São Tomé and Príncipe Pins Export Hopes on Cocoa and Oil as IMF Debt Program Holds

, The stakes. Africa’s second-smallest economy needs new export earnings to reduce chronic reliance on imported fuel, food, and foreign aid., The date. A new 40-month IMF Extended Credit Facility was approved on December 19, 2024, to guide fiscal repair through 2026., The debt burden. The IMF still classifies São Tomé and Príncipe as in debt distress, with unresolved arrears to Angola, Brazil, and Equatorial Guinea., The export base. High-quality cocoa dominates a small export basket that the World Bank valued at about US$37.9 million in 2024, of which cocoa was roughly US$26.5 million., The growth bet. Boutique tourism now contributes about 11% of GDP as the government courts small-scale, higher-spending visitors.

São Tomé and Príncipe enters 2026 as a compact island economy still balancing between survival and a slow structural pivot. Its external accounts remain fragile, but cocoa, oil diplomacy, and boutique tourism each carry a different kind of investor hope.

São Tomé and Príncipe is one of Africa’s smallest economies, with a nominal GDP estimated between US$679 million and US$764 million in 2023 and 2024.

The country graduated from UN Least Developed Country status in December 2024, a separate United Nations category from the World Bank income classification.

This transition sits awkwardly against its persistent dependence on imported food and fuel.

External earnings are small, leaving the country exposed to global price swings and shipping disruptions.

Services dominate the economy, accounting for roughly 72% to 76% of GDP, while agriculture contributes about 11% to 14%.

High-quality cocoa remains the country’s most reliable export base and a central source of foreign exchange.

The World Bank put total export earnings at about US$37.9 million in 2024, though national factsheets cite higher figures of US$50 million to US$60 million.

Record high cocoa prices in 2024 supported growth, alongside moderating oil import costs and a gradual recovery in tourism.

Still, cocoa earnings alone cannot close the gap with much larger import bills.

The economy carries a chronic trade deficit, reflecting its small production base and heavy reliance on external supplies.

Real GDP growth strengthened to about 1.1% in 2024, according to IMF and World Bank estimates, up from roughly 0.4% in 2023.

The AfDB similarly recorded 0.9% growth in 2024, boosted by cocoa and tourism.

Projections for 2025 ranged around 2.9% in IMF documents, as electricity shortages eased.

Inflation has been falling but remains high, dropping from 21.3% at the end of 2023 to 16.1% in 2024, with a projected 10% for 2025.

Lower inflation is tied to the IMF programme and cheaper imported fuel.

The current account deficit improved sharply in 2024, with IMF data citing a decline to 1.9% of GDP from 12.3% in 2023.

The World Bank sees the deficit averaging 4.3% of GDP in 2024 and 2025, down from over 10% in 2022 and 2023.

IMF staff described the 2024 improvement as driven by temporary factors rather than a durable export surge.

International reserves rose from US$38.9 million in December 2024 to US$69.4 million a year later, covering about 2.5 months of imports.

That buffer remains thin for a country highly exposed to commodity and climate shocks.

Grants accounted for around 40% of total government revenue in 2025, according to World Bank data.

This keeps São Tomé and Príncipe firmly reliant on donor support and concessional finance.

Public debt fell from 88.1% of GDP in 2021 to 68.6% in 2024, helped by higher grant inflows and limited commercial borrowing.

Contingent liabilities were still estimated at 31.7% of GDP in 2024, adding hidden fiscal risk.

Aid flows may soften the debt burden, but they also underline how little room the state has for autonomous investment.

The IMF still classifies São Tomé and Príncipe as in debt distress for both external and overall public debt.

At the end of 2023, total public and publicly guaranteed debt was 77% of GDP, with external debt at about 36%.

A new 40-month Extended Credit Facility was approved on December 19, 2024.

The programme is worth about US$25 million and focuses on fiscal consolidation, energy-sector reform, and stronger public financial management.

State utility EMAE is a key target for reform within the programme.

São Tomé and Príncipe carries unresolved post-HIPC external arrears to Angola, Brazil, and Equatorial Guinea.

Those arrears were about 1.6% of GDP at the end of 2023 and around 1.3% in 2024.

A US$30 million loan from Nigeria was excluded from the official debt stock because no signed contract with repayment conditions exists.

The arrears keep the country in debt distress in IMF assessments, even as headline debt ratios improve.