Equatorial Guinea (EQG) is an upper middle-income country. It is composed of a mainland, Rio Muni, and small islands including Bioko (where the capital Malabo is located), Annobon, Corisco, Elobey, and others. Its population was estimated at 1.5 million people in 2021. The country is bordered in the north by Cameroon, in the east and south by Gabon, and to the west by the Gulf of Guinea. It is well endowed with arable land and mineral resources ranging from gold, uranium, diamond, columbite-tantalite, and gas and oil, discovered in the 1990s.
In power since 1979, President Obiang was re-elected for a six-year term on November 26, 2022, with 94.9% of the ballots. General elections including municipal, legislative, and presidential elections were held the same day.
The absence of real checks and balances grants his political party, “El Partido Democratico de Guinea Ecuatorial (PDGE)”, absolute executive power. The PDGE won almost all the seats at the Chamber of Deputies, the Senate, and at the municipality level.
A new Prime Minister, Manuela Roka Botey former Deputy Minister of Education was appointed on January 31, 2023. She became the first woman to fill this role in Equatorial Guinea.
On February 14, 2023, the European Parliament adopted a resolution on the respect for human rights in Equatorial Guinea, urging EU member states to demand an end to all political persecution.
Since early April 2022, President Obiang initiated consultations with different parties to organize the coming legislative elections and launched an electoral census in the country. Early September 2022, the parliament had approved a move to prepone the presidential elections to November 20, 2022, while the presidential term expires in April 2023. Government officials of Equatorial Guinea had based this decision on the current economic downturn and the consequent need to streamline public expenditure.
The discovery of large oil reserves in the 1990s has allowed Equatorial Guinea to become the third-largest producer of oil in Sub-Saharan Africa, after Nigeria and Angola. However, EQG’s macroeconomic and fiscal situation deteriorated at the end of the last commodity super cycle of 2014, with an average negative GDP growth from 2015 to 2021.
After seven consecutive years of recession, the Equatoguinean economy is estimated to have rebounded with 2.9% growth in 2022 (from -2.8% in 2021), mainly owing to a pickup in hydrocarbon output. Inflation in Equatorial Guinea is estimated to have surged to 4.9% in 2022 (compared to 1.8% in 2021) due to higher global food and energy prices, which have been exacerbated by Russia’s invasion of Ukraine.
Strong hydrocarbon revenues from higher production (in the first half of the year) and more favorable oil prices improved the country’s fiscal position, with the fiscal surplus estimated at 3.8% of GDP in 2022, compared to a deficit of 2.8% of GDP in 2021. Higher hydrocarbon export revenues improved the external position, with the current account deficit estimated to have narrowed to 0.8% of GDP in 2022, from 2.3% of GDP in 2021.
To restore its external debt and fiscal imbalances, EQG has been undertaking several reforms and entered an IMF Staff Monitored Program (SMP) in May 2018. The reforms included raising non-hydrocarbon tax revenues and reducing the non-hydrocarbon primary deficit, improving PFM in coordination with the other CEMAC countries, supporting social sectors, protecting the banking sector through the non-accumulation of new arrears, and improving governance. In 2021, the country took measures to address governance and corruption challenges by adopting an anti-corruption law that promotes fiscal transparency.
EQG became member of Organization of the Petroleum Exporting Countries (OPEC) in May 2017. For the government, joining OPEC could be an attempt to bolster foreign investment and technology transfers from other member countries, especially from the Gulf.
Economic and social Outlook
Equatorial Guinea’s oil-dependent economy is slowly emerging from the ravages of the COVID-19 pandemic and the 2021 Bata explosions, but substantial challenges remain. The relaxation of pandemic containment measures and higher international oil prices are helping boost economic activity, government revenues, and export earnings.
However, surging food prices and high rate of food insecurity particularly among the rural population are still prevalent. Owing to the country overreliance on imports for its food consumption (80%), high food prices are fueled by global recovery from the pandemic and supply shocks caused by the war in Ukraine.
Considering the secular decline in hydrocarbon production, policy priorities include changing the current development model to promote economic diversification. While the government has taken positive steps in some areas, significant progress in adopting and fully implementing key reforms to boost economic diversification is needed. Policies should focus on supporting social cohesion and human development, strengthening governance, boosting trade integration, and creating an enabling business environment to promote economic diversification and inclusive growth.
Last Updated: Oct 24, 2023