São Tomé and Príncipe will get $12 million cash from the International Monetary Fund (IMF) to combat COVID-19 following the board’s approval on Tuesday, April 21, 2020.
São Tomé and Príncipe, officially the Democratic Republic of São Tomé and Príncipe, is an island country in the Gulf of Guinea, off the western equatorial coast of Central Africa.
The loan money falls under the Rapid Credit Facility (RCF). The country will also benefit from IMF debt service relief under the Catastrophe Containment and Relief Trust (CCRT).
Under the CCRT, São Tomé and Príncipe will not service its debt to the IMF in the next 6 months. That amounts for about $0.15 million. The relief could be extended for up-to 2 years, subject to the availability of resources under the CCRT.
According to the IMF, the COVID-19 pandemic is taking a heavy toll on Sao Tome and Principe, with tourism and externally financed projects halted and international supply chains disrupted. The challenging circumstances are further affected by the fragility of the economy and a weak health care system.
Mr. Tao Zhang, Deputy Managing Director and Acting IMF Chair, said the authorities of São Tomé and Príncipe have moved swiftly to develop a plan to address the major challenges posed by the COVID-19 pandemic.
“In addition to posing a major health risk, the pandemic exerts strong fiscal and balance of payments pressures. Emergency support under the Rapid Credit Facility will help prevent a much more severe and prolonged economic contraction and provide space for critical health and social spending. It is also expected to help catalyze donor support, which is vital for closing the remaining financing gap,” Zhang added.
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Below are the emergency financing requests approved by the IMF Executive Board for Sub-Saharan Africa.