2017 Index of Economic Freedom

Equatorial Guinea

overall score45.0
world rank174
Rule of Law

Property Rights35.4

Government Integrity24.6

Judicial Effectiveness13.1

Government Size

Government Spending53.6

Tax Burden75.4

Fiscal Health46.4

Regulatory Efficiency

Business Freedom50.9

Labor Freedom38.5

Monetary Freedom78.3

Open Markets

Trade Freedom53.8

Investment Freedom40.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 0.8 million
  • GDP (PPP):
    • $25.4 billion
    • -12.2% growth
    • -2.3% 5-year compound annual growth
    • $31,758 per capita
  • Unemployment:
    • 9.4%
  • Inflation (CPI):
    • 3.2%
  • FDI Inflow:
    • $316.2 million
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Oil has been the major source of high economic growth in Equatorial Guinea over the past five years. Overall economic development has been uneven, and poverty remains daunting. Privatization and liberalization half-measures have made little difference, and improving the investment and business climate remains an urgent priority.

Persistent institutional weaknesses impede development of a more vibrant private sector. Pervasive corruption and onerous regulations are major hurdles for foreign and domestic investment. The rule of law is weak, and private property is vulnerable to bureaucratic interference and even expropriation. Restrictive labor laws hamper employment and productivity growth. It is estimated that more than half of the workforce is employed in the informal economy.

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Background

President Teodoro Obiang Nguema Mbasogo seized power from his uncle in a coup in 1979. He most recently won reelection in April 2016 with 93 percent of the vote, a result that the opposition protested as fraudulent. In 2014, more than $30 million in assets allegedly purchased with embezzled funds was seized from Obiang’s son by U.S. authorities. Human rights organizations criticize Obiang for similarly enriching himself through corrupt practices. Equatorial Guinea is one of Africa’s fastest-growing economies and sub-Saharan Africa’s third-largest oil producer. The government is trying to diversify its economy by developing its agricultural, fishing, financial services, and tourism sectors.

Rule of LawView Methodology

Property Rights 35.4 Create a Graph using this measurement

Government Integrity 24.6 Create a Graph using this measurement

Judicial Effectiveness 13.1 Create a Graph using this measurement

Property rights are enforced selectively. Despite laws regarding the rights of property owners, the government can seize land with very little, if any, due process. Because the president is also the chief magistrate, the judicial system is not independent. Graft and nepotism are rampant. The government views domestic private firms without links to the regime as suspicious.

Government SizeView Methodology

The top personal income and corporate tax rates are 35 percent. Other taxes include a value-added tax and a tax on inheritance. The overall tax burden equals 2.8 percent of total domestic income. Government spending has amounted to 39.3 percent of total output (GDP) over the past three years, and budget deficits have averaged 5.7 percent of GDP. Public debt is equivalent to 20.1 percent of GDP.

Regulatory EfficiencyView Methodology

Cumbersome procedures and high compliance costs slow licensing and make starting a business more difficult. Existing labor regulations are outmoded and create challenging barriers to hiring. During the commodity boom, the government misused its substantial oil revenues to subsidize strategic sectors; now government revenues have plummeted as a result of plunging global oil prices and poor management of the oil sector.

Open MarketsView Methodology

Trade is extremely important to Equatorial Guinea’s economy; the value of exports and imports taken together equals 178 percent of GDP. The average applied tariff rate is 15.6 percent. Weak regulatory and judicial systems may discourage foreign investment. Credit costs are high, and access to financing is limited. The government controls long-term lending through the state-owned development bank.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius74.70.0
2Botswana70.1-1.0
3Rwanda67.64.5
4Côte d'Ivoire 633.0
5Namibia62.50.6
6South Africa62.30.4
7Seychelles61.8-0.4
8Swaziland61.11.4
9Uganda60.91.6
10Burkina Faso59.60.5
11Benin59.2-0.1
12Mali58.62.1
13Gabon58.6-0.4
14Tanzania58.60.1
15Madagascar57.4-3.7
16Nigeria57.1-0.4
17Cabo Verde56.9-9.6
18Democratic Republic of Congo56.410.0
19Ghana56.2-6.8
20Guinea-Bissau56.14.3
21Senegal55.9-2.2
22Comoros55.83.4
23Zambia55.8-3.0
24São Tomé and Príncipe 55.4-1.3
25Mauritania54.4-0.4
26Lesotho53.93.3
27Kenya53.5-4.0
28The Gambia53.4-3.7
29Togo53.2-0.4
30Burundi53.2-0.7
31Ethiopia52.71.2
32Sierra Leone52.60.3
33Malawi52.20.4
34Cameroon51.8-2.4
35Central African Republic51.86.6
36Niger50.8-3.5
37Mozambique 49.9-3.3
38Liberia49.1-3.1
39Chad492.7
40Sudan48.8N/A
41Angola48.5-0.4
42Guinea47.6-5.7
43Djibouti46.7-9.3
44Equatorial Guinea451.3
45Zimbabwe445.8
46Eritrea42.2-0.5
47Republic of Congo 40-2.8
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