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Country Report Equatorial Guinea 3rd Quarter 2012

  • Publication Date:July 2012
  • Publisher:EIU
  • Product Type: Report
  • Pages:28

Country Report Equatorial Guinea 3rd Quarter 2012

Outlook for 2012-16

  • The major threat to political stability in 2012-16 is the risk of the elderly president, Teodoro Obiang Nguema Mbasogo, leaving office suddenly, owing to either ill health or a coup, which could create a destabilising power contest.
  • Policy in 2012-16 will be guided in principle by the government's medium-term strategy paper, the National Economic Development Plan: Horizon 2020, which targets economic diversification and poverty reduction.
  • The difficult business environment, which constrains private-sector investment, is expected to persist; in particular, corruption among officials will remain rampant.
  • The Economist Intelligence Unit expects the fiscal account to remain in surplus, underpinned by rising hydrocarbons output for most of the forecast period; oil and gas receipts form the bulk of government revenue.
  • Helped by the start-up of production from the Aseng oilfield, GDP growth will accelerate to 6.3% in 2012. Growth will remain robust in 2013-14, before slowing in 2015-16 on the back of a lull in new oilfield start-ups.
  • Despite the weaker outlook for the CFA franc, subdued global commodity prices will help to reduce average annual inflation to 5.7% in 2012-16.
  • Given our forecasts for GDP growth and the oil sector, we expect the current-account deficit to record a small surplus-of 1.1% of GDP-in 2012, before moving back into deficit in 2013-16.

Review

  • The president's eldest son was appointed second vice-president in charge of national defence and security, a move designed to increase his political weight and prepare him for succeeding his father.
  • A new cabinet was appointed that included several of the president's family members and close allies, further boosting his influence on governmental affairs.
  • The army's salaries were doubled in an effort to boost its support for the new military leadership and reduce discontent within the ranks. Meanwhile, civil servants have unsuccessfully demand pay rises.
  • A human rights activist and opposition politician was pardoned by the president, highlighting his overwhelming influence over the judiciary as well as the regime's continued efforts to harass opposition activists.
  • US prosecutors have provided more evidence in a civil forfeiture complaint against the second vice-president, reflecting persistent concerns over the misuse of public funds.

Please Note: Due to the Nature of This Report The Toc is Not Available

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