The African Development Bank (AfDB) Group has approved a $7.5 million supplemental financing grant from the Nigeria Trust Fund (NTF) to support São Tomé and Príncipe’s ongoing economic reform programme.
The bank, in a statement on its website, said the new funding increases its total support for the initiative to about $20 million over the past two years.
According to the AfDB, the fresh grant will help close a critical financing gap in the country’s 2025 national budget while advancing key fiscal and energy sector reforms essential to its economic recovery.
The bank projected that São Tomé and Príncipe’s economic output will rise from 1.1 per cent in 2024 to 2.9 per cent in 2025 and further to 4.8 per cent in 2026, driven by agricultural exports, a rebound in tourism, and infrastructure investments.
Pietro Toigo, AfDB Country Manager for São Tomé and Príncipe, described the approval as a significant step in strengthening the country’s fiscal sustainability and energy transition, especially after the severe economic crisis experienced in 2023.
“This approval marks an important multi-year reform path in public financial management and energy transition that helped stabilise the economy after the acute crisis in 2023,” Toigo said. “We are delighted at the collaboration with the Nigerian and São Tomean authorities to mobilise additional resources from the NTF to close a critical funding gap.”
He explained that the Fiscal Sustainability and Economic Resilience Programme targets long-standing structural challenges, including chronic electricity shortages, low domestic revenue mobilisation, and vulnerability to external shocks.
The AfDB noted that São Tomé and Príncipe had recently introduced a value-added tax, modernised customs operations using the ASYCUDA platform, and implemented measures to improve debt management—all aimed at increasing the tax-to-GDP ratio.
The programme also prioritises transforming the energy sector through better governance of the national utility, tariff reforms geared toward cost recovery, and an accelerated transition to renewable energy. The country has joined the Mission 300 Energy Compact initiative and approved a National Energy Compact (2025–2030) aimed at achieving universal access to clean energy.
The bank said the supplemental financing aligns with broader support from international development partners and reinforces confidence in the country’s reform trajectory. The reforms, it added, will help boost resilience, diversify revenue, and expand fiscal space for investments in infrastructure and human capital.
According to Toigo, upcoming reform milestones include operationalising new public procurement systems, finalising anti–money laundering frameworks, implementing a comprehensive public financial management strategy, and deploying prepaid electricity meters to strengthen revenue collection.
The programme aligns with São Tomé and Príncipe’s Vision 2030 development agenda and its forthcoming National Strategy for Sustainable Development (2026–2040), which seeks to reposition the economy for inclusive and sustained growth.