Country Report Equatorial Guinea January 2009

Outlook for 2009-10

• 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 apparent underlying stability, given the personality-based nature of the regime the security situation could deteriorate rapidly if ill-health were to force MrObiang to step down suddenly.
• 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.
• Lower oil revenue is forecast to cause the fiscal surplus to narrow significantly over the forecast period.
• Real GDP is expected to contract by just 0.3% in 2009 and 1% in 2010, as no new oilfields are scheduled to come on stream and oil production at the Zafiro oilfield will continue to decline.
• Inflation is forecast to fall from an estimated 7.5% in 2008 to an average 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 7.6% of GDP in 2008, the current account is expected to record a deficit equivalent to 24.5% of GDP in 2009 and 5.9% of GDP in 2010, owing to sharply lower oil prices.

Monthly review

• The UN has issued a negative appraisal of the country's penal and judiciary system, stating that the use of torture is systematic, the judiciary lacks independence and the state of the country's prisons is deplorable.
• The main land border crossing between Equatorial Guinea and Cameroon has been closed, as tensions have risen following the killing of a Cameroonian fisherman by the EquatoGuinean security forces.
• The government has reprioritised the projects planned for the next decade, as not all of them can be funded if oil prices remain low.
• The regional central bank has reduced the rediscount rate by 75 basis points in order to ease monetary conditions.
• The government has reportedly repatriated US$2.8bn of public funds deposited in banks abroad in order to avoid the negative consequences of the global financial turmoil.
• Production at the Zafiro oilfield is estimated to have fallen from a peak of 260,000 barrels/day (b/d) in 2005 to around 185,000 b/d in 2008.

Source: Country Report

This report covers the following industry codes:
SIC Code: 49
NAICS Code: 22

This report covers the following industry codes:
SIC Code: 49
NAICS Code: 22