Sao Tome Public and Natural Resource Management Development Policy Grant

closed

Closed

The Public and Natural Resource Management Development (PNRMD) Policy Grand operation is designed to help implement the Government's economic reform program for 2008-2009 that is based on Sao Tom and Principe's Poverty Reduction Strategy Paper (PRSP). It supports policy measures aimed principally at improving the accountability, effectiveness, and level of public resources, and at strengthening governance in the oil sector. It will in addition support the authorities' efforts to initiate the preparation of a new PRSP based on updated information on oil prospects and in depth analysis of growth diversification options. This operation will raise the level, efficiency, and effectiveness of existing public spending to better deliver key services. This will be achieved by supporting government's policy actions to: (1) improve public expenditure efficiency through better budget preparation, execution, and control; (2) enhance the tax regimes and assure stronger impact of public expenditures on poverty; and (3) raise the standard of petroleum sector governance in line with international standards of transparency and the Extractive Industries Transparency Initiative (EITI). Ultimately, the main benefits of this operation will accrue to all Sao Tomeans in terms of higher incomes, reduced poverty, and higher levels of transparency and political and economic stability. Gross domestic product (GDP) growth, which slowed down to about 4.5 percent in 2004-05 due to political instability and low levels of investment, bounced back to an average of 6.4 percent in 2006 and 2007 largely correlated with foreign direct investment (FDI) in construction and tourism in anticipation of potential oil production. The use of oil signature bonuses by the government also helped buoy further economic activity. In this context, the services sector, now accounting for more than half of GDP, has started to take a significant role in the economy. Tourism has become the most dynamic sector and the primary source of foreign exchange for the country, with more than 40 percent of total exports earnings in 2005-06.

FY17 - Energy and Extractives,FY17 - Public Administration

World Bank Group

Project

Oil and Gas, Forest Products and Packaging, Hotel, Government