International Trade in Equatorial Guinea

News Related to International Trade in Equatorial Guinea

Business outline for Equatorial Guinea

Economic Overview

Until it was hit by the global recession, Equatorial Guinea was one of the most rapidly growing countries in Africa. Thus, growth fell from 10.7% in 2008 to 0.9% in 2010, as an effect of the decline in oil price and oil production. The country's economy should recovery progressively in 2011. Equatorial Guinea is the third-largest oil producer in Sub-Saharan Africa, oil production representing most of the country's income. 

A program to diversify the sources of growth for the 2008-2020 period is based on the development of energy, fishing, farming, tourism and the financial services. Further effort to improve education and access to drinking water and health care are also among its goals.

Thanks to oil wealth enjoyed by Equatorial Guinea, the country has one of the highest per capita GDPs in Africa. However, poverty is widespread (affecting 77% of the population in 2006), the sanitary conditions are poor and inequality is high.

FDI in Figures

Due to the rise in international oil prices, the FDI inflow into Equatorial Guinea has been increasing. The share of FDI stock as a percentage of GDP increased between 2000 and 2008. The inflows of FDI began to decline in 2009 due to the deterioration of the economic situation of the main investing countries, but recovered in 2009-2010 and should remain on a high level in the year 2011.

In an attempt to create a favorable investment climate, the government is supporting the promotion of non-traditional exports, allowing repatriation of profits and offering various tax incentives. However, the high level of corruption, poor condition of infrastructures, insufficient supply of water and electricity, and the lack of skilled manpower are all factors that reduce the potential attractiveness of the country.

The majority of FDI is attracted by the oil sector, followed by the forestry and fishing sectors. The USA is the largest investor followed by Italy and France.

Foreign Trade Overview

Equatorial Guinea has an economy open to trade, which represents more than 115% of the country's GDP. However, although the government policies encourage a liberalized economy, poor enforcement of these policies create a difficult business environment in the country. Customs duties are relatively high but the government is working on reducing other barriers to entry. Extremely slow bureaucratic procedures and fraudulent practices adopted by custom officials are some of the major barriers to the good performance of trade business in the country.

Equatorial Guinea is a country which exports more than what it imports. The result is a substantial trade surplus, a trend that should continue in 2010. However, the fluctuation and the drop in oil exports have had an influence in the trade balance, the drop of oil prices in 2009 has decreased the surplus of the trade balance. 

The main trade partners of the country are the United States, the European Union and China.