Sao Tome & Principe: Seeking alternatives to oil
Thomas Cromwell

Africa’s smallest country, comprised primarily of two volcanic islands, Sao Tome and Principe is one of the poorest in the world. It has only 206,000 residents. Once a Portuguese colony used to grow sugar, and later coffee and cocoa, STP became independent in 1975 but so far has had limited success in expanding its economic base.

A few years ago STP’s fortunes seemed set to change for the better when potential oil deposits were identified off the northern shore, where neighboring Nigeria has a highly successful oil industry in the Gulf of Guinea. An agreement to split revenues 60-40 with Nigeria, in STP’s favor, was signed and exploration begun.

However, according to STP’s first ambassador to Washington, Ovidio M.B. Pequeno, with the recent drop in crude prices it looks as if it might be several years before prospecting leads to production.

The ambassador said that last year’s survey by ExxonMobil looked promising, but that the second stage of exploration, scheduled for this year, might now be postponed. At the same time, the oil is to be found in deep water, and there is a global shortage of deep-sea rigs.

In addition to ExxonMobil, Anadarko, Addax and Chevron all have interests in the STP oil fields.

The prospect of oil revenues had prompted an unusual rush of international interest in STP, and the ambassador said that most of the contacts made with the embassy had been motivated by that. Now, though, the phones have gone largely silent.

The embassy was first opened in Washington in 2006. “We are not here because of oil,” he said. As the only diplomat in Washington, he has a great deal to do.

In the meantime, the government in the capital, Sao Tome, has been forced to suspend planning for an oil-fueled economy in favor of developing other sectors, especially agriculture, the traditional base for the economy. The country also has a wealth of fish.

But agriculture has not been very productive in recent years. A cocoa crop that once produced 10,000 tons a year, has declined to 2,500 tons a year today. The ambassador said the problem has been a combination of droughts and poor management.

At the same time, the government is looking for ways to turn STP into ‘an African Singapore,’ according to Ambassador Pequeno. STP can be a stepping stone to neighboring countries in terms of services, the ambassador said, but “We have a long way to go.”

The island country lacks a deep draft port or a modern airport. It has few roads and outdated communications systems. Much of the territory is not served by the electricity network. Healthcare is limited, although a Taiwanese program has cut Malaria by 60 percent.

The government hopes to borrow money to build this essential infrastructure. It needs $300 million for the port and $50 to upgrade the airport.

“We are open to any ideas or projects to develop the country,” the ambassador said.

As it is, there are only two flights a week from Lisbon, and a handful of flights from other neighboring countries. There is only one good hotel. The beaches may be fine, but getting to them is typically difficult.

“People need to know where Sao Tome and Principe is,” the ambassador said, talking about the basic problem his country faces. And, indeed, few people could find it on a map of the world.

The ambassador is actively encouraging the US government to offer more assistance. USAID has not been active there and the Peace Corps has had no volunteers in the country for years.

STP has qualified for the Millennium Challenge Corporation’s Threshold Program, and hopes that after meeting qualifying criteria will receive funding to help develop its infrastructure. The changes most needed are the customs and tax systems, and the amount of time it takes to register a company. The ambassador said they hope to qualify for funds by November this year.

He is also talking to OPIC (the Overseas Private Investment Corporation) and the Peace Corps. The volunteers “did a fantastic job. We are pressing them to return.”

He is also encouraging the International Monetary Fund, World Bank and International Finance Corporation to get more involved in STP’s development.

The ambassador noted that his country is not taking advantage of AGOA (the African Growth and Opportunity Act) to develop exports to the United States, and is now looking into developing a textile industry to benefit from the trade preferences AGOA offers.

One of the main impediments to growth has been political disputes in the parliament, which for the last couple of years has been stalled because of conflicts. With political gridlock, key decisions on development priorities have been delayed many times.

“We need a consensus on a plan for national development,” the ambassador said, supported by all parties, left and right.

Ambassador Pequeno noted that a critical investment is to develop the capacity of the people, but, “you need a lot of money to invest in people. We need people with training, which is a long-term investment.”

CURRICULUM VITAE

Name: OVIDIO MANUEL BARBOSA PEQUENO
DOB :  November 5, 1954
Marital Status : Married

Education:

Bachelor of Arts with Major in Journalism, Pacific Western University, USA

Communications Courses in the Institute of Technology of New York, New York


Professional Experience:

-Minister of Foreign Affairs Cooperation and Communities,2007-2008

-Ambassador Extraordinary and Plenipotentiary to United States, March 2006

-Ambassador Extraordinary and Plenipotentiary to Canada, March 2006

-Appointed Permanent Representative and Ambassador Extraordinary and Plenipotentiary to United Nations, March 2006

-Ambassador Extraordinary and Plenipotentiary to Federal Republic of Brazil, March 2006

-Minister of Foreign Affairs, Cooperation and Communities, from April 2004 until March 2006

-Chairman of the Joint Ministerial Council dealing with Joint Development Authority under Sao Tome and Nigeria Treaty on Oil Exploration, 2005-2006

-Chairman of the Council of Ministers of the Lusophone Speaking Countries 2004 to 2006

-Ambassador Extraordinary and Plenipotentiary to the Republic of China/Taiwan from December 1999 until April 2004

-Bureau’s Chief of Voice of America in Angola, period of 1998/1999

-Senior Editor at Voice of America, in Washington DC, from 1990 till 2000

-First Secretary, at Permanent Mission of Sao Tome and Principe and accredited to Canada, from 1983 till 1990

-Permanent Secretary a.i. and Director of International Economic Affairs,Ministry of Foreign Affairs and Cooperation

-Chief of Department of Information, Ministry of Information and Culture


International Experience

-Mr. Pequeno has traveled extensively and has participated in different international meetings, including, United Nations, African Union, African Growth Opportunity Act, Non Aligned Movement, UN Human Rights Commission, European Union, Africa Caribbean and Pacific, CEEAC, CEMAC,IMF, World Bank and other international forums.


Awards

-Cordon Rouge of the Republic of China, Taiwan

-VOA professional mention for participation in the preparations and consolidation of VOA’s Relay Station in Sao Tome and Principe

-Step increase for professional quality, Voice of America

-Member of Rotary Club


Mr. Pequeno whose mother tongue is Portuguese speaks fluently English, French, Spanish and has some knowledge of Italian, German and Chinese.