[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-111434-en":3,"doc-seo-111434-105":29,"detail-sidebar-cat-0-en-105":91},{"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":20,"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},111434,5909877438554,"Maeve","https://ap-avatar.wpscdn.com/avatar/5600025385ad2bf12a7?_k=1778553567797529272",8,"Research & Report","Democratic Republic of São Tomé and Príncipe - Joint Bank-Fund Debt Sustainability Analysis","São Tomé and Príncipe remains in external debt distress because of prolonged unsettled external arrears of about 1.3 percent of GDP at end-2024. Staff assesses repayment capacity over time, with export recovery and fiscal consolidation reducing vulnerabilities. Under the baseline, two external debt indicators breach thresholds from 2025–2028, and PV of PPG debt exceeds the 35 percent benchmark between 2025–2030. Public debt stays on a downward path supported by reforms to EMAE, cautious concessional borrowing, and fiscal and energy-sector measures, despite elevated contingent-liability risks.","Public Disclosure Authorized  \nPub lic Disc losure Authorized  \nApproved by:  \nManuela Francisco and Hassan Zaman (IDA) , and Costas Christou and Anna Ivanova (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. Recovery of exports and fiscal consolidation will help lower debt vulnerabilities. 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 the debt-to-exports ratio and the debt service-to-exports ratio both breach 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 2030 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 breaches the threshold in 2025 but remains within the benchmark through the remaining projection horizon.1 Public debt sustainability is preserved, even if the authorities go forward with contracting a non-concessional loan, currently under discussion, for about 2 percent of GDP to finance a socially sensitive hospital project. Public debt remains on a downward trajectory, supported by the authorities’ commitment to reform EMAE, borrow externally at a measured pace and primarily 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 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 2024 World Bank Country Policy Institutional Assessment (CPIA) data is 2.464, corresponding to a weak debt-carrying capacity.  \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| \u003Cbr>Subsectors of the Public Sector Subsectors\u003Cbr>Covered |\n| 12345678  Central government   X \u003Cbr> State and local government    Other elements in the general government    o/w: Social security fund    o/w: Extra budgetary funds (EBFs)  \u003Cbr> Guarantees (to other entities in the public and private sector, including to SOEs)  X   Central bank (borrowed on behalf of the government)  X \u003Cbr> Non-guaranteed SOE debt   |\n| Sources: IMF and World Bank staff.\u003Cbr>1 Includes EM","cbCairKO7hPhzJcm","https://ap.wps.com/l/cbCairKO7hPhzJcm","pdf",910124,1,24,"English","en",105,"# Risk of external debt distress\n## Overall risk of debt distress\n## Granularity in the risk rating\n## Debt indicators and thresholds\n## Public debt sustainability and reform measures\n## Contingent liabilities and coverage","[{\"question\":\"Why does São Tomé and Príncipe remain in debt distress?\",\"answer\":\"It remains in external debt distress due to prolonged unsettled external arrears of around 1.3 percent of GDP at end-2024.\"},{\"question\":\"Which debt indicators breach thresholds under the baseline, and when?\",\"answer\":\"The PV of the debt-to-exports ratio and the debt service-to-exports ratio breach thresholds from 2025 to 2028. The PV of total PPG debt breaches the 35 percent of GDP benchmark from 2025 to 2030, with threshold behavior influenced by concessional terms and related debt adjustments.\"},{\"question\":\"What measures support public debt sustainability despite continued risks?\",\"answer\":\"The analysis links sustainability to authorities’ commitment to reform EMAE, borrow externally at a measured pace primarily on concessional terms, and implement fiscal consolidation and energy-sector reforms, while noting high risks from potential contingent liabilities.\"}]",1784490113,60,{"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":86,"head_meta":88,"extra_data":90,"updated_unix":27},"democratic-republic-of-sao-tome-and-principe-joint-bank-fund-debt-sustainability-analysis","",{"@graph":35,"@context":85},[36,53,68],{"@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/111434/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":62,"encodingFormat":60,"isAccessibleForFree":63,"interactionStatistic":64},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-20","2026-07-19",true,{"@type":65,"interactionType":66,"userInteractionCount":20},"InteractionCounter",{"@type":67},"ViewAction",{"@type":69,"mainEntity":70},"FAQPage",[71,77,81],{"name":72,"@type":73,"acceptedAnswer":74},"Why does São Tomé and Príncipe remain in debt distress?","Question",{"text":75,"@type":76},"It remains in external debt distress due to prolonged unsettled external arrears of around 1.3 percent of GDP at end-2024.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"Which debt indicators breach thresholds under the baseline, and when?",{"text":80,"@type":76},"The PV of the debt-to-exports ratio and the debt service-to-exports ratio breach thresholds from 2025 to 2028. The PV of total PPG debt breaches the 35 percent of GDP benchmark from 2025 to 2030, with threshold behavior influenced by concessional terms and related debt adjustments.",{"name":82,"@type":73,"acceptedAnswer":83},"What measures support public debt sustainability despite continued risks?",{"text":84,"@type":76},"The analysis links sustainability to authorities’ commitment to reform EMAE, borrow externally at a measured pace primarily on concessional terms, and implement fiscal consolidation and energy-sector reforms, while noting high risks from potential contingent liabilities.","https://schema.org",{"og:url":51,"og:type":87,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":89,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":92},[93,97,101,105,109,114,119,122,127,130,134],{"id":20,"doc_module":4,"doc_module_name":45,"category_name":94,"show_sort_weight":95,"slug":96},"Story & Novel",90,"story-novel",{"id":46,"doc_module":4,"doc_module_name":45,"category_name":98,"show_sort_weight":99,"slug":100},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":45,"category_name":102,"show_sort_weight":103,"slug":104},"Exam",70,"exam",{"id":106,"doc_module":4,"doc_module_name":45,"category_name":107,"show_sort_weight":28,"slug":108},5,"Comic","comic",{"id":110,"doc_module":4,"doc_module_name":45,"category_name":111,"show_sort_weight":112,"slug":113},6,"Technology",50,"technology",{"id":115,"doc_module":4,"doc_module_name":45,"category_name":116,"show_sort_weight":117,"slug":118},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":45,"category_name":12,"show_sort_weight":120,"slug":121},30,"research-report",{"id":123,"doc_module":4,"doc_module_name":45,"category_name":124,"show_sort_weight":125,"slug":126},9,"Religion & Spirituality",20,"religion-spirituality",{"id":125,"doc_module":4,"doc_module_name":45,"category_name":128,"show_sort_weight":125,"slug":129},"World Cup","world-cup",{"id":131,"doc_module":4,"doc_module_name":45,"category_name":132,"show_sort_weight":131,"slug":133},10,"Lifestyle","lifestyle",{"id":135,"doc_module":4,"doc_module_name":45,"category_name":136,"show_sort_weight":106,"slug":137},19,"General","general"]