The African Development Fund (ADF) has approved a grant of U.S. $10.7 million for the implementation of the first phase of the Zuntámon Initiative in São Tomé and Príncipe.
The project, within the framework of the Lusophone Compact, aims to improve the business environment in the country by removing specific bottlenecks that hinder private sector-led growth.
Data from the World Bank shows that the country’s growth in the last two decades was driven by agriculture, tourism, oil-fueled foreign direct investment, but mostly by government expenditure.
‘The Zuntámon Initiative will focus its interventions on commodities to which women and youths are actively contributing, as well as export products with high growth potential, such as cocoa, coconut and horticultural products’, AfDB said in a statement on its website.
‘The focus on these products and services is in line with the government of São Tomé and Príncipe’s post-Covid-19 economic recovery strategy, which prioritises support to pandemic-affected businesses and recovery in key industries such as agriculture, fisheries, tourism and hospitality.
‘In addition to SMEs, the project will benefit investor and business support institutions such as the Trade and Investment Promotion Agency, business associations and business support organisations, financial institutions and the Central Bank of São Tomé and Príncipe.
‘Implementation of the project will lead to reduction in the number of days to resolve commercial disputes from 1,185 to 600 days by strengthening the capacity of the arbitration centre and the commercial court system, and through strengthening the business environment to increase the number of registered businesses’.
According to the World Food Programme (WFP), the limited number of qualified workers in the country is an obstacle to the production of goods and services on the scale needed to meet market demand.
‘This project will build the capacity of critical institutions of the government of Sao Tome while improving the business environment for private sector development’, Director, Human Capital, Youth and Skills Development, Martha Phiri, said.
‘It will promote and incentivise the formalisation of the informal economy to create more and better jobs, especially for women and youths who dominate the informal sector’.
Photo source: David Stanley