Equatorial Guinea

Economic Overview

The Republic of Equatorial Guinea has one of Africa's most hydrocarbon-dependent economies. The discovery of large offshore oil reserves in the 1990s transformed the country, catapulting it to have one of the highest GDP per capita figures on the continent. However, this wealth is concentrated, and the economy remains highly vulnerable to fluctuations in global energy prices. The government's long-term challenge is to diversify the economy, improve governance and transparency, and translate resource wealth into more inclusive and sustainable development. The 2025-2026 outlook is heavily tied to oil and gas production levels and the country's success in attracting new investment into its maturing fields.

GDP Size & Growth Trajectory

Equatorial Guinea's economic growth is almost entirely a function of its oil and gas sector. After a period of contraction due to declining output from mature oil fields, the economy has faced challenges in returning to strong growth. The IMF's projections are often subject to significant revision based on energy sector performance. Growth is expected to remain subdued without significant new investment in the hydrocarbon sector.

Sector Composition

• Industry: This sector completely dominates the economy, contributing over 60% of GDP. This is almost entirely composed of oil and natural gas extraction. The country is a significant oil producer and has a major Liquefied Natural Gas (LNG) plant on Bioko Island.
• Services: The services sector accounts for about 30% of GDP and is driven by activities supporting the oil industry, as well as public administration.
• Agriculture: This sector is very small, contributing less than 5% to GDP. The country is a net importer of food.

Inflation Trends

As a member of the CEMAC monetary zone, inflation has generally been more contained than in countries with independent monetary policies. However, it remains susceptible to fluctuations in global food and import prices.

Fiscal & Monetary Policy Stance

• Monetary Policy: Monetary policy is managed by the regional central bank, the Bank of Central African States (BEAC), with the currency (XAF) pegged to the Euro.
• Fiscal Policy: Government revenue is overwhelmingly dependent on the oil and gas sector. Fiscal policy is therefore highly pro-cyclical, with spending expanding during oil booms and contracting sharply during downturns.

Market Size & Demand Potential

The domestic market is very small, with a small population and significant wealth inequality.

Population Size and Demographics

With a population of less than 2 million, the domestic consumer market is extremely limited.

Urbanization and Consumer Hubs

Economic activity is concentrated in two main locations: Malabo, the capital city located on Bioko Island, which is the hub for the oil and gas industry; and Bata, the largest city, located on the mainland.

Business Environment

The business environment is considered challenging, with significant concerns around transparency and governance.

Ease of Doing Business & Regulatory Reforms

Equatorial Guinea ranks very low on global ease of doing business indices. The operating environment is opaque, and bureaucracy can be a significant hurdle.

Political Stability & Governance

The country has been characterized by exceptional political stability at the highest level of leadership.

Political Environment

The country is a presidential republic. President Teodoro Obiang Nguema Mbasogo has been in power since 1979, making him one of the longest-serving leaders in the world. This has provided decades of policy continuity, but in an environment of highly centralized decision-making.

Rule of Law & Investor Protection

The legal system is a mix of Spanish civil law and customary law. While investment laws exist, the rule of law is weak, and contract enforcement can be uncertain. Corruption and a lack of transparency, particularly in the management of hydrocarbon revenues, are major concerns for investors.

Infrastructure Readiness

Oil revenues have been used to fund significant infrastructure projects.

Transport and Logistics

• Ports: The country has modern port facilities in both Malabo and Bata.
• Airports: There are international airports in both Malabo and Bata.
• Roads: The government has invested in developing a good road network on both the mainland and Bioko Island.

Energy Sector

The entire formal economy is built on the energy sector.

• Oil: The country is a significant oil producer, though output has been declining from its main fields.
• Natural Gas / LNG: The Punta Europa gas complex on Bioko Island is a world-class facility that processes natural gas and produces LNG for export, as well as methanol and other products. Monetizing its gas reserves is a key strategic priority.

Sector-Specific Opportunities

1. Oil and Gas

The hydrocarbon sector remains the only significant area for large-scale foreign investment. Opportunities exist in exploration for new fields and, more critically, in providing enhanced oil recovery and production optimization services for the country's maturing fields.

2. Gas Monetization

Leveraging the existing LNG infrastructure, there are strategic opportunities to develop and process gas from both domestic and nearby offshore fields (e.g., in Cameroon and Nigeria), positioning Equatorial Guinea as a regional gas processing hub.

3. Fisheries

With its long coastline, there is untapped potential in developing a commercial fishing and fish processing industry for both domestic consumption and export.