This country profile was published in November 2008 in our annual 'Africa in 2009' issue. The next edition, 'Africa in 2010' will be on sale 23 November 2009.

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Political and economic difficulties appear set to continue to dominate the landscape in 2009. Joaquim Rafael Branco, São Tomé’s tenth prime minister in as many years, heads an uneasy coalition of the two largest parties in the National Assembly, the Movimento de Libertação de São Tomé e Príncipe-Partido Social Democrata (MLSTP-PSD), which historically has opposed President Fradique de Menezes and the Movimento Democrático das Forças da Mudança-Partido Liberal (MDFM) which supports him.


The coalition is short of money and riven by internal tensions. It came into being only because both parties were ready to join forces in May to remove previous premier Patrice Trovoada, a wealthy businessman and son of former-President Miguel Trovoada (1981-91). Trovoada is a controversial figure who is widely disliked in the political class. He lasted just three months as prime minister of a coalition of his own Acção Democrática Independente with the MDFM before he was forced out amid allegations of impropriety and exceeding his authority.


The MLSTP-PSD and MDFM together have 43 of 55 seats in parliament but already have been at odds with each other over key appointments. In October, Branco insisted on the removal of Agostinho Rita, an MDFM appointee as minister of the key natural resources and energy portfolio, who was accused of forcing the state power company to make an advance payment of $3,000 to an accounting school in which he had interests. Even without such apparently parochial tensions, it would be an unprecedented achievement if Branco’s coalition were to be able to remain together until fresh elections, scheduled for 2010, are held.


The IMF has urged the government to rein in spending, after food and fuel costs helped push inflation above the 20% level in 2007. Such restraint is likely to prove risky for the government, as little of the estimated 6% growth in GDP for 2008 has been trickling down to an impoverished population that had hoped by now to be riding the crest of an oil boom. Now the president is looking to the proposed construction of a deep-water port at Fernao Dias along the north coast of São Tomé to generate growth. Terminal Link, a subsidiary of French company CMA-CGM, promises 1,000 new jobs in the $400m, four-year project.


There was little activity in the oil sector in 2008. Operators in blocks 2, 3 and 4 of the Joint Development Zone (JDZ) with Nigeria cited non-availability of rigs as the cause of delays. Since the award of licences in 2005 and 2006, only one exploration well has been drilled. Chevron said it had not found commercial deposits of oil in block 1.


Oil executives are confident, however, that there remains a reasonable chance of significant discoveries in the JDZ in the near future. They say that in the same way as the initial excitement about the JDZ’s prospects was not supported by geological data, neither is the present gloom. Addax, based in Switzerland, Sinopec of China and US independent Anadarko, which operate the three main unexplored blocks, are all confident of pressing ahead with exploration work in early 2009. Rafael Branco will be hoping that they do, and that they have some success.