Sao Tome and Principe Economy 2007

Economy - overview:
This small, poor island economy has become increasingly dependent on cocoa since independence in 1975. Cocoa production has substantially declined in recent years because of drought and mismanagement, but strengthening prices helped boost export earnings in 2003. Sao Tome has to import all fuels, most manufactured goods, consumer goods, and a substantial amount of food. Over the years, it has had difficulty servicing its external debt and has relied heavily on concessional aid and debt rescheduling. Sao Tome benefited from $200 million in debt relief in December 2000 under the Highly Indebted Poor Countries (HIPC) program, which helped bring down the country's $300 million debt burden. In August 2005, Sao Tome signed on to a new 3-year IMF Poverty Reduction and Growth Facility (PRGF) program worth $4.3 million. Considerable potential exists for development of a tourist industry, and the government has taken steps to expand facilities in recent years. The government also has attempted to reduce price controls and subsidies. Sao Tome is optimistic about the development of petroleum resources in its territorial waters in the oil-rich Gulf of Guinea, which are being jointly developed in a 60-40 split with Nigeria. The first production licenses were sold in 2004, though a dispute over licensing with Nigeria delayed Sao Tome's receipt of more than $20 million in signing bonuses for almost a year. Real GDP growth exceeded 4% in 2006, as a result of increases in public expenditures and oil-related capital investment.

GDP (purchasing power parity):
$278 million (2006 est.)

GDP (official exchange rate):
$71.38 million (2005 est.)

GDP - real growth rate:
4.4% (2006 est.)

GDP - per capita (PPP):
$1,200 (2003 est.)

GDP - composition by sector:
agriculture: 15%
industry: 13.7%
services: 71.3% (2006 est.)

Labor force:
35,050 (1991)

Labor force - by occupation:
note: population mainly engaged in subsistence agriculture and fishing; shortages of skilled workers

Unemployment rate:
NA%

Population below poverty line:
54% (2004 est.)

Household income or consumption by percentage share:
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices):
23.1% (2006 est.)

Investment (gross fixed):
40.4% of GDP (2006 est.)

Budget:
revenues: $42.96 million
expenditures: $59.61 million (2006 est.)

Agriculture - products:
cocoa, coconuts, palm kernels, copra, cinnamon, pepper, coffee, bananas, papayas, beans; poultry; fish

Industries:
light construction, textiles, soap, beer, fish processing, timber

Industrial production growth rate:
NA%

Electricity - production:
18 million kWh (2005)

Electricity - consumption:
16.74 million kWh (2005)

Electricity - exports:
0 kWh (2005)

Electricity - imports:
0 kWh (2005)

Oil - production:
0 bbl/day (2004 est.)

Oil - consumption:
660 bbl/day (2004 est.)

Oil - exports:
NA bbl/day

Oil - imports:
NA bbl/day

Oil - proved reserves:
0 bbl (1 January 2006)

Natural gas - production:
0 cu m (2005 est.)

Natural gas - consumption:
0 cu m (2005 est.)

Current account balance:
$-46 million (2006 est.)

Exports:
$3 million f.o.b. (2006 est.)

Exports - commodities:
cocoa 80%, copra, coffee, palm oil

Exports - partners:
Netherlands 47.9%, Belgium 19%, Portugal 9.3% (2006)

Imports:
$63 million f.o.b. (2006 est.)

Imports - commodities:
machinery and electrical equipment, food products, petroleum products

Imports - partners:
Portugal 48.8%, France 19.7%, Belgium 5.1%, US 5.1% (2006)

Economic aid - recipient:
$31.9 million in December 2000 under the HIPC program (2005)

Reserves of foreign exchange and gold:
$36 million (2006 est.)

Debt - external:
$318 million (2002)

Market value of publicly traded shares:
$NA

Currency (code):
dobra (STD)

Exchange rates:
dobras per US dollar - 12,050 (2006), 9,900.4 (2005), NA 9,902.3 (2004), 9,347.6 (2003), 9,088.3 (2002)