Press Release No. 20/52

IMF Staff Concludes Visit to Equatorial Guinea

February 14, 2020

• The mission welcomed the authorities’ decision to move forward with the publication oil and gas contracts.
• Preliminary data suggests that the overall fiscal balance improved in 2019, with a significant reduction in the non-oil primary balance.
• The mission stressed the importance of adhering to the timeline for the implementation of structural reforms.

An International Monetary Fund (IMF) staff team led by Lisandro Abrego visited Malabo from February 5 to 13, 2020 to discuss with the authorities and take stock of progress on Equatorial Guinea’s economic reform program supported by the IMF’s EFF.

At the end of the visit, Mr. Abrego issued the following statement: 

“The mission noted that progress is being made with program implementation in the macro-fiscal area. Preliminary data suggests that the overall fiscal balance improved in 2019, with a significant reduction in the non-oil primary balance. The outcome was aided by the operationalization of tighter expenditure approval and tracking mechanisms put in place last year. This also supported a reduction in the stock of domestic arrears. While the authorities’ 2020 budget is consistent with the program quantitative targets for this year, continued fiscal discipline and significant improvements in tax and customs administration will be necessary to further strengthen the public finances and meet program targets for 2020. 

“Implementation of structural reforms has just started, and it is too early to make an assessment. In its dialogue with the authorities the mission stressed the importance of adhering to the timeline for the implementation of these reforms, which are key to achieving the objectives of the program in the macroeconomic, economic diversification, governance and anti-corruption areas. The mission welcomed the authorities’ decision to move forward with the publication oil and gas contracts, which started this week with the publication of a subset of production contracts. The team looks forward to the publication of the full set of contracts.

“In line with the economic program, the mission also emphasized the importance of addressing weaknesses in the banking sector to foster financial stability and support the recovery of the non-oil economy and economic diversification. It stressed the need to clear domestic arrears and enforce compliance with prudential regulation in the banking system while maintaining close supervision of it. These actions require strong coordination among the Equatoguinean authorities and the regional financial regulator (COBAC). The mission also highlighted the need to continue making progress on improving the business climate, which is also key to promoting the recovery of the non-oil economy and diversification.    

“During the visit, the IMF team met with Minister of Finance, Economy and Planning, César Mba Abogo; Minister of Mines and Hydrocarbons, Gabriel Obiang Lima; other senior government officials, as well as representatives of the private sector and civil society.

“We would like to thank the Equatoguinean authorities for their continued hospitality and constructive discussions.”