Country Information - Sao Tome

ECONOMIC BACKGROUND This small island economy has become increasingly dependent on cocoa since independence 26 years ago. However, cocoa production has substantially declined because of drought and mismanagement. The resulting shortage of cocoa for export has created a persistent balance-of-payments problem. Sao Tome has to import all fuels, most manufactured goods, consumer goods, and a substantial amount of food. Over the years, it has been unable to service its external debt and has had to depend on concessional aid and debt rescheduling. Sao Tome benefited from $200 million in debt relief in December 2000 under the Highly Indebted Poor Countries (HIPC) program. Sao Tome's success in implementing structural reforms has been rewarded by international donors, who have pledged increased assistance in 2001. Considerable potential exists for development of a tourist industry, and the government has taken steps to expand facilities in recent years. The government also has attempted to reduce price controls and subsidies. Sao Tome is also optimistic that substantial petroleum discoveries are forthcoming in its territorial waters in the oil-rich waters of the Gulf of Guinea. Corruption scandals continue to weaken the economy. (Source: World Factbook, 2002) Click here for Country Map [23kB]

BI-LATERAL TRADE OVERVIEW Not much bi-lateral trade occurs between the small island state of Sao Tome & Principe and the United States, with the U.S. recording a trade surplus in 2001 of $ 10 million. Sao Tome's exports to the U.S. are negligible, consisting mainly of products falling into the 'machinery' category (see link to Country Trade Profile below). In 2001, 99% (by value) of imports from the U.S. consisted of transportation equipment, although preliminary 2002 data suggests that this pattern will not be repeated in 2002. By mid-2002, Sao Tome had not recorded any exports to the U.S. that qualified under the duty-free provisions of the AGOA, making it one of a number of Sub-Saharan African (SSA) economies that were yet to directly benefit from AGOA. Click here for Detailed Trade Profile