Country Report Equatorial Guinea February 2009

Outlook for 2009-10

• The president, Teodoro Obiang Nguema Mbasogo, is expected to be re-elected by a landslide later this year, as the public are afraid to voice discontent and he enjoys the support of a significant proportion of the Fang ethnic group.
• Despite apparent underlying stability, the security situation could deteriorate rapidly if ill-health were to force Mr Obiang to step down suddenly, given the personality-based nature of the regime.
• There is a risk that Nigerian rebel movements operating in the Niger Delta could attack installations in Equatorial Guinea, as they have reportedly threatened the government over its dealings with the Nigerian authorities.
• Economic diversification will remain the government’s main economic policy objective, but the regime will be forced to re-evaluate its economic development programme in line with lower oil prices.
• Real GDP is expected to contract by 2.2% in 2009 and 1% in 2010, as no new oilfields are scheduled to come on stream and production at the Zafiro oilfield will continue to decline.
• Inflation is forecast to fall from an estimated 7.5% in 2008 to an average rate of 4.5% in 2009 and 5% in 2010, reflecting the decline in global food and oil prices.
• After posting an estimated surplus equivalent to 7.1% of GDP in 2008, the current account is expected to record a deficit equivalent to 20.9% of GDP in 2009 and 5.2% of GDP in 2010, owing to a dramatic fall in average oil prices.

Monthly review

• The strict measures taken by Equatorial Guinea to control illegal immigration have continued to generate tensions with Cameroon.
• In his traditional end-of-year speech, Mr Obiang promised rapid changes but failed to mention the global economic downturn or the steep fall in oil prices.
• Equatorial Guinea has become a member of a new permanent organisation intended to stabilise gas prices and monitor markets: the Forum of Gas Exporting Countries (FGEC).
• South Africa’s Ophir Energy has made two gas discoveries in Block R. The news is particularly positive because it will increase oil companies’ interest in the deepwater blocks lying south-west of Bioko Island.
• The government has announced that it has taken the first steps to create a company responsible for securing gas supplies from different sources to feed new processing facilities in Equatorial Guinea.

This report covers the following industry codes:
SIC Code: 60;47;1
NAICS Code: 52;48;11