Editing Economy of Equatorial Guinea (section)

==In greater depth==
Oil and gas exports have increased substantially and will drive the economy for years to come.<ref name=":0">{{citation-attribution|1={{Cite web|date=January 2002|title=Background Note: Equatorial Guinea|url=http://www.state.gov/r/pa/ei/bgn/7221.htm|url-status=dead|archive-url=https://web.archive.org/web/20020605221551/http://www.state.gov/r/pa/ei/bgn/7221.htm|archive-date=June 5, 2002|publisher=[[U.S. Department of State]]}}}}</ref> Real GDP growth reached 23% in 1999, and initial estimates suggested growth of about 15% in 2001, according to IMF 2001 forecast.<ref name=":0" /> Per capita income grew from about $1,000 in 1998 to about $2,000 in 2000.<ref name=":0" /> The energy export sector is responsible for this rapid growth.<ref name=":0" /> Oil production has increased from {{convert|81000|oilbbl/d}} to {{convert|210000|oilbbl/d}} between 1998 and early 2001.<ref name=":0" /> There is ongoing additional development of existing commercially viable oil and gas deposits as well as new exploration in other offshore concessions.<ref name=":0" />

Equatorial Guinea has other largely unexploited human and natural resources, including a tropical climate, fertile soils, rich expanses of water, deepwater ports, and an untapped, if unskilled, source of labor.<ref name=":0" /> Following independence in 1968, the country suffered under a repressive dictatorship for 11 years, which devastated the economy.<ref name=":0" /> The agricultural sector, which historically was known for cocoa of the highest quality, has never fully recovered.<ref name=":0" /> In 1969 Equatorial Guinea produced 36,161 tons of highly bid cocoa, but production dropped to 4,800 tons in 2000.<ref name=":0" /> Coffee production also dropped sharply during this period to bounce back to 100,000 metric tons in 2000.<ref name=":0" /> Timber is the main source of foreign exchange after oil, accounting for about 12.4% of total export earnings in 1996–99.<ref name=":0" /> Timber production increased steadily during the 1990s; wood exports reached a record 789,000 cubic meters in 1999 as demand in Asia (mainly China) gathered pace after the 1998 economic crisis.<ref name=":0" /> Most of the production (mainly Okoume) goes to exports, and only 3% is processed locally. Environmentalists fear that exploitation at this level is unsustainable and point out to the permanent damage already inflicted on the forestry reserves on Bioko.<ref name=":0" />

Consumer price inflation has declined from the 38.8% experienced in 1994 following the CFA franc devaluation, to 7.8% in 1998, and 1.0% in 1999, according to BEAC data.<ref name=":0" /> Consumer prices rose about 6% in 2000, according to initial estimates, and there was anecdotal evidence that price inflation was accelerating in 2001.<ref name=":0" />

Equatorial Guinea's policies, as defined by law, comprise an open investment regime.<ref name=":0" /> Qualitative restrictions on imports, non-tariff protection, and many import licensing requirements were lifted when in 1992 the government adopted a public investment program endorsed by the World Bank.<ref name=":0" /> The Government of the Republic of Equatorial Guinea has sold some state enterprises.<ref name=":0" /> It is attempting to create a more favourable investment climate, and its investment code contains numerous incentives for job creation, training, promotion of non-traditional exports, support of development projects and indigenous capital participation, freedom for repatriation of profits, exemption from certain taxes and capital, and other benefits.<ref name=":0" /> Trade regulations have been further liberalized since implementation in 1994 of the ICN [[turnover tax]], in conformity with Central African tax and custom reform codes.<ref name=":0" /> The reform included elimination of quota restrictions and reductions in the range and amounts of tariffs.<ref name=":0" /> The CEMAC countries agreed to replace the ICN with a value added tax (VAT) in 1999.<ref name=":0" />

While business laws promote a liberalized economy, the business climate remains difficult. Application of the laws remains selective.<ref name=":0" /> Corruption among officials is widespread, and many business deals are concluded under non-transparent circumstances.<ref name=":0" />

There is little industry in the country, and the local market for industrial products is small.<ref name=":0" /> The government seeks to expand the role of free enterprise and to promote foreign investment but has had little success in creating an atmosphere conducive to investor interest.<ref name=":0" />

The Equatorial-Guinea budget has grown enormously in the past 3 years as royalties and taxes on foreign company oil and gas production have provided new resources to a once poor government.<ref name=":0" /> The 2001 budget foresaw revenues of about 154 [[1000000000 (number)|billion]] CFA francs (154 GCFAF) (about U.S.$200 million), up about 50% from 2000 levels.<ref name=":0" /> Oil revenues account for about two-thirds of government revenue, and VAT and trade taxes are the other large revenue sources.<ref name=":0" />

Year 2001 government expenditures were planned to reach 158 billion CFA francs, up about 50% from 2000 levels.<ref name=":0" /> New investment projects represented about 40% of the budget, and personnel and internal and external debt payments represented about one-third of planned expenditures.<ref name=":0" />

The Equatorial-Guinea Government has undertaken a number of reforms since 1991 to reduce its predominant role in the economy and promote private sector development.<ref name=":0" /> Its role is a diminishing one, although many government interactions with the private sector are at times capricious.<ref name=":0" /> Beginning in early 1997, the government initiated efforts to attract significant private sector involvement through a Corporate Council on Africa visit and numerous ministerial efforts.<ref name=":0" /> In 1998, the government privatized distribution of petroleum products.<ref name=":0" /> There are now Total and Mobil stations in the country.<ref name=":0" /> The government has expressed interest in privatizing the outmoded electricity utility.<ref name=":0" /> A French company operates cellular telephone service in cooperation with a state enterprise.<ref name=":0" /> The government is anxious for greater U.S. investment, and President Obiang visited the U.S. three times between 1999 and 2001 to encourage greater U.S. corporate interest.<ref name=":0" /> Investment in agriculture, fishing, livestock, and tourism are among sectors the government would like targeted.<ref name=":0" />

Equatorial Guinea's balance-of-payments situation has improved substantially since the mid-1990s because of new oil and gas production and favorable world energy prices.<ref name=":0" /> Exports totaled about francs CFA 915 billion in 2000 (1.25 G$US), up from CFA 437 billion (700 M$US) in 1999. Crude oil exports accounted for more than 90% of export earnings in 2000.<ref name=":0" /> Timber exports, by contrast, represented only about 5% of export revenues in 2000.<ref name=":0" /> Additional oil production coming on line in 2001, combined with methanol gas exports from the new CMS-Nomeco plant, should increase export earnings substantially.<ref name=":0" />

Imports into Equatorial Guinea also are growing very quickly.<ref name=":0" /> Imports totaled francs CFA 380 billion (530 M$US), up from franc CFA 261 million (420 M$US) in 1999.<ref name=":0" /> Imports of equipment used for the oil and gas sector accounted for about three-quarters of imports in 2000.<ref name=":0" /> Imports of capital equipment for public investment projects reached francs CFA 30 billion in 2000, up 40% from 1999 levels.<ref name=":0" />

Equatorial Guinea's foreign debt stock was approximately francs CFA 69 billion (100 M$US) in 2000, slightly less than the debt stock in 1999, according to BEAC data.<ref name=":0" /> Equatorial Guinea's [[debt service ratio]] fell from 20% of GDP in 1994 to only 1% in 2000.<ref name=":0" /> Foreign exchange reserves were increasing slightly, although they were relatively low in terms of import coverage.<ref name=":0" /> According to the terms of the franc CFA zone, some of these reserves are kept in an account with the French Ministry of Finance.<ref name=":0" />

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]].<ref name=":0" /> Many of these aid programs have ceased altogether or have diminished.<ref name=":0" /> [[Spain]], [[France]], and the [[European Union]] continue to provide some project assistance, as do [[China]] and [[Cuba]].<ref name=":0" /> The government also has discussed working with World Bank assistance to develop government administrative capacity.<ref name=":0" />

Equatorial Guinea operated under an [[International Monetary Fund|IMF]]-negotiated [[Enhanced structural adjustment facility|Enhanced Structural Adjustment Facility]] (ESAF) until 1996.<ref name=":0" /> Since then, there have been no formal agreements or arrangements.<ref name=":0" /> The International monetary Fund held Article IV consultations (periodic country evaluations) in 1996, 1997, and in August 1999.<ref name=":0" /> After the 1999 consultations, IMF directors stressed the need for Equatorial Guinea to establish greater fiscal discipline, accountability, and more transparent management of public sector resources, especially energy sector revenue.<ref name=":0" /> IMF officials also have emphasized the need for economic data.<ref name=":0" /> In 1999, the Equato-Guinean Government began attempting to meet IMF-imposed requirements, maintaining contact with IMF and the World Bank representatives.<ref name=":0" /> However, the newfound oil wealth allowed the government to avoid improving fiscal discipline, transparency and accountability.{{Citation needed|date=September 2021}}