Sao Tome state budget rises 45 pct in 2006

2 February 2006

Sao Tome, Sao Tome and Principe, 02 Feb – The state budget for Sao Tome and Principe for 2006, presented by the country’s Government in Parliament this week, includes a 45-percent increase in expenses, to US$87 million, according to local press reports.

Of total projected expenses, 35 percent will be applied on current expenses and the remainder on capital expenses, especially on servicing foreign debt.

In 2005, capital expenses represented 90 percent of state expenses of US$60 million, but this year the government expects improvements in debt servicing for Sao Tome and Principe.

Following International Monetary Fund approval of state accounts in 2005, the West African archipelago is due to have its debt renegotiated, which could lead to a partial dropping of the amounts owed.

Speaking in Parliament, Prime Minister Maria do Carmo Silveira, said that the presented budget, “aims at being strict, providing needed macroeconomic stability, but also outline actions to promote the development of some structural projects for the country.”

Among these, she said, are “The project for expanding the airport, building of Trindade secondary school, finishing the operating theatre on Príncipe and rebuilding roads.”

Another aim is to providing drinking water to around 50 percent of the islands’ population.

According to Sao Tome And Principe Central Bank estimates, the country’s Gross Domestic Product (GDP) should increase by over 4.5 percent in 2006, while the archipelago’s inflation rate should fall.

The archipelago is already benefiting from the beginning of oil drilling in the first bloc of the joint development area with Nigeria, which should contribute to an increase in investment and jobs. (macauhub)