Country Report Equatorial Guinea October 2009

Summary

The president, Teodoro Obiang Nguema Mbasogo, is expected to be re-elected in a landslide victory in December 2009, supported by repressive measures and the backing of a significant proportion of the majority Fang ethnic group.
Despite apparent political 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 still a high risk that Nigerian rebel movements operating in the Niger Delta could attack installations in Equatorial Guinea again.
Relatively high oil prices will allow the government to continue to pursue an expansionary fiscal policy and to increase the role of the state in the hydrocarbons sector.
Although hydrocarbons production is expected to continue falling in 2010 and to increase only slightly in 2011, real GDP is forecast to grow by 2% in 2010 and 3.7% in 2011 owing to strong growth in the non-oil sector.
Average inflation is forecast to rise to 6% in 2010 as a result of higher fuel prices and stronger growth in the non-oil sector, and is expected to fall to 5% in 2011 owing to a moderate fall in international oil prices.
The current-account deficit is forecast to narrow from an estimated 5.6% of GDP in 2009 to 4.6% of GDP in 2010, before widening sharply to 9.2% of GDP as a result of the deteriorating trade balance.

Equatorial Guinea has stepped up efforts to enhance bilateral co-operation with Nigeria in several areas, especially in security.
Equatorial Guinea, Gabon, Cameroon and Sao Tome and Principe have undertaken a joint military exercise simulating operations to interdict piracy, illegal fishing and clandestine immigration.
A new scandal has further undermined the reputation of the regional central bank, Banque des Etats de l'Afrique centrale (BEAC), with the revelation that CFAfr15bn (US$33m) has been embezzled.
Equatorial Guinea has been ranked 170th out of 183? countries in terms of the business operating environment in an annual survey published by the World Bank, Doing Business 2010.
A US-based oil company, Noble Energy, has reached an agreement with a Dutch company, SBM Offshore, to lease a floating production, storage, and offloading (FPSO) vessel to develop the Aseng field in Block I.

This report covers the following industry codes:
SIC Code: 49;70
NAICS Code: 22;72