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Country Brief

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Equatorial Guinea: Country Brief

Equatorial Guinea, the only former Spanish colony in Sub Saharan Africa, is composed of a mainland, Rio Muni, and small islands including Bioko where the capital Malabo is located, Annobon, Corisco, Elobey, and others. It is one of the smallest countries on the continent with a population of 562,339 people according to a 2007/2008 United Nations estimate. The country is bounded on the north by Cameroon, east and south by Gabon, and west by the Gulf of Guinea. It is well endowed with arable land and mineral resources ranging from gold, oil, uranium, diamond, and columbite-tantalite, and notably petroleum discovered in the 1990s.

Political Overview

The president, Obiang Nguema Mbasogo, is the longest-serving head of state in Sub Saharan Africa and is expected to retain a tight grip on power. His position was bolstered by his landslide victory in the last presidential election in November 2009. The absence of real checks and balances grants his party (Partido democratico de Guinea Ecuatorial - PDGE) an absolute executive power.

A new government was appointed in January 2010, fulfilling a legal obligation to form a new administration after a presidential election. Legalized opposition parties continue to voice their discontent, but their capacity to influence policy is limited.

Economic Overview

The country is emerging as one of the fastest growing economies in Africa. After the discovery of massive oil reserves in the 1990s, it has become the third-largest producer of oil in Sub Saharan Africa, after Nigeria and Angola. Oil revenue increased dramatically in value from US$190 million in 2000 to an estimated US$8.4 billion in 2009. Oil prices are forecast to remain high in 2011-12.

Massive foreign investments in the oil and gas sector, together with a sharp rise in oil exports and favorable terms of trade, have contributed to the country’s impressive GDP growth, including an average real annual growth of 26.2 percent from 2001 to 2005. However, a slowdown in hydrocarbon production has caused the overall GDP growth to decelerate to 9.7 percent between 2006 and 2009. Further, oil boom generates inflationary pressures, with the inflation rate estimated at 7.7 percent in 2009. In 2008, Atlas GNI per capita was estimated at US$14,980. Oil contributes to around 73 percent of GDP, while the non-oil primary sector accounts for 3 percent of GDP.

Policy in 2011-12 will in principle be guided by the government’s medium-term strategy paper, the National Economic Development Plan: Horizon 2020, which targets economic diversification and poverty reduction. However, progress is expected to remain slow due to the difficult business environment, which constrains private-sector investment. The government will seek to drive economic diversification by investing state funds in strategic sectors such as fisheries, agriculture and eco-tourism.

The government will continue rapid expenditure growth in 2011, focusing on capital projects particularly road building and preparations for several international events due to be held in Equatorial Guinea during 2011-12. The Africa Cup of Nations football tournament, which is to be co-hosted with Gabon in January 2012, will be particularly expensive, given the concomitant costs of new infrastructure and services.

Currently, Equatorial Guinea, an International Bank for Reconstruction and Development (IBRD) country, has no lending program with the Bank. However, Technical Assistance has been provided since 2007 under a Service Agreement including the preparation of a Public Expenditure Review (PER), support towards the Extractive Industries Transparency Initiative (EITI) and statistical capacity building to prepare the National Accounts.

In the margins of the African Union Summit in July 2011, a second Service Agreement has been recently signed in order to help Equatorial Guinea to implement its National Development Plan (Horizon 2020). This Technical Assistance will build upon work prepared to date and include: (i) continued statistical support to prepare the national accounts, (ii) support to improve debt management, including a diagnostic and a reform plan; and (iii) an analysis of the sources of growth, including an enterprise survey to assess the investment climate. The Bank will also support the Government’s plans to qualify for EITI compliance through: (i) advising on effective participation of civil society in the process, and (ii) modifying legislation to encourage interaction with other local and international organizations.

 

The oil boom has not yet been translated into positive human development outcomes, which remain poor, as evidenced by the low human development index ranking (117th out of 169 countries in 2010).

Despite abundant petroleum revenues, the standard of living of the majority of the population has not been significantly affected and poverty is widespread. Indications are that about three out of four people live with less than two dollars per day; about half the population does not have access to drinking water or sewage facilities. Between 1995 and 2000, approximately 16 percent of children under age five were malnourished. In education, the relatively low gross enrollment rate in primary education throws doubts on the capacity of Equatorial Guinea to reach the MDG of universal primary education by 2015.

Equatorial Guinea has been relatively stable in the Central African region, and joined the Bank of Central African States (BEAC) in 1985.

Main partners in the country are the United States, Spain, France, and China. The World Bank works closely with Equatorial Guinea through its office in Libreville, Gabon.

 

Last updated September 2011




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