IMF approves new support program for São Tomé and Príncipe

The International Monetary Fund (IMF) has approved a new US$18.2 million financial package for São Tomé and Príncipe, the institution said in a statement issued on Wednesday in Washington.

Support under an Extended Credit Facility (ECF) has a 40-month implementation deadline, and the IMF Executive Board’s decision will allow the immediate disbursement of US$2.6 million, according to the statement issued, “to support economic and structural reforms.”

The ECF agreement aims to support the present government’s economic reforms, macroeconomic stability as well as private sector-led economic growth, as well as improving the balance of payments and restoring fiscal and external sustainability in the medium term.

The document points out that São Tomé and Príncipe is a small island state with limited resources and capacity, its economy has a very limited production base and is heavily dependent on imports and foreign aid and that exports of goods account for just 4.0% of the total Gross Domestic Product.

It also stressed that tourism, agriculture and fisheries have potential for growth, although they require better infrastructure and investment by private entities, and added that while tourism has grown in recent years, local added value is very low due to the large amount of imports.

The statement said it would be this support programme complemented by a US$10 million World Bank support programme to protect poorer households. (Macauhub)