.): 87,4
- 2026 (Proj.): 71,2
- Of which: EMAE's debt to ENCO:
- 2017: 23,3
- 2019: 31,5
- 2020: 32,9
- 2026 (Proj.): 26,5
- External sector:
- Current account balance (percent of GDP) including official transfers:
- 2017: -13,2
- 2019: -12,1
- 2020: -17,4
- 2021 (Proj.): -14,1
- 2024 (Proj.): -6,3
- 2026 (Proj.): -5,7
- Current account balance excluding official transfers:
- 2017: -24,3
- 2019: -18,5
- 2020: -28,6
- 2021 (Proj.): -23,9
- 2026 (Proj.): -10,7
- PV of external debt (percent of GDP):
- 2017: 26,6
- 2018: 32,2
- 2019: 25,4
- 2020: 30,0
- 2021 (Proj.): 21,7
- External debt service (percent of exports):
- 2017: 11,6
- 2018: 6,8
- 2019: 8,7
- Exports of goods and non-factor services (US$ millions):
- 2017: 86,1
- 2018: 98,0
- 2019: 96,2
- 2020: 50,7
- 2021 (Proj.): 51,7
- 2026 (Proj.): 140,5
- Gross international reserves (Millions of U.S. dollars):
- 2017: 51,4
- 2018: 35,1
- 2019: 40,4
- 2020: 54,7
- 2021 (Proj.): 67,6
- 2026 (Proj.): 76,5
- Months of imports of goods and services (2017): 3,6
- Months of imports of goods and nonfactor services (2017): 4,2; (2019): 5,1; (2020): 6,0
- National Oil Account (US$ millions):
- 2017: 11,3
- 2018: 19,5
- 2019: 18,8
- 2020: 16,2
- 2021 (Proj.): 16,6
- 2026 (Proj.): 10,2
- Memorandum items:
- Gross Domestic Product (Millions of new dobra):
- 2017: 8.154
- 2018: 8.619
- 2019: 9.424
- 2020: 8.976
- 2021 (Proj.): 10.247
- 2026 (Proj.): 14.693
- GDP (US$ millions):
- 2017: 375,8
- 2019: 430,7
- 2020: 418,1
- 2021 (Proj.): 477,3
- 2026 (Proj.): 771,6
- Per capita (in U.S. dollars):
- 2017: 1.842
- 2019: 2.022
- 2020: 1.918
- 2021 (Proj.): 2.190
- 2026 (Proj.): 3.002
Sources: São Tomé and Príncipe authorities' data and IMF staff estimates and projections.
