Statement at the End of an IMF Visit to Conduct the First Review of Equatorial Guinea’s Staff-Monitored Program

IMF News, July 11, 2018

Source details

Canonical URL: Statement at the End of an IMF Visit to Conduct the First Review of Equatorial Guinea’s Staff-Monitored Program

An IMF mission led by Lisandro Ábrego, IMF Mission Chief for Equatorial Guinea, visited Malabo on July 2–11 to conduct discussions on the first review of Equatorial Guinea’s Staff-Monitored Program (SMP), approved by Management in May 2018 (see Press Release No. 18/218).
Press Release No. 18/287 dated July 11, 2018 conveys preliminary findings; the views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
The mission will not result in a Board discussion; a report is expected to be submitted for IMF’s Management consideration in early August 2018.

"Program implementation through April has been broadly satisfactory; IMF Management expected to consider program review in August;"
Authorities have met all but one quantitative performance (PM) measures and indicative targets for the first review under the SMP; the unmet PM was "owing to technical reasons."
The structural benchmark for end-April on having a revised 2018 budget approved by Parliament was not met, but "the authorities have operated within the parameters of the revised budget."
The mission reached a staff-level agreement for the completion of the first review under the SMP.

A revised 2018 budget, tighter control and tracking of spending along with enhanced revenue administration is guiding fiscal adjustment.
The improved budget framework "has contributed to higher non-resource tax revenues, and a lower non-resource primary deficit in the first four months of 2018."
The revised 2018 budget was approved by the Council of Ministers and "it is now scheduled to be approved by Parliament later this month."
The mission "supported the ongoing efforts to strengthen the public financial-management framework to support fiscal discipline."

"Economic prospects in the near term, as in the rest of the CEMAC region, are difficult."
Key factors:
- Falling hydrocarbon production has driven overall economic growth into negative territory.
- The non-oil sector "has started to show signs of recovery, posting modest growth in 2017."
- Inflation remains low, reflecting economic slack and contained international food prices.
- "The external current account has improved, both because of fiscal adjustment and higher oil prices, but Equatorial Guinea still needs to rebuild its foreign assets and raise its contribution to BEAC’s international reserves."

Progress reported on structural measures programmed for end-July, including:
- Ratification of the UN Convention against Corruption in May.
- Better control and tracking of public spending.
- Improvements in revenue administration and the environment for investment.
Governance and transparency priorities recommended or supported by the mission:
- Complete the process to adhere to EITI, "by building on the work already done."
- Launch the process for the audit of the state-owned hydrocarbon companies and government internal arrears.
- Support the publication of a broader set of fiscal data through a new Ministry of Finance website (www.minhacienda.gob.gq) and "suggests the authorities to turn this into a regular practice."

The mission and the authorities agreed that strong implementation of the government’s reform strategy is essential to:
- Keep stabilizing the public finances.
- Contain the growth of public debt.
- "Set the basis for sustainable, inclusive growth within a more diversified economy."
It is important to "shield the poor and vulnerable from any adverse effects of economic adjustment and generally to strengthen social protection."

The mission met with:
- His Excellency, the Minister of Finance, Economy and Planning, Mr. Lucas Abaga Nchama;
- His Excellency, the Minister of Mines and Hydrocarbons, Mr. Gabriel Obiang Lima;
- Other senior government officials; members of the diplomatic community; and representatives of the private sector and civil society.
"The team wishes to thank the Equatoguinean authorities and other interlocutors that it held discussions with for their excellent collaboration and warm hospitality."

IMF staff statement, Press Release No. 18/287, July 11, 2018.