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Country Profile 2012: EQUATORIAL GUINEA

posted by – September 11th, 2012


President Teodoro Obiang Nguema Mbasogo’s regime is again looking at  reforms that would make the government more accountable and the regime more  transparent.

Moving the goalposts again


Even though the government has not followed through on its previous promises,  it continues to make new ones. Obiang Nguema, now 69, has ruled the country for  32 years but sees the idea of presidential term limits as a potential means to  win more international support for a country that attracts rafts of negative  attention. In October, the US Department of Justice sought to seize more than  $70m in property held by the president’s son Teodorin that they believe had been  purchased through misappropriation of public funds.

The ruling Partido Democrático de Guinea Ecuatorial (PDGE) remains  intolerant of political opposition. The UN Human Rights Council criticised the  government in Malabo in September after the authorities executed four men  allegedly involved in a 2009 attack on the presidential palace, without giving  them the right to appeal. In a bid to improve its international image, the PDGE  began campaigning in October for changes to the fundamental law that will  strengthen the presidency, create term limits of two seven-year terms and  establish new institutions like the Senate, the Ombudsman’s Office and Court of  Auditors. A referendum was held on the reforms on 13 November and passed without  suspense.

The mining sector is resurgent but will be  constrained by a lack of power, and weak transportation and processing  infrastructure

The government sought to broaden its African profile by hosting the July  African Union summit. There, amidst the instability in Libya, President Obiang  Nguema railed against international interventions based theoretically on human  rights grounds. The country will co-host the 2012 African Cup of Nations  football tournament with Gabon in January and February, attracting tourists and  foreign media.

Whether the country’s oil and gas will last another 10 or 30 years, the IMF  and other donors are pressuring the government to diversify the economy.  Priorities for economic diversification include agriculture, fisheries and  tourism. World Bank officials say that institutional reforms are needed to  launch the economy into another league. Togo-based Ecobank said that Equatorial  Guinea offers an attractive operating environment, and it is seeking approval  for a banking licence there.

Malabo may have more pedestrian bridges than any other city in Africa, but in  terms of the business environment, health and education, Equatorial Guinea lags  behind its continental counterparts. There is still progress to be made in the  provision of electricity, and the administration plans to inaugurate the  Djibloho dam built by China’s Sinohydro and financed by the government’s own  funds in 2012. To improve its performance, the Sociedad de Electricidad de  Guinea Ecuatorial is in the process of being restructured and  privatised.

Despite best intentions, oil and gas remain the mainstays of the economy. The  energy ministry predicts that oil production will rise to about 300,000 barrels  per day (bpd) in 2012 thanks to new production from the Aseng field operated by  Noble Energy. Meanwhile, most companies there have plans to drill on gas  prospects in the year to come. China National Offshore Oil Corporation, Noble,  PetroSA, Repsol and the state were in discussions at the end of 2011 on plans  for a second liquified natural gas plant, which would cost an estimated $2.2bn.  Equatorial Guinea has dropped plans to source gas for the plant from Nigeria or  Cameroon but the necessary capacity of the plant will only be known when more  drilling is completed in 2012. In October, Ophir Energy increased the size of  its acreage on Block R in order to encompass more than 3bn ft3 of indicated gas  reserves.

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