Since its independence in 1975, this tiny, impoverished island’s economy has grown more reliant on cocoa. However, due to drought and mismanagement, cocoa output has significantly decreased. The resultant scarcity of cocoa for export has resulted in a long-term balance-of-payments issue. As a result, Tomé must import all energy, the majority of manufacturing products, consumer goods, and a significant quantity of food. It has been unable to pay its foreign debt and has had to rely on concessional assistance and debt rescheduling throughout the years. Sao Tomé received $200 million in debt relief from the Highly Indebted Poor Countries (HIPC) program in December 2000. International funders praised So Tomé’s achievement in enacting structural changes by pledging greater aid in 2001. There is significant potential for the development of a tourism sector, and the government has recently made efforts to enhance infrastructure. In addition, the government has tried to remove price restrictions and subsidies. Sao Tomé is likewise hopeful about significant petroleum finds in its territorial seas in the oil-rich waters of the Gulf of Guinea. Corruption scandals continue to erode the economy’s strength.
The islands of Sao Tomé and Principe, about 300 and 250 kilometers (190 and 160 miles) off the northwest coast of Gabon, are Africa’s second smallest country. They are located in the equatorial Atlantic and Gulf of Guinea, respectively, about 300 and 250 kilometers (190 and 160 miles) off the northwest coast of Gabon. Both are part of the Cameroon volcanic mountain range, which also includes the Equatorial Guinea islands of Annobón to the southwest and Bioko to the northeast, as well as Mount Cameroon on the Gulf of Guinea shore.
Sao Tomé is the most hilly of the two islands, measuring 50 kilometers (30 miles) long and 30 kilometers (20 miles) broad. Pico de Sao Tomé, at 2,024 meters (6,640 feet), is the highest mountain. Principe is about 30 kilometers (20 miles) long and 6 kilometers (4 miles) broad. Pico de Principe, at 948 meters (3,110 feet), is the highest mountain. Both islands are crossed by swift streams that flow down the mountains, through lush woodland and farmland, to the sea. The equator passes via an islet called Ilhéu das Rolas just south of So Tomé Island.
Pico Co Grande (Great Dog Mountain) is a prominent volcanic plug peak in southern Sao Tomé, situated at 0°7′0′′N 6°34′00′′E. It climbs nearly 300 meters (1,000 feet) above the surrounding landscape, with a peak elevation of 663 meters (2,175 feet).
The climate is tropical at sea level, hot and humid with average annual temperatures of about 27 °C (80.6 °F) and minimal daily fluctuation. The temperature seldom exceeds 32 degrees Celsius (89.6 degrees Fahrenheit). The average annual temperature in the interior’s higher elevations is 20 °C (68 °F), with chilly evenings. On the southwestern slopes, annual rainfall ranges from 5,000 mm (196.85 in) to 1,000 mm (39.37 in) in the northern lowlands. From October through May, the rainy season is in full swing.
The equator passes at Ilhéu das Rolas, a small islet off the coast of Sao Tomé Island.
Although the Sao Tomé shrew and many bat species are unique to Sao Tomé and Principe, the country does not contain a significant number of native animals. The islands are home to many unique birds and plants, including the world’s smallest ibis (the So Tomé ibis), the world’s biggest sunbird (the gigantic sunbird), the uncommon Sao Tomé fiscal, and numerous huge Begonia species. Sao Tomé and Principe is a major nesting location for sea turtles, particularly hawksbill turtles (Eretmochelys imbricata).
The first ever census was conducted in 2011 with the assistance of Cape Verde’s National Statistic Institute (INE).
The government estimates the population to be 163,784 people. Around 157,500 people reside on Sao Tomé and 6,000 on Principe, according to estimates.
All are derived from individuals brought to the islands by the Portuguese from various nations beginning in 1470. The departure of most of the 4,000 Portuguese inhabitants in the 1970s and the entrance of several hundred Sao Tomé refugees from Angola were two major demographic migrations.
Almost all inhabitants are members of the Roman Catholic, Evangelical Protestant, or Seventh-day Adventist churches, all of which have strong connections to Portuguese churches. A modest but increasing Muslim population exists.
The economy of Sao Tomé and Principe has been centered on plantation agriculture since the 19th century. Plantations held by the Portuguese accounted for 90% of the cultivated land at the time of independence. Control of these plantations was transferred to different state-owned agricultural companies after independence. Cocoa is the primary crop of So Tomé, accounting for almost all of the country’s agricultural exports. Copra, palm kernels, and coffee are among the other export crops.
Because domestic food crop output is insufficient to satisfy local demand, the nation imports the majority of its food. Approximately 90% of the country’s food requirements are supplied via imports, according to estimates from 1997. In recent years, the government has made efforts to increase food production, and numerous initiatives have been launched, with the majority of funding coming from foreign donors.
Apart from agriculture, fishing and a tiny industrial sector processing local agricultural products and manufacturing a few basic consumer items are the major economic activity. The beautiful islands offer tourism potential, and the government is working to enhance the country’s basic tourist infrastructure. The government employs about 11% of the workforce.
Following independence, the country’s economy was centralized, with the government owning and controlling the majority of the means of production. The original constitution promised a mixed economy, with privately held cooperatives coexisting with government owned land and industrial facilities.
The economy of Sao Tomé had significant challenges in the 1980s and 1990s. Growth slowed, and cocoa exports fell in value and volume, resulting in significant balance-of-payments imbalances. Plantation land redistribution efforts resulted in lower cocoa output. At the same time, the price of cocoa on the worldwide market plummeted.
The administration implemented a number of far-reaching economic changes in response to the country’s economic slump. In 1987, the government launched an IMF structural adjustment program and encouraged more private involvement in the administration of parastatals, as well as the agricultural, commercial, banking, and tourist sectors. Since the early 1990s, extensive privatization has been the focus of economic reform, particularly in the state-run agricultural and industrial sectors.
The UN Development Programme, the World Bank, the European Union (EU), Portugal, Taiwan, and the African Development Bank have all provided aid to the government of Sao Tomé and Principe in the past. The IMF authorized a poverty reduction and growth facility for So Tomé e Prncipe in April 2000, in collaboration with the Banco Central de Sao Tomé e Principe, with the goal of lowering inflation to 3% in 2001, increasing ideal growth to 4%, and decreasing the budget deficit.
Sao Tomé was eligible for substantial debt relief under the IMF-World Bank’s Heavily Indebted Poor Countries (HIPC) program in late 2000. Due to the attempted coup d’état in July 2003 and accompanying emergency expenditures, the IMF is reevaluating the decrease. Following the cease-fire, the IMF agreed to deploy a team to Sao Tomé to assess the country’s macroeconomic situation. This assessment is continuing, with forthcoming oil legislation to decide how the government would handle incoming oil earnings, which are yet unclear but are anticipated to have a significant impact on the economy.
In the meanwhile, various attempts to encourage private tourist projects have been undertaken, although their reach remains restricted.
In Pinheira, Sao Tomé hosts an American International Transmitting Bureau (IBB) broadcasting station for the Voice of America.
Portugal continues to be one of So Tomé’s most important trade partners, especially in terms of imports. The EU is the primary source of food, manufacturing goods, machinery, and transportation equipment.
In the March 2011 Euromoney Country Risk rankings, Sao Tomé and Principe was rated as the 174th safest investment location in the world.