Pardoning of foreign debt seen as an achievement by Sao Tome government

23 April 2007

Sao Tome, Sao Tome and Principe, 23 April – The debt relief announced last month for Sao Tome by its main international creditors is “one of the major achievements” of the archipelago’s government in its first year of power, Deputy Prime Minister Maria Tebus has said.

Tebus, standing in for Prime Minister Tomé Vera Cruz, currently receiving medical treatment abroad, was giving an appraisal of the first 12 months of Sao Tome’s government, which took office 20 April, 2006.

The International Monetary Fund and World Bank announced on 15 March that 91 percent of Sao Tome’s external debts, equivalent to US$ 327 million , was being canceled under the Highly Indebted Poor Countries Initiative (HIPC).

Tebus, who also serves as Sao Tome’s finance and planning minister, also said the debt relief granted was due to the government’s successful efforts in correcting the macroeconomic situation it inherited, characterized by soaring prices of essential goods and products.

“It was a tough and difficult battle that only began to show results from July, when the monthly inflation index fell from 5.15 percent to 0.9 percent,” she stressed.

Other notable achievements in the government’s first 12 months of office were the modernization of Sao Tome’s international airport in a project worth over US$ 1 million, the creation of a new national carrier, STP airways, as well as rehabilitation work on 70 kilometers of highways in the south of the country in a scheme valued at over US$ 30 million, Tebus added.

Sao Tome’s deputy prime minister also highlighted the re-launch of a cattle farming project with funding from African Development Bank, estimated to be worth US$ 6 million, and a new fisheries accord with the European Union, forecast to generate more than US$ 2 million annually for the islands.

Turning to future objectives for Sao Tome’s government, Tebus highlighted a US$ 1 billion project to build a new airport in the islands, water supply schemes and the purchase of a new ferry to strengthen links between the two main islands in the archipelago.

It was the first time for many years that a Sao Tome government’s review of its first year in power was dominated by economic questions, rather than the partisan issues that have been more prominent in earlier periods of political instability, analysts said. (macauhub)