Country Report Equatorial Guinea September 2009

Outlook for 2009-10

• The president, Teodoro Obiang Nguema Mbasogo, is expected to be re-elected in a landslide victory 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.
• There is still a high 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, but it is unlikely to implement the expenditure cuts announced in April 2009.
• Real GDP is expected to contract by 1.8% 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 1.4% in 2010 because of higher public spending.
• 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 5.7% of GDP in 2009 and 6.5% GDP in 2010, owing to a fall in average oil prices.

Monthly review

• Mr Obiang has celebrated 30 years in power. He has become the longest-serving ruler in Sub-Saharan Africa and there are no indications that he intends to leave power soon.
• A Ukranian plane carrying weapons to Equatorial Guinea has finally been released after being apprehended by the Nigerian authorities in June for lack of adequate documentation.
• The minister of foreign affairs, Pastor Micha Ondo Bile, has travelled to the US to seek greater co-operation to improve the security situation in the Gulf of Guinea and maintain good relations with the new US administration.
• The Ministry of Mines, Industry and Energy has signed a production-sharing agreement for block EG-17 with a consortium formed by two UK-based companies, Starc Limited and Glencore Exploration.
• The government hopes that the development of the Aseng field will accelerate the monetisation of gas resources by providing key infrastructure to other projects in Blocks O and I.

Source: Country Report

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