Equatorial Guinea - Economy
In recent years, Equatorial Guinea’s economy has been in a downturn. In 2020, it has been affected by the COVID epidemic. The number of unemployed people has increased sharply and social security has deteriorated. Criminal cases such as extortion, theft, road robbery and even house robbery occur from time to time. Due to the aging and poor management of infrastructure such as power supply, fires are prone to occur.
With investments estimated at over $12 billion, the United States is the largest cumulative bilateral foreign investor in Equatorial Guinea, although the Chinese presence is growing. While business laws promote a liberalized economy, the business climate remains difficult. Application of the laws remains selective. Corruption among officials is widespread, and many business deals are concluded under nontransparent circumstances. A wage law regulates separate wage levels for the petroleum, private, and government sector. Outside of the oil sector, there is little industry in the country, and the local market for industrial products is small. Although the government seeks to expand the role of free enterprise and to promote foreign investment, it has had little success in creating an atmosphere conducive to investor interest.
Equatorial Guinea in the 1980s and 1990s received foreign assistance from numerous bilateral and multilateral donors, including European countries, the United States, and the World Bank. Many of these aid programs have ceased altogether or have diminished. Spain, France, and the European Union (EU) continue to provide some project assistance, as do China, Brazil, and Cuba. The government has discussed working with World Bank assistance to develop government administrative capacity.
Exports to the U.S. totaled over $2.39 billion in 2009 and consisted overwhelmingly of petroleum products. In the same year, U.S. exports to Equatorial Guinea totaled $304 million (making the country the seventh-largest export market for U.S. products in Sub-Saharan Africa) and consisted mainly of machinery, articles of iron or steel, measuring instruments, and chemical products.
Infrastructure has improved dramatically in the last few years. Numerous, large-scale infrastructure investments have been completed or are underway. Several ports and a new terminal were built to accommodate the needs of the oil industry. Surface transport options are increasing as the government has invested heavily in road pavement projects. Considerable funds have been invested in improving transportation, including paving most roads in the country; new airfields in Annobon, Corisco, and Mongomo; and a new port on Annobon.
In order to facilitate connections between among others provincial capitals, large municipalities, ports, airports and border areas, more than 698 kilometers of national highways have been paved over the three years 2012-2014, and a further 402 kilometres were nearing completion. For provincial roads, which, though not part of the main road network, are significant because they can open up small towns and villages, large centres and rural agricultural production areas, a total of 124 kilometres has been surfaced. These roads serve to relieve congestion in rural areas, thereby facilitating the free movement of goods and services, and bring children in rural areas closer to school by reducing their journey time and the risks inherent in roads that are in a poor state of repair.
Equatorial Guinea's electricity sector is owned and operated by the state-run monopoly, SEGESA. The government has expressed interest in privatizing the outmoded electricity utility. Equatorial Guinea's electricity generating capacity is more than adequate to meet demand on both the continent and the island of Bioko, although the power supply has been unreliable. The country's distribution network has been incapable of delivering reliable electricity to end users, due to aging equipment and poor management, as demonstrated by regular blackouts. Equatorial Guinea is estimated to have 2,600 megawatts (MW) of hydropower potential.
Potable water is available in the major towns but is not always reliable because of poor maintenance and aging infrastructure; consequently, supply interruptions are frequent and prolonged in some neighborhoods. Some villages and rural areas are equipped with generators and water pumps, usually owned by private individuals.
Telecommunications have improved dramatically in recent years. Parastatal GETESA, a joint venture with a 40% ownership stake held by France Telecom, provides telephone service in the major cities with an efficient, digital fixed network and good mobile coverage. GETESA's fixed-line service has 20,000 subscribers and the mobile service is used by over 200,000. Recently, a Tanzanian company, HITS, has begun operations. As a startup company its coverage is not as widespread and has fewer users. Internet access is widely available and is increasing, providing improved access to information.
Equatorial Guinea has two of the deepest Atlantic seaports of the region, including the main business and commercial port city of Bata. The ports of both Malabo and Bata have been severely overextended. A half-billion dollar renovation project for the Port of Malabo is nearing completion, and a renovation of the Bata port is scheduled to begin. The country's third-largest port, located on Bioko Island is Luba, which has become a major transportation hub for offshore oil and gas companies operating in the Gulf of Guinea. Luba is located some 50 kilometers from Malabo and was previously virtually inactive except for minor fishing activities and occasional use to ease congestion in Malabo.
The influx of oil workers has increased international air activity. Major international carriers now connect Malabo directly to Paris, Madrid, Frankfurt, Addis Ababa, and Casablanca. A major American airline announced that it is interested in beginning service to the airport in the capital, Malabo; however, upgrades to the Malabo airport must be put into place before this can occur. The runway at Malabo's international airport (3,200 meters) is equipped with lights and can service Boeing 747s. The runway at Bata (2,400 meters) does not operate at night but can accommodate aircraft as large as B737s. Bata is undergoing an upgrade with runway extension and expansion. Three minor airstrips (800 meters) located at Mongomo and on the islands of Annobon and Corisco have been extended and can now accommodate B737s. Air service between the island and continental territories is restricted to 5 small airlines. In March 2006 the European Union blacklisted airlines based in Equatorial Guinea from flying into the EU. A project to gain International Civil Aviation Organization (ICAO) accreditation for various parts of the airline industry is underway, and a contract has been signed to bring both Bata and Malabo up to ICAO and Transportation Security Administration (TSA) standards.
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