Sao Tome and Principe government wants to use Oil Fund money

7 March 2007

Sao Tome, Sao Tome and Principe, 7 March – The government of Sao Tome and Principe wants to use US$23 million from its Oil Fund in order to boost the State Budget for 2007, which is due to be debated Wednesday in the country’s parliament, the Minister of Planning and Finance said.

Maria Tébus told journalists that the need to boost the budget using the national oil fund was mainly due to the archipelago’s debts to its bilateral cooperation partners.

In March 2006, Sao Tome and Principe netted US$28.6 million from three shared production contracts with Nigeria, which are based on a treaty stating that Nigeria receives 60 percent of revenues while 40 percent goes to Sao Tome.

As part of the framework law of Sao Tome oil revenues, the Tébus said that of the US$23 million, most was needed to pay a debt to Nigeria of US$15 million from loans granted over the last four years.

Tébus said that US$3 million would serve to cover the expenses of Sao Tome and Principe being part of a joint administrative and management structure for oil exploration with Nigeria.

The remaining US$5 million from the oil fund would be used to pay down other debts, according to what was established with the International Monetary Fund (IMF) and the World Bank, as part of a joint macroeconomic program, which aims to pardon the archipelago’s external debt, estimated at over US$300 million.

“We (the government) work on the budget with the technical support F these two institutions in order to get our debt pardoned,” Tébus said, calling on Sao Tome’s members of parliament to approve the document attached to the General State Budget for 2007, estimated at around US$100 million.

Having denied the existence of any proposal to increase public workers’ salaries, the minister said that the biggest budgetary expenditures were the health and education sectors, as part of the national strategy to combat poverty.

Two months ago, the president of Sao Tome and Principe, Fradique de Menezes, decided to maintain the 2006 state budget due to a delay in finishing the budget for this year.

The 2006 budget included expenses of over US$80 million. (macauhub)