São Tomé and Príncipe parliament discusses amending budget to include funding from China

The São Tomée and Príncipe parliament on Tuesday is due to start discussing a proposed amending budget for this year, with a view to including financing from the country’s new cooperation with the People’s Republic of China, Macauhub has learned from a parliamentary source.

The proposal for the 2017 Amending Budget, approved last May by the Council of Ministers, was considered “unavoidable” by the government in view of “China’s expressed desire to initiate a new cycle of development cooperation focused on new areas of intervention and new financing.”

The Chinese funding, estimated at just over US$146 million, is the result of the implementation of the General Agreement on Economic, Scientific and Cultural Cooperation, signed last April in Beijing, following the re-establishment in December 2016 of diplomatic relations between the two countries.

In addition to specific agreements, particularly in the energy, tourism, health and fisheries sectors, China also expressed readiness to finance construction of the deep-water port, the modernisation of São Tome’s international airport, as well as pardoning a debt valued at about US$28 million.

The budget framework for Chinese cooperation funds will be in line with the recommendations of the International Monetary Fund (IMF), which completed a two-month review of the archipelago’s macroeconomic programme to adjust expenditure to revenue and reduce the budget deficit to 1.8% of Gross Domestic Product in 2017.

In response to IMF requirements, the government decided last May to cut fuels allocated to most public institutions and supplementary wage benefits and other public expenditure by 30% under measures classified as “transitional.”

The 2017 State Budget, approved at the end of January, includes expenses of just over 133 million euros, an increase of 23.4% over the estimated budget execution to December 2016.

Speaking to Macauhub in São Tomé, the spokesman for parliamentary office , Sualiz Dendê, said the debate on the proposal for the 2017 Amending Budget could last for three or four days. (macauhub)