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São Tomé and Principe: Financial Regulatory Bodies Take Center Stage in Country’s Modernization Efforts

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The government of São Tomé and Principe has made significant strides in modernizing its payment system, introducing platforms for VISA and MasterCard in May 2021. This move is seen as a major boost to the country’s financial sector, paving the way for increased economic activity.

Central Bank of São Tomé and Principe

At the heart of the country’s banking system lies the Central Bank of São Tomé and Principe (BCSTP), responsible for overseeing the national financial system. The BCSTP sells hard currencies and sets indicative interest rates, ensuring a stable monetary environment. The country’s national currency, the dobra (STD), is pegged to the Euro at an exchange rate of 1 Euro to 24.50 STD.

Banking Sector

The banking sector in São Tomé and Principe is comprised of one Central Bank and four commercial banks, including two investment banks. These institutions are supervised by the BCSTP, which has taken measures to ensure the stability of the financial system. In recent years, the BCSTP has declared three commercial banks insolvent, namely Banco Equator in 2016, Banco Privado de São Tomé in 2018, and Energy Bank in 2022.

Access to Foreign Exchange

The government has been working closely with the BCSTP to increase access to foreign exchange, a critical component of business operations. Repatriation of capital is possible with prior authorization from the Central Bank. This move is expected to boost economic activity, as businesses will have greater access to raw materials and other essential resources.

Challenges

Despite the efforts of the financial regulatory bodies, there are still some challenges facing the sector. There are no U.S. banks operating in São Tomé and Principe, with Portuguese banks serving as the primary conduit for transferring funds. However, this has not hindered the country’s economic growth, with the government working to create a more favorable business environment.

Payment Platforms

The introduction of payment platforms for VISA and MasterCard is expected to revolutionize the way businesses operate in São Tomé and Principe. The move will provide greater flexibility and convenience for transactions, making it easier for companies to conduct international trade. This development is likely to attract more foreign investment, driving economic growth and development.

Conclusion

As the country continues on its path of modernization, the financial regulatory bodies are playing a critical role in ensuring the stability and sustainability of the banking sector. With their efforts, São Tomé and Principe is poised for significant economic growth, making it an attractive destination for investors seeking opportunities in the region.

Key Points:

  • The government introduced payment platforms for VISA and MasterCard in May 2021.
  • The Central Bank of São Tomé and Principe (BCSTP) oversees the national financial system.
  • The banking sector is comprised of one Central Bank and four commercial banks, including two investment banks.
  • Access to foreign exchange has been increased, with repatriation of capital possible with prior authorization from the Central Bank.