Sao Tome and Principe: IMF calls for salary containment in State Sector

26 March 2008

Sao Tome, Sao Tome and Principe, 26 March – A mission from the International Monetary Fund (IMF) which is currently in Sao Tome and Principe has warned the Sao Tome government off using external funding in order to provide a salary raise to the public sector.

The mission, which is in Sao Tome to assess the country’s macroeconomic situation, has said that the archipelago is being “negatively influenced” by the international economic climate marked by the continued rise in oil and food prices, but continued to say that internal ways of dealing with expenses needed to be found.

In a speech made at a meeting held Tuesday in the capital of Sao Tome, the head of the IMF mission, Jian-Yewang said that, despite the relative economic growth of the archipelago and the pardoning of public debt, the “economic structure of the country was still much debilitated.”

Noting that the Sao Tome government was currently drawing up the State Budget, Jian-Yewang said that it was very clear that Sao Tome and Principe had to live within its means.

The State Budget is expected to be handed into parliament this week for discussion and approval in mid April, but the salary increase has yet to be decided.

Over 80 percent of Sao Tome’s state budget is funded by its international partners, namely Taiwan, which every year contributes US$25 million and the World Bank which has pledged US$4 million.

Prime Minister Patrice Trovoada, in a recent interview with Sao Toem television, avoided talking about the salary increase, saying only that there was a need to “start a discussion about the national minimum wage.”

In order to improve fiscal sustainability, the head of the IMF mission noted that the government needed to define a policy to reduce inflation in a continued way, improve management of its foreign reserves and, finally, improve its internal income. (macauhub)