São Tomé and Príncipe's economy: the estates cocoa built

How cocoa took over the plantation islands

Plantation agriculture on São Tomé is older than cocoa. The forests were first cleared in the early sixteenth century for sugarcane worked by enslaved labour, and Britannica's economic history of the colony records that competition from Brazil and the poor quality of the islands' badly dried sugar had all but destroyed that industry by the end of the century. For roughly two hundred years afterwards the islands earned their keep as a transfer point in the Atlantic slave trade: the cargoes of small ships were moved onto larger vessels for the crossing to Brazil, and the islanders grew food to provision them.

Portuguese administrators looking for a profitable cash crop brought the coffee plant in 1780 and the cocoa tree in 1819. The cocoa seedlings came from Brazil, and the first tree to grow to full size stood on Príncipe in 1824. Cacao replaced coffee as the main cash crop in the 1890s.

The timing was set in Europe. By the late nineteenth century industrial processing had turned chocolate from an expensive, bitter drink into a cheap confectionery, and Brazil's independence in 1822 had pushed Portugal to grow the crop in its African colonies instead. A dozen large plantations exported most of the islands' cocoa in the 1900s, and their owners lived in Lisbon. By 1905 the islands had the nickname "the Chocolate Islands", and J. S. Fry & Sons, Rowntree's and Cadbury were all buying their cocoa mainly from them.

How Lisbon took its share of the crop

The colony's cocoa had to travel on a Portuguese ship to a Portuguese port, which in practice meant Lisbon, where most of it was re-exported with a further tax. Portugal introduced an export duty of 14 reis a kilogram in 1882 to cover deficits elsewhere in its empire. It cut the São Tomé rate to 12 reis in 1892, about 8.5% of the cocoa's value, and gave Príncipe ten years of duty-free exports.

When the duty went up to 18 reis a kilogram in 1894, in place of a rural land tax that had rarely been collected, the planters complained about what the money had bought them: 14 kilometres of railway, a single short road and a basic iron quay. A plan of 1912 to lower the duty to 13 reis would have been paid for by a new land tax in Lisbon and a re-export tax of 30 reis a kilogram, and it was Lisbon that protested.

The owners also tried to set the world price. A first attempt in 1898 to hold back supply ended with the crop rotting in Lisbon warehouses. A second, in 1901, worked. In 1906 the owners borrowed 600,000 British pounds from Portuguese banks to store 50,000 bags of cocoa in Lisbon and hold the price at one German mark a kilogram, and competition from Brazilian, Ecuadorian and other exporters broke the scheme in 1908.

Who did the work on the roças

The estates were called roças, and each was built as a company town. UNESCO describes them as combining agricultural land, industrial plant, housing and social facilities in tightly planned layouts; they had chapels, hospitals, schools and stores, arranged around a plaza used both for the daily roll call and for drying cocoa beans. Six of them, Monte Café, Água Izé, Diogo Vaz, São João, Sundy and Belo Monte, were inscribed on the World Heritage List on 28 July 2026 as a record of a colonial agro-industrial system built on forced migration and labour.

The sources date Portugal's abolition of slavery in its colonies differently: 1869 in the account of the cocoa trade and in AFP's reporting, 1875 in Britannica. After it, the islands' freed population, the forros, and the Europeans both refused plantation work, and Portugal recruited contract labourers from its other African colonies. Between 1888 and 1908 an estimated 67,000 Africans were hired for the cocoa estates, nearly all of them from Angola, Mozambique and Cape Verde.

The money they were paid did not leave the estates. In the early 1900s a man earned about 2,500 reis a month, around US$2.50 at the time, and a woman 1,800 reis. Every store on the islands was company-owned, so nearly all of those wages went back to the planters. A British Foreign Office investigator, Arthur Nightingale, concluded in a report of August 1906 that the "slaves had been renamed serviçias"; Portugal answered that there was no direct evidence of slavery continuing. The human side of that record belongs to the islands' history, which follows it to the Batepá massacre of 1953.

Why the cocoa boom ended before independence

Two things cut the crop in the 1910s. The first was a boycott. British journalists, Henry Nevinson among them, published the conditions on the roças, and Cadbury, after nearly a decade of protest, stopped buying São Tomé cocoa on 9 March 1909. Other British manufacturers and the German maker Stollwerck followed.

The second was disease. Insects, fungal infections and the swollen shoot virus spread through poorly maintained fields in the 1910s and 1920s, and a plague of thrips in 1919 did more damage to that year's harvest than the boycott had. Once the conditions were public, the owners found it hard to attract new workers or buyers. By 1935 most roça buildings and machinery had been abandoned or turned over to growing food for the islands' own population.

Britannica describes the islands after the First World War as isolated and notorious for the brutality and corruption on plantations run for absentee planters and corporations. Cocoa went on being grown in modest quantities until independence on 12 July 1975, by which time Portuguese-owned plantations held 90% of the cultivated land.

What independence did to the estates

Virtually all the Portuguese colonists left for Portugal in 1975, and the estates passed to state-owned agricultural enterprises. The new government nationalised the roças intending to diversify the economy by planning cocoa production centrally, and the experienced managers left with the owners. Output fell from 10,000 tonnes in 1975 to 3,900 tonnes in 1987, and droughts, floods, worn-out soils and a lack of investment made the decline worse.

Reform came in stages and none of them brought the crop back. Liberalisation began in 1985, the government adopted an IMF structural adjustment programme in 1987, and the economy moved to free-market rules in 1990; neither that move nor World Bank finance in the 1980s revived cocoa production. Until 1993 the state's agricultural land was organised as 15 large plantation enterprises. By the end of that decade most had been dissolved and their land handed to smallholders and medium-sized firms on a usufruct basis, a right to work the land and keep its produce without owning it. A slump in cocoa prices in 1998 completed the picture: by 2000 most farmers grew cocoa mainly to keep their claim to the land, and the islands' leaders declared the "era of cocoa" over.

Britannica, writing about the reformed estates, describes high unemployment existing side by side with a critical shortage of labour on the former plantations, where pay and conditions are poor. Much of the land has been harvested from time to time since independence and otherwise left untended.

How the islands sell cocoa now

Cacao trees still cover most of the farmland. About two-fifths of the country's land is cultivated, cacao trees cover a little under two-thirds of that, and coconut palms most of the rest. Cocoa plantations take up 25,000 hectares of São Tomé island, mainly in the north and centre, and Príncipe's volcanic soil is where the first tree grew.

There are two ways the beans are sold. Conventional cocoa is priced off the commodity market in New York; certified cocoa is grown organically or under fair-trade terms, and producers have moved toward it over the twenty-first century. CECAB, the Organic Cocoa Production and Export Cooperative, was founded in 2004 by smallholders' associations and sells to Kaoka, a French chocolate maker. Other growers produce fair-trade cocoa for Divine Chocolate, François Pralus and Cadbury, the company whose boycott began the collapse a century earlier. In 2021, 30% of the islands' cocoa was graded "fine" or "flavour" cocoa, the two classes with no defects or few.

The volumes are small. The harvest of 2017 came to 3,550 tonnes, 0.1% of the world's supply that year, and generated an estimated gross value added of 178 million dobras, about 7.2 million euros at the time. Cocoa made up 80% of exports in 2009 and 54% in 2021. The sources state the share differently: Wikipedia's national article gives 54% as cocoa's share of agricultural exports, its economy article gives about 95% of exports without a year, and Britannica says only that cocoa brings in almost all foreign exchange from merchandise exports.

Copra, palm kernels and coffee are the other export crops. In 2019 HBD Príncipe opened a chocolate factory on the site of Roça Sundy, and the IMF reported in September 2025 that export revenue had been lifted that year by high cocoa prices.

Why the islands buy far more than they sell

Exports were worth 24 million euros in 2018, up from 11 million euros in 2013. Half of that was cocoa beans and a fifth was electrical machinery, with smaller amounts of aircraft parts, cars, iron, plastics, pepper, oils, nuts and beef. Imports in 2018 came to 161 million dollars. The trade record is kept in two currencies across those years, so the gap is measured roughly, but on any reading the islands imported several times what they sold.

Food is a large part of the difference. The country has never been self-sufficient in staples, and as of 1997 an estimated 90% of its food needs were met through imports. Britannica puts the cause in local eating habits, the legacy of the plantation economy and foreign food aid, which together undermined the growing of food crops for the local market. Fishing is limited by a narrow continental shelf: artisanal fishermen do not meet local demand, and trawlers from European Union countries pay small licence fees to fish the national waters.

The import bill is tied closely to two countries. In the breakdown Wikipedia gives with its 2018 totals, about 51% of imports came from Portugal and a fifth from Angola, and refined oil, mainly Angolan, made up a fifth of all imports. Portugal sends machinery, electric generators, computers, wine, wheat, rice, milk and soy oil. In 2009 the buyers of the islands' exports were the United Kingdom with 32.99%, the Netherlands with 26.93%, Belgium with 21.04% and Portugal with 4.31%.

The Central Bank of São Tomé and Príncipe issues the dobra and controls foreign exchange. Banco Internacional de São Tomé e Príncipe, a subsidiary of Portugal's state-owned Caixa Geral de Depósitos, held a monopoly on commercial banking until a change in the banking law in 2003; six banks were operating when Wikipedia's account was written. The World Bank reported in 2026 that gross reserves had risen from 95 million dollars in 2025 to 111 million dollars by May 2026, about four months of imports.

How donors and lenders fund the state

The gap between what the islands sell and what they spend has been closed from outside since the mid-1980s. Under IMF and World Bank programmes the government devalued the currency, cut the budget deficit, privatised nationalised companies and removed price subsidies and controls. Britannica's assessment is that the results fell short of their targets despite large inflows of foreign money, and that corruption and mass poverty grew in the same years. The donors named in Wikipedia's account are the UN Development Programme, the World Bank, the European Union, Portugal, Taiwan and the African Development Bank.

The sequence of agreements is long. In April 2000 the IMF approved a poverty reduction and growth facility aimed at bringing inflation down to 3% in 2001. In late 2000 the country qualified for debt reduction under the Heavily Indebted Poor Countries initiative, and further debt relief followed in 2007. The programme in force in 2025 was an Extended Credit Facility; an IMF staff team visited from 22 to 26 September 2025 ahead of its second review.

Growth averaged 5.5% a year between 2009 and 2017, driven mainly by government spending financed with foreign loans, and it slowed from 2014 as those loans fell. The World Bank's 2026 assessment says the same of the present: growth has relied on externally financed public spending, and the decline in development assistance is making that model harder to sustain. Its portfolio of 10 projects carried a net commitment of 226 million dollars in 2026, including cash transfers to 6,000 households. The two lenders' figures for 2025 do not agree: the World Bank reports the fiscal balance moving from a surplus of 0.3% of GDP in 2024 to a deficit of 3.3% in 2025, and the African Development Bank estimates a surplus of 0.1% of GDP for 2025.

What the search for offshore oil has paid

The islands have no known mineral resources, and since 2001 the hope of an income to replace cocoa has sat under the sea. That year São Tomé and Príncipe and Nigeria agreed to explore jointly in waters both claim, a Joint Development Zone about 200 kilometres from the Nigerian coast, and the agreement was renegotiated in 2003. The zone opened for bids in April 2003, divided into nine blocks. In April 2004 the winning bid for block one, from ChevronTexaco, ExxonMobil and the Dangote Group, was announced at 123 million dollars, of which São Tomé was to take 40% and Nigeria 60%.

The signing fees were large against the size of the state. Wikipedia's economy article expected a joint project with Nigeria in 2005 to bring the government 50 million dollars in exploration licence fees, four times government revenue in 2004. The prospect also entered politics: in July 2003 the army seized power for a week, complaining of corruption and that oil revenues would not be shared fairly. The first exploratory drilling in the zone began in 2006, and Britannica records that concession earnings from the mid-2000s, with significant debt relief in 2007, brought a period of optimism.

What has not followed is oil. Geologists estimate the Gulf of Guinea province at more than 10 billion barrels, but no reserves have been proven, and no crude oil or natural gas had been found as of 2021. The country imports all the petroleum it uses.

Why power cuts slow the economy

The electricity supply leans on the same imports. There are many sites for small hydroelectric schemes and no large rivers for major ones. The state-owned water and electricity utility, Empresa de Água e Electricidade, depends on fuel the government pays for: those purchases reached 2.4% of GDP in 2025, according to the World Bank. Access to electricity stood at 78% of the population in 2022.

Both lenders name power cuts as a drag on output. The World Bank estimates that growth slowed to 1% in 2025 because outages disrupted farming and services, and expects 0.4% in 2026. The African Development Bank, publishing in June 2026, put 2025 growth at 2.1%, up from 1.1% in 2024, and projected 2.4% for 2026. Both name energy shortages as the constraint, and the World Bank's partnership framework for 2024 to 2029 puts affordable electricity first among its five pillars.

Prices follow fuel. Inflation peaked at 21.3% in 2023 and eased to about 11% in 2025. It fell to 8.6% in April 2026 and rose to 9.2% in May, after fuel prices were adjusted.

Whether the old estates can earn as hotels

The roças are now being sold a second time, to visitors. About a hundred of them survive, according to the culture ministry in 2026, most little more than run-down buildings and some still lived in by former workers and their descendants. HBD owns two former roças on Príncipe. At Sundy the planter's mansion has been turned into a five-star hotel, and the workers' houses are being converted into further rooms. AFP reported in August 2026 that the government had launched a ten-year plan to restore the buildings and find new uses for them, and the World Heritage inscription of July 2026 is expected to support the effort to preserve them.

Tourism already counts in the figures. The IMF noted a recovery in tourism in September 2025, and the African Development Bank lists tourism and construction among the drivers of its projected growth of 3.2% in 2027. Angolan visitors, numbering hundreds a year, are part of that trade.

The people the estates might employ are leaving. The African Development Bank reports that emigration, especially of working-age people, has accelerated sharply since 2022, and the World Bank links it to limited job opportunities. GDP per head was about 4,044 dollars in 2025, and 13.1% of the population lived below the international poverty line of three dollars a day that year. The population on record was 204,327 in 2017.