This document provides an overview of Equatorial Guinea, including its geography, demographics, economy, politics, and infrastructure. Some key points: - Equatorial Guinea has experienced rapid economic growth in recent years due to higher oil production and prices, but poverty remains widespread and civil/political rights are limited. - The economy is dominated by oil production and exports, which account for over 70% of GDP. Agriculture and fishing also contribute to the economy. - Infrastructure development has increased with oil revenues, but roads, ports, and utilities still need improvements. - President Teodoro Obiang Nguema has ruled since 1979 and his party dominates the unicameral legislature.

1. Country Brief
EQUATORIAL GUINEA
April 28, 2009
Highlights
Positive Trends
• The government has invested heavily to upgrade and modernize the infrastructure.
• Growth has been very rapid in recent years, spurred by higher oil prices.
• The external debt is very modest.
Negative Trends
• Equatorial Guinea is not a democracy. Civil and Political rights are severely limited.
• Despite the recent economic boom, poverty remains pervasive.
• Corruption is a major problem.
Geography
Equatorial Guinea is a country with a tropical climate that is situated in central West Africa. It
consists of a land mass on the African continent that borders Gabon, Cameroon and the Gulf of
Guinea and several islands, the largest of which is the island of Bioko that lies about 24.5 miles
off the coast of Cameroon. The total land area is slightly smaller than Maryland. The
population is 633,441. The capital and the largest city is Malabo. It is located on the island of
Bioko and has a population of around 100,000. The major port is at Bata, which is the second
largest city with a population of about 70,000. It is located on the mainland.
Arable land accounts for 4.6 percent of the area of the country, 38.9 percent of the population
lives in urban areas and 58.2 percent of the country is covered by forests. There are 296
kilometers (184 miles) of coastline and 3.6 percent of the land area is devoted to permanent
crops. The median age is 18.9 years, the birth rate is 36.5 per 1,000 people, 41.9 percent of the
population is under 15 years old, 24.1 percent is between 25 and 44 and 4.1 percent are 65
years and older. The population growth rate is 2.4 percent (UNDP estimate for 2005-2015).
The time zone is one hour ahead of Greenwich Mean Time. Equatorial Guinea is a former
Spanish colony that received its independence on October 12, 1968. It is the only country in
Africa where Spanish is the main language. French is also an official language. In July 2007,
President Teodoro Obiang Nguema announced that Portuguese would become the third official
language. The decision was prompted by the government’s desire to apply for membership to
the Community of Portuguese Language Countries.
Economic Overview
The energy sector dominates the economy with oil accounting for 73.8 percent of GDP in 2007.
Manufacturing related to the oil sector was responsible for 11.6 percent of GDP while
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2. construction had a 7.9 percent share. Agriculture, forestry and fishing were just 2.7 percent of
GDP. About two-thirds of the work force is employed in agriculture. The recent economic boom
prompted by rising oil production and prices has significantly reduced unemployment. In 2007,
it was estimated at 8 percent. This is down from 30 percent in 1998. A booming economy has
attracted migrant labor from other West African nations. An October 22, 2008 article on the All
African.com website noted that there were more than 300,000 people from outside the country.
The article said “Malabo is filled with Senegalese jewelers and restaurant owners, Nigerian art
dealers and Beninese, Lebanese and Chinese businessmen.”
The crops grown are coffee, cocoa, rice, yams, cassava, bananas and palm oil. Petroleum,
natural gas and timber are the major natural resources. There are also small deposits of gold
and bauxite. Petroleum and natural gas exploration, liquefied natural gas, fishing and saw
milling are the principle industries.
The economy rose at an annual rate of 21.9 percent between 1999 and 2008. This compares to
0.8 percent for Gabon, 3.8 percent for Cameroon, 4.2 percent for the Republic of the Congo and
8.0 percent for Nigeria. According to the IMF, the per capita income in 2008 was $16,262. This
was 1,821 percent above the level of 1999 and it placed Equatorial Guinea 45th of 178
countries and territories that the IMF compiles per capita data for. Equatorial Guinea has the
highest per capita income in Africa.
The high per capita income presents a false and misleading picture of the living conditions in the
country. A 2008 African Development Bank/OECD Report noted that “The sustained economic
growth and the increase in oil revenues have had very little effect on poverty reduction and on
improving the general standard of living of the population.”
Energy Sector
Oil production surged from 102,000 barrels per day (bpd) in 1999 to 368,530 bpd in 2007 of
which 1,000 bpd was consumed domestically and the remainder was exported. In 2007,
Equatorial Guinea was the seventh largest oil producer in Africa, following Nigeria, Algeria,
Libya, Angola, Egypt and Sudan. For 2008, oil output was estimated by the Energy Information
Agency (a division of the US Energy Department) at 359,200 bpd. Total proven oil reserves are
estimated at 1.1 billion barrels, which is 8.4 years of output at the 2008 level of production
The Ministry of Mines, Industry and Energy is the regulatory body that supervises the petroleum
industry. The national oil company, GePetrol, which was founded in 2002, manages the
government’s interest in production sharing agreements and joint ventures with the international
oil companies that operate in the country. GePetrol and Sonagas, the state owned natural gas
company that was founded in 2005, are mandated to own at least a 35 percent interest in all
energy projects. Among the major oil companies with operations in the country are ExxonMobil,
Amerada Hess, ChevronTexaco, Vanco (US), Atlas Petroleum Company (US), Roc Oil
(Australia), Petronas (Malaysia), Sasol Petroleum (South Africa), Glencore (Switzerland),
Marathon Oil, Noble Energy (US), Tullow Oil (UK), Petrobras (Brazil), Oil and Natural Gas
Corporation (India), the Nigerian National Petroleum Corporation and the China National
Offshore Oil Company (CNOOC). In April 2008, Devon Energy (US) sold its operations to
GePetrol for $2.2 billion. Getotal, jointly owned by Total and the government, has a monopoly
on the distribution of petroleum products, all of which are imported due to a lack of refining
capacity.
Equatorial Guinea has large reserves of natural gas which are estimated at 1.3 trillion cubic feet.
That is equivalent to 28.3 years of output at the 2006 level of 46 billion cubic feet. The bulk of
the gas reserves are located offshore Bioko Island. Eon of Germany, Fenosa of Spain and Galp
Energia of Portugal have formed a consortium that will work with Sonagas to construct a
network of pipelines and processing facilities on Bioko to export natural gas to Europe. In return,
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3. the companies will receive long-term natural gas contracts. Eon will own 25 percent of the
venture, Fenonsa and Galp Energia will each own 5 percent, Sonagas will have a 50 percent
interest and the remainder will be owned by the government.
The electricity sector is owned and operated by the state-run monopoly, Sociedad de
Electricidad de Guinea Ecuatorial S.A. (SEGESA). The power supply is unreliable because of
aging equipment and as a result, consumers often experience prolonged blackouts. The
government has plans to upgrade and modernize the electrical grid to make it more
dependable. Many businesses have diesel and gasoline powered generators as back-up
sources of power supply. About 9 percent of the electricity that is generated is derived from
hydro-power and the remainder is from fossil fuels.
External Accounts
The recent sharp rise in oil prices (up until the third quarter of 2008) and increasing oil
production fueled a sharp surge in the trade surplus. Between 2004 and 2008, the IMF
estimated it rose 261.4 percent to $11.179 billion as exports swelled by 217.7 percent and
imports climbed 132.1 percent. The surplus was equal to a staggering 57.3 percent of GDP.
Crude oil, liquefied natural gas, liquefied petroleum gas and methanol accounted for 99.3
percent of total exports in 2008. Most of the rest consisted of timber. According to IMF data,
public sector equipment was the largest import category with a 57.3 percent share followed by
inputs and equipment for the petroleum sector and petroleum products, which together
accounted for 27.7 percent of the total. The US was the largest export market in 2007,
accounting for 20.6 percent of the total followed by China at 18.8 percent and Spain with a 13.9
percent share. The US was also the largest source of imports at 19.6 percent. In second place
was Spain with 13.9 percent and the Ivory Coast was third with 11.9 percent.
The trade surplus is offset to a large extent by outflows of income remittances from energy
companies. According to the IMF, the deficit in the net investment income category surged from
$2.810 billion in 2004 to $6.610 billion in 2008. The current account surplus in 2008 was $2.225
billion. This was well above the $541 million surplus in 2007 and was equal to 11.4 percent of
GDP.
Surging oil export revenue has substantially boosted foreign exchange reserves. The IMF
estimated that gross official foreign assets at the end of 2008 were $8.472 billion, which was
414.1 percent above the level of 2004. This was equal to 27 and three quarters months of
import cover.
External Debt and Budget Balance
The total outstanding medium and long-term debt at the end of 2007 was just $136.3 million,
which was equal to a mere 1.1 percent of GDP. Of the total, 41 percent was owed to the
International Development Agency (a division of the World Bank) and 34.5 percent was owed to
the African Development Bank (AfDB). Only 15.3 percent was bilateral. Debt servicing costs in
2007 (including principal payments) were $37.1 million. This was equal to 0.3 percent of GDP,
0.4 percent of the exports of goods and non factor income and 0.8 percent of government
receipts.
The budget is heavily dependent on receipts from the energy sector (including corporate taxes,
and income from production sharing arrangements). For the 2008 budget, it was responsible for
91.8 percent of total revenue. Non hydrocarbon personal income taxes meanwhile brought in
just 0.6 percent of government receipts and the value added tax had a 1.6 percent share. With
regard to spending, the largest allocation was capital expenditures, which accounted for 83.9
percent of the total. The budget had an estimated surplus of 1,433.5 million CFA francs in 2008.
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4. This was equal to 17.1 percent of GDP. Excluding oil revenue however, the budget registered a
deficit of 47.4 percent of GDP.
Agriculture Sector
Agriculture was once a main pillar of the economy with cocoa and coffee among the largest
export earners. The agriculture sector though has been in long-term decline. Most of agriculture
is subsistence in nature with productivity very low because of lack of mechanization, inadequate
access to credit and small plot sizes. A considerable amount of the food requirement is imported
from the Cameroon.
Logging has become a major industry. The sector is dominated by Rimbunan Hijau (Malaysia).
It has access to more than a dozen concessions that total over 300,000 hectares (741,000
acres) and account for over half of the log production. About 60 percent of the total forest area
is under concession to logging companies.
Infrastructure
The government has embarked upon a major program to modernize the inadequate
infrastructure. Between 2004 and 2007, infrastructure spending surged 116.1 percent to $920.6
million.
There are 2,880 km (1,788 miles) of roads of which 24 percent are paved. In its March 12, 2009
travel advisory, the US State Department noted that “Generally…road networks are
underdeveloped. There are few road and traffic signs, though more signs are becoming
evident…During the rainy season, many roads are passable only with four-wheel-drive
vehicles. However, new road construction and repair is taking place all over the country and
road conditions have improved markedly over the course of the past year.” The African
Development Bank (AfDB) has financed an upgrading of the roads from Malabo to Luba and
Riaba, a Chinese company has finished a project linking Mongomo to Bata on the mainland,
and the European Union has financed the construction of a road network linking Equatorial
Guinea to Cameroon and Gabon.
There are 5 airports all of which are paved. The main international airport is Saint Isabel
Airport. It is located on Bioko Island, 9 km east of the capital. The airport has undergone
extensive upgrading and modernization in recent years. It has a runway of 3,200 meters and
can handle Boeing 747s. CEIBA Intercontinental is the national carrier. The airport is serviced
by Air France, Benin Golf Air, Cameroon Airlines, Delta Airlines, Iberia, KLM, Lufthansa, Royal
Air Maroc and Swiss Air. There are flights to Abuja, Amsterdam, Atlanta, Casablanca,
Contonou, Douala, Frankfurt, Lagos, Libreville, Madrid, Paris (Charles De Gaulle) and Zurich.
There is no railway service.
The largest port is located at Bata. It is one of the deepest ports in the region with a maximum
depth of 11.58 meters (38 feet). Since there is no natural harbor, a jetty has been constructed
to facilitate offshore handling of cargo. The quay is 600m long. The port handles 240,000 tons
of cargo per year. The port at Malabo is the second largest in the country. A major expansion
project was begun by Somagec (Morocco) in 2007. When completed, it will have a 485m dock,
a 6,000m operating area, 2 storage areas with 8,400 cubic meters of capacity and a passenger
terminal with a 1,200m platform. At present, the port handles 200,000 tons of cargo a year. The
third largest port is at Luba, which is on Bioko island, 50 km from Malabo. For a long time it was
inactive but it now serves as an oilfield service logistics base. The port has dockyard facilities,
berthing space for ocean-going ships, warehousing, storage and workshop facilities for oil
logistical equipment and repair and maintenance yards. It is also a duty free zone and has a
helicopter landing pad.
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5. There is no oil refinery.
There are 38 km of natural gas pipelines.
Marathon Oil Corporation is completing a $1.4 billion LNG facility on Bioko Island.
Potable water is available in the major towns but is not always reliable because of poor
maintenance and aging infrastructure. As a result, there are frequent supply interruptions. A
major project to upgrade the public water system is underway. The work in Malabo and Bata is
expected to be completed this year.
Informal Economy
An article entitled “The Political Economy of Oil in Equatorial Guinea” published in the March
2006 edition of the African Studies Quarterly noted that “Criminal industries already known to
flourish in Equatorial Guinea include toxic waste dumping, drug trafficking, pirate fishing, arms
and aircraft smuggling, and forced labor of children.” Illegal logging is also a major illicit
economic activity. According to a 2002 World Bank study, illegal logging accounted for 70
percent of logging.
Political Environment
Index Rank Score
Status: Not Political Rights: 7.0/7.0
Freedom House Index 2009
Free Civil Rights: 7.0/7.0
Government
President Teodor Obiang Neguema Mbasogo has been in office since August 3, 1979 when he
seized power in a military coup. On June 25, 1989, he was elected in an unopposed contest.
He was re-elected on February 25, 1996 and on December 15, 2002. The 2002 elections were
boycotted by the opposition because of concerns the voting would not be free and fair. The next
Presidential election is scheduled for December in 2009. President Teodor Obiang Neguema
Mbasogo has indicated that he will run for a renewed mandate.
There is a unicameral House of People’s Representatives (Camara de Representantes del
Pueblo) that has 100 seats. Members are elected by popular vote to a five year term. Suffrage
is 18 years. In the May 4, 2008 elections, President Obiang’s Democratic Party of Equatorial
Guinea (PGDE) and its main ally, the Democratic Opposition, captured 99 of the seats. The
legislature has very little power as the constitution vests all executive power with the president.
In its political assessment of Equatorial Guinea, Freedom House wrote that it “is not an electoral
democracy, and the country has never held a credible election. President Teodoro Obiang
Nguema Mbasogo…holds broad powers and limits public participation in the policy-making
process….There are 13 registered political parties…6 of which are aligned with the PDGE. The
activities of the remaining parties…are closely monitored by the government.”
The 1982 constitution gives the President extensive powers, including naming and dismissing
members of the cabinet, making laws by decree, dissolving the Chamber of Representatives,
negotiating and ratifying treaties and calling legislative elections. The President is also the
commander in chief of the armed forces and appoints the heads of the seven provinces.
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6. Civil Liberties
Freedom House has designated Equatorial Guinea as “not free” and has assigned it a rating of
7 out of 7 for political and civil rights. The lower the rating the higher the degree of political and
civil liberties. Equatorial Guinea is one of only eight countries that Freedom House has assigned
a rating of 7 for both political and civil rights. The others are Myanmar, Libya, North Korea,
Somalia, Sudan, Turkmenistan and Uzbekistan.
Equatorial Guinea is rated 155 of 167 nations in the 2008 EIU Democracy Index.
Press freedom is constitutionally guaranteed, but is actually severely restricted in practice. The
1992 press law authorizes the government to censor all publications. Virtually all of the print
and broadcast media are state run. Libel is a criminal offense, and all journalists are required to
register with the government. The only internet provider is affiliated with the government
telephone monopoly. There have been unconfirmed reports that the government monitors use
of the internet. Freedom House ranked Equatorial Guinea 186 of 195 in its Freedom of the
Press survey for 2008 and characterized the press as “not free.”
Freedom of religion is generally respected. Freedoms of association and assembly however
are severely restricted. Official authorization is required for all gatherings that are deemed to be
political in nature. The constitution guarantees the right to form and join trade unions. These
rights though are not respected. There is only one legal trade union. There are many legal
barriers that prevent workers from bargaining collectively.
The judiciary is not independent. Laws with respect to search, seizure and detention are ignored
by the security forces which according to Freedom House act with “impunity”. Human Rights
organizations have accused the government of widespread civil rights abuses including torture,
the detention of political opponents, and extrajudicial killings.
Country Credit Ratings
Credit Rating Standard & Poor’s Moody’s Fitch Ratings
(as of date of publication) N/A N/A N/A
Equatorial Guinea is not rated by any of the major credit rating agencies.
Business Environment
Index Rank Score
Bertelsmann Transformation Index 2008 N/A N/A
Economic Freedom of the World Index 2008 N/A N/A
Fund for Peace - Failed State Index 2008 42/177 88/120
Heritage Foundation Economic Freedom Index 142/178 51.3/100.0
2009
Milken Institute Capital Access Index 2007 N/A N/A
Transparency International Corruption 171/180 1.7/10.0
Perception Index 2008
UNCTAD – Inward Potential Performance Index N/A N/A
2004-2006
World Bank Ease of Doing Business 2009 167/181 N/A
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7. World Bank Gov Indicators 2008, Control of 2.4 Percentile -1.37
Corruption
World Bank Gov Indicator 2008, Political Stability 38.0 Percentile -1.37
World Bank Gov Indicator 2008, Regulatory 7.8 Percentile -1.35
Quality
World Bank Gov Indicators 2008, Rule of Law 10.0 Percentile -1.16
World Economic Forum – Global Competitive N/A N/A
Index 2008-2009
Openness to Foreign Investment
The government encourages foreign investment to spur economic growth and employment. No
legal distinctions are made between foreign and domestic companies. There are no restrictions
on the repatriation of profits, dividends, capital, interest and principal payments on foreign debt,
lease payments, royalties and management fees. Foreigners can own land. There have been
no instances of expropriation of property in recent years. Some sectors of the economy are
restricted to nationals including the arms industry, the storing of toxic waste and the production
of alcoholic beverages, excluding beer. Foreign companies must have at least 70 percent of
their work force comprised of nationals. An exception is made for the oil sector where the ratio
is a maximum of 30 percent. Dividends paid to non-resident entities are subjected to a 25
percent withholding tax. Foreigners can open foreign exchange accounts but must first obtain
government approval to do so. The top income tax and the corporate tax rates are 35 percent.
A value-added tax (VAT) was introduced in February 2008.
Despite the relatively liberal foreign investment framework, the State Department’s 2005
Investment Climate Statement characterized the business environment as “extremely
challenging.” It said, “Senior government officials have extorted money from foreign
companies…The investment code, while liberal in intent, is extremely bureaucratic in practice
and open to manipulation…The tax system is not transparent, and basic tax laws are often
unavailable for review by foreign companies or their representatives. Enforcement of taxation
and equal treatment is often arbitrary and the government has attempted to extort additional
revenue from foreign companies through sudden changes to the tax code…Many aspects of
property rights are ill defined and inadequately protected. The execution of judicial decisions is
slow and fraught with administrative and legal bottlenecks…The right of private ownership is
recognized in Equatorial Guinea, but is limited in practice by a dysfunctional judiciary,
inadequate definitions of property rights, and widespread inconsistencies in government
decision-making.”
Foreign Investment
Data from the UNCTAD indicate that FDI in 2007 was $1.726 billion. This was above the
$1.656 billion level in 2006 and represented 44.7 percent of gross fixed capital formation. The
total stock of FDI (book value) at the end of 2007 was $10.745 billion, which was equal to 102.5
percent of GDP.
Most of the FDI is concentrated in the energy sector. French telecom has a large stake in the
telecom sector, owning 40 percent of GESTA, the phone company while its Orange subsidiary
provides cellular service. Sofitel, which is owned by Accor (France), owns one of the major
hotels in Malabo. Incat of the UK has been involved in revitalizing the port of Luba. Pils of the
Netherlands manages the port of Luba. Cepesca of Spain has constructed a fish processing
plant at Mbini. China Dalian, Get and Chaabi of Morocco and Seguibat enterprises of Lebanon
are involved in a program to build subsidized housing.
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8. Privatization
The government has attempted to privatize SEGESA, however, foreign companies have shown
little interest in buying it.
According to World Bank Data, privatization receipts between 2000 and 2007 were just $2
million.
Financial Sector
The financial sector is small and underdeveloped. There are four banks; BGFI Bank Guinee
Equatoriale (a subsidiary of BGFI of Gabon), Caisse commune d’ espargne et d’ investissement
(a subsidiary of CCEI of Cameroon, SGBGE (a subsidiary of Societe Generale) and Banco
Nacional de Guinea Equatorial (BANGE)). The insurance sector consists of three insurance
companies and one reinsurance company. In its Article IV Consultation report that was
released on March 25, 2009, the IMF noted that the financial system “appears generally
sound…Bank real lending rates have come down in recent years, reflecting a more competitive
environment, but lending is mainly concentrated in public infrastructure projects. Consumer
credit remains modest and the mortgage market is undeveloped. Relatively few households
have bank accounts.” Non-performing loans as of 2007 were equal to 10.7 percent of all
outstanding loans.
Equatorial Guinea uses the Central African CFA franc. There is also a West African CFA franc
but it is not legal tender in the Central African CFA zone. The currency is issued by the Banque
des Etats de l’ Afrique Centrale (BEAC), which is located in Yaounde, Cameroon. It is the
Central Bank for the six countries; Cameroon, the Central African Republic, Chad, the Republic
of the Congo, Equatorial Guinea and Gabon that use the Central Africa CFA franc. The
currency is fixed against the Euro at CFA655.957 per Euro. It dropped by 3.9 percent against
the US dollar in 2008 and in the year top date period ending April 27th, 2009, it slipped by 6.4
percent.
The countries that use the Central African CFA franc are members of the West Economic and
Monetary Community of Central Africa (CEMAC). It was established to promote economic
integration by promoting trade and a common market. The members share a common financial,
regulatory, and legal structure, and maintain a common external tariff on imports from non-
CEMAC countries. There is free movement of capital within the CEMAC. Unlike in the West
zone CFA countries, there is not a joint stock exchange.
Corruption and Transparency
Equatorial Guinea has not ratified the UN Convention Against Corruption. It is ranked 171 of
180 in Transparency International’s 2008 corruption perception index. In the previous year’s
index, it was ranked 168th. The law provides penalties for official corruption. However, those
laws are not enforced. Corruption is widespread and pervasive. According Freedom House,
the president and “his inner circle…have reaped huge personal profits from the growing oil
industry.” The State Department’s 2009 Human Rights Report (which reviewed developments in
2008) said “officials frequently engaged in corrupt practices with impunity. Corruption continued
to be a severe problem. Officials by law must declare their assets, although the declarations
were not published publicly. There was no requirement that officials divest themselves of
business interests that were in potential conflict with official responsibilities, and no law
prohibiting conflict of interest.”
In an attempt to polish its international image, the government has indicated that it will join the
Extractive Industries Transparency Initiative (EITI), which encourages transparency and
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9. accountability in extractive industries in order to ensure that earnings from natural resources are
not siphoned away by corrupt practices. Equatorial Guinea obtained candidate status from the
EITI Board on February 22, 2008 and has until March 2010 to be validated as a compliant
country. This may prove to be difficult as transparency surrounding the oil industry continues to
be opaque.
On December 2, 2008, several anticorruption groups filed a lawsuit in Paris against President
Obiang and two other African heads of state, accusing them of purchasing luxury homes in
France with embezzled public funds. Also in December, a Spanish human rights group filed a
complaint with anticorruption public prosecutors in Spain, alleging that members of President
Obiang's family and high-ranking political officials close to him had illegally embezzled 12.7
billion CFA francs from a state petrol company to buy homes in Spain, and had laundered these
public funds between 2000 and 2003 in American and Spanish banks.
In 2004, the US Senate Permanent Subcommittee on Investigations released a report indicating
that Riggs Bank helped top officials of the government misappropriate hundreds of millions of
dollars in oil revenue. According the report, “Between 1995 and 2004, the bank oversaw as
many as 60 accounts containing as much as $700 million, making Equatorial Guinea its largest
single customer. Among those holding such accounts were the president and members of his
family…oil companies had made payments into the personal accounts of Equatorial Guinean
officials that were used for land purchases, office leases, and the education of the children of
the country's leaders…some Equatorial Guinea ministers and their families had come to
dominate certain sectors of the economy and, in some cases, had become virtual economic
gatekeepers for foreign companies wishing to do business in the country."
In early, 2006, the President’s son, Teodorín Obiang, bought numerous luxury cars including
two Bugatti Veyrons, costing over a million euros apiece. An investigation by Tracfin, the
French anti-money laundering service, into the purchase concluded in November 2007 that the
money most likely came from “laundered proceeds of misappropriated public funds."
On November 10, 2006, the British newspaper the Guardian reported that Teodorin bought a 16
acres 15,000 square foot mansion with eight bathrooms, a pool, a tennis court, a designer golf
course and “sprawling gardens speckled with fountains” in Malibu, California, for $35 million
dollars. The paper noted that his monthly salary as a minister in his father’s cabinet was about
$5,800. It said, “he appears to spend as little time as possible fulfilling his duties as the minister
of agriculture and forestry…Instead he flits between South Africa, France and the US, pursuing
business ventures such as a failed rap label while acquiring property and a fleet of Ferraris,
Lamborghinis and Bentleys.”
Equatorial Guinea fares poorly in many of the World Bank’s key indicators. It is ranked 167 of
181 countries in ease of doing business. This compares with a ranking of 165 in the previous
survey. It is ranked 174th in starting a business, 178th for employing workers, 131st in getting
credit, 69th in enforcing contracts, 69th in registering property, 142nd in protecting investors and
181st in closing a business. With respect to the World Bank’s governance indicators, Equatorial
Guinea performs poorly. For, control of corruption, rule of law and regulatory quality, it is ranked
at or below the 10th percentile. For political stability, it is at the 38.0 percentile.
The Heritage Foundation ranks Equatorial Guinea 142 of 178 and it is ranked 42 of 177 in the
2008 Failed State Index (a low ranking indicates a high degree of economic and political
dysfunction). Equatorial Guinea is not ranked in the Fraser Institute World Freedom Index, the
Bertelsmann Transformation Index, the World Economic Forum’s 2007-2008 Competitiveness
Index, the UNCTAD Inward Potential Performance Index for 2004-2006, or the Milken Institute
Capital Access Index.
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10. Standards Compliance Assessments
IMF Dissemination Standard Subscription Status
Special Data Dissemination Standard Not a SDDS Subscriber
General Data Dissemination Standard Not a GDDS Subscriber
IMF Assessment Standards Assessed Dates Compliance Level
Reports on Standards and Fiscal Transparency April 27, 2005 Low
Codes (ROSCs)
Financial Sector Assessment N/A
Programs (FSAPs)
Equatorial Guinea has been assessed by the IMF in Fiscal Transparency through its ROSC
Program. The report said, “Several weaknesses in transparency need to be addressed urgently.
Priority areas identified for improvement are: establishment of a clear fiscal policy framework for
management of petroleum wealth…reconciliation of oil revenue flows; and clarification of the
mandate and corporate governance structure of the national oil company GEPetrol.” The IMF
recommended a number of steps to increase fiscal transparency including using the non-oil
fiscal balance as the principal fiscal target, appointing an independent auditor to review
company and government reports and unifying the investment and current budgets.
Human Capital
Index Rank Score
UNDP Human Development Index 2008 115/1778 0.717/1.000
Social Indicators
Equatorial Guinea ranks 115 of 179 in the UNDP Human Development Index in 2009. Although
it has the highest per capita income in sub-Saharan Africa, many of its major social indicators
reflect the existence of widespread poverty. The infant mortality rate is 123 per 1,000 live births,
57 percent of the population does not have access to clean drinking water, the probability of not
surviving till the age of 40 is 35.6 percent, 19 percent of children under 5 are underweight for
their age, 49 percent of one-year olds are not fully immunized against measles, 35 percent of
births are not attended to by a skilled health care professional, 49 percent of the population
does not have access to improved sanitation facilities, the under five mortality rate is 205 per
1,000 live births,13 percent of infants are born with low birth weight, the maternal mortality rate
is 680 per 100,000 live births, the probability of dying between the ages of 15 and 60 is 44.9
percent and the projected life expectancy for 2009 (according to the US Census Bureau) is 61.6
years (62.5 years for females and 60.7 years for males).
Technology Access
There are 20 mainline telephone lines and 434 cellular subscribers per 1,000 people. Internet
use is 16 per 1,000 people, there are 10 personal computers per 1,000 people, there are 0.4
broadband subscribers per 1,000 people, 26 percent of households have a television and there
are 340 radios per 1,000 people. The per capita consumption of electricity is just 52 kilowatt
hours (in the US, it is 14,240 kilowatt hours).
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11. Equatorial Guinea is ranked 145 of 182 in the UN’s 2008 E-Government Readiness Index. The
Index measures the use of information and communication technology to “provide and improve
government services, transactions and interactions with citizens, businesses, and other arms of
government.”
Health Indicators
There are 30 physicians per 100,000 people, 50 nurses and midwives per 100,000 people, 20
laboratory health care workers per 100,000 people, 20 pharmacists per 100,000 people, there
were just 15 dentists in 2004 and there are 110 hospital beds per 100,000 people.
The prevalence of HIV/AIDs among the adult population (15-49 years old) is 3.2 percent, the
prevalence of tuberculosis cases is 404 per 100,000 people (in the US, there are just 3 per
100,000 people) and the prevalence of obesity is 15.4 percent for females and 6.4 percent for
males. In 2006, there were 193,341 cases of malaria and 1,091 deaths from malaria.
The per capita health care expenditures in 2005 were $282. This compares to $6,350 in the
US.
In a World Heath Organization Survey on the leading causes of death for 2002, HIV/AIDS was
responsible for the largest number, with a 17 percent share, followed by malaria at 11 percent.
Diarrhea diseases and lower respiratory inflections were each tied in third place at 6 percent
share.
In its March 12, 2009 travel advisory, the State Department said, “Medical facilities are
extremely limited. Pharmacies in Malabo and Bata stock basic medicines including antibiotics,
but cannot be counted on to supply advanced medications. Outside of these cities, many
medicines are unavailable… The sanitation levels in even the best hospitals are very low though
the new Israeli-built and staffed La Paz Hospital in Bata approaches European standards of
sanitation and is reported by Red Cross officials to be the best in the region. Doctors and
hospitals often require immediate payment for health services, and patients are often expected
to supply their own bandages, linen and toiletries. The Malabo hospital is undergoing a
complete update, with expected completion in late 2009…Malaria is a serious problem and
there are periodic outbreaks of cholera.”
In the World Health Organization’s ranking of the World’s Health Care Systems, Equatorial
Guinea is in 171st place of the 190 countries surveyed.
Education
Education is compulsory for ages 7 to 11 but is not stringently enforced. The costs of tuition,
books, uniforms and other fees make education unattainable for the poor. Many schools are
inadequately equipped. Untrained school teachers are common. There are an insufficient
number of schools. Primary school begins at age 7 and continues for 5 years. Of the students
who enroll in Grade 1, 93 percent graduate. The pupil/teacher ratio in primary school is 32:1.
Secondary education begins at age 12 and is completed in 7 years.
The adult literacy rate is 87 percent for those 15 years and older. The average for sub-Saharan
Africa is 62.1 percent. The net enrollment rate in primary school is 84 percent for girls and 99
percent for boys. This compares to the sub-Saharan average of 67 percent for girls and 73
percent for boys. The ratio of primary school age children who are not in primary school is 11
percent. The school life expectancy is 9.6, which is higher than the regional average of 8.2
years.
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12. Economic Data and Outlook
IMF Country Data Overview 2008 (Est.)
GDP GDP: GDP per CPI: Current Budget FDI
Growth capita: Account as deficit as (UNCTAD
% of GDP % of GDP 2007)
7.4% $20.163 $16,262 5.9% 11.4% 17.1% $1.726 bln
bln
IMF Article IV Consultation
In its Article IV Consultation Report of March 25, 2009, the IMF noted that the economy in
2008 was underpinned by high oil prices and increased government capital spending. It
warned that the 2009 budget was too expansionary and therefore could fuel inflationary
pressures. In addition, it urged the government to improve public financial management
procedures, expand access to credit for small and medium sized businesses and indicated
that “the weak statistical base hinders macroeconomic assessments.”
Economic Outlook
In light of Equatorial Guinea’s great dependence on the energy sector to generate export and
government revenue, the recent sharp decline in oil prices suggests that 2009 will be a difficult
and challenging year. After rising by 21.4 percent in 2007 and 11.3 percent in 2008, the IMF is
predicting a 5.4 percent retreat in the economy this year and a further descent of 2.8 percent in
2010. The current account meanwhile is expected to register its first deficit since 2005 and the
budget will probably also be in deficit following last year’s surplus of 17.1 percent of GDP as
government revenues are severely curtailed by the plunge in oil prices. The high level of foreign
exchange reserves however provides the government with the resources to finance the budget
deficit as well as to continue its aggressive capital spending program which is designed to
modernize and upgrade the infrastructure.
Over the medium-term, the government must devise a strategy to diversify the economy away
from its great dependence on the energy sector. This is especially important as in the absence
of new discoveries, oil production has probably peaked. The government has plans to turn the
country into the Dubai of West Africa. However, a shortage of skilled labor, pervasive corruption
and the lack of incentives to develop non-energy industries will make this a difficult goal to
achieve.
Membership in international organizations
Financial Action Task Force (FATF) Not a member
International Center for Settlements of Not a member
Investment Disputes (ICSID)
International Federation of Accountants (IFAC) Not a member
Multinational Investment Guarantee Agency Yes, a member
(MIGA)
United Nations Convention Against Corruption Not a signatory
World Intellectual Property Organization (WIPO) Yes, a member
World Trade Organization (WTO) Observer status
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