Press Release No. 22/355

IMF Staff Concludes Discussions On Equatorial Guinea

October 17, 2022

Washington, DC: An International Monetary Fund (IMF) staff team led by Mariana Colacelli met with the Equatoguinean authorities in Washington, DC, during October 11-15, 2022, to discuss progress on Equatorial Guinea’s economic reform program supported by the extended arrangement under the Extended Fund Facility approved in 2019 and commitments under the 2021 Rapid Financing Instrument. The discussions were also focused on the macroeconomic outlook and policies.

At the end of the visit, Ms. Colacelli issued the following statement:

“The economy is benefitting from higher hydrocarbon production and prices in 2022, but a sharp rise in food prices is stoking inflation. In the first half of 2022, real GDP rose by about 2 percent (y/y) buoyed by rising hydrocarbon output. However, in 2022, real GDP growth may be lower than the 5.8 percent anticipated at the time of the July Executive Board discussion of the 2022 Article IV Consultation due to a recent incident in a large oil production unit. The overall fiscal balance improved in the first half of the year beyond staff projections, reaching 5 percent of GDP, mainly due to higher hydrocarbon revenue. Inflation accelerated to 6.1 percent (y/y) in August led by the increase in food prices.

“Recently, the authorities have been taking steps to address the increase in food prices while advancing work to enhance social outcomes and diversify the economy over time. The government is working with foreign suppliers of basic food items, to facilitate their imports, with a plan to subsidize their transportation costs to help contain local retail food prices. To support the authorities’ priority of improving social outcomes and boosting human capital, they recently hired about four thousand public workers, mainly for education and health and social welfare sectors, in the first-ever competitive public sector hiring process. Supporting their diversification goals, and to help kick-start the tourism sector, the government has recently hired a provider to launch an online visa portal in early 2023.

“With the 2020-21 emergencies from the COVID-19 pandemic and Bata explosions, implementation of governance measures under the 2019 EFF-supported program and the 2021 RFI commitments has been slow, but recently gained momentum. The authorities have made substantial progress since the Executive Board discussion of the 2022 Article IV Consultation, with key measures completed in the last month. Final audit reports have been published in the Ministry of Finance website, including the audit of COVID-related expenses, and the audits of state-owned oil and gas companies (GEPetrol and Sonagas).

“Other measures have also advanced, but more progress and complete implementation is needed. The authorities have shared with staff a preliminary audit report of Bata-related expenses, which they expect to be finalized and published soon. The authorities have prepared a progress report on their 2019 Good Governance and Anti-Corruption Action Plan, to be published soon. The authorities are finalizing the regulations for the asset declaration regime of public officials and for the governance of the Anti-Corruption Commission, in line with the 2021 Anti-Corruption Law. The authorities are working to publish the contracts and beneficial ownership information of all companies that were awarded procurement contracts for COVID and Bata emergencies, as prescribed in their regulation adopted in December 2021. A website for the Official Gazette has been set up, and the authorities have uploaded relevant legal documents, but additional documents remain to be uploaded. A list of assets for privatization and a list of assets that will be subject to other forms of private management have been approved by the Council of Ministers and published on the Ministry of Finance website, with ongoing discussions on the composition of the lists.

“Implementation of the domestic arrears’ regularization plan is also progressing, albeit slowly. The authorities have recently made progress with a first stage of the operation, but a strong implementation and completion of the rest of the operation is promptly needed to help strengthen the banking sector and support non-hydrocarbon sector recovery.

“With the 2019 EFF-supported program ending in December 2022, discussions on continued Fund program engagement are ongoing, including the authorities’ interest in a new program. In this context, the authorities re-iterated their plans for continuing with their structural reform agenda initiated under the 2019 EFF and implementing high-quality fiscal measures to support inclusive growth, diversification, and domestic and external stability. In addition, the authorities’ economic program will continue to be supported by IMF technical assistance.

“During the discussions, the IMF team met with Minister of Finance, Economy and Planning Valentin Ela Maye Mba, State Secretary of Budget and Financial Control Antonio Ngua Mba Eyang, BEAC Second Deputy National Director Jaime Edu Andomo Obono, and other senior government officials.

“The IMF team would like to thank the authorities for the candid and constructive discussions.”