Equatorial Guinea - Tips

Equatorial Guinea - Tips

Equatorial Guinea Bureau of African Affairs
June 2007

Background Note: Equatorial Guinea

Children play a skipping game in
front of cathedral built during
colonial times in Malabo, Equatorial
Guinea, August 25, 2002. [© AP
Images]

Flag of Equatorial Guinea is three equal horizontal bands of green - top -
white, and red with a blue isosceles triangle based on the hoist side and the
coat of arms centered in the white band.

PROFILE

OFFICIAL NAME:
Republic of Equatorial Guinea

Geography
Location: Western Africa, bordering the Bay of Biafra. Bordering
nations--Cameroon, Gabon.
Area: 28,050 sq. km; slightly smaller than Maryland.
Cities: Capital--Malabo. Other cities--Bata (also capital of Littoral
province on the mainland).
Terrain: Varies. Bioko Island is volcanic, with three major peaks of 9,876
feet, 7,416 feet and 6,885 feet. Behind the coastal plain, the mainland
provinces are hilly at a level of approximately 2,000 feet, with some
4,000-foot peaks. Annobon Island is volcanic.
Climate: Tropical; always hot, humid. Bata on the mainland is somewhat drier
and cooler.

People
Nationality: Noun--Equatorial Guinean(s), Equatoguinean(s)
Adjective--Equatorial Guinean, Equatoguinean.
Population (July 2007 est.): 551,201.
Annual growth rate (2007 est.): 2.015%; (1975-2002): 2.8%.
Ethnic groups: The Fang ethnic group of the mainland constitutes the great
majority of the population and dominates political life and business. The
Bubi group comprises about 50,000 people living mainly in Bioko Island. The
Annobonese on the island of Annobon are estimated at about 3,000 in number.
The other three ethnic groups are found on the coast of Rio Muni and include
the Ndowe and Kombe (about 3,000 each) and the Bujebas (about 2,000). The
pygmy populations have long been integrated into the dominant Bantu-speaking
cultures. Europeans are less than 1,000, mostly Spanish.
Languages: Official--Spanish, French; other--pidgin English, Fang, Bubi, Ibo.
Religion: Nominally Christian and predominantly Roman Catholic; pagan
practices.
Education: Primary school compulsory for ages 6-14. Attendance (2002 est.)--
85%. Adult literacy (2003 est.)--85.7%.
Health (2007 est.): Life expectancy--49.51 years. Infant mortality rate
--87.15/1,000.

Government
Type: Nominally multi-party Republic with strong domination by the executive
branch.
Independence: October 12, 1968 (from Spain).
Constitution: Approved by national referendum November 17, 1991; amended
January 1995.
Branches: Executive--President (Chief of State) and a Council of Ministers
appointed by the president. Legislative--100-member Chamber of People's
Representatives (members directly elected by universal suffrage to serve
five-year terms). Judicial--Supreme Tribunal.
Administrative subdivisions: Seven provinces--Annobon, Bioko Norte, Bioko
Sur, Centro Sur, Kie-Ntem, Littoral, Wele-Nzas.
Political parties: The ruling party is the Partido Democratico de Guinea
Ecuatorial (PDGE), formed July 30, 1987. Numerous other parties were allowed
to form in the early 1990s.
Suffrage: 18 years of age; universal adult.

Economy
GDP (2005 est.): $7.644 billion.
Real GDP growth rate (2005 est.) 18.6%.
Inflation rate (2006 est. average): 5.2%.
Unemployment rate: (1998 est.) 30%.
Natural resources: Petroleum, natural gas, timber, small, unexploited
deposits of gold, manganese, and uranium.
Agriculture (2006 est.): 2.8% of GDP. Products--coffee, cocoa, rice, yams,
cassava (tapioca), bananas, palm oil nuts, manioc, livestock, and timber.
Industry (2006 est.): 92.6% of GDP. Types--petroleum, fishing, saw milling,
natural gas.
Services (2006): 4.5% of GDP.
Trade (2006 est.): Exports--$8.961 billion: hydrocarbons (97%), timber (2%),
others (1%). Imports--$2.543 billion. Major trading partners--United States,
Spain, China, Canada, France, Great Britain, Cameroon, and Norway.
Currency: Communaute Financiere Africaine (CFA) Franc.

GEOGRAPHY
The Republic of Equatorial Guinea is located in west central Africa. Bioko
Island lies about 40 kilometers (25 mi.) from Cameroon. Annobon Island lies
about 595 kilometers (370 mi.) southwest of Bioko Island. The larger
continental region of Rio Muni lies between Cameroon and Gabon on the
mainland; it includes the islands of Corisco, Elobey Grande, Elobey Chico,
and adjacent islets.

Bioko Island, called Fernando Po until the 1970s, is the largest island in
the Gulf of Guinea--2,017 square kilometers (780 sq. mi.). It is shaped like
a boot, with two large volcanic formations separated by a valley that bisects
the island at its narrowest point. The 195-kilometer (120-mi.) coastline is
steep and rugged in the south but lower and more accessible in the north,
with excellent harbors at Malabo and Luba, and several scenic beaches between
those towns.

On the continent, Rio Muni covers 26,003 square kilometers (10,040 sq. mi.).
The coastal plain gives way to a succession of valleys separated by low hills
and spurs of the Crystal Mountains. The Rio Benito (Mbini), which divides Rio
Muni in half, is unnavigable except for a 20-kilometer stretch at its
estuary. Temperatures and humidity in Rio Muni are generally lower than on
Bioko Island.

Annobon Island, named for its discovery on New Year's Day 1472, is a small
volcanic island covering 18 square kilometers (7 sq. mi.). The coastline is
abrupt except in the north; the principal volcanic cone contains a small
lake. Most of the estimated 1,900 inhabitants are fisherman specializing in
traditional, small-scale tuna fishing and whaling. The climate is
tropical--heavy rainfall, high humidity, and frequent seasonal changes with
violent windstorms.

PEOPLE
The majority of the Equatoguinean people are of Bantu origin. The largest
tribe, the Fang, is indigenous to the mainland, but substantial migration to
Bioko Island has resulted in Fang dominance over the earlier Bantu
inhabitants. The Fang constitute 80% of the population and are themselves
divided into 67 clans. Those in the northern part of Rio Muni speak
Fang-Ntumu, while those in the south speak Fang-Okah; the two dialects are
mutually unintelligible. The Bubi, who constitute 15% of the population, are
indigenous to Bioko Island. In addition, there are coastal tribes, sometimes
referred to as "Playeros," consisting of Ndowes, Bujebas, Balengues, and
Bengas on the mainland and small islands, and "Fernandinos," a Creole
community, on Bioko. Together, these groups comprise 5% of the population.
There are also foreigners from neighboring Cameroon, Nigeria, and Gabon.

Spanish and French are both official languages, though use of Spanish
predominates. The Roman Catholic Church has greatly influenced both religion
and education.

Equatoguineans tend to have both a Spanish first name and an African first
and last name. When written, the Spanish and African first names are followed
by the father's first name (which becomes the principal surname) and the
mother's first name. Thus people may have up to four names, with a different
surname for each generation.

HISTORY
The first inhabitants of the region that is now Equatorial Guinea are
believed to have been Pygmies, of whom only isolated pockets remain in
northern Rio Muni. Bantu migrations between the 17th and 19th centuries
brought the coastal tribes and later the Fang. Elements of the latter may
have generated the Bubi, who immigrated to Bioko from Cameroon and Rio Muni
in several waves and succeeded former Neolithic populations. The Annobon
population, native to Angola, was introduced by the Portuguese via Sao Tome.

The Portuguese explorer, Fernando Po (Fernao do Poo), seeking a route to
India, is credited with having discovered the island of Bioko in 1471. He
called it Formosa ("pretty flower"), but it quickly took on the name of its
European discoverer. The Portuguese retained control until 1778, when the
island, adjacent islets, and commercial rights to the mainland between the
Niger and Ogoue Rivers were ceded to Spain in exchange for territory in South
America (Treaty of Pardo). From 1827 to 1843, Britain established a base on
the island to combat the slave trade. The Treaty of Paris settled conflicting
claims to the mainland in 1900, and periodically, the mainland territories
were united administratively under Spanish rule.

Spain lacked the wealth and the interest to develop an extensive economic
infrastructure in what was commonly known as Spanish Guinea during the first
half of this century. However, through a paternalistic system, particularly
on Bioko Island, Spain developed large cacao plantations for which thousands
of Nigerian workers were imported as laborers. At independence in 1968,
largely as a result of this system, Equatorial Guinea had one of the highest
per capita incomes in Africa. The Spanish also helped Equatorial Guinea
achieve one of the continent's highest literacy rates and developed a good
network of health care facilities.

In 1959, the Spanish territory of the Gulf of Guinea was established with
status similar to the provinces of metropolitan Spain. As the Spanish
Equatorial Region, a governor general ruled it exercising military and
civilian powers. The first local elections were held in 1959, and the first
Equatoguinean representatives were seated in the Spanish parliament. Under
the Basic Law of December 1963, limited autonomy was authorized under a joint
legislative body for the territory's two provinces. The name of the country
was changed to Equatorial Guinea. Although Spain's commissioner general had
extensive powers, the Equatorial Guinean General Assembly had considerable
initiative in formulating laws and regulations.

In March 1968, under pressure from Equatoguinean nationalists and the United
Nations, Spain announced that it would grant independence to Equatorial
Guinea. A constitutional convention produced an electoral law and draft
constitution. In the presence of a UN observer team, a referendum was held on
August 11, 1968, and 63% of the electorate voted in favor of the
constitution, which provided for a government with a General Assembly and a
Supreme Court with judges appointed by the president.

In September 1968, Francisco Macias Nguema was elected first president of
Equatorial Guinea, and independence was granted in October. In July 1970,
Macias created a single-party state and by May 1971, key portions of the
constitution were abrogated. In 1972 Macias took complete control of the
government and assumed the title of President-for-Life. The Macias regime was
characterized by abandonment of all government functions except internal
security, which was accomplished by terror; this led to the death or exile of
up to one-third of the country's population. Due to pilferage, ignorance, and
neglect, the country's infrastructure--electrical, water, road,
transportation, and health--fell into ruin. Religion was repressed, and
education ceased. The private and public sectors of the economy were
devastated. Nigerian contract laborers on Bioko, estimated to have been
60,000, left en masse in early 1976. The economy collapsed, and skilled
citizens and foreigners left.

In August 1979, Macias' nephew from Mongomo and former director of the
infamous Black Beach prison, Teodoro Obiang Nguema Mbasogo, led a successful
coup d'etat; Macias was arrested, tried, and executed. Obiang assumed the
Presidency in October 1979. Obiang initially ruled Equatorial Guinea with the
assistance of a Supreme Military Council. A new constitution, drafted in 1982
with the help of the United Nations Commission on Human Rights, came into
effect after a popular vote on August 15, 1982; the Council was abolished,
and Obiang remained in the presidency for a 7-year term. He was reelected in
1989. In February 1996, he again won reelection with 98% of the vote; several
opponents withdrew from the race, however, and international observers
criticized the election. Subsequently, Obiang named a new cabinet, which
included some opposition figures in minor portfolios.

Despite the formal ending of one-party rule in 1991, President Obiang and a
circle of advisors (drawn largely from his own family and ethnic group)
maintain real authority. The President names and dismisses cabinet members
and judges, ratifies treaties, leads the armed forces, and has considerable
authority in other areas. He appoints the governors of Equatorial Guinea's
seven provinces. The opposition had few electoral successes in the 1990s. By
early 2000, President Obiang's PDGE party fully dominated government at all
levels. In December 2002, President Obiang won a new seven-year mandate with
97% of the vote. Reportedly, 95% of eligible voters voted in this election,
although many observers noted numerous irregularities. The next presidential
election is scheduled for 2009.

GOVERNMENT
The 1982 constitution gives the President extensive powers, including naming
and dismissing members of the cabinet, making laws by decree, dissolving the
Chamber of Representatives, negotiating and ratifying treaties and calling
legislative elections. The President retains his role as commander in chief
of the armed forces maintains close supervision of military activity. In June
2004, the President reorganized the cabinet and created two new positions:
Minister of National Security and Director of National Forces. The Prime
Minister is appointed by the President and operates under powers designated
by the President. The Prime Minister coordinates government activities in
areas other than foreign affairs, national defense, and security.

The Chamber of Representatives is comprised of 100 members elected by direct
suffrage for 5-year terms. In practice, the Chamber is not independent and
rarely acts without presidential approval or direction. A new National
Assembly was directly elected in April 2004. There are 100 members in this
body, of which 14 are from the loyal opposition and 2 from opposition parties
(the CPDS: Convergencia Para la Democracia Social). The next legislative
election is scheduled for 2008.

The President appoints the governors of the seven provinces. Each province is
divided administratively into districts and municipalities. The internal
administrative system falls under the Ministry of Territorial Administration;
several other ministries are represented at the provincial and district
levels.

The judicial system follows similar administrative levels. At the top are the
President and his judicial advisors (the Supreme Court). In descending rank
are the appeals courts, chief judges for the divisions, and local
magistrates. Tribal laws and customs are honored in the formal court system
when not in conflict with national law. The current court system, which often
uses customary law, is a combination of traditional, civil, and military
justice, and it operates in an ad hoc manner for lack of established
procedures and experienced judicial personnel.

The other official branch of the government is the State Council. The State
Council's main function is to serve as caretaker in case of death or physical
incapacity of the President. It comprises the following ex officio members:
the President of the Republic, the Prime Minister, the Minister of Defense,
the President of the National Assembly and the Chairman of the Social and
Economic Council.

Although the abuses and atrocities that characterized the Macias years have
been eliminated, effective rule of law does not exist and the government is
ultimately run by the Presidency. Religious freedom is tolerated.

Principal Government Officials
President--Teodoro Obiang Nguema Mbasogo, Brig. Gen. (ret.)
Prime Minister--Ricardo Mangue
Minister of Foreign Affairs and International Cooperation--Pastor Micha Ondo
Bile
Ambassador to the United States--Purification Angue Ondo

Equatorial Guinea maintains an embassy at 2020 16th Street NW, Washington, DC
20009 (Tel. (202) 518-5700, Fax. (202) 518-5252). Its mission to the United
Nations is at 801 Second Avenue, Suite 1403, New York, N.W. 10017 (Tel.
212-599-1523).

POLITICAL CONDITIONS
In the period following Spain's grant of local autonomy to Equatorial Guinea
in 1963, there was a great deal of political party activity. Bubi and
Fernandino parties on the island preferred separation from Rio Muni or a
loose federation. Ethnically based parties in Rio Muni favored independence
for a united country comprising Bioko and Rio Muni, an approach that
ultimately won out. (The Movimiento para la Auto-determinacion de la Isla de
Bioko (MAIB) which advocates independence for the island under Bubi control,
is one of the offshoots of the era immediately preceding independence). After
the accession of Macias to power, political activity largely ceased in
Equatorial Guinea. Opposition figures who lived among the exile communities
in Spain and elsewhere agitated for reforms; some of them had been employed
in the Macias and Obiang governments. After political activities in
Equatorial Guinea were legalized in the early 1990s, some opposition leaders
returned, but repressive actions have continued sporadically.

The country's first freely contested municipal elections were held in
September 1995. Most observers agree that the elections themselves were
relatively free and transparent and that the opposition parties garnered
between two-thirds and three-quarters of the total vote. The government,
however, delayed announcement of the results and then claimed a highly
dubious 52% victory overall and the capture of 19 of 27 municipal councils.
In early January 1996 Obiang called for presidential elections. International
observers agreed that the campaign was marred by fraud, and most of the
opposition candidates withdrew in the final week. Obiang claimed re-election
with 98% of the vote. In an attempt to mollify his critics, Obiang gave minor
portfolios in his cabinet to people identified as opposition figures. In the
legislative election in March 1999, the party increased its majority in the
80-seat parliament from 68 to 75. The main opposition parties refused the
seats they had allegedly won. In May 2000, the ruling PDGE overwhelmed its
rivals in local elections. Opposition parties rejected the next election, the
December 2002 Presidential election, as invalid. During this election,
President Obiang was re-elected with 97% of the vote. Following his
re-election Obiang formed a government based on national unity encompassing
all opposition parties, except for the CPDS, which declined to join after
Obiang refused to release one of their jailed leaders.

In April 2004, parliamentary and municipal elections took place. President
Obiang's Democratic Party of Equatorial Guinea (PDGE) and allied parties won
98 of 100 seats in parliament and all but seven of 244 municipal posts.
International observers criticized both the election and its results.

While President Obiang's rule, in which schools reopened, primary education
expanded, and public utilities and roads restored, compares favorably with
Macias' tyranny and terror, it has been criticized for not implementing
genuine democratic reforms. Corruption and a dysfunctional judicial system
disrupt the development of Equatorial Guinea's economy and society. In 2004,
the President appointed a new Prime Minister, Miguel Abia Biteo, and replaced
several ministers; however, the government budget still did not include all
revenues and expenditures. The United Nations Development Program proposed a
broad governance reform program, but the Equatoguinean Government was not
moving rapidly to implement it. In August 2006 a new Prime Minister, Ricardo
Mangue, was named.

Equatorial Guinea suffered a severe human rights setback in May 2002 when a
special tribunal convicted 68 prisoners and their relatives and sentenced
them 6 to 20 years in prison for an alleged attempted coup d'etat. Among the
prisoners were leaders of the three main opposition parties that had remained
independent from President Obiang's ruling party. There were numerous
irregularities associated with the trial, including evidence of torture and a
lack of substantive proof. In August 2003, 31 of these convicted prisoners
were granted a presidential amnesty.

In March 2004, Zimbabwean police in Harare impounded a plane from South
Africa with 64 alleged mercenaries on board. The group said they were
providing security for a mine in Democratic Republic of the Congo, but a
couple of days later an Equatorial Guinean minister said they had detained 15
more men who he claimed were the advance party for the group captured in
Zimbabwe. Nick du Toit, the leader of the group of South Africans, Armenians
and one German, in Equatorial Guinea, said at his trial in Equatorial Guinea
that he was playing a limited role in a coup bid organized by Simon Mann, the
alleged leader of the group held in Zimbabwe, to remove Obiang from power and
install an exiled opposition politician, Severo Moto.

In September 2004, Mann was sentenced to seven years in jail in Zimbabwe
after being convicted of illegally trying to buy weapons. Zimbabwe has since
agreed to extradite Mann to Equatorial Guinea. Others arrested with him were
acquitted of any links to a suspected coup attempt after magistrates said
prosecutors had failed to prove their case but were convicted on immigration
charges to one year in jail. Both Mann's trial in Zimbabwe and the Equatorial
Guinea trial began amid complaints of abuse and unfair treatment from
relatives of those being held. One suspect, a German, died in prison in
Equatorial Guinea of malaria (Amnesty International believed that he died as
a result of the effects of torture, and called for an investigation). In
Equatorial Guinea in November 2004, a total of 22 people were convicted,
including nine tried in absentia. Three Equatoguineans and three South
Africans were acquitted. In June 2005, President Obiang decided to grant
amnesty to the six Armenian pilots.

Although Equatorial Guinea lacks a well-established democratic tradition
comparable to the developed democracies of the West, it should be noted that,
out of the anarchic, chaotic, and repressive conditions of the Macias years
the country has made small, haphazard steps toward the development of
participatory political system.

ECONOMY
Oil and gas exports have increased substantially and will drive the economy
for years to come. Real GDP growth reached 18% in 2000, 66% in 2001, 20% in
2002, 10% in 2003 and 25.7% in 2004 (est.). Per capita income rose from about
$590 in 1998 to $2,000 in 2000 and $5,300 in 2004. The energy export sector
is responsible for this rapid growth. Oil production increased from 81,000
barrels per day (bbl/d) in 1998 to more than 300,000 bbl/d by 2004. In 2005
production was estimated to be 420,000 bbl/d. Exploration efforts continue in
search of further potential offshore concessions.

Equatorial Guinea has other unexploited human and natural resources,
including a tropical climate, fertile soils, rich expanses of water,
deepwater ports, and an untapped, if unskilled, source of labor. Following
independence in 1968, the country suffered under a repressive dictatorship
for 11 years, which devastated the economy. The agricultural sector,
historically known for cocoa of the highest quality, never fully recovered.
In 1969, Equatorial Guinea produced 36,161 tons of highly bid cocoa, but
production dropped to 4,800 tons in 2000 and 3,430 tons in 2002. It increased
slightly from 2003 levels to 2,906 tons by 2004. Coffee production was
126,000 metric tons in 2002, up from 67000 tons 5 years earlier. Timber is
the main source of foreign exchange after oil, though it now only accounts
for 2% of total export earnings. Timber production increased steadily during
the 1990s; wood exports reached a record 789,000 cubic meters in 1999 as
demand in Asia (mainly China) gathered pace after the 1998 economic crisis.
Since 1998, production of timber has fallen closer to a sustainable level.
530,500 cubic meters were sold in 2002. Most of the production (mainly
Okoume) goes to exports, and only 3% is processed locally. Bioko Island has
already suffered permanent damage due to earlier exploitation. Consumer price
inflation has declined from the 38.8% experienced in 1994 following the CFA
franc devaluation, to 7.8% in 1998, and 4.0% in 2000, according to BEAC data.
Consumer prices inflation has remained steady at around 6% since 2002.

Equatorial Guinea's economic policies, as defined by law, comprise an open
investment regime. Qualitative restrictions on imports, non-tariff
protection, and many import licensing requirements were lifted in 1992 when
the government adopted a public investment program endorsed by the World
Bank. The Government of Equatorial Guinea has sold some state enterprises. It
is attempting to create a more favorable investment climate, and its
investment code contains numerous incentives for job creation, training,
promotion of nontraditional exports, support of development projects and
indigenous capital participation, freedom for repatriation of profits,
exemption from certain taxes and capital, and other benefits. Trade
regulations have been further liberalized since Central African Economic and
Monetary Union (CEMAC) reform codes in 1994. This included elimination of
quota restrictions and reductions in the range and amounts of tariffs. The
CEMAC countries agreed to the introduction of a value added tax (VAT) in
1999.

While business laws promote a liberalized economy, the business climate
remains difficult. Application of the laws remains selective. Corruption
among officials is widespread, and many business deals are concluded under
nontransparent circumstances. A wage law now regulates separate wage levels
for the petroleum, private, and government sector.

There is little industry in the country, and the local market for industrial
products is small. The government seeks to expand the role of free enterprise
and to promote foreign investment but has had little success in creating an
atmosphere conducive to investor interest.

The Equatoguinean budget has grown enormously in the past 5 years as
royalties and taxes on foreign company oil and gas production have provided
new resources to a once poor government. The 2005 government revenue was
about $1.97 billion. Oil revenues account for more than 81% of government
revenue. Value Added Tax and trade taxes are other large revenue sources for
the government.

The Equatoguinean Government has undertaken a number of reforms since 1991 to
reduce its predominant role in the economy and promote private sector
development. Its role is a diminishing one, although many government
interactions with the private sector are at times capricious. The government
is anxious for greater U.S. investment. Beginning in early 1997, the
government initiated efforts to attract significant private sector
involvement through cooperative efforts with the Corporate Council on Africa
visit and numerous ministerial efforts. In 1998, the government privatized
distribution of petroleum products. There are now Total and Mobil stations in
the country. The maritime border with Nigeria was settled in 2000, allowing
Equatorial Guinea to continue exploitation of its oil fields. In October
2002, the government launched a national oil company, GEPetrol, under the
Ministry of Mines and Hydrocarbons.

The government has expressed interest in privatizing the outmoded electricity
utility. Several ports and a new terminal were built to accommodate the needs
of the oil industry. A French company operates cellular telephone service in
cooperation with a state enterprise. Most of the new infrastructure has not
reached the average Equatoguinean living on the mainland. Agriculture,
fishing, livestock, and tourism are among sectors the government would like
targeted.

Equatorial Guinea's balance-of-payments situation has improved substantially
since the mid-1990s because of new oil and gas production and favorable world
energy prices. Exports totaled $6.72 billion in 2005. Crude oil exports now
annually accounts for more than 97% of export earnings. Timber exports, by
contrast, now represent only about 2% of export revenues. Imports into
Equatorial Guinea also are growing very quickly. Imports totaled $1.86
billion in 2005.

Equatorial Guinea in the 1980s and 1990s received foreign assistance from
numerous bilateral and multilateral donors, including European countries, the
United States, and the World Bank. Many of these aid programs have ceased
altogether or have diminished. Spain, France, and the European Union continue
to provide some project assistance, as do China and Cuba. The government also
has discussed working with World Bank assistance to develop government
administrative capacity.

Equatorial Guinea operated under an International Monetary Fund-negotiated
Enhanced Structural Adjustment Facility (ESAF) until 1996. Since then, there
have been no formal agreements or arrangements. However, since 1996, the IMF
has held regular held Article IV consultations (periodic country
evaluations). After the 2003 consultations, IMF directors stressed the need
for further improvements in governance and transparency, the attainment of a
sustainable fiscal position, the implementation of structural reforms to
bolster the non-oil sector, the development of a transparent framework for
saving and managing part of the country's oil wealth and a comprehensive
effort to reduce poverty.

Trade and Investment
With investments estimated at $11 billion, the United States is the largest
cumulative bilateral foreign investor in Equatorial Guinea. In 2003, 74% of
U.S. exports to Equatorial Guinea consisted of energy sector-related
transportation and machinery equipment. The United States' main import from
Equatorial Guinea is petroleum (99% of imports in 2003). In 1999, the
European Union (EU) imported $281.7 million in goods from Equatorial Guinea,
89% of which was petroleum and 7% timber. The European Union exported $104
million to Equatorial Guinea. Approximately 20% of these exports were oil and
gas-related, and the remaining 80% ranged from agricultural products to
clothing to used cars.

Infrastructure
Infrastructure is generally old and in poor condition. Surface transport
options are increasing as the government has invested heavily in road
pavement projects. In 2002, the African Development Bank and the European
Union co-financed two projects to improve the paved roads from Malabo to Luba
and Riaba; and to build an interstate road network to link Equatorial Guinea
to Cameroon and Gabon. The Chinese are undertaking a project to link Mongomo
to Bata, both cities on the mainland. In November 2003, the government
announced an ambitious ten-project program to upgrade the country's road
network and improve the airport facilities at Bata, the country's second city
(on the mainland). A new road links Malabo with the airport and there have
been improvements in the city. The program is estimated to cost hundreds of
millions of dollars, but there are doubts over the capacity of the government
to manage such a huge scheme.

Estimates of Equatorial Guinea's electricity generating capacity vary, with
15.4 megawatts (MW) of certain installed capacity, and 5-30 MW of estimated
additional capacity. About 5.0 MW are located on the mainland, including 4 MW
of oil-fired thermal capacity and 1 MW of hydroelectric capacity. Bioko
Island receives electricity from two thermal plants and one hydroelectric
plant. The expansion of natural gas production at the Alba field in recent
years has provided a convenient fuel source for new power generation in the
country. The 10.4-MW, natural gas-fired Punta Europa plant began operation in
1999, supplying gas-fired electricity to Bioko Island. Another 4-6 MW of
generation capacity is currently under construction at the AMPCO complex on
the island. Equatorial Guinea is estimated to have 2,600 MW of hydropower
potential.

Equatorial Guinea's electricity sector is owned and operated by the state-run
monopoly, SEGESA. The power supply is unreliable, due to aging equipment and
poor management, as demonstrated by regular blackouts in Malabo. As a result,
small diesel generators are widely used as a back-up source of power supply.
In Malabo, the American company, Marathon Oil, built a 30 mega-watt electric
power plant financed by the government, which came on line in mid-2000.

Potable water is available in the major towns but is not always reliable
because of poor maintenance and mismanagement; consequently, supply
interruptions are often frequent and prolonged in some neighborhoods. Some
villages and rural areas are equipped with generators and water pumps,
usually owned by private individuals.

Telecommunications have improved dramatically in recent years. Parastatal
Getesa, a joint venture with a 40% ownership stake held by France Telecom,
provides telephone service in the major cities through an efficient, digital
fixed network and good mobile coverage. Getesa's fixed-line service has 9,000
subscribers and the mobile service has 28,000. Internet access is limited and
has yet to make an impact on the dissemination of information.

Equatorial Guinea has two of the deepest Atlantic seaports of the region,
including the main business and commercial port city of Bata. The ports of
both Malabo and Bata are severely overextended and require extensive
rehabilitation and reconditioning. In partnership with a U.S. petroleum
company, Amerada Hess, a British company, Incat, has made significant
progress in a project to renovate and expand Luba, the country's
third-largest port, located on Bioko Island. The government hopes Luba will
become a major transportation hub for offshore oil and gas companies
operating in the Gulf of Guinea. Luba is located some 50 kilometers from
Malabo and was previously virtually inactive except for minor fishing
activities and occasional use to ease congestion in Malabo. Riaba, the only
other port of any scale on Bioko, is less active. The continental ports of
Mbini and Cogo have deteriorated as well and are now used primarily for
timber.

Five small airlines now offer regular daily services between the two cities
of Malabo and Bata and nearby neighboring countries. A few aging Soviet-built
aircraft operated by several small carriers (one state-owned, the others
private,) constitute this national aircraft fleet. In March of 2006 the
European Union fully banned most airlines based in Equatorial Guinea from
flying into the EU. The influx of oil workers has increased international air
activity. Major international carriers now connect Malabo to the European
cities of Amsterdam, Paris, Madrid, and Zurich. A weekly business-class
charter flight was providing service to Houston, Texas. The runway at
Malabo's international airport (3,200 meters) is equipped with lights and can
service equipment similar to DC-10s and C130s. The runway at Bata (2,400
meters) does not operate at night but can accommodate aircraft as large as
B737s. Two minor airstrips (800 meters) are located at Mongomo and on the
island of Annobon.

Energy Developments
Oil is Equatorial Guinea's most valuable asset. Since the discovery of the
Zafiro field in 1995, production has increased more than tenfold, and oil has
quickly become the country's most important export commodity, accounting for
nearly 90% of the value of total exports in 2003. Equatorial Guinea is now
the third largest producer of crude oil in sub-Saharan Africa, after Nigeria
and Angola. Equatorial Guinea's oil reserves are located mainly in the
hydrocarbon-rich Gulf of Guinea, containing estimated probable reserves as
high as 10% of the world total. As a result, large amounts of foreign
investment primarily by U.S. companies have poured into the country's oil
sector in recent years. Equatorial Guinea's total proven oil reserves are
estimated at 1.1 billion barrels.

Oil production from Equatorial Guinea is expanding rapidly, averaging 237,500
bbl/d in 2003, of which 206,000 was crude. This represents a tremendous
increase from the 1996 oil output of 17,000 bbl/d. Production improvements
and expansion projects undertaken in 2003 pushed petroleum output even
higher, resulting in average production of 350,000 bbl/d for the first half
of 2004. In October 2004, the government capped production levels at 350,000
bbl/d to extend the life of the country's petroleum reserves. Three
fields--Zafiro, Ceiba, and Alba--currently account for the majority of the
country's oil output.

Equatorial Guinea's oil profits have expanded since 1998, when the country
introduced more liberal regulatory and profit sharing arrangements for
hydrocarbon exploration and production activities, including revised and
updated Production Sharing Contracts (PSCs). As a result, government oil
revenues increased from 13% to 20% of total oil export earnings. Although
significant, the government's share is still relatively small by
international standards.

In 2001, GEPetrol became Equatorial Guinea's national oil company. It was
established as the primary state-run institution responsible for the
country's downstream oil sector activities. However, since 2001 its primary
focus has become managing the government's interest stakes in various PSCs
with foreign oil companies. GEPetrol also partners with foreign firms to
undertake exploration projects and has a say in the country's environmental
policy implementation. Plans to increase the government's stake in new and
existing PSCs have been discussed, but not formally pursued.

The majority of the reserves are found in the Zafiro field, located northwest
of Bioko Island and south of Nigeria's offshore oil fields. In recent years,
Exxon Mobil has focused on increasing production from Zafiro, expanding
drilling capacity to accommodate this plan. Zafiro is Equatorial Guinea's
largest oil producer, with output rising from an initial level of 7,000 bbl/d
in August 1996 to approximately 280,000 bbl/d by 2004. Ceiba, Equatorial
Guinea's second major producing oil field, is located just offshore of Rio
Muni and is estimated to contain 300 million barrels of oil. Production at
Ceiba has risen dramatically during the past 2-3 years, following
improvements and upgrades to the facility. Alba, Equatorial Guinea's third
significant field was discovered in 1991. Original estimates of reserves at
Alba were around 68 million barrels of oil equivalent (BOE), but recent
exploration has increased new estimates significantly, to almost 1 billion
BOE. Unlike the Zafiro or Ceiba fields, exploration and production at Alba
has focused on natural gas, including condensates.

Ceiba's discovery has significantly increased interest in petroleum
exploration of surrounding areas, with many new companies acquiring licenses
in exploration blocks further offshore in the Rio Muni basin. International
companies with interests in one or more exploration blocks include Chevron
(U.S.), Vanco Energy (U.S.), Atlas Petroleum International (US), Devon Energy
(US), Roc Oil (Australia), Petronas (Malaysia), Sasol Petroleum (South
Africa), and Glencore (Switzerland). In October 2004, Noble Energy Equatorial
Guinea, an Equatoguinean subsidiary of American Noble Energy, Inc. signed a
contract to exploit a new oil field off the island of Bioko. Recently,
Equatorial Guineau gave the Chinese National Offshore Oil Company (CNOOC) the
rights to its newest oil field. While China's capacity for deep-water
drilling remains thus far unproven, CNOOC expects to complete two new oil
rigs by 2009.

Equatorial Guinea's natural gas reserves are located offshore Bioko Island,
primarily in the Alba and Zafiro oil and gas fields. Natural gas and
condensate production in Equatorial Guinea has expanded rapidly in the last
five years in response to new investments by major stakeholders in the Alba
natural gas field. Alba, the country's largest natural gas field, contains
1.3 trillion cubic feet (Tcf) of proven reserves, with probable reserves
estimated at 4.4 Tcf or more.

Marathon Oil and GE Petrol have joined together in a $1.4 billion deal to
construct a liquefied natural gas (LNG) facility on Bioko Island. In May
2003, the government gave final approval for the plan to construct an LNG
plant, once Marathon and GE Petrol had secured a 17-year purchase agreement
with British Gas (BG) of the United Kingdom. Under the contract, the LNG
facility will supply 3.4 million tons of LNG to BG, beginning in 2007. In
June 2005, Marathon and GE Petrol restructured the deal to include two
Japanese companies, Mitsui and Marubeni, as minority shareholders. Natural
gas consumption in Equatorial Guinea has increased in recent years, along
with higher production. Natural gas consumption jumped to 45 Bcf in 2002,
from approximately 1 Bcf during each of the four previous years.

DEFENSE
The Equatoguinean military consists of approximately 2,500 service members.
The largest contingent is the Army with 1,400 soldiers; the police have 400
para-military policemen, the Navy has 200 members and the Air Force has
approximately 120. There is a Gendarmerie but the exact number of members is
unknown. All are very poorly trained, but the government is steadily
purchasing new equipment from Ukraine and China among others. In 2003, the
government spent $75 million on military expenditures, about 9% of the 2002
budget. Neither the Navy nor the Air Force has trained crews to operate or
maintain their equipment. Family and ethnic ties to the president determine
promotions and influence within the military. Military decision-making is
completely centralized with the President also serving as the Minister of
Defense.

Between 1984 and 1992, service members went regularly to the United States on
the International Military Education Training program, after which funding
for this program for Equatorial Guinea ceased. U.S. military-to-military
engagement has been dormant since 1997 (the year of the last Joint Combined
Exchange Training Exercise), although their representatives did attend a
recent military hosted conference on Gulf of Guinea Security Cooperation.

FOREIGN RELATIONS
A transitional agreement, signed in October 1968, implemented a Spanish
pre-independence decision to assist Equatorial Guinea and provided for the
temporary maintenance of Spanish forces there. A dispute with President
Macias in 1969 led to a request that all Spanish troops immediately depart,
and a large number of civilians left at the same time. Diplomatic relations
between the two countries were never broken but were suspended by Spain in
March 1977 in the wake of renewed disputes. After Macias' fall in 1979,
President Obiang asked for Spanish assistance, and since then, Spain has
regained its place of influence in Equatorial Guinea. The two countries
signed permanent agreements for economic and technical cooperation, private
concessions, and trade relations. Spain maintained a bilateral assistance
program in Equatorial Guinea. Most Equatoguinean opposition elements
(including a purported government-in-exile) are based in Spain to the
annoyance of the Equatoguinean Government. Relations between the two
countries grew difficult after the March 2004 coup attempt due to their
hosting opposition figure Severo Moto and their belief that Spain had
foreknowledge of the coup. However, the Spanish Foreign Minister, Miguel
Angel Moratinos, visited Equatorial Guinea in March 2005.

Equatorial Guinea has had generally cordial relations with its neighbors. It
is a member of the Central African Economic and Monetary Union (CEMAC), which
includes Cameroon, Central African Republic, Chad, Congo/Brazzaville, and
Gabon. Equatorial Guinea is also part of the central Africa CFA franc zone,
and the Cameroon-based Bank of Central African States coordinates monetary
policy. The Bank of France guarantees the CFA franc, and French technical
advisers work in the finance and planning ministries. France, Spain, Cuba,
and China have participated in infrastructure and technical development
projects.

Equatorial Guinea had a minor border dispute with Cameroon that was resolved
by the International Court of Justice in 2002. The Corisco border dispute
with Gabon was solved by an agreement signed with the help of UN mediation in
January 2004, but the small island of Mbane and potentially oil-rich waters
surrounding it remain contested. The majority Fang ethnic group of mainland
Equatorial Guinea extends both north and south into the forests of Cameroon
and Gabon. Cameroon exports some food products to Equatorial Guinea and
imports oil from Equatorial Guinea for its refinery at nearby Limbe. The
development of the oil industry by U.S.-based companies and the lack of a
well-trained work force have provided motivation for an influx of
English-speaking workers (legal and illegal) from Cameroon, Nigeria, and
Ghana. (However, relations with the Nigerian Government have lately been
cordial as the two countries delineated their offshore borders to facilitate
development of nearby gas fields.) Roundups and expulsion of foreigners
following the March 2004 coup attempt revived tensions between these
neighbors.

The government's official policy is one of nonalignment and it has been
reluctant to fully integrate itself into CEMAC. In its search for assistance
to meet the goal of national reconstruction, the Government of Equatorial
Guinea has established diplomatic relations with numerous European and third
world countries.

U.S.-EQUATORIAL GUINEA RELATIONS
The Equatoguinean Government favorably views the U.S. Government and American
companies. The United States is the largest single foreign investor in
Equatorial Guinea. U.S. companies have the largest and most visible foreign
presence in the country. In an effort to attract increased U.S. investment,
American passport-holders are entitled to visa-free entry for short visits.
The United States is the only country with this privilege. With the increased
U.S. investment presence, relations between the U.S. and the Government of
Equatorial Guinea have been characterized by a positive, constructive
relationship.

Equatorial Guinea maintains an embassy in Washington, DC, and has received
approval for a consulate in Houston, Texas. President Obiang has worked to
cultivate the Equatorial Guinea-U.S. relationship with regular visits to the
U.S. for meetings with senior government and business leaders.

The 2005 U.S. State Department Human Rights report on Equatorial Guinea cited
shortcomings in basic human rights, political freedom, and labor rights.
Equatorial Guinea attributes deficiencies to excessive zeal on the part of
local authorities and promises better control and sensitization. U.S.
Government policy involves constructive engagement with Equatorial Guinea to
encourage an improvement in the human rights situation and positive use of
petroleum funds directed toward the development of a working civil society.
Equatoguineans visit the U.S. under programs sponsored by the U.S.
Government, American oil companies, and educational institutions. The
Ambassador's Self-Help Fund annually finances a number of small grassroots
projects.

In view of growing ties between U.S. companies and Equatorial Guinea, the
U.S. Government's overseas investment promotion agency, the Overseas Private
Investment Corporation (OPIC), has concluded the largest agreement in
Sub-Saharan Africa for a major U.S. project in Equatorial Guinea. The U.S.
Agency for International Development has no Equatorial Guinea-related
programs or initiatives nor is the Peace Corps present. American-based
non-governmental organizations and other donor groups have very little
involvement in the country.

Principal U.S. Embassy Officials
Ambassador--Donald C. Johnson
Deputy Chief of Mission--Sarah Morrison
Management/Consular Officer--Maureen McGovern
USAID Contractor-Social Needs--William Gelman

The United States has reopened its full-time Embassy in Malabo (limited
function), with the first resident Ambassador in 12 years. Inquiries should
be directed to: Tel: (240) 09.88.95; Fax: (240) 09.88.94. The street/mailing
address is: Carretera de Aeropuerto KM-3 (El Paraiso), Apt. 95, Malabo,
Equatorial Guinea. The U.S. mailing address is American Embassy-Malabo,
Department of State, Washington, DC 20521-2320. Business hours are Monday to
Thursday: 07:30 to 17:00; Friday: 07:30 to 12:30.

TRAVEL AND BUSINESS INFORMATION
The U.S. Department of State's Consular Information Program advises Americans
traveling and residing abroad through Consular Information Sheets, Public
Announcements, and Travel Warnings. Consular Information Sheets exist for all
countries and include information on entry and exit requirements, currency
regulations, health conditions, safety and security, crime, political
disturbances, and the addresses of the U.S. embassies and consulates abroad.
Public Announcements are issued to disseminate information quickly about
terrorist threats and other relatively short-term conditions overseas that
pose significant risks to the security of American travelers. Travel Warnings
are issued when the State Department recommends that Americans avoid travel
to a certain country because the situation is dangerous or unstable.

For the latest security information, Americans living and traveling abroad
should regularly monitor the Department's Bureau of Consular Affairs Internet
web site at http://www.travel.state.gov, where the current Worldwide Caution,
Public Announcements, and Travel Warnings can be found. Consular Affairs
Publications, which contain information on obtaining passports and planning a
safe trip abroad, are also available at http://www.travel.state.gov. For
additional information on international travel, see http://www.usa.gov/
Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S citizens who traveling or residing
abroad to register via the State Department's travel registration website or
at the nearest U.S. embassy or consulate abroad. Registration will make your
presence and whereabouts known in case it is necessary to contact you in an
emergency and will enable you to receive up-to-date information on security
conditions.

Emergency information concerning Americans traveling abroad may be obtained
by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular
toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of
State's single, centralized public contact center for U.S. passport
information. Telephone: 1-877-4USA-PPT (1-877-487-2778). Customer service
representatives and operators for TDD/TTY are available Monday-Friday, 7:00
a.m. to 12:00 midnight, Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for
Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP
(877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the
most recent health advisories, immunization recommendations or requirements,
and advice on food and drinking water safety for regions and countries. A
booklet entitled "Health Information for International Travel" (HHS
publication number CDC-95-8280) is available from the U.S. Government
Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Further Electronic Information
Department of State Web Site. Available on the Internet at http://
www.state.gov, the Department of State web site provides timely, global
access to official U.S. foreign policy information, including Background
Notes and daily press briefings along with the directory of key officers of
Foreign Service posts and more. The Overseas Security Advisory Council (OSAC)
provides security information and regional news that impact U.S. companies
working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market
information offered by the federal government and provides trade leads, free
export counseling, help with the export process, and more.
STAT-USA/Internet, a service of the U.S. Department of Commerce, provides
authoritative economic, business, and international trade information from
the Federal government. The site includes current and historical
trade-related releases, international market research, trade opportunities,
and country analysis and provides access to the National Trade Data Bank. ***********************************************************
See http://www.state.gov/r/pa/bgn/ for all Background notes
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