Abstract
The discussions for the 2003 Article IV Consultation with Equatorial Guinea were conducted in Malabo and Bata. Executive Directors expressed concern about the continued weakness in economic policy performance, macroeconomic management, and governance. The authorities agreed that Equatorial Guinea's medium-term economic outlook was favorable, provided that sound economic management was put in place and maintained. The macroeconomic stability needed to be complemented by a number of structural reforms to foster non-oil growth. The recently established government-owned oil company (GEPETROL) has initiated some operations.
1. This supplement provides additional information that has become available since the issuance of the staff report for the 2003 Article IV consultation with Equatorial Guinea on October 29, 2003. This information does not alter the thrust of the staff appraisal.
2. Budget execution data through end-September 2003 show a strong pick-up in spending in the third quarter, compared with previously available information through June. Overall spending through end-September reached 85 percent of outlays budgeted for the year as a whole, mainly on account of a substantial increase in capital outlays while the pace of recurrent spending continued to be moderate. The staff urges the authorities to reduce spending in the remainder of the year, in line with budget objectives.
3. The authorities have recently requested technical assistance from the World Bank to strengthen management capacity in the petroleum sector. The World Bank intends to provide training to officials of the Ministry of Mines and Energy and the state-owned oil company GEPetrol. Advice will also be given on the proper definition of these two agencies’ roles and responsibilities so as to avoid duplication of functions and conflicts of interest