[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-109597-en":3,"doc-seo-109597-105":30,"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":21,"is_downloadable":21,"audit_status":21,"page_count":22,"language":23,"language_code":24,"site_id":25,"html_lang":24,"table_of_contents":26,"faqs":27,"seo_title":13,"seo_description":14,"update_tm":28,"read_time":29},109597,687197207639,"Asher","https://ap-avatar.wpscdn.com/davatar_a8503ba1806abce46bf441b54a3ca4cd",8,"Research & Report","São Tomé and Príncipe - Joint World Bank-IMF Debt Sustainability Analysis","Joint World Bank-IMF Debt Sustainability Analysis assesses São Tomé and Príncipe’s external and public debt risks, concluding that the country remains in debt distress driven by persistent external arrears and severe public-sector liquidity constraints reflected in loss-making SOE EMAE’s domestic arrears. Baseline results show external PPG burden indicators largely below thresholds, while PV of total PPG remains above the high-risk benchmark due to the COVID-19 shock, but is assessed sustainable under concessional debt terms and planned reforms.","Public Disclosure Authorized  \nINTERNATIONAL DEVELOPMENT ASSOCIATION  \nINTERNATIONAL MONETARY FUND  \nSÃO TOMÉ AND PRÍNCIPE Joint World Bank-IMF Debt Sustainability Analysis  \nJuly 2020  \nPrepared Jointly by the staffs ofthe International Development Association (IDA)  \nand the International Monetary Fund (IMF)  \nApproved by Marcello Estevão (IDA), David Owen and Kevin Fletcher (IMF)  \nPub lic Disc losure Authorized  \n\n| São Tomé and Príncipe: Joint Bank-Fund Debt Sustainability Analysis 1 |  |\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 judgement | No |\n\nThe country remains in debt distress due to prolonged unsettled external arrears. In addition, the significant domestic arrears of the large loss-making state-owned utility company (EMAE) reflect the severe liquidity constraints of the public sector. Staff assesses that the country has the capacity to repay the external arrears over time, as indicated by the external debt ratios. While the present value (PV) of external public and publicly guaranteed (PPG) debt-to-exports ratio breaches its threshold in 2020 due to the COVID-19 shock, all other external PPG debt burden indicators remain well below their thresholds throughout the projection horizon in the baseline scenario.2, 3 While the PV of total PPG debt is currently above the high-risk benchmark, it can be deemed sustainable since the PV ofPPG debt falls below the benchmark when accounting for the terms of formalized concessional debt of EMAE and the government to the country’sfuel supplier, ENCO. Furthermore, the country is committed to implement EMAE’s planned reforms and borrow externally only on concessional terms at a measured pace. The likelihood of contingent liabilities materializing, particularly ENCO’s arrears to its parent company Sonangol (a stateowned company of Angola), remains relatively low  \n1 The DSA follows the IMF and World Bank Staff Guidance Note on the Application of the Joint Fund-Bank Debt Sustainability Framework (DSF) for Low-Income Countries (LICs) (February 2018). The country’s Composite Indicator score is 2.685, which is based on the October 2019 WEO and the 2018 CPIA, and its debt carrying capacity is assessed to be medium.  \n2 World Bank staff simulated a scenario assuming full disbursement of annual IDA allocations under credit terms, which did not affect the risk of external debt distress rating.  \n3 São Tomé and Príncipe has requested participation in the DSSI from all its official bilateral creditors. As of July 13, 2020, none of the creditors had yet formally responded to this request. The DSA baseline assumes the application of DSSI terms to eligible debt from G20/Paris Club creditors and other bilateral creditors that may associate with the Paris Club Memorandum of Understanding. Pending confirmation, DSSI terms are not applied to eligible debt from other bilateral creditors (Equatorial Guinea and Angola) .  \nPUBLIC DEBT COVERAGE  \n1. In the DSA framework for São Tomé and Príncipe, PPG debt coverage includes the central government andEMAE, a state-owned enterprise (SOE) providing utility.4 5 EMAE has been accumulating arrears over the years to its fuel supplier, ENCO, totaling over 26 percent of GDP at end-2019.6 7 Three SOEs besides EMAE—ENAPORT, ENASA, and Correios—are not included in the analysis due to lack of reliable data. Nevertheless, the potential liabilities from these SOEs are modeled by using the default value of 2 percent of GDP. Contingent liabilities from financial markets are also set at their default value of 5 percent of GDP. In addition, the contingent liability stress test further includes disputed debt of $30 million from Nigeria. The authorities maintain that its repayment was conditional on oil revenues, which have no near-term prospect for materialization. Finally, for the external DSA, the contingent liability shock als","cbCais7vizhG7k0a","https://ap.wps.com/l/cbCais7vizhG7k0a","pdf",615861,4,1,17,"English","en",105,"# Risk of debt distress\n## External debt distress assessment\n## Public debt coverage and contingent liabilities\n## Baseline scenario and threshold comparisons\n## Policy commitments and reforms","[{\"question\":\"Why does São Tomé and Príncipe remain in debt distress?\",\"answer\":\"The analysis attributes distress to prolonged unresolved external arrears and to significant domestic arrears accumulated by EMAE, the loss-making state-owned utility, which underscores severe public-sector liquidity constraints.\"},{\"question\":\"How do the external PPG debt burden indicators compare with thresholds?\",\"answer\":\"In the baseline scenario, all other external PPG debt burden indicators remain well below thresholds throughout the projection horizon, though the PV of external public and publicly guaranteed debt-to-exports ratio breaches its threshold in 2020 due to the COVID-19 shock.\"},{\"question\":\"What supports the conclusion that total PPG debt is sustainable despite high-risk signals?\",\"answer\":\"Although the PV of total PPG debt is above the high-risk benchmark currently, it is assessed sustainable because PV of PPG debt falls below the benchmark once accounting for the terms of formalized concessional debt involving EMAE and government arrangements with the fuel supplier ENCO, alongside commitments to implement reforms and borrow externally only on concessional 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does São Tomé and Príncipe remain in debt distress?","Question",{"text":75,"@type":76},"The analysis attributes distress to prolonged unresolved external arrears and to significant domestic arrears accumulated by EMAE, the loss-making state-owned utility, which underscores severe public-sector liquidity constraints.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"How do the external PPG debt burden indicators compare with thresholds?",{"text":80,"@type":76},"In the baseline scenario, all other external PPG debt burden indicators remain well below thresholds throughout the projection horizon, though the PV of external public and publicly guaranteed debt-to-exports ratio breaches its threshold in 2020 due to the COVID-19 shock.",{"name":82,"@type":73,"acceptedAnswer":83},"What supports the conclusion that total PPG debt is sustainable despite high-risk signals?",{"text":84,"@type":76},"Although the PV of total PPG debt is above the high-risk benchmark currently, it is assessed sustainable because PV of PPG debt falls below the benchmark once accounting for the terms of formalized concessional debt involving EMAE and government arrangements with the fuel supplier ENCO, alongside commitments to implement reforms and borrow externally only on concessional terms.","https://schema.org",{"og:url":52,"og:type":87,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":89,"canonical":52},"index,follow",{"doc_id":7,"site_id":25},{"code":4,"msg":5,"data":92},[93,97,101,105,110,115,120,123,128,131,135],{"id":21,"doc_module":4,"doc_module_name":46,"category_name":94,"show_sort_weight":95,"slug":96},"Story & 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