São Tomé & Príncipe Economic Outlook
- The Sao Tome and Principe economy grew by 5.3% in 2015, up from 4.5% in 2014, but should drop back to 5% in the next two years.
- Sao Tome and Principe was the top Central African performer for overall governance in the 2015 Ibrahim index with key improvements in economic opportunity, human rights and rule of law.
- The rural move into the city has made a national urbanisation strategy imperative in the absence of any national planning.
The Sao Tome and Principe economy grew by 5.3% in 2015, up from 4.5% in 2014. Economic growth is expected to remain above 5% in 2016 and 5.4% in 2017. Increased foreign direct investment in construction, agriculture, tourism and new projects funded by donors should lead and boost future growth. Inflation will decline to about 4.6% in 2016 and 4.7% in 2017, from 5.3% in 2015, backed by the fixed exchange rate regime. Structural reforms for sustainable economic growth and job creation are central to the government’s economic reform agenda. The reforms include improving the taxpayer registry and expanding the tax base by registering new taxpayers. The government has also revised its investment code, prepared financial sector and private sector development strategies and is implementing an automatic price adjustment mechanism for petroleum products. Effective implementation of the reforms and strategies will improve public administration efficiency and social services for the population.
The credibility, accountability and transparency of the SAFE financial administration system remain critical for the government. The system was started as a pilot project in four ministries dealing with decentralisation and was used to prepare the 2010, 2011, and 2012 financial accounts. The government is also finalising the establishment of an electronic financial control department to assist with financial accounts reporting.
The capital, Sao Tome, is the only urban agglomeration. Its 131 000 people in 2015 represented 68% of the total population. The city and its surrounding area is subject to increased urbanisation. The island of Principe (7 450 inhabitants in 2015) has no urban agglomeration. Although migration to the city seems to be slowing, the average annual urbanisation growth rate is estimated at 1.87% for 2013 to 2018.