IMF Executive Board Concludes 2023 Article IV Consultation with Equatorial Guinea

January 16, 2024

Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded today the 2023 Article IV consultation [1] with Equatorial Guinea.

Equatorial Guinea’s economy remains confronted with a continuous decline in oil production. After the 2022 respite, the economy is expected to fall back into a deep recession, with an estimated 8.8 percent fall in economic activity in 2023. Inflation is expected to have moderated to 2.5 percent from 4.9 percent in 2022, while the current account surplus would have fallen to 1 percent of GDP from 2.4 percent in 2022. The overall fiscal surplus is estimated to have dropped to 0.3 percent of GDP from 13.6 percent in 2022, while the non-hydrocarbon primary fiscal deficit is expected at 23.3 percent of non-hydrocarbon GDP, up from 22.7 percent of non-hydrocarbon GDP in 2022.

Near and medium-term growth prospects appear challenging with the projected reduction in oil production and lackluster growth in the non-oil economy due to underlying structural weaknesses. Real GDP growth is projected to contract by 5.5 percent in 2024, and the economy would remain on average in recession over the medium term. The current account balance surplus would turn into deficit, averaging -7.6 percent of GDP over 2024-28. However, based on the authorities’ announced plans, the fiscal surplus is projected to increase to 2.9 percent of GDP and the non-hydrocarbon primary deficit to improve to 19.5 percent of non-hydrocarbon GDP in 2024.

This outlook is subject to uncertainty, and risks remain titled to the downside. These include faster-than-projected depletion of oil reserves, waning demand for hydrocarbons amid acceleration of global transition to net zero and delays in implementing key policy reforms.

Executive Board Assessment [2]

Executive Directors agreed with the thrust of the staff appraisal. They noted that Equatorial Guinea’s economy expanded in 2022 after a long period of recession. However, the recovery was short‑lived, and the medium‑term outlook faces substantial risks stemming from the projected decline in oil production and challenging business environment. Against this background, Directors urged front‑loaded efforts to support macroeconomic and financial stability, transformative reforms to promote economic diversification, and advancement of the governance and anti‑corruption agenda to support sustainable growth.

To ensure fiscal sustainability, Directors welcomed the authorities' agreement to anchor fiscal policy on nonhydrocarbon primary balance and to consolidate public finances. They commended the authorities for approving a 2024 budget that targets a substantial fiscal adjustment, while boosting investment in health and education.

Directors emphasized the importance of addressing risks and vulnerabilities in the banking sector to safeguard financial stability. They encouraged the authorities to complete their ongoing efforts to restructure and recapitalize the troubled part of the banking sector and to address the high level of non‑performing loans. These efforts should be coupled with actions to recover assets to limit the budgetary cost. While welcoming progress made so far to settle domestic arrears, Directors called for a comprehensive and transparent plan.

Directors called for bold structural reforms to foster economic diversification and support inclusive, sustainable growth. Reform priorities include reducing the regulatory burden for business creation, boosting investment in human capital, and ensuring the well‑functioning and efficiency of markets.

Directors underscored the urgent need for strong implementation of the governance and anti‑corruption reforms agenda. The funding of the anti‑corruption commission, a steppingstone for an effective implementation of the asset declaration regime, and the adoption of the anti‑corruption law are welcome steps, and efforts to fully implement these reforms are encouraged. Directors also stressed the importance of improving transparency in the hydrocarbon sector, strengthening the effectiveness of the AML/CFT framework, and addressing the constraints in economic data generation and provision.

Noting the authorities’ interest in a financing arrangement with the Fund, Directors generally underlined the importance of building a track record on reforms alongside continuing to strengthen capacity, including through Fund technical assistance, to support their efforts.

It is expected that the next Article IV consultation with the Republic of Equatorial Guinea will be held on the standard 12‑month cycle.

Equatorial Guinea: Selected Economic and Financial Indicators, 2019–28

Estimates

Projections

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

(Percent of GDP, unless otherwise specified)

Production, Prices, and Money

Real GDP

-5.5

-4.8

-0.4

3.2

-8.8

-5.5

3.7

-4.1

-0.2

-0.8

Hydrocarbon GDP 1

-8.8

-3.5

-7.3

1.1

-21.0

-16.9

4.7

-16.5

-7.3

-10.5

Non-hydrocarbon GDP

-1.4

-6.3

7.7

5.4

3.0

3.0

3.1

3.4

3.2

3.5

GDP deflator

-3.2

-10.2

19.9

4.5

-10.1

10.3

1.2

5.1

3.4

4.1

Hydrocarbon sector

-11.7

-28.0

57.8

9.7

-37.4

4.8

-1.2

-4.5

-2.9

-1.9

Non-Hydrocarbon sector

2.7

3.3

-1.7

0.3

2.8

7.0

2.1

2.9

2.5

2.3

Consumer prices (annual average)

1.2

4.8

-0.1

4.9

2.5

5.0

1.8

2.6

2.2

2.0

Consumer prices (end of period)

4.3

-0.6

2.9

5.0

2.2

6.3

0.4

2.2

2.3

1.8

Monetary and Exchange Rate

Broad money

19.6

-7.0

0.4

20.7

-6.6

10.1

4.1

4.0

3.2

3.3

Nominal effective exchange rate (- = depreciation)

-1.5

2.5

0.9

-4.4

…

…

…

…

…

…

Real effective exchange rate (- = depreciation)

-2.2

6.0

-2.2

-6.5

…

…

…

…

…

…

External Sector

Exports, f.o.b.

-8.3

-46.6

33.7

83.7

-45.3

-10.0

1.8

-18.3

-8.7

-11.4

Hydrocarbon exports

-15.7

-37.9

31.7

87.9

-46.5

-10.7

1.7

-19.6

-9.6

-12.7

Non-hydrocarbon exports

63.3

-89.9

94.7

-3.1

0.5

3.1

2.9

3.3

3.7

3.8

Imports, f.o.b.

-24.7

-27.7

4.4

15.1

-11.7

8.3

4.3

-11.8

9.2

1.6

Terms of trade

7.3

-24.5

49.3

-18.5

-36.2

5.0

5.0

-8.8

-6.5

-2.7

Government Finance

Revenue

-14.3

-33.9

27.0

117.1

-37.8

9.8

-22.7

-9.8

0.4

0.5

Expenditure

-20.6

-17.7

-6.4

46.6

9.8

-1.7

6.4

4.4

6.1

5.7

Investment and Savings

Gross investment

10.9

4.7

4.8

13.6

14.7

14.3

15.7

16.1

16.2

16.3

Gross national savings

3.4

3.9

9.0

16.1

15.7

10.5

9.7

7.9

6.6

5.7

Government Finance

Revenue

18.6

14.4

15.3

30.8

23.4

24.6

18.1

16.2

15.8

15.4

Of which:

hydrocarbon revenue

14.8

10.7

12.3

27.9

19.2

19.7

13.1

10.9

10.3

9.8

hydrocarbon revenue (as percentage of non-hydro GDP)

3.8

3.7

3.0

2.9

4.2

4.9

5.0

5.3

5.4

5.6

non-hydrocarbon revenue

7.6

5.4

5.1

5.1

5.6

6.2

6.3

6.4

6.4

6.4

non-hydrocarbon revenue (as percent of non-hydro GDP)

16.8

16.2

12.7

17.2

23.0

21.7

22.0

22.8

23.5

24.0

Expenditure

1.8

-1.8

2.6

13.6

0.3

2.9

-3.9

-6.6

-7.7

-8.7

Overall fiscal balance (Commitment basis)

1.8

-1.8

2.6

13.6

0.3

2.9

-3.9

-6.6

-7.7

-8.7

Overall fiscal balance (Cash basis)

-0.5

-3.2

1.0

11.9

-2.0

1.1

-5.3

-7.7

-8.8

-9.6

Non-hydrocarbon primary balance 2

-11.5

-11.2

-8.6

-13.1

-17.3

-15.3

-15.1

-15.5

-15.9

-16.3

Non-hydrocarbon primary balance (as percent of non-hydrocarbon GDP)

-19.5

-16.8

-14.6

-22.7

-23.3

-19.5

-19.1

-18.6

-18.6

-18.6

Change in domestic arrears

-2.3

-1.5

-1.6

-1.7

-2.3

-1.8

-1.4

-1.1

-1.1

-1.0

External Sector

Current account balance (including official transfers; - = deficit)

-7.5

-0.8

4.2

2.4

1.0

-3.8

-6.1

-8.1

-9.6

-10.6

Imputed Foreign Reserves (net), US$ billions

-0.2

-0.5

-0.3

1.1

1.1

0.8

0.3

-0.5

-1.4

-2.5

Debt

Total public debt

43.2

49.4

42.1

34.6

42.1

34.0

33.3

36.0

37.4

38.1

Domestic debt

29.2

34.0

29.9

24.6

31.9

31.9

32.4

33.5

32.9

32.4

External debt

14.0

15.4

12.2

10.0

10.2

2.1

0.9

2.5

4.5

5.7

External debt service-to-exports ratio (percent)

4.8

7.6

7.8

4.3

7.8

6.1

6.6

5.5

4.7

5.3

External debt service/government revenue (percent)

11.9

15.2

16.5

7.6

11.9

7.7

10.8

8.1

6.4

6.4

Memorandum Items

Oil price (U.S. dollars a barrel) 3

57.7

43.3

70.8

99.0

82.7

80.1

76.5

73.4

71.1

69.4

Nominal GDP (billions of CFA francs)

6,658

5,695

6,804

7,340

6,019

6,277

6,583

6,634

6,848

7,074

Nominal GDP (millions of US dollars)

11,364

9,894

12,269

11,767

9,917

10,361

10,914

11,013

11,356

11,715

Hydrocarbon GDP (billions of CFA francs)

2,754

1,914

2,801

3,107

1,535

1,337

1,383

1,103

993

872

Non-hydrocarbon GDP (billions of CFA francs)

3,905

3,781

4,003

4,233

4,484

4,939

5,199

5,531

5,855

6,201

Hydrocarbon volume (barrels)

11.4

11.0

13.2

21.3

20.8

15.4

10.8

8.2

7.0

6.7

Oil volume (crude + condensado, millions of barrels)

52.6

52.4

43.4

39.5

28.7

27.8

30.4

25.8

24.1

21.3

Gas volume (LNG + propane + butane + methanol, millions of bbls oil equivalent)

55.9

48.7

55.1

62.2

53.2

33.9

33.9

27.5

25.0

23.8

Total Hydrocarbon Volume (in millions of barrels of oil equivalent)

108.6

101.2

98.5

101.7

81.9

61.7

64.3

53.3

49.1

45.1

Exchange rate (average; CFA francs/U.S. dollar)

585.9

623.8

605.8

602.4

Gross Reserve assets at the BEAC (months of next years' imports) 4

0.2

0.3

0.2

6.1

5.4

3.7

2.0

-0.7

-3.8

-3.3

Sources: Data provided by the Equatoguinean authorities; and staff estimates and projections.

1Including oil, LNG, LPG, butane, propane, and methanol.

2Excluding oil revenues, and interest earned and paid.

3 The local price of crude oil is the Brent and includes a quality discount.

4 Refers to imputed reserves.


[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] At the conclusion of the discussion the acting Chairman of the Board summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in Summings Up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm .

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