IMF Executive Board Concludes 2022 Article IV Consultation with Equatorial Guinea
IMF News, July 29, 2022
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- Published: July 29, 2022
Overview
- On July 25, 2022, the Executive Board of the International Monetary Fund concluded the Article IV consultation with Equatorial Guinea.
- Equatorial Guinea’s oil-dependent economy is slowly emerging from the COVID-19 pandemic and the Bata explosions.
- Relaxation of pandemic containment measures and higher international oil prices are supporting economic activity, government revenues, and export earnings.
- Substantial challenges remain, including surging food prices, banking sector vulnerabilities, and a stalled structural reform agenda.
Economic outlook and projections
- Real GDP:
- Contraction of 3.2 percent in 2021.
- Projected growth of 5.8 percent in 2022 supported by hydrocarbon production and Bata reconstruction.
- Starting in 2023, projected contraction through the medium term reflecting reduced hydrocarbon output and stalled reforms.
- Inflation:
- Projected to rise to 6 percent by end-2022 due to pass-through from higher international oil and food prices, and to moderate over the medium term.
- Sectoral projections (selected):
- Hydrocarbon sectors projected growth of 9.0 percent in 2022, then contractions of -8.3 percent in 2023 and -25.3 percent in 2024.
- Non-hydrocarbon sectors projected growth of 2.4 percent in 2022 and 2.7 percent in 2023.
- External and fiscal indicators (selected projections and estimates):
- Exports, f.o.b.: 64.5 percent change in 2022, then -21.2 percent in 2023.
- Gross national savings: 7.7 percent in 2022 and 18.6 percent in 2023.
- Oil price (U.S. dollars a barrel): 107.7 in 2022; projected 92.9 in 2023, 84.1 in 2024, 78.2 in 2025, 74.4 in 2026, 71.8 in 2027.
- Oil volume (crude + condensado, millions of barrels): 43 in 2021; projected 38 in 2022, 30 in 2023, 29 in 2024, 25 in 2025, 22 in 2026.
Risks and vulnerabilities
- Balance of risks tilted to the downside.
- Upside scenarios:
- Continued increase in hydrocarbon prices could further boost export earnings, improve fiscal balances, and increase external reserves.
- Stronger reform efforts could reverse the medium-term decline in real GDP.
- Downside scenarios:
- Sustained surge in international food prices increasing food insecurity.
- Resurgence of the pandemic.
- Lower oil prices.
- Spike in marine piracy incidents.
- Further delays in addressing governance and corruption vulnerabilities.
- Worsening of banking sector stability indicators.
Executive Board assessment and policy recommendations
- Directors agreed with the staff appraisal: economy emerging but severe challenges remain; risks tilted to the downside.
- Near-term priorities:
- Sustain external and fiscal sustainability while providing targeted support to the most vulnerable.
- Use part of windfall hydrocarbon revenues to rebuild macroeconomic buffers, including accumulation of foreign reserves, and to address social needs, especially food insecurity.
- Improve efficiency of public spending and non-hydrocarbon revenue.
- Structural and governance priorities:
- Significantly strengthen commitment to reinvigorate the stalled structural reform agenda.
- Address serious governance vulnerabilities to support sustainable, inclusive growth.
- Substantially increase efforts to improve governance, enhance transparency, and fight corruption.
- Implement asset declaration regime for senior public officials, including publication of declarations.
- Complete and publish audits, including for state-owned hydrocarbon firms.
- Regularly publish beneficial ownership information on emergency-related public spending and periodic implementation progress reports of the 2019 Good Governance and Anti-Corruption Action Plan.
- Strengthen the effectiveness of the AML/CFT framework and improve timely publication of economic data.
- Banking sector recommendations:
- Tackle high non-performing loans, undercapitalization, and low liquidity at some banks.
- Accelerate plans to settle domestic arrears to help address banking sector stability concerns.
- Strengthen management of state-owned banks.
- Develop mobile payments to improve financial access and inclusion.
- Human capital and diversification:
- Boost investment in basic healthcare, education, and sanitation to strengthen human capital and social outcomes.
- Leverage existing public infrastructure to stimulate new economic activities.
- Commit to build a climate resilient economy.
- Fund support:
- The Fund stands ready to continue to support the authorities’ efforts, including through capacity development.
Selected economic and financial indicators (2019–27, selected lines preserved exactly as presented)
- Real GDP (annual percent change): -5.5 (2019), -4.2 (2020), -3.2 (2021), 5.8 (2022), -3.1 (2023), -12.3 (2024), -2.6 (2025), -4.7 (2026), -1.1 (2027).
- Hydrocarbon sectors (annual percent change): -8.8 (2019), -3.4 (2020), -7.3 (2021), 9.0 (2022), -8.3 (2023), -25.3 (2024), -10.0 (2025), -16.2 (2026), -9.0 (2027).
- Non-hydrocarbon sectors (annual percent change): -1.4 (2019), -5.2 (2020), 1.6 (2021), 2.4 (2022), 2.7 (2023), 0.7 (2024), 3.0 (2025), 3.1 (2026).
- GDP deflator (annual percent change): 20.9 (2019), 36.4 (2020), -6.0 (2021), -0.7 (2022), 2.1 (2023), 3.8 (2024), 3.5 (2025), 4.5 (2026), 5.4 (2027).
- Consumer prices (annual average): 1.2 (2019), 4.8 (2020), -0.1 (2021), 5.1 (2022), 5.7 (2023), 5.2 (2024), 4.7 (2025), 4.2 (2026).
- Consumer prices (end of period): 4.1 (2019), -0.5 (2020), 2.9 (2021), 4.0 (2022).
- Broad money (annual percent change): -6.3 (2019), -7.0 (2020), 0.4 (2021), 1.8 (2022), -8.9 (2023), -12.9 (2024), 2.3 (2025).
- Exports, f.o.b. (annual percent change): -16.5 (2019), -38.5 (2020), 57.6 (2021), 64.5 (2022), -21.2 (2023), -30.3 (2024), -12.4 (2025), -17.3 (2026).
- Hydrocarbon exports (annual percent change): -15.7 (2019), -38.7 (2020), 63.8 (2021), 69.0 (2022), -22.3 (2023), -32.2 (2024), -13.8 (2025), -19.5 (2026).
- Imports, f.o.b. (annual percent change): -22.0 (2019), -31.2 (2020), 22.3 (2021), 46.7 (2022), -21.5 (2023), -11.2 (2024), -4.1 (2025), -1.8 (2026).
- Terms of trade (annual percent change): 12.5 (2019), -13.7 (2020), 24.9 (2021), 54.1 (2022), -15.4 (2023), -10.9 (2024), -0.3 (2025), -9.1 (2026), -6.5 (2027).
- Gross investment (percent of GDP): 10.9 (2019), 4.6 (2020), 9.5 (2021), 9.8 (2022), 11.0 (2023), 11.1 (2024).
- Gross national savings (percent of GDP): 10.0 (2019), 1.3 (2020), 7.9 (2021), 7.7 (2022), 18.6 (2023), 14.1 (2024), 15.3 (2025), 15.8 (2026), 16.0 (2027).
- Of which : hydrocarbon revenue (percent of GDP): 14.8 (2019), 10.5 (2020), 13.3 (2021), 12.9 (2022), 10.8 (2023), 9.1 (2024), 7.6 (2025), 6.7 (2026).
- Non-hydrocarbon revenue (percent of GDP): 3.6 (2019), 2.5 (2020), 3.7 (2021), 16.8 (2022), 12.7 (2023), 12.1 (2024), 11.8 (2025), 12.0 (2026).
- Non-hydrocarbon primary balance (percent of GDP): -12.2 (2019), -11.1 (2020), -8.7 (2021), -8.5 (2022), -7.7 (2023), -6.9 (2024), -5.8 (2025).
- Outstanding public debt (percent of GDP): 43.2 (2019), 48.4 (2020), 42.8 (2021), 27.1 (2022), 26.5 (2023), 28.5 (2024), 26.2 (2025), 24.1 (2026), 21.1 (2027).
- Change in domestic arrears (percent of GDP): -2.3 (2019), -1.6 (2020).
- Current account balance (including official transfers; - = deficit): -0.9 (2019), -2.1 (2020), -5.3 (2021), -7.1 (2022).
- Total external public debt (percent of GDP): 14.0 (2019), 15.1 (2020), 8.4 (2021), 10.3 (2022), 9.2 (2023).
- External debt service-to-exports ratio (percent): 3.2 (2019), 3.9 (2020), 6.9 (2021), 9.9 (2022).
- External debt service/government revenue (percent): 11.9 (2019), 14.4 (2020), 9.4 (2021), 9.7 (2022), 11.2 (2023), 15.5 (2024).
- CEMAC Foreign Reserves (US$ billions, end-of-period): 7.4 (2019), 7.8 (2020), 8.1 (2021), 12.8 (2022).
- Nominal GDP (billions of CFA francs): 6,658 (2019), 5,813 (2020), 6,804 (2021), 9,819 (2022), 8,946 (2023), 7,794 (2024), 7,755 (2025), 7,667 (2026), 7,846 (2027).
- Nominal GDP (millions of US dollars): 11,364 (2019), 10,099 (2020), 12,269 (2021).
- Non-hydrocarbon GDP (billions of CFA francs): 3,905 (2019), 3,832 (2020), 4,003 (2021), 4,323 (2022), 4,707 (2023), 5,002 (2024), 5,410 (2025), 5,810 (2026), 6,214 (2027).
- Exchange rate (average; CFA francs/U.S. dollar): 585.9 (2019), 575.6 (2020), 554.5 (2021).
Source: IMF Press Release No. 22/280, "IMF Executive Board Concludes 2022 Article IV Consultation with Equatorial Guinea."