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Republic of Equatorial Guinea: Staff Report for the 2012 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund
Published Date:
March 2013
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Relations with the Fund

(As of November 30, 2012)

I. Membership Status: Joined: 12/22/1969 Article VIII

II. General Resources Account:

SDR MillionPercent Quota
Quota52.30100.00
Total holdings of currency47.3890.59
Reserve position in the Fund4.939.42

III. SDR Department:

SDR MillionPercent Allocation
Net cumulative allocation31.29100.00
Holdings21.1667.62

IV. Outstanding Purchases and Loans: None

V. Latest Financial Arrangements:

TypeDate of ArrengementExpiration DateAmount Approved (SDR Million)Amount Drawn (SDR Million)
ECF (Formerly PRGF)Feb. 03, 1993Feb. 02, 199612.884.60
SAFDec. 07, 1988Dec. 06, 199112.889.20
Stand-ByJun. 28, 1985Jun. 27, 19869.205.40

VI. Projected Payments to the Fund

(SDR Million; based on existing use of resources and present holdings of SDRs):

2013201420152016
Principal
Charges/Interest0.010.010.010.01
Total0.010.010.010.01

VII. Implementation of HIPC Initiative: Not Applicable

VIII. Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable

IX. Implementation of Post-Catastrophe Debt Relief (PCDR): Not Applicable

X. Safeguard Assessments: The Bank of the Central African States (BEAC) is the regional central bank. The most recent safeguards assessment of the BEAC was completed on July 6, 2009. The findings of this assessment indicated that implementation of previous safeguards recommendations on financial reporting, internal audit, and internal control was limited, and that the changing risk profile of the BEAC foreign exchange holdings required further actions to strengthen safeguards at the BEAC. Subsequent to the revelation of Paris office fraud, a series of initial measures and longer-term reforms was agreed between the IMF and the BEAC in order to continue with country programs. The BEAC adopted an action plan for 2010 with the aim of reforming its own governance and strengthening key safeguards. Implementation delays and additional safeguards concerns raised in the first special audit triggered a suspension of IMF disbursements to CEMAC countries from June to early August 2010, after which they resumed. In addition, since 2010, the BEAC and the IMF agreed on additional periodic measures to address the weaknesses highlighted by the special audit and to strengthen governance bodies. A recent safeguards monitoring mission identified a new series of rolling benchmarks to address outstanding safeguards concerns going forward.

XI. Exchange System: The regional currency is the CFA franc. From 1948 to 1999, it was pegged to the French franc. Since the euro was introduced in 1999, it has been pegged to the euro at the rate of CFAF 655.957 per euro.

Equatorial Guinea maintains an exchange system free of restrictions on the making of payments and transfers for current international transactions. A 2007 temporary ministerial order requires authorization of the General Directorate of Banking prior to rapid money transfers abroad by non-bank financial institutions.

XII. Article IV Consultations: Equatorial Guinea is on the standard 12-month Article IV consultation cycle. The last Article IV consultation with Equatorial Guinea was concluded by the Executive Board on April 22, 2011 (Press Release No. 11/234).

XIII. Technical Assistance:

FAD provided an 18-month technical assistance during 1992–94 to reorganize the tax department and personnel training.

FAD conducted a review of PEF and tax administration systems in 1997.

STA evaluated the collection of monetary statistics and proposed steps to adopt the methodology of the Monetary and Financial Statistics Manual 2000 in December 2002.

FAD conducted a diagnostic mission on key deficiencies and training needs in public finance in May 2003.

FAD conducted a diagnostic mission on modernization of public expenditure management processes and steps for reforming the system in July 2005.

STA conducted a diagnostic mission on real sector statistics in July 2005.

STA conducted a diagnostic mission on government financial statistics in January 2006.

STA conducted a follow-up mission in real sector statistics in January 2006.

A macrofiscal advisor, backstopped by AFR, and paid for by the government through a reimbursement agreement with the Fund, was in residence in Equatorial Guinea from June 2006 to early May 2007.

A public financial management advisor, backstopped by FAD, and paid for by the government through a reimbursement agreement with the Fund, was in residence in Equatorial Guinea from June 2006 to early May 2007.

STA conducted a technical assistance mission in real sector statistics in March 2007.

AFRITAC Central conducted a technical assistance mission on national accounts and consumer price statistics in October 2007.

AFRITAC Central conducted technical assistance missions in price statistics in March 2008 and June 2008.

Two macrofiscal advisors, backstopped by AFR, and paid for by the government through a reimbursement agreement with the Fund, were redeployed in April 2008 for a one-year period. Their contract was extended in 2009 and 2010, and expired December 31, 2011.

AFRITAC Central conducted a technical assistance mission on trade statistics in July 2008.

AFRITAC Central conducted technical assistance missions on national accounts statistics in June and July 2008, January, May, and December 2011.

AFRITAC Central conducted technical assistance missions in public financial management statistics in February 2008, February 2009, July 2010, May 2011, and March 2012.

AFRITAC Central conducted a technical assistance mission on the budget accounting system and practices in September 2012.

XIV. Resident Representative: None

Relations with the World Bank Group

TitleProductsProvisional timing of missionsExpected delivery date
A. Mutual information on relevant work programs
The World Bank work program in the next 12 months1. Extractive Industries Transparency Initiative (EITI) assistanceOctober 2012 (EITI workshop), March 2013 (Presentation of civil society legislation review)August 2013
2. Technical assistance to statistics office (national accounts)Resident technical assistance extended to November 2013January 2013: 2006

National Accounts

March 2013: 2007

National Accounts

November 2013:

Enterprise Census
3. Investment climate surveyTBDTBD
4. Growth analysisJanuary 2013 (Presentation of preliminary results and diversification conference)February 2013
5. Debt management diagnostic and reformOctober 2012 (Debt Management Analysis), ~February 2013 (Debt Management Reform Plan)August 2013
The IMF work program in the next 12 months1. Article IV consultationOctober 2012 missionJanuary 2013 IMF Executive Board
B. Requests for work program inputs
Fund request to BankData sharing, in particular the outcome of technical assistance to the statistical office
Bank request to FundUpdate on macroeconomic framework



Article IV documents
C. Agreement on joint products and missions
Joint products in the next 12 months

Statistical Issues

Equatorial Guinea—Statistical IssuesAs of December 12, 2012
I. Assessment of Data Adequacy for Surveillance
General: Data provision has serious shortcomings that significantly hamper surveillance. National accounts, government finance statistics, and balance of payments data are all deficient in quality, timing, and coverage. A decree to establish an autonomous National Statistics Institute has not been followed through and staff vacancies in the General Directorate of Statistics have not been filled. Poor centralization of information between the island and continental regions is also an issue. Limited use has been made of technical assistance.
National Accounts: National accounts are constructed by the Bank of Central African States (BEAC) as part of their regular Monetary Programming exercise. They are based largely on estimates, without the benefit of survey information except in the hydrocarbon sector. The current base year is 1985. An exercise is under way by the General Directorate of Statistics, supported by the World Bank resident adviser, to compile complete accounts for 2006 and 2007. The initial outcomes are expected to be available in early 2013. A demographic and health survey was conducted in 2011 and is currently being processed. A population and housing survey, a household survey, an employment survey, and an agricultural survey are planned for 2013.
Price statistics: Compilation of the official CPI resumed in January 2009, with data collected in five major cities. However, a number of deficiencies remain, including outdated weights and composition of the basket of goods and services, and gaps in the time series corresponding to the period for which data was not collected (June 2005 – February 2006, and 2008). Imputations for missing data do not always reflect underlying trends. In general, the CPI tends to underestimate inflation.
Government finance statistics: The authorities provide budget execution data to the African Department, but these are limited in detail (with, for example, a poor delineation between capital and current spending and no functional classification) and are not fully reconciled with the monetary accounts. The fiscal data are not subject to any internal process of verification because internal and external audit capability remains weak. The authorities are discussing with IMF FAD their request for TA contracts covering recruitment and backstopping for three residential advisors for public finance, budgeting, and accounting. Gains in transparency were made temporarily through the Extractive Industries Transparency Initiative process, with a reconciliation report posted on the World Bank website in March 2010 that included information on state owned oil companies.
Monetary statistics: The accuracy of monetary statistics may be affected by large cross-border movements of BEAC-issued banknotes among CEMAC member countries. About 60 percent of banknotes issued in Equatorial Guinea by the BEAC national directorate circulate in Cameroon and only 26 percent remain in the country, while currency in circulation in Equatorial Guinea includes some 18 percent of banknotes from Cameroon and as much from Gabon.
Balance of payments: Although the BEAC produces balance of payments data for its monetary programming exercise, they are in general not derived from records of current stocks or flows and are not fully consistent with other datasets. Statistics are largely constructed from estimates rather than actual financial and customs records, even though information on the hydrocarbons sector is available to some parts of the government and customs data have improved since the implementation of the Central African Customs and Economic Union reform and the deployment of customs brigades.



A balance of payments statistics mission is scheduled in March 2013.
II. Data Standards and Quality
Equatorial Guinea does not participate in the GDDS.Equatorial Guinea has not yet received a mission to produce the data module of the Reports on the Observance of Standards and Codes (data ROSC).
III. Reporting to STA (Optional)
Real sector statistics reported to STA for publication in the International Financial Statistics (IFS) are limited to GDP (without breakdown by sector or expenditure category), exports, and imports. The November 2012 issue of the IFS included data for GDP through 2009 and exports and imports through 2010. The authorities agreed to submit CPI data for the IFS publication and STA is communicating with the authorities regarding the procedure. The BEAC reports monetary, interest rates, and exchange rate statistics for publication in the IFS, but delays are persistent (currently the lag is about three months). Balance of payments data are not submitted to STA for publication in the IFS or the Balance of Payments Statistics Yearbook. The latest year for which balance of payments data are available is 1996. Equatorial Guinea does not report fiscal data to STA for publication in the IFS or the Government Finance Statistics Yearbook.
Equatorial Guinea: Table of Common Indicators Required for Surveillance(As of December 12, 2011)
Date of Latest ObservationDate ReceivedFrequency of Data7Frequency of Reporting7Frequency of Publication7
Exchange Rates11/29/1211/29/12DDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1June 201210/17/12MMI
Reserve/Base MoneySept 201212/5/12MMM
Broad MoneySept 201212/5/12MMM
Central Bank Balance SheetSept 201212/5/12MMM
Consolidated Balance Sheet of the Banking SystemSept 201212/5/12MMM
Interest Rates2Nov 201212/4/12MMI
Consumer Price IndexApr 201211/19/12MMM
Revenue, Expenditure, Balance and Composition of Financing3—General Government4June 201210/17/12QQI
Stocks of Central Government and Central Government-Guaranteed Debt56July 201210/17/12AAI
External Current Account Balance201110/17/12AAI
Exports and Imports of Goods and Services201110/17/12AAI
GDP/GNP201110/17/12AAI
Gross External DebtJuly 201210/17/12MMI
International Investment Position7NANANA

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, and rates on treasury bills, notes and bonds.

Foreign and domestic bank, nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Includes currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, and rates on treasury bills, notes and bonds.

Foreign and domestic bank, nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Includes currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

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