Sao Tome and Principe - Country Commercial Guide
Market Challenges
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The government is dependent upon international donors for roughly 90 percent of its budget. Aside from donor funding, the economy remains primarily dependent on agriculture, with a small but growing contribution from tourism.

The private sector consists mainly of informal operators and micro and small enterprises that are mainly engaged in commerce and, to a lesser extent, agricultural activity with little investment capacity.

Recent World Bank estimates show that about one-third of the population lives on less than $1.90 per day, and more than two-thirds of the population is poor, using a poverty line of $3.2 per day. Urban areas and southern districts such as Caué and Lembá have higher levels of poverty incidence

Attempts to diversify the economy have met with little success. Hampering investment are a lack of basic infrastructure (roads, electricity, and water) and the high cost of transportation to relatively isolated locations.

Besides having a small internal market with limited growth potential, STP faces challenges in accessing external markets, mainly in terms of logistics, competitiveness, international norms and regulations and financing instruments.

STP suffers from limited institutional capacity and a limited human, natural, and financial resources base.