Economy
GDP (2002 est.): $2.5 billion.
GDP growth rate: 23.8% (IMF 2001 est.).
GDP per capita (2002 est.): $4,900.
Inflation rate (2002 est.): 9%.
Unemployment rate: N/A.
Natural resources: Petroleum, timber, small, unexploited deposits of gold, manganese, and uranium.
Agriculture (1999 est.): 16% of GDP. Products--coffee, cocoa, rice, yams, cassava (tapioca), bananas, palm oil nuts, manioc (tapioca), livestock, and timber.
Industry (1999 est.): 75.3% of GDP. Types--petroleum, fishing, saw milling, natural gas.
Services (2001): 5.4% of GDP.
Trade (2000 est.): Exports--$1,363 million: hydrocarbons (95%), timber (2%-3%), others (3%-2%). Imports--$542 million. Major trading partners--United States, China, France, Spain, Cameroon, Great Britain, and Gabon. The United States is the largest cumulative bilateral foreign investor in Equatorial Guinea. The majority of U.S. exports to Equatorial Guinea consist of energy sector-related transportation and machinery equipment. The United States main import from Equatorial Guinea is petroleum. In 1999, the European Union (EU) imported $281.7 million in goods from Equatorial Guinea, 89% of which was petroleum and 7% timber. The European union exported $104 million to Equatorial Guinea. Approximately 20% of these exports were oil and gas-related, and the remaining 80% ranged from agricultural products to clothing to used cars. Currency: Communaute Financiere Africaine (CFA) franc (XAF). Fiscal year: April 1-March 31.

Equatorial Guinea Economy
Oil and gas exports have increased substantially and will drive the economy for years to come. Real GDP growth reached 23% in 1999, 18% in 2000, 66% in 2001 and 24% in 2002. Per capita income doubled from about $1,000 in 1998 to $2,000 in 2000 and $4,900 today. The energy export sector is responsible for this rapid growth. Oil production has increased from 81,000 barrels per day in 1998 to more that 350,000 bpd by 2003. Production of 500,000 bpd is projected by 2005. This is based on existing commercially viable oil and gas deposits. Exploration efforts continue in search of further potential offshore concessions.

Equatorial Guinea has other unexploited human and natural resources, including a tropical climate, fertile soils, rich expanses of water, deepwater ports, and an untapped, if unskilled, source of labor. Following independence in 1968, the country suffered under a repressive dictatorship for 11 years, which devastated the economy. The agricultural sector, which historically was known for cocoa of the highest quality, has never fully recovered. In 1969 Equatorial Guinea produced 36,161 tons of highly bid cocoa, but production dropped to 4,800 tons in 2000 and 2,700 tons in 2001. Coffee production also dropped to 100,000 metric tons in 2000. Timber is the main source of foreign exchange after oil, though it now only accounts for 3% of total export earnings. Timber production increased steadily during the 1990s; wood exports reached a record 789,000 cubic meters in 1999 as demand in Asia (mainly China) gathered pace after the 1998 economic crisis. Most of the production (mainly Okoume) goes to exports, and only 3% is processed locally. Environmentalists fear that exploitation at this level is unsustainable and point out to the permanent damage already inflicted on the forestry reserves on Bioko.

Consumer price inflation has declined from the 38.8% experienced in 1994 following the CFA franc devaluation, to 7.8% in 1998, and 1.0% in 1999, according to BEAC data. Consumer prices inflation has remained steady at 6% since 2002.

Equatorial Guinea's policies, as defined by law, comprise an open investment regime. Qualitative restrictions on imports, nontariff protection, and many import licensing requirements were lifted when in 1992 the government adopted a public investment program endorsed by the World Bank. The Government of the Republic of Equatorial Guinea has sold some state enterprises. It is attempting to create a more favorable investment climate, and its investment code contains numerous incentives for job creation, training, promotion of nontraditional exports, support of development projects and indigenous capital participation, freedom for repatriation of profits, exemption from certain taxes and capital, and other benefits. Trade regulations have been further liberalized since Central African Economic and Monetary Union (CEMAC) reform codes in 1994. This included elimination of quota restrictions and reductions in the range and amounts of tariffs. The CEMAC countries agreed to the introduction of a value added tax (VAT) in 1999.

While business laws promote a liberalized economy, the business climate remains difficult. Application of the laws remains selective. Corruption among officials is widespread, and many business deals are concluded under nontransparent circumstances. A newly introduced wage law now regulates separate wage levels for the petroleum, private and government sector.

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

The Equatoguinean budget has grown enormously in the past 5 years as royalties and taxes on foreign company oil and gas production have provided new resources to a once poor government. The 2001 budget foresaw revenues of about 154 billion CFA francs (about U.S.$200 million), up about 50% from 2000 levels. Oil revenues account for more than two-thirds of government revenue, and VAT and trade taxes are the other large revenue sources.

The Equatoguinean Government has undertaken a number of reforms since 1991 to reduce its predominant role in the economy and promote private sector development. Its role is a diminishing one, although many government interactions with the private sector are at times capricious. The government is anxious for greater U.S. investment. Beginning in early 1997, the government initiated efforts to attract significant private sector involvement through cooperative efforts with the Corporate Council on Africa visit and numerous ministerial efforts. In 1998, the government privatized distribution of petroleum products. There are now Total and Mobil stations in the country. The government has expressed interest in privatizing the outmoded electricity utility. A French company operates cellular telephone service in cooperation with a state enterprise. Agriculture, fishing, livestock, and tourism are among sectors the government would like targeted.

Equatorial Guinea's balance-of-payments situation has improved substantially since the mid-1990s because of new oil and gas production and favorable world energy prices. Exports totaled $2.45 billion in 2002. Crude oil exports now annually accounted for more than 90% of export earnings. Timber exports, by contrast, now represent only about 3% of export revenues. Imports into Equatorial Guinea also are growing very quickly. Imports totaled U.S. $260 million.

Equatorial Guinea in the 1980s and 1990s received foreign assistance from numerous bilateral and multilateral donors, including European countries, the United States, and the World Bank. Many of these aid programs have ceased altogether or have diminished. Spain, France, and the European Union continue to provide some project assistance, as do China and Cuba. The government also has discussed working with World Bank assistance to develop government administrative capacity.

Equatorial Guinea operated under an International Monetary Fund-negotiated Enhanced Structural Adjustment Facility (ESAF) until 1996. Since then, there have been no formal agreements or arrangements. Since 1996, the IMF has held regular held Article IV consultations (periodic country evaluations) . After the 1999 consultations, IMF directors stressed the need for Equatorial Guinea to establish greater fiscal discipline, accountability, and more transparent management of public sector resources, especially energy sector revenue. IMF officials also have emphasized the need for economic data. Since 1999, the EquatoguineanGovernment has attempted to meet IMFrequests for transparency and openness in its treasury accounts.
source: http://www.state.gov