Sao Tome & Prin. Country Summary

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in São Tomé and Príncipe was undertaken in 2024. According to that Evaluation, São Tomé and Príncipe was deemed Compliant for 5 and Largely Compliant for 11 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness ratings.

São Tomé and Príncipe is making strides in combating corruption through government reforms and the implementation of anti-corruption laws, although challenges remain due to historical issues and the lack of a designated agency for oversight. The country faces a range of criminal activities, including drug trafficking and petty crimes, while its judicial system struggles with political influence and resource limitations, which hinder effective law enforcement and contribute to a fragile economic environment that may incentivize criminal behavior.

São Tomé and Príncipe (STP) is a developing nation characterized by a stable multi-party democracy, with a GDP of approximately $418.6 million and a population of around 215,056. The country's economy heavily relies on foreign aid, with over 90% of its budget financed by international donors, including China, Portugal, and the World Bank. In recent years, STP has made significant strides to enhance its investment climate by implementing various reforms, such as the introduction of a Value Added Tax (VAT) and a modern Labor Code, while also ratifying the African Continental Free Trade Agreement to attract foreign direct investment (FDI) and stimulate economic growth.

Despite these positive developments, challenges remain, including a small domestic market, inadequate infrastructure, and high costs of credit, which hinder foreign investment opportunities. The government is actively working to improve the business environment and has established a "one-stop shop" for business registration to streamline processes for investors. With a focus on sectors like tourism, agriculture, and potential hydrocarbon production, STP aims to leverage its maritime resources and modernize its infrastructure to foster sustainable economic growth and attract sustained FDI.