Equatorial Guinea’s economy is expected to grow by 2.8 percent in 2021, according to economic growth data that reveals the country’s economy has been in negative territory since 2016.
“It is forecast that in 2021 the economy will achieve a positive growth rate due mainly to the increase in gas production and the gradual recovery of some activities in the tertiary sector, compared to 2020,” estimated the National Institute of Statistics of Equatorial Guinea (INEGE).
INEGE released on Monday definitive macroeconomic data for 2018, estimates for the years 2019 and 2020 and forecasts for 2021.
“Oil Gross Domestic Product (GDP) is expected to register a growth of 4.7% and non-oil 0.5%,” INEGE added.
In May 2019, the Government sent information to the International Monetary Fund (IMF), assuring that it had emerged from economic recession in 2017 and recorded growth of 7.3% that year and 3.4% in 2018.
However, the IMF pointed to the country’s negative economic growth from 2015 until 2023, only forecasting positive growth, of 1.5 percent, in 2024.
According to the definitive macroeconomic data for 2018, presented by INEGE director-general Ricardo Nsue Ndemesogo, the growth rate of Equatorial Guinea’s economy stood at -6.2% that year, down from -5.7% in 2017.
“The drop in hydrocarbon production, combined with the reduction in public expenditure, led to a contraction of GDP in real terms by 6.2%, with oil GDP falling by 12.4% and non-oil GDP increasing by 2.9%,” he indicated.
For 2019, estimates for economic growth show a slight improvement in the fall in GDP, which will be around -6.0 percent, with oil GDP shrinking by 9.3 percent and non-oil GDP by 2.0 percent.
For 2020, INEGE calculates a contraction of 4.9 percent of the economy.
INEGE had previously forecast growth of the economy, highly dependent on hydrocarbons, between -5.8 per cent (in an optimistic perspective) and -8.9 per cent (in a very pessimistic scenario), due to the effects of the pandemic on the world economy and the demand for oil products.
“However, despite an unfavourable international situation (with the price of crude oil at $41.3 per barrel, or a 32.8% decrease), the Ministry of Mines and Hydrocarbons managed to motivate companies in the sector to maintain their investments, allowing crude exports to recover by 0.2%, compared to 5.5% in 2019,” INEGE points out.
For 2021, despite the continued impacts of the pandemic, INEGE estimates a recovery in the economy based on the forecasts of the increase in the price of a barrel of oil, the ongoing vaccination programme and the launch of the first phase of the gas exploration project in the Alen field.
It also predicts a positive impact from the increase in public spending, projected in the budget, with current spending increasing by 18.1 percent and investment spending by 14.5 percent compared to 2020.
The International Monetary Fund (IMF) announced in January that it will review the financial assistance programme for Equatorial Guinea due to the “profound impact of the crisis”, which prevented any disbursements in 2020 and postponed the first review of the programme until this year.
Equatorial Guinea agreed a financial rescue programme at the end of 2019 to help balance the economy after several years of economic recession, but received only $40 million, along with the signing of the agreement in December that year.
The British magazine The Economist published an article in which it linked the lack of disbursements in 2020 with the rejection of the country’s membership of the Extractive Industry Transparency Initiative due to lack of information.
