[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111693-en":3,"doc-seo-111693-105":29,"detail-sidebar-cat-0-en-105":90},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":4,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},111693,1374391975076,"Riley","https://ap-avatar.wpscdn.com/avatar/14000253ca4ec9f6853?x-image-process=image/resize,m_fixed,w_180,h_180&k=1783305029341752051",8,"Research & Report","DEMOCRATIC REPUBLIC OF SÃO TOMÉ AND PRÍNCIPE - JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS - Debt Distress Risk Assessment","São Tomé and Príncipe remains in external debt distress due to prolonged unsettled arrears of about 1.3 percent of GDP at end-2024. Despite this, staff assesses repayment capacity over time, with export recovery and fiscal consolidation reducing debt risks, while vulnerability to shocks remains high. Under the baseline, two external debt indicators temporarily exceed thresholds: the PV debt-to-exports ratio in 2025 and the debt service-to-exports ratio from 2025 to 2028.","Public Disclosure  \nPub lic Disc losure Authorized  \nApproved by:  \nManuela Francisco and Hassan Zaman (IDA) , and Costas Christou and Anna Ivanova Martin Cihak (IMF)  \nPrepared by the staff of the International Development Association (IDA) and the International Monetary Fund (IMF)  \n\n| DEMOCRATIC REPUBLIC OF SÃO TOMÉ AND PRÍNCIPE:\u003Cbr>JOINT BANK-FUND DEBT SUSTAINABILITY ANALYSIS |  |\n| --- | --- |\n| Risk of external debt distress | In debt distress |\n| Overall risk of debt distress | In debt distress |\n| Granularity in the risk rating | Sustainable |\n| Application of judgment | No |\n\nSão Tomé and Príncipe (STP) remains in debt distress, due to prolonged unsettled external arrears of around 1.3 percent of GDP at end-2024 . Nevertheless, staff assesses that the country has the capacity to repay the external arrears over time. Export recovery and fiscal consolidation will help lower debt risks. At the same time, the country remains highly vulnerable to shocks and changing macroeconomic conditions. Two external debt indicators temporarily breach their respective thresholds under the baseline. The present value (PV) of debt-to-exports ratio marginally breaches its threshold in 2025, and the debt service-to-exports ratio breaches the threshold from 2025 to 2028. The PV of total public and publicly guaranteed (PPG) debt breaches the benchmark (35 percent of GDP) from 2025 to 2027 but after accounting for the concessional terms of utility company EMAE’s and central government’s debt and arrears to the country’s fuel supplier ENCO, it remains within the benchmark through the projection horizon.1  \n1 The thresholds are determined by the Composite Indicator (CI) . São Tomé and Príncipe’s CI score based on the April 2025 World Economic Outlook (WEO) and the 2023 World Bank Country Policy Institutional Assessment (CPIA) data is 2.433, corresponding to a weak debt-carrying capacity.  \nPublic debt sustainability is preserved, as public debt remains on a downward trajectory, supported by the authorities’commitment to reform EMAE, borrow externally at a measured pace and on concessional terms, and implement fiscal consolidation and energy sector reforms. However, it is subject to large risks , particularly due to the elevated likelihood of contingent liabilities materializing, as already highlighted in the most recent DSA.  \n1. For the purposes of the DSA for São Tomé and Príncipe (STP), PPG debt includes the central government, the central bank, and EMAE’s debts.2,3 Public sector debt coverage is comprehensive albeit not yet complete (Text Table 1) .4 EMAE (Empresa de Agua e Electricidade , the state-owned utility company) has been accumulating arrears over the years to its fuel supplier ENCO (Empresa Nacional de Combustíveis e Óleos), totaling 23.1 percent of GDP at end-2024, which are included in PPG debt for DSA purposes.5 Contingent liabilities associated with the other three state-owned enterprises (SOEs)—ENAPORT, ENASA, and Correios—are estimated at 2 percent as of end-2023, based on the findings of a recent TA mission. The DSA applies the residency-based definition of external debt. Using the currency criterion would yield significantly different results, as EMAE’s debt and arrears to ENCO, though denominated in USD, are classified as domestic debt.  \n\n|  |\n| --- |\n| Subsectors of the Public Sector Subsectors Covered 1 Central government\u003Cbr> X 234567 State and local government \u003Cbr>Other elements in the general government \u003Cbr>o/w: Social security fund \u003Cbr>o/w: Extra budgetary funds (EBFs) \u003Cbr>Guarantees (to other entities in the public and private sector, including to SOEs) Central bank (borrowed on behalf of the government) \u003Cbr>XX 8 Non-guaranteed SOE debt\u003Cbr> |\n| Sources: IMF and World Bank staff.\u003Cbr>1 Includes EMAE.\u003Cbr>2 The recent IMF STA technical assistance mission confirmed that the social security fund and extra budgetary funds are not covered in the debt stock reporting. The authorities are working to improve the coverage. |\n\n","cbCaioNpemBo9gxq","https://ap.wps.com/l/cbCaioNpemBo9gxq","pdf",1487547,1,23,"English","en",105,"# Risk of external debt distress\n## Overall risk of debt distress\n## Granularity in the risk rating\n## Application of judgment\n## Debt indicators breaching thresholds\n## Public debt sustainability and reform commitments","[{\"question\":\"Why does São Tomé and Príncipe remain in external debt distress?\",\"answer\":\"It remains in debt distress because external arrears have stayed unsettled for a prolonged period, reaching around 1.3 percent of GDP at end-2024.\"},{\"question\":\"Which external debt indicators breach thresholds under the baseline?\",\"answer\":\"The PV debt-to-exports ratio marginally breaches its threshold in 2025, and the debt service-to-exports ratio breaches thresholds from 2025 to 2028.\"},{\"question\":\"How is public debt sustainability assessed despite high risks?\",\"answer\":\"Public debt is kept on a downward trajectory, supported by reform commitments for EMAE, measured concessional external borrowing, and fiscal consolidation plus energy sector reforms; however, large risks persist due to likely materialization of contingent liabilities.\"}]",1784491290,58,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":85,"head_meta":87,"extra_data":89,"updated_unix":27},"democratic-republic-of-sao-tome-and-principe-joint-bank-fund-debt-sustainability-analysis-debt-distress-risk-assessment","",{"@graph":35,"@context":84},[36,53,67],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/democratic-republic-of-sao-tome-and-principe-joint-bank-fund-debt-sustainability-analysis-debt-distress-risk-assessment/111693/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":61,"encodingFormat":60,"isAccessibleForFree":62,"interactionStatistic":63},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-19",true,{"@type":64,"interactionType":65,"userInteractionCount":4},"InteractionCounter",{"@type":66},"ViewAction",{"@type":68,"mainEntity":69},"FAQPage",[70,76,80],{"name":71,"@type":72,"acceptedAnswer":73},"Why does São Tomé and Príncipe remain in external debt distress?","Question",{"text":74,"@type":75},"It remains in debt distress because external arrears have stayed unsettled for a prolonged period, reaching around 1.3 percent of GDP at end-2024.","Answer",{"name":77,"@type":72,"acceptedAnswer":78},"Which external debt indicators breach thresholds under the baseline?",{"text":79,"@type":75},"The PV debt-to-exports ratio marginally breaches its threshold in 2025, and the debt service-to-exports ratio breaches thresholds from 2025 to 2028.",{"name":81,"@type":72,"acceptedAnswer":82},"How is public debt sustainability assessed despite high risks?",{"text":83,"@type":75},"Public debt is kept on a downward trajectory, supported by reform commitments for EMAE, measured concessional external borrowing, and fiscal consolidation plus energy sector reforms; 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