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Guinea

Author(s):
International Monetary Fund
Published Date:
January 1997
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I. Overview

1. Over the decade following independence in 1968, Equatorial Guinea underwent severe economic, political, and social disruptions that resulted in economic decline and a marked deterioration in the provision of the most basic health services and education. A new government came to power in 1979, and in 1980 pledged a program of economic reconstruction. Economic growth remained elusive, however, reflecting a continuation of expansionary policies, deterioration in crucial infrastructure and a seriously overvalued exchange rate.

2. In 1985, Equatorial Guinea became a member of the Bank of Central African States (BEAC), and adopted the CFA franc as its currency.1 As a result of the new currency arrangement, inflation dropped markedly. Output did not respond as had been envisaged, however, and a significant deterioration in the terms of trade exacerbated fiscal and external imbalances. Repeated attempts through the early 1990s to reduce macroeconomic imbalances and restore economic growth in the context of structural adjustment programs met with little success and, despite the coming on stream of the country’s first oil production in 1992 (see box), the economic activity in timber and cocoa sectors--the country’s traditional export base--continued to stagnate.

3. On January 12, 1994, Equatorial Guinea, in concert with the other members of the CFA franc zone, adjusted the exchange rate from CFAF 50 to CFAF 100 per FF 1--a 50 percent depreciation in foreign currency terms. A program of strong domestic policies, underpinned by a second annual ESAF arrangement, supported this action. The traditional export sectors, notably forestry, responded well to the devaluation and led to renewed economic growth, but highly expansionary fiscal policies and the lack of transparency in financial management led the program quickly off track; a subsequent attempt to reestablish a track record of policy performance under a staff-monitored program also met with unsatisfactory results, owing to broadly similar shortcomings.

Box 1.General Background

Equatorial Guinea consists of several geographically distinct areas. Rio Muni, the mainland region, accounts for approximately 85 percent of the land area and 80 percent of the total population. The rest of the country includes the island of Bioko, which is the site of the capital city, Malabo, and five additional small islands in the Gulf of Guinea. The total land mass covers about 28,000 square kilometers, with an estimated population of 400,000. The economic bases of this country differ between the islands and the mainland. In the Rio Muni region, timber production and food crops are dominant. Bioko, which is more developed and urbanized than the mainland, has historically focused on cocoa production. However, in 1984, a small offshore hydrocarbon deposit was discovered in the Alba field, 36 kilometers off the coast of Bioko, and, in 1995, larger offshore discoveries were made in the Zafiro field, which borders on Nigerian territorial waters. Oil production began in 1992, when an independent oil company, Walter International, started operations in the Alba field. Mobil Oil and the United Meridian Corporation (UMC) began production from the Zafiro field in August 1996. Exploration for additional deposits, both to the northwest of Bioko and off the coast of Rio Muni, is ongoing, and the prospects, according to the three-dimensional seismic data collected thus far, are encouraging.

Equatorial Guinea is composed of two main ethnic groups, the Fang and the Bubi. The Fang, who are indigenous to the mainland, are the larger of the two ethnic groups, and constitute the ruling class. The Bubi, who are indigenous to the island of Bioko, make up as much as 50 percent of the population there, but have virtually no presence on the mainland. By all accounts the population is growing rapidly, although no data are available to confirm this. The lack of attention paid to health and education over the past three decades has led to low life expectancy (49 years) and a low literacy rate (50 percent).

4. In 1995, expectations arising from the new discoveries of sizable oil reserves and double-digit growth in the non-oil economy--led by the timber industry--dominated economic developments. However, the fiscal position was again expansionary, as the fiscal deficit grew to 5 percent of GDP, exacerbating imbalances and adding to external payments arrears. Total budgetary revenue as a share of GDP fell and noninterest expenditure increased sharply--including unclassified spending on the order of 3 percent of GDP. Public sector financial mismanagement continued to be a serious concern, and structural reform appeared to have come to a standstill.

II. Domestic Economic Developments, 1991-95

A. Aggregate Supply and Demand

5. Equatorial Guinea’s production base is narrow and highly skewed toward the exploitation of exhaustible resources, with output and export earnings heavily dependent on timber and, increasingly, oil (Appendix II, Tables 1 and 2).2 The emergence of the oil sector has allowed real GDP to grow at an average of more than 8 percent for the past five years, and largely masked the weaknesses in the non-oil economy--which grew by less than 2 percent a year on average in the early 1990s (Chart 1; Appendix II, Table 3). However, responding well to the January 1994 devaluation of the CFA franc, non-oil real GDP growth accelerated considerably. In 1994 and 1995, it grew by 7 percent and 11 percent, respectively. The buoyancy in non-oil activity has been led by the forestry sector, which grew by 39 percent in 1994 and by 20 percent in 1995.

CHART 1EQUATORIAL GUINEA GROWTH, SAVING, AND INVESTMENT, 1991–95

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Table 1.Real Sector Developments, 1993-95
199319941995
(Percentage change)
Real GDP7.16.814.9
Non-oil GDP4.06.510.8
Consumer prices (annual average)1.638.911.4
(In percent of GDP)
Consumption106.775.983.4
Investment15.624.266.7
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

6. The coming on stream of the first oil wells in 1992 and the January 1994 devaluation of the CFA franc led to two structural breaks in the sectoral distribution of GDP over the 1991-95 period. Prior to the production of oil in Equatorial Guinea, the primary sector accounted for some 55 percent of domestic production; the secondary sector, 12 percent; and the tertiary sector, 28 percent. Within the primary sector, subsistence crops (31 percent) and forestry (14 percent) constituted the principal components. From 1991 to 1993, the contribution of oil production to GDP at market prices grew from zero to 14 percent of GDP. Over this period, the growth in the relative importance of oil was offset primarily by a reduction in the share of the non-oil primary sector, as activity in the traditional export sectors remained stagnant and the declines in the secondary and tertiary sectors were mitigated by the growth in construction and the public administration, respectively.

7. The 1994 devaluation brought about sharp growth in nominal and real GDP. It also sparked an increase in the relative importance of the primary sector share in GDP as a result of its price effect on the oil, forestry, and export crop subsectors. At the same time these sectors were also growing strongly in real terms: in the forestry and export crop subsector, this was due to the competitive boost prompted by the devaluation; in the oil sector, it was the result of increased production from the existing wells in the Alba field. Thus, in 1995, the primary sector accounted for more than 71 percent of domestic output, of which the oil sector alone represented 25 percent.

8. Available information indicates that gross domestic expenditure averaged 130 percent of GDP over the period 1991-95, with about 98 percentage points going to consumption (public and private) and 32 percentage points to gross capital formation (Appendix II, Table 4). Gross domestic expenditure in 1991 and 1995 deviated sharply from the period average, to 158 percent and 150 percent of GDP, respectively, as a result of investment in the oil sector. Consumption as a share of GDP exhibited a steadily downward path over the 1991-95 period, falling from 119 percent in 1991 to 83 percent in 1995, owing largely to the rapid growth in oil GDP, and the abrupt decline in external financing from bilateral sources. Gross domestic investment began to surge as of 1994--despite the decline in donor support for the public investment program--because of the start of large-scale investment in the oil sector and an increase in investment in the timber industry. The shift is also evident in the external resource balance: the startup of oil production, reduction in capital imports, and decline in external financing through 1994 led to a swing equivalent to 58 percent of GDP and brought the external resource position into virtual balance. However, in 1995, with the surge in petroleum sector investment, the balance shifted again, and the external resource balance registered a deficit of some 50 percentage points of GDP. Driven by the higher level of private sector savings registered in 1994 and 1995 as a result of the higher rates of economic growth in the timber and petroleum sectors, overall national savings increased markedly over the 1991-95 period, rising from 4 percent of GDP to 24 percent by 1994, before dropping back to 12 percent in 1995, owing to the increase in investment in the oil sector outstripping the growth in the sector’s output.

B. Oil Sector Developments and Prospects

9. Equatorial Guinea is situated at the end of the basin formed by Nigeria and Cameroon, which has favorable geomorphic characteristics. While oil exploration has centered on the offshore zones to the north-northwest of Bioko island, interest extends to other areas, including Rio Muni, though no significant discoveries have been made as yet outside of the offshore zones north of the island. A reliable estimate of Equatorial Guinea’s total proven reserves is not available, since the dimensions of the recent reservoir discoveries are not yet fully known, and other promising, untested structures are in the early stages of examination. Priority is being given to exploration, and the strategy is to rapidly bring reservoirs, once tested, into production. Much of the recent exploration activity in Equatorial Guinea and the Gulf of Guinea can be attributed to technological developments that have lowered the costs of exploration and extraction in medium- and deep-water environments: three-dimensional seismic analysis, horizontal well drilling, behavior modeling of oil wells, shorter development lags, and the use of floating production, storage, and off-loading vessels (FPSOs).

10. The oil sector comprises three oil companies and five geographic blocks (see Box 2). The smallest block, the Alba field, run today by the Northern Michigan Electric Company (NOMECO), began producing 2,500 barrels a day (b/d) in January 1992. By 1995, production had grown to 6,700 b/d and the Alba wells remained the country’s sole source of oil production. Block B, which is operated by Mobil Oil, and in which the United Meridian Corporation (UMC) holds a minority stake, has been actively explored since early 1995. A series of discoveries in early 1995 led to the commercialization of the Zafiro field in October 1995, and production for export began on August 25, 1996. By end-1996 a total of eight wells are expected to be producing some 40,000 b/d. Another 20,000-40,000 b/d are projected to come on stream during the development’s second phase, in 1997. Blocks A, C, and D are controlled by UMC, and exploration of these blocks is set to begin by end-1996.

Box 2.The Oil Fields in Equatorial Guinea

Alba field

In 1979, the government and the Spanish oil company Hispanoil entered into a joint venture agreement to create Guineo Española de Petróleo (GEPSA). Under the agreement, Hispanoil would bear all exploration expenses, but following commercial discovery, the government would participate equally in all costs and receipts of the contractor. Between 1982 and 1985, GEPSA acquired seismic data and drilled six wells, two of which yielded gas and light oil. Under the contract, GEPSA was to drill one more well before the end of the seventh year of the contract. However, Hispanoil, now REPSOL, did not comply with its obligation, and the contract was ultimately canceled in 1990.

A contract for the development of the Alba field and exploration of surrounding areas by an American oil company, Walter International, was signed in May 1990. Within the framework of this contract, one additional well was drilled, which confirmed the extension of the Alba field, and production began in 1992. In 1995, the Northern Michigan Electric Company (NOMECO) took over the operation of the Alba wells and purchased a 35 percent working interest, although Walter International maintained a minority stake in the consortium.

Production began at a rate of 2,500 barrels a day (b/d), and increased during the year, a second well started producing during the fourth quarter. However, since then, technical problems have sporadically brought production down below full capacity. In 1994, with one of the two wells inoperative for several months, production amounted to only 1.72 million barrels. Production rebounded to full capacity in 1995, and 2.44 million barrels of oil were extracted, or an average of some 6,700 b/d. Proven reserves are reportedly in the range of 50 million barrels, although the high levels of gas in the Alba structure make it difficult to assess the recoverability of these reserves.1 If operated in accordance with international industry practice, production from the Alba field should last another 10-15 years.

After extraction, the hydrocarbon products are transported through a 10-inch pipeline for the 22 miles between the production platform and Bioko island, where condensate and gas are separated; the condensate is exported, while the associated gas is flared The condensate is of exceptional quality (53 degrees API),2 and should begin to command a premium over market benchmarks as it becomes known. Export shipments take place approximately every six weeks, and the condensate is sold primarily in the spot market.

The high proportion of the Alba oil field gas that is flared has led the government to consider a number of uses for this resource, including utilizing the gas to supply the local market with bottled butane, separating liquefied petroleum gas (LPG) for export, producing diesel for local consumption (requiring thermal power plants on Bioko island), or building a fertilizer plant on the island. The lack of infrastructure in Equatorial Guinea, however, hinders the commercial viability of production for domestic consumption, and at present NOMECO has limited itself to installing an LPG transformation facility to augment exports. Through this facility it should be producing an additional 2,500-3,000 b/d of condensate by early 1997. This will reduce the gas currently being flared by approximately one-fourth.

Development activities in the Alba concession have picked up markedly in the past year. In 1995 NOMECO identified significant offshore natural gas reserves within its concession, although tests have not yet concluded whether extraction will prove commercially viable. Three additional oil wells south-southwest of the current production area are scheduled to be drilled in 1996, and more are planned for 1997.

Zafiro, Opalo, and Topacio--Block B

In June 1992, the government and United Meridian Corporation (UMC) signed a production-sharing agreement to explore and develop concession Block B, northwest of the island of Bioko. Block B is a triangular concession, with the triangle’s hypotenuse contiguous to Nigeria’s territorial waters and the prolific Qua Iboe formation. In May 1994, in order to expedite development of the block, UMC sold a 65 percent stake to Mobil Oil, and shortly thereafter, the two began exploratory drilling. Mobil became the operator in January 1995, and later that year exercised its contractual right to acquire an additional 10 percent participating interest in Block B to bring its share to 75 percent. After oil was discovered in 1995, the Nigerians challenged Equatorial Guinea’s delineation of the aquatic border, claiming that a sizable portion of Block B is in Nigerian waters, and the two governments are holding ongoing talks to resolve the dispute.

Mobil has accelerated the exploration and development plan for Block B. In March 1995, the Zafiro field was discovered. The testing of Zafiro-1 was completed in March 1995, and was found to have a production capacity of 10,500 b/d. Two other Zafiro wells and the wildcat well Opalo-1 were successfully drilled in the same complex shortly thereafter.3 The field was declared commercial in October 1995, and development entered Phase 1. Phase 1 envisages a fast-track development of a total of eight wells that are expected to produce an estimated 40,000 b/d by end-1996. Production from Phase 1 began on August 25,1996, using a floating (FPSO) system connected to eight subsea wells. To anchor the operation, Mobil commissioned the conversion of an oil tanker into the second-largest FPSO vessel in the world, and renamed it the Zafiro Producer.

Mobil announced in March 1996 that it had successfully tested a new well, Topacio-1, 3 miles south of the Zafiro- 1 well but within the Zafiro field. Subsequent Topacio appraisal wells confirmed the extension of the Zafiro field and are expected to add an additional 20,000-40,000 b/d to the country’s production capacity once they are brought on line. For now, however, the Topacio development has been suspended to be part of the future development plan once the results from Phase 1 have undergone a more detailed evaluation later this year.

Mobil and UMC have been very encouraged by what they have found so far in Block B, and intend to pursue aggressively exploration in the remaining 92 percent of the concession. The quality of the crude oil that has been discovered thus far is good (30-38 API) and should compare favorably with the most relevant benchmark, U.K. Brent. The drilling in the area is easy by industry standards, owing to the sandy sedimentary layer on the ocean floor, and the seismic structures are considered promising. Mobil and UMC have developed a 100-well exploration plan that foresees high levels of investment through at least 1998.

Blocks A, C, and D

Block A lies due north of the island of Bioko and borders on Nigerian and Cameroonian offshore oil producing areas. Blocks C and D lie northwest and northeast of Bioko, respectively, with Block C situated between the island and Block B. UMC has signed production-sharing agreements with the government for each block, and is the majority shareholder and operator for the three. Encouraged by the successes in Block B, UMC has announced that a drilling program will begin in earnest by end-1996.

1 The recovery ratio is the portion of the identifiable oil that is considered to be recoverable, and it depends on, inter alia, the maintenance of well pressure, which is influenced by the gas-to-oil balance in a particular reservoir.2 The American Petroleum Institute (API) ranks the gravity of petroleum products by degree, with a higher degree corresponding to a lighter, and typically more expensive, product.3 Wildcat wells are those drilled in areas not yet identified as productive, as opposed to appraisal wells, which gauge the dimensions of previously tested deposits.

C. Non-Oil Sectoral Developments

Agriculture and related sectors

11. Equatorial Guinea has about 2.2 million hectares of forest, mostly on the continent, of which 1 million (45 percent) are now under concession contracts; another 700,000 hectares have reportedly been set aside for protection and conservation. Since the 1994 devaluation, the timber sector has become progressively dominated by a broader base of foreign and domestically owned enterprises. As of end-1995, there were 38 timber concessions, as compared with 15 as of end-1993, and the largest concessionaire held less than 15 percent of total hectares under concession (Appendix II, Table 5). Bolstered by the devaluation, timber output grew by 39 percent in 1994, and by another 20 percent in 1995, reaching 319,400 cubic meters, of which 3.5 percent is sawn wood and 2.7 percent is plywood (Appendix II, Tables 6 and 7). In addition to the competitiveness gains brought about by the devaluation, such high growth reflects an increase in demand for the okume variety by East Asian countries. In 1995, the timber sector accounted for 19 percent of GDP and 25 percent of non-oil GDP.

12. The accelerated growth of the forestry sector has called into question the sustainability of the current production levels and practices. Between 1993 and 1995 total hectares conceded to timber production rose by 75 percent, growing from 597,000 hectares in 1993 to more than 1 million by 1995. Moreover, there are clear indications that a good number of producers, many of them foreign, have not been following established cultivation guidelines, and in particular are not limiting themselves to the boundaries of their concessions. Finally, the deterioration of the system of roads in Equatorial Guinea has induced producers to concentrate their activities in areas with better access to transportation, namely the coastal region. The confluence of these phenomena has had a devastating effect on forest resources in general, and on those of the coastal area in particular. Taking into account the present rate of extraction, available resources would last an estimated 15 years, or about one-fourth of the natural renewal cycle of the trees.

13. While timber production dominates in the mainland region, cocoa has traditionally been grown on Bioko. During the 1970s cocoa production reached 20,000 tons per annum on 46,000 hectares of plantations, with almost all of the labor provided by Nigerian contract laborers. Production plummeted in the mid-1970s, however, with the exodus of the Spanish proprietors and the foreign laborers. With assistance from the World Bank and the African Development Bank, steps were taken to rehabilitate the sector in the 1980s. Among other measures, the authorities introduced a system of graduated export taxes such that taxes paralleled movements in the world market prices; this virtually eliminated export tax receipts. A revised system of export grading was also introduced with a view to restoring the confidence of buyers. In addition, in an effort to increase productivity and production in the cocoa sector, the European Union shifted the emphasis of its funding from the support of the producer price of cocoa to an investment program geared to increase productivity; Equatorial Guinea began replacing its aging stock of cocoa trees with new trees in the early 1990s.

14. Most cultivation is undertaken by small-scale sharecroppers, and access to inputs is central to the quality and volume of output when growing in volcanic soil. To address their financing needs, revolving credit facilities were introduced in the early 1990s, financed by counterpart funds from STABEX grants, whereby sharecroppers receive the inputs and repay them at the end of the season out of the cocoa they produce. However, the system had no mechanism to ensure that the sharecroppers did not sell their product elsewhere and default on the credit advanced. The disruptive effect that this had on the channel through which inputs are supplied contributed to the sharp drop in output first evidenced in the 1992/93 season, when cocoa production dropped by 44 percent, to 2,855 tons. In the 1994/95 season, production increased by 24 percent, to 3,770 tons, registering its first significant increase in more than a decade and reflecting the effect of the devaluation on profitability, a rebound in world prices, and the lagged effect of earlier replantings on yields.

15. Coffee production, all of which is of the robusta variety, has declined in recent years and is no longer officially reported. The coffee quality is poor, owing to unfavorable climatic conditions, and the small amount that is still produced, mainly by smallholders as a supplementary cash crop, takes place in the continental region. In 1994, the last year for which production data are available, officially recorded coffee output amounted to only 84 tons, although significant quantities are reportedly still smuggled to neighboring countries. After reaching a peak of CFAF 500 per kilogram during the 1986/87 season, producer prices plummeted to CFAF 125 per kilogram for the 1993/94 season, in line with falling world market prices for robusta, and then rose to CFAF 700 by the 1994/95 season, as a result of the devaluation of the CFA franc and the rising coffee prices on the world market (Appendix II, Table 8).

16. Equatorial Guinea is situated in rich fishing waters. Its marine resources are mainly exploited by foreign fleets under fisheries agreements, primarily with the European Community. In 1986, the government negotiated a multiyear industrial fishing agreement with the European Union, which earned about US$7 million. The agreement, which was renewed in 1989, called for license fees based on boat capacity, eliminating the need to verify the catch. The agreement expired in 1992 and was renewed in 1994.

Manufacturing and energy

17. Industrial development in Equatorial Guinea has been severely limited by a small domestic market, a weak banking system, unreliable public utilities, and an urban and transport infrastructure that is badly dilapidated. Apart from wood processing, there is virtually no industry on the continent, and only cocoa fermenting and drying on Bioko.

18. Equatorial Guinea is well endowed with wood and hydroelectric resources. However, more than 80 percent of the domestic energy needs are still met through consumption of fuel. Until 1989, electricity was generated by a thermoelectric generator on Bioko, and by thermoelectric and hydroelectric generators on the continent. Moreover, many enterprises and households relied upon individual generators. In 1990, a 3.6 MW hydropower plant began operating in Riaba, on Bioko. Its output is sufficient to meet demand through the existing distribution system, which supplies only the towns of Malabo and Riaba during the rainy season. During the dry season, however, the Malabo diesel plant is needed to compensate for the reduction in output from Riaba. Rio Muni is also supplied by a 3.6 MW hydropower plant, located in Bikomo, which on average provides 90 percent of the continent’s energy requirements.

19. The state-owned company EEPGE (Empresa Estatal Petrolífera de Guinea Ecuatorial) is the owner of all the infrastructure for petroleum products storage and distribution in the country. EEPGE leases these facilities to a mixed-capital company, GE-TOTAL (Total Ecuatoguineana de Gestión), which has the exclusive right to manage and operate the supply and distribution of petroleum products in Equatorial Guinea.

Services

20. The services sector, which includes trade and commerce, transport and communications, finance and housing, and public administration, currently accounts for 19 percent of GDP. Trade and commerce continues to be the biggest subsector, with a share in GDP of about 8 percent in 1995. The share of this sector increased significantly after Equatorial Guinea joined the CFA franc zone.

21. The geographical separation of Bioko and Rio Muni makes transportation infrastructure very important. Equatorial Guinea has three ports, located in Bata, Malabo, and Luba, and two airports, one at Malabo and the other at Bata, which benefited from extensive rehabilitation in 1989-90 under an externally financed project. The large-scale investment in the petroleum sector will likely generate the need for a fourth port on the island of Bioko in the near future. The country had a relatively well developed road system at one point, including more than 1,000 kilometers of logging roads on the continent. However, in recent years there has been a considerable deterioration of the road system because of the lack of maintenance and the heavy rainfall associated with the region. Banking and finance activities are relatively undeveloped and are described in Section IV.

D. Prices, Wages, and Employment

22. Equatorial Guinea has a fairly liberalized price system, with only a few administratively fixed prices. Price controls have been progressively reduced and were in 1995 only in effect for bread, petroleum products (Appendix II, Tables 10 and 11), some agricultural inputs, and basic public utilities such as electricity and telecommunications. With regard to producer prices, the government has endeavored to adjust cocoa prices since the 1994 devaluation in line with their international level in order to provide the proper price signals to producers. The level of consumer prices remained broadly stable over the 1991-93 period. In 1994, the pass-through effect of the devaluation caused the average price level to rise by some 39 percent, but by 1995 it had nearly run its course, and the increase in consumer prices slowed to 11 percent (Appendix II, Tables 12 and 13).

23. Available data concerning price developments are limited to one consumer price index, compiled by the Office of Statistics of the Ministry of Economy and Finance. The index, which had been based upon a 1984 consumption basket for African residents of Malabo, was re-weighted based on a 1990 survey (stemming from the work of an international consultant). In the new index, coverage extends beyond Malabo to include the largest city on the mainland, Bata, and assigns a 50 percent weight to each. Within the consumption basket, the weight given to food and beverages was reduced from 89 percent to 60 percent, while clothing, health and sanitation services, and gasoline were accorded larger weights than before. However, the new index continues to show large fluctuations, which appear to be statistical, rather than seasonal, in nature, and suffers from compilation lags and difficulties in collecting timely data from the mainland. Furthermore, in light of the effects of the devaluation and the change in relative prices, the extent to which the index reflects post-devaluation consumption patterns is not clear.

24. Data on wages are limited. In April 1990 the government published a Decree-law setting minimum wages for every professional category. Under the decree, minimum wages would be revised every two years, taking into consideration developments in the cost of living and production, as well as the need to maintain a high level of employment. Minimum wages were last set on January 2, 1996, for three categories of labor. Minimum monthly wages for commerce, animal husbandry, fishing and forestry were set at CFAF 41,250 a month; for agricultural workers, at CFAF 23,000; and for laborers in the petroleum sector, at CFAF 100,000. The government provided a 14 percent increase in the average public sector wage in 1994 and left the pay scale unchanged in 1995. In 1996, the government enacted a 37 percent increase in the salary structure, with additional bonuses that will bring the salary increase for the year to 60 percent.

25. Unemployment is not documented. Current estimates indicate that subsistence agriculture absorbs most of the labor force in Equatorial Guinea; the monetized sector accounts for a small fraction of total employment. The government estimates that there are between 5,000 and 7,500 civil servants, including casual labor and the military; the authorities do not have a recent and comprehensive census. Public sector employment, including public enterprises, which has been used increasingly as a social safety net, has become more and more bloated and is highly inefficient. These factors have led to a progressive urbanization of the population and have contributed to the stagnation of agricultural production. In 1992, the government published a law permitting the establishment of trade unions. However, despite the existence of a legal framework, no trade union has yet been established.

III. Public Finance

A. Scope of the Public Sector

26. The nonfinancial public sector of Equatorial Guinea comprises the central government, local governments and municipalities, autonomous agencies, and state and mixed enterprises. In recent years, in the context of structural adjustment programs, the government has targeted a reduction in the scope of its direct intervention in the economy and a strengthening of public enterprise performance. Nonviable parastatals were to be liquidated, and joint ventures with foreign capital and management were to be created. The entities that were considered more potentially attractive to foreign investors--the state-owned maritime transport company (AMGESA), the electric utility (SEGESA), and the national airline (EGA)--were to be privatized first. In the event, there was little progress. An inventory of enterprises and their main assets was completed, however, in 1995, but the authorities have not used this information to elicit investor interest as had been hoped.

27. Overall fiscal operations cover the consolidated transactions of the central and local governments and municipalities. The fiscal year corresponds to the calendar year. While the government, with external technical assistance and increased computerization, has made substantial improvements in compilation and timeliness of basic budgetary data, some serious weaknesses remain in budgetary procedure, data coverage, and classification. Budgetary planning, revenue mobilization, and expenditure control are insufficiently institutionalized for effective policy design and implementation, and consequently the annual budget exercise approved by Parliament generally has little bearing on the fiscal outturn. Communication of information among government units is neither regular nor systematic, and, in particular, data on foreign-financed capital expenditure are not properly centralized and are not reflected in the Ministry of Finance’s budgetary process.

B. Overall Budgetary Developments, 1991-1995 3

28. The financial position of the government deteriorated significantly over the period 1991-95. The overall fiscal deficit (commitment basis, excluding foreign-financed capital expenditure) averaged 4.2 percent of GDP, and worsened from percent 2.5 of GDP in 1991 to 4.7 percent of GDP in 1995, owing to a decline in domestic revenue collections and expenditure overruns (Chart 2; Appendix II, Tables 14 and 15). The lack of transparency in revenue mobilization contributed importantly to the low level of oil revenue and to the fall in non-oil revenues--notably in the collection of import taxes. Total expenditure and net lending remained broadly flat in nominal terms over the 1991-95 period, but the sharp contraction in the capital budget, and in particular foreign-financed capital outlays, masked increases in noninterest domestically financed expenditure. The overall fiscal deficits were not properly financed and led to the accumulation of external payments arrears.

CHART 2FISCAL DEVELOPMENTS, 1991-95

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

1/ Excluding grants and foreign-financed capital expenditure.

2/ Including unclassified expenditure.

3/ Excluding scheduled amortization to the Fund.

4/ Including payment of arrears, excluding amortization to the Fund.

Table 2.Fiscal Developments, 1993-95
199319941995
(In percent of GDP)
Domestic revenue20.816.914.9
Oil revenue2.82.72.5
Non-oil revenue18.014.112.4
Domestically financed expenditure 1/29.019.319.6
Overall balance 1/-8.2-2.5-4.7
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Excluding foreign-financed capital outlays.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Excluding foreign-financed capital outlays.

C. Revenue Developments, 1991-95

29. Domestic revenue performance in Equatorial Guinea has deteriorated markedly in recent years, declining in terms of GDP from 21 percent in 1991 to 15 percent in 1995, as the emergence of oil proceeds did little to offset the weakness in non-oil revenue (Appendix II, Table 16). For its part, non-oil revenue fell from 21 percent of non-oil GDP in 1991 to less than 17 percent in 1995. These results were due in large part to the inability to channel oil revenue to the budget and to the further deterioration in the customs administration, which has been plagued with extensive ad hoc exemptions and mismanagement.

30. Tax revenue, which had averaged 14 percent of GDP in the late 1980s, fell from 13 percent of GDP in 1991 to 9 percent in 1995, with the largest fall experienced in 1994, when tax revenue fell by 3 percentage points of GDP. The drop in tax revenue can be traced in the main to problems with the collection of import taxes. In 1995, import taxes amounted to an estimated 8 percent of taxable imports, as compared with 18 percent in 1991. Notwithstanding the 1994 devaluation, nominal import tax revenue fell over the five-year period, from CFAF 1.5 billion in 1991 to CFAF 1.4 billion in 1995--a 55 percent decline in real terms (using the import deflator). Extensive ad hoc exemptions, tax evasion, and mismanagement reduced import taxes collected in 1995 to less than one-third of the import taxes assessed at customs. Export taxes increased nearly fourfold over the period as a result of the effects of the devaluation on the taxable base and the strong increase in timber export volumes. However, tax evasion in the timber industry has recently become more marked, as the timber tax yield has fallen from 17 percent in 1993 to less than 14 percent in 1995. Income tax from oil production has not yet materialized; the authorities explained that differences in interpreting the contractual tax base have yet to be settled, and therefore no income tax payments have been received by the government since production began in 1992.

31. Nontax revenue (excluding oil revenue) has fallen as a share of GDP by more than half, declining from 7 percent in 1991 to 3 percent in 1995. This is attributable to the poor performance of public enterprises and to the inability of the government to channel to the budget fees stemming from the jump in timber concessions in 1994-1995. Nontax receipts from the oil sector, namely royalties and exploration fees, have partially offset the weakness in other areas of revenue administration, growing from 0.3 percent of GDP in 1991 to 2.5 percent in 1995. However, total government oil revenue--virtually all of which has been nontax in nature--has averaged some 10 percent of export earnings, which is low by international standards.4 Moreover, bonus payments associated with the discovery and commercialization of oil production zones have not been captured by the budget.

32. In the context of the regional customs union (UDEAC) reforms, a major simplification and reduction of import tariffs was implemented in August 1994. Import tariffs (as well as turnover and excise taxes) for the UDEAC countries were set at the regional level, thus limiting Equatorial Guinea’s ability to modify these rates unilaterally. The common duty rate for basic necessities was reduced to 5 percent; for raw materials and capital goods, 10 percent; for intermediate and miscellaneous goods, 20 percent; and for consumer goods, 30 percent. The reform was designed to be revenue neutral, as a broadening of the taxable import base and the introduction of a broad-based turnover tax were to accompany the lowering of the import tax rates. Import surcharges were modified in early 1995, shortly after the introduction of the new UDEAC rate structure.

D. Expenditure Developments, 1991-95

33. The lack of proper expenditure procedures coupled with limited budgetary resources contributed to a strong shift in the composition of expenditure over the period, away from capital expenditure and in favor of current noninterest outlays, while total expenditure remained broadly stable in nominal terms (Appendix II, Table 17). Total expenditure remained near CFAF 20 billion over the 1991-95 period, but fell sharply in terms of GDP, from 54 percent in 1991 to 22 percent in 1995, and can be accounted for by the decline in foreign-financed capital outlays, which arose from the donor community’s heightened concerns regarding governance issues triggered by the November 1993 municipal elections.

34. Domestically financed noninterest expenditure doubled in nominal terms, but remained broadly flat in terms of GDP, at some 15 percent. Expenditure growth in the areas of the wage bill and the purchases of goods and services mirrored the overall trend, but outlays for subsidies and transfers--which constitute a sizable portion of spending on health and education services--shrank as a share of GDP, from 3 percent in 1991 to 1 percent in 1995. Unclassified expenditure was in large measure driving the significant fiscal slippage in 1993 and 1995, with unexplained outlays in those years totaling 7 percent and 2½ percent of GDP, respectively. Scheduled interest payments on external debt averaged some 34 percent of domestic revenue over the period, and total scheduled external debt service averaged some 89 percent. In contrast, total cash payments on the external debt--including payments on arrears--averaged 14 percent of domestic revenue.5

IV. Money and Banking

A. Institutional Setting, Policies and Instruments

35. Equatorial Guinea is one of the six member countries of the Bank of Central African States (BEAC) that share the CFA franc as a common currency.6

36. Monetary and credit policy in the area is formulated by the BEAC Board of Directors, in consultation with the National Monetary Committee in each country, which are the entities responsible for the implementation of monetary and credit policies and the assessment of credit requirements. The central objective of monetary policy is to validate the parity of the CFA franc vis-à-vis the French franc. In pursuit of this, the BEAC had traditionally relied on credit rationing and administrative controls. Credit to central governments is anchored by a statutory limit on the stock of central bank advances to the government, which is set equal to 20 percent of fiscal receipts from the preceding fiscal year.

37. In recent years, the BEAC has undertaken a monetary policy reform to gradually shift from direct controls to indirect instruments. A major step in this direction was taken in July 1994, when the BEAC launched a regional money market consisting of weekly auctions of central bank credit and an interbank market. Under the new system, the basic discount rate was discontinued and replaced, as a reference rate, by the central bank auction rate (taux d’intérêt des appels d’offres, or TIAO), which is set by the Governor of the BEAC at the time of each auction. In order to provide short-term liquidity, the central bank also introduced repurchase agreements (prises en pension) and, to absorb excess liquidity from the banking system, it offered to hold special deposits from commercial banks at pre-announced rates of remuneration. An additional step was taken in February 1996, when a system of weekly reverse auctions of central bank bills (appels d’offres negatifs) was introduced to progressively replace central bank special deposits. However, the development of the new monetary policy instruments has been undermined by the BEAC’s attempts at fixing both interest rates and quantities available at the central bank weekly auctions, and by the deterioration of confidence in the banking sectors in Cameroon and Congo, which has limited the effectiveness of the interbank market.

B. Banking System

38. From 1986 until the establishment of a second bank in September 1995, the Meridian Banque Internationale de l’Afrique Occidentale - Guinée Equatoriale (MBIAO-GE) was the only commercial bank in Equatorial Guinea, with its headquarters in Malabo and a branch in Bata. In April 1995, the main shareholder of the bank’s foreign owner (MIBL-Bahamas) was placed in receivership, and the bank’s management was replaced with an administrator appointed by the regional supervision commission (COBAC).7 At the same time, in line with the COBAC’s recommendation, the bank began to make provisions on its balance sheet in order to cover the full amount of certain assets blocked abroad. In August 1995, however, it was able to recover the totality of the assets previously held by MIBL-Bahamas. A Belgian bank, the Belgolaise, recently reached an agreement with the MBIAO-GE, whereby it would become the majority shareholder; the agreement’s ratification by the Belgian bank is still pending. Under the agreement, the prospective shareholder would contribute most of the CFAF 700 million needed for the banks’ full recapitalization.

39. A second commercial bank, the Caisse Commune d’Epargne et d’Investissement-Equatorial Guinea (CCEI), started operation in September 1995, bringing some competition into the financial market. The majority of the new bank’s capital is owned by the CCEI-Cameroon. Since March 1996, the new bank suffered indirectly from the situation of its main shareholder, as the BEAC central services requested capital control on all transfers made by CCEI banks in the entire zone, which caused transaction delays. By June 1996, the bank had attracted deposits for about half the value of those at the MBIAO, but had provided few loans. Ultimately, the CCEI intends to establish rural credit cooperatives, building on its experience in Cameroon.

C. Monetary Developments

40. Over the last two years, delays in the sorting of bank notes have caused distortions in the measurement of money in circulation in BEAC countries and obscured the interpretation of monetary developments.8 Specifically, this resulted in underestimation of money supply and net foreign assets in countries that are net importers of notes, and overestimation of currency in circulation and net foreign assets in countries, such as Equatorial Guinea, that are net exporters of notes. The problem appears to be particularly acute in Equatorial Guinea, as the country traditionally has a large trade deficit vis-à-vis other BEAC members, and is therefore likely to export a large share of the gross currency it emits.9 As a result, monetary data--in particular foreign assets and currency in circulation--should be assessed with caution.

41. The growth in broad money, after averaging 12 percent a year over the 1991-93 period, is reported to have grown by some 140 percent in 1994, and by another 49 percent in 1995. The income velocity of money decreased considerably over the period, as nominal non-oil GDP grew by an average of 2 percent between 1991 and 1993, before jumping to 50 percent and 18 percent in 1994 and 1995, respectively. After having deteriorated steadily over the 1991-93 period, Equatorial Guinea’s net foreign asset position strengthened in 1994 and 1995 (in foreign currency terms) in response to the devaluation. In CFA franc terms, net foreign assets increased by CFAF 1.4 billion in 1994, and by CFAF 3.5 billion in 1995, owing in large part to import substitution and to the improved performance of the traditional export sectors (Chart 3; Appendix II, Tables 18 and 19).

CHART 3MONETARY DEVELOPMENTS, 1991-95

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

1/ Non-oil GDP relative to average broad money.

42. Domestic credit (in terms of beginning-of-period stock of money) expanded on average by 92 percent a year between 1991 and 1995, driven primarily by credit to the government, which expanded at an annual rate of 81 percent a year. In 1991, the government assumed responsibility for CFAF 4.7 billion in loans made originally by the BEAC to banks liquidated in 1986, which caused a sharp expansion in credit to the government. Over the period 1992-95, credit to the government grew primarily as a result of increases in the BEAC statutory borrowing ceilings and in the domestic counterpart of Fund resources.10 In 1995, however, net credit to the government contracted modestly, as the government drawings under the BEAC statutory limit were more than offset by repayments to the Fund and an increase in transaction balances at the MBIAO-GE (Appendix II, Tables 20 and 21). Credit to the private sector rose by an average of 12 percent in terms of broad money over the 1991-95 period, reflecting the limited size of the non-oil sector and the reluctance of the banking system to expand its private sector lending activities beyond the extension of trade credits, owing to the narrowness of the creditworthy client base.11 Since the devaluation, however, growth in credit to the private sector has accelerated somewhat, as the forestry and the cocoa sectors have come to rely on the domestic banking system to contract their short-term, seasonal loans, which the exporters guarantee through the opening of letters of credit with foreign banks.

43. Data regarding sectoral distribution of credit are incomplete and considered unreliable (Appendix II, Table 22). The pool of borrowers remains very narrow, with the main clients including semipublic enterprises such as SEGESA (the electricity company) and GE-TOTAL (the petroleum distributor), and private traders such as Casa Mallo S.A. and APRA (the main cocoa exporters), and ABAYAK (the cement trader). The COBAC judges the credit portfolio of the MBIAO-GE to be sound.

44. Recent developments in deposit and lending rates applied by the central bank and the commercial banks are summarized in Appendix II, Table 23. Interest rates applicable in Equatorial Guinea are determined within the context of the policies of the BEAC. Progressively, interest rate policy in Equatorial Guinea has reflected the BEAC’s more flexible and market-oriented stance. In 1994, the change in parity and the resulting gain in confidence in the CFA franc allowed the BEAC to reduce administratively set interest rates, including the remuneration on deposits at the central bank, maximum lending rates, and minimum savings deposit rates. In November 1995, the BEAC also reduced its controls on commercial bank rates, maintaining only a maximum lending rate (currently set at 22 percent, a 7 percent margin above the penalty rate), and a minimum rate for small depositors (5.5 percent as of June 1996).12

V. External Developments

45. Equatorial Guinea’s balance of payments reflects the recent changes in the structure of the economy: 1) the growing dominance of oil production; 2) the strong supply response of non-oil exports following the devaluation; and 3) the sharp decline in official foreign financing resulting from the deterioration in relations with the donor community since 1994 (Appendix II, Tables 24-27). It also depicts a narrow export base concentrated on few exhaustible resources, and a need to reestablish orderly relations with creditors. In 1994 and 1995, the country benefited from a slight improvement in its terms of trade, which partially reversed the fall in export prices that had taken place in the first part of the decade (Appendix II, Table 31). Also, over the last two years, it was able to strengthen its competitiveness position, as cost-push inflationary pressures were contained and the gains from the devaluation preserved (Appendix II, Table 34).

Table 3.External Sector Developments, 1993-95
199319941995
(In percent of GDP, unless otherwise indicated)
Current account balance-10.6-0.5-54.2
Non-oil current account balance-20.1-8.1-5.7
Overall balance-13.8-13.0-8.5
Debt service (in percent of exports of goods and nonfactor services)44.033.927.8
Debt service (in percent of domestic revenue)78.3110.093.7
Cash payments on debt (in percent of domestic revenue) 1/12.025.38.4
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Includes payment of arrears.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Includes payment of arrears.

46. The evolution of the current account is mostly driven by the activities of the oil companies. In both 1991 and 1995, the pace of oil exploration and drilling intensified and caused the current account deficit to reach 35 percent and 54 percent of GDP, respectively. By contrast, during the period 1992-94, when new oil investments were lower, the current account deficit declined from 13 percent of GDP to 1 percent of GDP. Over the same period, the trade balance swung from a deficit of US$3 million to a surplus of US$17 million, as a result of both growing oil exports and declining imports. Since 1992, with movements in the capital account largely compensating for changes in the current account, the overall balance remained broadly stable in U.S. dollar terms, although the deficit declined in percent of GDP from 20 percent to 9 percent. Equatorial Guinea financed most of its overall deficit through the accumulation of external payments arrears, including to multilateral creditors.

A. The Oil Sector

47. Crude oil export volume increased from some 3,000 b/d in 1992 to 6,243 b/d in 199513 and it is expected to reach some 40,000 b/d by end-1996. In the past, export prices have fluctuated around the level of international reference prices, as difficulties associated with finding buyers for small quantities from a relatively unestablished source have tended to reduce the premium that this product should otherwise command.

48. The effect of the petroleum sector on the current account has been positive in years when exploration and fixed investment in the oil sector have been moderate, as was the case in 1992-94. However, in 1995, imports of goods and services by the oil companies increased to US$123 million, from US$20 million in 1994, in support of drilling, three-dimensional seismic surveys, an LPG plant, and infrastructure construction in the Zafiro field. Imports by the oil sector are expected to reach US$156 million in 1996. The oil companies, in financing the boom in imports from abroad, generated an enormous shift in the capital account, from a deficit of US$15 million in 1994 to a surplus of US$87 million in 1995. The net effect of the petroleum sector on the overall balance of payments corresponds to the sum of payments to government, primarily as royalties, and leakages into the local private sector in terms of payments for local goods and services (which are estimated to be about 3 percent of production and development costs).

B. The Non-Oil Sector

49. The non-oil trade balance improved markedly after the devaluation, swinging from a deficit of 11 percent of GDP in 1993 to a surplus 7 percent in 1995. Over the same period, the current account and the overall balances followed a similar evolution, with a deficit declining from 20 percent to 6 percent of GDP and from 22 percent to 13 percent of GDP, respectively. Both a 37 percent contraction in non-oil imports (see below) and a 27 percent growth in non-oil exports contributed to the adjustment in 1994, while the strength of continued export growth outweighed a partial recovery in imports in 1995 (Chart 4).

CHART 4EXTERNAL SECTOR DEVELOPMENTS, 1991-95

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

1/ Excluding re-exports.

2/ Excluding imports for re-exports.

50. As described in Section II C, timber production has increased rapidly since 1993. Export volume grew by 36 percent in 1994 and by 23 percent in 1995. Favorable international prices together with a growing proportion of precious woods contributed to a strong increase in export prices. However, until recently, efforts to stimulate wood manufacturing have met with little success, as in 1995 processed timber accounted for only 9 percent of the total value of timber exports.

51. The partial recovery in cocoa production reflects the incentive effect of particularly favorable export prices (1995 prices were almost 40 percent higher than in 1993), and the lagged effect of the replantings that were initiated in 1992. In 1995, the volume of cocoa exports was 80 percent higher than in 1993, albeit well below the levels registered in 1991 and 1992.

52. Other export crops--including coffee, malanga, bananas, black pepper, and, more recently, medicinal plants produced by the cocoa exporter APRA--together generate the same level of export earnings as cocoa. In 1995, these crops accounted for as much as 10 percent of non-oil exports.

53. The significant decline in imports observed in 1994 was almost entirely due to cuts in the public investment program, as foreign donors reduced their contribution from US$40 million in 1993 to US$9 million 1994 (Appendix II, Table 29). In fact, the change in relative prices resulting from the devaluation contributed little to the contraction in imports. The reduction in foreign assistance also affected imports of services, as technical assistance dropped from US$15 million in 1993 to US$4 million in 1994 and fell even further in 1995, as well as the non-oil capital account, which swung from a US$2 million surplus in 1993 to a US$8 million deficit in 1995. Indeed, the only important source of disbursements in 1995 was the Chinese government, which continued to sponsor infrastructrual projects in transportation and health.

External debt

54. The burden of Equatorial Guinea’s outstanding medium- and long-term public debt, in terms of GDP, remained stable over the 1991-93 period, then increased sharply in 1994 as a result of the devaluation (Appendix II, Table 32). In 1995, however, influenced by the strong growth in GDP in 1994-95 and the concessional Paris Club terms of reference rescheduling in December 1994, total external debt fell to 130 percent of GDP (US$233 million), as compared with 203 percent of GDP (or US$261 million) at end-1994, and 159 percent of GDP (or US$225 million) at end-1991.

55. The structure of the debt also changed over the 1991-95 period, as the debt owed to multilateral institutions increased from 37 percent of total external debt (US$84 million) in 1991 to 54 percent (US$127 million) in 1995, and bilateral debt declined during the same period from 63 percent (US$142 million) of total debt to 45 percent (US$105 million). The shift in the debt structure was driven by the increase in multilateral lending and the decline in outstanding Paris Club debt that resulted from the concessional debt relief granted by the Paris Club in 1992 and 1995, which reduced the total debt outstanding to Paris Club members from US$100 million in 1991 to about US$60 million in 1995.

56. With regard to Paris Club creditors, US$42 million was owed to Spain at end-1995, US$6 million to France, and nearly US$13 million to Italy. The major non-Paris Club creditors are the People’s Republic of China, with US$25 million at end-1995, and Argentina, with about US$10 million.

57. At the end of 1995 external payments arrears stood at US$37 million, of which US$14 million represented interest payments arrears. About 23 percent of external payments arrears was owed to multilateral institutions, 21 percent to Paris Club creditors, and 55 percent to other bilateral creditors.

58. Scheduled external debt service remained stable over the 1991-95 period at an average of US$25 million; however, as a percentage of exports of goods and nonfactor services, it declined from 56 percent in 1991 to 28 percent in 1995, owing to the sharp increase in oil and timber exports (Appendix II, Table 33). Cash payments effected--including those on arrears--were a fraction of scheduled debt service, averaging 7 percent of exports of goods and nonfactor services, and falling from 16 percent in 1991 to 2 percent in 1995. The burden of scheduled debt service was only marginally higher in terms of domestic revenue, as described in Section III.D.

APPENDIX I Equatorial Guinea: Summary of Tax System as of December 31, 1995
TaxNature of TaxExemptions and DeductionsRates
1. Taxes on net income and profits (Impuesto sobre la renta y utilidades)
1.1 Tax on income from rural property (Contribución rústica)Levied on actual or potential income from rural property, whether or not it is under exploitation. All property must be declared and registered. The tax is payable every six months.A 15 percent deduction from the fixed rate is allowed for property used for husbandry; cultivation of cocoa, coffee, coconuts, foodstuffs, and cultivation of palm oil. Exempt are: properties of less than 5 hectares; properties owned by the government (provided that the rent is used for public service), by religious institutions (if the area under exploitation does not exceed 10 hectares), and by international institutions.CFAF 200 per hectare.
1.2 Tax on income from urban property (Contributión urbana)Levied on actual or potential income from urban property, which is based on the value of land and buildings. The tax is payable each six months.Exempt are: property owned by the government, nonprofit organizations, representatives of foreign governments on a reciprocity basis, and international organizations. Property used for education and property with a taxable base below CFAF 500,000 (provided that it is the only property of the owner or that the combined taxable base of all his properties does not exceed that value) are also exempted.0.4 percent of value of land and buildings.
1.3 Corporate income tax (Impuesto sobre sociedades)Levied on combined income received by companies from activities in Equatorial Guinea. Return of taxable income must be filed within four months following the date of the balance sheet.Normal business expenses, including depreciation allowances, are deductible. Depreciation allowances range from 5 percent for buildings to 50 percent for glassware and utensils used in hotels and restaurants. Cooperatives involved in the production and sale of agricultural products that can be used as inputs for agriculture and industry are exempted. Nonprofit organizations, local governments and agricultural development institutions are also exempt.25 percent.
1.3.1 Minimum tax on companies (Cuota minima fiscal)Levied on all companies subject to 1.3 if the corporate income tax would fall below the minimum. The tax is payable by end-March.Companies benefiting from tax holidays under the Investment Code, artisans’ cooperatives, and all other companies for the first two years of their activities are exempt. Exporters of agricultural products and companies engaged in agricultural and husbandry activities (except forestry), fishing, and processing of agricultural products are also exempt.Annual turnover (CFAF)

Below 50,000,000

From 50,000,001 to 100,000,000

From 100,000,001 to 500,000,000

From 500,000,001
Minimum tax

300,000

600,000

1,000,000

2,000,000
1.4 Personal income tax (Impuesto sobre la renta de las personas fisicas)Tax levied on annual income received by individuals who are residents of Equatorial Guinea. The same rate applies all taxable personal income.Professional expenditure of up to CFAF 1 million incurred in the process of generating income may be deducted. Diplomats are exempt on a reciprocity basis.Annual income tax brackets (CFAF) Below 200,000

From 200,001 to 300,000

From 300,001 to 400,000

From 400,001 to 500,000

From 500,001 to 600,000

From 600,001 to 700,000

From 700,001 to 800,000

From 800,001 to 900,000

From 900,001 to 1,000,000

From 1,000,001 to 1,250,000

From 1,250,001 to 1,500,000

From 1,500,001 to 1,750,000

From 1,750,001 to 2,000,000

From 2,000,001 to 2,500,000

From 2,500,001 to 3,000,000

From 3,000,001 to 4,000,000

From 4,000,001 to 5,000,000

From 5,000,001 to 6,000,000

From 6,000,001 to 7,000,000

From 7,000,001
Marginal rate

0%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

15%

16%

17%

18%

19%

20%
Income tax Exempt

2,000

5,000

9,000

14,000

20,000

27,000

35,000

44,000

69,000

96,000

126,000

158,500

228,500

303,500

463,500

633,500

813,500

1,003,500
1.4.1 Tax on rental income (Impuesto sobre rentas inmobiliarias)Levied on rental income from real estate.Normal business expenses, including interest payments on debt contracted in relation to acquisition, maintenance, repair or renovation of property, are deductible. Rental income from properties owned by the government, and buildings occupied by owners, direct descendants or ascendents, are exempt.12 percent.
1.4.2 Tax on industrial and commercial profits (Impuesto sobre beneficios industriales y comerciales)Levied on net income from Cameroonian sources from industrial and commercial operations. Taxpayers are assessed on actual net profits (régimen del beneficio real) or they may opt for an estimated income assessment (régimen a destajo).Normal business expenses, including depreciation allowances, are deductible.25 percent.
1.4.3 Tax on agricultural profits (Impuesto sobre el beneficio agrícola)Levied on the net income of farmers. The two assessment systems described in 1.4.2 are also applicableSame deductions as in 1.4.2.1) For individuals: tax table (1.4).

2) For legal entities: 25 percent.
1.4.4 Tax on noncommercial profits (Impuesto sobre beneficios no comerciales)Levied on the net income of all residents engaged in independent activities of a noncommercial nature; it applies mainly to professional income.Same deductions as in 1.4.21) For individuals: tax table (1.4).

2) For legal collectives: 25 percent.
1.4.5 Tax on wages and salaries (Impuesto sobre sueldos y salarios)Levied on net income from wages, salaries, pensions, and annuities. The tax is withheld at source, and declarations must be made by employers every January.Dependency allowances and social security benefits, and 20 percent of remunerations representing professional expenses, are deductible. However, remuneration in kind is included as follows:Tax table (1.4).
Benefit





Housing

Elect & water

Per dom. servant

Food
Assessment in percent of gross salary

10%

8%

5%

25%
(with a ceiling of CFAF 75,000 per person)
1.4.6 Tax on income from securities (Impuesto sobre rentas de capitales mobiliarios)Levied on dividend distributions and interest derived in Equatorial Guinea.Exempt are loans given with borrowed money, savings accounts, and use of reserves to augment capital.12 percent.
2. Taxes on goods and services (Impuesto sobre bienes y servicios)
2.1 Domestic turnover tax (Impuesto sobre la cifra de negocio interior y servicios)Levied on gross receipts obtained from industrial, commercial, and professional activities, including sale of goods and services. The tax is payable during the month following each quarter if the amount to be paid is less than CFAF 25,000 a month; otherwise, the tax is payable monthly.Sales without further processing of goods that have already paid the turnover tax are exempt. Also exempt are: exports; unprocessed agricultural products (including timber), newspapers, private schools, and transactions. Diesel consumption by the electricity enterprise is also exempt.5 percent on basic necessities.

12 percent on luxuries and services.
2.2 Surcharge on the domestic sale of refined oil products (Recargo, recargo excepcional)Levied value per liter of refined product.Diesel consumption by the electricity enterprise is exempt.CFAF 205.4 per liter on gasoline

CFAF 20.0 per liter on kerosene

CFAF 55.3 per liter on diesel

CFAF 23.2 per liter on jet fuel
3. Property transfer taxes
3.1 Property transfer (Impuesto sobre transfcrencias patrimoniales)Levied on net value of property transferred inter vivos in Equatorial Guinea, on capital gains in urban and rural property; on the transfer of shares, securities; on the sale, lease, exchange and mortgage of real estate; on the sale and lease of movable property; and on the transfer of other selected financial claims.The state and autonomous bodies of the government, which are specifically exempt from the tax; nonprofit, educational, and religious institutions, local governments, transfers of real estate made in favor of foreign governments for diplomatic use, and transfers exempt under international agreements.a) Ad valorem rates: 1-9 percent

b) Fixed rates according to the nature of the transfer and values involved.
3.2 Inheritance duties (Impuesto sobre las sucesiones)Levied on net value of property transferred causa mortis.Debts to be honored by inheritor, provided that they are properly documented, are deductible. Inheritance below CFAF 100,000 is exempt as well as salaries not received by the deceased while in active service; life insurance benefits of up to CFAF 500,000 are exempt if inheritor is a spouse or a legitimate or adoptive descendant or ascendant.Rates vary between 2 percent and 28 percent depending on the relation of inheritor to the deceased.
4. Stamp tax (Impuesto del timbre)Assessed on the value declared at the time a juridical act is concluded. Applies to legal instruments, including accounting and banking documents; import and export documents; insurance; transportation, rental, and other contracts; and property registration.a) Ad valorem rates: 2-10 percent

b) Fixed rates according to the nature of the legal document and values involved.
5. Poll tax (Impuesto sobre personas fisicas)Annual tax payable by most residents of Equatorial Guinea over 18 years of age. The tax is payable in the first quarter of the fiscal year. Payment of this tax is deductible from annual global payment made by foreigners to the security office.Exempt are: citizens under 18 years of age; diplomats (on a reciprocity basis); parents having more than six children under 18 years of age; men over age 60 and women over age 50; single women with more than three children under 18 years of age; and the handicapped.CFAF 2,000 per resident.

CFAF 1,500 per parent

CFAF 1,000 per dependant.

CFAF 500 per non-exempt elderly person.
6. Taxes on foreign trade (Impuesto sobre el comercio internacional)
6.1 Taxes on importsThe rates of all import taxes, with the exception of the import duties on petroleum products and the surcharge (6.1.4), are identical for all UDEAC member countries.
6.1.1 Customs duty (Derechos de importación)Collected on the c.i.f. value of all imports, with the exception of petroleum products, which are subject to special arrangements.Imports admitted under special franchise or those subject to special treatment according to the Investment Code.Category I

(basic necessities)

Category II

(raw materials and equipment)

Category III

(investment goods)

Category IV

(consumption goods)


5 percent



10 percent



20 percent



30 percent
Petroleum products (per liter):
gasoline

kerosene

diesel

jet fuel
CFAF 10

CFAF 5

CFAF 4

CFAF 3
6.1.2 Fiscal duty (Derechos fiscales)Assessed on the c.i.f. value of all imports, except alcohol, tobacco, and wine, for which the rates are specified by weight or volume.Exemptions: (a) equipment imported by enterprises that are exempt from import taxes; (b) goods imported by certain categories of consignees (embassies, international organizations, etc.); and (c) petroleum products.From 20-80 percent, with the majority of these rates between 20 percent and 40 percent.
6.1.3 Turnover tax on imports (Impuesto sobre importaciones)Levy applicable to the c.i.f. value of imports plus customs and fiscal duties.Same exemptions as in 6.1.2.5 percent (reduced rate)

12 percent (standard rate)
6.1.4 Surcharge on alcoholic beverages and tobacco products (Recargo sobre bebidas y tabaco)Assessed on all such imports from countries outside the UDEAC zone.Alcoholic beverages: 25 to 30 percent Tobacco products: 30 percent
6.2 Taxes on exports
6.2.1 Export duty (Derechos de exportación)Assessed on reference prices (precios de referencia) established for coffee and timber; and at a fixed rate for cocoa.Cocoa and coffee: 1 percent of FOB. value.

Coffee: graduated rates based on world market prices

Logs: 20 percent, plus CFAF 325 per cubic meter.

Plywood and sawn wood: 10 percent, plus CFAF 325 per cubic meter.
6.2.2 Tax on reexports and merchandise in transitAssessed on the c.i.f. value of goods to re-export or in transit.a) Re-exports and transiting goods: 5 percent of F.O.B. value for nonresidents; 3 percent of F.O.B. value for residents.
APPENDIX II
Table 1.Equatorial Guinea: Gross Domestic Product by Sector of Origin, 1991-95
19911992199319941995

Est.
(In millions of current CFA francs)
Primary sector20,60924,25026,28948,33964,096
Non-oil primary sector20,60920,01920,10133,89341,479
Agriculture14,60314,59014,41219,97124,148
Export crops1,7421,4618141,6962,475
Subsistence crops11,54011,72912,12315,99819,163
Livestock1,3211,4011,4742,2772,510
Forestry5,1075,0365,34413,32416,728
Fishing899392345598603
Oil sector--4,2316,18814,44622,617
Secondary sector4,3714,5994,8166,6797,280
Manufacturing608659660835876
Electricity1,5261,5691,7442,4522,680
Construction2,2372,3712,4123,3913,724
Tertiary sector10,33111,49511,47715,15917,030
Trade and commerce4,2824,6674,6716,5677,404
Transport and communications1,0101,0281,0331,4521,606
Finance and housing1,0351,0651,0651,4971,669
Public administration2,4793,1653,1643,4724,080
Other services1,5251,5701,5442,1702,270
Import duties1,5321,6681,7501,3301,409
GDP at market prices36,84242,01244,33271,50789,815
Of which: non-oil GDP(36,842)(37,781)(38,144)(57,061)(67,198)
(Annual percentage change)
Primary sector(2.7)17.78.483.932.6
Non-oil primary sector(2.7)(2.9)0.468.622.4
Agriculture1.7(0.1)(1.2)38.620.9
Export crops(4.9)(16.1)(44.3)108.445.9
Subsistence crops2.31.63.432.019.8
Livestock5.76.05.254.410.2
Forestry(12.2)(1.4)6.1149.325.5
Fishing(10.5)(56.4)(12.0)73.30.9
Oil sector46.3133.556.6
Secondary sector19.35.24.738.79.0
Manufacturing9.48.40.226.54.9
Electricity3.92.811.240.69.3
Construction36.66.01.740.69.8
Tertiary sector8.011.3(0.2)32.112.3
Trade and commerce17.39.00.140.612.7
Transport and communications9.41.80.540.610.6
Finance and housing4.72.9--40.611.5
Public administration(8.1)27.7(0.0)9.717.5
Other services16.63.0(1.7)40.64.6
Import duties(1.9)8.94.9(24.0)5.9
GDP at market prices2.414.05.561.325.6
Of which: non-oil GDP(2.4)(2.5)(1.0)(49.6)(17.8)
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Table 2.Equatorial Guinea: Gross Domestic Product by Sector of Origin, 1991-95(In percent of GDP in current CFA francs)
19911992199319941995

Est.
Primary sector55.952.759.367.671.4
Non-oil primary sector55.947.745.347.446.2
Agriculture39.634.732.527.926.9
Export crops4.73.51.82.42.8
Subsistence crops31.327.927.322.421.3
Livestock3.63.33.33.22.8
Forestry13.912.012.118.618.6
Fishing2.40.90.80.80.7
Oil sector--10.114.020.225.2
Secondary sector11.910.910.99.38.1
Manufacturing1.71.61.51.21.0
Electricity4.13.73.93.43.0
Construction6.15.65.44.74.1
Tertiary sector28.027.425.921.219.0
Trade and commerce11.611.110.59.28.2
Transport and communications2.72.42.32.01.8
Finance and housing2.82.52.42.11.9
Public administration6.77.57.14.94.5
Other services4.13.73.53.02.5
Import duties4.24.03.91.91.6
GDP at market prices100.0100.0100.0100.0100.0
Of which: non-oil GDP(100.0)(89.9)(86.0)(79.8)(74.8)
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Table 3.Equatorial Guinea: Gross Domestic Product by Sector of Origin, 1991-95
19911992199319941995

Est.
(In millions of CFA francs in 1985 prices)
Primary sector21,71425,43526,98630,45436,578
Non-oil primary sector21,71421,04421,06424,00227,431
Agriculture16,28616,06115,77716,75118,807
Export crops5,1464,2512,8423,0144,053
Subsistence crops9,85110,41611,35412,10913,045
Livestock1,2891,3931,5811,6281,710
Forestry4,5514,5944,9386,8848,243
Fishing877390349366381
Oil sector--4,3915,9226,4529,147
Secondary sector4,3694,3914,8875,1265,490
Manufacturing681729802842868
Electricity1,5051,3041,5221,5681,705
Construction2,1822,3582,5622,7162,917
Tertiary sector10,17711,54412,37212,65213,335
Trade and commerce4,1784,6414,9625,1605,413
Transport and communications1,0241,0671,1051,1381,160
Finance and housing1,0101,0591,1311,1821,252
Public administration2,4193,1483,5223,4863,783
Other services1,5461,6291,6521,6851,727
Import duties1,4951,6591,8591,0051,155
GDP at market prices37,75343,02946,10449,23756,558
Of which: non-oil GDP(37,753)(38,638)(40,182)(42,785)(47,411)
(Annual percentage change in constant prices)
Primary sector-6.617.16.112.920.1
Non-oil primary sector-6.6-3.10.113.914.3
Agriculture-2.8-1.4-1.86.212.3
Export crops5.8-17.4-33.16.034.5
Subsistence crops-6.75.79.06.77.7
Livestock-2.68.113.53.05.0
Forestry-16.20.97.539.419.7
Fishing-17.4-55.6-10.55.04.0
Oil sector----34.98.941.8
Secondary sector15.00.511.34.97.1
Manufacturing10.27.010.15.03.1
Electricity3.9-13.316.73.08.8
Construction25.98.08.76.07.4
Tertiary sector7.213.47.22.35.4
Trade and commerce8.111.16.94.04.9
Transport and communications43.64.13.63.01.9
Finance and housing-3.54.96.84.55.9
Public administration-15.330.211.9-1.08.5
Other services53.05.41.42.02.5
Import duties-9.511.012.1-45.914.9
GDP at market prices-1.114.07.16.814.9
Of which: non-oil GDP(-1.1)(2.3)(4.0)(6.5)(10.8)
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Table 4.Equatorial Guinea: Gross Domestic Product by Use of Resources, 1991-95
19911992199319941995

Est.
(In billons of CFA francs)
Domestic demand58.251.054.271.6134.8
Resource balance-21.3-9.0-9.9-0.1-45.0
Exports of goods and nonfactor services12.015.416.539.145.2
Imports of goods and nonfactor services-33.3-24.4-26.4-39.2-90.2
Gross domestic product36.842.044.371.589.8
Net factor income from abroad-2.5-2.8-2.4-4.0-5.6
Public-2.7-2.4-3.9-4.1
Private-0.1-0.0-0.1-1.5
Gross national product34.439.241.967.584.2
Unrequited transfors10.86.27.73.71.8
Public11.37.28.43.73.1
Private-0.4-1.0-0.7-0.0-1.3
Gross disposable income45.245.549.571.286.1
Corruption43.944.044.054.374.9
Public5.36.114.411.610.0
Private38.537.929.742.765.0
Oil0.31.16.3
Nonoil29.341.658.7
National savings1.31.55.516.911.2
Public3.23.45.6
Private2.313.55.6
Oil5.613.17.9
Nonoil-3.30.5-2.3
Gross fixed capital formation14.37.010.217.359.9
Public7.12.40.2
Private3.114.959.7
Oil2.810.356.6
Nonoil0.34.63.1
Current account-13.0-5.5-4.7-0.4-48.7
(In percent of GDP)
Domestic demand157.9121.4122.3100.1150.1
Resource balance-57.9-21.4-22.3-0.1-50.1
Net factor income from abroad-6.7-6.6-5.5-5.5-6.2
Unrequited transfers29.314.917.35.22.0
Gross disposable income122.6108.3111.799.695.8
Consumption119.1104.799.375.983.4
Public14.514.532.416.211.1
Private104.690.266.959.772.3
Oil0.71.67.0
Nonoil66.258.165.3
National savings3.63.612.523.712.4
Public7.24.86.2
Private5.218.96.2
Oil12.718.38.8
Nonoil-7.50.7-2.6
Gross fixed capital formation38.816.723.024.266.7
Public16.03.40.2
Private7.020.866.4
Oil6.414.463.0
Nonoil0.66.43.4
Current account-35.3-13.1-10.6-0.5-54.3
Sources: Data provided by the Equatorial Guinean authorities, and staff estimates.
Sources: Data provided by the Equatorial Guinean authorities, and staff estimates.
Table 5.Equatorial Guinea: Timber Concessions by Enterprise, 1993-95
At end-1993At end-1994At end-1995
Thousands

of hectares
Percent

of total
Thousands

of hectares
Percent

of total
Thousands

of hectares
Percent

of total
A.B.M. S.A.100.016.8144.816.2139.813.3
Aflisok50.08.450.05.650.04.8
Chilbo S.L.20.03.440.04.520.01.9
Bueta-Urcolas S.L.35.05.935.03.935.03.3
EXAMAGE S.A.30.05.030.03.330.02.9
T. Nguema Obiang25.04.225.02.825.02.4
MAFE S.A.10.01.723.52.613.51.3
Angel Alogo Nchama12.02.012.01.312.01.1
Mir S. A.100.016.8--------
SEFGE S.A.50.08.4--------
ECA20.03.4--------
Semasa80.013.480.08.980.07.6
BU Forestal S.L.35.05.935.03.935.03.3
Chilbo20.03.420.02.220.01.9
Mafesa10.01.710.01.110.01.0
Constancia Mangue Nsue----50.05.650.04.8
SOFOGE----42.04.742.04.0
Alosa Forestal----32.53.617.51.7
Hassan Hachen----30.03.330.02.9
African Trading----25.02.825.02.4
EXFO S.A.----25.02.825.02.4
SOFONA----11.01.211.01.0
Miguel Oyono----7.50.87.50.7
EGUIMA S.A.----20.02.220.01.9
Armengol Ondo Nguema----17.52.017.51.7
M.I. Chele and O. Bangue----17.01.917.01.6
Densa Forestal----13.51.513.51.3
AFO S.A.----12.01.312.01.1
Agroforestal----25.02.825.02.4
SIMGE S.A.----25.02.825.02.4
Carlano----8.00.98.00.8
FORGE----30.03.3302.9
Laymex Holdings LTM--------35.03.3
AGRICOM--------3.50.3
ECUAFORSA--------7.00.7
EFG--------20.01.9
SOMAVI--------20.01.9
SUIFO--------50.04.8
SINOSA--------52.05.0
AFLOMAR--------10.01.0
AVOLENAM FORESTAL--------6.50.6
Total597.0100.0896.3100.01050.3100.0
Source: Data provided by the Equatorial Guinean authorities.
Source: Data provided by the Equatorial Guinean authorities.
Table 6.Equatorial Guinea: Production of Principal Export Commodities, 1990-95
Cocoa1/Coffee2/TimberPetroleum
(Tons)(Tons)(Thousands of

cubic meters)
(Thousands

of barrels)
(Thousands

of tons)
19906,793424212.5----
19915,673695159.8----
19925,121500165.81,134158
19932,855300191.21,627217
19943,04684266.71,724236
19953,770n.a.319.02,444337
Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.

Crop year. The last quarter of a calendar year and the first three quarters of the following calendar year constitute the current crop year. Most of the harvest is completed by December, and exports normally continue through the first two quarters of the following calendar year.

Marketed through official channels.

Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.

Crop year. The last quarter of a calendar year and the first three quarters of the following calendar year constitute the current crop year. Most of the harvest is completed by December, and exports normally continue through the first two quarters of the following calendar year.

Marketed through official channels.

Table 7.Equatorial Guinea: Production and Exports of Timber, 1991-95(In thousands of cubic meters)
19911992199319941995

Est.
Total production159.8165.8191.2266.7319.4
Logs149.4155.0178.8249.6299.7
Sawn timber6.66.87.89.911.2
Processed timber3.84.04.67.28.5
Exports133.8144.7168.8229.4281.0
Logs122.2132.1156.4216.6267.3
Sawn timber5.66.67.57.57.3
Processed timber6.06.04.95.46.3
Consumption and change in stocks (decrease -)1/26.021.122.437.338.4
Logs27.222.922.433.032.3
Sawn timber1.00.20.32.43.9
Processed timber-2.2-2.0-0.31.82.2
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Calculated as a residual.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Calculated as a residual.

Table 8.Equatorial Guinea: Official Producer Prices, 1990-95 1/(In CFA francs per kilogram)
Cocoa 2/Coffee 3/
1990/91230150
1991/92250160
1992/93255160
1993/94235125
1994/95400700
1995/96450700
Source: Data provided by the Equatorial Guinean authorities.

Crop year (October 1 - September 30).

First grade dried cocoa.

Washed beans.

Source: Data provided by the Equatorial Guinean authorities.

Crop year (October 1 - September 30).

First grade dried cocoa.

Washed beans.

Table 9.Equatorial Guinea: Public Investment Program, 1990-94 1/
19901991199219931994
(In millions of CFA francs)
Expenditure by sector
Agriculture, forestry, and fishing1,4302,1861,7352,8611,381
Administrative development1,2591,561440715855
Education3,1383,4353,1073,183260
Energy4772614915531
Industry--55125917918
Information, tourism, and culture1,565--352834124
Mining and hydrocarbons5609787739--
Social promotion421540483
Health2,6932,6372,2532,4441,502
Transport and communications1,6777835874061,124
Other408386325358926
Total12,69412,18910,03311,9206,226
Type of expenditure
Technical assistance5,3583,2022,9524,1042,273
Local salaries1,538831585700619
Other current expenditure2,2493,5952,6383,6681,000
Capital formation3,5494,5613,8583,4472,335
Total12,69412,18910,03311,9206,226
Financing
Domestic1,2267197917241,113
External11,46811,4709,24211,1965,113
Grants9,6039,9296,9598,1032,932
Loans1,8641,5412,2833,0932,181
Total12,69412,18910,03311,9206,226
(In millions of U.S. dollars)
Financing
Domestic4.52.53.02.62.0
External42.140.734.939.59.2
Grants35.335.226.328.65.3
Loans6.85.58.610.93.9
Total46.643.237.942.111.2
(In percent of total investment expenditure)
Expenditure by sector
Agriculture, forestry, and fishing11.317.917.324.022.2
Administrative development9.912.84.46.013.7
Education24.728.231.026.74.2
Energy3.80.21.51.30.5
Industry--4.52.61.50.3
Information, tourism, and culture12.3--3.57.02.0
Mining and hydrocarbons--5.07.86.2--
Social promotion0.30.10.40.40.1
Health21.221.622.520.524.1
Transport and communications13.26.45.93.418.1
Other3.23.23.23.014.9
Total100.0100.0100.0100.0100.0
Type of expenditure
Technical assistance42.226.329.434.436.5
Local salaries12.16.85.85.99.9
Other current expenditure17.729.526.330.816.1
Capital formation28.037.438.528.937.5
Total100.0100.0100.0100.0100.0
Financing
Domestic9.75.97.96.117.9
External90.394.192.193.982.1
Grants75.681.569.468.047.1
Loans14.712.622.826.035.0
Total100.0100.0100.0100.0100.0
Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.

Data not available for 1995.

Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.

Data not available for 1995.

Table 10.Equatorial Guinea: Volume and Prices of Imported Petroleum Products, 1991-95
19911992199319941995

Est.
Volume of imports
(in thousands of liters)
Gasoline3,8133,8932,4554,0053,528
Diesel8,32613,3489,0128,52911,064
Jet/Kerosene1,8495,9524,3714,8605,947
Value of imports, c.i.f.
(in millions of CFA francs)
Gasoline388214127328296
Diesel690681457665873
Jet/Kerosene157306223369466
Average import price, c.i.f.
(in CFA francs per liter)
Gasoline10255528284
Diesel8351517879
Jet/Kerosene8551517678
Average domestic retail price 1/
(in CFA francs per liter)
Gasoline295350350435435
Diesel 2/225225225280280
Jet/Kerosene175175175230230
Profits 3/
(in CFA francs per liter)
Gasoline193295298353351
Diesel142174174202201
Jet/Kerosene90124124155152
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Includes taxes.

Except for diesel supplied to the electricity company, which was charged CFAF 120 per liter throughout the period.

Difference between average import price and average domestic retail price.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Includes taxes.

Except for diesel supplied to the electricity company, which was charged CFAF 120 per liter throughout the period.

Difference between average import price and average domestic retail price.

Table 11.Equatorial Guinea: Price Structure of Petroleum Products, 1995(In CFA francs per cubic meter)
GasolineKeroseneDieselJet fuel
Import reference price (c.i.f. Malabo-Bata)106,657106,657106,657106,657
Losses and port fees1,1301,1301,1301,130
Total delivery price107,787107,787107,787107,787
Import taxes10,1605,1664,4923,127
Storage and equipment fees (EEPGE)13,000--13,00013,000
Price before distribution130,947112,953125,279123,914
Distribution expenses77,77257,41377,77291,924
Distributor’s margin9,4009,8009,8009,800
Municipal taxes1,2751,5821,7721,955
Sales taxes215,60628,25265,37732,407
Retail price435,000210,000280,000260,000
Memorandum item:
World market price 1/83,84580,67578,94777,175
Source: Data provided by the Equatorial Guinean authorities.

As reported by the supplier.

Source: Data provided by the Equatorial Guinean authorities.

As reported by the supplier.

Table 12.Equatorial Guinea: Consumer Price Index, 1991-95(January 1990 = 100)
Previous

Weights

(percent)
New

Weights

(percent)
19911992199319941995
Estimates
Food and beverages88.660.498.1102.5107.1148.1167.2
Cereals16.87.096.4101.1109.9175.4203.4
Vegetables24.48.199.3100.2100.4146.7169.4
Fruits10.74.5101.6115.4120.8138.9202.9
Meat and fish19.826.697.6101.5107.4134.1154.2
Beverages1.93.9117.1107.1108.3172.8159.0
Other16.810.397.9101.6101.1157.8168.9
Health and sanitation3.44.4108.294.4112.5202.9216.2
Soap and sanitation products--2.4114.891.1128.4176.9190.7
Medicine--2.0100.896.092.5225.1236.4
Clothing3.714.787.875.868.799.8120.7
Furniture and other equipment3.58.695.997.795.3133.4136.8
Furniture--3.294.599.698.0107.8117.9
Other equipment--5.497.096.093.9153.0152.5
Other services0.89.099.6105.597.7116.3119.2
Gasoline--2.997.698.598.5115.7116.3
General index100.0100.097.098.099.6138.3154.1
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Table 13.Equatorial Guinea: Monthly Movements in the Consumer Price Index, 1991-95
19911992199319941995
(January 1990 =100)
Month
January95.697.2101.0123.3153.0
February98.498.298.2126.3148.6
March95.797.897.1128.7152.1
April95.897.195.9135.8147.7
May96.296.8100.7137.6146.1
June96.097.597.4140.5150.0
July96.496.199.1140.7156.2
August96.298.4102.2144.2158.0
September96.793.5101.2148.9158.6
October98.199.2101.2144.1157.7
November98.8101.3100.7144.7159.7
December100.2103.0100.2145.2161.0
Annual average97.098.099.6138.3154.1
Memorandum items:(Annual percentage change)
Average(0.9)1.01.638.911.4
End of period0.42.8(2.7)45.010.9
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Table 14.Equatorial Guinea: Summary of Central Government Financial Operations, 1991-95(In millions of CFA francs, unless otherwise specified)
19911992199319941995
Total revenue and grants17,91615,79017,56414,98415,543
Domestic revenue7,6968,8299,23412,05213,408
Oil revenue1077921,2561,9522,260
Non-oil revenue7,6688,1168,09410,10011,148
Blocked revenue-79-79-116----
Grants10,2206,9618,3302,9322,134
Total expenditure and net lending20,07519,42024,06018,93420,138
Current expenditure7,8859,3409,17712,70814,396
Net lending and government equity shares--52------
Unclassified expenditure----2,963--2,114
Capital expenditure12,19010,02911,9206,2263,628
Overall deficit (commitment basis) 1/-2,159-3,630-6,496-3,950-4,595
Net change in arrears70-5,3284611,860-5,094
Domestic-1,343-2,002-1,802-1,603-186
External (interest only)1,413-3,3262,2633,463-4,909
Overall deficit (cash basis) 1/-2,089-8,958-6,036-2,090-9,689
Financing2,0898,9586,0362,0909,689
External (net)9599,8494,3365789,773
Disbursements1,5404,1384,4882,181955
Scheduled amortization-4,107-3,979-4,213-8,105-7,515
Net change in arrears (principal only) 2/3,526-3,8634,0616,502-13,866
Debt relief--13,553----30,199
Domestic (net)1,130-8911,7001,512-84
Net bank credit1,282-3571,9641,402417
Of which: IMF (net)1,923751,3371,150-533
Nonbank financing-152-534-264110-501
Memorandum items:
Debt service (before debt relief) 2/86.478.378.3110.093.6
Debt service (after debt relief) 2/86.427.178.3110.065.1
Debt payments made (including arrears) 2/26.46.212.025.38.4
Primary balance 1/397-385-3,201980231
Overall balance 3/-908-1,354-3,630-1,769-4,193
Overall balance (in percent of GDP) 3/-2.5-3.2-8.2-2.5-4.7
Source: Data provided by the Equatorial Guinean authorities.

Including grants and foreign-financed capital expenditure.

In percent of domestic revenue and including principal obligations to the Fund.

Excluding grants and foreign-financed capital expenditure.

Source: Data provided by the Equatorial Guinean authorities.

Including grants and foreign-financed capital expenditure.

In percent of domestic revenue and including principal obligations to the Fund.

Excluding grants and foreign-financed capital expenditure.

Table 15.Equatorial Guinea: Fiscal Indicators, 1991-95
19911992199319941995
(Annual percentage change)
Total revenue-3.3-11.911.2-14.73.7
Domestic revenue1.314.74.630.5113
Oil revenue-82.5640.258.655.415.8
Non-oil revenue8.65.9-0.726.610.4
Tax revenue-3.519.34.026.17.9
Taxes on goods and services-5.98.87.77.921.1
Taxes on international trade-8.57.310.422.222.2
Import duties-1.98.94.9-24.05.9
Export duties-20.14.022.9111.833.6
Other tax revenue34.797.0-15.279.0-35.6
Nontax revenue11.8-19.0-11.920.418.8
Grants-6.4-31.919.7-64.8-27.2
Total expenditure and net lending 1/-1.7-3.323.9-2136.4
Current expenditure2.118.4-1.738.513.3
Wages and salaries8.05.85.619.316.5
Goods and services1.940.0-14.157.632.0
Subsidies and transfers-20.2-18.36.0-1.16.3
Scheduled interest8.426.91.649.6-2.1
Capital expenditure 1/-4.0-17.718.9-47.8-41.7
(In percent of total revenue)
Domestic revenue43.055.952.680.486.3
Oil revenue0.65.07.213.014.5
Non-oil revenue42.450.945.467.471.7
Tax revenue27.737.635.151.954.0
Taxes on income and profit1.61.10.92.72.4
Taxes on goods and services11.714.514.017.820.7
Taxes on international trade12.515.215.121.625.5
Import duties8.610.610.08.99.1
Export duties3.94.65.112.716.4
Other tax revenue1.96.75.09.85.4
Nontax revenue15.113.811.015.517.7
Blocked revenue-0.4-0.5-0.7----
Grants57.044.147.419.613.7
(In percent of total expenditure)
Current expenditure39.348.138.167.171.5
Wages and salaries11.612.710.816.417.9
Goods and services10.114.610.120.325.2
Subsidies and transfers4.94.13.54.44.4
Scheduled interest12.716.713.726.024.0
Capital expenditure 1/60.751.649.532.918.0
Net lending and government equity shares--0.3------
Unclassified expenditure----12.3--10.5
(In percent of GDP)
Total revenue48.637.639.621.017.3
Domestic revenue20.921.020.816.914.9
Oil revenue0.31.92.82.72.5
Non-oil revenue20.619.118.014.112.4
Non-oil tax revenue13.514.113.910.99.3
Non-oil nontax revenue7.35.24.33.23.1
Blocked revenue-0.2-0.2-0.3----
Grants27.716.618.84.12.4
Total expenditure and net lending 1/54.546.254.326.522.4
Current expenditure21.422.220.717.816.0
Capital expenditure 1/33.123.926.98.74.0
Net lending and government equity shares--0.1------
Unclassified expenditure----6.7--2.4
Memorandum items:
Non-oil revenue in percent of non-oil GDP20.621.320.917.716.6
Source: Data provided by the Equatorial Guinean authorities.

Including foreign-financed capital expenditure.

Source: Data provided by the Equatorial Guinean authorities.

Including foreign-financed capital expenditure.

Table 16.Equatorial Guinea: Revenue of the Central Government, 1991-95(In millions of CFA francs, unless otherwise specified)
19911992199319941995
Total revenue and grants17,91615,79017,56414,98415,543
Domestic revenue7,6968,8299,23412,05213,408
Oil revenue1077921,2561,9522,260
Royalties--4446791,5491,665
Concession fees107348577403595
Non-oil revenue7,5898,0377,97810,10011,148
Tax revenue4,9715,9316,1697,7828,395
Taxes on income and profit280175165411373
Taxes on inheritance and transfers1--422
Taxes on goods and services2,1042,2902,4662,6613,223
Sale of petroleum products1,6141,7521,9752,1081,933
Other goods4905384915531,290
Taxes on international trade2,2382,4022,6523,2403,960
Import duties1,5321,6681,7501,3301,409
Petroleum products868112112298
Other1,4461,5871,6291,2081,311
Export duties7067349021,9102,551
Coffee1--------
Timber5666598071,7842,448
Re-exports11965504623
Other2010458012
Other tax revenue3481,0648821,468837
Stamp tax1111162030
Poll tax91340198
Road fees 1/--92191432472
Other taxes 2/328948635997327
Nontax revenue2,6972,1851,9252,3182,753
Property income10577152188204
Administrative fees617453386548888
Concessions948299230750526
Fishing772471136285
Timber--21515047
Electricity sector3412455--
Telecommunications sector173178200277184
Other concessions--12--13210
Extraordinary nontax revenue 3/232665231420532
Other795691926412603
Blocked revenue-79-79-116----
Grants10,2206,9618,3302,9322,134
Project related9,9306,8348,1032,9321,581
Other290127227--553
Memorandum items:
Noninterest non-oil revenue in percent of non-oil GDP20.621.320.917.716.6
Domestic revenue in percent of GDP20.921.020.816.914.9
Oil revenue0.31.92.82.72.5
Non-oil revenue20.619.118.014.112.4
Tax revenue13.514.113.910.99.3
Non-tax revenue (including blocked revenue)7.15.04.13.23.1
Source: Data provided by the Equatorial Guinean authorities.

Logging roads.

Includes tax arrears paid.

Includes nontax revenue from previous years.

Source: Data provided by the Equatorial Guinean authorities.

Logging roads.

Includes tax arrears paid.

Includes nontax revenue from previous years.

Table 17.Equatorial Guinea: Expenditures of the Central Government, 1/ 1991-95(In millions of CFA francs, unless otherwise specified)
19911992199319941995
Total expenditure and net lending20,07519,42024,06018,93420,138
Current expenditure7,8859,3409,17712,70814,396
Wages and salaries2,3232,4582,5963,0983,609
Goods and services2,0262,8362,4373,8405,068
Petroleum products4785886919521,634
Other1,5482,2481,7462,8883,434
Travel322330255470345
Embassies246221221404252
Consumption of electricity231167143456801
Other goods and services7491,5301,1271,5582,036
Subsidies and transfers980801849840893
Scheduled interest2,5563,2453,2954,9304,826
Domestic (BEAC)169314278363318
External2,3872,9313,0174,5674,508
Capital expenditure12,19010,02911,9206,2263,628
Recorded in the Treasury7197917241,1131,091
Foreign-financed 2/11,4719,23811,1965,1132,537
Net lending and government equity shares--52------
Unclassified expenditure----2,963--2,114
Memorandum items:
Noninterest domestically financed expenditure6,0486,9389,5698,89112,775
Military expenditure 2/1,3211,721
Total scheduled interest 3/33.236.835.740.936.0
Of which: interest on external obligations(31.0)(33.2)(32.7)(37.9)(33.6)
interest to multilateral institutions(8.1)(8.2)(6.3)(10.0)(82)
(In percent of GDP)
Noninterest domestically financed expenditure16.416.521.612.414.2
Wages and goods and services11.812.611.49.79.7
Subsidies and transfers2.71.91.91.21.0
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

On a commitment basis.

Estimated.

Before debt relief; in percent of domestic revenue, including interest and charges due to the IMF.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

On a commitment basis.

Estimated.

Before debt relief; in percent of domestic revenue, including interest and charges due to the IMF.

Table 18.Equatorial Guinea: Monetary Survey, 1991-95(In millions of CFA francs; end of period)
19911992199319941995
Net foreign assets-4,379-6,391-7,156-13,318-9,793
BEAC (net)-5,488-7,502-7,947-15,170-10,683
Operations account-4,224-6,340-3,185-4,874-1,262
Use of Fund credit (net)-3,408-3,483-4,842-10,483-9,248
Other2,1442,32180187-173
Commercial banks (net)1,1091,1117911,852890
Net domestic assets7,2869,58010,61221,26221,467
Net domestic credit11,61611,87913,95120,50620,802
Credit to government (net)9,9259,56811,52317,53516,713
BEAC7,3957,5747,2027,3018,106
Current account advances1,2001,5751,5781,6002,409
Government deposits-250-446-137-60-64
Exceptional loans 1/1,7891,7891,1051,1051,105
Consolidated loan 1/4,6564,6564,6564,6564,656
Use of Fund credit3,4083,4834,84210,4839,248
Stand-by arrangements----------
SAF arrangements3,4083,4834,3228,0448,046
ESAF arrangements----5202,4391,202
Trust fund----------
Commercial banks-10-748-12094-21
Credit to other public institutions (net)-868-741-401-343-620
BEAC-1-1-417-6
Commercial banks-867-740-360-350-614
Credit to the economy1,6912,3112,4282,9714,089
Other items (net)-4,330-2,299-3,339756665
Money and quasi-money2,6592,9363,2277,75611,530
Currency in circulation1,0906261,1993,7656,775
Demand deposits1,0451,6291,3352,2352,704
Time and savings deposits5246816931,7562,051
Medium- and long-term foreign liabilities248253229188144
Memorandum item:
Velocity (non-oil GDP relative to broad money)14.813.512.410.47.0
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

In 1991, an exceptional loan was extended to allow the reconstitution of Equatorial Guinea’s SDR position. In addition, the government obtained from the BEAC a 15-year consolidated loan of CFAF 4.7 billion to repay loans made by the BEAC to two closed commercial banks.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

In 1991, an exceptional loan was extended to allow the reconstitution of Equatorial Guinea’s SDR position. In addition, the government obtained from the BEAC a 15-year consolidated loan of CFAF 4.7 billion to repay loans made by the BEAC to two closed commercial banks.

Table 19.Equatorial Guinea: Changes in Monetary Aggregates (after valuation adjustment), 1991-95
19911992199319941995
(Flows, in millions of CFA francs)
Net foreign assets1,467-2,012-7651,3943,525
Net domestic assets-1,1352,2941,0322,871205
Net domestic credit7,5622632,0721,677296
Credit to government (net)7,521-3571,9551,170-822
Credit to the economy416201175071,118
Other items (net)-8,6972,031-1,0401,194-91
Money and quasi-money3432772914,5293,774
Currency in circulation190-4645732,5663,010
Demand deposits48584-294900469
Time and savings deposits105157121,063295
Medium- and long-term foreign liabilities-115-24-264-44
(Annual percentage change)
Net foreign assets25.1-45.9-12.09.526.5
Net domestic assets-13.513.510.815.61.0
Net domestic credit186.52.317.48.91.4
Credit to government (net)312.9-3.620.47.1-4.7
Credit to the economy2.536.75.120.637.6
Other items (net)-199.2-46.9-45.2272.412.0
Money and quasi-money14.810.49.9140.348.7
Medium- and long-term foreign liabilities-4.22.0-9.5-58.4-23.4
(Annual change in percent of beginning-of-period broad money)
Net foreign assets63.3-75.7-26.143.245.4
Net domestic assets-49.086.335.289.02.6
Net domestic credit326.59.970.652.03.8
Credit to government (net)324.7-13.466.636.3-10.6
Credit to the economy1.823.34.015.714.4
Other items (net)-375.576.4-35.437.0-1.2
Money and quasi-money14.810.49.9140.348.7
Medium- and long-term foreign liabilities-0.50.2-0.8-8.2-0.6
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.
Table 20.Equatorial Guinea: Central Bank Summary Accounts, 1991-95(In millions of CFA francs; end of period)
19911992199319941995
Net foreign assets-5,488-7,502-7,947-15,170-10,683
Foreign assets2,4542,56614120920
Franc zone currency3924972919916
SDRs2,0622,069112104
Foreign liabilities-7,942-10,068-8,088-15,379-10,703
Current accounts of foreign institutions-753-1,290-1,409-2,620-2,618
Operations account-4,224-6,340-3,185-4,874-1,262
Equatorial Guinean notes abroad 1/-243-215------
Use of Fund credit (net) 2/-3,408-3,483-4,842-10,483-9,248
Adjustment to Fund accounts No. 1 and 26861,2601,3482,5982,425
Net domestic assets7,4099,59810,39519,55019,404
Net credit to government10,80311,05712,00317,78417,348
Credit to government11,05311,50312,18117,84417,418
Current account advances1,2001,5751,5781,6002,409
Exceptional loans1,7891,7891,1051,1051,105
Consolidated loan4,6564,6564,6564,6564,656
Use of Fund credit (net) 2/3,4083,4834,84210,4839,248
Credit to other public
institutions--------7--
Government deposits-249-445-137-67-64
Treasury cash holdings-17-25-53-44-44
Treasury current accounts-22-327-29-18-15
Special accounts-210-93-55-5-5
Deposits of other public
institutions-1-1-41---6
Loans to banks----------
Other items (net)-3,394-1,459-1,6081,7662,056
Other assets-5569699577,3266,970
Other liabilities-2,592-2,231-2,364-5,279-4,614
Capital and reserves-246-197-201-281-300
Monetary base1,9212,0962,4484,3818,721
Currency in circulation1,0906261,1993,7656,775
Currency issued1,0644381,4343,6827,119
Notes of other BEAC countries389493--19916
Equatorial Guinean notes abroad 1/-243-215------
Treasury cash holdings-17-25-53-44-44
Currency holdings of banks-103-65-182-72-316
Reserves8311,4701,2496161,946
Currency holdings of banks1036518272316
Banks’ deposits with the BEAC7281,4051,0675441,630
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

In 1993, the BEAC changed its methodology for calculating currency in circulation and foreign liabilities.

Includes Trust Fund.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

In 1993, the BEAC changed its methodology for calculating currency in circulation and foreign liabilities.

Includes Trust Fund.

Table 21.Equatorial Guinea: Consolidated Balance Sheet of Commercial Banks, 1/ 1991-95(In millions of CFA francs; end of period)
19911992199319941995
Net foreign assets1,1091,1117911,852890
Foreign assets1,4661,6741,1983,0902,489
Foreign liabilities-357-563-407-1,238-1,599
Net domestic assets7081,4521,4662,3274,009
Reserves8311,4701,2496151,946
Net domestic credit8148231,9482,7223,454
Net credit to government-877-1,488-480-249-635
Credit to government156----202--
Credit to other public institutions6723477246
Government deposits-166-748-120-108-21
Deposits from other public institutions-934-763-407-350-860
Credit to the economy1,6912,3112,4282,9714,089
Short-term1,6601,9832,2022,8764,020
Of which: public enterprises39293437721717
Medium- and long-term313282269569
Other items (net)-937-841-1,731-1,010-1,391
Other assets1,7681,283539502,447
Other liabilities-1,849-636-118-600-1,541
Capital and reserves-856-1,488-1,666-1,360-2,297
Money1,5692,3102,0283,9914,755
Demand deposits1,0451,6291,3352,2352,704
Time and savings deposits5246816931,7562,051
Medium- and long-term foreign liabilities248253229188144
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Meridien Banque Internationale de l’Afrique Occidentale-Guinee Equatoriale (MBIAO-GE) and, since September 1995, Caisse Commune d’Epargne et d’Investissement (CCEI).

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Meridien Banque Internationale de l’Afrique Occidentale-Guinee Equatoriale (MBIAO-GE) and, since September 1995, Caisse Commune d’Epargne et d’Investissement (CCEI).

Table 22.Equatorial Guinea: Distribution of Credit Extended by BIAO-GE,1/ 1991-95
1991199219931994

Est.
1995

Est.
(In millions of CFA francs; end of period)
Agriculture428467282116589
Food processing913------
Forestry and wood processing82979456187783
Construction311129147113133
Commerce220189526617687
Import and distribution of petroleum products34210417792635
Transport and storage1810--8143
Hotels and restaurants6345--12--
Other services343300197222198
Personal loans79683454401,196
Unclassified442409241545
Total2,7762,6341,9942,6614,370
(In percent of total)
Agriculture15.417.714.14.413.5
Food processing0.30.5------
Forestry and wood processing29.930.12.87.017.9
Construction11.24.97.44.23.0
Commerce7.97.226.423.215.7
Import and distribution of petroleum products1.28.020.929.814.5
Transport and storage0.60.4--0.33.3
Hotels and restaurants2.31.7--0.5--
Other services12.411.49.98.34.5
Personal loans2.82.617.316.527.4
Unclassified15.915.51.25.80.1
Total100.0100.0100.0100.0100.0
Source: Data provided by the Equatorial Guinean authorities; and staff calculations.

Meridien Banque Internationale de l’Afrique Occidentale - Guinee Equatoriale.

In 1992 and 1995, total distributed credit exceeds credit to the economy in Table 21, because this table includes export credits in foreign currency, which are classified under foreign assets in Table 21.

In 1993 and 1994, totals shown are lower than in Table 21, because of a change in the methodology of the BEAC.

Source: Data provided by the Equatorial Guinean authorities; and staff calculations.

Meridien Banque Internationale de l’Afrique Occidentale - Guinee Equatoriale.

In 1992 and 1995, total distributed credit exceeds credit to the economy in Table 21, because this table includes export credits in foreign currency, which are classified under foreign assets in Table 21.

In 1993 and 1994, totals shown are lower than in Table 21, because of a change in the methodology of the BEAC.

Table 23.Equatorial Guinea: Structure of Interest Rates, 1993-95(In percent per annum; end of period)
19921993199419951996
JuneDec.JuneDec.JuneDec.JuneDec.June
Central bank
Rate on advances to treasuries8.509.5011.0011.5011.007.757.758.008.00
Penalty rate on advances to treasuries8.5010.5016.0018.0012.0010.5010.5010.5010.50
Rate on special deposits by treasuries6.006.006.006.006.004.004.504.503.90
Basic discount rate 1/10.5012.0011.0011.5012.50
Penalty rate on banks16.0016.0016.0018.0020.0015.0015.0015.0015.00
Auction rate (TIAO) 2/3/7.758.758.608.00
Repurchase rate (TIPP) 2/4/9.2510.5010.7510.00
Rate on special deposits by banks 2/4.004.504.503.90
Reverse auction rate (TIPS) 5/3.60-3.73
Commercial banks
Maximum lending rate17.2517.2517.0017.0017.0016.0016.0016.0022.00
Minimum lending rate7.507.507.757.758.005.505.505.505.50
Sources: Data provided by the Equatorial Guinean authorities.

Discontinued in July 1994.

Introduced in July 1994 with the adoption of indirect instruments of monetary policy.

The auction rate, set by the Governor, is derived from the monetary market auctions and constitutes the reference rate.

The repurchase rate (taux de prise en pension) is set at 1.5 to 2 percent points above the TIAO.

The reverse auction system (appels d’offere negatifs) was introduced in May 1996.

Sources: Data provided by the Equatorial Guinean authorities.

Discontinued in July 1994.

Introduced in July 1994 with the adoption of indirect instruments of monetary policy.

The auction rate, set by the Governor, is derived from the monetary market auctions and constitutes the reference rate.

The repurchase rate (taux de prise en pension) is set at 1.5 to 2 percent points above the TIAO.

The reverse auction system (appels d’offere negatifs) was introduced in May 1996.

Table 24.Equatorial Guinea: Balance of Payments, 1991-1995(In millions of U.S dollar, unless otherwise specified)
19911992199319941995

Est.
Exports, f.o.b.35.551.852.365.186.4
Petroleum--17.823.929.038.5
Timber15.117.216.624.036.0
Cocoa5.95.42.03.75.0
Coffee0.30.20.10.10.1
Re-exports10.86.55.24.12.2
Other3.44.84.44.34.7
Imports, c.i.f.-90.4-62.2-52.4-34.3-75.9
Public investment-20.4-17.3-17.9-4.7-2.6
Petroleum sector-39.3-8.3-6.5-5.1-40.0
Petroleum products-2.8-3.7-2.7-2.9-3.4
Other-27.9-33.0-25.3-21.5-29.9
Trade balance-55.010.5-0.130.810.5
Services (net)-26.1-34.0-43.5-38.1-111.8
Factor services (net)-5.5-10.5-8.6-7.1-11.2
Oil concessions (rental fees)0.50.72.00.70.2
Fishery and timber concessions2.70.3--0.50.7
Petroleum sector investment income-----0.1-3.0
Interest payments (net)-8.8-11.5-10.7-8.2-9.0
Other services (net)-20.6-23.5-34.9-31.0-100.6
Credits6.96.45.85.44.1
Debits-27.5-29.9-40.7-36.3-104.7
Technical assistance-11.4-11.2-14.5-4.1-1.9
Investment services-4.9-6.2-8.5-15.5-83.3
Public investment-4.9-4.4-3.8-0.8-0.4
Petroleum sector---1.9-4.7-14.7-82.9
Other-11.3-12.5-17.7-16.7-19.4
Transfers (net)35.623.627.06.63.6
Official (net)37.227.229.66.76.2
Credits38.428.130.37.06.3
Project-related35.226.328.65.32.0
Budgetary aid1.5------1.1
Stabex--------1.7
Other1.71.81.71.71.5
Debits-1.3-0.9-0.7-0.2-0.1
Private (net)-1.6-3.6-2.6-0.1-2.6
Current account, excluding official transfers-82.7-48.1-46.2-7.4-103.8
Current account, including official transfers-45.5-20.9-16.6-0.6-97.6
Medium- and long-term capital (net)33.9-2.4-8.3-14.887.2
Public (net)-9.10.91.8-10.0-7.7
Disbursements5.515.916.74.67.3
Amortization-14.6-15.0-14.9-14.6-15.1
Private (net)43.0-3.3-10.1-4.895.0
Short-term capital (net) and errors and omissions-1.4-7.83.2-1.3-4.9
Overall balance-13.0-31.1-21.6-l6.8-15.3
Financing13.031.121.616.815.3
Net change in reserves (increase -)-3.57.61.6-1.2-7.6
Of which: use of Fund credit (net)(6.9)(0.3)(4.8)(2.1)(-1.1)
Debt relief--50.6----60.5
Change in arrears16.5-27.220.117.9-37.6
Accumulation20.27.220.919.816.1
Reduction-3.6-344-0.8-1.8-53.8
Memorandum items:
Debt service ratio before debt relief 1/
In percent of exports of goods and nonfactor services55.644.944.033.927.8
In percent of government domestic revenue86.478.378.3110.093.8
Sources: Data provided by the Equatorial Guinean authorities, and staff estimates.

Includes official transfers.

Sources: Data provided by the Equatorial Guinean authorities, and staff estimates.

Includes official transfers.

Table 25.Equatorial Guinea: Balance of Payments, 1991-95
19911992199319941995

Est.
(In billions of CFA francs, unless otherwise specified)
Exports, f.o.b.10.013.714.836.143.1
Petroleum--4.76.816.119.2
Timber4.34.54.713.318.0
Re-exports3.01.71.52.31.1
Other2.72.71.94.54.9
Imports, c.i.f-25.5-16.5-14.8-19.0-37.9
Public investment-5.8-4.6-5.1-2.6-1.3
Petroleum sector-11.1-2.2-1.8-2.8-20.0
Petroleum products-0.8-1.0-0.8-1.6-1.7
Other-7.9-8.7-7.2-11.9-14.9
Trade balance-15.5-2.8-0.017.15.2
Services (net)-7.4-9.0-12.3-21.2-55.8
Factor services (net)-1.5-2.8-2.4-4.0-5.6
Oil concessions (rental fees)0.10.20.60.40.1
Fishery and timber concessions0.80.1--0.30.3
Petroleum sector investment income-------0.1-1.5
Interest payments (net)-2.5-3.0-3.0-4.6-4.5
Other services (net)-5.8-6.2-9.9-17.2-50.2
Credits2.01.71.73.02.0
Debits-7.8-7.9-11.5-20.2-52.2
Technical assistance-3.2-3.0-4.1-2.3-1.0
Investment services-1.4-1.7-2.4-8.6-41.6
Other-3.2-3.3-5.0-9.3-9.7
Transfers (net)10.06.27.73.71.8
Official (net)10.57.28.43.73.1
Credits10.87.48.63.93.1
Project-related9.97.08.12.91.0
Budgetary aid0.4------0.6
Stabex--------0.8
Other0.50.50.50.90.8
Debits-0.4-0.2-0.2-0.1-0.1
Private (net)-0.4-1.0-0.7-0.0-1.3
Current account, excluding official transfers-23.3-12.7-13.1-4.1-51.8
Current account, including official transfers-12.8-5.5-4.7-0.4-48.7
Medium- and long-term capital (net)9.6-0.6-2.3-8.243.5
Public (net)-2.60.20.5-5.6-3.9
Disbursements1.54.24.72.53.7
Amortization-4.1-4.0-4.2-8.1-7.5
Private (net)12.1-0.9-2.9-2.747.4
Short-term capital (net) and errors and omissions-0.4-2.1-0.9-0.7-2.4
Overall balance-3.7-8.2-6.1-9.3-7.6
Financing3.78.26.19.37.6
Net change in reserves (increase -)-1.02.00.4-0.7-3.8
Of which: use of Fund credit(1.9)(0.1)(1.4)(1.2)(-0.6)
Debt relief--13.4----30.2
Change in arrears4.7-7.25.710.0-18.8
Accumulation5.71.95.911.08.1
Reduction-1.0-9.1-0.2-1.0-26.8
Memorandum items:(In percent of GDP)
Current account balance 1/-34.8-13.1-10.6-0.5-54.2
Oil-30.15.29.57.6-48.5
Non-oil-73-18.4-20.1-8.1-5.7
Overall account balance-12.5-19.6-13.8-13.0-8.5
Oil0.82.73.13.64.4
Non-oil-13.3-22.3-17.0-16.6-12.8
Non-oil trade balance-12.0-12.6-11.25.46.7
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Includes official transfers.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Includes official transfers.

Table 26.Equatorial Guinea: Composition of Exports, 1991-95
19911992199319941995
(In units indicated)
Volume
Oil (barrels per day) 1/--3,1084,4574,8666,243
Timber (thousands of cubic meters)134145169229281
Logs122132156217267
Processed timber1213121314
Cocoa (metric tons)5,8754,8702,1833,3003,927
Coffee (metric tons)2211661248436
Unit value
Oil (U.S. dollars per barrel)--19.3714.7116.3116.89
Timber (U.S. dollars per cubic meter)11311998104128
Logs10411095100122
Processed timber205208144175250
Cocoa (U.S. dollars per metric ton)1,0011,0999321,1351,284
Coffee (U.S. dollars per metric ton)1,3311,0021,1506071,603
(In millions of U.S. dollars)
Value35.4551.7552.2865.0886.44
Oil--17.7623.9328.9738.47
Timber15.0817.1616.5823.9536.00
Logs12.7014.5414.7921.7232.59
Processed timber2.382.631.792.233.41
Cocoa5.885.352.043.755.04
Coffee0.290.170.140.050.06
Re-exports10.786.535.244.102.21
Other3.414.784.364.254.66
(In billions of CFA francs)
Value10.0013.7014.8436.1343.09
Oil--4.706.7816.0819.20
Timber4.264.544.6913.3017.92
Logs3.583.854.1912.0616.22
Processed timber0.670.690.511.241.70
Cocoa1.661.420.582.082.52
Coffee0.080.040.040.030.03
Re-exports3.041.731.502.281.10
Other0.961.271.252.362.33
Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.

Calendar-year basis.

Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.

Calendar-year basis.

Table 27.Equatorial Guinea: Petroleum Sector Accounts, 1991-95(In millions of U.S. dollars, unless otherwise specified)
19911992199319941995
Exports
Barrels per day 1/--3,1084,4574,8666,243
Tons per year (in thousands)--151.3216.9236.8303.8
International price (in U.S. dollars per barrel)--19.3714.7115.8917.17
Premium/discount (-) (in U.S. dollars per barrel) 2/------0.42-0.28
Value--17.823.929.038.48
Costs to the companies40.314.516.024.4130.8
Royalties (10 percent of exports)--1.82.42.93.8
Gross investment40.312.713.621.5126.9
Signature fee----0.3----
Production bonus for government--1.0------
Development costs39.88.58.815.3118.5
Production costs--2.52.55.58.2
Income tax and profit sharing0.50.72.00.70.2
Concession (rental fees)
Net cash flow (exports less costs)-40.33.37.94.6-92.3
Memorandum items:
Production and development costs, total39.811.011.320.8126.7
Of which: imports(39.3)(8.3)(6.5)(5.1)(40.0)
services(--(1.9)(4.7)(14.7)(82.9)
Gross investment—Walters Intenational/Nomeco31.211.910.611.819.0
Signature fee-------
Production bonus for government--1.0------
Development costs31.08.36.15.510.6
Production costs--2.52.55.58.2
Income tax and profit sharing----------
Concession0.20.12.00.70.2
Gross investment—United Meridien/Mobil8.20.3--9.8108.0
Signature fee----------
Production bonus for government----------
Development costs8.0----9.8108.0
Production costs----------
Income tax and profit sharing----------
Concession0.20.3------
Gross investment—Other1.00.53.0----
Signature fee----0.3----
Production bonus for government----------
Development costs0.90.22.7----
Production costs----------
Income tax and profit sharing----------
Concession0.10.4------
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Calendar-year basis.

The realized export price minus the international price.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Calendar-year basis.

The realized export price minus the international price.

Table 28.Equatorial Guinea: Export Indices, 1991-95(In U.S. dollar terms; 1992 = 100)
19911992199319941995
Petroleum
Value--100.0134.7163.1216.6
Unit value--100.075.984.287.2
Volume--100.0143.4156.6200.9
Timber
Value87.9100.096.6139.6209.8
Unit value95.1100.082.988.1108.1
Volume92.5100.0116.6158.5194.1
Cocoa
Value109.9100.038.070.094.2
Unit value91.1100.084.8103.3116.9
Volume120.6100.044.867.880.6
Coffee
Value176.8100.085.430.534.7
Unit value132.8100.0114.760.6159.9
Volume133.1100.074.450.421.7
Total exports 1/
Value52.6100.0105.5140.3196.8
Unit value94.5100.079.287.198.6
Volume55.6100.0133.3161.1199.6
Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.

Excluding re-exports and “other” exports.

Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.

Excluding re-exports and “other” exports.

Table 29.Equatorial Guinea: Composition of Imports, 1991-95
19911992199319941995
(In millions of U.S. dollars)
Total imports, c.i.f.90.462.252.434.375.9
Public investment program20.417.317.94.72.6
Oil sector39.38.36.55.140.0
Petroleum products2.83.72.72.93.4
Imports for re-exports10.86.25.03.72.1
Other17.226.820.317.827.8
(In percent of total)
Total imports, c.i.f.100.0100.0100.0100.0100.0
Public investment program22.627.834.213.83.4
Oil sector43.413.312.315.052.7
Petroleum products3.15.95.28.44.5
Imports for re-exports11.910.09.510.82.8
Other19.043.038.752.036.7
Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.
Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.
Table 30.Equatorial Guinea: Direction of Trade, 1991-95(In percent of total)
19911992199319941995
Total exports100.0100.0100.0100.0100.0
China------3.112.7
Cote d’Ivoire----------
France8.113.95.66.14.6
Gabon----------
Germany8.15.65.63.12.3
Italy13.58.32.83.12.3
Japan----22.221.517.4
Netherlands13.513.911.16.14.6
Nigeria--------3.5
Portugal2.75.68.37.74.6
Spain45.944.433.320.012.7
Tunisia----------
United States----11.16.134.0
Yugoslavia, SFR2.75.6------
Other5.42.8--23.21.2
Total imports100.0100.0100.0100.0100.0
Austria----1.2----
Belgium-Luxembourg4.63.34.76.56.5
Cameroon35.633.736.543.540.3
China------1.61.3
France9.214.112.911.314.3
Gabon----------
Germany1.11.11.21.61.3
Italy4.63.33.56.53.9
Japan--1.11.2----
Netherlands6.96.55.99.75.2
Russia2.3--1.2----
Spain11.516.322.414.518.2
Tunisia----------
United Kingdom3.43.32.41.61.3
United States14.913.04.73.27.8
Yugoslavia, SFR1.11.1------
Other4.63.32.4----
Sources: Data provided by the Equatorial Guinean authorities; IMF Direction of Trade Statistics Yearbook; and staff calculations.
Sources: Data provided by the Equatorial Guinean authorities; IMF Direction of Trade Statistics Yearbook; and staff calculations.
Table 31.Equatorial Guinea: International Trade Indices, 1991-95(In U.S. dollar terms, unless otherwise specified; 1987 = 100)
19911992199319941995
Export unit value 1/98.0103.782.190.3102.2
Import unit value 2/107.8112.4106.3110.3123.3
Terms of trade90.992.277.281.982.9
(Annual percentage change)-4.41.5-16.36.01.3
Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.

Excluding re-exports.

Based on indices for partner countries’ exports of goods.

Sources: Data provided by the Equatorial Guinean authorities; and staff calculations.

Excluding re-exports.

Based on indices for partner countries’ exports of goods.

Table 32.Equatorial Guinea: External Medium- and Long-Term Outstanding Public Debt 1/, 1991-95(In millions of U.S. dollars, unless otherwise specified)
19911992199319941995

Est.
Total outstanding debt 1/225.5221.2249.1261.3233.0
Of which: interest arrears(21.0)(8.4)(16.4)(21.3)(14.3)
Multilateral debt83.794.0118.0123.7126.8
Of which: interest arrears(0.3)(2.7)(4.4)(4.9)(5.1)
AfDB/AfDF35.636.538.6
IDA47.649.451.3
IMF12.612.716.419.618.5
Other18.318.218.4
Bilateral debt141.8126.4130.3136.8105.3
Of which: interest arrears(20.7)(5.8)(12.0)(16.4)(9.2)
Paris Club creditors100.387.284.190.060.0
Of which: interest arrears(16.8)(1.2)(7.3)(11.5)(3.5)
post-cutoff-date debt…(15.8)(16.9)(3.2)
Non-Paris Club creditors41.539.246.246.845.3
Of which: interest arrears(4.0)(4.6)(4.7)(4.9)(5.7)
France14.417.818.95.6
Italy12.713.113.712.5
Spain60.153.357.441.9
Argentina6.69.19.510.5
China22.722.123.025.2
Russian Federation5.49.910.35.1
Other4.535.936.522.6
Uninsured suppliers’ credits=0.80.80.80.8
Memorandum items:
External debt outstanding (in percent of GDP)158.6146.6159.1202.9129.6
Average interest rate 2/3.74.94.33.33.5
Concessional debt (in percent of total debt) 3/67.066.358.2
Grant element (in percent of total debt) 4/16.221.719.6
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Including the IMF.

Current interest accruals divided by the stock of outstanding debt.

Debt with a grant element above 25 percent.

The grant element has been calculated by applying a discount rate in conjunction with estimates of the key elements of the debt’s term structure, the interest rate, the grace period, and the amortization schedule. The difference between the face value of the debt and the amount corresponding to the grant element is the present value of the debt.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Including the IMF.

Current interest accruals divided by the stock of outstanding debt.

Debt with a grant element above 25 percent.

The grant element has been calculated by applying a discount rate in conjunction with estimates of the key elements of the debt’s term structure, the interest rate, the grace period, and the amortization schedule. The difference between the face value of the debt and the amount corresponding to the grant element is the present value of the debt.

Table 33.Equatorial Guinea: Scheduled External Public Debt Service, 1991-95 (In millions of U.S. dollars)
19911992199319941995

Est.
Multilateral creditors4.04.23.65.55.6
Principal1.81.51.53.23.4
Interest2.22.72.12.22.2
Bilateral creditors19.922.322.018.519.6
Principal13.313.513.412.512.8
Interest6.68.88.66.06.8
Paris Club creditors15.717.116.814.014.2
Principal10.311.710.910.210.2
Interest5.45.55.93.84.1
Other creditors4.25.25.24.55.3
Principal2.91.82.42.32.6
Interest1.23.32.82.22.7
Total23.926.525.623.925.2
Principal15.115.014.915.716.2
Interest8.811.510.78.29.0
Memorandum items:
Debt service ratio
In percent of exports of
goods and nonfactor services 1/55.644.944.033.927.8
In percent of government
domestic revenue 1/86.478.378.3110.093.7
Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Before debt relief.

Sources: Data provided by the Equatorial Guinean authorities; and staff estimates.

Before debt relief.

Table 34.Equatorial Guinea: Exchange Rates, 1990-95
Nominal effective

exchange rate
Real effective

exchange rate
CFAF/US$CFAF/SDR
Index 1/Annual

percentage

change
Index 1/Annual

percentage

change
Period

average
End of

period
Period

average
End of

period
Annual
1990117.910.684.81.9272256369365
1991119.11.078.1-7.9282259386370
1992126.76.474.9-4.1265275373379
1993134.56.178.95.4283295395405
199483.7-37.860.1-23.9555535795780
199587.54.664.16.6
Quarterly
1990Q I115.19.582.5-3.7287285377371
Q II117.111.68635.1282281370371
Q III118.611.384.1-2.4267262366365
Q IV120.99.986.09.5253256362365
1991Q I120.84.981.6-1.1261291368392
Q II117.40.278.1-9.6294307393404
Q III117.7-0.8743-11.7296283396388
Q IV120.6-0.278.4-8.9278259384370
1992Q I122.11.174.5-8.6276278383382
Q II124.05.770.5-9.7272257378367
Q III128.79.47521.2248238360351
Q IV131.99.479.31.1263275369379
1993Q I133.08.976222277274382383
Q II134.88.677.610.0273285386400
Q III133.73.981.07.7291283408402
Q IV136.43.581.02.1292295407405
1994Q I81.4-38.859.0-22.6586571813807
Q II82.9-38.560.5-22.0569547805792
Q III85.0-36.460.2-25.7535528781775
Q IV85.2-37.560.6-25.1531535778780
1995Q I86.66.462.15.3517485772757
Q II87.65.663.85.5492485770761
Q III87.83264.77.6495491751740
Q IV88.23.565.58.1493490736728
Sources: Data provided by the Equatorial Guinean authorities; and IMF, Information Notice System.

1986 = 100

Sources: Data provided by the Equatorial Guinean authorities; and IMF, Information Notice System.

1986 = 100

APPENDIX III External Trade Arrangements and Restrictions

A. Exchange Arrangement

59. The currency of Equatorial Guinea is the CFA franc,14 which is pegged to the French franc, the intervention currency, at the fixed rate of CFAF 1 per F 0.01. Exchange transactions in French francs between the BEAC and commercial banks take place at the same rate. Buying and selling rates for certain other foreign currencies are also officially posted, with quotations based on the fixed rate for the French franc and the rates in the Paris exchange market for the currencies concerned. A commission of 0.5 percent is levied on transfers to countries that are not members of the BEAC, except for: transfers originating from central and local governments; payments for imports covered by a duly issued license domiciled with a bank; scheduled repayment of loans properly contracted abroad; travel allowances paid by the government and its agencies for official missions; and payments of insurance premiums. There are no taxes or subsidies on purchases or sales of foreign exchange.

60. With the exception of those measures relating to gold, Equatorial Guinea’s exchange controls generally do not apply to: (1) France (and its overseas departments and territories) and Monaco; and (2) to all other countries whose bank of issue is linked with the French Treasury by an Operations Account (Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Comoros, the Congo, Côte d’Ivoire, Gabon, Mali, Niger, Senegal, and Togo). Thus, all payments to these countries may be made freely, but all financial transfers of more than CFAF 500,000 to countries of the Operations Account area must be declared to the authorities for statistical purposes. All other countries are considered foreign countries. There are no arrangements for forward cover against exchange rate risk regulating operations in the official or the commercial banking sector.

61. Equatorial Guinea communicated to the Fund in early June 1996 its decision to accept, in concert with the other countries in the BEAC zone, and effective June 1, 1996, the obligations of Article VIII, Sections 2, 3, and 4.

B. Administration of Control

62. Exchange control is administered by the Directorate General of Exchange Control (DNCC) of the Ministry of Finance. Exchange transactions relating to all countries must be effected through authorized banks. Import and export licenses are issued without restriction by the Ministry of Commerce and Industry.

63. Although arrears are maintained with respect to external payments, they result from fiscal constraints and not from any administrative control on foreign exchange.

C. Prescription of Currency

64. Because Equatorial Guinea is an Operations Account country, settlements with France (as defined above), Monaco, and the Operations Account countries are made in CFA francs, French francs, or the currency of any other institute of issue that maintains an Operations Account with the French Treasury. Settlements with all other countries are usually made through correspondent banks in France in any of the currencies of those countries or through foreign accounts in French francs.

D. Nonresident Accounts

65. The regulations pertaining to nonresident accounts are based on regulations applied in France. The principal nonresident accounts are foreign accounts in French francs. As the BEAC suspended in 1993 the repurchase of BEAC bank notes circulating outside the territories of its member countries, BEAC bank notes received by the foreign correspondents of authorized banks and mailed to the BEAC agency in Equatorial Guinea by the Bank of France or the Central Bank of West African States (BCEAO) may not be credited to foreign accounts in French francs.

E. Imports and Import Payments

66. Imports valued at more than CFAF 50,000 are subject to licensing, but licenses are issued freely. Also, all import transactions whose value exceeds CFAF 50,000 must be domiciled with an authorized bank. Import transactions by residents involving goods for use outside Equatorial Guinea must be domiciled with a bank in the country of final destination. Settlements for imports effected under an import license benefit from the authorization of uninterrupted transfer given to the authorized banks by the Ministry of Finance.

67. In August 1994, a new tariff structure was introduced in the context of the tax and customs reform of the Central African Customs and Economic Union (UDEAC), as described in Section III C.

F. Payments for Invisibles

68. Payments in excess of CFAF 500,000 for invisibles to France (as defined above), Monaco, and the Operations Account countries require prior declaration but are permitted freely; those to other countries are subject to the approval of the Ministry of Economy and Finance. Payments for invisibles related to trade are permitted freely when the basic trade transaction has been approved or does not require authorization. Transfers of income accruing to nonresidents in the form of profits, dividends, and royalties are also permitted freely when the basic transaction has been approved.

69. Residents traveling for tourism or business purposes to countries in the franc zone are allowed to take out BEAC banknotes up to a limit of CFAF 2 million; amounts in excess of this limit may be taken out in the form of means of payment other than bank notes. Allowances for travel to countries outside the franc zone are subject to the following regulations: (1) for tourist travel, CFAF 100,000 a day, with a maximum of CFAF 2 million a trip; (2) for business travel, CFAF 250,000 a day, with a maximum of CFAF 5 million a trip; (3) allowances in excess of these limits are subject to the authorization of the Ministry of Economy and Finance or, by delegation, the BEAC; and (4) the use of credit cards, which must be issued by resident financial intermediaries and approved by the Ministry of Economy and Finance, is limited to the ceilings indicated above for tourist and business travel. However, these regulations are administered liberally, and bona fide requests for allowances in excess of these limits are normally granted. Returning resident travelers are required to declare all means of payment in their possession upon arrival at customs and to surrender within eight days all means of payment exceeding the equivalent of CFAF 25,000. All resident travelers, regardless of destination, must declare in writing all means of payment at their disposal at the time of departure. Reexport by nonresident travelers of means of payments other than bank notes issued abroad and registered in their name is not restricted, subject to documentation that they had been purchased with funds drawn from a foreign account in CFA francs or with other foreign exchange. Reexport of foreign bank notes is allowed up to the equivalent of CFAF 250,000; reexport of foreign bank notes above this ceiling requires documentation demonstrating either the importation of foreign bank notes or their purchase against other means of payment registered in the name of the traveler or through the use of nonresident deposits lodged in local banks.

70. The transfer of rent from real property owned in Equatorial Guinea by foreign nationals is permitted up to 50 percent of the income declared for taxation purposes, net of tax. Remittances for current repair and management of real property abroad are limited to the equivalent of CFAF 200,000 every two or three years. The transfer abroad of the salaries of expatriates working in Equatorial Guinea is permitted upon presentation of the appropriate pay voucher as well as justification of expenses, provided that the transfer takes place within three months of the pay period concerned. Except in the case of expatriates working in Equatorial Guinea on a temporary basis, payments of insurance premiums up to CFAF 50,000 to foreign countries are permitted; larger amounts may be authorized by the DNCC.

G. Exports and Export Proceeds

71. Export transactions valued at CFAF 50,000 or more must be domiciled with an authorized bank. Exports to all countries are subject to domiciliation requirements for the appropriate documents. Proceeds from exports to all countries must be repatriated within 30 days of the payment date stipulated in the sales contract. Payments for exports must be made within 30 days of the arrival date of the merchandise at its destination.

H. Proceeds from Invisibles

72. Proceeds from transactions in invisibles with France (as defined above), Monaco, and the Operations Account countries may be retained. All amounts due from residents of other countries in respect of services, and all income earned in those countries from foreign assets, must be collected within a month of the due date and surrendered within a month of collection if received in foreign currency. Resident and nonresident travelers may bring in any amount of bank notes and coins issued by the BEAC, the Bank of France, or a bank of issue maintaining an Operations Account with the French Treasury, as well as any amount of foreign bank notes and coins (except gold coins) of countries outside the Operations Account area.

I. Capital

73. Capital movements between Equatorial Guinea and France (as defined above), Monaco, and the Operations Account countries are free of exchange control. Capital transfers to all other countries require exchange control approval and are restricted, but capital receipts from such countries are freely permitted.15

74. Under the investment code of April 30, 1992 (as modified on June 6, 1994), a number of privileges may be granted to approved foreign investments. These privileges include exemption from import- and export-licensing requirements and free transfer abroad of debt payments and net profits.

1In addition, the country joined the Central African States Customs Union (UDEAC) and adopted customs tariffs and tax codes based on the UDEAC model.
2Equatorial Guinea’s statistical base is weak and available data should be interpreted with caution. The preparation of estimates of the national income accounts has been sporadic--despite the technical assistance provided by the United Nations Development Program (UNDP) and others, notably France--as consolidation of the gains achieved through technical assistance has proved elusive. As a result, the authorities currently produce only indicative estimates of GDP by sector of activity at current prices. The estimation of real GDP is further hampered by the lack of reliable sectoral price indices.
3A summary of the tax system is provided in Appendix I.
4Comparable multiyear estimates of total government revenue per barrel in the region are 30 percent for Gabon, 50 percent for Cameroon, 44 percent for Nigeria, and 55 percent for Angola.
5Excludes amortization to the Fund.
6The other members are Cameroon, the Central African Republic, Chad, Gabon, and the Republic of Congo.
7The COBAC was established in January 1993, with the aim of improving banking regulations and supervision.
8Currency in circulation in a particular country is defined as gross currency issued minus cash in vault. Part of cash in vault is currency taken out of circulation through the payment of imports, which must be sorted and returned to the country of issue. The country returning the currency has a reduction of its cash in vault (thus increasing currency and M2) and has its net foreign asset position credited through the operations account The stock of unsorted notes has grown dramatically since 1993, despite sporadic efforts to address the backlog.
9Attempts to correct for this problem--by subtracting estimates of CFA bank notes issued in Equatorial Guinea and held in other BEAC member countries--did not produce satisfactory results on a consistent basis. Because of the small weight of Equatorial Guinea’s economy, and because of the stochastic nature of the sorting process, applying any coefficient to the amount of unsorted bills of the zone results in unreasonably wide fluctuations in net emission.
10The variation in the stock of net bank credit to government as indicated in the monetary accounts may differ from flows registered in the fiscal accounts, owing primarily to the valuation effect on the domestic counterpart of the stock of use of Fund credit that is captured in the monetary accounts.
11Medium-term loans account for only some 3 percent of the stock of outstanding credit to the economy.
12The minimum rate only applies to saving deposit balances below CFAF 5 million.
13Section II.B describes in detail the evolution of oil production.
14The CFA franc circulating in Equatorial Guinea is issued by the Bank of Central African States (BEAC).
15Regulations on capital transactions, such as the sale of foreign securities in Equatorial Guinea or direct investments, have been prepared and are pending approval. The authorities are also in the process of drafting legislation aimed at stimulating foreign investment in the agricultural, forestry, construction, public works, mining, and industrial equipment maintenance sectors.

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