In mid-December Sao Tome and Principe exited the least developed countries (LDC) category established by the United Nations (UN) General Assembly.
The small island developing state off the coast of central Africa, home to about 230,000 people, has emerged as a more stable and viable economy with strides in education, health and per capita income.
The progress was in part bolstered by international support, including technical assistance from UN Trade and Development (UNCTAD).
Sao Tome and Principe is the eighth country so far to have changed status, or “graduate”, following Botswana (1994), Cabo Verde (2007), Maldives (2011), Samoa (2014), Equatorial Guinea (2017), Vanuatu (2020) and Bhutan (2023).
Between 2020 and 2022, Sao Tome and Principe’s average gross national income per capita reached $2,271, well above the LDC graduation threshold set at $1,306.
Similarly, the country’s score on the Human Assets Index, a measure of health and education outcomes, rose from 59.3 in 2002 to 91.4 in 2024, far exceeding the graduation threshold of 66.
UNCTAD notes that graduation could reduce Sao Tome and Principe’s access to certain international support measures exclusive to LDCs, such as trade preferences or concessional financing options – some bound to expire upon graduation and others with a transition period.
For instance countries that grant tariff preferences to LDCs may remove it from eligibility. Canada recently announced that Cape Verde, Samoa, Tuvalu and Vanuatu will graduate from and be ineligible for preferential tariffs under the LDC Tariff program effective January 1, 2025. Sao Tome and Principe will likely be part of a future announcement.
The list of LDCs currently registers 44.
Source: UNCTAD