An International Monetary Fund (IMF) staff team has reached a staff-level agreement with São Tomé and Príncipe regarding the second review of the country's 40-month program under the Extended Credit Facility (ECF). The ECF arrangement, approved by the IMF Executive Board in December 2024 for a total of SDR18.5 million (approximately US$25 million), aims to support economic reforms and policy priorities.
Mr. Slavi Slavov, Mission Chief for São Tomé and Príncipe, led meetings in São Tomé from October 23 to November 5, 2025. At the conclusion of these discussions, Mr. Slavov stated:
“The São Toméan authorities and IMF staff team have reached a staff-level agreement on the steps needed to conclude the second review of São Tomé and Príncipe’s economic program supported by the ECF arrangement. Subject to approval by the IMF’s Executive Board, São Tomé and Príncipe would have access to about SDR 2.1 million (US$2.8 million), bringing the total IMF financial support disbursed under the current arrangement to around SDR 10.1 million (about US$13.4 million).
“São Tomé and Príncipe is facing unfavorable demographics, a shock to electricity supply, and delays in the energy transition. Prolonged power outages pose severe risks to economic recovery. The São Toméan economy remains relatively resilient, despite stubbornly high inflation, a tight policy mix, and the country’s vulnerability to climate change and natural disasters. Inflation picked up in recent months, hovering in the low double digits, mostly due to supply constraints and some demand-related factors. Core inflation has also gone up. The pegged exchange rate has served as an anchor to support domestic stability, but the widening inflation differential with the Euro Area puts pressure on the fragile external position of the country.
“Growth is expected to accelerate to 3.9 percent in 2026, and settle at around 3.3 percent over the medium term. This reflects the resilience of the agriculture sector and tourism, as well as a pickup in 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. Low international oil prices helped to reduce fiscal and external sector pressures—supporting reserve accumulation—a key pillar of the ECF program. Reforming the energy sector remains essential to unlocking growth and alleviating pressures on public debt and foreign exchange reserves.
“The Fund-supported program continues to play a pivotal role in supporting macroeconomic stability, fostering structural reforms, and catalyzing 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; Acting Governor of the Central Bank Lara Simone Beirão; other government officials; representatives of the private sector including commercial banks; and development partners. The mission expresses its deep appreciation to the authorities for their cooperation, hospitality, and constructive policy discussions.”
The agreement must still receive approval from IMF management before any additional funds are released.