Summary:
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Ms. Colacelli made the following declaration following the visit:The economy will profit from increasing hydrocarbon production and pricing in 2022, but a substantial increase in food prices will fuel inflation.
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Staff members have access to a draft of the audit report on Bata-related spending that the authorities intend to be finalised and released soon.
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The Council of Ministers has authorised a list of assets slated for privatisation and a list of assets slated for various types of private management.
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Both indexes have been made public on the website of the Ministry of Finance.
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The 2019 EFF-supported programme will end in December 2022.
During October 11–15, 2022, in Washington, DC, an IMF staff team headed by Mariana Colacelli met with the government of Equatorial Guinea to discuss the status of the country’s economic reform programme, which is supported by the extended arrangement under the Extended Fund Facility approved in 2019 and commitments under the 2021 Rapid Financing Instrument. The macroeconomic outlook and policy were other topics of discussion.
Ms. Colacelli made the following declaration following the visit:
The economy will profit from increasing hydrocarbon production and pricing in 2022, but a substantial increase in food prices will fuel fuel inflation. Real GDP increased by around 2% (y/y) in the first half of 2022, helped by rising hydrocarbon output. However, a recent event in a significant oil production unit may result in less than the 5.8 percent real GDP growth predicted during the 2022 Article IV Consultation Executive Board discussion in July. Beyond staff expectations, the fiscal balance improved in the year’s first half, reaching 5% of GDP, primarily due to more significant hydrocarbon revenue. Food price increases pushed inflation to 6.1 percent year on year in August.
The government has been addressing the rise in food costs while pushing efforts to improve social outcomes and gradually diversify the economy. With the goal of subsidizing their transportation costs to help keep local retail food prices in check, the government is collaborating with international vendors of essential food goods to expedite their imports. In the first-ever competitive public sector employment procedure, the authorities recently employed nearly 4,000 public employees, mainly for the education, health, and social welfare sectors, to support their aim of enhancing social outcomes and developing human capital. The government has just recruited a provider to create an online visa gateway in early 2023 to support their diversification ambitions and help jump-start the tourism sector.
Implementation of governance reforms under the 2019 EFF-supported programme and the 2021 RFI commitments has been delayed but lately gained steam due to the 2020–21 emergency from the COVID–19 epidemic and the Bata explosions. The authorities have made significant progress since the last Executive Board debate on the 2022 Article IV Consultation. They have finished essential tasks within the past month. Final audit reports, including those for the audits of state-owned oil and gas businesses and COVID-related expenses, have been posted on the website of the Ministry of Finance (GEPetrol and Sonagas).
Other initiatives have been advanced but still require further development and full implementation. Staff members have access to a draft of the audit report on Bata-related spending that the authorities intend to be finalised and released soon. A progress report on the authorities’ 2019 Good Governance and Anti-Corruption Action Plan has been created and will be released soon. As per the 2021 Anti-Corruption Law, the leaders are finalising the rules for the asset declaration policy for public officials and the management of the Anti-Corruption Commission. As outlined in their regulation adopted in December 2021, the authorities seek to publicise the contracts and beneficial ownership information of all companies awarded procurement contracts for the COVID and Bata emergencies. The authorities have put up a website for the Official Gazette and uploaded pertinent legal documents there, but more need to be uploaded. The Council of Ministers has authorised a list of assets slated for privatisation and a list of assets slated for various types of private management. Both indexes have been made public on the website of the Ministry of Finance. Discussions on the lists’ make-up are still ongoing.
The regularisation of household arrears is also being implemented, however slowly. To help strengthen the banking sector and boost the non-hydrocarbon sector’s recovery, the authorities have lately achieved headway with the first stage of the operation. However, robust implementation and the completion of the remaining operations are urgently required.
“Discussions on further Fund programme engagement, including the authorities’ interest in a new programme,” are underway. The 2019 EFF-supported programme will end in December 2022. The authorities reiterated their plans to carry out the structural reform programme started under the 2019 EFF and to implement high-quality fiscal measures to support inclusive growth, diversification, and internal and external stability in this framework. Additionally, technical assistance from the IMF will continue to support the government’s economic plan.
The IMF delegation met with key government officials during the negotiations, including the Minister of Finance, Economy, and Planning Valentin Ela Maye Mba; State Secretary of Budget and Financial Control Antonio Ngua Mba Eyang; BEAC Second Deputy National Director Jaime Edu Andomo Obono; and others.
The IMF team would like to thank the authorities for their open and fruitful conversations.
It is distributed by APO Group on behalf of the International Monetary Fund (IMF).
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Analysis by: Advocacy Unified Network
