The African Development Bank Group has approved a $7.5 million supplemental financing grant from the Nigeria Trust Fund to support São Tomé and Príncipe’s economic reform programme.

The AfDB, in a statement on its website, said the sum brought the total bank’s support for the initiative to about $20 million over two years.

The bank said the additional funding would close a critical financing gap in the island nation’s 2025 national budget while advancing fiscal and energy sector reforms central to its economic recovery efforts.

“Economic projections show output rising from 1.1 per cent in 2024 to 2.9 per cent in 2025 and 4.8 per cent in 2026. This is driven by agricultural exports, tourism rebound and infrastructure investments,” it said.

It quoted Pietro Toigo, AfDB country manager for São Tomé and Príncipe, as saying that the approval marked a significant step in strengthening the country’s fiscal sustainability and energy transition.

Mr Toigo said this was important, especially following the severe economic crisis experienced in 2023.

“This approval marks an important multi-year reform path in public financial management and energy transition that helped stabilise the economy after the acute crisis in 2023. We are delighted at the collaboration with the Nigerian and São Tomean authorities to mobilise additional resources from the NTF to close a critical funding gap,” he said.

According to Mr Toigo, the Fiscal Sustainability and Economic Resilience Programme is designed to address long-standing structural challenges.

He said this included chronic electricity shortages, low domestic revenue mobilisation and exposure to external shocks.

The AfDB said that São Tomé and Príncipe had implemented significant revenue measures, such as the introduction of a value-added tax and the modernisation of customs processes.

Mr Toigo said this was done through the ASYCUDA platform to increase the tax-to-gross domestic product ratio and enhance debt management.

“The programme also focuses on transforming the energy sector through improved governance of the national utility, tariff reforms to move toward cost recovery and accelerated transition to renewable energy. The country recently joined the Mission 300 Energy Compact initiative and approved a National Energy Compact (2025–2030) aimed at achieving universal clean-energy access.

“The supplemental financing aligns with broader support from development partners, reinforcing international confidence in the country’s reform trajectory. The reforms will help strengthen resilience, diversify revenue sources and create fiscal room for investment in infrastructure and human capital,” he said.

Mr Toigo listed some of its key upcoming reform milestones, including operationalising new public procurement systems and finalising anti–money laundering frameworks.

He said others were implementing a comprehensive public financial management strategy and deploying prepaid electricity meters to enhance revenue collection.

The programme aligned with São Tomé and Príncipe’s Vision 2030 development agenda.

It also aligned with the forthcoming National Strategy for Sustainable Development 2026–2040, which aimed to reposition the economy for inclusive and sustained growth.

(NAN)