São Tomé and PríncipeSão Tomé and Príncipe

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Contact at AFI team is Enoch Randy Aikins
This entry was last updated on 24 August 2022 using IFs v7.63.

In this entry, we first describe the Current Path forecast for São Tomé and Príncipe as it is expected to unfold to 2043, the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term vision for Africa. 

The Current Path forecast is divided into summaries on demographics, economics, poverty, health/WaSH and climate change/energy. A second section then presents a single positive scenario for potential improvements in stability, demographics, health/WaSH, agriculture, education, manufacturing/transfers, leapfrogging, free trade, financial flows, infrastructure, governance and the impact of various scenarios on carbon emissions. With the individual impact of these sectors and dimensions having been considered, a final section presents the impact of the Combined Agenda 2063 scenario. 

We generally review the impact of each scenario and the Combined Agenda 2063 scenario on gross domestic product (GDP) per person and extreme poverty except for Health/WaSH that uses life expectancy and infant mortality. 

The information is presented graphically and supported by brief interpretive text. 

All US$ numbers are in 2017 values.

Summary

  • Current Path forecast
    • São Tomé and Príncipe is a lower middle-income country in Africa with a population of about 218 000 people. It is an island nation in the Gulf of Guinea, consisting of two archipelagos, and is located off the north-western coast of Gabon and Equatorial Guinea. Life expectancy in São Tomé and Príncipe was 71.2 years in 2019, and there is a high rate of deaths from non-communicable diseases. São Tomé and Príncipe’s GDP per capita in 2019 stood at US$3 322, and about 158 000 people live below the benchmark poverty line of US$3.20 for lower middle-income countries. Jump to forecast: Current Path
    • In the Current Path forecast, São Tomé and Príncipe increases its population from an estimated 218 000 people in 2019 to 351 000 people in 2043, and witnesses slower urbanisation compared to Africa’s lower middle-income countries, increasing from 72.7% in 2019 to 79.4% by 2043. Jump to Demographics: Current Path
    • Benin is expected to experience significant growth in GDP, reaching US$906.9 million in 2043, and increase in GDP per capita to US$4 910. The country slightly reduces its level of informality, with a decrease in the size of the informal sector’s contribution to GDP, from 28.7% in 2019 to 24.3% in 2043. Jump to Economics: Current Path
    • The country still struggles with the proportion of people living below the poverty line of US$3.20 with 62% of the population in 2043 in the Current Path forecast. Jump to Poverty: Current Path
    • São Tomé and Príncipe will remain a low carbon emitter, with only a 0.1 million ton increase in carbon emissions in 2043. Jump to Carbon emissions/Energy: Current Path
  • Sectoral scenarios
    • The Stability scenario will improve São Tomé and Príncipe’s score on the governance security index to 0.86 in 2043, and simultaneously increase GDP per capita to US$5 062, reducing the proportion of people living below the poverty line to 60.5% of the population. Jump to Stability scenario
    • São Tomé and Príncipe will achieve the Demographic dividend by 2039 in the Demographic scenario. Jump to Demographic scenario
    • The Health/WaSH scenario will increase life expectancy to 74.9 years by 2043, and reduce infant mortality per 1 000 live births to 13.4. Jump to Health/WaSH scenario
    • In the Agriculture scenario, São Tomé and Príncipe’s yield per hectare will rise to 8.7 metric tons, and the nation will remain a net importer of agricultural products with a balance of 14.4% total agricultural demand by 2043. Jump to Agriculture scenario
    • The Education scenario will result in a higher GDP per capita of US$5 098 by 2043, although the number of poor people in São Tomé and Príncipe will decline only marginally as a result of implementing this scenario. Jump to Education scenario
    • Government welfare transfers to households will increase to US$80 million in 2043 in the Manufacturing/Transfers scenario. Jump to Manufacturing/Transfers scenario
    • The Leapfrogging scenario will increase mobile broadband subscriptions per 100 people from 47.2 in 2019 to 152.3 in 2043, and also enable access to electricity to 91.5% of the population. Jump to Leapfrogging scenario
    • In the Free Trade scenario, there will be an increase in GDP per capita to US$5 611 by 2043 and a reduction in the proportion of poor people in São Tomé and Príncipe to 56.3% of the population. Jump to Free Trade scenario
    • The Financial Flows scenario will decrease the amount of foreign aid as a percentage of GDP, while also increasing the contribution of foreign direct investment to São Tomé and Príncipe’s economy to 7.9% in 2043. Jump to Financial Flows scenario
    • The Infrastructure scenario will increase the percentage of the rural population living within 2 km of all-weather roads to 74.3% by 2043. Jump to Infrastructure scenario
    • The Governance scenario will increase GDP per capita to US$5 065 in 2043. Jump to Governance scenario
    • While São Tomé and Príncipe’s carbon emissions are projected to increase in all the scenarios, the Free Trade scenario will have the greatest effect. Jump to Impact of scenarios on carbon emissions
  • Combined Agenda 2063 scenario
    • In the Combined Agenda 2063 scenario, São Tomé and Príncipe’s GDP per capita will increase by US$2 172 in 2043, with the Free Trade and Manufacturing/Transfers scenarios having the greatest potential to increase GDP per capita. There will be aggressive growth of the economy to US$1.5 billion in 2043, compared to projections of US$900 million in the Current Path forecast, and a reduction in the number of people living below the poverty line to 130 000 (39.8% of population). Jump to Combined Agenda 2063 scenario

All charts for São Tomé and Príncipe

Chart 1: Political map of São Tomé and Príncipe
Chart
Source: African Futures
São Tomé and Príncipe: Current Path forecast

São Tomé and Príncipe: Current Path forecast

This page provides an overview of the key characteristics of São Tomé and Príncipe along its likely (or Current Path) development trajectory. The Current Path forecast from the International Futures forecasting (IFs) platform is a dynamic scenario that imitates the continuation of current policies and environmental conditions. The Current Path is therefore in congruence with historical patterns and produces a series of dynamic forecasts endogenised in relationships across crucial global systems. We use 2019 as a standard reference year and the forecasts generally extend to 2043 to coincide with the end of the third ten-year implementation plan of the African Union’s Agenda 2063 long-term development vision.

São Tomé and Príncipe is a member of the Community of Sahel–Saharan States (CEN–SAD), the Economic Community of Central African States (ECCAS), and is one of 23 lower middle-income countries in Africa according to the World Bank’s income classification.

It is an island country in the Gulf of Guinea, consisting of two archipelagos, and is located off the western coast of Gabon and Equatorial Guinea. Covering an area of about 1 000 km2, São Tomé and Príncipe is the second smallest and second least populous African sovereign state after Seychelles. The country gained independence in 1975 and while Portuguese is the official language of the country, a number of other local languages are recognised as regional languages. The population was estimated to be 218 000 people in 2019. The country’s climate is tropical, cooling down further towards the interior.

São Tomé and Príncipe is divided into districts. The larger island of São Tomé is divided into six districts (Água Grande, Cantagalo, Caué, Lembá, Lobata, and Mé-Zóchi) and Príncipe is a single district (Pagué). The capital and largest city of São Tomé and Príncipe is São Tomé. The São Tomean economy relies heavily on agriculture, tourism, fishing, and limited industry. Key exports from São Tomé and Príncipe include gas turbines, cocoa beans, and other agricultural products like pepper, coconut and chocolate. While the islands have no known mineral resources, there have been some investments in exploring and developing the petroleum sector for the country off-shore.

Chart 1: Political map of São Tomé and Príncipe
Chart
Source: African Futures
Demographics: Current Path

Demographics: Current Path

São Tomé and Príncipe is the second least populous country in Africa and the least populous country in East Africa. The country’s population in 1990 was 119 000. Over the past 29 years, São Tomé and Príncipe’s population has increased to 218 000, representing an increase of 83.2% over the period. The population of the country is forecast to increase to 351 000 by 2043 along the Current Path. This will constitute an increase of 61% over the period, suggesting that the projected population growth over the next 24 years will be slower than the preceding 29 years.

The projected slower growth of the population may be as a result of the expected decline in the fertility rate through the use of improved birth control methods such as contraceptives. The country has a youth bulge of 46.3% and a median age of 18.6 years in 2019. Despite the projected decline in the youth bulge, it will still remain above 40% across the forecast period. This raises concerns about youth unemployment in the country, which stood at 23.1% among people aged 15–24 years in 2020. The lack of a youth employment policy together with information asymmetry between employers and job seekers has worsened the challenges of integrating youth into the country, and has led to the failure of most of the policy interventions aimed at addressing youth unemployment in the country. In 2009, the government attempted to increase youth employment by reducing the minimum wage for young people without comparable qualifications; however, this was not successful due to the absence of legislation to support the initiative.

In addition, 41.7% of São Tomé and Príncipe’s population is under the age of 15 years and 27.1% is under the age of 30 years. Given the projected decline in the fertility rate from 4.2 births per woman in 2019 to 2.9 births per woman in 2043, the proportion of people under the age of 15 is also expected to decline to 33%. This decline coupled with extended life expectancy will impact the share of the adult population from 30 years and older that is projected to increase from 28.4% in 2019 to 34.2% in 2043.

São Tomé and Príncipe made the urban transition about 24 years earlier than the average for lower middle-income African countries. By the turn of the century, the country was the eighth most urbanised in Africa. In 1990, the majority of the São Tomé and Príncipe population (56.4%) resided in rural areas. By 1997, the country had already attained parity in urban–rural settlement and by 2019, urban residents constituted 72.7% of the population, signalling rapid urbanisation of the country. Rural–urban migration in the country can be attributed to the influx of young people from rural communities into urban areas, mainly the national capital São Tomé and Príncipe, in search of employment opportunities. This was intensified by weak cocoa prices in the country that drove young people out of the agriculture sector in search of other income opportunities. By 2043, it is projected that the proportion of the population that will reside in the urban areas will increase to 79.4%, meaning that the country’s urbanisation rate will slow down.

The total land area for the country is small at only 1 001 km². In 2019, São Tomé and Príncipe was the most densely populated country in Central Africa and the sixth most densely populated country in Africa. The population density of the country is estimated to be about 2.3 people per hectare, which is far higher than the average of 0.45 for Africa and 0.6 for lower middle-income Africa. The population of São Tomé is highly concentrated on São Tomé island with only a minority residing on Príncipe island. The capital city São Tomé alone hosts over a third of the country’s population. There is also quite a large number of people living in dispersed settlements locally known as lucháns.

Chart 4: Population density map for 2019
Chart
Source: African Futures
Economics: Current Path

Economics: Current Path

From 1990 to 2019 the GDP of São Tomé and Príncipe increased from US$126.4 million to US$345.5 million, representing an increase of 173.3%. Economic growth in the country was hindered in the 1990s primarily due to political and macroeconomic instability coupled with the weak participation of the private sector of the country. From 1991 to 2014, the country witnessed 17 changes in government. Private investment was low during this period, especially in the tourism sector. There have been various reforms, such as the Heavily Indebted Poor Countries programme (HIPCs) in the 2000s, aimed at improving macroeconomic stability and economic performance. These reforms largely stabilised the exchange rate, led to debt forgiveness, increased private investment, improved the macroeconomic stability and restored the economy on the path of growth. Over the next 24 years, São Tomé and Príncipe’s GDP is estimated to increase to US$906.9 million from its level in 2019, constituting a 162.5% increase. The increase in GDP reflects the higher economic growth expected to occur in the forecast horizon compared to previous years. The economy is projected to grow due to the expected increase in demand for exported commodities such as cocoa, palm oil and the resumption of tourism after the COVID-19 pandemic.

Although many of the charts in the sectoral scenarios also include GDP per capita, this overview is an essential point of departure for interpreting the general economic outlook of São Tomé and Príncipe.

São Tomé and Príncipe’s GDP per capita has seen a steady increase over time despite the country’s rapid population growth. The GDP per capita increased by 33.7% from US$2 484 in 1990 to US$3 322 in 2019, reflecting the relatively high GDP growth compared to population size over this period. While population growth has hovered in the range of 1.4% to 2.9%, GDP growth was mostly above this range and reached as high as 9.1% in 2006. With the projected increase in GDP and decline in fertility rates, it is forecast that the GDP per capita will rise such that by 2043, the GDP per capita will increase to US$4 910. This represents an increase of about 47.8% over the period. While this growth is promising it should be noted that the country’s GDP per capita was far lower than the average for lower middle-income countries in Africa. Indeed, the gap between São Tomé and Príncipe and its peers on the continent is expected to widen from US$3 667 in 2019 to US$4 232 by 2043. This suggests that São Tomé and Príncipe either has a higher population growth rate or slower economic growth or even both compared to the average lower middle-income country in Africa.

In 2019, the size of the informal sector in São Tomé and Príncipe was equivalent to 28.7% of GDP, representing US$91 million, which was slightly lower than the average of 29.2% for lower middle-income African countries. This suggests that compared to its income peer group, São Tomé and Príncipe has performed relatively better at formalising its economy. The size of the informal sector is expected to decline to 24.3% by 2043, constituting a 4.4 percentage point decrease over the 24-year period. In 2019, the total number of people employed in the informal economy constituted 51.7% of the total labour force; this is expected to decline to 40.6% in 2043. It is therefore not surprising that the level of informality will also decline within the same period. The informal sector in São Tomé and Príncipe is dominated by women and youth. The country received a grant of US$10.7 million from the African Development Fund for the country to fund the first phase of the Zuntámon Lusophone Compact Initiative, which was supposed to improve the business environment and create incentives for informal businesses to formalise their operations. By 2043, the size of the informal sector in São Tomé and Príncipe is projected to be about 2.1 percentage points smaller than the average of 26.4% for lower middle-income African countries.

The IFs platform uses data from the Global Trade and Analysis Project (GTAP) to classify economic activity into six sectors: agriculture, energy, materials (including mining), manufacturing, service and information and communication technologies (ICT). Most other sources use a threefold distinction between only agriculture, industry and services with the result that data may differ.

The three largest contributing sectors to GDP in São Tomé and Príncipe are the service, agriculture and manufacturing sectors, although the economy most heavily relies on the service sector. The service sector in São Tomé and Príncipe is dominated by tourism. In 2019, its contribution to GDP was about US$0.25 billion (71.1% of GDP), and is expected to increase to US$670 million by 2043 (74% of GDP). The agriculture sector is currently the second largest contributor to GDP with a share of US$40 million (11.9% of GDP) in 2019. However, the share of agriculture is projected to decline to US$50 million (5.1%). Manufacturing is the third most significant contributor to GDP, with a share of US$30 million (10.2%). The manufacturing sector will overtake the agriculture sector as the second largest contributor to GDP so that by 2043, the manufacturing sector will contribute 6.9 percentage points more to GDP than agriculture. This is indicative of a transforming economy shifting away from the primary sector.

The data on agricultural production and demand in the IFs forecasting platform initialises from data provided on food balances by the Food and Agriculture Organization (FAO). IFs contains data on numerous types of agriculture but aggregates its forecast into crops, meat and fish, presented in million metric tons. Chart 9 shows agricultural production and demand as a total of all three categories.

In 2018, the total agricultural land area of São Tomé and Príncipe was 440 km2, constituting 45.8% of the total land area. Cocoa is the main cash crop of the country, and its cultivation takes up about 60% of all arable land in the country. Other crops grown in the country include taro, cocoyam, bananas, cacao and oil palm. In 1990, São Tomé and Príncipe’s demand for agricultural products exceeded domestic production by 10 000 metric tons; this gap widened to 50 000 metric tons in 2019. Some challenges facing the agriculture sector include lack of access to credit facilities, low productivity as a result of the lack of improved methods of farming, poor transportation networks and small farm sizes. Access to land for agriculture purposes and poor climatic conditions also continue to remain a challenge for many people, especially women and youth. Despite these challenges, yield per hectare for crops is expected to increase slightly from 3.4 metric tons in 2019 to 4.7 metric tons in 2043. Agriculture demand will continue to outstrip domestic production. In 2043 the shortfall is expected to be about 190 000 metric tons, representing a 280% increase over the forecast horizon. This raises concerns about food security in the country and emphasises the importance of intervention in this sector.

Poverty: Current Path

Poverty: Current Path

There are numerous methodologies for and approaches to defining poverty. We measure income poverty and use GDP per capita as a proxy. In 2015, the World Bank adopted the measure of US$1.90 per person per day (in 2011 international prices), also used to measure progress towards the achievement of Sustainable Development Goal (SDG) 1 of eradicating extreme poverty. To account for extreme poverty in richer countries occurring at slightly higher levels of income than in poor countries, the World Bank introduced three additional poverty lines in 2017:

  • US$3.20 for lower middle-income countries 
  • US$5.50 for upper middle-income countries
  • US$22.70 for high-income countries.

As a lower middle-income country, São Tomé and Príncipe uses the US$3.20 benchmark for extreme poverty. The incidence of poverty in the country is more prevalent among women than men, according to the 2010 household survey. The country suffers from high levels of systemic poverty. The underlying causes of poverty in the country include low incomes and the lack of means of production. Although the majority of poor people are in the rural areas, there is a gradual shifting of poverty from the rural areas to the urban centres, especially in the national capital. The growth in urban poverty can be attributed to growing youth unemployment and lack of opportunities in other sectors of the economy aside from the traditional sectors, such as agriculture, as well as the large percentage of people residing in urban centres. As of 2019, 72.6% of São Tomé and Príncipe’s population (158 000 people), were surviving on less than US$3.20 per day. The absolute number of poor people living below the poverty line of US$3.20 is projected to increase to 218 000 by 2043. The proportion of the population living below the poverty line will initially increase to 76.9% due to the impact of the COVID-19 pandemic and then slightly decline to 75.2% by 2022. It will then rise again, peaking in 2026 at about 77.3%. Thereafter, the proportion of people living below US$3.20 will assume a downward trend so that by 2043, the number of people in absolute poverty will be 62% of the population. This means that the proportion of the poor population will reduce by 10.6 percentage points in the forecast horizon. However, the number of poor people will increase by 60 000. Throughout the period under consideration, the proportion of poor people in São Tomé and Príncipe is significantly higher than the average for lower middle-income countries in Africa, such that by 2043, the extreme poverty rate in São Tomé and Príncipe is a 23.7 percentage points above the projected average of 38.3% for lower middle-income Africa.

Carbon Emissions/Energy: Current Path

Carbon Emissions/Energy: Current Path

The IFs platform forecasts six types of energy, namely oil, gas, coal, hydro, nuclear and other renewables. To allow comparisons between different types of energy, the data is converted into billion barrels of oil equivalent (BBOE). The energy contained in a barrel of oil is approximately 5.8 million British thermal units (MBTUs) or 1 700 kilowatt-hours (kWh) of energy.

The country has low energy production of oil, coal and gas, but it is sufficient to meet its current needs. In 2019, the total amount of oil produced in São Tomé and Príncipe was 0.1 million BOE, constituting about 33.3% of total energy production. This was complemented by gas and coal production also amounting to 0.1 million BOE (33.3%) each. By 2043, gas will become the dominant type of energy produced in São Tomé and Príncipe, with a total production amounting to 0.3 million BOE (42.9% of total energy production). This is followed by oil with a production capacity of 0.2 million BOE (28.6% of total production). From 2031, the country will begin production of other renewable energies so that by 2043, they will constitute 14.3% of total energy production in the country. Bioenergy currently makes up the majority of renewable energy used in São Tomé and Príncipe, but the country does boast great hydro/marine renewable potential as well as solar.

Carbon is released in many ways, but the three most important contributors to greenhouse gases are carbon dioxide (CO2), carbon monoxide (CO) and methane (CH4). Since each has a different molecular weight, IFs uses carbon. Many other sites and calculations use CO2 equivalent.

São Tomé and Príncipe is one of the countries in Africa with significantly low levels of carbon emissions. Carbon emissions are projected to increase from negligible figures in 2019 to about 100 000 tons of carbon in 2043 on the Current Path. The power industry accounts for 62% of total carbon emissions in the country, followed by the transport industry, which contributes about 29.3% of emitted carbon.

Stability scenario

Stability scenario

The Stability scenario represents reasonable but ambitious reductions in risk of regime instability and lower levels of internal conflict. Stability is generally a prerequisite for other aspects of development and this would encourage inflows of foreign direct investment (FDI) and improve business confidence. Better governance through the accountability that follows substantive democracy is modelled separately.

The intervention is explained here in the thematic part of the website.

Since independence, São Tomé and Príncipe has had a history of political instability; however, the 1990 constitution ushered the country into a system of multiparty democracy. Since then, there have been peaceful transfers of power from one party to another, helping to promote stability in the country. The country’s president is elected democratically for a five-year term. The incumbent Carlos Vila Nova took power from the opposition party in 2021. The prime minister is appointed by the president but must receive the approval of the majority party in the National Assembly. Finally, members of the National Legislative Assembly are elected for a four-year period. In 2019, São Tomé and Príncipe’s score on the governance security index was 0.72, which was on par with the average for lower middle-income countries in Africa. In the Stability scenario, the country’s score is projected to rise to 0.86 in 2043, which is 0.09 points above the Current Path forecast in the same year. The forecast for the country remains on par with that projected for lower middle-income Africa.

In 2019, the GDP per capita for São Tomé and Príncipe was US$3 322, which was less than the average of US$6 989 for lower middle-income countries in Africa. In the Stability scenario, GDP per capita is projected to increase to US$5 062 by 2043, representing an increase of 52.4% over the period. The Stability scenario has the potential to raise the GDP per capita by an additional US$152 compared to the Current Path forecast in 2043. This will still be US$4 080 lower than the average of US$9 142 for lower middle-income countries in Africa. The anticipated growth in GDP can be explained by the fact that good governance attracts foreign investment that ultimately stimulates economic growth.

With São Tomé and Príncipe being a lower middle-income country, it uses the global poverty benchmark of US$3.20. In 2019, the number of poor people was 158 000, equivalent to 72.6% of the population. The Stability scenario will reduce the proportion of people living below the poverty line to 60.5% by 2043, which is 1.5 percentage points below the Current Path forecast, but 22.2 percentage points below the average for lower middle-income countries in Africa. Also, the number of poor people will decline from the 218 000 people projected on the Current Path to 209 000 people in the Stability scenario in 2043. This means that by 2043 the materialisation of the Stability scenario could lead to 9 000 fewer poor people compared to the Current Path forecast.

Demographic scenario

Demographic scenario

This section presents the impact of a Demographic scenario that aims to hasten and increase the demographic dividend through reasonable but ambitious reductions in the communicable-disease burden for children under five, the maternal mortality ratio and increased access to modern contraception. 

The intervention is explained here in the thematic part of the website.

Demographers typically differentiate between a first, second and even a third demographic dividend. We focus here on the contribution of the size of the labour force (between 15 and 64 years of age) relative to dependants (children and the elderly) as part of the first dividend. A window of opportunity opens when the ratio of the working-age population to dependants is equal to or surpasses 1.7.

In 2019, the ratio of the working-age persons to dependants in São Tomé and Príncipe was 1.2, which means that there were 1.2 working-age people for each dependant in the country. This was less than the average of 1.32 for lower middle-income countries in Africa and less than the average 1.3 for Africa. In the Current Path forecast, the country will not be able to reach its demographic dividend in the forecast horizon. In the Demographic scenario, São Tomé and Príncipe is projected to reach its demographic dividend by 2039 so that by 2043, the ratio of working-age persons to dependants is projected to be 1.9. This is higher than the projection of 1.6 on the Current Path and the 1.6 projected average for lower middle-income countries in Africa. São Tomé and Príncipe’s attainment of the demographic dividend can be attributed to the improved contraceptive use that is expected to lead to a decline in fertility rates in the Demographic scenario. It can also stem from a reduction in infant and maternal mortality and increased lifespan.

The infant mortality rate is the number of infant deaths per 1 000 live births and is an important marker of the overall quality of the health system in a country.

In 2019, the infant mortality rate in São Tomé and Príncipe was 23.9 deaths per 1 000 live births. This figure is significantly lower than the average of 46.4 for lower middle-income countries in Africa. By 2043, the Demographic scenario will lead to a decline in infant mortality of 11.5 deaths per 1 000 live births, which is 2 deaths lower than the Current Path forecast and 18.2 deaths lower than the average for lower middle-income countries in Africa.

In 2019, the GDP per capita for São Tomé and Príncipe was US$3 322, which was far below the US$6 989 average for lower middle-income African countries. By 2043, it is estimated that based on the Demographic scenario, GDP per capita will increase to US$5 100, which is US$190 more than the projected US$4 910 on the Current Path in the same year. The additional increase in GDP per capita as a result of the Demographic scenario can be as result of the projected decline in population growth due to decline in fertility rates. However, the projected GDP per capita in the Demographic scenario will be US$4 042 less compared to the average for lower middle-income countries in Africa.

In the Demographic scenario, the number of poor people in São Tomé and Príncipe will decline to 198 000 in 2043, which will be 20 000 people fewer than in the Current Path forecast. Similarly, the proportion of the poor population can be reduced to 59.8% in the Demographic scenario, which is 2.2 percentage points lower than the Current Path forecast but 21.5 percentage points higher than the average for lower middle-income Africa in 2043. The decline in both the number and portion of poor people in the Demographic scenario compared to the Current Path forecast is indicative of the decline in population size as a result of a reduction in fertility rates.

Health/WaSH scenario

Health/WaSH scenario

This section presents reasonable but ambitious improvements in the Health/WaSH scenario, which include reductions in the mortality rate associated with both communicable diseases (e.g. AIDS, diarrhoea, malaria and respiratory infections) and non-communicable diseases (NCDs) (e.g. diabetes), as well as improvements in access to safe water and better sanitation. The acronym WaSH stands for water, sanitation and hygiene.

The intervention is explained here in the thematic part of the website.

The life expectancy at birth for the average person in São Tomé and Príncipe was 71.2 years in 2019, which was higher than the average of 67.5 for lower middle-income countries in Africa. This can be attributed to the country’s reduction in deaths from communicable diseases. Nevertheless, there is more to be done to reduce deaths as a result of non-communicable diseases such as lower respiratory infections, high blood pressure, cerebrovascular, anaemia, ischaemic heart diseases, strokes, cancer, diabetes, and respiratory infections. On average, females have a higher life expectancy at birth (72.8 years) compared to males (69.6 years). In the Health/WaSH scenario, life expectancy is estimated to increase to about 74.9 years by 2043, which is on par with the Current Path forecast of 74.8 years and above the average of 73.3 years for lower middle-income African countries. In both the Current Path forecast and the Health/WaSH scenario, females will continue to have a higher life expectancy compared to males with a difference of about 4 years by 2043.

As noted earlier, the infant mortality rate per 1 000 live births in São Tomé and Príncipe in 2019 was 23.9 — below the average of 46.4 for lower middle-income countries in Africa. By 2043, infant mortality per 1 000 live births in the country will be 13.4 in the Health/WaSH scenario and 13.5 in the Current Path forecast, respectively, both of which are far lower than the projected average for lower middle-income countries in Africa. This means that the Health/WaSH scenario reduces infant mortality only slightly more than the Current Path forecast. The Demographic scenario leads to a much quicker reduction in infant mortality compared to the Health/WaSH scenario.

Agriculture scenario

Agriculture scenario

The Agriculture scenario represents reasonable but ambitious increases in yields per hectare (reflecting better management and seed and fertiliser technology), increased land under irrigation and reduced loss and waste. Where appropriate, it includes an increase in calorie consumption, reflecting the prioritisation of food self-sufficiency above food exports as a desirable policy objective.

The intervention is explained here in the thematic part of the website.

The data on yield per hectare (in metric tons) is for crops but does not distinguish between different categories of crops.

The São Tomean agriculture sector provided employment for about 18.7% of the population in 2020. In 2019, the average yield per hectare for crops was 3.5 metric tons, which was lower than the average of 5.1 metric tons per hectare for lower middle-income countries in Africa. This means that compared to its income group peers, São Tomé and Príncipe has not been able to adopt measures such as improved technology and mechanised agriculture that could increase yield per hectare. This has led to demand exceeding production in the country. Agricultural yield per hectare is projected to increase in both the Current Path forecast and the Agriculture scenario, although the increase is much quicker in the latter. By 2043, the Current Path forecast will lead to an increase in yield per hectare of 4.7 metric tons, which is still below the average for lower middle-income Africa. In the Agriculture scenario, the projected yield per hectare climbs to 8.7 metric tons, which is 4 metric tons per hectare more than the Current Path estimates. The projections in the Agriculture scenario will be higher than the average of 6.1 metric tons projected for lower middle-income African countries.

In 2019, the net agricultural import was 23% of agricultural demand in São Tomé and Príncipe, which was above the average of 13.3% for lower middle-income countries in Africa. The country imports large quantities of food to meet its growing demands. The major food items imported into the country are wheat, rice, soybeans, oil and sugar. Based on the Current Path forecast, import dependence will grow to 54.3% of total demand by 2043 as demand surpasses domestic production. The situation is mitigated in the Agriculture scenario as the net agricultural import deficit declines until it reaches a minimum of 3.6% in 2035. Afterwards, it assumes an upward trend so that by 2043, the country’s net import of agricultural products will be 14.4% of total agricultural demand. This will be lower than the projected average of 36.8% for lower middle-income countries in Africa.

The agriculture sector accounted for about 13% of GDP in São Tomé and Príncipe in 2020. The Agriculture scenario is expected to lead to an increase in GDP per capita over the years. By 2043, the GDP per capita as a result of the Agriculture scenario will increase from the US$3 322 in 2019 to US$5 037, constituting a 51.6% increase over the period. This is above the Current Path estimates of US$4 910. In the Agriculture scenario, São Tomé and Príncipe’s GDP per capita will still be far lower than the average of US$9 142 for lower middle-income countries in Africa.

In the Agriculture scenario, it is forecasted that 195 000 people, representing 55.6% of the population, will live on less than US$3.20 a day by 2043. This is 6.4 percentage points lower than Current Path forecast but 17.3 percentage points above the average for lower middle-income countries in Africa. It means that the Agriculture scenario could reduce absolute poverty by 23 000 people in São Tomé and Príncipe. The effect of agriculture on poverty reduction is expected, given that most of the poor people in the country depend on subsistence agriculture and farming to survive, especially those working in the cacao plantations.

Education scenario

Education scenario

The Education scenario represents reasonable but ambitious improved intake, transition and graduation rates from primary to tertiary levels and better quality of education. It also models substantive progress towards gender parity at all levels, additional vocational training at secondary school level and increases in the share of science and engineering graduates.

The intervention is explained here in the thematic part of the website.

São Tomé and Príncipe has made significant gains in its educational sector. However, there are still challenges. According to the country’s outlined education sector plan, the Educational Policy Charter 2012–2020, the objective is for the government to provide free, quality education to all children in the country. Primary education is universal, free and compulsory up to the age of 15, although families are responsible for buying items such as books and uniforms. Despite the high literacy rate, higher education enrolment and attendance is very low. For instance, in 2010, the number of young people with post-primary education stood at about 1.2% of the total youth population. In 2019, São Tomé and Príncipe’s mean years of education was 6.5, which was below the average of 7.2 for lower middle-income countries on the continent. In terms of gender, the mean years of education for males were 6.8 years, which is 0.6 years more than the average for females of 6.2 years. This means that on average, men are more likely to attain an additional 0.6 years of higher education compared to women. The gap in favour of men for mean years of education in São Tomé and Príncipe is lower than the average of 1.3 years for lower middle-income countries in Africa. By 2043, in the Education scenario, it is expected that the mean years of education will rise to 8.3 years, which will be 0.2 years more than the Current Path estimates of 8.1 and 0.2 years fewer than the average for lower middle-income countries in Africa at 8.5. Also, in the Education scenario, the gender gap regarding mean years of education will be 0.1 years in favour of women in 2043 compared to the 0.9 years in favour of men for the average lower middle-income countries in Africa within the same period. This suggests that over the forecast period, São Tomé and Príncipe will perform better at ensuring equal school enrolment for boys and girls.

The main challenges facing the educational sector in São Tomé and Príncipe are low quality, poor governance and the inefficiency of the education sector. For instance, it is estimated that about 60% of primary school teachers lack the requisite qualifications. The average test score for primary learners in São Tomé and Príncipe for 2019 was 30.9 out of 100, which was less than the average of 33.6 for lower middle-income countries in Africa. The Education scenario will increase the average test scores for primary learners to 42.8, compared to the Current Path scenario which is estimated at 36.3. Moreover, the Education scenario for 2043 will result in scores which are 7.5 percentage points more than the average for lower middle-income African countries.

In 2019, the average secondary learner test score for São Tomé and Príncipe was 40.6 out of 100, which was below the average of 41.7 for lower-middle-income African countries. São Tomé and Príncipe performs relatively better at secondary level than at primary level. By 2043, the average test scores for secondary learners in the Education scenario is projected to rise to 53.9, which is 9.2 percentage points above the Current Path estimates and 12.1 percentages higher than the average of 41.8 for lower middle-income countries in Africa.

By 2043, the GDP per capita in São Tomé and Príncipe as a result of the Education scenario is estimated to be US$5 098, which is US$188 more than the projected US$4 910 in the Current Path forecast. Investment in education increases the human capital formation of a country, which ultimately leads to improvements in productivity and economic growth. The projected GDP per capita in the Education scenario is still below the average of US$9 142 for lower middle-income countries in Africa.

By 2043, in the Education scenario, it is projected that there will be 211 000 poor people (60.2% of the population). This means that the Education scenario will contribute to reducing the number of poor people by 7 000 in 2043 compared to the Current Path forecast. Education improves the viability of getting jobs or starting a business, which improves livelihoods and reduces poverty. However, the realisation of the effect of education takes time due to the years of training necessary. Also, the proportion of poor people in São Tomé and Príncipe based on the Education scenario will be 21.9 percentage points higher than the average for lower middle-income countries in Africa.

Manufacturing/transfers scenario

Manufacturing/transfers scenario

The Manufacturing/Transfers scenario represents reasonable but ambitious manufacturing growth through greater investment in the economy, investments in research and development, and promotion of the export of manufactured goods. It is accompanied by an increase in welfare transfers (social grants) to moderate the initial increases in inequality that are typically associated with a manufacturing transition. To this end, the scenario improves tax administration and increases government revenues.

The intervention is explained here in the thematic part of the website.

Chart 30 should be read with Chart 8 that presents a stacked area graph on the contribution to GDP and size, in billion US$, of the Current Path economy for each of the sectors.

In the Manufacturing/Transfers scenario, the service sector will be the largest contributor to the GDP of São Tomé and Príncipe with an absolute contribution of US$70 million more by 2043 compared to the Current Path forecast. This will correspond to a rate of contribution of a 0.30 percentage point difference. The manufacturing sector, which is the second largest contributor, is also projected to contribute an additional US$10 million to GDP by 2043. However, its rate of contribution will increase and peak at a 0.32 percentage point difference in 2035 and decline afterwards to a 0.03 percentage point difference to GDP based on the Manufacturing/Transfers scenario in 2043. The third contributor to GDP in this scenario is ICT with a rate of contribution of 0.21 percentage point difference by 2043. The rate of the agriculture sector’s contribution to GDP based on the difference between the Manufacturing/Transfers scenario and the Current Path forecast is negative and declining throughout the period such that by 2043, its rate of contribution will be a −0.40 percentage point difference.

In 2019, total welfare transfers to households in São Tomé and Príncipe amounted to US$20 million. This is projected to quadruple to US$80 million by 2043 in the Manufacturing/Transfers scenario, which is higher than the projected US$50 million in the Current Path suggesting that the Manufacturing/Transfers scenario can lead to an improvement in government welfare transfers by an additional US$30 million in 2043 compared to the Current Path forecast.

By 2043, it is estimated that the GDP per capita of São Tomé and Príncipe in the Manufacturing/Transfers scenario will rise to US$5 219. This estimate will be greater than the projections in the Current Path forecast such that by 2043, the additional gains from GDP per capita as a result of the Manufacturing/Transfers scenario will be US$309. The GDP per capita by 2043 in the Manufacturing/Transfers scenario will however still be below the average of US$9 142 for lower middle-income countries in Africa.

By 2043, the total number of poor people is projected to be around 207 000 (59.1% of the population) in the Manufacturing/Transfers scenario. This is lower than the projected 218 000 people (62%) in the Current Path, suggesting that the Manufacturing/Transfers scenario can lead to 17 000 additional people being lifted out of extreme poverty. The implication of this is improvement in investment in research and development, promotion of export, and welfare transfers, which are important means by which São Tomé and Príncipe can reduce poverty in the next 24 years. The proportion of poor people in São Tomé and Príncipe based on the Manufacturing/Transfers scenario in 2043 will be about 20.8 percentage points above the average for lower middle-income countries in Africa.

Leapfrogging scenario

Leapfrogging scenario

The Leapfrogging scenario represents a reasonable but ambitious adoption of and investment in renewable energy technologies, resulting in better access to electricity in urban and rural areas. The scenario includes accelerated access to mobile and fixed broadband and the adoption of modern technology that improves government efficiency and allows for the more rapid formalisation of the informal sector.

The intervention is explained here in the thematic part of the website.

Fixed broadband includes cable modem Internet connections, DSL Internet connections of at least 256 KB/s, fibre and other fixed broadband technology connections (such as satellite broadband Internet, ethernet local area networks, fixed-wireless access, wireless local area networks, WiMAX, etc.).

In 2019, São Tomé and Príncipe had 2.4 fixed broadband subscriptions per 100 people — below the average of 3.7 for lower middle-income countries in Africa. In the Current Path forecast, fixed broadband subscriptions are projected to rise to 31.4 per 100 people. The Leapfrogging scenario will lead to a greater increase in fixed broadband subscriptions of 50 subscriptions per 100 people by as early as 2041. This means that compared to the Current Path forecast, the Leapfrogging scenario will lead to an additional 18.6 subscriptions per 100 people by 2043, and by then, fixed broadband subscription in São Tomé and Príncipe will be higher than the average of 26.5 subscriptions per 100 people for lower middle-income African countries.

Mobile broadband refers to wireless Internet access delivered through cellular towers to computers and other digital devices.

São Tomé and Príncipe had 47.2 mobile broadband subscriptions per 100 people in 2019 — slightly below the average of 49.1 for lower middle-income countries on the continent. Between 2024 and 2037, mobile broadband subscriptions in the Leapfrogging scenario will be higher than the Current Path forecast. In the long term, both the Leapfrogging scenario and the Current Path forecast converge to 152.3 mobile broadband subscriptions per 100 people by 2043 — above the average of 147.6 for Africa’s lower middle-income countries.

The number of people in São Tomé and Príncipe with access to electricity in 2019 was 150 000 (68.2% of the total population). This was above the average of 66.3% for lower middle-income countries in Africa. The proportion of urban residents who had access to electricity was 76.7%, compared to 54.1% for rural dwellers, which reveals a disparity in access to electricity between rural and urban residents in the country. By 2043, in the Leapfrogging scenario, access to electricity is projected to increase to 320 000 people (91.5% of the population). This will be higher than the 290 000 people (83.1%) projected in the Current Path, meaning that the Leapfrogging scenario could increase access to electricity by 30 000 additional people in the country. Both the Leapfrogging scenario and the Current Path forecast estimates in 2043 will be higher than the projected average of 81.7% for lower middle-income countries in Africa. By 2043, 90.6% and 85.6% of urban dwellers in São Tomé and Príncipe will have access to electricity using the Leapfrogging scenario and the Current Path forecast, respectively. In the case of rural dwellers, 95.3% and 73.9% will have access to electricity by 2043 based on the Leapfrogging scenario and the Current Path forecast, respectively. This suggests that in the Leapfrogging scenario, rural dwellers will have more access to electricity compared to urban residents.

São Tomé and Príncipe’s GDP per capita is projected to increase to US$5 191 in 2043 based on the Leapfrogging scenario — an increase of US$281 compared to the Current Path forecast in 2043. However, it will still be below the average of US$9 142 for lower middle-income countries in Africa. Improvement in access to broadband has a positive effect on productivity by reducing transaction costs, which eventually leads to economic growth.

In the Leapfrogging scenario, the number of poor people in 2043 is projected to be 210 000 (60% of the population). This projection is lower than the 218 000 people estimated in the Current Path forecast in the same year, which suggests that the number of poor people in the Leapfrogging scenario is about 8 000 fewer than the Current Path forecast in 2043. Access to electricity and adoption of technology can reduce poverty by reducing the transaction costs of businesses. It can also have an effect on the formalisation of the economy, enabling informal labour access to improved welfare packages such as social security. The number of poor people projected in the Leapfrogging scenario is also 2 percentage points lower than the Current Path forecast but 21.7 percentage points above the average for lower middle-income African countries in 2043.

Free Trade scenario

Free Trade scenario

The Free Trade scenario represents the impact of the full implementation of the African Continental Free Trade Area (AfCFTA) by 2034 through increases in exports, improved productivity and increased trade and economic freedom.

The intervention is explained here in the thematic part of the website. 

The trade balance is the difference between the value of a country's exports and its imports. A country that imports more goods and services than it exports in terms of value has a trade deficit, while a country that exports more goods and services than it imports has a trade surplus.

Like many African countries, São Tomé and Príncipe is a net importer of goods and services. The main export of the country is cocoa, which accounts for 79% of its total export volumes. Other exported commodities include pepper, coconuts and chocolate. In 2019, São Tomé and Príncipe’s trade deficit represented 27.8% of GDP, which was much higher than the average of 6.6% of GDP for lower middle-income African countries. The main imported items include capital equipment, fuel, basic foodstuff, construction equipment and beverages. The major trading partners are France, Spain and the Netherlands in the European Union. From 2024 to 2034, the Free Trade scenario leads to a quicker improvement in the trade balance compared to the Current Path forecast, reaching a peak of a deficit of 9.1% of GDP in the Free Trade scenario and 11.5% of GDP on the Current Path in 2027 before declining. From 2036, the trend reverses so that by 2043, the Current Path forecast leads to a deficit of 21.5% compared to the 25.2% in the Free Trade scenario. By 2043, São Tomé and Príncipe’s trade deficit in the Free Trade scenario will be 21.9 percentage points of GDP higher than the average 3.3% deficit for lower middle-income African countries on the Current Path.

The GDP per capita for São Tomé and Príncipe is estimated to increase to US$5 611 by 2043 in the Free Trade scenario, which is US$701 more than the Current Path. This suggests that the country can benefit from improved trade among African countries through the full implementation of AfCFTA as it can lead to higher economic growth and productivity in São Tomé and Príncipe. The GDP per capita for São Tomé and Príncipe will remain below the projected average of US$9 142 for lower middle-income African countries in the Free Trade scenario.

From 2027 to 2034, the Current Path forecast leads to a quicker reduction in poverty in São Tomé and Príncipe compared to the Free Trade scenario. However, from 2037, the Free Trade scenario will lead to a greater reduction in both the number and proportion of poor people compared to the Current Path. By 2043, the number of people living below the poverty line of US$3.20 in the Free Trade scenario will be 200 000 people (56.3% of the population). This is 5.7 percentage points lower than the Current Path forecast, meaning that the Free Trade scenario has 20 000 fewer poor people than the Current Path by 2043. The proportion of poor people projected in the Free Trade scenario will still be significantly higher than the average of 38.3% for lower middle-income countries in Africa.

Financial Flows scenario

Financial Flows scenario

The Financial Flows scenario represents a reasonable but ambitious increase in worker remittances and aid flows to poor countries, and an increase in the stock of foreign direct investment (FDI) and additional portfolio investment inflows to middle-income countries. We also reduced outward financial flows to emulate a reduction in illicit financial outflows.

The intervention is explained here in the thematic part of the website.

The government of São Tomé and Príncipe relies heavily on donor assistance to support the national budget, especially in paying for capital goods. Total foreign aid received by São Tomé and Príncipe in 2019 was equivalent to 14.6% of GDP (US$46.2 million), which is far higher than the average of 1.7% for lower middle-income countries in Africa. While the absolute value of foreign aid is projected to increase in both the Current Path forecast and in the Financial Flows scenario, aid as a percentage of GDP will decline in both cases. By 2043, total aid as a percentage of GDP in the Financial Flows scenario will amount to 7.9%, which is lower than the projected 8.3% in the Current Path forecast. This will also be far higher than the projected 0.54% for average lower middle-income countries in Africa.

São Tomé and Príncipe’s total FDI in 2019 amounted to 10.7% of GDP, which was higher than the average of 2.6% for lower middle-income African countries. This suggests that FDI to São Tomé and Príncipe has been relatively high compared to the average for its income group peers. Most FDI is in the oil exploration sector and the tourism sector. In an attempt to attract more FDI inflows to grow the economy, the government of São Tomé and Príncipe has introduced liberalisation policies that allow foreign investors to invest in almost all sectors of the economy. Sectors such as agriculture, fishing, tourism, construction, port and airport, transportation, financial services, electricity, water and sanitation, which were previously closed to foreign investors, are now available for investment partly due to the more stable environment in recent years. There is also an incentive package for reinvestment of profit with the reduction of income tax on reinvested earnings. Other investment incentives include reduction of corporate taxes, stamp taxes and import tariffs among others.

By 2043, it is projected that the total FDI to the country will slightly decline to about 10.4% of GDP in the Current Path forecast, whereas in the Financial Flows scenario, FDI is projected to increase to 11.7% of GDP in 2043, which will be significantly higher than the projected average of 3.5% for lower middle-income countries on the continent. The impact of the COVID-19 pandemic on FDI is also clearly observed in this chart.

In 2019, the total value of remittances received by São Tomé and Príncipe amounted to US$20 million, which constituted 6.3% of GDP. This is higher than the average of 2.6% for lower middle-income African countries and depicts relatively higher levels of remittances to the country. This can be as a result of the large number of citizens of the country forming the diaspora. The absolute value of remittance is projected to increase in both the Current Path forecast and the Financial Flows scenario. By 2043, the total value of remittances received will be US$38.2 million in the Financial Flows scenario, which will be higher than the US$36.6 million projected on the Current Path. However, remittances as a percentage of GDP are projected to fall such that by 2043, they will be 4.7% in the Financial Flows scenario and 4.4% on the Current Path. These will still be greater than the average of 2% of GDP for the average lower middle-income African country.

São Tomé and Príncipe’s GDP per capita is estimated to increase to US$5 025 by 2043 in the Financial Flows scenario. This represents an increase of US$115 over the Current Path projection in the same year, suggesting that an increase in remittances, aid and FDI inflow are positively associated with economic growth through the multiplier effect on both consumption and government expenditure. This estimate is however still below the average for lower middle-income countries in Africa, which is projected to be US$9 142 by 2043.

Trade openness will reduce poverty in the long term after initially increasing it due to the redistributive effects of trade. Most African countries export primary commodities and low-tech manufacturing products, and therefore a continental free trade agreement (AfCFTA) that reduces tariffs and non-tariff barriers across Africa will increase competition among countries in primary commodities and low-tech manufacturing exports. Countries with inefficient, high-cost manufacturing sectors might be displaced as the AfCFTA is implemented, thereby pushing up poverty rates. In the long term, as the economy adjusts and produces and exports its comparatively advantaged (lower relative cost) goods and services, poverty rates will decline.

In the Financial Flows scenario, about 214 000 people (61% of the total population) are projected to live below the poverty line of US$3.20. This estimate constitutes a reduction of about 4 000 people, equivalent to 1.1 percentage points, compared to the Current Path in the same year. It is also significantly higher than the projected average of 38.3% for lower middle-income countries in Africa in 2043.

Infrastructure scenario

Infrastructure scenario

The Infrastructure scenario represents a reasonable but ambitious increase in infrastructure spending across Africa, focusing on basic infrastructure (roads, water, sanitation, electricity access and ICT) in low-income countries and increasing emphasis on advanced infrastructure (such as ports, airports, railway and electricity generation) in higher-income countries.

Note that health and sanitation infrastructure is included as part of the Health/WaSH scenario and that ICT infrastructure and more rapid uptake of renewables are part of the Leapfrogging scenario. The interventions there push directly on outcomes, whereas those modelled in this scenario increase infrastructure spending, indirectly boosting other forms of infrastructure, including those supporting health, sanitation and ICT. 

The intervention is explained here in the thematic part of the website.

In 2019, 150 000 people (68.2% of the population) had access to electricity in São Tomé and Príncipe, projected to increase to 310 000 people (88.4% of the population) in the Infrastructure scenario in 2043. This will be higher than the projection of 290 000 people (83.1% of the population) in the Current Path forecast and 81.7% forecast for average lower middle-income countries in Africa. By 2043, electricity access for urban residents in the Infrastructure scenario will constitute 90.2%, compared to 81.8% for rural dwellers. In the Current Path, electricity access for urban residents will constitute 85.6% of the population, compared to the 73.9% access for the rural population, indicating that the Financial Flows scenario will lead to a greater disparity in electricity access in favour of the urban population.

Indicator 9.1.1 in the Sustainable Development Goals refers to the proportion of the rural population who live within 2 km of an all-season road and is captured in the Rural Access Index.

In 2019, 63.01% of all rural dwellers in São Tomé and Príncipe resided within 2 km of an all-weather road, which was slightly above the average of 61.4% for lower middle-income African countries and above the average in Africa of 53%. In the Infrastructure scenario, it is expected to rise to 74.3% by 2043, above the 71% projected in the Current Path forecast and the average of 67.8% for lower middle-income countries in Africa. Accessibility to rural areas is important in spurring the socio-economic development of a country and improving the living standards of rural dwellers.

São Tomé and Príncipe’s GDP per capita is estimated to rise to US$5 104 by 2043 in the Infrastructure scenario, which is US$194 more than the projection in the Current Path forecast in the same year. It is however lower than the average of US$9 142 for lower middle-income countries in Africa. Access to electricity is positively associated with economic growth through its effect on reducing production costs and increasing productivity.

The proportion of the poor population is expected to decline from 72.6% in 2019 to 60.3% in 2043 in the Infrastructure scenario. This corresponds to 211 000 poor people in 2043 who will live below the poverty line. Comparing this with the projections in the Current Path suggests that there will be 7 000 fewer poor people in the Infrastructure scenario than the Current Path forecast for the same year. The poverty rate in the scenario in 2043 will still be significantly higher than the estimated average of 38.3% for lower middle-income countries in Africa.

Governance scenario

Governance scenario

The Governance scenario represents a reasonable but ambitious improvement in accountability and reduces corruption, and hence improves the quality of service delivery by government.

The intervention is explained here in the thematic part of the website.

As defined by the World Bank, government effectiveness ‘captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government’s commitment to such policies’.

Chart 51 presents the impact of the interventions in the Governance scenario on government effectiveness.

In 2019, São Tomé and Príncipe’s government effectiveness score was 1.78, which was below the average of 1.89 for lower middle-income countries in Africa. In both the Current Path forecast and the Governance scenario, government effectiveness is projected to increase over the period, although the increase in the Governance scenario is higher than the increase in the Current Path forecast. The projected score of government effectiveness in the Governance scenario in 2043 is 2.28, which will be 0.11 points more than the projected score in the Current Path forecast. São Tomé and Príncipe’s government effectiveness score will be slightly lower compared to the average of 2.32 for lower middle-income countries in Africa.

In the Governance scenario, São Tomé and Príncipe’s GDP per capita is projected to increase to US$5 065 in 2043, which is US$155 more than the estimates in the Current Path forecast. However, this projection is still below the average of US$9 142 for lower middle-income countries on the continent in the same year. Good governance in the form of transparency, accountability, rule of law and reduced corruption can stimulate economic growth and increase income levels. Authorities in São Tomé and Príncipe should therefore make efforts to improve governance as a means of increasing economic growth.

The proportion of people living below the poverty line of US$3.20 is expected to decline to 60.6% in 2043 in the Governance scenario, which is higher than the 38.3% average for lower middle-income African countries. It also corresponds to a 1.4 percentage point reduction in poverty by 2043 compared to the Current Path forecast.

Impact of scenarios on carbon emissions

Impact of scenarios on carbon emissions

This section presents projections for carbon emissions in the Current Path for São Tomé and Príncipe and the 11 scenarios. Note that IFs uses carbon equivalents rather than CO2 equivalents.

The total amount of carbon emitted by São Tomé and Príncipe in 2019 was 30 000 tons. The country’s carbon emissions are projected to increase in all the scenarios, with total carbon emissions estimated to be around 100 000 tons by 2043. The intervention with the greatest impact on carbon emissions is the Free Trade scenario followed by the Manufacturing/Transfers scenario, in line with the projected economic growth in these scenarios. On the other hand, the intervention with the least impact on carbon emission is the Demographic scenario as a result of the smaller population size.

Combined Agenda 2063 scenario

Combined Agenda 2063 scenario

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The Combined Agenda 2063 scenario consists of the combination of all 11 sectoral scenarios presented above, namely the Stability, Demographic, Health/WaSH, Agriculture, Education, Manufacturing/Transfers, Leapfrogging, Free Trade, Financial Flows, Infrastructure and Governance scenarios. The cumulative impact of better education, health, infrastructure, etc. means that countries get an additional benefit in the integrated IFs forecasting platform that we refer to as the synergistic effect. Chart 55 presents the contribution of each of these 12 components to GDP per capita in the Combined Agenda 2063 scenario as a stacked area graph.

The scenario with the greatest impact on GDP per capita of São Tomé and Príncipe by 2043 is the Free Trade scenario, adding an additional US$701 above the Current Path forecast. This is followed by the Manufacturing/Transfers and Leapfrogging scenarios, contributing additional US$309 and US$280, respectively.

The scenarios with the least impact on GDP per capita are the Health/WaSH and the Financial Flows scenarios. This suggests that in the long term, the Free Trade, Manufacturing/Transfers and Leapfrogging scenarios have the greatest potential to improve human and economic development in São Tomé and Príncipe.

Whereas Chart 55 presents a stacked area graph on the contribution of each scenario to GDP per capita as well as the additional benefit or synergistic effect, Chart 56 presents only the GDP per capita in the Current Path forecast and the Combined Agenda 2063 scenario.

São Tomé and Príncipe’s GDP per capita is estimated to increase to US$7 082 in 2043 in the Combined Agenda 2063 scenario. This will be US$2 172 more than the projection based on the Current Path scenario, meaning that the Combined Agenda 2063 scenario will lead to an increase of US$2 322 in GDP per capita by 2043 compared to the Current Path forecast. However, São Tomé and Príncipe’s GDP per capita in the Combined Agenda 2063 scenario will still be lower than the average of US$9 142 for lower middle-income countries in Africa in 2043.

In the Combined Agenda 2063 scenario, both the number and proportion of poor people in São Tomé and Príncipe will significantly decline. By 2043, about 130 000 people in the country (39.8% of the population) will be living below the poverty line of US$3.20, such that compared to the Current Path forecast, an additional 88 000 people can be lifted out of extreme poverty in the Combined Agenda 2063 scenario. This also corresponds to a 22.2 percentage point decrease in poverty from the Current Path forecast in the same year. The projections for the proportion of poor people in São Tomé and Príncipe will be slightly above the average of 38.3% for lower middle-income African countries by 2043. The Combined Agenda scenario represents the combined effect of all the scenarios, and it is therefore not surprising that it leads to such a significant impact on poverty reduction.

See <Chart 8> to view the Current Path forecast of the sectoral composition of the economy.

In the Combined Agenda 2063 scenario, the biggest contributors to GDP in the long term will be the service, manufacturing and agriculture sectors, respectively. By 2043, in the Combined Agenda scenario, the service sector will contribute an additional US$490 million to GDP, equivalent to 1.4 percentage points of GDP more than the Current Path forecast. Manufacturing, which is projected to contribute US$70 million more in 2043, will witness a decline in its rate of contribution so that by 2043, its contribution will amount to −.03 percentage points of GDP below the Current Path forecast. Agriculture is projected to contribute about US$40 million, which corresponds to 0.6 percentage points of GDP more compared to the Current Path forecast.

The estimated GDP (MER) for 2043 in the Combined Agenda 2063 scenario in 2043 will be US$1.5 billion, indicating an increase of 335% from 2019. It will be higher than the Current Path estimates of US$900 million, as compared to the Current Path forecast, the size of the economy will grow by 66.7% by 2043 in the Combined Agenda 2063 scenario. The Combined Agenda 2063 scenario shows that a policy push across all the development sectors is necessary to achieve sustained growth and development in São Tomé and Príncipe; therefore, it is not surprising that it yields such significant growth in GDP.

The total amount of carbon emitted in 2019 was 30 000 tons. In the Combined Agenda 2063 scenario, the total carbon emissions are projected to rise to 130 000 tons by 2043, representing an increase of about 333.3% over the period. This is higher than the estimate of 100 000 in the Current Path forecast for 2043, meaning that the Combined Agenda 2063 scenario leads to more carbon emissions than the Current Path. The materialisation of the Combined Agenda 2063 scenario would stimulate high economic growth in São Tomé and Príncipe but would come at cost in terms of environmental degradation. To mitigate the environmental impact of the Combined Agenda 2063 scenario, its implementation should be accompanied by concrete steps to accelerate the energy transition.

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Cite this research

Enoch Randy Aikins (2022) São Tomé and Príncipe. Published online at futures.issafrica.org. Retrieved from https://futures.issafrica.org/geographic/countries/sao-tome-and-principe/ [Online Resource] Updated 24 August 2022.