Housing Finance in Sao Tome and Principe
Overview
This profile is also available in French here.
To download a pdf version of the full 2023 São Tomé and Príncipe country profile, click here.
The population of Sao Tomé and Principe in 2020 was 210–240. In 2017, 138 758 people (66%) lived in poverty.In 2021, 75% of So Tomé and Principe’s population resided in cities, while 86% lived in slums. The country and economy are unable to sustainably finance housing projects or meet housing needs.
The real GDP of Sao Tomé and Principe fell by 6.4% in 2020, the first loss in a decade. Economic sectors such as tourism and service businesses were dented, while border closures hampered cocoa exports. In May 2022, inflation was 14.9%, up from 6.8% in May 2021. The government is researching economic policy options, including increasing the independence of the central bank to increase access to finance.
According to a 2012 national poll, 66.1% of urban residents own their homes, 17.5% rent, 15.2% live in free housing, and 1.2% have alternate housing. Non-performing loans declined from 29.6% in the fourth quarter of 2020 to 28.6% in the fourth quarter of 2021 as a result of the central bank imposing new limits in order to minimise non-performing loans in the financial industry by April 2022. Housing/construction, consumption, and trade received 37.4%, 19.6%, and 19.4% of loans, respectively, according to the central bank’s 2020 annual report.
In terms of housing supply, Sao Tomé and Prncipe have signed an agreement with China to construct 200 social housing units. On the island of So Tomé, 60 new homes are being built in the Cantagalo and Lobata regions.
Due to heavy rains and extensive cultivation on steep hillsides, So Tomé and Principe are prone to landslides. Torrential rains flooded 61 homes in Principe in May 2022, displacing 350 people. The current climate conditions have harmed the services industry the most, followed by the housing sector.
The government upgraded its payment systems in May 2021 by integrating VISA and MasterCard. Economic growth could be boosted by a post-pandemic tourism resurgence and macroeconomic stability.
Find out more information on the housing finance sector of Sao Tome and Principe, including key stakeholders, important policies and housing affordability:
- Overview
- Access to Finance
- Affordability
- Housing Supply
- Property Markets
- Policy and Legislation
- Opportunities
- Green Applications for Affordable Housing
- Availability of Data on Housing Finance
- Additional Sources
- Websites
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2023 edition, which has up-to-date profiles for 55 African countries.
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Sao Tome and Principe
Overview
The Democratic Republic of São Tomé and Príncipe is the second smallest country in Sub-Saharan Africa by land area[1] consisting of two main islands and numerous islets of approximately 1 001km2.[2] It is an island state in the Gulf of Guinea sharing maritime borders with Equatorial Guinea, Gabon, and Nigeria. The population of São Tomé and Príncipe was estimated at 210 240 in 2020.[3] Approximately 138 758 people, 66% of the population, lived below the national poverty line as of 2017.[4] The urban population of São Tomé and Príncipe was 75% of the total population in 2021[5] with 180 806 people, 86% of the urban population, living in slums.[6] The country and its economy cannot finance housing projects or develop a sustainable way of resolving the housing crisis.
The economy of São Tomé and Príncipe is based largely on subsistence agriculture and fisheries. The country also relies on foreign grants which were approximately 10.5% of GDP in 2020.[7] São Tomé and Príncipe is classified as being in debt distress, according to the World Bank-International Monetary Fund low-income country debt sustainability analysis (DSA). The country’s protracted arrears on external debt are still not regularised, as it continues to seek rescheduling of agreements with Angola, Brazil, and Equatorial Guinea totalling 2.8% of Gross Domestic Product (GDP).[8]
GDP grew by 3.1% in 2020.[9] The year-on-year inflation rate in May 2022 was 14.9% as against the May 2021 value of 6.8%.[10] In 2020, the economy of São Tomé and Príncipe shrank by an estimated 6.4% in real terms, the first time in a decade. This contrasts with growth of 2.2% in 2018 and 1.3% in 2019. COVID-19 containment measures weakened demand in the tourism and service sectors and dealt a blow the hotels and restaurants, transport, construction, and manufacturing sectors, while widespread international border closures disrupted cocoa exports. As a result, the central bank adopted accommodative monetary policy, reducing the minimum reserve requirements from 21% in 2019 to 17% in 2020 for foreign-currency denominated accounts and from 18% to 14% for domestic currency accounts to support the banks in lending to the pandemic-distressed private sector.[11] The government is exploring a number of economic policy reforms including strengthening the independence of the central bank and continuing investment in public infrastructure to improve the business environment.[12] In attempting to reduce external borrowing to cover oil imports, the country is focused on developing investment in alternative power sources and fiscal reforms. Accordingly, public debt, which rose to 104.9% of GDP in 2020, is projected to decrease to 96.4% of GDP in 2022.[13]
In the National Strategy for Risk Management of Disasters, the top climate-related threats the country faces include, among others, strong winds, floods, droughts, landslides, cholera, malaria, and influenza. Being a country of volcanic origin makes São Tomé and Príncipe prone to landslides due to torrential rains and the practice of intensive agriculture in areas of high slopes.[14] In May 2022, heavy rains flooded 61 residences in the Autonomous Region of Príncipe, and affected 350 families in various municipalities. Rains also destroyed agricultural lands and roads became inaccessible. Communities such as Bela Vista, Abade and Aeroporto to Picão via Telelé have, due to rock erosion, seen 10 landslides and two partially destroyed residences.[15]
The value of direct economic losses attributed to current climate conditions is approximately 0.34% of the total capital stock value, with the services sector bearing the largest portion of the losses followed by the housing sector.[16]
[1] World Bank (2020). World Development Indicators. http://wdi.worldbank.org/table/3.1 (Accessed 23 August 2022).
[2] Instituto Nacional de Estatistica. Main Indicators. https://www.ine.st/ (Accessed on 23 August 2022).
[3] Instituto Nacional de Estatistica. Main Indicators. https://www.ine.st/ (Accessed on 23 August 2022).
[4] World Bank (2020). São Tomé and Príncipe – World Bank DataBank. https://databankfiles.worldbank.org/data/download/poverty/33EF03BB-9722-4AE2-ABC7-AA2972D68AFE/Global_POVEQ_STP.pdf (Accessed on 23 August 2022). Pg. 1
[5] World Bank (2021). World Development Indicators. https://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS?locations=ST (Accessed on 23 August 2022)
[6] World Bank (2018). World Development Indicators. https://data.worldbank.org/indicator/EN.POP.SLUM.UR.ZS?locations=ST (Accessed on 23 August 2022)
[7] IMF (2022). Democratic Republic of São Tomé And Príncipe: Staff Report for 2022 Article IV Consultation, Fourth Review under the Extended Credit Facility Arrangement, Request for Waivers for Nonobservance of Performance Criteria, Modification of Performance Criteria and Financing Assurances Review. IMF Country Report No. 22/95. https://www.imf.org/-/media/Files/Publications/CR/2022/English/1STPEA2022001.ashx (Accessed 24 August 2022). Pg. 31
[8] World Bank (2018). Democratic Republic of São Tomé and Príncipe: Joint Bank-Fund Debt Sustainability Analysis, 2018 Update. https://openknowledge.worldbank.org/bitstream/handle/10986/30528/129999-STP-Debt-Sustainability-Analysis-2018-Update-Final-Sep1818.pdf?sequence=1&isAllowed=y (Accessed 3 September 2022). Pg. 6
[9] Instituto Nacional de Estatistica. GDP Grade 2020. https://www.ine.st/index.php/component/phocadownload/file/613-nota-pib-2020 (Accessed 24 August 2022)
[10] Instituto Nacional de Estatistica. CPI May 2022. https://www.ine.st/index.php/component/phocadownload/file/700-ipc-maio-2022 (Accessed 24 August 2022)
[11] The African Development Bank. (2022). São Tomé and Príncipe Economic Outlook.
https://www.afdb.org/en/countries-southern-africa-sao-tome-and-principe/sao-tome-and-principe-economic-outlook (Accessed 24 August 2022).
[12] The African Development Bank. (2022). São Tomé and Príncipe Economic Outlook.
https://www.afdb.org/en/countries-southern-africa-sao-tome-and-principe/sao-tome-and-principe-economic-outlook (Accessed 24 August 2022).
[13] The African Development Bank. (2022). São Tomé and Príncipe Economic Outlook.
https://www.afdb.org/en/countries-southern-africa-sao-tome-and-principe/sao-tome-and-principe-economic-outlook (Accessed 24 August 2022).
[14] Estratégia Nacional para Gestão de Risco De Desastres (2010). http://cnmc.gov.st/index.php/pt/documentos-pt/documentacao-mudancas-climaticas/40-estrategia-nacional-gestao-risco-e-catastrofes/file (Accessed 24 August 2022). Pg. 12
[15] Johnston, S. N. (2022). Sao Tome And Principe: Floods and Landslides – Operations Update No. 2, DREF N° MDRST001 – Sao Tomé and Principe. 21 June 2022. Turismo STP. https://www.turismo-stp.org/sao-tome-and-principe-floods-and-landslides-operations-update-no-2-dref-n-mdrst001-sao-tome-and-principe/ (Accessed 3 September 2022)
[16] United Nations Office for Disaster Risk Reduction (2019). Disaster Risk Profile – São Tomé and Príncipe. http://riskprofilesundrr.org/documents/1528/download (Accessed 24 August 2022). Pg. 12.
Access to Finance
Banco Central São Tomé e Príncipe (BCSTP), the country’s central bank, is the supervisor of the country’s financial system and carries out the functions of monetary issuance, is the state banker, monetary, and exchange authority.[1]
Four licensed commercial banks operate in the country: Banco Internacional de São Tomé e Príncipe (BISTP), Ecobank São Tomé and Príncipe, Afriland First Bank São Tomé and Príncipe, and Banque Gabonaise et Française Internationale (BGFI) Bank.[2] These banks are owned by Portuguese, Cameroonian, Angolan, Gabonese, Togolese, and São Toméan interests. Efforts are being made to complete the liquidation of three banks, but a lack of a modern legal framework, and the effects of the pandemic, are making this difficult. The central bank decided to dissolve Banco Equador following its failure to find a buyer in May 2016 when it was put up for sale. Banco Equador repeatedly failed to meet regulatory requirements in terms of capital buffers, liquidity and solvency after the central bank took over its administration in January 2015.[3] Banco Equador’s liquidation process is ongoing.[4] Banco Privado, since 2013, accumulated losses that resulted in the depletion of its own funds, so that they fell below the required minimum. Banco Privado failed to implement measures recommended by the central bank i.e., to strengthen the provisions, processes and strategies of corporate governance, increasing its risk level.[5] A process was reportedly under way in April 2022 to negotiate the assets between the shareholders and the Board of the BSCTP for Banco Privado.[6] Effective 17 January 2022, the central bank cancelled the authorisation to operate Energy Bank after unsuccessful attempts at reorganisation and resolution.[7]
The National Financial Inclusion Strategy highlights the government’s efforts to make financial services and products accessible to all as a mechanism to allow those vulnerable to poverty to contribute to the country’s economy. A survey by the central bank in 2017 concluded that 76% of the São Toméan population above 18 years old was excluded from the financial system. The data also indicated that 60% of São Toméans did not have access to banks. Also, 57% of women were financially excluded versus 43% of men. The financial exclusion can be attributed to low or no income, low school education, low levels of financial literacy, and high levels of informal financial activities.[8]
Following the expiration of moratorium payments on Non-Performing Loans (NPLs) in June 2021, the country saw a system-wide decrease in NPLs from 29.6% in the fourth quarter of 2020 to 28.6% in quarter 4 of 2021.[9] The central bank has implemented measures to tackle the still high level of NPLs in the financial sector, with new regulations, which banks were required to comply with by April 2022.[10] In the analysis of loan portfolios by economic sector, the central bank’s 2020 annual report indicated that loans were predominantly allocated to the housing/construction sector, consumption, and commerce sectors, representing 37.4%, 19.6% and 19.4% of loans respectively.[11] The average bank lending rate in 2020 was 19.1%.[12] Credit to the construction sector is mostly provided by one bank and this affects the ability of individuals and housing developers’ to afford interest rates offered.
The 2020 World Bank Doing Business report stated São Tomé and Príncipe had a credit registry coverage of 21.5%. This indicates the number of individuals and firms listed in credit registry as a percentage of adult population.[13] The central bank maintains a credit registry of all current loans. However, there are gaps in the information provided to the credit registry. Information is provided by some banks and none of the microfinance institutions.[14] Also, information is provided monthly instead of in real time and the registry does not use an algorithm to produce credit scores that can help standardise credit risk analysis.[15] Discrimination in access to credit based on gender is not prohibited by law.[16] The country does not have a collateral registry nor a means of determining priority for secured collaterals in instances of insolvency. Doing Business scored São Tomé and Príncipe zero on credit bureau coverage as well.[17] Little has been done to innovate providing access to credit, especially for the poor. The banking system in the country has become more concentrated as the share of the largest bank’s total assets increased from 53% in 2016 to 60% in 2020.[18]
BISTP, on its website, provides information on housing credit for purchase, construction, and works. The bank can finance up to 100% of the value of works or acquisition, or up to 50% of guarantees. Mortgage interest rates are up to 8% per year and up to 5% for financial guarantees, with a maximum tenure of 240 months or 20 years.[19] Information on the number of mortgages held is not available.
[1] Banco Central Sao Tome e Principe. Mission and Functions of the Central Bank. https://bcstp.st/Banco-Central?x=YxQopwdWTjzY80JlI1egeg==&&z=jQskNOBQ7rc4mUOvyRxc9A== (Accessed 25 August 2022)
[2] Banco Central Sao Tome e Principe. Financial Institutions. https://bcstp.st/Instituicoes-Financeiras-Detalhes?cod=BAN (Accessed 25 August 2022).
[3] Economist Intelligence (2018). São Tomé and Príncipe Banco Equador liquidated. http://country.eiu.com/article.aspx?articleid=1784535562&Country=S%C3%A3o%20Tom%C3%A9%20and%20Pr%_2 (Accessed 5 September 2022).
[4] IMF (2022). Democratic Republic of São Tomé And Príncipe: Staff Report for 2022 Article IV Consultation, Fourth Review under the Extended Credit Facility Arrangement, Request for Waivers for Non-observance of Performance Criteria, Modification of Performance Criteria and Financing Assurances Review. IMF Country Report No. 22/95. https://www.imf.org/-/media/Files/Publications/CR/2022/English/1STPEA2022001.ashx (Accessed 25 August 2022). Pg. 69.
[5] Economist Intelligence (2018). São Tomé and Príncipe Banco Privado on the verge of liquidation. http://country.eiu.com/article.aspx?articleid=1986525382&Country=S%C3%A3o%20Tom%C3%A9%20and%20Pr%_9 (Accessed 5 September 2022).
[6] IMF (2022). Democratic Republic of São Tomé And Príncipe: Staff Report for 2022 Article IV Consultation, Fourth Review under the Extended Credit Facility Arrangement, Request for Waivers for Non-observance of Performance Criteria, Modification of Performance Criteria and Financing Assurances Review. IMF Country Report No. 22/95. https://www.imf.org/-/media/Files/Publications/CR/2022/English/1STPEA2022001.ashx (Accessed 25 August 2022). Pg. 69.
[7] IMF (2022). Democratic Republic of São Tomé And Príncipe: Staff Report for 2022 Article IV Consultation, Fourth Review under the Extended Credit Facility Arrangement, Request for Waivers for Non-observance of Performance Criteria, Modification of Performance Criteria and Financing Assurances Review. IMF Country Report No. 22/95. https://www.imf.org/-/media/Files/Publications/CR/2022/English/1STPEA2022001.ashx (Accessed 25 August 2022). Pg. 69.
[8] Alliance for Financial Inclusion (2021). National Financial Inclusion Strategy 2021 – 2025 – Democratic Republic of São Tomé & Príncipe. https://www.afi-global.org/wp-content/uploads/2021/08/National-Financial-Inclusion-Strategy-STP1.pdf (Accessed 25 August 2022) Pg. 8.
[9] IMF (2022). Democratic Republic of São Tomé And Príncipe: Staff Report for 2022 Article IV Consultation, Fourth Review under the Extended Credit Facility Arrangement, Request for Waivers for Non-observance of Performance Criteria, Modification of Performance Criteria and Financing Assurances Review. IMF Country Report No. 22/95. https://www.imf.org/-/media/Files/Publications/CR/2022/English/1STPEA2022001.ashx (Accessed 25 August 2022). Pg. 20.
[10] IMF (2022). Democratic Republic of São Tomé And Príncipe: Staff Report for 2022 Article IV Consultation, Fourth Review under the Extended Credit Facility Arrangement, Request for Waivers for Non-observance of Performance Criteria, Modification of Performance Criteria and Financing Assurances Review. IMF Country Report No. 22/95. https://www.imf.org/-/media/Files/Publications/CR/2022/English/1STPEA2022001.ashx (Accessed 25 August 2022). Pg. 20.
[11] Banco Central Sao Tome e Principe. Report on the Santomean Economy 2020. https://bcstp.st/Upload/New_DOC/EE/Relatorio%20Anual%202020.pdf (Accessed 25 August 2022). Pg 69
[12] IMF (2022). Democratic Republic of São Tomé And Príncipe: Staff Report for 2022 Article IV Consultation, Fourth Review under the Extended Credit Facility Arrangement, Request for Waivers for Non-observance of Performance Criteria, Modification of Performance Criteria and Financing Assurances Review. IMF Country Report No. 22/95. https://www.imf.org/-/media/Files/Publications/CR/2022/English/1STPEA2022001.ashx (Accessed 25 August 2022). Pg. 31.
[13] World Bank (2020). Doing Business, São Tomé and Príncipe 2020.
https://www.doingbusiness.org/content/dam/doingBusiness/country/s/sao-tome-and-principe/STP.pdf (Accessed 25 August 2022). Pg. 28.
[14] World Bank (2016). Democratic Republic of São Tomé and Príncipe: Financial Sector Development Implementation Plan: 2017-2019. https://documents1.worldbank.org/curated/en/707521474550469708/pdf/AUS15036-WP-P150418-PUBLIC-ABSTRACT-SENT-STPFSDIPENFINAL.pdf (Accessed 25 August 2022) Pg. 44
[15] World Bank (2016). Democratic Republic of São Tomé and Príncipe: Financial Sector Development Implementation Plan: 2017-2019. https://documents1.worldbank.org/curated/en/707521474550469708/pdf/AUS15036-WP-P150418-PUBLIC-ABSTRACT-SENT-STPFSDIPENFINAL.pdf (Accessed 25 August 2022) Pg. 44.
[16] World Bank (2022). Women, Business and the Law 2022 São Tomé and Príncipe. https://wbl.worldbank.org/content/dam/documents/wbl/2022/snapshots/Sao-tome-and-principe.pdf (Accessed 5 September 2022). Pg. 2.
[17] World Bank (2020). Doing Business, São Tomé and Príncipe 2020.
https://www.doingbusiness.org/content/dam/doingBusiness/country/s/sao-tome-and-principe/STP.pdf (Accessed 25 August 2022). Pg. 28.
[18] IMF (2022). Democratic Republic of São Tomé And Príncipe: Staff Report for 2022 Article IV Consultation, Fourth Review under the Extended Credit Facility Arrangement, Request for Waivers for Non-observance of Performance Criteria, Modification of Performance Criteria and Financing Assurances Review. IMF Country Report No. 22/95. https://www.imf.org/-/media/Files/Publications/CR/2022/English/1STPEA2022001.ashx (Accessed 25 August 2022). Pg. 28.
[19] Banco Internacional de São Tomé e Príncipe (2022). Mortgage loans.
https://www.bistp.st/inicio/particulares/creditos/habitacao/ (Accessed 25 August 2022).
Affordability
From the 2012 national survey, 66.1% of the population in the urban areas own their homes, 17.5% live in rented accommodation, 15.2% live in free homes and 1.2% have other means of accommodation.[1] The total unemployment rate in the country is 13.6%, ranging from 9.3% for men to 19.7% for women.[2] As of 2017, the percentage of the population living below the national poverty line was 66%[3] and the Gini index is 40.7,[4] indicating a high level of unequal income distribution.
The typical cost of land per square metre in an urban area is Db2 450 (US$105). The price of the cheapest, newly built house by a formal developer or contractor in an urban area is Db1 482 250 (US$63 346) and the size is 80m2. The typical monthly rental price for these houses built by a formal developer or contractor in an urban area is Db17 150 (US$733). The total construction cost per square meter is Db7 350 (US$314). The minimum size of a residential plot in urban areas in square meters is 300m2.[5]
[1] Instituto Nacional de Estatistica (2018). Accommodation Features and Conditions. https://www.ine.st/index.php/publicacao/documentos/file/209-4a-caracteristicas-e-condicoes-alojamento-75 (Accessed 26 August 2022).
[2] Instituto Nacional de Estatistica (2018). Unemployed Population. https://www.ine.st/index.php/publicacao/documentos/file/185-3a-populacao-desempregada-60 (Accessed 26 August 2022).
[3] World Bank (2020). São Tomé and Príncipe – World Bank DataBank. https://databankfiles.worldbank.org/data/download/poverty/33EF03BB-9722-4AE2-ABC7-AA2972D68AFE/Global_POVEQ_STP.pdf (Accessed on 26 August 2022). Pg. 1.
[4] World Bank (2022). Gini index – São Tomé and Príncipe – World Bank Data https://data.worldbank.org/indicator/SI.POV.GINI?locations=ST (Accessed on 26 August 2022).
[5] Email correspondence with Artur Neves, Bwaso Imobiliária (https://bwasoimoveis.net/) 2 August 2022.
Housing Supply
The land tenure system is a combination of private holding and usufruct of public land. Urban lands are mostly private. The Ministry of Infrastructure, Natural Resources, and the Environment is responsible for the administration of urban lands.[1] It takes a 16-step process and 67 days to obtain a construction permit. The country scored 4.5 on an index scale of 0-30 in the quality of land administration index, which measures the reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights, according to the World Bank Doing Business 2020 report. The country also scored 41.1 out of 100 in the ranking of economies on the ease of registering property, below the Sub-Saharan regional average of 53.6. Both men and women have equal ownership rights to property. Not all privately held land plots are mapped or registered.[2]
According to the 2012 census, most houses are made of wood with 64.8% using new wood for construction and 15.3% using reclaimed or salvaged wood.[3] Urban areas mostly comprise low-income housing built of wood, from the deforestation of local forests,[4] are occupied by more than one family, and have improper sanitation. At the national level, zinc is mostly used in roofing, with most districts having more than two-thirds of the houses covered in zinc, followed by tile and slate.[5] In urban areas, 30% of households have piped water and 57% of dwellings do not have any type of sanitary installation.[6] However, 65% of dwellings in urban areas have access to electricity.[7] Increased development in peri-urban areas has resulted in informal settlements with inadequate water and sanitation and energy infrastructure.[8]
São Tomé and Príncipe has signed a cooperation agreement with China to construct 200 social housing units. Currently, 60 apartments have been built in the districts of Cantagalo and Lobata in the island of São Tomé.[9] The project includes five buildings with three floors each, two buildings in Lobata, north of the island of São Tomé, and three in the district of Cantagalo, in the south of the island, each having 12 apartments.[10] The Chinese Embassy in São Tomé has indicated that China will pay for construction of another 140 homes in São Tomé and Príncipe by 2024.[11] China has proposed doing a feasibility study prior to starting the second phase of construction of the social houses.[12]
In November 2020, the São Tomé and Príncipe Housing and Real Estate Agency, through a public-private partnership, signed a memorandum with KCG SARL, a company based in Cameroon, to construct 20 000 social housing units. The project, which seeks to cover the entire national territory, comprises 80% social housing and 20% commercial housing. The agreement is part of the government’s commitment to solve the housing problem in the country.[13]
[1] World Bank (2019). Country Economic Memorandum for São Tomé and Príncipe – Background Note 7: What are the Bottlenecks on Land Governance and How to Remove Them to Support Tourism and Agriculture Development? https://openknowledge.worldbank.org/bitstream/handle/10986/32090/Sao-Tome-and-Principe-Country-Economic-Memorandum-Background-Note-7-What-are-the-bottlenecks-on-land-governance-and-how-to-remove-them-to-support-tourism-and-agriculture-development.pdf?sequence=1&isAllowed=y (Accessed 26 August 2022).
[2] World Bank (2020). Doing Business, São Tomé and Príncipe 2020.
https://www.doingbusiness.org/content/dam/doingBusiness/country/s/sao-tome-and-principe/STP.pdf (Accessed 26 August 2022).
[3] Instituto Nacional de Estatistica (2018). Housing Construction Material. https://www.ine.st/index.php/publicacao/documentos/file/215-5-material-de-construcao-dos-alojamentos-81 (Accessed 26 August 2022).
[4] South-South Galaxy (2022). Support to the Urban Development of São Tomé and Príncipe
Transferring know-how to enhance the São Tomé and Príncipe public administration’s capacity to develop and implement social-housing instruments and policies. https://my.southsouth-galaxy.org/en/solutions/detail/support-to-the-urban-development-of-sao-tome-and-principe-project (Accessed 3 September 2022).
[5] Instituto Nacional de Estatistica (2018). Housing Construction Material. https://www.ine.st/index.php/publicacao/documentos/file/214-4f-caracteristicas-e-condicoes-alojamento-80 (Accessed 3 September 2022)
[6] Instituto Nacional de Estatistica (2018). Accommodation Features and Conditions. https://www.ine.st/index.php/publicacao/documentos/file/212-4d-caracteristicas-e-condicoes-alojamento-78 (Accessed 26 August 2022).
[7] Instituto Nacional de Estatistica (2018). Housing Construction Material. https://www.ine.st/index.php/publicacao/documentos/file/214-4f-caracteristicas-e-condicoes-alojamento-80 (Accessed 26 August 2022).
[8] Sanitation and Water for All Secretariat (2021). SWA Welcomes São Tomé and Principe to the Partnership. https://www.sanitationandwaterforall.org/news/swa-welcomes-sao-tome-and-principe-partnership (Accessed 26 August 2022).
[9] Permanent Secretariat of Forum for Economic and Trade Co-operation between China and Portuguese-Speaking Countries (MACAO) (2022). China Constructs Social Housing for São Tomé and Príncipe. https://www.forumchinaplp.org.mo/china-constructs-social-housing-for-sao-tome-and-principe/ (Accessed 26 August 2022).
[10] China-Lusophone Brief (2021). China-Financed Social Housing in Sao Tome Nears Completion. https://www.clbrief.com/the-first-blocks-of-social-apartments-in-lobata-district-should-be-ready-in-the-next-days/ (Accessed 26 August 2022)
[11] Economic & Trade Co-operation and Human Resources Portal between China and Portuguese-Speaking Countries (2021). Chinese-funded Public Housing on São Tomé Island Completed. https://www.platformchinaplp.mo/trade_content.php?id=9050&lang=en (Accessed 26 August 2022).
[12] Permanent Secretariat of Forum for Economic and Trade Co-operation between China and Portuguese-Speaking Countries (MACAO) (2022). China Constructs Social Housing for São Tomé and Príncipe. https://www.forumchinaplp.org.mo/china-constructs-social-housing-for-sao-tome-and-principe/ (Accessed 26 August 2022).
[13] Neto, R. (2020). Sao Tome government and KCG SARL of Cameroon sign agreement to build 20,000 social housing. 27 November 2020. Agencia STP-Press. https://www.stp-press.st/2020/11/27/governo-sao-tomense-e-kcs-sarl-dos-camaroes-assinam-acordo-para-construcao-de-20-mil-casas-sociais/ (Accessed 5 September 2022).
Property Markets
The 2020 World Bank’s Doing Business report ranks São Tomé and Príncipe at 170 out of 190 economies. The country has a title registration system. There are eight procedures involved in registering property and registration is done in 52 days. The cost of registration is 10.2% of the property value.[1]
There is no comprehensive and functional electronic database for checking for encumbrances, property loans, sales, or rentals. Past and newly issued immovable property records are paper-based, require manual bookkeeping, and follow the folio real system – a system that records information about the land as opposed to personal systems which record information about the owner.[2]
[1] World Bank (2020). Doing Business, São Tomé and Príncipe 2020.
https://www.doingbusiness.org/content/dam/doingBusiness/country/s/sao-tome-and-principe/STP.pdf (Accessed 27 August 2022). Pg. 26.
[2] World Bank (2019). Country Economic Memorandum for São Tomé and Príncipe – Background Note 7: What are the Bottlenecks on Land Governance and How to Remove Them to Support Tourism and Agriculture Development? https://openknowledge.worldbank.org/bitstream/handle/10986/32090/Sao-Tome-and-Principe-Country-Economic-Memorandum-Background-Note-7-What-are-the-bottlenecks-on-land-governance-and-how-to-remove-them-to-support-tourism-and-agriculture-development.pdf?sequence=1&isAllowed=y (Accessed 27 August 2022).
Policy and Legislation
The government has established a National Land Use Planning and Cartography Directorate responsible for managing and allocating land, managing natural and protected areas, ensuring sector land distribution, and planning major infrastructure by zone.[1] The institution in charge of immovable property registration is the Conservatória do Registo Predial and the institution in charge of the plans showing legal boundaries is Direcção dos Serviços Geograficos e Cadastrais.[2]
The Código dos Registos Predial e Notarial Lei nº 12/2018 e 14/2018 laws require that all property sale transactions be registered at the immovable property registry to make them opposable to third parties. Also, the Codigo do Registro Predial 1968, Código dos Registos Predial e Notarial Lei nº 12/2018 e 14/2018 laws subject immovable property to state guarantee. The Registrar and Notary are responsible for verifying the identity of parties to a property transaction. The São Toméan First Instance Tribunal (Tribunal de Primeira Instancia de São Tomé) oversees resolving disputes between local businesses over tenure rights.[3] The basic legislation for land tenure is Lei 3/91 on landed property.[4] The Directorate of State Property, under the Ministry of Planning, Finance, and the Blue Economy legally represents the state in contracts for the purchase or sale of movable and real estate property.[5] It is important to note that foreigners cannot purchase land, although they can purchase structures.
Law nº 4/2020 came into force in April 2020, establishing a set of Extraordinary Budgetary Measures to deal with the COVID-19 pandemic. Also, the decree law, NAP (Permanent Application Norm) 07/2020 came into force in May 2020, giving the central bank powers to regulate measures to be adopted by the financial sector on legal moratoriums for credit in progress, as well as other products and services. The moratorium consists of the temporary suspension of credit payments for a period of six months, with the amount of the instalments to be paid later, under the same conditions defined in the credit agreement before the moratorium. Beneficiaries include companies and individuals with housing and other loans.[6]
[1] African Development Fund (2015). São Tomé and Príncipe: Study on The National Land Use Plan Appraisal Report. https://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/SAO_PRINCIPE_AND_PRINCIPE_AR-_Study_on_the_National_Land_Use_Plan__APPROVED.pdf (Accessed 27 August 2022) Pg. 2.
[2] World Bank (2020). Doing Business, São Tomé and Príncipe 2020.
https://www.doingbusiness.org/content/dam/doingBusiness/country/s/sao-tome-and-principe/STP.pdf (Accessed 27 August 2022). Pg. 25.
[3] World Bank (2020). Doing Business, São Tomé and Príncipe 2020.
https://www.doingbusiness.org/content/dam/doingBusiness/country/s/sao-tome-and-principe/STP.pdf (Accessed 27 August 2022). Pg. 26.
[4] World Bank (2011). São Tomé and Príncipe Adaptation to Climate Change Resettlement Policy Framework (Revised 2015). https://documents1.worldbank.org/curated/en/495931468057321246/pdf/RP1120-REVISED-PORTUGUESE-ENGLISH-v1-RP-P111669-PUBLIC-Disclosed-8-4-2015-Box393180B.pdf (Accessed 27 August 2022). Pg. 37.
[5] World Bank (2019). Country Economic Memorandum for São Tomé and Príncipe – Background Note 7: What are the Bottlenecks on Land Governance and How to Remove Them to Support Tourism and Agriculture Development? https://openknowledge.worldbank.org/bitstream/handle/10986/32090/Sao-Tome-and-Principe-Country-Economic-Memorandum-Background-Note-7-What-are-the-bottlenecks-on-land-governance-and-how-to-remove-them-to-support-tourism-and-agriculture-development.pdf?sequence=1&isAllowed=y (Accessed 27 August 2022).
[6] Banco Internacional de São Tomé e Príncipe (2020). Legal Moratorium for Credit in progress at BISTP.
https://www.bistp.st/inicio/noticia-detalhe/moratoria-bistp (Accessed 5 September 2022).
Opportunities
Recovery of the country’s tourism sector post-pandemic, coupled with macroeconomic stability, could lead to greater economic growth. At the same time, the country has made significant progress in implementing social protection programmes in recent years amidst global crises, which affect the country’s poor, such as COVID-19 and the Russian-Ukraine conflict.[1] The government modernised its payment systems in May 2021 by introducing VISA and MasterCard,[2] improving the country’s payment infrastructure capacity to process interbank payments and local and international retail payments safely and efficiently. Modernisation of payment systems is expected to benefit the housing sector as this will make payment processing more efficient with reduced turnaround time and minimal system errors. Wider access to financial services such as deposits, transfers, savings and loans mitigates the risk of carrying huge amounts of cash for housing transactions.
[1] World Bank (2022). Press Release – São Tomé and Príncipe: World Bank Injects $18 Million to Strengthen Social Protection and Reduce Impact of COVID-19 on the Poor. https://www.worldbank.org/en/news/press-release/2022/05/02/sao-tome-and-principe-world-bank-injects-18-million-to-strengthen-social-protection-and-reduce-impact-of-covid-19-on-the- (Accessed 27 August 2022).
[2] International Trade Administration (2022). São Tomé and Príncipe – Market Opportunities. https://www.trade.gov/country-commercial-guides/sao-tome-and-principe-market-opportunities (Accessed 27 August 2022).
Green Applications for Affordable Housing
The Instituto Nacional de Estatistica is the main source of housing data in the country. However, the information on the website is out of date, with the most recent available data being from 2012. Up-to-date data is lacking, particularly on poverty, inequality, socioeconomic indicators, and housing. The Institute does publish other recent information such as population estimates, and data available on the website is disaggregated by gender.
The central bank publishes data and statistics on the banking sector in the country, in addition to its annual reports. However, information on mortgage products available is difficult to obtain. Reforms of the property and mortgage registry will benefit tax collection and facilitate loan collateralisation by the banking system.
Availability of Data on Housing Finance
São Tomé and Príncipe is ranked 126 out of 182 countries in terms of vulnerability to climate change, as per the Global Adaptation country index in 2020.[1] Climate change poses a challenge in accessing finance especially for low-income earners who depend on farm and sea for livelihoods. The challenges range from difficulties in meeting minimum requirements for having a bank account to obstacles in accessing financing products and services because of the inability to provide credit guarantees and collateral.[2] The country has also included a pillar in the National Financial Inclusion Strategy on Inclusive Green Finance to facilitate building a green and financially-inclusive economy.[3]
United Nations (UN) Habitat and the local government of São Tomé and Príncipe have built 133 new houses using the most environmentally-friendly construction techniques available, benefiting approximately 504 people.[4] In addition, two municipalities have implemented the City Resilience Action Planning Tool aimed at helping local governments to understand and plan actions that progressively build urban resilience and reduce urban risk.[5] The government has launched a project to construct the country’s first photovoltaic power plant of 1.5MWp in Santo Amaro, a town in the Lobata District, with the support of the African Development Bank (AfDB). The solar power plant is expected to be operational by the end of 2022, with the project expected to replace a thermoelectric power station to be shut down by the end of 2022 and ensuring the rehabilitation of the Papagaio mini-hydroelectric plant, located in Príncipe.[6] The installed power capacity for the country is 35.8MW with 92% generated from diesel and 8% being renewable energy from hydropower.[7]
[1] Notre Dame Global Adaptation Initiative (2020). Country Rankings. https://gain.nd.edu/our-work/country-index/rankings/ (Accessed 27 August 2022).
[2] Alliance for Financial Inclusion (2021). Integrating Inclusive Green Finance into São Tomé and Príncipe’s upcoming NFIS. https://www.afi-global.org/newsroom/blogs/integrating-inclusive-green-finance-into-sao-tome-and-principes-upcoming-nfis/ (Accessed 27 August 2022).
[3] Alliance for Financial Inclusion (2021). National Financial Inclusion Strategy 2021 – 2025 – Democratic Republic of São Tomé & Príncipe. https://www.afi-global.org/wp-content/uploads/2021/08/National-Financial-Inclusion-Strategy-STP1.pdf (Accessed 27 August 2022) Pg. 9.
[4] UN-Habitat (2022). São Tomé and Príncipe. https://unhabitat.org/sao-tome-and-principe (Accessed 27 August 2022).
[5] UN-Habitat (2022). São Tomé and Príncipe. https://unhabitat.org/sao-tome-and-principe (Accessed 27 August 2022).
[6] Solar Quarter (2022). Sao Tome and Principe Issues Tender for its First Grid-connected Solar PV Plant. https://solarquarter.com/2022/05/10/sao-tome-and-principe-issues-tender-for-its-first-grid-connected-solar-pv-plant/ (Accessed 3 September 2022).
[7] African Development Bank Group (2020). São Tomé & Príncipe – Mini-hydropower projects support programme – Enabling Environment – SEFA Appraisal Report. https://www.afdb.org/en/documents/sao-tome-principe-mini-hydropower-projects-support-programme-enabling-environment-sefa-appraisal-report (Accessed 3 September 2022).
Additional Sources
The Borgen Project (2020). Living Conditions in São Tomé and Príncipe https://borgenproject.org/living-conditions-in-sao-tome-and-principe/
U.S. Department of State (2022). 2022 Investment Climate Statements: São Tomé and Príncipe https://www.state.gov/reports/2022-investment-climate-statements/sao-tome-and-principe/
Making Finance Work for Africa (2021). São Tomé and Príncipe. Financial Sector Overview https://www.mfw4a.org/country/sao-tome-and-principe
Websites
Banco Central São Tomé e Príncipe https://bcstp.st/
Instituto Nacional de Estatistica https://www.ine.st/
Banco Internacional de S. Tome e Príncipe https://www.bistp.st/
Afriland First Bank https://www.afrilandfirstbankst.com/
Ecobank São Tomé and Príncipe https://ecobank.com/st/personal-banking
