|Select Economic and Financial Indicators||2014||2015||2016||2017e||2018f|
|Real GDP (% change)||-0.7||-9.1||-9.7||-7.4||-7.8|
|GDP (USD bn)||21.5||12.2||10.2||10.1||9.9|
|Fiscal Balance (% GDP)||-7.2||-12.6||-9.8||-6.6||-5.5|
|Broad Money (% change, end period)||-14.1||-10.9||-16.4||19.8||15.6|
|Exports (USD bn)||12.8||6.0||4.7||4.7||3.6|
|Imports (USD bn)||9.0||5.8||3.7||3.4||2.5|
|Current Account Balance (% GDP)||-4.3||-17.7||-10.5||-8.0||-7.4|
|FX Reserves (USD bn, end period)||4.5||1.9||0.1||0.0||0.0|
|Exchange Rate (average)||496.16||594.11||597.41||588.92||565.09|
|Oil production (mn bpd)||0.276||0.301||0.285||0.265||0.25|
Real GDP: Despite a recovery in crude oil prices, declining output from mature oil fields amid limited investment into expanding oil production continues to cloud the growth outlook for Equatorial Guinea. The slump in for the hydrocarbon sector (60% of GDP) on account of declining oil production has underpinned a deep fiscal retrenchment which began in 2015 and a scale down of activity in the construction sector (21% of non-hydrocarbon GDP). Accordingly, we remain pessimistic over the economy and forecast continued recession over 2018.
Inflation: As a net oil exporter with subsidized fuel prices, the central government shoulders the burden of the rise in crude prices with limited pass-through to the domestic economy. Furthermore, as a member of the CFA franc, inflationary expectations are well anchored which leaves developments in food production as the driver of price pressures.
Fiscal balance: Given the out-sized share of oil in fiscal receipts, Equatorial Guinea has undergone a fiscal consolidation via a cutback on the implementation of its large scale public investment plan (Horizon 2020). Improving oil revenues and continued fiscal contraction should translate into a reduction in the budget deficit to 5.8% of GDP in 2018 (2017e: 8.1%).
Current account: Improvement in oil prices and cutback in capital imports as the government curtails fiscal spending underpins a moderation in the current account deficit over 2018 to 7.4% from the elevated levels observed since the 2014 collapse in crude oil prices.
Given the centrality of oil revenues in Equatorial Guinea’s economy, the key risk to outlook is from fresh downside to oil prices.
Exchange Rate Structure
|Target||XAF655.957 to EUR1|
|Type of intervention||Via Central Bank|
|FX Products||Spot||Forwards||Non-deliverable Forwards||Options||Swaps|
|Daily trading volume (USD mn)||n/a||n/a|
|Average trade size (USD mn)||n/a|
|FX Market Structure||BEAC’s exchange regime is free of restrictions on payments and transfers for current international transactions, apart from restrictions maintaned for security.|
|Non-resident FX Regulations||Spot||Forwards||Non-deliverable Forwards||Options||Swaps|
|Trade and FDI flow||No restrictions||n/a|
|Resident FX Regulations||Spot||Forwards||Non-deliverable Forwards||Options||Swaps|
|Trade and FDI flow||No restrictions||n/a|
|Primary Market||Treasury bills||Treasury notes||Treasury bonds||Central Bank bills||OMOs|
|End use||Government financing|
|Daily trading volume||Limited trading||n/a|
|Average trade size||Limited trading|
|Ecobank local affiliate contact details:|
Ecobank Equatorial Guinea, Avenida de la Independencia, Apdo 268, Malabo
Tel: +333 098 271 / 555 300 203
|Equatorial Guinea Debt||2014||2015||2016||2017e||2018f|
|Government debt (% GDP)||11.0||28.1||38.4||53.8||64.3|
|External debt (official creditors, % GDP)||4.8||8.5||10.1||15.4||22.1|
|External public debt stock (USD bn)||1.0||1.0||1.0||1.6||2.2|
|Share of total sub-Sahara debt (%)||0.4||0.4||0.3||0.5||0.6|
Hydrocarbon & mineral production
Equatorial Guinea became Middle Africa’s third largest oil producer in 2013, overtaking Republic of Congo, following the start of production on the Alen gas-condensate field in Q4 2013. Equatorial Guinea subsequently joined OPEC in May 2017. The country’s crude oil production was estimated at 325,000 bpd in 2017, all of which was offshore. Equatorial Guinea is also host to one of three LNG plants in Middle Africa. The USD1.4bn Punta Europa LNG plant on Bioko Island exports nearly all of the country’s gas production, which was estimated at 3.7mn tonnes of LNG per year. A second LNG train, built at a cost of USD4bn, was due to start operations in 2017, with the potential to increase LNG output to 7.4mn tonnes per year. Equatorial Guinea consumes around 5,000 bpd of petroleum products, which are made up entirely of imports through Luba and Malabo seaports. Petroleum products are distributed by Getotal, a jointly owned venture by Total and the government of Equatorial Guinea.
Aside from hydrocarbons, Equatorial Guinea has no significant mineral output. The country’s mainland territory is believed to hold reserves of gold, diamonds and coltan, but to date there has only been small-scale artisanal production of gold.
Soft commodity production
Equatorial Guinea lacks a developed agricultural sector. Most agricultural output is focused on food crops (such as cassava & yams) and micro production of cash crops (such as cocoa). The country’s only major soft commodity is raw timber, with output worth US$200mn in 2017, all of which came from the mainland.
Equatorial Guinea’s imports totalled US$1.1bn in 2016. The country is reliant on imports of capital goods and industrial raw materials, reflecting the underdeveloped manufacturing sector and large-scale infrastructure investment. Key imports in 2016 included machinery, vehicles & ships (US$365mn), electronics (US$71mn), iron & steel (US$68mn) and aluminium (US$19mn). The country also imports large volumes of foodstuffs, including US$109mn of beverages (mostly beer & water) and US$56mn of fish.
Equatorial Guinea’s exports totalled US$4.6bn in 2016. This was one third lower than the previous year, and 70.6% below 2012, reflecting the slump in crude oil and gas prices since 2014. Hydrocarbons dominate exports, with crude oil (US$3.2bn), gas (US$879 mn) together making up 87.5% of export revenues in 2016. Most of the country’s crude oil is exported to South Korea, India, Spain and China, while its gas goes to India and Japan. Equatorial Guinea also exported US$280mn worth of raw timber, mostly to China, although large illicit volumes are not captured by official data.