Overview
The first confirmed COVID-19 cases were reported on April 6, 2020. With the help of the WHO, a field hospital was established in mid-April, and a lab started to function in mid-June. The state of emergency first declared on March 17. Economic conditions have deteriorated since the introduction of confinement measures. Real GDP is expected to contract by about 6 percent in 2020 due to weak external demand and pandemic-containment measures.
Reopening of the economy. The government moved from a state of emergency to a state of alert in October, in the final phase of reopening the economy. The country reopened hotels, restaurants, commercial flights, and extended the operation of commerce and public service to normal hours. They also started in-person classes at schools and universities, while taking steps to ensure social distancing and prevent re-emergence of the virus. However, there was a resurgence of the virus in the first two months of 2021. The authorities announced further containment measures at end-February and since then, the number of cases has declined sharply. Vaccinations, supported by the WHO COVAX program, began on March 15, 2021.
COVID-19 Restrictions
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Economic Measures
Key Policy Responses as of June 3, 2021
FISCAL
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Key measures include: (i) Implementation of the health contingency plan prepared in coordination with the WHO and increased health spending (on medicine, equipment, staffing, and treatment centers) to protect against COVID-19; (ii) Expansion of social assistance to the most vulnerable, including expansion of the WB-supported cash-transfer program, and increased support to the disadvantaged (the elderly, disabled and abandoned children); (iii) Protecting small businesses and employment, in particular through salary contributions; (iv) Financial assistance to workers who lost their jobs in both the formal and informal sectors; (v) Implementation of automatic stabilizers; (vi) Where supply chains are disrupted, the state will procure seeds, feedstock, and other essential inputs to be sold to farmers at market price; (vii) Introduction of a solidarity tax on workers, including public servants, whose salaries are relatively unaffected by the shock.
MONETARY AND MACRO-FINANCIAL
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The Central Bank of Sao Tome (BCSTP) has reduced the policy rate and minimum cash reserve requirement, and temporarily eased some prudential ratios for three months to ensure adequate provision of liquidity in the market.
The BCSTP has encouraged commercial banks to reduce some banking fees and grant a temporary moratorium on debt repayments for fundamentally sound businesses affected by the crisis. They are also working on options to increase liquidity to banks so that they will be able to grant credit to the economy and have established, in coordination with AfDB, a new credit line for banks to provide lending to small and medium enterprises affected by the pandemic.
Civic Freedom Tracker
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