Financial Crime World

Sao Tome and Principe: Banking Regulations for Compliance

Challenges in the Doing Business 2018 Report

Sao Tome and Principe, a small island nation off the coast of West Africa, has been ranked 169 out of 190 economies in the World Bank’s Doing Business 2018 report. The country’s banking regulations are a major area of concern, with several obstacles hindering business activity.

Progress Made

According to the report, Sao Tome and Principe has made significant progress in reducing the time it takes to start a business, from 36 days to just 13 days over the past year. However, the country still struggles with cumbersome regulatory procedures, including complex tax requirements and labor market regulations that make it difficult for businesses to operate.

Areas for Improvement

The World Bank report highlights several areas where Sao Tome and Principe needs to improve its banking regulations:

  • Simplifying Construction Permits: Streamline the process of obtaining construction permits
  • Improving Electricity Connections: Simplify electricity connections
  • Enhancing Property Registration: Improve property registration processes
  • Access to Credit for SMEs: Enhance access to credit for small and medium-sized enterprises (SMEs)
  • Strengthening Labor Market Regulation: Strengthen labor market regulation

The Underdeveloped Banking Sector

The report also notes that Sao Tome and Principe’s banking sector is still underdeveloped, with limited access to financing for SMEs and a lack of competition among banks.

To address these challenges, the World Bank recommends several reforms:

  • Simplifying Tax Procedures: Simplify tax procedures and reduce tax rates
  • Single Window System: Implement a single window system for business registration and licensing
  • Strengthening Property Rights: Strengthen the property rights regime
  • Microfinance Initiatives: Improve access to credit for SMEs through microfinance initiatives
  • Enhancing Labor Market Regulation: Enhance labor market regulation to reduce bureaucracy

The Road Ahead

By implementing these reforms, Sao Tome and Principe can improve its business environment, attract more foreign investment, and create jobs for its growing population. The country’s economic future depends on it.