Resources
Equatorial Guinea
Key Facts
- Capital: Malabo
- Region: Central Africa
- Official languages: French, Portuguese, Spanish
- Independence Day: October 12, 1968
- Area: 28,051 sq km
- Population (2018): 1.3 million
- REC membership: ECCAS
- WTO membership: No
- GDP (2018): US$ 13.432 billion
- GNI per capita (2018): US$ 6 841
- Currency: CFA franc
Economic overview
Equatorial Guinea continues to struggle to emerge from the economic recession caused by the 2014 slump in oil prices. Real GDP is estimated to have shrunk by 4.1% in 2019 after a contraction of 6.1% in 2018 due to less activity in the oil sector. The inflation rate remains low, at 1.4% in 2019 versus 1.3% in 2018, below the CEMAC target of 3%.
In 2018, public finances improved thanks to implementing most of the benchmarking program measures signed with the IMF. Big cuts were made in public capital spending (down 20.6%) and tax revenue collection improved, with non-oil revenues increasing by 7.2%. The budget balance, which showed a deficit of 2.6% of GDP in 2017, became a surplus (0.5% of GDP in 2018 and 1.3% in 2019). The current account deficit improved from 7.7% of GDP in 2018 to 5.6% in 2019 following a better trade balance due to the reduction in capital goods imports.
Progress in human development is below Equatorial Guinea’s economic potential. According to the human development index, the country went from 139 of 188 countries in 2016 to 141 of 187 in 2017. The gross enrollment rate in primary education was 80%, and the grade repetition rate 24%. Unemployment affected 25% of the working-age population in 2017, and the hydrocarbon sector employed only 4% of the workforce.
The oil windfall has enabled the country to modernize its infrastructure over the past two decades. Ambitious programs are being carried out in a variety of infrastructure (roads, ports, airports, water supply, and electricity production, transmission, and distribution), which are generally new and in good condition.
Economic diversification, which is slow to materialize, remains an important goal for the country’s long-term economic growth and stability. The agricultural sector, whose contribution to the national economy was less than 2% of GDP between 2014 and 2018, has good potential on 850,000 hectares of land (versus only 20,000 hectares currently in cultivation). The National Agricultural and Food and Nutrition Security Investment Plan 2015-20 emphasizes training farmers and creating small and medium agricultural enterprises.
The fisheries and aquaculture sector (0.2% of GDP between 2014 and 2018) could also be an important source of diversification thanks to the size of the country’s exclusive economic zone (maritime territory).
The economy remains dominated by hydrocarbons, even though non-oil activities increased from about 40% of GDP in 2013 to 56% in 2017. The country’s overall economic outlook remains negative with a recession expected in 2020 along with a predicted decline in oil sector activity (down 6.8% in 2020). However, inflationary pressures should remain moderate, with inflation rates of about 1.6% in 2020 and 1.4% in 2021.
To maintain the dynamism established to reduce economic imbalances and ensure the stability of the country’s macroeconomic framework in the medium term, the government has made the necessary efforts to implement the Benchmarking Program with the IMF, and negotiations for an Extended Credit Facility began in September 2019. This program is expected to focus on maintaining macroeconomic stability and strengthening the banking sector, while promoting social welfare, economic diversification, good governance, and transparency. The budget balance should improve, recording surpluses of 1.4% of GDP in 2020 and 0.5% in 2021.
At the institutional level, the country is hampered by structural weakness in its ability to manage public finances and by governance in implementing its economic and social transformation policy.
Last updated: April 2020