## IMF Staff Concludes Visit to Equatorial Guinea for the Staff-Monitored Program and Program Negotiations under the Extended Fund Facility _IMF News, September 27, 2019_ ## Source details **Canonical URL:** [IMF Staff Concludes Visit to Equatorial Guinea for the Staff-Monitored Program and Program Negotiations under the Extended Fund Facility](https://www.imf.org/en/news/articles/2019/09/27/pr19357-equatorial-guinea-imf-staff-concludes-visit-to-equatorial-guinea) ## Other formats - [Markdown version](/en/news/articles/2019/09/27/pr19357-equatorial-guinea-imf-staff-concludes-visit-to-equatorial-guinea/index.md) - [Structured JSON version](/en/news/articles/2019/09/27/pr19357-equatorial-guinea-imf-staff-concludes-visit-to-equatorial-guinea/index.json) - [Bundle manifest](/en/news/articles/2019/09/27/pr19357-equatorial-guinea-imf-staff-concludes-visit-to-equatorial-guinea/bundle-manifest.json) ## Bibliographic details - Published: September 27, 2019 --- ### Mission outcomes and procedural status - IMF mission led by Lisandro Ábrego visited Malabo during Sep 16-27 to conduct the second and final review of the Staff-Monitored Program (SMP) and negotiate a three-year program supported by the Extended Fund Facility (EFF). - The authorities and IMF staff reached staff-level agreement to complete the second and final review of the SMP. - Substantial progress was made on discussions of a three-year EFF-supported program; discussions would continue next month during the Annual Meetings in Washington, D. C. - Goal: bring an IMF-supported program for Board consideration before the end of this year. - The mission will not result in a Board discussion; once concluded, the IMF team would submit a report in support of the conclusion of the second SMP review and Equatorial Guinea’s request for a three-year arrangement under the EFF for consideration to the Executive Board. ### Key quantitative fiscal and macroeconomic findings - The authorities met all the quantitative fiscal and monetary targets for end-July 2018, except for one. - Fiscal balances: - Government recorded an overall surplus of 0.5 percent of GDP in 2018. - This is a significant improvement from the deficit of 2.5 percent of GDP posted in 2017. - Fiscal balance has continued to improve in the first half of 2019. - Reserves at the BEAC have increased during the first half of 2019. - Economic activity: - Economic activity continued to contract in 2018, driven by lower oil production. - The non-oil sector is estimated to have experienced some modest growth in 2018 but remains constrained by weak private sector confidence and low credit growth. - The non-oil sector is projected to strengthen in 2019 but overall growth would remain negative. ### Structural reforms and governance actions - Implementation status of structural measures for the second review: - Three out of five structural measures for the second review have been implemented. - Implemented measures include: - Parliament ratified the UN Convention Against Corruption. - Government hired internationally recognized firms to audit GEPetrol and Sonagas and to conduct an audit of domestic arrears. - Work on presenting a membership application to the Extractive Industries Transparency Initiative (EITI) has advanced but has not been completed; it was agreed the application would be submitted before IMF Board consideration of the EFF-supported program. - IMF staff prepared a governance diagnostic report in collaboration with the authorities; this report will provide the basis for a strategy to foster good governance to be implemented as part of the EFF program. - Authorities have taken measures to improve the business climate and support economic diversification, including reprogramming the long-term development strategy Horizonte 2020 based on conclusions of the Third National Economic Conference. ### EFF program objectives and policy priorities - Overarching goal: support the recovery of economic activity and foster sustainable inclusive economic growth. - Program seeks to: - Sustain macroeconomic stability while promoting social protection. - Strengthen the banking sector. - Promote economic diversification. - Foster good governance and transparency. - Support the fight against corruption. - Expected program effects: - Facilitate economic policy implementation. - Bolster investor confidence. - Catalyze resources from other multilateral institutions. - Contribute to the CEMAC strategy. - Facilitate adoption of reforms to address structural problems. ### Agreed policy directions and recommended measures - To maintain macroeconomic and financial stability: - Further strengthen fiscal balances. - Design and adopt a credible plan to repay domestic arrears. - Agreement on accompanying policy measures, some already being implemented. - Consensus on changing composition of expenditures to create room for higher social spending to foster inclusive growth and mitigate effects of adjustment on low-income groups. - Agreement on reforms to: - Stimulate non-hydrocarbon growth. - Increase transparency. - Improve governance and anti-corruption frameworks. ### Next steps and timeline - Discussions to continue in Washington D.C. during the Annual Meetings, with the goal of reaching agreement on a Fund-supported program during 2019. - Upon conclusion of negotiations, IMF staff would submit the report supporting the conclusion of the second SMP review and the request for a three-year EFF arrangement to the Executive Board. ### Engagements and meetings - The mission met with: - H.E. President Teodoro Obiang Nguema Mbasogo. - Prime Minister Francisco Pascual Obama Asue. - Minister of Finance, Economy and Planning, César Mba Abogo. - Minister of Mines and Hydrocarbons, Gabriel Obiang Lima. - BEAC National Director, Genoveva Obiang. - Other senior government officials, members of the diplomatic community, representatives of the private sector and civil society. - Media relations contact: PRESS OFFICER: Meera Louis; Phone: +1 202 623-7100; Email: MEDIA@IMF.org *IMF Staff press release No. 19/357, Sep 27, 2019 — statement issued by mission chief Lisandro Ábrego in Malabo.* --- ## References - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2019/09/27/pr19357-equatorial-guinea-imf-staff-concludes-visit-to-equatorial-guinea_