IMF approves loan of 6.2 million to São Tomé and Príncipe

15 July 2015

The International Monetary Fund (IMF) approved a loan of US$6.2 million to São Tomé and Príncipe, to support the government’s reform programme and settle payment delays, the IMF said in a statement issued Tuesday.

“The new loan under the Extended Credit Facility aims to support the government programme of economic reforms, strengthen public finances, reduce vulnerabilities of the balance of payments and clear the long delays in payments,” the statement said.

“The economy of São Tomé and Príncipe has been strengthened in recent years, but the high levels of public debt and poverty remain among the biggest challenges,” said the deputy director of the IMF Mitsuhiro Furusawa, cited in the statement.

Gross domestic product (GDP) growth has increased, inflation has remained low, and international reserves have increased, therefore he said, “the medium-term prospects are generally favourable, with the acceleration of growth driven by foreign investment related to tourism and an increase in projects financed by international donors.”

The macroeconomic performance of São Tomé has been positive since 2012, with sustained growth and a drop in inflation, but poverty and debt remain high, noted the IMF, pointing out that GDP increased to 4.5 percent in 2014, based on an increase in foreign direct investment in the launch of new projects funded by donors and the improvement in tourist revenue.

The São Tomé and Príncipe 2015/2018 development programme remains in line with the national strategy for poverty reduction, approved in 2012, and will be updated next year, concluded the IMF. (macauhub/ST)