São Tomé and Príncipe government to negotiate foreign debt pardon

3 September 2019

The São Tomé and Príncipe government plans to negotiate with its international partners for a foreign debt pardon of more than US$300 million, Prime Minister Jorge Bom Jesus said in remarks in Lisbon to Deutsche Welle Africa.

The prime minister also said that the US$70 million hidden debt contracted by the previous government of Patrice Trovoada had a serious impact on public accounts but added that it will be up to the court to determine those responsible for it being taken on.

“For a long time governments, especially the former, have disclosed the amount of foreign debt but the value of domestic debt has been evaded,” said Bom Jesus, adding that both components are part of state debt which is, “nowadays almost unsustainable.”

The International Monetary Fund accused former Prime Minister Patrice Trovoada’s government of concealing various debts and expenditures worth 3.0% of Gross Domestic Product (GDP), causing São Tomé and Príncipe’s debt to go “virtually out of control.”

“When we were here in April, we discovered that expenses of around 2% of GDP had not been entered in the accounts presented to us,” said Xiangming Li, head of the IMF mission to São Tomé and Príncipe.

The head of the mission said that the equivalent of 1.0% of GDP should be added to this 2.0%, resulting from loans taken out by public entities from commercial banks, “which made the country exceed the previously established reference indicator.”

Jorge Bom Jesus also reaffirmed his government’s commitment to the fight against corruption “in order to remove the country from the hole it finds itself in,” recalling that São Tomé e Príncipe has the necessary resources for its development, “involving an immense sea and airspace and oil exploration in the exclusive economic zone, among others.”

The prime minister also said he believed it would be possible to make the country’s economy grow by double digits, following major investments in infrastructure, such as the modernisation and expansion of São Tomé international airport and the construction of a deep-water port. projects that are being reviewed with the support of Chinese cooperation.

Bom Jesus also assured DW Africa that his government will do its utmost to meet the challenges it took on in 2018, and in the coming months will prepare the State Budget for 2020, which will reflect the “set of challenges to get the country out of the over 40-year doldrums since independence.” (Macauhub)