Sao Tome Economy, GDP, Budget, Industry and Agriculture

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Sao Tome Economy


View the information below regarding the economy of Sao Tome. The summary and statistics contains gdp, industry, agriculture and more for Sao Tome. If you need other information please visit the Sao Tome Country Page.

  • Sao Tome Government
  • Sao Tome People
  • Sao Tome Geography
  • Sao Tome History

    Economy
    GDP (1999 est): $45 million.
    Annual GDP growth rate (2002): 4.1%.
    Per capita GDP (2002): $439.
    Consumer price inflation (2002): 9.0%.
    Natural resources: Agricultural products, fish, petroleum (not yet exploited).
    Agriculture (17% of GDP, 1999): Products--cocoa, coconuts, copra, palm kernels, cinnamon, pepper, coffee, bananas, beans, poultry. Cultivated land--484 sq. kilometers.
    Industry (5.5% of GDP, 1999): Types--light construction, shirts, soap, beer, fisheries, shrimp processing, palm oil.
    Trade: Exports (2002)--$5.03 million: 95% cocoa, copra, palm kernels, coffee. Major markets-- Portugal, Netherlands, Spain, Germany, China. Imports (2002)--$31.4 million: food, fuel, machinery and electrical equipment. Major suppliers--Portugal (43%), France (16%), UK (14%). Total external debt (2002): $293.1 million.
    Exchange rate (May 2003): 9,192.7033 dobras=US$1.
    Fiscal year: Calendar year.

    Economy of Sao Tome
    Since the 1800s, the economy of Sao Tome and Principe has been based on plantation agriculture. At the time of independence, Portuguese-owned plantations occupied 90% of the cultivated area. After independence, control of these plantations passed to various state-owned agricultural enterprises, which have since been privatized. The dominant crop on Sao Tome is cocoa, representing about 95% of exports. Other export crops include copra, palm kernels, and coffee.

    Domestic food-crop production is inadequate to meet local consumption, so the country imports some of its food. Efforts have been made by the government in recent years to expand food production, and several projects have been undertaken, largely financed by foreign donors.

    Other than agriculture, the main economic activities are fishing and a small industrial sector engaged in processing local agricultural products and producing a few basic consumer goods. The scenic islands have potential for tourism, and the government is attempting to improve its rudimentary tourist industry infrastructure. The government sector accounts for about 11% of employment.

    Following independence, the country had a centrally directed economy with most means of production owned and controlled by the state. The original constitution guaranteed a “mixed economy,” with privately owned cooperatives combined with publicly owned property and means of production. In the 1980s and 1990s, the economy of Sao Tome encountered major difficulties. Economic growth stagnated, and cocoa exports dropped in both value and volume, creating large balance-of-payments deficits. Efforts to redistribute plantation land resulted in decreased cocoa production. At the same time, the international price of cocoa slumped.

    In response to its economic downturn, the government undertook a series of far-reaching economic reforms. In 1987, the government implemented an International Monetary Fund (IMF) structural adjustment program, and invited greater private participation in management of the parastatals, as well as in the agricultural, commercial, banking, and tourism sectors. The focus of economic reform since the early 1990s has been widespread privatization, especially of the state-run agricultural and industrial sectors.

    The Sao Tomean Government has traditionally obtained foreign assistance from various donors, including the UN Development Program, the World Bank, the European Union, Portugal, Taiwan, and the African Development Bank. In April 2000, the IMF approved a poverty reduction and growth facility for Sao Tome aimed at reducing inflation to 3% for 2001, raising ideal growth to 4%, and reducing the fiscal deficit. In late 2000, Sao Tome qualified for significant debt reduction under the IMF-World Bank’s heavily indebted poor countries (HIPC) initiative. The reduction, which should take effect in 2004, should free additional resources for poverty reduction and public investment.

    In 2001, Sao Tome and Nigeria reached agreement on joint exploration for petroleum in waters claimed by the two countries. After a lengthy series of negotiations, in April 2003 the joint development zone was opened for bids by international oil firms. Winners of the bidding round are expected to begin exploration in early 2004. Sao Tome stands to gain significant revenue both from the bidding process and from follow-on production, should reserves in the area match expectations.

    Portugal remains one of Sao Tome's major trading partners, particularly as a source of imports. Food, manufactured articles, machinery, and transportation equipment are imported primarily from the EU.

    source: http://www.state.gov

  • Sao Tome Government
  • Sao Tome People
  • Sao Tome Geography
  • Sao Tome History