The GDP of Equatorial Guinea fell by 10.2% in 2015 due to the drop in oil prices and was expected to contract by 8% in 2016. Oil and gas production fell by 10%, compared to 2014, to around 165 000 barrels a day in 2015.The government has used oil revenues to carry out structural changes over the last 15 years and implement a housing policy for new homes and better access to water and electricity. The economy depends on oil and gas that contributed 90% of GDP, 87% of fiscal revenues and 89% of exports in 2015. According to World Bank the inflation was estimated at 1.7% in 2015.
Why invest in Equatorial Guinea?
Government needs investment and expertise is in projects ranging from transport, hospitals, industrial plants and schools, offering a range of incentives and benefits for companies or individuals seeking to invest or work in Equatorial Guinea. There are over 800 construction projects that will strengthen the country’s infrastructure, promote tourism and investment.
The country is governed under multiparty political system. The President, Teodoro Obiang Nguema Mbasogo has been in office since 1979. The country’s constitution was amended following the November 2011 referendum and a new government was appointed in May 2012. The legislative, senatorial, and municipal elections were held in May 2013 and confirmed the domination of the ruling party (PDGE). The government’s development agenda is guided by a medium-term strategy, the National Economic Development Plan: Horizon 2020, which targets economic diversification and poverty reduction.
According to a 2015 population census, Equatorial Guinea had a population of 1.2 million people that was growing at 2.78% per year.
About 39.9% of total population lived in urban areas in 2015 with estimated urbanization annual rate of change of 3.12% for the period from 2010 to 2015.
Doing business in Equatorial Guinea
The highlights of World Bank score of doing business in Equatorial Guinea are summarised as follows;
|Topics||World Bank 2017 Rank||World Bank 2016 Rank||Change in Rank|
|Starting a Business||187||188||
|Dealing with Construction Permits||160||157||-3|
|Protecting Minority Investors||137||136||-1|
|Trading across Borders||174||174|
The government is the in process of creating conducive environment for doing business.
Decree No. 54/1994 provides the right to freely transfer convertible currency abroad at the end of each fiscal year. Due to limited financial services, it can occasionally be difficult to execute international transfers. Local currency is not widely available outside of the Central African Franc zone, but can be relatively easily obtained in country. Equatorial Guinea is an almost entirely cash economy, though credit cards are slowly growing in usage.
Arbitration and disputes
Law No. 7/1992 states that the government will not expropriate foreign investments except when acting in the public interest with fair, just, and proper compensation. Law No. 7/1992 states that disputes that cannot be resolved through direct negotiation by the involved parties shall be referred to Equatoguinean courts. Either party can also submit the dispute to international arbitration. Law No. 7/1992 states that international arbitration may utilize ICSID as the basis of procedure.
Key development challenges
Improving the doing business environment in the country.
Equatorial Guinea was number 163 out of 177 countries and scored 19 points out of 100 in the 2013 Corruption Perceptions Index reported by Transparency International.
There is low threat from terrorism but one has to take into consideration the security alerts from reliable sources.
Unemployment and skilled labour
Unemployment Rate in Equatorial Guinea is averaging 22.3% in 2017 and is projected at 22.62 in 2018 and 18% in 2020.
Attitude to Foreign Direct Investment
Equatorial Guinea does not have a single agency that serves as a hub for foreign investors. Investors must work with the relevant ministry to negotiate a contract. The Government of the Republic of Equatorial Guinea is actively soliciting foreign investment through various platforms that have included the February 2014 economic diversification symposium. During the symposium, the government announced the establishment of a “one-stop-shop” for investors aimed at simplifying the process. Foreign investment is regulated by at least the following laws: Law No. 7/1992, Law No. 2/1994, Decree No. 54/1994, and Decree 127/2004.
Restrictions on Foreign investment
Decree 127/2004 stipulates that shareholder capital firms and companies operating in the petroleum sector must have Equatoguinean shareholders (percentage not specified). Foreign companies or companies created by foreigners are required to have at least 35% of share capital held by Equatoguinean partners. Equatoguinean partners must also account for one third of the representatives on the Board of Directors. In some sectors, investments must be part of public-private partnerships with a government entity. Foreign investors are not permitted to own land or property, but can lease it from the government or others.
Intellectual Property (IP) Rights.
Equatorial Guinea is a member of the African Intellectual Property Organization (OAPI). Intellectual property protections fall under the Council of Scientific and Technological Research of Equatorial Guinea. Legal structures to enforce intellectual property rights are hardly there. Equatorial Guinea joined the World Intellectual Property Organization (WIPO) in 1997.
Petroleum, natural gas, gold, bauxite, diamonds, tantalum, sand, gravel, clay
Investment Climate in Equatorial Guinea has been summarized to include the following
Sources of information