Sao Tome and Principe should follow successful examples for managing oil revenues, ADB says

14 January 2014

Sao Tome and Principe should follow the examples of Brazil and Timor Leste (East Timor) in using the revenues it is expected to get over the next few years from oil exploration, according to a report from the African Development Bank (ADB).

“Models from other non-African Lusophone countries can be taken into consideration, such as Brazil and Timor Leste, which have managed to manage the hydrocarbon resources and thus prevent useless distortions and undesirable results to reach more vigorous sustainable growth,” the ADB’s report said on analysing the impact of a rise in state revenues from oil in Sao Tome and Principe.

The Sao Tome government Friday launched an international tender for exploration of two oil blocks in its exclusive economic zone (EEZ), according to a statement from the National Oil Agency.

“Good governance and efficient management of oil resources will provide a unique opportunity for a structural transformation of the economy,” and it is therefore, “imperative for the country to learn from the positive experience of other African countries, such as Botswana” that have efficiently managed their wealth of natural resources,” the document added.

“Sao Tome and Principe has enormous potential to become a medium income based on its size and per capita GDP, if it implements efficient and transparent management of its wealth of natural resources, thus preventing the so-called natural resources curse,” the report said. (macauhub)