Press Release No. 05/13

Press Release: Statement by IMF Deputy Managing Director Agustín Carstens at the Conclusion of a Visit to Equatorial Guinea

January 27, 2005

Mr. Agustín Carstens, Deputy Managing Director of the International Monetary Fund (IMF), issued the following statement earlier today in Malabo:

"This is my first visit to Equatorial Guinea as Deputy Managing Director of the IMF and I want to thank the authorities here for their gracious hospitality.

"As you know, I have spent the past two days here in Malabo, where I have had the opportunity to meet with President Teodoro Obiang Nguema Mbasogo as well as with Prime Minister Miguel Abia Biteo Borico. I have also had valuable discussions with Finance Minister Marcelino Owono Edu, National Director of the BEAC Francisco Garcia Berniko, and other senior officials. This afternoon, I visited the Marathon Oil LPG/LNG facility and an education sector project. Finally, I have had the opportunity to hear the views of a distinguished group of parliamentarians from the countries of the Economic and Monetary Community of Central African States (CEMAC)--Cameroon, the Central African Republic, the Republic of Congo, Chad, Equatorial Guinea, Gabon--at an IMF/World Bank workshop on Transparency and Accountability in Resource Management.

"In my meeting with the authorities, I noted that Equatorial Guinea was one of Africa's fastest growing economies, benefiting from oil production. I pointed out the need to manage these natural resources well in order to ensure long-term sustainability. I also stressed that with its vast oil and gas wealth, Equatorial Guinea is better positioned to target priority sectors, while safeguarding macroeconomic stability, and address the large social and development needs of its population and make rapid progress toward achieving the Millennium Development Goals.

"Notwithstanding the favorable prospects for the oil sector and the increase in related revenues to the government, I underscored the need to press ahead with the structural reform agenda in order to improve the competitiveness of the economy, develop and diversify the rest of its non-oil economy, and create an environment conducive to private sector activity.

"Transparency and accountability are essential for good governance, private investment, and an improved business climate. In my discussion with the President, I was greatly encouraged by the importance he placed on transparency in oil resource management and public expenditure. We agreed on the need to build on the authorities' recent efforts to increase the transparency of oil related transactions and improve public accounting procedures, including by reconciling and routinely publishing oil revenue data, the government's foreign asset holdings, and the audited accounts of the state oil company.

"My visit has been a brief one, but my meetings have nevertheless clearly indicated the extent of the economic challenges facing Equatorial Guinea. During my discussion with the President, he expressed concern about the administration's serious institutional capacity constraints, which hinder its ability to implement economic policy. I noted that for the immediate period ahead, the focus should be on building capacity in the priority areas identified by the IMF report on the observance of standards and codes (ROSC) in fiscal transparency and urged the President to seek the support of bilateral and multilateral development partners and also draw on the expertise of development partners in identifying external resident advisors.

"I was particularly glad to participate in today's resource management workshop, which was organized at the initiative of Equatorial Guinea's authorities. The proceedings showed that CEMAC members have keenly observed the experiences of other countries in sustainably exploiting natural resources. In the workshop, we learned of the importance of current international resource transparency initiatives for the Gulf of Guinea countries. We also heard suggestions about the role of national parliaments, government agencies, and other stakeholders in the management of oil resources. By considering the best practices functioning in other countries, CEMAC members are well placed to make optimal use of their own natural resources."