Country Report Equatorial Guinea July 2009

Summary

The president, Teodoro Obiang Nguema Mbasogo, is expected to be re-elected by a landslide later this year, supported by harsh, repressive measures and the backing 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.
Following an attack on the presidential palace in February, there is a higher risk that Nigerian rebel movements operating in the Niger Delta could attack installations in Equatorial Guinea again.
The regime has been forced to re-evaluate its economic development programme in line with lower oil prices and reduced output and is expected to reduce capital expenditure.
Real GDP is expected to contract by 2.5% in 2009, owing to an expected fall in oil production and a sharp reduction in activity in the non-oil sector. Real GDP is forecast to grow by 0.5% in 2010.
Inflation is forecast to fall to 4% in 2009 owing to a decline in global food and oil? prices and lower government spending, before rising to 4.5% in 2010.
After posting an estimated surplus equivalent to 7.6% of GDP in 2008, the current account is expected to record deficits equivalent to 4.6% of GDP in 2009 and 5.2% GDP in 2010, owing to a dramatic fall in average oil prices.

The death of the Gabonese president, Omar Bongo Ondimba, could affect relations with Equatorial Guinea if Gabon's new ruler makes a more assertive claim over the disputed sovereignty of three uninhabited islets in Corisco Bay.
The opposition has claimed that there are almost 50 political prisoners in the country, but the regime has continued to deny their existence.
The government has refuted all the corruption allegations made by a Spanish court, dismissing them as falsehoods created by well-known pressure groups frustrated at Equatorial Guinea's rapid development.
The regional central bank has cut its rediscount rate by 25 basis points to ease pressure on the region's economy.
A South African firm, Gasol, and the national gas company, Sonagas, have created a joint venture to develop the associated gas resources at the Zafiro? field.
Foreign-exchange reserves fell in the first quarter of 2009 from US$4.4bn to US$3.9bn.

Source: Country Report

This report covers the following industry codes:
SIC Code: 37;49;60
NAICS Code: 336;22;52