Country Report Equatorial Guinea June 2009

Outlook for 2009-10

• 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 MrObiang 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 4.5% in 2009 and by 0.6% in 2010, owing to an expected fall in oil production and a sharp reduction in activity in the non-oil sector as the government reduces fiscal spending.
• Inflation is forecast to fall to 4% in 2009 owing to a decline in global food and oilprices 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 9.3% of GDP in 2009 and 7.9% GDP in 2010, owing to a dramatic fall in average oil prices.

Monthly review

• The Spanish attorney in charge of anti-corruption activities has supported the suit filed by a Spanish non-governmental organisation to investigate the origin of the funds used by Mr Obiang to purchase properties in Spain.
• The main opposition party, Convergencia para la Democracia Social, has chosen its long-serving leader, Placido Miko, as its candidate in the forthcoming presidential election.
• Oil production from the Ceiba and Okume oilfields operated by Hess Corporation has been higher than previously expected, reaching some 83,000barrels/day in 2008.
• The US has remained the country's main trading partner, accounting for 24% of exports in 2008; Spain has overtaken China in second position.
• Repsol YPF of Spain has become the operator of Block C after the previous operator, ExxonMobil of the US, relinquished its interest in the block.

Source: Country Report

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