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Phone Code: 00239Root-level Domain Code: .st
Phone Code: 00239
Root-level Domain Code: .st
Background: Discovered and claimed by Portugal in the late 15th century, the islands' sugar-based economy gave way to coffee and cocoa in the 19th century - all grown with plantation slave labor, a form of which lingered into the 20th century. Although independence was achieved in 1975, democratic reforms were not instituted until the late 1980s. Though the first free elections were held in 1991, the political environment has been one of continued instability with frequent changes in leadership and coup attempts in 1995 and 2003. The recent discovery of oil in the Gulf of Guinea is likely to have a significant impact on the country's economy.
Economy Overview: This small, poor island economy has become increasingly dependent on cocoa since independence in 1975. Cocoa production has substantially declined in recent years because of drought and mismanagement, but strengthening prices helped boost export earnings in 2003. Sao Tome has to import all fuels, most manufactured goods, consumer goods, and a substantial amount of food. Over the years, it has had difficulty servicing its external debt and has relied heavily 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, which helped bring down the country's $300 million debt burden. In August 2005, Sao Tome signed on to a new 3-year IMF Poverty Reduction and Growth Facility (PRGF) program worth $4.3 million. 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 optimistic about the development of petroleum resources in its territorial waters in the oil-rich Gulf of Guinea, which are being jointly developed in a 60-40 split with Nigeria. The first production licenses were sold in 2004, though a dispute over licensing with Nigeria delayed Sao Tome's receipt of more than $20 million in signing bonuses for almost a year. Real GDP growth exceeded 4% in 2006, as a result of increases in public expenditures and oil-related capital investment.
Geography Note: the smallest country in Africa; the two main islands form part of a chain of extinct volcanoes and both are fairly mountainous
Location: Western Africa, islands in the Gulf of Guinea, straddling the Equator, west of Gabon
Natural Resources: fish, hydropower
Geographic Coordinates: 1 00 N, 7 00 E
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