Strengthening Banking Regulations in Sao Tome and Principe
The World Bank has approved an additional $7 million to support the government of Sao Tome and Principe in strengthening its banking system, improving access to finance and national statistics. This funding is part of the ongoing Institutional Capacity Building Project, aimed at modernizing the financial infrastructure of the country.
Challenges in Sao Tome and Principe’s Financial Infrastructure
Despite recent improvements in digital payment systems, Sao Tome and Principe’s financial infrastructure remains underdeveloped and unreliable. This limits access to payment services in rural areas and on the island of Principe, hindering:
- Collection of taxes
- Payment of utility bills, wages, and pensions
- Disbursement of welfare benefits
Importance of a Modern Financial System
“A modern and efficient financial system is essential for a country’s sustained development,” said Jean-Christophe Carret, World Bank Country Director to Sao Tome and Principe. “It is crucial that STP maintains the progress made in improving its financial system, particularly as it will be beneficial for the tourism industry, which generates significant economic activity and relies heavily on digital payment systems.”
Project Goals
The additional funding comes at a critical time, supporting the government’s response to COVID-19 by promoting the use of digital payments to scale-up social protection programs and enhance financial inclusion. With this new allocation, the World Bank’s overall contribution to the project will be $19 million.
The project aims to:
- Strengthen the Central Bank of Sao Tome and Principe
- Modernize its systems and improve its capacity to regulate the banking sector
- Increase access to finance for households and businesses, particularly in rural areas, by promoting digital payments and financial inclusion
Contributing to Economic Growth and Development
By supporting the government’s efforts to develop a modern and efficient financial system, the World Bank hopes to contribute to Sao Tome and Principe’s economic growth and development, while also improving the lives of its citizens.