Country Report Equatorial Guinea

Summary

Although the regime had given signs that it intended to open up the political system, the overwhelming victory of the ruling party in the May 2008 legislative poll cast doubts over the legitimacy of the electoral process.
The president, Teodoro Obiang Nguema Mbasogo, is expected to be re-elected by a landslide in 2009, as the population is afraid to voice discontent and he enjoys the support of a significant proportion of the Fang ethnic group.
Despite this apparent underlying stability, given the personality-based nature of the regime the security situation could deteriorate rapidly if Mr Obiang were to be forced to step down suddenly.
Improving public infrastructure, enhancing the efficiency of public administration and promoting economic diversification will be the government's main economic policy objectives over the forecast period.
Real GDP is expected to post strong growth of 11.5% in 2008 as production from new oil- and gasfields reaches full capacity, before falling to 1.1% in 2009, as no new fields are planned to come on stream.
Inflation is forecast to fall from 6% in 2008 to 5% in 2009, owing to a slowdown in economic activity and in money supply growth.
Higher oil production and a sharp increase in international oil prices are expected to widen the current-account surplus to 18.7% of GDP in 2008, narrowing to 15.6% of GDP in 2009 as a result of higher imports.

The pro-presidential coalition led by the ruling Partido Democratico de Guinea Ecuatorial (PDGE) won the May 4th legislative election by a landslide, obtaining 99 out of 100 seats in the National Assembly.
Opposition parties have denounced electoral irregularities and the intimidation tactics used by the regime, including the increased military presence on the streets.
The government has allegedly asked the Spanish authorities to extradite the exiled opposition leader, Severo Moto Nsa, following his arrest for his alleged participation in the smuggling of arms to Equatorial Guinea.
According to data recently published by the IMF, the government has placed roughly two-thirds of its fiscal surplus in commercial banks abroad in order to obtain higher yields for its reserves, which contravenes regional regulations.
The state has continued to negotiate with oil companies operating in the country to finalise its purchase of Devon's assets in Equatorial Guinea and to increase its stake in several other blocks.