Publication: Country Economic Memorandum for Sao Tome and Principe - Background Note 6: Stock Take on Business Environment Reform in São Tomé and Príncipe
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Date
2019-06-26
ISSN
Published
2019-06-26
Author(s)
Uriz, Zenaida
Abstract
The importance of a good regulatory and
institutional environment for business creation and growth
is well established. Good regulations and a level playing
field are particularly important to maximize opportunities
for private investment in small island states like São Tomé
and Príncipe, which tends to be constrained by the lack of
economies of scale and distance to markets. Burdensome
regulations can hamper the competitiveness of
export-oriented sectors, which are essential for São Tomé
and Príncipe’s sustainable growth and job creation.
Moreover, sectors that depend on natural or cultural assets,
such as tourism, require good quality regulations and
planning to protect those assets. Improving the regulatory
environment is an important factor, together with better
skills, connectivity, and infrastructure, to strengthen the
competitiveness of São Tomé and Príncipe’s economy. Accurate
data on the size and composition of the private sector in
Sao Tome and Príncipe is lacking, but existing information
shows that it is dominated by microenterprises in commerce
and services. The ongoing enterprise survey will provide
insights on the characteristics and main challenges of São
Tomé and Príncipe’s firms, while an updated business census,
which is planned with support from the World Bank, will give
a broader view of the private sector. Data from the National
Statistics Institute (INE) shows that there are only 14
companies with more than 100 employees, including the
utilities and transport sector SOEs, and 80 percent of firms
for which data is available have less than five employees.
Most firms are concentrated in the commerce, construction,
and tourism sectors. While additional analysis will be
necessary to identify the factors contributing to the small
size and sophistication of SãoTomé and Príncipe’s firms, the
regulatory environment may be among them as it affects entry
and operating costs, access to finance, and ability to
resolve commercial disputes.
Link to Data Set
Citation
“Uriz, Zenaida. 2019. Country Economic Memorandum for Sao Tome and Principe - Background Note 6: Stock Take on Business Environment Reform in São Tomé and Príncipe. © World Bank, Washington, DC. http://hdl.handle.net/10986/32139 License: CC BY 3.0 IGO.”