| Project Detail |
Proposed Development Objective(s)
The objective of this operation is to help the government introduce growth-enabling reforms in the financial sector,
business environment, and infrastructure; generate fiscal resources and savings; and improve quality of expenditures
The expected key results of this operations are:
i. to have all banks comply with the minimum capital adequacy ratio;
ii. to increase in the quality and quantity of payment services provided by banks and the entry in the market of new
payment service providers, increasing competition and offer of new digital financial services;
iii. to improve the effectiveness of property registration and to increase the recognition and protection of women´s
property rights;
iv. to improve EMAE’s operational results and the quality of energy services;
v. to broaden the tax base and generate a stable source of public revenue;
vi. to improve SOE management, oversight, and performance; and
vii. to increase transparency and control as well as more timeliness and predictability in the disbursement of social
protection benefits.
Project Description
The objective of the proposed DPO is to support the implementation of growth-enabling reforms in the financial
sector, business environment, and infrastructure; generate fiscal resources and savings, and improve the quality of
expenditures. These reforms will address the main the obstacles to economic development in STP and are expected to
promote financial development and inclusion, attract investors, develop more efficient and accessible infrastructure,
and foster fiscal sustainability and private-sector-led growth in the medium term. The operation is organized around
two pillars, each including several policy actions:
Pillar A: Introduce growth-enabling reforms in the financial sector, business environment, and infrastructure. Policies
under this pillar aim to support the BCSTP to effectively address vulnerabilities in the financial sector by improving bank
supervision and financial soundness. They also aim to develop a national payment system and the microfinance sector,
as well as improve the registry of properties, which will increase the availability of credit, accelerate financial inclusion,
and improve the tourism sector. Additionally, pillar A will support policies aimed at expanding infrastructures and
improving public service delivery.
Prior Action #1: The Recipient, through BCSTP, has approved the Report for the São Tomé and Príncipe Banking System
Asset Quality Review, as part of its efforts to improve financial soundness of commercial banks.
Prior Action #2: The Recipient through: (i) its National Assembly, has passed the legal framework for payment services
providers and payment system operators, which outlines the oversight framework, and duties and powers of BCSTP;
and (ii) BCSTP, has passed the key implementing regulations under the National Payments System Law, which provide
for the legal protection of the electronic transfer of funds and the licensing and supervision of payment institutions and
payment system operators.
Prior Action #3: The Recipient, through BCSTP, has passed key regulations, which establish the minimum entry, operation
requirements, risk management minimum requirements, and supervisory and reporting procedures for microfinance institutions.
Prior Action #4: The Recipient, through its Council of Ministers, has approved the institutional structure for enabling
interoperability between the land property register (Registo de Propriedade) and the cadaster (Registo Cadastral).
Prior Action #5: The Recipient, through the Presidency of the Republic, has instituted an energy demand management
program, which includes the exchange of low efficient bulbs with higher efficient ones.
Prior Action #6: The Recipient, through its Council of Ministers, has approved: (a) a Least-Cost Power Sector
Development Plan, which provides the basis for a competitive process for all power generation activities; and (b) a
Management Improvement Plan for EMAE, which aims to improve EMAE’s operational performance.
Prior Action #7: The Recipient, through AGER, has signed a concession contract with EMAE, which stipulates the
obligations of the Recipient and the licensee, including rules on tariffs and sanctions.
Pillar B: Generate fiscal resources and savings and improve the quality of expenditures. This pillar includes policies
aimed at strengthening fiscal sustainability and protecting poor and vulnerable households.
Prior Action #8: The Recipient, through the National Assembly, has passed the Value Added Tax Code, which sets
forth provisions aimed at broadening the tax base and generating more own-source revenues.
Prior Action #9: The Recipient, through the Ministry of Finance, has instituted a financial system-based (non-cash)
payment mechanism to allow for the tracking and reconciliation of funds allocated to social protection payments. |
