- IMF staff and the São Toméan authorities have reached a staff-level agreement on the third review of the economic policies underpinned by the 52-month program supported by the Extended Credit Facility (ECF). Subject to the completion of the agreed prior actions and approval by the IMF’s Executive Board, São Tomé and Príncipe would have access to about SDR 4.4 million (US$6.1 million). Most quantitative targets for the third review have been met, and significant progress was made on a range of macro-structural issues.
- Despite a protracted energy crisis and external shocks, the authorities have made progress in preserving macroeconomic stability. Growth has been revised down to 1 percent in 2025 and 0.4 percent in 2026, while inflation has fallen to single digits, supported by a tight monetary stance. Growth is expected to pick up and inflation to gradually decelerate over the medium term.
- The São Toméan authorities remain committed to the objectives established in the ECF-supported program approved by the IMF Executive Board in December 2024.
Washington, DC: An International Monetary Fund (IMF) staff team, led by Mr. Slavi Slavov, Mission Chief for São Tomé and Príncipe, held meetings in São Tomé during March 26-April 8, 2026, followed by virtual discussions to assess progress on the authorities’ reforms and policy priorities in the context of the third review of São Tomé and Príncipe’s 52-month program supported by the Extended Credit Facility (ECF). The arrangement was originally approved by the IMF Executive Board for a total amount of SDR18.5 million (around US$25 million) on December 19, 2024. The Board approved a 12-month extension and an augmentation of the ECF of SDR 4.4 million (about US$6.1 million) on December 19, 2025.
At the end of the mission, Mr. Slavov issued the following statement:
“The São Toméan authorities and IMF staff team have reached a staff-level agreement on the steps needed to conclude the third review of São Tomé and Príncipe’s economic program supported by the ECF arrangement. Subject to the completion of the agreed prior actions and approval by the IMF’s Executive Board, São Tomé and Príncipe would have access to about SDR 4.4 million (US$6.1 million), bringing the total IMF financial support disbursed under the current arrangement to around SDR 14.5 million (about US$19.9 million).
“São Tomé and Príncipe is facing unfavorable external conditions, a protracted shock to electricity supply, and delays in the energy transition. The global oil price shock resulting from the war in the Middle East and the prolonged power outages pose severe risks to economic recovery. Inflation has declined in recent months, reaching upper single digits, but the higher cost of fuel and imported essential goods could reverse the inflation trend. Core inflation has remained high. The pegged exchange rate has served as an anchor to support domestic stability, but the persistent positive inflation differential with the Euro Area puts pressure on the country’s fragile external position.
“Growth is expected to remain subdued in 2026 at 0.4 percent, recover in 2027, and settle at around 2¾ percent over the medium term. The economy remains supported by the resilience of the agriculture sector and tourism, as well as by remittances and public investment. In the medium term, growth is expected to be hindered by the demographic outlook. The IMF-supported program plays a catalytic role in mobilizing financial support and technical assistance from the country’s main development partners. High international oil prices are exacerbating existing fiscal and external sector pressures—putting at risk the needed reserve accumulation—a key pillar of the ECF program. Reforming the energy sector remains essential to overcome the impact of global shocks, unlock growth, and alleviate pressures on public debt and foreign exchange reserves.
“The Fund-supported program continues to play a pivotal role in supporting macroeconomic stability, helping the country to confront external shocks, foster structural reforms, and catalyze support from other development partners.
“The IMF staff team met President Carlos Vila Nova; Prime Minister Américo d’Oliveira dos Ramos; Minister of State for Economy and Finance Gareth Haddad do Espírito Santo Guadalupe; Minister of Natural Resources Nelson Mário Cardoso; Governor of the Central Bank Agostinho Fernandes; and other government officials. The staff team also engaged with representatives of the private sector, including commercial banks, and development partners. The team expresses its deep appreciation to the authorities for their cooperation, hospitality, and constructive policy discussions.”
READ MORE: https://www.imf.org/en/news/articles/2026/06/22/pr26217-sao-tome-and-principe-imf-reaches-staff-level-agreement-on-the-third-review-ecf-arrangement
