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- GDP (PPP):
- $19.3 billion
- 2.0% growth
- 2.7% 5-year compound annual growth
- $25,929 per capita
- Inflation (CPI):
- FDI Inflow:
Equatorial Guinea’s economic freedom score is 44.4, making its economy the 168th freest in the 2014 Index. Its overall score has risen by 2.1 points, with improvements in investment freedom and government spending overcoming deteriorations in trade freedom, property rights, and freedom from corruption. Equatorial Guinea is ranked 42nd out of 46 countries in the Sub-Saharan Africa region, and its score is below the regional and world averages.
Over the 16 years during which Equatorial Guinea has been graded in the Index, its economic freedom has remained largely stagnant. Improvements in financial freedom, investment freedom, monetary freedom, and freedom from corruption have been outweighed by double-digit declines in government spending, fiscal freedom, and business freedom. Equatorial Guinea had moved out of the ranks of the “repressed” from 2003 to 2009 but has fallen back to that status since 2010.
Equatorial Guinea’s overall economic performance is undermined by poor institutional performance in some of the foundational areas of economic freedom. The judiciary is vulnerable to political interference, the rule of law is weak, and corruption is pervasive. A substantial reform effort will be required to encourage broad-based economic development.
President Teodoro Obiang Nguema Mbasogo seized power in 1979 and continues to control the military and the government. Equatorial Guinea is a significant oil producer and one of Africa’s fastest-growing economies. In 2007, oil accounted for 91 percent of GDP, 91 percent of government revenue, and 99 percent of exports. Foreign investment in the oil industry is extensive, but government management of oil wealth is not transparent. Corruption is high. Average living standards are low. Most people still rely on subsistence farming, hunting, and fishing. Undeveloped natural resources include zinc, diamonds, gold, and other precious metals. Forestry and farming also contribute modestly to GDP. The president’s son, Minister of Agriculture and Forestry Nguema Obiang Mangue, has been accused of embezzling public funds to buy property in France.
President Obiang and his inner circle dominate Equatorial Guinea’s economic landscape, and graft is rampant. Most major business transactions cannot transpire without involving an individual connected to the regime. The judiciary is not independent, and judges in sensitive cases reportedly consult with the president’s office before making decisions. Protection of property rights is poor.
The top individual income and corporate tax rates are 35 percent. Other taxes include a value-added tax (VAT) and a tax on inheritance. The overall tax burden remains a low 1.5 percent of GDP. Public expenditures are 35 percent of the gross domestic economy. Oil revenue continues to be a main supporter of public finances, keeping public debt below 10 percent of GDP.
Cumbersome procedures and high compliance costs continue to be impediments to starting a business. In the absence of private-sector employment opportunities, an organized labor market has not emerged. Existing labor regulations are outmoded and create challenging barriers to hiring. The government has misused its substantial oil revenues by using state funds to subsidize sectors such as fisheries, agriculture, and eco-tourism.
Equatorial Guinea’s average tariff rate was 15.6 percent as of 2007. As with other members of the Central African Economic and Monetary Community, it may take weeks to import cargo. The government plays a role in foreign investment decisions. The financial sector remains subject to heavy state interference. Access to financing is limited. The government controls long-term lending through the state-owned development bank.