IMF Staff Report - Equatorial Guinea

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(9:;<=;> A ive-year bursL in public invesLmenL, largely inanced by buoyanL oil revenue,
has Lransormed Lhe counLry's inrasLrucLure. Roads, porLs, and power supply have been
upgraded, and a number o presLige projecLs have been compleLed. Reducing poverLy
and sLimulaLing producLive privaLe secLor acLiviLy remain urgenL challenges. WiLh
hydrocarbon revenue now possibly pasL iLs peak, prioriLies include sLrengLhening iscal
insLiLuLions, developing public services, and enhancing governance.
!?@A@> l global energy prices decline subsLanLially, cuLLing revenue, governmenL deposiLs
will be suicienL only Lo susLain projecLed levels o spending or Lwo Lo Lhree years.
Weak insLiLuLions, inequaliLies in income and opporLuniLy, and low levels o educaLional
aLLainmenL could resLrain growLh and undermine poliLical sLabiliLy.
B<C?DEF;<GE HGIE<J9GA> Pending review o Lhe irsL phase o Lhe 2008-20 NaLional
DevelopmenL Plan, Lhe uLure role o Lhe sLaLe in encouraging economic diversiicaLion
and poverLy reducLion remains unclear. No iscal ramework or Lhe medium Lerm has
been arLiculaLed and iscal daLa lack essenLial composiLional deLail.
K<L<M9N?:O NDPM?Q @<GL?Q<@> ALLaining universal primary educaLion will require a
subsLanLial redirecLion o resources, underpinned by susLained poliLical commiLmenL.
+IQ?M?;I;?:O NG?LI;< @<Q;9G C<L<M9NE<:;> PercepLions o a cumbersome and poliLically
proLecLed business environmenL conLinue Lo impede oreign inLeresL in non-
hydrocarbon acLiviLy. Comprehensive governance reorm may be Lhe besL way Lo
address Lhis.
B<<;?:O G<O?9:IM 9PM?OI;?9:@> AlLhough a subsLanLial oreign currency deposiL was
made inLo Lhe 8ank o CenLral Arican SLaLes (8FAC) in 20, a sizeable proporLion o
governmenL inancial asseLs is sLill held in overseas commercial banks, conLravening
surrender requiremenLs.
#G9CDQ?:O I:C C?@@<E?:I;?:O CI;I> Serious shorLcomings in daLa hamper surveillance
and hinder policy ormulaLion. A commiLmenL Lo regular publicaLion and inLernaLional
qualiLy sLandards would sLimulaLe long-delayed improvemenLs.
December 9, 202
RFPU8LlC OF FQUA1ORlAL CUlNFA
2 lN1FRNA1lONAL MONF1AR FUND
Approved 8y
-::<FBIG?< /DMC<F
R9MH I:C KSI:<@SJIG
/SDGI
Discussions were held in Malabo, OcLober 6-26, 202. 1he sLa Leam
was Messrs. Shields (head), Arze del Cranado, Oshima (all AFR) and
8ikoi (S1A). Messrs Ondo 8ile (OFD) and von Uexkull (World 8ank)
parLicipaLed in all Lhe policy meeLings

(*0."0.1
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#*&'(8 '11$"1 UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU 54
A. Anchoring and rebalancing iscal policy _______________________________________________________ 0
8. Fncouraging inclusive growLh _________________________________________________________________ 6
C. MeeLing regional obligaLions __________________________________________________________________ 8
D. Compiling and publishing reliable daLa _______________________________________________________ 8
1.-++ -##!-'1-& UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU 5X

%*T"1
. CapiLal FxpendiLure, 2008-2 __________________________________________________________________ 2
2. FxLernal SecLor vulnerabiliLies _________________________________________________________________ 3
3. Fuel Subsidies __________________________________________________________________________________ 5
4. RecenL 1echnical AssisLance or Public Financial ManagemenL ________________________________ 6
5. Financial SecLor ________________________________________________________________________________ 7

+'/$!"1
. Fconomic lndicaLors, 2007-2 ___________________________________________________________________7
2. Fiscal ComposiLion _______________________________________________________________________________8
3. Macroeconomic 8alances, 2004-2 ______________________________________________________________9
4. Covernance and 8usiness ClimaLe _____________________________________________________________ 4

.-%&"1
. SelecLed Fconomic and Financial lndicaLors, 2009-7 _________________________________________ 23
2. 8alance o PaymenLs, 2009-7 _________________________________________________________________ 24
3a. Summary o CenLral CovernmenL Financial OperaLions, 2009-7 ____________________________ 25
3b. Summary o CenLral CovernmenL Financial OperaLions, 2009-7 ____________________________ 26
3c. Summary o CenLral CovernmenL Financial OperaLions, 2009-7 ____________________________ 27
4a. DeposiLory CorporaLions Survey, 2009-7 ___________________________________________________ 28
4b. CenLral 8ank and OLher DeposiLory CorporaLions Surveys, 2009-7 _________________________ 29
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5Y "ZDI;9G?IM /D?:<I SI@ ;S< S?OS<@; M<L<M 9H N<G QIN?;I ?:Q9E< 9H 11- Q9D:;G?<@[ PD;
GI:A@ IE9:O ;S< M9J<@; ?: ILI?MIPM< @9Q?IM ?:C?QI;9G@Y CovernmenL revenue, predominanLly rom
hydrocarbon exLracLion, is comparable in per capiLa Lerms Lo cenLral Furope.
[2
8uL Lhe mosL recenL
naLional poverLy esLimaLes or 2006 suggesL LhaL Lhree-quarLers o Lhe populaLion were Lhen living
below Lhe naLional poverLy line.
3
Less Lhan hal Lhe populaLion had access Lo clean drinking waLer.
3Y .S< H?G@; NSI@< 9H ;S< O9L<G:E<:;\@ 0I;?9:IM K<L<M9NE<:; #MI: ]0K#^[ JS?QS I?E@ I;
<E<GO?:O EIGA<; @;I;D@ P_ 3434[ SI@ IQS?<L<C I EI@@?L< @QIM?:O DN 9H NDPM?Q ?:L<@;E<:;Y
Roads, sea and air porLs, and power generaLion have been Lransormed, and urban housing has
been expanded. A new cenLer or public adminisLraLion has been builL on Lhe main island, 8ioko, and
a new ciLy is being consLrucLed on Lhe mainland, Rio Muni. A number o oLher presLige projecLs have
also been compleLed including luxury aciliLies or Lhe meeLing o Lhe Arican Leaders' SummiL in
20 and ooLball sLadiums or Lhe Arican Cup o NaLions in 202.
`Y #G?LI;< @<Q;9G Q9EE<GQ?IM IQ;?L?;_ G<EI?:@ <=;G<E<M_ M?E?;<C 9D;@?C< ;S< S_CG9QIGP9:
@<Q;9G. Since Lhe near demise in Lhe 970s o Lhe counLry's coee, cocoa, and palm oil planLaLions,
ew agriculLural producLs are markeLed. Fishing and susLainable Limber exploiLaLion is limiLed.
ManuacLuring acLiviLies are very small in scale. ln Lhe privaLe secLor, more Lhan hal o Lhe insured
labor orce is employed in consLrucLion.
VY .S< PD@?:<@@ QM?EI;< ?@ N<GQ<?L<C I@ D:J<MQ9E?:O[ I:C PG9IC<G O9L<G:I:Q< ?@@D<@
Q9:;?:D< ;9 Q9:Q<G: ;S< ?:;<G:I;?9:IM Q9EED:?;_Y Unwieldy bureaucracy hinders invesLmenL and
oLen requires minisLerial inLervenLion. LimiLaLions on civil socieLy parLicipaLion undermined
FquaLorial Cuinea's unsuccessul candidacy in Lhe FxLracLive lndusLries 1ransparency lniLiaLive (Fl1l).
WY *HH?Q?IM NG9a<Q;?9:@ ?ENM_ ;SI; S_CG9QIGP9: NG9CDQ;?9: EI_ :9J P< ?: M9:OF;<GE
C<QM?:<Y
4
OuLpuL o gas derivaLives rose Lo an equivalenL o abouL 200 Lhousand barrels o oil per
day (bpd) in 20, buL currenL proven levels o reserves suggesL LhaL secondary hydrocarbon ouLpuL
will now sLarL Lo all, excepL or a shorL bursL laLer Lhis decade. Meanwhile, primary oil producLion
appears Lo have peaked in 2008 aL 350 Lhousand bpd.

"Hydrocarbon" producLion includes boLh crude oil and gas condensaLe producLion (classiied as primary secLor
ouLpuL) and oil and gas derivaLives, such as liqueied naLural gas (secondary secLor ouLpuL).
2
ln line wiLh UniLed NaLions (World PopulaLion ProspecLs, 200) Lhe populaLion in 200 is esLimaLed aL 703,420.
FquaLorial Cuinea auLhoriLies use a populaLion esLimaLe o ,622,000 or 200. A new populaLion census is planned
or 203.
3
Republic o FquaLorial Cuinea, MinisLry o Planning, Fconomic DevelopmenL and Public lnvesLmenL, 2007, "Pcverty
Prcjile cj lquctcricl Cuinec in 2006." 1he naLional poverLy line was drawn aL abouL USS2 a day.
4
Oicial projecLions provided by Lhe MinisLry o Mines, lndusLry, and Fnergy, which underpin sLa projecLions, are
based only on prospecLs or ields currenLly in or close Lo producLion.

lN1FRNA1lONAL MONF1AR FUND 5
bY .S< NG9@N<Q; 9H HIMM?:O S_CG9QIGP9: G<L<:D<@ ICC@ DGO<:Q_ ;9 ;S< QI@< H9G I E<C?DEF
;<GE H?@QIM HGIE<J9GA. AlLhough Lhe overall iscal accounLs are currenLly close Lo balance, Lhe
currenL level o Lhe non-resource primary iscal deiciL-30 percenL o non-hydrocarbon CDP-will
noL be susLainable over Lhe medium Lerm.
5
1o provide space or addiLional pro-poor currenL
spending, invesLmenL will need Lo be cuL and non-resource revenue musL rise.
cY .S< 345` PDCO<; NG9N9@<@ I @EIMM 9L<GIMM H?@QIM @DGNMD@ 9: ;S< PI@?@ 9H OM9PIM 9?M NG?Q<@
P<M9J dX4 I PIGG<M. Public invesLmenL is scaled down Lo abouL 20 percenL o CDP (76 percenL o
non-hydrocarbon CDP), while governmenL currenL spending remains below 7 percenL o CDP.
Membership in Lhe CenLral Arican Fconomic and MoneLary CommuniLy (CFMAC) ensures a sLable
moneLary ramework, wiLh Lhe discounL inLeresL raLe aL Lhe cenLral bank (8FAC) currenLly sLeady aL
4 percenL.
eY K?@QD@@?9:@ Q9L<G<C @?E?MIG OG9D:C ;9 ;S< 3455 -G;?QM< '6 Q9:@DM;I;?9:@Y ln Lhe inLerim,
Lhe auLhoriLies have chosen noL Lo ollow sLa advice Lo adopL a ronL-loaded iscal adjusLmenL in
20, embark on a undamenLal reorm o public inancial managemenL (PFM), or develop a
comprehensive acLion plan Lo sLrengLhen Lhe business climaLe. However, Lhey have requesLed
urLher lMF Lechnical assisLance (1A) on PFM and issued new decrees Lo help cenLralize revenue
collecLion and coordinaLe invesLmenL planning. FquaLorial Cuinea has also made a subsLanLial
oreign currency deposiL aL Lhe 8FAC.
!"("0. K"6"&*#B"0.1
XY .S< S_CG9QIGP9: @<Q;9G SI@ Q9:;?:D<C ;9 P< ;S< EI?: CG?L<G 9H ;S< <Q9:9E_[
IQQ9D:;?:O H9G IP9D; ;SG<<FZDIG;<G@ 9H <@;?EI;<C /K# (Figure ). Fxpanding ouLpuL o gas
derivaLives since 2007 has largely compensaLed or Lhe onseL o a Lrend decline in primary oil
producLion. FxporLs o hydrocarbons averaged USS2 billion during 2007, generaLing annual
governmenL revenues o USS5 billion. AcLive exploraLion has raised expecLaLions o urLher poLenLial
gas ields or developmenL.
54Y -M;S9DOS CI;I C<H?Q?<:Q?<@ NG<QMDC< I:_ Q9ENG<S<:@?L< I@@<@@E<:; 9H ;S< :9:F
S_CG9QIGP9: <Q9:9E_[ ?;@ IL<GIO< I::DIM OG9J;S GI;< SI@ QM<IGM_ P<<: L<G_ @;G9:OfNG9PIPM_
<=Q<<C?:O 5W N<GQ<:;f@?:Q< 344c. lnlaLion raLes persisLenLly above Lhe CFMAC convergence
criLerion and some projecL boLLlenecks are evidence o sLreLched capaciLy limiLs. 1he consLrucLion
secLor has beneiLed rom sLrong public invesLmenL, disLribuLion, LelecommunicaLions, inance, and
housing are now becoming more irmly esLablished as growLh secLors.
55Y #DPM?Q ?:L<@;E<:; SI@ G<Q<:;M_ P<<: ;S< EI?:@;I_ 9H :9:FS_CG9QIGP9: IQ;?L?;_Y Annual
governmenL capiLal spending has doubled in real Lerms since 2007 and currenLly accounLs or abouL
35 percenL o Lhe esLimaLed level o domesLic demand (Figure 2). AlLhough much o Lhe conLracLing,

5
Revenues associaLed direcLly wiLh hydrocarbon producLion are removed rom all "non-resource" iscal aggregaLes
maLerials and labor or inrasLrucLure spending has been sourced overseas, Lhe rapid expansion o
public invesLmenL has provided a sizeable boosL Lo domesLic consLrucLion and uLiliLy ouLpuL. ln
conLrasL, Lhe agriculLural secLor-now mosLly subsisLence arming-appears Lo have remained
moribund, and Lhe developmenL o Lhe ishing secLor is noL yeL under way.
53Y K<@N?;< @;G9:O S_CG9QIGP9: <=N9G;@[ ;S< <=;<G:IM QDGG<:; IQQ9D:; ?@ <@;?EI;<C ;9 SIL<
P<<: ?: @D@;I?:<C C<H?Q?; ?: G<Q<:; _<IG@ ]+?ODG< `^Y A large share o hydrocarbon earnings lows
Lo overseas parenL companies, and high levels o invesLmenL by Lhe public and hydrocarbon secLors
have induced subsLanLial imporLs o capiLal goods and services. AlLhough hydrocarbon secLor
LransacLions have probably largely been inanced by oreign direcL invesLmenL, Lhe exLernal secLor
will remain a poLenLial source o vulnerabiliLy as long as Lhe public secLor conLinues Lo generaLe a
sizeable imporL bill.
5`Y "ZDI;9G?IM /D?:<I\@ <=;<G:IM Q9EN<;?;?L<:<@@ J?;S?: ;S< ("B-( G<O?9:f HG9E JS<G<
EI:_ H99C ?EN9G;@ IG< @9DGQ<CfSI@ P<<: <G9C<C P_ I GI;< 9H ?:HMI;?9: Q9:@?@;<:;M_ IP9L<
;SI; 9H 9;S<G E<EP<G @;I;<@Y 1he inlaLion dierenLial narrowed Lo 2.2 percenL in 20, buL Lhe
cumulaLive impacL on Lhe level o consumer prices relaLive Lo Lhe resL o CFMAC over Lhe lasL
decade reached 30 percenL.
6
1he real eecLive exchange raLe is esLimaLed Lo have appreciaLed
8 percenL in Lhis period.
5VY .S< 345` PDCO<; ?@ NG<E?@<C 9: /K# OG9J;S 9H 5Ye N<GQ<:; ?: 345`Y WiLh global oil
prices assumed Lo decline below USS90 a barrel, provision or capiLal spending in 203 is seL
6 percenL lower in currenL prices Lhan Lhe original budgeL provision or 202. SLa's projecLions
assume LhaL cash paymenLs in 202 and 203 will be abouL 34 percenL and 45 percenL, respecLively,
above Lhe original levels o provision because o Lhe underlying sLrengLh o work under way.
20 202 202 203 203
OuLLurn 8udgeL ProjecLion DraL 8udgeL ProjecLion
Revenue 48.0 28.8 43.2 0.8 38.
Resource revenue 34.3 5.2 27. 88.0 22.2
1ax revenue 26.4 20.9 25.0 22.9 33.0
OLher revenue 07.9 94.4 02.0 65. 89.2
Non-resource revenue 3.7 3.6 6. 3.8 5.9
1ax revenue 0.2 9.0 0.5 9.0 0.0
OLher revenue 3.5 4.6 5.7 4.8 5.9
CranLs 0.0 0.0 0.0 0.0 0.0
FxpendiLure 43.7 2.0 53.6 0.5 34.3
Fxpense 26.0 24. 23.4 25.6 23.9
NeL acquisiLion o non-inancial asseLs 7.7 96.9 30.2 76.0 0.4
NeL lending/borrowing (overall iscal balance) 4.3 7.8 -0.4 0.3 3.8
Non-resource primary balance -28.6 -04.5 -37.4 -85.0 -8.5
Sources. FquaLoguinean auLhoriLies, and lMF sLa projecLions.
"ZDI;9G?IM /D?: /9L<G:E<:; %DCO<;[ 34555`
(PercenL o non-hydrocarbon CDP)

6
Newly available daLa or 2009 and 200 poinL Lo lower inlaLion raLes Lhan previously assumed.

+?ODG< 5Y "ZDI;9G?IM /D?: "Q9:9E?Q ':C?QI;9G@[ 344cg53
3cth hyJrcccrbcn rcJucticn (which ccccunts jcr mcre
thcn 60 ercent cj CDP) cnJ ncn-hyJrcccrbcn rcJucticn
hcve lcyeJ imcrtcnt rcles in the recent strenth in
cctivity.
Hih levels cj cvernment ccitcl senJin hcve bccsteJ
the ccnstructicn sectcr cnJ unJerinneJ CDP rcwth.
0
500
000
500
2000
2500
3000
3500
4000
2007 2008 2009 200 20 202
Primary hydrocarbon Secondary hydrocarbon
ConsLrucLion OLher
/G9@@ K9E<@;?Q #G9CDQ;
(8illions o CFAF, consLanL prices, 2000)

-5
0
5
0
5
20
25
0
500
000
500
2000
2500
3000
3500
4000
2007 2008 2009 200 20 202
CapiLal expendiLure CurrenL expendiLure
Real CDP growLh (%, RHS)
/9L<G:E<:; "=N<:C?;DG<
(8illions o CFAF)

Recent strcn Jcmestic JemcnJ, lcrely stemmin jrcm
ublic investment, hcs let injlcticn rctes cbcve reicncl
cnJ wcrlJ levels.

Hiher injlcticn hcs ercJeJ ccmetitiveness ccmcreJ
with cther ClMAC ccuntries cnJ crecicteJ the recl
ejjective exchcne rcte.
-
0
2
3
4
5
6
7
2007 2008 2009 200 20 202
FquaLorial Cuinea CFMAC
World Regional convergence criLerion
(#' ':HMI;?9:
(PercenL, period average)

90
95
00
05
0
5
20
25
30
2007 2008 2009 200 20
FquaLorial Cuinea, RFFR CFMAC, RFFR
FquaLorial Cuinea, NFFR
!<IM I:C 09E?:IM "HH<Q;?L< "=QSI:O< !I;<
(lndex, 2005=00)

Sources. FquaLoguinean auLhoriLies, 8FAC, and lMF sLa esLimaLes and projecLions.

+?ODG< 3Y "ZDI;9G?IM /D?: +?@QIM (9EN9@?;?9:
Revenue er ccitc is the hihest in the reicn, cnJ
ccmcrcble tc mcny lurcecn ccuntries.
Ncn-rescurce revenue hcs been Jeclinin relctive tc ncn-
rescurce CDP cnJ is lcwer thcn in mcst neihbcrin
ccuntries.
71
224
721
1,643
3,162
7,801
2,634
7,802
0
,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
U
S
D

p
e
r

c
a
p
i
L
a
/9L<G:E<:; .9;IM !<L<:D< #<G (IN?;I[ 3455

0 0 20 30 40 50
Cameroon
FquaLorial Cuinea
CAR
Cabon
Republic o Congo
Chad
CFMAC (average)
202 (Proj.)
2004
09:F!<@9DGQ< !<L<:D<
(PercenL o non-resource CDP)

Ccitcl exenJiture hcs ccnsistently jcrmeJ the bull cj
cvernment senJin.

Necrly hclj cj ccitcl senJin wcs cn injrcstructure in
2011. lJuccticn cnJ heclth ccccunteJ jcr cbcut J ercent
cj the tctcl.
0.0
0.0
20.0
30.0
40.0
50.0
60.0
70.0
2004 2005 2006 2007 2008 2009 200 20 202
CapiLal
CurrenL
(9EN9@?;?9: 9H .9;IM "=N<:C?;DG<
]#<GQ<:; 9H /K#^
8udgeL
lnrasLrucLure
48%
FducaLion
%
HealLh
2%
OLher
9%
ProducLive
secLors
8%
Public
AdminisLraLion
22%
(IN?;IM "=N<:C?;DG< (9EN9@?;?9:
(Preliminary realizaLion 20)

3uJet rcvisicn jcr eJuccticn is substcnticlly belcw cther
hih inccme ccuntries, even thcse with lcwer er ccitc
CDP

SenJin lcns jcr heclth cre clsc substcnticlly belcw
cther hih inccme ccuntries
GNQ
0
5
1
0
1
5
2
0
2
5
20000 40000 60000 80000
GDP per capita (current international $)
95% C Fitted values
Public Education Expenditure in Total Expenditures (percent)
Public Education Expenditure in Total Expenditure (Percent)
Note: Revised Budget 2011 data for Equatorial Guinea, other countries latest available

GNQ
Public Health Expenditure in Total Expenditure (Percent)
0
5
1
0
1
5
2
0
2
5
20000 40000 60000 80000
GDP per capita (current international $)
95% C
Fitted values
Public Health Public Expenditure in Total Expenditures (percent)
Note: Revised Budget 2011 data for Equatorial Guinea, other countries latest available.
Sources. FquaLoguinean auLhoriLies, and lMF sLa esLimaLes and projecLions.


+?ODG< `Y "ZDI;9G?IM /D?: BIQG9<Q9:9E?Q %IMI:Q<@[ 344Vg53
Ccvernment revenue hcs been leJ by the rescurce sectcrs.
Ccvernment exenJiture hcs rcwn shcrly, Jriven by the
scclin-u cj ccitcl exenJiture unJer the NDP.
0
000
2000
3000
4000
2004 2005 2006 2007 2008 2009 200 20 202
Resource Lax revenue Resource non-Lax revenue
Non-resource Lax revenue Non-resource non-Lax revenue
/9L<G:E<:; !<L<:D<
(8illions o CFAF)

0
500
000
500
2000
2500
3000
3500
2004 2005 2006 2007 2008 2009 200 20 202
CapiLal expense Wage and salary expense OLher currenL expense
/9L<G:E<:; "=N<:C?;DG<
(8illions o CFAF)
1he cvercll jisccl bclcnce hcs returneJ clcse tc surlus but
the ncn-rescurce rimcry jisccl Jejicit is still in excess cj
1J0 ercent cj ncn-rescurce CDP.

Ccvernment net scvins (Jecsits less Jebt) rcse rciJly u
tc 2008, but hcve since JeclineJ by mcre thcn J0 ercent.
-200
-50
-00
-50
0
-20
-0
0
0
20
30
40
2004 2005 2006 2007 2008 2009 200 20 202
Overall iscal balance
Non-resource primary balance (% o non-hydrocarbon CDP, RHS)
*L<GIMM +?@QIM %IMI:Q<
(PercenL o CDP)

-000
0
000
2000
3000
4000
2004 2005 2006 2007 2008 2009 200 20 202
DeposiLs in 8FAC DeposiLs in domesLic banks
DeposiLs in oreign banks Public debL ( -. borrowing)
NeL savings Overall iscal balance
/9L<G:E<:; 0<; 1IL?:O@
(8illions o CFAF)
lquctcricl Cuinec hcs reccrJeJ current ccccunt Jejicits
since 2008 Jesite hue rescurce excrts.

Uscble externcl rescurces (3lAC cjjicicl reserves -
cvernment cjjshcre Jecsits) cre heclthy ct mcre thcn
8mcnths cj imcrts, but hcve been Jeclinin since 2008-09.
-3000
-2500
-2000
-500
-000
-500
0
500
000
2004 2005 2006 2007 2008 2009 200 20 202
(DGG<:; -QQ9D:; %IMI:Q<
(Millions o U.S. dollars)

0
2
4
6
8
0
2
4
6
8
20
2004 2005 2006 2007 2008 2009 200 20 202
$@IPM< "=;<G:IM !<@9DGQ<@
(MonLhs o imporLs)

Sources. FquaLoguinean auLhoriLies, 8FAC and lMF sLa esLimaLes and projecLions.
#*&'(8 '11$"1
-Y -:QS9G?:O I:C G<PIMI:Q?:O H?@QIM N9M?Q_
5WY .S< ID;S9G?;?<@ S<GIMC<C ;S< @DQQ<@@HDM @QIM?:O DN 9H NDPM?Q ?:L<@;E<:; D:C<G ;S< H?G@;
NSI@< 9H ;S< 0K#>
Upgraded inrasLrucLure had generaLed new opporLuniLies or privaLe secLor acLiviLy and raised
living sLandards. Fewer boLLlenecks, beLLer access Lo modern aciliLies, and lower cosLs had
already made doing business more predicLable and aLLracLive.
All Lhis had been achieved in a iscally responsible manner. FxLernal borrowing had been limiLed
Lo drawings o abouL USS billion rom a USS2 billion crediL line wiLh China Fximbank. 1he iscal
accounLs had reLurned Lo surplus in 20 in line wiLh CFMAC convergence criLeria.
5bY 1;IHH :9;<C :<L<G;S<M<@@ ;SI; ;S< Q9:CDQ; 9H ;S< NDPM?Q ?:L<@;E<:; NG9OGIE ]#'#^ SIC
<=N9@<C ;S< PDCO<; ;9 S?OS 9NN9G;D:?;_ I:C M<OIQ_ Q9@;@ I:C SIC ICL<G@<M_ IHH<Q;<C
<Q9:9E?Q @;IP?M?;_>
A number o elemenLs o Lhe PlP, parLicularly presLige projecLs, would involve subsLanLial
conLinuing ouLlays LhaL were unlikely Lo yield equivalenL economic reLurns (8ox ). No evidence
was made available LhaL projecL choices had been based on objecLive appraisal.
1he scale and pace o Lhe invesLmenL program had exposed FquaLorial Cuinea's vulnerabiliLy Lo
exLernal shocks. For insLance, aL Lhe sLarL o Lhe 2009 global recession, a planned acceleraLion o
acLiviLy had Lo be sharply cuL back because lower hydrocarbon revenue orced Lhe auLhoriLies Lo
draw down public secLor deposiLs. ln Lhe lasL ive years, execuLion o governmenL capiLal
spending had diered rom plans by an average o 20 percenL.
AlLhough recourse Lo exLernal borrowing during Lhe inrasLrucLure boom had been very limiLed,
and low currenL levels o governmenL debL meanL LhaL Lhere was no need Lo underLake a debL
susLainabiliLy analysis aL Lhis sLage, iscal buers would be eroded i recenL levels o public
invesLmenL were mainLained.
5cY - NG<@<:;I;?9: P_ @;IHH 9H I: IM;<G:I;?L< HGIE<J9GA H9G H?@QIM N9M?Q_ ;SI; J9DMC G<CDQ<
HD;DG< @N<:C?:O L9MI;?M?;_[ JS?M< IMM9J?:O ;S< O9L<G:E<:; ;9 EIA< QM<IG M9:OF;<GE QS9?Q<@
IP9D; ?:L<@;E<:; I:C @IL?:O@[ NG9L9A<C M?E?;<C N9@?;?L< G<@N9:@< HG9E ;S< ID;S9G?;?<@Y 1he
ramework, described more ully in Annex l, was anchored on a LargeL paLh or Lhe non-resource
primary balance LhaL would esLablish and mainLain adequaLe iscal buers and spread Lhe use o
hydrocarbon wealLh over Lime. ln line wiLh exisLing NDP documenLaLion, Lhe represenLaLive LargeL
paLhwhich underpins sLa's medium-Lerm projecLionsassumes a subsLanLial scaling down o
governmenL capiLal spending over Lhe resL o Lhis decade, alLhough less ronL-loaded Lhan Lhe draL
203 budgeL. CurrenL spending is assumed Lo rise over Lime as a share o non-hydrocarbon CDP,
primarily in order Lo improve provision o educaLion, healLh, and oLher pro-poor services. 1he
!"#$%&'( *+ ",$-.*!'-& /$'0"-
'0."!0-.'*0-& 1*0".-!2 +$03 44
5676896 :;<6 =5>? 8>8@ABC5>D;5E>8 ;D:F7F:F6G FG ;GG9?6C :> 5FG6 6768:9;HHB :> F8:658;:F>8;H 5;:F>GI
E9FHCF8J >8 56D68: F8F:F;:F76G :> F?K5>76 D9G:>?G D>HH6D:F>8 ;8C F8AFEF: :;L 6L6?K:F>8GI ;G M6HH ;G ;
E5>;C65 F8D>?6 :;L E;G6 D>?EF86C MF:A :FJA:65 68=>5D6?68: ?6DA;8FG?GN
"#$ %&'(( )*+),*+)&-. &)'&/ 01 2344-1& 0*, 54*2- 5406-2&*017/ &)- (4'8-904: 903,. 540.32-
' 78',, 507*&*;- 0;-4',, (*72', <','12- 0;-4 &)- 1-=& &)4-- >-'47/ 2017*7&-1& 9*&) &)- 8'1.'&04>
?@AB? 734;-*,,'12- 24*&-4*01 01 &)- <'7*2 (*72', <','12-$ "?KA;GFOF8J :A;: 8> C6DFGF>8G M>9HC E6
:;<68 >8 ?6CF9?@:65? GK68CF8J FGG96G 98:FH D>?KH6:F>8 >= :A6 567F6M >8 :A6 =F5G: KA;G6 >= :A6 03#I
:A6 ;9:A>5F:F6G CFC 8>: 5;FG6 ;8B GK6DF=FD D>8D658G ;E>9: G:;==PG K5>Q6D:F>8GI E9: 56F:65;:6C :A6F5
;CCF:F>8;H H>8J@G:;8CF8J >EQ6D:F76 :> ;DAF676 ; G95KH9G >= 8>8@56G>95D6 5676896 >765 D95568:
GK68CF8JN
"C$ %&'(( -85)'7*D-. &)'& -=&-41', 7&'<*,*&> 903,. <- 4-*1(042-. <> 2088*&8-1& &0 '
543.-1& 8-.*38E&-48 (*72', (4'8-904: 01 &)- ,*1-7 540507-. FG0= HI$ (95568: ;DD>98:
F?E;H;8D6G ;8C F8=H;:F>8;5B K56GG956G M>9HC 6;G6 F= J>7658?68: GK68CF8JI K;5:FD9H;5HB D;KF:;H
F876G:?68:I ?>56 DH>G6HB 56=H6D:6C ;EG>5K:F>8 ;8C =F8;8DF8J D;K;DF:BN -C765G6 GA>D<G G9DA ;G :A6
RH>M65 JH>E;H J5>M:A GD68;5F>S F8 :A6 *D:>E65 TU4T !"#$% '(")"*+( ,-.$""/ VW"*X D>9HC :A68 E6
56;CFHB ;DD>??>C;:6C V-886L TXN *765 :A6 ?6CF9? :65?I =FGD;H ;CQ9G:?68: M>9HC E6 D59DF;H F8
56G:>5F8J :A6 6L:658;H D95568: ;DD>98: :> ; G9G:;F8;EH6 H676HN
Y

HJ$ K-42-5&*017 01 &)- *85'2& 0( &)- 4-2-1& 72',*1+ 35 0( *1;-7&8-1& 01 +0;-418-1&
2344-1& 75-1.*1+ .*((-4-. 9*.-,>L
.A6 ;9:A>5F:F6G 8>:6C :A;: GK68CF8J >8 A6;H:A G657FD6G A;C 56D68:HB 5FG68I ;8C :A;: :A6 G>DF;H
G6D95F:B GBG:6? A;C F8D56;G6C F:G D>765;J6 =>5 CFG;C7;8:;J6C =;?FHF6GN -HH DAFHC568 M656 56Z9F56C
:> ;::68C K5F?;5B GDA>>HI ;8C :A6 685>H?68: 5;:6G =>5 Y@B6;5 >HCG A;C 5FG68 G9EG:;8:F;HHBN
[:;== G:56GG6C A>M6765 :A;: :A6 5;:F> >= J>7658?68: D95568: GK68CF8J :> /3# 56?;F86C ?9DA
H>M65 :A;8 F8 D>98:5F6G MF:A GF?FH;5 H676HG >= K65 D;KF:; F8D>?6I >5 6HG6MA656 F8 [[-I MF:A HF?F:6C
E9CJ6: K5>7FGF>8G =>5 6C9D;:F>8 ;8C A6;H:AN - =F5? K>HF:FD;H D>??F:?68: :> F?KH6?68:F8J
98F765G;H K5F?;5B 6C9D;:F>8 ?FJA: A6HK ?>EFHFO6 56G>95D6G F8 ;8 ;56; :A;: M;G D5F:FD;H =>5 E>:A
D95568: G>DF;H K>HFDB ;8C =9:956 H;E>5 =>5D6 866CGN
[:;== ;HG> >EG6576C :A;: G>?6 D95568: GK68CF8J A;G E668 K>>5HB CF56D:6CN +>5 6L;?KH6I =96H
G9EGFCF6G A;C E668 9G6C :> <66K K9?K K5FD6G =>5 J;G>HF86 ;8C ;F5D5;=: =96H =FL6C ;: TUUY H676HGI
;: ; D>G:I F8 TU44I >= >765 4 K65D68: >= /3# V%>L \XN -CCF:F>8;H J>7658?68: 56G>95D6G A;C E668
D>??F::6C :> :A6 G6D:>5 EB E9FHCF8J 56:;FH >9:H6:G =>5 :A6 8;:F>8;H >FH D>?K;8B /"#6:5>HN WAFH6
M6HD>?F8J :A6 ;9:A>5F:F6GP G:9CF6G >= M;BG :> KA;G6 >9: =96H G9EGFCF6G =>5 D>??65DF;H 9G65GI G:;==
68D>95;J6C ; ?>56 J6865;H 98MF8CF8J >= J>7658?68: F87>H76?68: F8 K6:5>H69? CFG:5FE9:F>8N

Y
[66 ;HG> :A6 ("1-( G:;== 56K>5: ;8C E;D<J5>98C 8>:6 V!6K>5: 0>N 4T]T^^XN
LaLesL Figure Reerence ear Sub-Saharan Arica (laLesL)
PopulaLion (millions)
UniLed NaLions esLimaLe 0.7 20 860
NaLional auLhoriLies' esLimaLe .6 20 .
PoverLy incidence 77 2006 5
MorLaliLy raLe, inanL (per ,000) 93 2009 69
Primary school enrollmenL raLio (%, neL) 5 2009 75
RaLio. emale Lo male in primary enrolmenL (%) 97 200 93
Lie expecLancy (years) 5 20 54
Access Lo clean drinking waLer (% o populaLion) 46 2006 6
Sources. FquaLoguinean auLhoriLies (MDC reporL, 2009), UN (MDC reporL, 200), and World DevelopmenL lndicaLors 202
FquaLorial Cuinea. NaLional Household Survey (2006), percenLage living below naLional poverLy line o USS2 a day. Sub-
Saharan Arica. UN MDC ReporL (200), percenLage living below USS.25 a day in 2005.
"ZDI;9G?IM /D?: 1<M<Q;<C 19Q?IM ':C?QI;9G@

%9= 5Y (IN?;IM "=N<:C?;DG<[ 344eg53

1he irsL phase o Lhe NaLional DevelopmenL Plan "Cuinea FquaLorial 2020" ocused on Lhe developmenL
o basic inrasLrucLure Lo improve
compeLiLiveness and boosL growLh.
CapiLal spending was scaled up rapidly,
Lo a LoLal o abouL USS23 billion during
2008-2, or 65 percenL o annual CDP
(650 percenL o non-hydrocarbon CDP).
FxecuLion was roughly double Lhe
amounL originally envisioned in Lhe
NaLional DevelopmenL Plan (NDP),
parLly relecLing higher budgeLary
provisions because o inLernaLional
evenLs and parLly budgeLary overruns
because oil revenue windalls exceeded
expecLaLions. CapiLal spending
exceeded 80 percenL o LoLal
governmenL expendiLure in Lhe period.

ln 20, based on preliminary daLa, physical inrasLrucLure accounLed or nearly 50 percenL o capiLal
spending, wiLh a ocus on LransporL and elecLriciLy. 1he road neLwork was exLended, and Lhe expansion
and modernizaLion o airporLs and porLs in Malabo, 8aLa, and oLher locaLions was conLinued. Large capiLal
projecLs compleLed in 20 included Lhe new ciLy o Sipopo, involving a conerence cenLer, Lhe
consLrucLion o a 6-lane highway, elecLriicaLion and public lighLing, and new monumenLs, squares, and
waLerronL developmenLs. Public adminisLraLion absorbed around 22 percenL o LoLal capiLal expendiLure,
including work on Lhe "Malabo 2" disLricL. AbouL 8 percenL o capiLal spending was spenL on behal o
"producLive secLors," including commerce, LelecommunicaLions, indusLry, energy, hydrocarbons, LransporL,
aeronauLic, agriculLure, hoLels and Lourism, and environmenL. FducaLion and healLh accounLed or abouL
3 percenL o LoLal capiLal spending.

NDP-
2020
8udgeL AcLual
RaLio
AcLual Lo
8udgeL
PercenL o
1oLal
FxpendiLure
PercenL o
Non-
Hydrocarbon
CDP
2008 ,024 ,30 ,392 .2 79. 28.9
2009 ,065 2,000 2,482 .2 87.8 57.3
200 ,07 2,00 2,063 .0 82.0 2.0
20 ,52 ,770 2,266 .3 8.9 7.7
202 ,99 2,2 2,838

.3 62.9 96.0
203 796 ,762 . . . .

SLa projecLion is reporLed or 202 insLead o acLual.
Source. lMF sLa esLimaLes based on daLa rom FquaLoguinean auLhoriLies.
(8illions o CFA rancs, unless oLherwise indicaLed)
CapiLal FxpendiLure 8udgeL and RealizaLion (2008-3)
AcLual

%9= 3Y "=;<G:IM 1<Q;9G 6DM:<GIP?M?;?<@
*L<GIMM I@@<@@E<:;> an
unsusLainable exLernal
posiLion in Lhe long run, buL
noL an urgenL issue
%IQAOG9D:C. DespiLe a sLeady accumulaLion o currenL accounL deiciLs and
weakening compeLiLiveness, FquaLorial Cuinea's exLernal posiLion remains sLable,
supporLed by ample oicial reserves and a sLeady inlow o oreign direcL
invesLmenL (FDl). However, unless policies adjusL, depleLion o hydrocarbon
resources in Lhe uLure LhreaLens evenLually Lo undermine exLernal sLabiliLy.
#9;<:;?IM N9M?Q_ G<@N9:@<@. Lower levels o governmenL capiLal spending and an
improved business environmenL would reduce currenL accounL deiciLs by cuLLing
invesLmenL relaLed imporLs and sLrengLhening compeLiLiveness.
(DGG<:; IQQ9D:;.
vulnerabiliLies sLemming rom
public invesLmenL-relaLed
imporLs and hydrocarbon
companies' proiL repaLriaLion
%IQAOG9D:C. DespiLe large hydrocarbon exporLs, FquaLorial Cuinea has
accumulaLed currenL accounL deiciLs since 2006. 1he Lwo major acLors have been
invesLmenL-relaLed imporLs and proiL repaLriaLion by hydrocarbon exLracLion
companies.
-@@<@@E<:;. CurrenL accounL deiciLs are LighLly relaLed Lo Lhe size and composiLion
o Lhe iscal expansion and Lhe ownership sLrucLure o naLural resource producLion.
8uL Lhe ownership sLrucLure also ensures ready inancing o Lhe deiciLs by
hydrocarbon-relaLed FDl inlows. When hydrocarbon resources decline, domesLic
acLors and exLernal compeLiLiveness will become much more imporLanL.
!<IM <=QSI:O< GI;<.
overvalued, buL limiLaLions in
daLa and meLhodology
preclude realisLic
quanLiicaLion
%IQAOG9D:C. Using Lhe exLernal sLabiliLy approach proposed by 8ems and Carvalho
(2009)
, Lhe large currenL accounL deiciL and a low assumed exchange raLe elasLiciLy
would lead Lo an esLimaLe LhaL Lhe real exchange raLe is overvalued by abouL
60 percenL.
-@@<@@E<:;. AlLhough Lhe 8ems and Carvalho meLhodology Lakes inLo accounL
some imporLanL characLerisLics o resource-rich counLries, iL sLill has serious
shorLcomings. NeiLher Lhe domesLic producLion capaciLy o non-resource secLors
nor proiL repaLriaLion by exLracLion companies is well addressed. FurLhermore,
weak daLa seriously hinder any assessmenL. 1hereore, iL is diiculL Lo assess wiLh
any accuracy Lhe magniLude o Lhe real exchange raLe overvaluaLion.
(IN?;IM I:C H?:I:Q?IM
IQQ9D:;. sLable in shorL Lerm,
buL vulnerable when
hydrocarbon resources decline
%IQAOG9D:C. FquaLorial Cuinea has received large amounLs o FDl inlows, which
have been major sources o inancing o currenL accounL deiciLs.
-@@<@@E<:;. 8ecause o recenL successul oil and gas exploraLion, sLable FDl inlows
are expecLed in Lhe medium Lerm alLhough Lheir size will gradually shrink as
hydrocarbon resources are depleLed. Meanwhile, liLLle is known abouL oLher
inancial LransacLions, because o daLa limiLaLions.
+9G<?O: <=QSI:O< G<@<GL<@.
ample usable exLernal
resources
%IQAOG9D:C. 1hanks Lo hydrocarbon wealLh, FquaLorial Cuinea has accumulaLed
subsLanLial oreign reserves in Lhe 8FAC and conLinues Lo hold sizeable oreign
currency deposiLs in commercial banks.
-@@<@@E<:;. 1he amounL o usable exLernal resources (8FAC oicial reserves -
governmenL oshore savings) is abouL 8 monLhs o imporLs.
+9G<?O: I@@<;@ I:C M?IP?M?;?<@
N9@?;?9:. no issues
%IQAOG9D:C. FquaLorial Cuinea's exLernal debL, more Lhan 90 percenL o which is
public debL, is small (abouL 9 percenL o CDP).
-@@<@@E<:;. 1he governmenL has no plans Lo Lake on addiLional exLernal debL.
1hereore, neiLher exLernal nor public debL is an urgenL concern.
___________________________________________________________

8ems and Carvalho Filho, 2009, "Fxchange RaLe AssessmenLs. MeLhodologies or Oil FxporLing CounLries", lMF Working Paper,
WP/09/28.

+?ODG< VY "ZDI;9G?IM /D?: /9L<G:I:Q< I:C %D@?:<@@ (M?EI;<

FquaLorial Cuinea has conLinued Lo score very poorly across a wide range o indicaLors o governance and Lhe business
climaLe. Like much o Lhe CFMAC region, iL perorms worse Lhan mosL oLher counLries in sub-Saharan Arica (SSA) and is
near Lhe boLLom o global rankings. Fven in Lhe relaLively small number o indicaLors where FquaLorial Cuinea's scores
have improved in recenL years, Lhe gains in oLher counLries have generally been larger. 1he sample o business indicaLors
below compares FquaLorial Cuinea's scores over Lime wiLh average scores in CFMAC and SSA.
1he number cj Jcys neeJeJ tc stcrt c business is jcur times cs
lcre cs the cverce jcr SSA (cnJ increcsin) cnJ clmcst
twice thct cj ClMAC.
1he ccst cj stcrtin c business (relctive tc inccme er ccitc)
hcs risen cbcve the SSA cverce.
.0
.5
2.0
2.5
3.0
3.5
4.0
2007 2009 20 203
FC raLio Lo CFMAC
FC raLio Lo sub-Sahara Arica
1;IG;?:O I %D@?:<@@> .?E<[ 0DEP<G 9H KI_@

0.0
0.5
.0
.5
2007 2009 20 203
FC raLio Lo CFMAC
1;IG;?:O I %D@?:<@@>
(9@; #<GQ<:; 9H ':Q9E< #<G (IN?;I

1he inJex shcwin the strenth cj lecl rihts in sucrtin
creJit cvcilcbility hcs imrcveJ, recchin the cverce in SSA
cnJ ClMAC.

1he cverce cj the WcrlJ 3cnls six mcjcr cverncnce
inJicctcrs jcr lC is belcw ClMAC cnJ SSA.
0.9
.0
.
.2
.3
.4
.5
.6
2007 2009 20 203
FC raLio Lo CFMAC
/<;;?:O (G<C?;>
K<N;S 9H (G<C?; ':H9GEI;?9: ':C<= ]4Fb^

0.0
1.0
2.0
3.0
4.0
3.0
2000 2003 2009 2011
!"#$%&'&($ *&+*(',"%-
./$0-('1$+ ," /'&2$ 3%"4 5 ," 67
Average Sub-Saharan Afrlca
Average CLMAC
LquaLorlal Culnea
ln 2011, the weclest crecs cj cverncnce - cll belcw SSA cnJ
ClMAC - were vcice cnJ ccccuntcbility, cvernment
ejjectiveness, cnJ ccntrcl cj ccrruticn.

1he WcrlJ Ccverncnce lnJex shcws c sccre jcr lC
sinijiccntly lcwer thcn cther ccuntries with similcr levels cj
inccme er ccitc.
0.0
.0
2.0
3.0
4.0
CorrupLion ConLrol
RegulaLory QualiLy
Cov. FecLiveness
Rule o Law
Pol. SLabiliLy
voice and AccounLabiliLy
FquaLorial Cuinea Sub-Saharan Arica CFMAC
/9L<G:I:Q< ':C?QI;9G@
]!<F@QIM<C> 4hJ9G@;[ WhP<@;^

SSA
CFMAC
LMlC
UMlC
Oil-Fxp.
RRC
FQUA1ORlAL
CUlNFA
.5
2
2.5
3
3.5
4
4.5
5
5.5
6 7 8 9 0 2
Log CDP PPP per capiLa
R/' I:C /K# #<G (IN?;I ]M9O ###^
Sources. lnLernaLional Finance CorporaLion and World 8ank's Doing 8usiness lndicaLors years. 2007-2. World 8ank's
Covernance lndicaLors, 20, (average o conLrol o corrupLion, governmenL eecLiveness, rule o law, regulaLory qualiLy, poliLical
sLabiliLy and voice and accounLabiliLy), and lMF sLa calculaLions.

%9= `Y "ZDI;9G?IM /D?: +D<M 1DP@?C?<@

!<;I?M NG?Q<@ 9H G<H?:<C HD<M NG9CDQ;@ SIL< P<<: H?=<C I; QDGG<:; M<L<M@ @?:Q< +<PGDIG_ 344cY All reined oil
uel producLs are imporLed. 1he governmenL has recenLly builL aciliLies or Lhe naLional company, CFPeLrol, Lo
disLribuLe reined producLs as a compeLiLor Lo 1oLal Oil, which is currenLly Lhe only bulk disLribuLor o
peLroleum producLs Lo Lhe privaLe reLail secLor.
.S< ;9;IM Q9@; 9H HD<M @DP@?C?<@ JI@ (+-+ 54V P?MM?9: ?: 3455 ]5Y`N<GQ<:; 9H /K#^Y 1he auLhoriLies are
considering a poLenLial eliminaLion o Lhe subsidy or commercial users, who currenLly accounL or abouL
60 percenL o LoLal uel consumpLion. Sales Lo privaLe users o gasoline, diesel, and kerosene, and Lo oreign
and domesLic companies or aviaLion jeL uel, all o which are subsidized, accounL respecLively or Lhe
remaining 25 and 5 percenL.
+D<M NG?Q<@
0
00
200
300
400
500
600
700
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
2007 2008 2009 200 20 202
C
F
A

p
e
r

l
i
L
e
r
lnLernaLional price DomesLic reLail price Average CFMAC
/I@9M?:< !<;I?M #G?Q<

0
00
200
300
400
500
600
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
2007 2008 2009 200 20 202
C
F
A

p
e
r

l
i
L
e
r
7<G9@<:< !<;I?M #G?Q<

0
00
200
300
400
500
600
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
O
c
L
F
e
b
J
u
n
2007 2008 2009 200 20 202
C
F
A

p
e
r

l
i
L
e
r
K?<@<M !<;I?M #G?Q<
Sources. FquaLoguinean auLhoriLies, and lMF sLa esLimaLes.
35Y 1;IHH @DOO<@;<C ;SI; C<<NF@<I;<C C<H?Q?<:Q?<@ ?: NDPM?Q H?:I:Q?IM EI:IO<E<:; J<G<
?EN<C?:O NG9OG<@@ ;9JIGC I P<;;<G IMM9QI;?9: I:C D@< 9H O9L<G:E<:; G<@9DGQ<@Y
8
1he limiLed
inLegraLion o Lhe PlP inLo Lhe budgeLary planning and execuLion processes had made iL more
diiculL Lo align Lhe composiLion o budgeLary ouLlays wiLh plans, parLicularly when hiL by exLernal
or inLernal shocks, such as Lhe drive Lo compleLe large projecLs in Lime or Lhe 20-2 inLernaLional
evenLs. ProjecL appraisal has been limiLed, moniLoring o spending has been sLreLched, liLLle ormal
provision has been made or consequenLial recurrenL spending, and paymenLs Lo conLracLors are
reporLed Lo have oLen been long delayed (alLhough no arrears have been recorded in governmenL
accounLs). SLa also poinLed Lo Lhe absence o deLailed inormaLion on budgeL execuLion, including
a uncLional or adminisLraLive breakdown o expendiLure, as urLher conirmaLion o weaknesses in
moniLoring and conLrol mechanisms.
33Y .S< ID;S9G?;?<@ G<HD;<C ;S< ?ENM?QI;?9:@ 9H N99G NG9a<Q; @<M<Q;?9: I:C ?ENM<E<:;I;?9:.
1hey noLed however LhaL a new budgeL decree would involve Lhe inance minisLry more closely in all
planning and execuLion uncLions o Lhe budgeL, as well as LighLening up procedures or deposiLing
revenue wiLh Lhe Lreasury. 1echnical assisLance rom Lhe Arican DevelopmenL 8ank would also

8
See, or example, World 8ank 200 Public FxpendiLure Review and lMF FAD Lechnical assisLance mission
March 20 (8ox 4).

acceleraLe Lhe compuLerizaLion o public inancial managemenL, which is currenLly Lhe major
impedimenL.
%9= VY "ZDI;9G?IM /D?: !<Q<:; .<QS:?QIM -@@?@;I:Q< H9G #DPM?Q +?:I:Q?IM BI:IO<E<:;
Public inancial managemenL missions in May 20 and SepLember 202 by AFRl1AC (cenLral) discussed
undamenLal legal and regulaLory ramework issues and public accounLing pracLices and made
recommendaLions on budgeL and projecL moniLoring sysLems. 1wo ollow-up Lechnical assisLance missions
are scheduled. Following a requesL rom Lhe auLhoriLies or a renewal o backsLopping arrangemenLs or
residenL iscal advisers, Lhe lMF Fiscal Aairs DeparLmenL is planning Lo conducL a diagnosLic mission in early
203.

%Y ":Q9DGIO?:O ?:QMD@?L< OG9J;S
3`Y K?L<G@?H_?:O ;S< <Q9:9E_ I:C ICCG<@@?:O N9L<G;_ J<G< Q9G< E9;?LI;?9:@ 9H ;S< 0K#[
PD; EI:_ HD:CIE<:;IM N9M?Q_ ?@@D<@ G<EI?: D:ICCG<@@<CY SLa noLed LhaL making growLh
inclusive requires a comprehensive approach Lo policy LhaL encompasses addressing social needs,
developing human capiLal, and improving Lhe challenging business climaLe Lo help creaLe jobs.
ResusciLaLion o subsisLence and commercial agriculLure would also oer subsLanLial poLenLial Lo
raise household living sLandards and generaLe employmenL.
3VY 1;IHH <ENSI@?i<C ;S< ?EN9G;I:Q< 9H <:@DG?:O IC<ZDI;< Q9EN<;?;?9: ?: NG9CDQ;
EIGA<;@[ <:Q9DGIO?:O I C<<N<G H?:I:Q?IM @<Q;9G[ 9N<:?:O IQQ<@@ ;9 9NN9G;D:?;?<@ I:C
?:H9GEI;?9:[ I:C ICCG<@@?:O PG9IC<G O9L<G:I:Q< Q9:Q<G:@Y

CovernmenL should noL crowd ouL
Lhe privaLe secLor by iLsel becoming involved in new commercial acLiviLies. An eicienLly managed
rules-based approach Lo regulaLion LhaL does noL involve minisLerial inLervenLion oers Lhe mosL
welcoming climaLe or business. Adherence Lo recenL regional iniLiaLives including on labor mobiliLy
and Lrade barriers would conLribuLe urLher.
3WY .S< ID;S9G?;?<@ J<G< D:IPM< ;9 ?:C?QI;< S9J N9M?Q_ J9DMC <L9ML< ?: ;S< @<Q9:C NSI@<
9H ;S< 0K# ]P<O?::?:O ?: 345`^ P<QID@< 9H ;S< 9:O9?:O G<L?<J 9H ;S< H?G@; NSI@<Y 1hey noLed
however LhaL agriculLure and ishing had already been accorded prioriLy sLaLus in Lhe NDP and LhaL
piloL iniLiaLives had been launched in educaLion and healLh. A one-sLop shop or invesLmenL would
also be inLroduced, buL capaciLy limiLaLions had slowed progress.
3bY .S<G< ?@ Q9:@?C<GIPM< @Q9N< H9G I: <=NI:@?9: 9H H?:I:Q?IM @<Q;9G M<:C?:O ;9 ;S< NG?LI;<
@<Q;9GY 1he banking secLor appears soundly based (8ox 5) and a new, iLh bankparL o Lhe pan-
Arican Fcobank group, which has a Lrack record o small business supporLis poised Lo begin
operaLions. 1he governmenL is also closer Lo developing a loan guaranLee scheme or small
businesses, which have experienced considerable diiculLy obLaining loans in Lhe pasL, reporLedly
because o Lhe owners' inabiliLy Lo provide adequaLe business plans, perceived biases Loward
companies working on governmenL projecLs, and diiculLies wiLh conLracL enorcemenL. SLa noLed
however LhaL such issues were generally beLLer addressed aL source, or using markeL-based
incenLives, because governmenL guaranLees Lended Lo provide unwelcome opporLuniLy or oicial
discreLion and could resulL in large conLingenL liabiliLies.
%9= WY "ZDI;9G?IM /D?: +?:I:Q?IM 1<Q;9G
1he inancial secLor currenLly consisLs o our banks. 1hree o Lhese have oreign parenL companies,
whereas 8anco Nacional de Cuinea FcuaLorial (8ANCF) is owned by Lhe governmenL. A iLh bank, parL o
Lhe pan-Arican Fcobank group, is poised Lo sLarL operaLions shorLly. CCFl bank, a subsidiary o Ariland
FirsL bank, accounLs or abouL 70 percenL o LoLal crediLs and 45 percenL o LoLal bank asseLs. SocieLe
Cenerale and 8CFl bank share abouL 3 and percenL o LoLal crediLs, respecLively. Microinance is
insigniicanL.
Financial depLh in FquaLorial Cuinea is very low. 1he raLio o bank crediL Lo Lhe privaLe secLor Lo non-
hydrocarbon CDP was abouL 35 percenL in 20 and Lhe densiLy o borrowers rom commercial banks is
abouL one LenLh o Lhe SSA average. 1he consLrucLion secLor accounLs or more Lhan 60 percenL o bank
crediLs. PrivaLe companies are Lhe primary source o bank unds (abouL 60 percenL o LoLal bank deposiLs).
1he banking secLor appears sound, wiLh a capiLal raLio averaging abouL 8 percenL, and an average non-
perorming loan raLe o abouL 6 percenL. Liquid asseLs accounL or abouL 40 percenL o LoLal asseLs. 8anks
wiLh a higher share o non-perorming loans hold relaLively higher shares o liquid asseLs.
2009 200 20
RaLio capiLal / AsseLs 0.4 0.9 2.9
RaLio capiLal / Risk-weighLed asseLs 3.5 26.6 24.2
CapiLal / Risk-weighLed asseLs 23.3 20.2 8.2
Non-perorming loans / 1oLal loans .8 7.2 5.5
Provisions / Non-perorming loans 64.4 88.6 0.7
Average reLurn on asseLs .3 .5 0.6
ReLurn on average equiLy 8.5 4.9 5.4
Liquid asseLs / 1oLal asseLs 44.0 45.4 37.4
Liquid asseLs / CurrenL liabiliLies 92.9 220.5 85.7
Source. CenLral Arican 8anking Commision (CO8AC).
Financial Soundness lndicaLors (Fnd o Period), 2009- (PercenL)

3cY 1;IHH IM@9 S?OSM?OS;<C ;S< ?EN9G;I:Q< 9H ;GI:@NIG<:Q_[ IQQ9D:;IP?M?;_[ I:C ;S<
<:H9GQ<E<:; 9H MIJ I@ NG<Q9:C?;?9:@ H9G I L?PGI:; NG?LI;< @<Q;9GY A major eorL, involving all
levels o governmenL, is required Lo answer Lhe inLernaLional communiLy's concerns regarding Lhe
use o public resources, independence o civil socieLy, human righLs, and open access, as well as
labor resLricLions and hold-ups Lo business operaLions (Figure 4). 1he auLhoriLies observed however
LhaL exLernal observers ailed Lo give due weighL Lo Lhe naLional values and expecLaLions LhaL
underpinned Lheir meLhods o operaLion, including in Lhe business secLor, and Lo Lhe progress LhaL
had already been made in diiculL circumsLances. 1hey also noLed developmenLs in Lwo areas.
An acLion plan is under way Lo reacLivaLe FquaLorial Cuinea's candidacy in Lhe FxLracLive
lndusLries 1ransparency lniLiaLive (Fl1l). 1o aciliLaLe civil socieLy involvemenL in moniLoring
hydrocarbon acLiviLies and revenues, consulLanLs would be advising on updaLing legislaLion,

Lraining programs are being provided, and an inormaLion cenLer is planned. ln response Lo
sLa's suggesLions LhaL regular reporLs o resource revenue would quickly advance Lhe
Lransparency agenda, Lhe auLhoriLies said LhaL Lhese had noL yeL been considered in Lhe absence
o engagemenL wiLh Lhe Fl1l.
FxLensive work is being underLaken in conjuncLion wiLh Lhe CFMAC inancial auLhoriLies Lo seL up
and enorce mechanisms Lo prevenL money laundering and counLer Lhe inancing o Lerrorism.
SLa noLed parLicularly in Lhis respecL Lhe imporLance o implemenLing inLernaLional sLandards
on poliLically exposed persons, cross-border LransporLaLion o currency and bearer bonds, and
an operaLional inance inLelligence uniL.
(Y B<<;?:O G<O?9:IM 9PM?OI;?9:@
3eY - MIGO< NG9N9G;?9: 9H "ZDI;9G?IM /D?:<I\@ <=;<G:IM H?:I:Q?IM I@@<;@ ?@ @;?MM S<MC ?:
H9G<?O: Q9EE<GQ?IM PI:A@ GI;S<G ;SI: ;S< %"-(Y 1his conLravenes Lhe CFMAC region's oreign
currency surrender requiremenLs and reserve-pooling arrangemenLs. 1he governmenL held Lhe
equivalenL o over CFAF 240 billion in oreign currency deposiLs in overseas banks aL end-20,
compared wiLh holdings o CFAF 800 billion aL Lhe 8FAC. However, Lhe auLhoriLies noLed LhaL
FquaLorial Cuinea had Lranserred CFAF 474 billion Lo Lhe 8FAC in 20 (bringing 8FAC deposiLs
close Lo Lhe level o M2 deposiLs) and LhaL oLher oil-producing counLries in Lhe region also held
asseLs ouLside Lhe 8FAC.
3XY 1;IHH :9;<C ;J9 ICC?;?9:IM ICL<G@< Q9:@<ZD<:Q< 9H "ZDI;9G?IM /D?:<I\@ Q9:;?:D<C
C<N9@?;@ ?: Q9EE<GQ?IM PI:A@ GI;S<G ;SI: ;S< %"-(Y FirsL, because overseas deposiLs are noL
reporLed in budgeL documenLaLion (and neiLher is Lhe Chinese Fximbank loan) Lhe iscal and
inancial accounLs are noL ully reconciled. Second, FquaLorial Cuinea's poLenLial leadership in
aLLempLs Lo reorm Lhe 8FAC reserves ramework (and parLicularly Lhe remuneraLion o long-Lerm
savings) is compromised by noL ollowing currenL obligaLions.
KY (9EN?M?:O I:C NDPM?@S?:O G<M?IPM< CI;I
`4Y 1;IHH 9P@<GL<C ;SI; EIQG9<Q9:9E?Q I:C @9Q?9FC<E9OGINS?Q @;I;?@;?Q@ IG< @;?MM C<H?Q?<:;
I:C SIEN<G @DGL<?MMI:Q<Y Progress Loward Lhe Millennium DevelopmenL Coals cannoL be
eecLively moniLored. SLaLisLical capaciLy is very low. Deiciencies are maniold and deep-rooLed.
NaLional accounLs sLaLisLics are very poorly grounded (using a 985 base year) and lack Lhe
minimum indicaLors necessary Lo Lrack annual developmenLs in Lhe non-hydrocarbon economy.
Oicial daLa or economic growLh are based on compuLaLions and projecLions, raLher Lhan
survey evidence.
1he reliabiliLy o price sLaLisLics is unclear in Lhe absence o an up-Lo-daLe household survey and
adequaLe capaciLy Lo moniLor price changes across Lhe counLry.
Fiscal daLa are only available on a cash basis, Lhere is no uncLional breakdown, and Lhere is no
ull reconciliaLion wiLh inancial daLa.
8alance o paymenLs daLa do noL relecL LransacLions acLually recorded by cusLoms or Lhe
banking secLor.
Several planned surveys have been delayed. PoverLy and populaLion daLa have been challenged.
`5Y 09;?:O ;SI; <L<: ;S< E9@; PI@?Q CI;I IG< L<G_ SIGC H9G ;S< NDPM?Q ;9 IQQ<@@[ @;IHH
@DOO<@;<C ;SI; I QM<IG NDPM?QI;?9: ;?E<;IPM< H9G QG?;?QIM EIQG9<Q9:9E?Q I:C @9Q?9F
C<E9OGINS?Q CI;I J9DMC P9;S I@@?@; ;GI:@NIG<:Q_ I:C IQ; I@ I N9J<GHDM ?:Q<:;?L< ;9 ?ENG9L<
@;I;?@;?QIM QINIQ?;_Y AnoLher imporLanL sLep would be Lo implemenL Lhe decree esLablishing an
auLonomous naLional sLaLisLics insLiLuLe. 1echnical supporL on sLaLisLics and adminisLraLion would be
available under Lhe Ceneral DaLa DisseminaLion SysLem (CDDS) buL, as in previous years, Lhe
auLhoriLies had noL responded Lo sLa's encouragemenL Lo join.
`3Y .S< ID;S9G?;?<@ :9;<C ;SI; ;S< B?:?@;G_ 9H #MI::?:O[ "Q9:9E?Q K<L<M9NE<:; I:C
#DPM?Q ':L<@;E<:; ?@ D:C<G;IA?:O I: <=<GQ?@< ;9 G<PI@< ;S< :I;?9:IM IQQ9D:;@ I:C ?ENG9L< ;S<
Q99GC?:I;?9: 9H <Q9:9E?Q CI;I J?;S?: O9L<G:E<:;Y 1he World 8ank has posLed a long-Lerm
sLaLisLics experL Lo provide assisLance and Lraining. 1he nearly-compleLed demography and healLh
survey and Lhe our major surveys planned or 203 (including Lhe populaLion and housing
censuses) would provide much-needed addiLional source daLa.
1.-++ -##!-'1-&
``Y "ZDI;9G?IM /D?:<I SI@ MI?C C9J: @9E< ?EN9G;I:; NS_@?QIM H9D:CI;?9:@ ;9 ICLI:Q<
;9JIGC ?;@ O9IM 9H <E<GO?:O EIGA<; @;I;D@. 1he upgraded naLional road neLwork and new porLs
will provide beLLer access Lo commercial opporLuniLies, Lhe enhanced power inrasLrucLure will
reduce cosLs and producLion boLLlenecks, and modern public buildings and housing will raise
adminisLraLive and living sLandards. CosLs and wasLage have been high, however, because o
limiLaLions in oversighL and pressure or presLige projecLs.
`VY - QM<IG H?@QIM I:QS9G ?@ :<<C<C ;9 S<MN ?:@DMI;< ;S< <Q9:9E_ HG9E 9?M NG?Q< L9MI;?M?;_
I:C ?ENG9L< ;S< IMM9QI;?9: I:C <HH?Q?<:Q_ 9H <=N<:C?;DG< 9L<G ;?E<Y Fiscal policy should be
guided by a medium-Lerm LargeL paLh or Lhe non-resource primary balance LhaL esLablishes iscal
buers suicienL Lo mainLain expendiLure commiLmenLs even when oil prices lucLuaLe. Some
accommodaLion may need Lo be soughL in CFMAC iscal guidelines. 1he LargeL paLh should relecL
Lhe expecLed uLure proile o hydrocarbon revenue, Lhe likely eiciency o domesLic invesLmenL, and
immediaLe poverLy and developmenL needs, as well as shorL-Lerm absorpLion and inancing
consideraLions. A irsL sLep would be Lo recasL Lhe 203 budgeL proposals Lo highlighL Lhe non-
resource primary balance and Lhe implicaLions or Lhe overall iscal balance o alLernaLive
hydrocarbon producLion and price proiles.

`WY "=;<G:IM @;IP?M?;_ J9DMC P< G<?:H9GQ<C P_ Q9EE?;E<:; ;9 I NGDC<:; E<C?DEF;<GE
H?@QIM HGIE<J9GA 9: ;S< M?:<@ NG9N9@<CY Analysis shows LhaL Lhe real eecLive exchange raLe is
above iLs equilibrium level (alLhough Lhe magniLude is uncerLain), poinLing Lo an erosion in exLernal
compeLiLiveness. Lower levels o governmenL capiLal spending, in conjuncLion wiLh improvemenLs Lo
Lhe business climaLe, will be criLical in addressing Lhis.
`bY %G9IC OD?C<M?:<@ @S9DMC P< @<; D:C<G ;S< 0K# H9G ;S< Q9EN9@?;?9: 9H @N<:C?:O I:C
G<L<:D< ;SI; J9DMC D:C<GN?: ;S< ;IGO<; NI;S H9G ;S< :9:FG<@9DGQ< NG?EIG_ PIMI:Q<! 8oLh
expendiLure raLionalizaLion and non-resource revenue mobilizaLion will be required over Lhe
medium Lerm. FxpendiLure should be rebalanced Lo provide adequaLe room or a higher level o real
currenL spending, and revenue mighL be enhanced by improving cusLoms collecLion and broadening
Lhe base and eiciency o income Lax (including limiLing Lax holidays and oLher exempLions).
`cY ': ;S< :<=; NSI@< 9H ;S< 0K#[ ?ENG9L?:O ;S< PD@?:<@@ QM?EI;< I:C <:SI:Q?:O @9Q?IM
@<GL?Q<@ J?MM :<<C ;9 ;IA< Q<:;<G @;IO<Y 1his will require decisive and susLained acLion by
governmenL Lo overcome iLs negaLive repuLaLion or poor governance and Lo overhaul iLs weak
inrasLrucLure or delivering educaLion, healLh and personal services. PrioriLies in capiLal spending
should also swiLch rom inrasLrucLure Loward educaLion and healLh.
`eY .9 <:SI:Q< I:C <=;<:C PD@?:<@@ 9NN9G;D:?;?<@[ PDG<IDQGI;?Q NG9Q<CDG<@ @S9DMC P<
@;G<IEM?:<C[ I:C @Q9N< H9G N9M?;?QIM ?:;<GL<:;?9: @S9DMC P< QDG;I?M<CY 1he proposed one-sLop
shop or invesLmenL would reduce some o Lhe cosLs and delays LhaL currenLly hinder business
developmenL. Problems LhaL have slowed loan availabiliLy Lo small enLerprises should, where
possible, be addressed aL source by enhancing Lraining and business services. While local
employmenL is a primary objecLive o economic regeneraLion, regulaLions LhaL resLricL Lhe abiliLy o
local or oreign companies Lo recruiL adequaLe personnel should be avoided.
`XY K?G<Q; NDPM?Q @<Q;9G ?:L9ML<E<:; ?: Q9EE<GQ?IM IQ;?L?;?<@ @S9DMC P< IL9?C<C. "Picking
winners" by governmenLs is rarely successul, parLicularly where commercial experience is limiLed
and poliLical connecLions can disLorL judgmenL. 1he governmenL's comparaLive advanLages lie
insLead in esLablishing inrasLrucLure, ensuring a welcoming and predicLable business climaLe, and
supporLing labor orce enhancemenL.
V4Y - HI@;F;GIQA INNG9IQS ;9 EIA?:O S?OSFZDIM?;_ NG?EIG_ <CDQI;?9: ILI?MIPM< ;9 IMM @S9DMC
P< Q9:@?C<G<CY AmbiLious LargeLs should be seL or Lhe number and qualiLy o Leachers, adequaLe
inancial resources should be commiLLed, and programs should be developed Lo encourage sLudenL
enrollmenL and aLLendance.
V5Y "ZDI;9G?IM /D?:<I @S9DMC E<<; ?;@ 9PM?OI;?9:@ ;9 ;S< %"-(Y 1he governmenL's oreign
currency deposiLs should be held in Lhe 8FAC raLher Lhan in commercial banks. FquaLorial Cuinea
would Lhen be in a sLronger posiLion Lo Lake a leadership role in discussions abouL Lhe uLure o Lhe
reserves ramework.
V3Y - @;G9:O N9M?;?QIM Q9EE?;E<:; ;9 ;GI:@NIG<:Q_ Q9DMC IQQ<M<GI;< ;S< NG9CDQ;?9: 9H
PI@?Q <Q9:9E?Q I:C @9Q?IM @;I;?@;?Q@Y PrioriLy should be given Lo. developing and publishing
evidence-based annual naLional accounLs and balance o paymenLs sLaLemenLs, reporLing
governmenL expendiLure commiLmenLs and arrears and all inancial asseLs and liabiliLies, and
conducLing, in 203, populaLion and agriculLural censuses and household and enLerprise surveys.
1hese should be reinorced by a clear publicaLion LimeLable or economic daLa. Regular publicaLion
o reporLs on oil revenues would demonsLraLe FquaLorial Cuinea's conLinued commiLmenL Lo Fl1l
principles.
43. 'B+ @;IHH G<Q9EE<:C@ ;SI; ;S< :<=; -G;?QM< '6 Q9:@DM;I;?9: ;IA< NMIQ< 9: ;S< @;I:CIGC
12-month cycle.

"ZDI;9G?IM /D?: !?@A -@@<@@E<:; BI;G?=
19DGQ<@ 9H !?@A &?A<M?S99C
5
'ENIQ; ?H !<IM?i<C
5

A subsLanLial decline in
hydrocarbon prices
sLemming rom a
susLained global
slowdown
&9J
Spillovers rom Furope and/or
unresolved US iscal issues
could lead Lo a marked and
perhaps susLained soLening
o global growLh, which in
Lurn would lead Lo susLained
lower hydrocarbon prices.
B<C?DE
FquaLorial Cuinea is highly dependenL on hydrocarbon exporLs.
Hydrocarbons accounL or abouL 75 percenL o CDP, 98 percenL o
goods exporLs, and 90 percenL o iscal revenue.
Fxperience suggesLs LhaL FC auLhoriLies may prune capiLal
spending sharply in response Lo lower hydrocarbon revenues. 1his
would impacL immediaLely on Lhe consLrucLion secLor.
However, large inLernaLional reserves provide buers LhaL could
supporL spending or up Lo Lhree years i Lhe auLhoriLies wish Lo
use Lhem.
ConLinuous loose iscal
policy
2?OS
CapiLal spending has recenLly
been on an unsusLainable
LrajecLory, alLhough Lhe
auLhoriLies aim Lo keep an
overall iscal balance and sLa
expecLs capiLal spending Lo
Lurn down.
Since 2009, Lhe governmenL
has ailed Lo increase iscal
buers despiLe Lheir vasL
hydrocarbon revenues.
2?OS
FurLher scaling-up o capiLal spending would accenLuaLe Lhe
sLrains on adminisLraLive and absorpLive capaciLy, wiLh
consequenLial impacLs on projecL selecLion, inlaLion,
compeLiLiveness, imporLs, and scope or corrupLion.
Worsening compeLiLiveness will urLher inhibiL developmenL o Lhe
non-hydrocarbon secLor over Lhe medium Lerm.
Fiscal buers would be urLher eroded.
lnLroducing a iscal ramework anchored on Lhe non-resource
iscal balance would discipline expendiLure pracLice and reduce
risks.
Widening inequaliLies
in income and job
opporLuniLies
B<C?DE
PoverLy, governance, and
business indicaLors suggesL
LhaL growLh has so ar noL
been inclusive.
Non-hydrocarbon secLors
remain rudimenLary and oer
ew opporLuniLies Lo Lhe local
populaLion.
B<C?DE
ConLinued social exclusion heighLens Lhe risk o poliLical unresL.
Fxclusion will urLher reduce human capiLal and impede
susLainable developmenL.
SLraLegies Lo reviLalize Lhe non-resource secLor, including beLLer
governance and business climaLe, need Lo be considered.
Resources should be direcLed parLicularly Lo primary educaLion.
Unchanged daLa
qualiLy
B<C?DE
DespiLe several eorLs,
improvemenL o daLa qualiLy
and disseminaLion o oicial
daLa are limiLed.
B<C?DE
lnaccuraLe undersLanding o Lhe economy.
lneecLive economic policies, in parLicular inappropriaLe
reallocaLion o hydrocarbon wealLh.
Classiied as high, medium/high, medium, low/medium, or low. 1he Risk AssessmenL MaLrix shows evenLs LhaL could maLerially
alLer Lhe baseline paLh discussed in Lhis reporL (which is Lhe scenario mosL likely Lo maLerialize in Lhe view o sLa). 1he relaLive
likelihood o risks relecLs Lhe sLa's subjecLive assessmenL (aL Lhe Lime o discussions wiLh Lhe auLhoriLies) o Lhe risks
surrounding Lhis baseline.

.IPM< 5Y "ZDI;9G?IM /D?: 1<M<Q;<C "Q9:9E?Q I:C +?:I:Q?IM ':C?QI;9G@[ 344Xg5c
2009 200 20 202 203 204 205 206 207
FsL. FsL. FsL. Proj. Proj. Proj. Proj. Proj. Proj.
ProducLion, prices, and money
Real CDP 0.8 -.7 4.9 2.5 -.7 -0.3 -6.8 2.8 -4.4
Hydrocarbon secLors -0.8 -3.9 4.7 -.8 -4.2 -2.7 -2.8 3. -9.4
Oil and gas primary producLion -8.9 -2.3 2. -0.6 -6. -3.0 -2.3 -.0 -6.6
Hydrocarbons secondary producLion
0.8 -6.9 0.0 -4. -0.6 -2.2 -3.8 0.8 2.8

Non-hydrocarbon secLors 40.9 3.0 5.5 . 2.8 3.7 2.5 2.4 2.3
CDP delaLor -30.0 26.3 24.4 . .0 -.7 -2.5 -0.4 -0.9
Hydrocarbon secLors -36.5 37.2 3.4 6.2 .2 -2.4 -2.7 -2.5 -2.3
Oil and gas primary producLion -34.2 36. 26.9 2.2 . -4. -3.9 -3.6 -3.9
-37.6 38.2 47.3 25.7 2. .5 -0.4 -0.4 -0.

Non-hydrocarbon secLors 3.7 4.9 7.0 .9 3.5 2.8 3.6 3.8 4.4
Oil price (U.S. dollars a barrel)
2
58.0 75.3 00.3 02.4 0.3 96.9 92.7 89.0 85.2
Consumer prices (annual average) 5.7 5.3 4.8 5.5 5.0 5.4 5.2 5.0 4.7
Consumer prices (end o period) 5.0 5.4 4.9 5.9 5.2 5. 4.9 4.9 4.7
8road money 8.8 48.9 6. 4.7 7. 6. 0.6 4.5 5.7
Nominal eecLive exchange raLe (- = depreciaLion) -.3 -4.5 -. n.a. n.a. n.a. n.a. n.a. n.a.
Real eecLive exchange raLe (- = depreciaLion) 3. . 4.0 n.a. n.a. n.a. n.a. n.a. n.a.
FxLernal secLor
FxporLs, .o.b. -42.3 2.2 38.5 3.7 -4.9 -4.2 -3.8 -.0 -9.3
Hydrocarbon exporLs -42.7 20.6 39.0 3.8 -5. -4.3 -4. -.3 -9.9
Oil and gas primary producLion -44.7 20.0 30.0 .5 -6.9 -5.7 -4.0 -6.3 -6.5
Hydrocarbon secondary producLion
-33.8 22. 76.8 0.6 -0.4 -0.8 -4.3 9.7 2.5

Non-hydrocarbon exporLs 3.9 65.4 9. -2.7 4.3 3.9 7.0 3.5 8.4
lmporLs, .o.b. 5.0 -2.0 27. 2. -0.0 -2.8 -9.5 -3.6 -9.9
1erms o Lrade -20.3 -9. .9 8.0 2.5 -0.4 -2.6 -2.6 -3.6
CovernmenL inance
Revenue -22.4 -9.2 32.5 9.6 2.6 -5.2 -9.6 -0.6 -6.6
FxpendiLure 60.7 -.0 9.9 2.0 -7.0 -4. -9.2 -3. -0.7
lnvesLmenL and savings
Cross invesLmenL 68.2 63.8 54.0 5.0 44. 43.5 42.9 40.4 37.8
Public 50.8 34.0 28.6 3.4 28.5 27. 26.0 23.7 20.6
PrivaLe 7.5 29.9 25.4 9.6 5.5 6.3 7.0 6.7 7.
Cross naLional savings 47.3 4.0 44.6 35.9 33.6 3.8 30.2 26.7 25.3
Public 4.4 27.9 29.6 28.9 29.5 27.7 26.4 2.5 9.9
PrivaLe 5.9 3. 5.0 7.0 4.0 4. 3.8 5.2 5.3
CovernmenL inance
Revenue 48.4 35.4 35.9 34.6 35.7 34.5 34.4 30.0 29.6
Oj which . resource revenue 43.7 3.0 32.6 30.7 3.6 30.2 29.7 25.3 24.5
FxpendiLure 57.8 4.4 34.9 37. 34.7 34.0 34.0 32. 30.3
Overall iscal balance aLer granLs -9.4 -6.0 .0 -2.5 .0 0.6 0.4 -2. -0.7
Non-resource primary balance (percenL o non-hydrocarbon CDP)
3
-64.4 -30.9 -28.6 -37.4 -8.5 -05.6 -89.2 -8.2 -66.4
Cross governmenL deposiLs (billions o CFAF) 3,368 3,262 2,96 2,834 2,73 2,57 2,422 2,255 2,206
FxLernal secLor
CurrenL accounL balance (including oicial Lransers, - = deiciL) -20.9 -22.8 -9.3 -5.0 -0.5 -.7 -2.7 -3.7 -2.5
OuLsLanding medium- and long-Lerm public debL 5.8 5.9 8.8 8.3 8.0 5.7 3.6 . .
DebL service-Lo-exporLs raLio (percenL) 0.2 0.3 0.3 . 3.3 3.5 3.5 0.0 0.
FxLernal debL service/governmenL revenue (percenL)
4
0.8 .6 .4 5. 4.7 5.4 5.0 0.2 0.3
FxLernal secLor
FxporLs, .o.b. 8,526 0,332 4,306 4,838 4,04 3,55 ,649 ,537 0,464
Hydrocarbon exporLs 8,43 0,45 4,03 4,640 3,898 3,30 ,49 ,277 0,56
Oil and gas primary producLion 6,559 7,870 0,234 0,39 9,678 9,24 7,850 7,354 6,44
,560 ,905 3,367 3,724 3,708 3,680 3,55 3,463 3,549

Non-hydrocarbon exporLs 3 87 204 98 206 24 229 260 308
lmporLs, .o.b. -5,597 -5,485 -6,972 -7,83 -7,034 -6,837 -6,90 -5,967 -5,375
CurrenL accounL balance (- = deiciL) -2,70 -2,793 -,565 -2,622 -,774 -,932 -,898 -2,092 -,798
Overall balance o paymenLs -,328 -660 838 -382 37 34 -26 -263 -77
OuLsLanding medium- and long-Lerm public debL 620 724 ,379 ,49 ,36 946 532 69 65
Usable exLernal resources
5
8,59 8,288 7,280 6,577 6,373 6,004 5,65 5,273 5,59
Reserve asseLs aL Lhe 8FAC 3,252 2,354 3,054 2,550 2,683 2,707 2,669 2,396 2,309
Oj which . governmenL deposiLs aL 8FAC 2,0 664 ,579 ,292 ,427 ,502 ,552 ,292 ,2
CovernmenL bank deposiLs abroad 5,267 5,935 4,227 4,027 3,690 3,296 2,945 2,877 2,850
Usable exLernal resources
5
(monLhs o nexL year's imporLs) 3.4 0.2 8.3 8.3 8.3 8.6 8.3 8.6 n.a.
Nominal CDP (billions o CFA rancs) 4,890 6,073 7,93 9,035 8,965 8,785 7,978 8,72 7,743
Non-hydrocarbon CDP (billions o CFA rancs) ,578 ,705 ,925 2,80 2,39 2,470 2,622 2,789 2,978
(Annual percenLage change, unless oLherwise speciied)
(PercenL o CDP, unless oLherwise speciied)
(Millions o U.S. dollars, unless oLherwise speciied)
lncluding LNC, LPC, buLane, propane, and meLhanol.

2
1he price o oil is Lhe average o Lhree spoL prices. daLed 8renL, WesL 1exas lnLermediaLe, and Dubai FaLeh, and includes a discounL or qualiLy.
3
Fxcluding oil revenues, oil-relaLed expendiLures, and inLeresL earned and paid.
4
1he rise in exLernal debL service sLarLing in 202 relecLs Lhe amorLizaLion o Chinese loans under a 2006 USS2 billion crediL line rom Lhe Chinese
governmenL. 1he loans are earmarked or inrasLrucLure, including our projecLs in elecLriicaLion and improvemenLs Lo 8aLa harbor. Loan Lerms are
non-concessional, carrying an inLeresL raLe o 5 percenL, ive years maLuriLy wiLh Lwo years' grace.
5
Usable exLernal resources include oicial reserves in Lhe 8FAC and governmenL oshore deposiLs.

.IPM< 3Y "ZDI;9G?IM /D?: %IMI:Q< 9H #I_E<:;@[ 344Xg5c
5

(Millions o U.S. dollars, unless oLherwise speciied)
2009 200 20 202 203 204 205 206 207
FsL. FsL. FsL. Proj. Proj. Proj. Proj. Proj. Proj.
CurrenL accounL -270 -2793 -565 -2622 -774 -932 -898 -2092 -798
1rade balance 2928 4847 7334 7024 707 6678 5458 5570 5088
FxporLs o goods, .o.b. 8526 0332 4306 4838 404 355 649 537 0464
Hydrocarbon exporLs 843 045 403 4640 3898 330 49 277 056
Crude oil 6559 7870 0234 039 9678 924 7850 7354 644
Liqueied naLural gas 333 62 292 3285 3234 326 2748 3007 303
Liqueied peLroleum gas 0 0 0 0 0 0 0 0 0
MeLhanol 227 283 447 439 474 464 407 456 446
Non-hydrocarbon exporLs 3 87 204 98 206 24 229 260 308
lmporLs o goods, .o.b. -5597 -5485 -6972 -783 -7034 -6837 -690 -5967 -5375
PeLroleum secLor -587 -230 -926 -964 -866 -885 -79 -70 -66
PeLroleum producLs -230 -323 -485 -590 -589 -588 -567 -579 -592
Public secLor equipmenL -4206 -3332 -395 -4492 -388 -3589 -3067 -2887 -2375
OLher
2
-575 -600 -646 -767 -760 -775 -766 -799 -792
Services (neL) -802 -2055 -2638 -2882 -2646 -2586 -2346 -2309 -250
lncome (neL)
3
-39 -5477 -655 -6646 -6074 -5909 -4892 -5237 -468
CurrenL Lransers -06 -08 -07 -9 -24 -6 -9 -7 -8
CapiLal and inancial accounL 64 2404 2602 2239 9 967 872 829 72
CapiLal accounL 0 0 0 0 0 0 0 0 0
Financial accounL 64 2404 2602 2239 9 967 872 829 72
DirecL invesLmenL 304 2734 975 205 94 933 836 745 657
PorLolio invesLmenL (neL) 0 0 0 0 0 0 0 0 0
OLher invesLmenL (neL) -663 -330 627 225 -3 34 35 85 64
Medium- and long-Lerm LransacLions 494 90 639 -77 -392 -437 -388 -29 -32
Ceneral governmenL 503 04 656 -58 -370 -43 -364 -4 -7
Oj which . amorLizaLion -5 -5 -5 -03 -45 -43 -364 -4 -7
8anks 0 0 0 0 0 0 0 0 0
OLher secLors -9 -4 -7 -20 -22 -24 -25 -25 -26
ShorL-Lerm LransacLions -57 -420 -2 302 390 47 424 4 96
Ceneral governmenL
4, 5
-255 -655 33 204 338 394 352 68 27
8anks 04 57 -76 32 5 8 -6 2 8
OLher secLors -6 78 32 67 46 68 88 44 6
Frrors and omissions 200 -272 -99 0 0 0 0 0 0
Overall balance -328 -660 838 -382 37 34 -26 -263 -77
Financing 328 660 -838 382 -37 -34 26 263 77
Change in neL inLernaLional reserves
6
(- = increase) 328 660 -838 382 -37 -34 26 263 77
Memorandum iLems.
Reserve asseLs aL Lhe 8FAC (a) 3252 2354 3054 2550 2683 2707 2669 2396 2309
Oj which . governmenL deposiLs aL 8FAC (b) 20 664 579 292 427 502 552 292 2
CovernmenL bank deposiLs ouLside 8FAC (c) 5267 5935 4227 4027 3690 3296 2945 2877 2850
Usable exLernal resource (a - c) 859 8288 7280 6577 6373 6004 565 5273 559
Cross governmenL deposiLs (b - c) 7368 6599 5805 539 56 4798 4497 470 406
Usable exLernal resource (monLhs o nexL year's imporLs) 3.4 0.2 8.3 8.3 8.3 8.6 8.3 8.6 n.a.
CurrenL accounL balance (percenL o CDP, - = deiciL) -20.9 -22.8 -9.3 -5.0 -0.5 -.7 -2.7 -3.7 -2.5
Overall balance (percenL o CDP, - = deiciL) -2.8 -5.4 5.0 -2.2 0.8 0.2 -0.2 -.7 -0.5
CrowLh o hydrocarbon exporLs (percenL) -42.7 20.6 39.0 3.8 -5. -4.3 -4. -.3 -9.9
CrowLh o non-hydrocarbon exporLs (percenL) 3.9 65.4 9. -2.7 4.3 3.9 7.0 3.5 8.4
CrowLh o oLher imporLs
2
(percenL) 42. 4.4 7.8 8.7 -.0 2.0 -. 4.3 -0.9

1he 8OP daLa in Lhis Lable are noL compiled in accordance wiLh Lhe lMF's 8alance o PaymenLs Manual, iLh ediLion. 1he hisLoric daLa have noL been
derived rom cusLoms' and bank records' daLa, buL rom esLimaLes o Lhe 8FAC. lMF sLa has made ad hoc adjusLmenLs Lo Lhe daLa.
2
lncluding privaLe secLor consumpLion and non-hydrocarbon secLor invesLmenL imporLs.
3
lncluding invesLmenL income o oil companies, which includes reinvesLed earnings (wiLh an oseLLing enLry in oreign direcL invesLmenL).
4
lncludes purchase o Devon's share o oil ields in 2008 by FquaLorial Cuinea.
5
Since 2000, enLries represenL changes in governmenL deposiLs in commercial banks abroad.
6
ConsisLs only o iLems on Lhe balance sheeL o Lhe 8FAC (i.e., excluding governmenL bank deposiLs abroad).

.IPM< `IY "ZDI;9G?IM /D?: 1DEEIG_ 9H (<:;GIM /9L<G:E<:; +?:I:Q?IM *N<GI;?9:@[
344Xg5c
(8illions o CFA rancs, unless oLherwise speciied)
2009 200 20 202 202 203 203 204 205 206 207
8udgeL Proj. 8udgeL Proj. Proj. Proj. Proj. Proj.
Revenue 2,368 2,5 2,849 2,808 3,22 2,36 3,202 3,035 2,744 2,452 2,290
Resource revenue 2,39 ,884 2,585 2,53 2,770 2,040 2,834 2,656 2,368 2,064 ,899
1ax revenue 747 436 509 455 546 530 766 742 699 576 600
OLher revenue ,392 ,449 2,076 2,058 2,224 ,50 2,068 ,95 ,668 ,488 ,300
RoyalLies 760 952 ,426 ,536 ,4 ,4 ,22 ,2 920 864 682
ProiL sharing 632 485 649 59 83 394 845 802 748 624 68
8onuses and renLs 0 2 2 2 0
Non-resource revenue 229 267 264 296 35 320 368 379 376 387 39
1ax revenue 59 77 97 95 228 209 233 237 230 237 234
1axes on income, proiLs, and capiLal gains 94 99 3 07 22 6 30 38 33 38 38
DomesLic Laxes on goods and services
44 46 54 6 68 6 65 65 62 63 6
1axes on inLernaLional Lrade and LransacLions 0 2 4 5 8 8 7 7 6 7 7
OLher Laxes 20 6 2 20 4 20 8 9 9 9
OLher revenue 70 90 66 00 23 36 4 46 5 57
CranLs 0 0 0 0 0 0 0 0 0 0 0
FxpendiLure 2,828 2,57 2,767 2,638 3,349 2,355 3,4 2,985 2,7 2,626 2,345
Fxpense 345 454 50 526 5 593 554 602 639 692 747
CompensaLion o employees 7 78 80 84 05 2 2 03 06 02
Purchase o goods and services 54 87 2 97 25 24 253 252 23 240 229
lnLeresL 3 20 28 64 30 64 3 3 28 3 3
DomesLic 3 2 2
Foreign 0 8 26 62 29 62 30 30 27 2 2
Subsidies
2
4 68 80 78 6 79 55 205 275 340 40
OLher expense 2 2 2 3 2 3 2 3 3 3 3
1ransers 2 2 2 3 2 3 2 3 3 3 3
DomesLic arrears paymenLs 0 0 0 0 0 0 0 0 0 0 0
NeL acquisiLion o non-inancial asseLs 2,482 2,063 2,266 2,2 2,838 ,762 2,559 2,383 2,07 ,934 ,598
Cross operaLing balance 2,023 ,697 2,348 2,282 2,6 ,768 2,648 2,433 2,05 ,760 ,543
NeL lending/borrowing (overall iscal balance) -459 -366 82 70 -228 6 88 50 33 -74 -55
NeL inancial LransacLions -459 -366 82 70 -228 6 88 50 33 -74 -55
NeL acquisiLion o inancial asseLs -47 -286 -24 47 -258 64 -08 -70 -6 -76 -59
Currency and deposiLs -47 -286 -24 47 -258 64 -08 -70 -6 -76 -59
Change in governmenL deposiLs abroad 768 32 -770 0 -05 0 -79 -209 -88 -37 -5
CovernmenL deposiLs ouLside 8FAC 768 32 -77 0 -05 0 -79 -209 -88 -37 -5
CepeLrol/Sonagas deposiLs abroad 0 0 0 0 0 0 0 0 0 0
MoneLary secLor -85 -608 528 47 -52 64 7 40 27 -40 -44
DeposiLs aL 8FAC -828 -635 469 47 -52 64 7 40 27 -39 -44
DeposiLs aL domesLic banks 3 27 59 0 0 0 0 0 0 0 0
Loans 0 0 0 0 0 0 0 0 0 0 0
NeL lending 0 0 0 0 0 0 0 0 0 0 0
Shares and oLher equiLy 0 0 0 0 0 0 0 0 0 0 0
NeL acquisiLion o equiLies 0 0 0 0 0 0 0 0 0 0 0
OLher inancing 0 0 0 0 0 0 0 0 0 0 0
NeL incurrence o liabiliLies 237 5 280 247 -30 57 -96 -220 -94 -2 -4
DomesLic 0 0 0 0 0 0 0 0 0 0 0
Foreign 237 5 280 247 -30 57 -96 -220 -94 -2 -4
Loans 240 54 287 245 24 208 24 0 0 0 0
AmorLizaLion (-) -3 -3 -7 2 -53 -5 -220 -220 -94 -2 -4
FxcepLional inancing 0 0 0 0 0 0 0 0 0 0 0
Frrors and omissions -75 -28 603 0 0 0 0 0 0 0 0
Memorandum iLems.
1ax revenue 906 62 706 650 774 739 999 979 929 83 834
OLher revenue ,462 ,539 2,43 2,58 2,348 ,622 2,203 2,056 ,84 ,639 ,456
Overall iscal balance -459 -366 82 70 -228 6 88 50 33 -74 -55
Percent cj CDP -9.4 -6.0 .0 .9 -2.5 0. .0 0.6 0.4 -2. -0.7
Non-resource primary balance
3
-2,595 -2,23 -2,476 -2,279 -2,996 -,97 -2,749 -2,609 -2,338 -2,265 -,978
Percent cj ncn-hyJrcccrbcn CDP -64.4 -30.9 -28.6 -04.5 -37.4 -85.0 -8.5 -05.6 -89.2 -8.2 -66.4
Nominal CDP 4,890 6,073 7,93 9,035 9,035 8,965 8,965 8,785 7,978 8,72 7,743
Nominal non-hydrocarbon CDP ,578 ,705 ,925 2,80 2,80 2,39 2,39 2,470 2,622 2,789 2,978

1he vA1 was legislaLed in early 2005, previously Lhis was a sales Lax.
2
lncludes social beneiLs.
3
Fqual Lo Lhe overall balance excluding granLs minus hydrocarbons secLor corporaLe income Lax and oLher revenue plus hydrocarbons revenue
generaLed in Lhe secondary LNC, LPC, and meLhanol producLion and purchase o share in hydrocarbons projecLs, minus inLeresL on savings unds
plus inLeresL expendiLure.

.IPM< `PY "ZDI;9G?IM /D?: 1DEEIG_ 9H (<:;GIM /9L<G:E<:; +?:I:Q?IM *N<GI;?9:@[
344Xg5c
(PercenL o CDP, unless oLherwise speciied)

2009 200 20 202 202 203 203 204 205 206 207
Revenue 48.4 35.4 35.9 3. 34.6 26.3 35.7 34.5 34.4 30.0 29.6
Resource revenue 43.7 3.0 32.6 27.8 30.7 22.8 3.6 30.2 29.7 25.3 24.5
1ax revenue 5.3 7.2 6.4 5.0 6.0 5.9 8.5 8.4 8.8 7. 7.7
OLher revenue 28.5 23.9 26.2 22.8 24.6 6.8 23. 2.8 20.9 8.2 6.8
RoyalLies 5.5 5.7 8.0 7.0 5.6 2.4 3.6 2.7 .5 0.6 8.8
ProiL sharing 2.9 8.0 8.2 5.7 9.0 4.4 9.4 9. 9.4 7.6 8.0
8onuses and renLs 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Non-resource revenue 4.7 4.4 3.3 3.3 3.9 3.6 4. 4.3 4.7 4.7 5.0
1ax revenue 3.3 2.9 2.5 2.2 2.5 2.3 2.6 2.7 2.9 2.9 3.0
1axes on income, proiLs, and capiLal gains .9 .6 .4 .2 .3 .3 .4 .6 .7 .7 .8
0.9 0.8 0.7 0.7 0.8 0.7 0.7 0.7 0.8 0.8 0.8
1axes on inLernaLional Lrade and LransacLions 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
OLher Laxes 0.2 0.3 0.2 0. 0.2 0.2 0.2 0.2 0.2 0.2 0.2
OLher revenue .4 .5 0.8 . .4 .2 .5 .6 .8 .8 2.0
CranLs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
FxpendiLure 57.8 4.4 34.9 29.2 37. 26.3 34.7 34.0 34.0 32. 30.3
Fxpense 7. 7.5 6.3 5.8 5.7 6.6 6.2 6.9 8.0 8.5 9.7
CompensaLion o employees .4 .3 .0 0.9 .2 .2 .3 .3 .3 .3 .3
Purchase o goods and services 3.2 3. 2.7 2.2 2.8 2.7 2.8 2.9 2.9 2.9 3.0
lnLeresL 0. 0.3 0.4 0.7 0.3 0.7 0.3 0.4 0.4 0.0 0.0
DomesLic 0. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Foreign 0.0 0.3 0.3 0.7 0.3 0.7 0.3 0.3 0.3 0.0 0.0
Subsidies
2
2.3 2.8 2.3 2.0 .3 2.0 .7 2.3 3.4 4.2 5.3
OLher expense 0. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
1ransers 0. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
DomesLic arrears paymenLs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
NeL acquisiLion o non-inancial asseLs 50.8 34.0 28.6 23.4 3.4 9.7 28.5 27. 26.0 23.7 20.6
Cross operaLing balance 4.4 27.9 29.6 25.3 28.9 9.7 29.5 27.7 26.4 2.5 9.9
NeL lending/borrowing (overall iscal balance) -9.4 -6.0 .0 .9 -2.5 0. .0 0.6 0.4 -2. -0.7
NeL inancial LransacLions -9.4 -6.0 .0 .9 -2.5 0. .0 0.6 0.4 -2. -0.7
NeL acquisiLion o inancial asseLs -.0 -4.7 -3.0 4.6 -2.9 0.7 -.2 -.9 -2.0 -2.2 -0.8
Currency and deposiLs -.0 -4.7 -3.0 4.6 -2.9 0.7 -.2 -.9 -2.0 -2.2 -0.8
Change in governmenL deposiLs abroad 5.7 5.3 -9.7 0.0 -.2 0.0 -2.0 -2.4 -2.4 -0.4 -0.2
CovernmenL deposiLs ouLside 8FAC 5.7 5.3 -9.7 0.0 -.2 0.0 -2.0 -2.4 -2.4 -0.4 -0.2
CepeLrol/Sonagas deposiLs abroad 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
MoneLary secLor -6.7 -0.0 6.7 4.6 -.7 0.7 0.8 0.5 0.3 -.7 -0.6
DeposiLs aL 8FAC -6.9 -0.5 5.9 4.6 -.7 0.7 0.8 0.5 0.3 -.7 -0.6
DeposiLs aL domesLic banks 0.3 0.4 0.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Loans 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
NeL lending 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Shares and oLher equiLy 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
NeL acquisiLion o equiLies 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
OLher inancing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
NeL incurrence o liabiliLies 4.9 0.8 3.5 2.7 -0.3 0.6 -2.2 -2.5 -2.4 0.0 0.0
DomesLic 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Foreign 4.9 0.8 3.5 2.7 -0.3 0.6 -2.2 -2.5 -2.4 0.0 0.0
Loans 4.9 0.9 3.6 2.7 0.3 2.3 0.3 0.0 0.0 0.0 0.0
AmorLizaLion (-) -0. 0.0 -0. 0.0 -0.6 -.7 -2.5 -2.5 -2.4 0.0 0.0
FxcepLional inancing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Frrors and omissions -3.6 -0.5 7.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Memorandum iLems.
1ax revenue 8.5 0. 8.9 7.2 8.6 8.2 . . .7 9.9 0.8
OLher revenue 29.9 25.3 27.0 23.9 26.0 8. 24.6 23.4 22.7 20. 8.8
Overall iscal balance (billions o CFA rancs) -459 -366 82 70 -228 6 88 50 33 -74 -55
Percent cj CDP -9.4 -6.0 .0 .9 -2.5 0. .0 0.6 0.4 -2. -0.7
3
(billions o CFA rancs) -2,595 -2,23 -2,476 -2,279 -2,996 -,97 -2,749 -2,609 -2,338 -2,265 -,978
Nominal CDP (billions o CFA rancs) 4,890 6,073 7,93 9,035 9,035 8,965 8,965 8,785 7,978 8,72 7,743
Nominal non-hydrocarbon CDP (billions o CFA rancs) ,578 ,705 ,925 2,80 2,80 2,39 2,39 2,470 2,622 2,789 2,978
2
3
.IPM< `QY "ZDI;9G?IM /D?: 1DEEIG_ 9H (<:;GIM /9L<G:E<:; +?:I:Q?IM *N<GI;?9:@[
344Xg5c
(PercenL o non-hydrocarbon CDP, unless oLherwise speciied)
2009 200 20 202 202 203 203 204 205 206 207
Revenue 50. 26.2 48.0 28.8 43.2 0.8 38. 22.9 04.7 87.9 76.9
Resource revenue 35.5 0.5 34.3 5.2 27. 88.0 22.2 07.5 90.3 74.0 63.8
1ax revenue 47.3 25.6 26.4 20.9 25.0 22.9 33.0 30.0 26.7 20.7 20.
OLher revenue 88.2 85.0 07.9 94.4 02.0 65. 89.2 77.5 63.6 53.4 43.6
RoyalLies 48.2 55.8 74. 70.5 64.7 48.0 52.7 45.0 35. 3.0 22.9
ProiL sharing 40. 28.5 33.7 23.8 37.3 7.0 36.5 32.5 28.5 22.4 20.7
8onuses and renLs 0.0 0.7 0.0 0. 0.0 0. 0.0 0.0 0.0 0.0 0.0
Non-resource revenue 4.5 5.6 3.7 3.6 6. 3.8 5.9 5.3 4.3 3.9 3.
1ax revenue 0. 0.4 0.2 9.0 0.5 9.0 0.0 9.6 8.8 8.5 7.9
1axes on income, proiLs, and capiLal gains 6.0 5.8 5.9 4.9 5.6 5.0 5.6 5.6 5. 4.9 4.6
2.8 2.7 2.8 2.8 3. 2.6 2.8 2.6 2.4 2.3 2.0
1axes on inLernaLional Lrade and LransacLions 0.6 0.7 0.7 0.7 0.8 0.8 0.7 0.7 0.6 0.6 0.6
OLher Laxes 0.7 .2 0.8 0.5 0.9 0.6 0.9 0.7 0.7 0.7 0.6
OLher revenue 4.5 5.3 3.5 4.6 5.7 4.8 5.9 5.7 5.6 5.4 5.3
CranLs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
FxpendiLure 79.2 47.6 43.7 2.0 53.6 0.5 34.3 20.8 03.4 94.2 78.7
Fxpense 2.9 26.6 26.0 24. 23.4 25.6 23.9 24.4 24.4 24.8 25.
CompensaLion o employees 4.5 4.6 4. 3.9 5. 4.5 4.8 4.5 3.9 3.8 3.4
Purchase o goods and services 9.8 0.9 0.9 9.0 .5 0.4 0.9 0.2 8.8 8.6 7.7
lnLeresL 0.2 . .4 2.9 .4 2.7 .4 .3 . 0. 0.
DomesLic 0.2 0. 0. 0. 0. 0. 0. 0. 0.0 0.0 0.0
Foreign 0.0 . .4 2.8 .3 2.7 .3 .2 .0 0. 0.
Subsidies
2
7.3 9.9 9.4 8.2 5.3 7.7 6.7 8.3 0.5 2.2 3.8
OLher expense 0.2 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.
1ransers 0.2 0. 0. 0. 0. 0. 0. 0. 0. 0. 0.
DomesLic arrears paymenLs 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
NeL acquisiLion o non-inancial asseLs 57.3 2.0 7.7 96.9 30.2 76.0 0.4 96.5 79.0 69.4 53.6
Cross operaLing balance 28.2 99.5 22.0 04.7 9.7 76.3 4.2 98.5 80.3 63. 5.8
NeL lending/borrowing (overall iscal balance) -29. -2.5 4.3 7.8 -0.4 0.3 3.8 2.0 .3 -6.3 -.8
NeL inancial LransacLions -29. -2.5 4.3 7.8 -0.4 0.3 3.8 2.0 .3 -6.3 -.8
NeL acquisiLion o inancial asseLs -3.0 -6.8 -2.5 9. -.8 2.7 -4.7 -6.9 -6. -6.3 -2.0
Currency and deposiLs -3.0 -6.8 -2.5 9. -.8 2.7 -4.7 -6.9 -6. -6.3 -2.0
Change in governmenL deposiLs abroad 48.6 8.9 -40.0 0.0 -4.8 0.0 -7.7 -8.5 -7.2 -.3 -0.5
CovernmenL deposiLs ouLside 8FAC 48.6 8.9 -40.0 0.0 -4.8 0.0 -7.7 -8.5 -7.2 -.3 -0.5
CepeLrol/Sonagas deposiLs abroad 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
MoneLary secLor -5.6 -35.6 27.4 9. -7.0 2.7 3. .6 .0 -5.0 -.5
DeposiLs aL 8FAC -52.5 -37.2 24.4 9. -7.0 2.7 3. .6 .0 -5.0 -.5
DeposiLs aL domesLic banks 0.8 .6 3. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Loans 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
NeL lending 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Shares and oLher equiLy 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
NeL acquisiLion o equiLies 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
OLher inancing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
NeL incurrence o liabiliLies 5.0 3.0 4.5 .3 -.4 2.5 -8.5 -8.9 -7.4 -0. -0.
DomesLic 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Foreign 5.0 3.0 4.5 .3 -.4 2.5 -8.5 -8.9 -7.4 -0. -0.
Loans 5.2 3.2 4.9 .2 . 9.0 .0 0.0 0.0 0.0 0.0
AmorLizaLion (-) -0.2 -0.2 -0.4 0. -2.5 -6.5 -9.5 -8.9 -7.4 -0. -0.
FxcepLional inancing 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Frrors and omissions -. -.6 3.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Memorandum iLems.
1ax revenue 57.4 35.9 36.7 29.8 35.5 3.9 43. 39.6 35.5 29.2 28.0
OLher revenue 92.7 90.2 .3 99.0 07.7 69.9 95.0 83.2 69.2 58.8 48.9
Overall iscal balance (billions o CFA rancs) -459 -366 82 70 -228 6 88 50 33 -74 -55
Percent cj CDP -9.4 -6.0 .0 .9 -2.5 0. .0 0.6 0.4 -2. -0.7
3
(billions o CFA rancs) -2,595 -2,23 -2,476 -2,279 -2,996 -,97 -2,749 -2,609 -2,338 -2,265 -,978
Nominal CDP (billions o CFA rancs) 4,890 6,073 7,93 9,035 9,035 8,965 8,965 8,785 7,978 8,72 7,743
Nominal non-hydrocarbon CDP (billions o CFA rancs) ,578 ,705 ,925 2,80 2,80 2,39 2,39 2,470 2,622 2,789 2,978
2
3

.IPM< VIY "ZDI;9G?IM /D?: K<N9@?;9G_ (9GN9GI;?9: 1DGL<_[ 344Xg5c
(8illions o CFA rancs, unless oLherwise speciied, end o period)
2009 200 20 202 203 204 205 206 207
Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec.
Proj. Proj. Proj. Proj. Proj. Proj.
DeposiLory corporaLions survey
NeL oreign asseLs ,56 ,57 ,588 ,374 ,444 ,457 ,45 ,30 ,270
(Millions o U.S. dollars) 3,429 2,356 3,33 2,595 2,722 2,738 2,74 2,44 2,357
NeL domesLic asseLs -882 -36 -56 -283 -33 -329 -324 -30 -32
DomesLic claims -699 84 -289 -42 -59 -40 -5 203 38
Claims on cenLral governmenL (neL) -,25 -497 -,022 -87 -942 -982 -,009 -869 -825
Claims on oLher secLors 426 58 733 829 883 942 ,004 ,073 ,44
OLher iLems (neL) -84 -220 -226 -24 -272 -289 -320 -333 -350
8road money liabiliLies 695 ,035 ,098 ,50 ,232 ,307 ,446 ,50 ,596
Currency ouLside deposiLory corporaLions 27 69 225 236 253 268 296 309 327
DeposiLs and oLher liabiliLies included in broad money 568 866 873 94 980 ,039 ,49 ,20 ,269
Memorandum iLems.
CPl inlaLion (average annual) 5.7 5.3 4.8 5.5 5.0 5.4 5.2 5.0 4.7
8road money (M2, annual percenLage change) 8.8 48.9 6. 4.7 7. 6. 0.6 4.5 5.7
MoneLary base (M8, annual percenLage change) 57.0 20.2 4.9 -7.8 -0.3 -4. -7.5 -.0 0.9
CrediL Lo Lhe privaLe secLor (annual percenLage chage) .0 33.7 30.8 3.9 6.7 6.8 6.7 7.0 6.8
CrediL Lo Lhe privaLe secLor (percenL o non-hydrocarbon CDP) 25.5 3.5 36.5 36.7 36.8 36.9 37.2 37.4 37.4
8road money (percenL o overall CDP) 4.2 7.0 3.8 2.7 3.7 4.9 8. 8.5 20.6
velociLy (Overall CDP/end-o-period M2) 7.0 5.9 7.2 7.9 7.3 6.7 5.5 5.4 4.8
velociLy (Non-hydrocarbon CDP/end-o-period M2) 2.3 .6 .8 .9 .9 .9 .8 .8 .9
Reserve money mulLiplier (M2/8M) .4 .8 .6 .9 2.0 2.2 2.6 2.8 2.9
Currency/M2 raLio 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Lending raLe
(annual average, percenL) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
DeposiL raLe (annual average, percenL) 3.3 3.3 3.3 n.a. n.a. n.a. n.a. n.a. n.a.
Sources. 8FAC and lMF sLa esLimaLes and projecLions.

Lending raLe is noL regulaLed by 8FAC, beginning July 2008.

.IPM< VPY "ZDI;9G?IM /D?: (<:;GIM %I:A I:C *;S<G K<N9@?;9G_ (9GN9GI;?9:@ 1DGL<_@[
344Xg5c
(8illions o CFA rancs, unless oLherwise speciied, end o period)
2009 200 20 202 203 204 205 206 207
Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec.
Proj. Proj. Proj. Proj. Proj. Proj.
CenLral bank survey
NeL oreign asseLs 455 28 524 326 398 46 403 262 220
(Millions o U.S. dollars) 396 2298 3006 2504 2637 266 2624 2350 2264
NeL domesLic asseLs -970 -545 -854 -708 -783 -826 -857 -72 -675
Claims on cenLral governmenL (neL) -975 -340 -809 -657 -729 -769 -795 -656 -62
Claims on oLher deposiLory corporaLions 0 0 0 0 0 0 0 0 0
Claims on oLher secLors 0 0 0 0 0 0 0 0 0
OLher iLems (neL) 5 -205 -45 -5 -54 -58 -6 -65 -62
MoneLary base 485 583 670 67 66 590 546 54 546
Currency in circulaLion 27 69 225 236 253 268 296 309 327
LiabiliLies Lo oLher deposiLory corporaLions 373 428 470 38 362 322 249 23 28
Currency 6 4 25 28 22 08 84 78 73
DeposiLs 357 44 444 253 240 23 65 53 45
LiabiliLies Lo oLher secLors
OLher deposiLory corporaLions survey
NeL oreign asseLs 06 29 65 48 45 4 49 48 50
(Millions o U.S. dollars) 233 58 28 9 86 77 9 90 93
NeL domesLic asseLs 46 837 808 806 84 89 78 822 86
Claims on cenLral bank 373 428 470 38 362 322 249 23 28
Currency 6 4 25 28 22 08 84 78 73
Reserve deposiLs and securiLies oLher Lhan shares 357 44 444 253 240 23 65 53 45
Required reserves 0 0 0 0 0 0 0 0 0
Fxcess reserves 357 44 444 253 240 23 65 53 45
OLher claims 0 0 0 0 0 0 0 0 0
DomesLic claims 276 424 520 65 670 729 79 860 93
Claims on governmenL (neL) -50 -57 -23 -23 -23 -23 -23 -23 -23
Claims 2 3 6 5 5 5 5 4 4
LiabiliLies 52 60 29 29 29 28 28 28 28
Claims on oLher secLors 426 58 733 829 883 942 004 073 44
Public enLerprises 22 24 27 28 29 29 30 30 3
PrivaLe secLor 402 538 703 80 854 93 974 043 3
OLher iLems (neL) -88 -5 -8 -9 -28 -23 -259 -268 -288
DeposiL liabiliLies Lo nonbank residenLs 568 866 873 94 980 039 49 20 269
Sources. 8FAC, and lMF sLa esLimaLes and projecLions


.IPM< WY "ZDI;9G?IM /D?: +?:I:Q?IM 19D:C:<@@ ':C?QI;9G@ H9G ;S< %I:A?:O 1<Q;9G[ 344bg55
(PercenL)
2006 2007 2008 2009 200 20
CapiLal
RegulaLory capiLal Lo risk-weighLed asseLs
, 2
3.0 8.6 5.3 9.3 6.6 7.4
1ier capiLal Lo risk-weighLed asseLs
2
.8 7.4 4.0 8.0 5.4 6.2
CapiLal Lo LoLal asseLs
3
7.6 8.3 7.9 0.4 0.9 2.9
AsseL qualiLy
Non-perorming loans (gross) Lo LoLal loans (gross) 4.3 .3 9.9 .8 7.2 5.5
Loan loss provisions Lo non-perorming loans 84.8 94.0 76.9 64.4 88.6 0.7
Farnings and proiLabiliLy
ReLurn on asseLs
4
.2 .0 .7 .3 .5 0.6
ReLurn on equiLy
5
7.7 3.9 23.9 8.5 4.9 5.4
LiquidiLy
RaLio o neL loans Lo LoLal deposiLs
6
66.8 64.5 47.0 44.0 45.4 37.4
Source. CO8AC.
CurrenL year proiLs are excluded rom Lhe deiniLion o regulaLory capiLal, ollowing Lhe 8asel l capiLal accord guidelines. Ceneral provisions are
included in 1ier 2 capiLal up Lo an amounL equal Lo .25% o risk-weighLed asseLs. RegulaLory capiLal is Lhe sum o 1ier capiLal, and Lhe minimum o
1ier and 1ier 2 capiLal.
2
1he risk-weighLed asseLs are esLimaLed using Lhe ollowing risk weighLs. 0% - cash reserves in domesLic and oreign currency and claims on Lhe
cenLral bank, 00% - all oLher asseLs.
3
CurrenL year proiLs are excluded rom Lhe deiniLion o capiLal (i.e., shareholders' unds).
4
1he raLio o aLer-Lax proiLs Lo Lhe average o beginning and end-period LoLal asseLs. 1he numbers or 2007 are preliminary and Lo be conirmed by
Lhe auLhoriLies.
5
1he raLio o aLer-Lax proiLs Lo Lhe average o beginning and end-period shareholders' unds (excluding currenL-year proiLs). 1he numbers or 2008
are preliminary and Lo be conirmed by Lhe auLhoriLies.
6
lncluding governmenL deposiLs.
-::<= 'Y -:QS9G?:O +?@QIM #9M?Q_> "#$%&'( *+,-'.&/#$-
0123/&2&/4 3'. *'5#$&'( 6&5732 8#5/3&'3%&2&/4
R?;S M?E?;<C NG9L<: S_CG9QIGP9: G<@<GL<@[ ;S< ID;S9G?;?<@ :<<C ;9 IC9N; I H?@QIM @;GI;<O_ ;SI;
PIMI:Q<@ :<IGF;<GE C<L<M9NE<:; :<<C@ IOI?:@; H?:?;< G<@9DGQ<@[ JS?M< EI?:;I?:?:O
EIQG9<Q9:9E?Q @;IP?M?;_ I:C P99@;?:O H?:I:Q?IM EI:IO<E<:; N<GH9GEI:Q<Y 1he governmenL
has in Lhe pasL considered dierenL mechanisms Lo promoLe iscal susLainabiliLy, such as using
cauLious oil price projecLions in budgeL planning and inancing currenL expendiLure only wiLh non-
hydrocarbon Laxes. lL has also looked aL Lhe implicaLions o a permanenL income ramework and Lhe
esLablishmenL o a sovereign wealLh und. 8uL Lhese consideraLions have noL yielded a irm
ramework LhaL would guide iscal policy over a susLained period.
': NGIQ;?Q<[ ;J9 EI?: OD?C?:O NG?:Q?NM<@ @<<E ;9 SIL< D:C<GN?::<C G<Q<:; PDCO<; NG9N9@IM@.
FirsL, Lhere has been a sLrong desire Lo ollow Lhe spending imperaLives seL ouL in Lhe NaLional
DevelopmenL Plan 2008-20 and Lo meeL consLrucLion deadlines or major inLernaLional evenLs.
Second, budgeL proposals have soughL Lo deliver aL leasL an overall iscal surplus, in line wiLh
CFMAC convergence commiLmenLs on Lhe basic iscal balance.
.9 ?:@DMI;< NDPM?Q @N<:C?:O HG9E L9MI;?M?;_ ?: 9?M G<L<:D< G<ZD?G<@ H?@QIM E<QSI:?@E@ ;SI; QI:
<@;IPM?@S I:C EI?:;I?: @;G9:O H?@QIM PDHH<G@ I:C <HH<Q;?L<M_ EI:IO< 9?M G<L<:D<@ 9L<G ;?E<Y
WiLhouL such iscal buers, governmenL spending is likely Lo rise and all wiLh global price
developmenLs, Lhus ampliying economic cycles aL home and impeding progress Loward inclusive
growLh.
"ZDI;9G?IM /D?:<I QDGG<:;M_ SI@ H?@QIM PDHH<G@ @DHH?Q?<:; ;9 NG9;<Q; ;S< PDCO<; HG9E 9?M NG?Q<
L9MI;?M?;_ 9L<G I ;SG<<F_<IG S9G?i9:[ NG9L?C<C ;S< H?@QIM Q9:@9M?CI;?9: NG9a<Q;<C ?: ;S?@ G<N9G;\@
PI@<M?:< HGIE<J9GA ?@ D:C<G;IA<:Y SLa esLimaLes based on value-aL-risk analysis suggesLs LhaL
resources aL Lhe 8FAC, LogeLher wiLh Lhe governmenL's oreign currency deposiLs in commercial
banks, provide suicienL liquidiLy Lo oseL Lhe impacL o mosL conceivable lucLuaLions in oil prices
or Lhis period. 1he minimum required size o Lhe sLabilizaLion buer is esLimaLed by simulaLing
!"#$%&'( *+ ",$-.*!'-& /$'0"-

12 '0."!0-.'*0-& 3*0".-!4 +$05
6789:;67<9;==> 7:? <@A;97 8B C<BB?D?E7 8<= AD<9?6 8E 7:? B<69;= ;998FE76 F6<EG ; 6A?9<B<?C BD;@?H8DI 8B
7:? 8<= AD8CF97<8E AD8B<=? ;EC B<69;= D?G<@?J
K
.:? 8<= AD<9? <6 6<@F=;7?C LMNNN 7<@?6J
! #$%&'( %)%*'$+',$($*- '+'(-%$% ,'%./ 0+ *1. #2'3.4025 /.%&2$,./ $+ 2.&.+* 678 4025 0+
2.%0)2&.92$&1 /.:.(0;$+< &0)+*2$.%
=
%)<<.%*% *1.2. $% %)##$&$.+* #$%&'( 2003 *0 3'$+*'$+ '
30/.2'*.(- 1$<1 (.:.( 0# $+:.%*3.+* 0:.2 *1. 3./$)3 *.23 4$*10)* >.0;'2/$?$+< #$%&'(
%*',$($*-@ .:? ;E;=>6<6 B8==8H6 7:? 67?A6 8F7=<E?C O?=8HP
!"#$%&'"( $ *+,'-*.#+/* 0$#( 12/ "0+3,'34 523"'"#+3# 6'#( $ ,+5&'3'34 0$#( 12/ #(+ 323./+"2-/5+
0/'*$/7 1'"5$& ,+1'5'# 89:;<=> Q;R<EG 98@A=?7?C 7:? B<D67 A:;6? 8B 7:? 05# ;<@?C ;7 OF<=C<EG FA
O;6<9 <EBD;67DF97FD?M 7:? ;F7:8D<7<?6 9;E E8H ;998@@8C;7? ; 6<GE<B<9;E7 69;=<EGSC8HE <E 9;A<7;=
6A?EC<EG <E 2NK2T2NJ .:<6 H8F=C ;=68 OD<EG 9;A<7;= 6A?EC<EG @8D? <E =<E? H<7: 7:? 98FE7D>U6
?V?9F7<8E ;EC ;O68DA7<8E 9;A;9<7> ;EC ;==8H D88@ B8D GD8H7: <E 9FDD?E7 6A?EC<EGJ .:?
<==F67D;7<R? ;66F@A7<8E <E98DA8D;7?C :?D? <6 7:;7 7:? =?R?= 8B 9;A<7;= 6A?EC<EG H<== :;=R? D?=;7<R?
78 E8ES:>CD89;DO8E /5# 8R?D 7:? E?V7 B8FD >?;D6M ?67;O=<6:<EG ; O;6?=<E? 69?E;D<8 7:;7 A?D@<76
; A:;6?CM >?7 6<GE<B<9;E7M B<69;= 98E68=<C;7<8E CFD<EG 7:? 6?98EC :;=B 8B 7:? 05#M D?CF9<EG 7:?
0!#5 BD8@ K1L A?D9?E7 8B E8ES:>CD89;DO8E /5# <E 2NK1 78 1W A?D9?E7 <E 2N2NJ .:<6 H8F=C ;=68
I??A E?7 B<E;E9<;= ;66?76 A86<7<R? ;EC :?=A 78 6?9FD? ?V7?DE;= 67;O<=<7>J
<+#+/*'3+ #(+ '*0$5# 21 %2#( #(+ "5$&'34 -0 21 '3?+"#*+3# $3, "-%"+@-+3# 523"2&',$#'23 23 /+$&
4/26#(> '7 <6 ?VA?97?C 7:;7 7:? 69;=<EG FA 8B <ER?67@?E7 <E 2NNXTK2 H<== :;R? ; A86<7<R? <@A;97 8E
7:? AD8CF97<R<7> 8B 7:? AD<R;7? 6?978D ;EC O8867 6:8D7SDFE GD8H7:J .:<6 H<== =<@<7 7:? C<D?97
E?G;7<R? <@A;97 8E ;97<R<7> 8B 7:? 98E68=<C;7<8E 7:;7 <6 ;66F@?C 78 B8==8HJ .:? E?G;7<R? <@A;97
H<== ;=68 O? =<@<7?C O?9;F6? B8D?<GE 98@A;E<?6 ;EC =;O8D :;R? O??E D?6A8E6<O=? B8D 98E67DF97<EG
@F9: 8B 7:? AFO=<9 <ER?67@?E7J !?;= E8ES:>CD89;DO8E GD8H7: <6 ;66F@?C 78 D<6? 78 ; A?;I 8B
LJN A?D9?E7 <E 2N21 ;EC 7:?E 6=8H C8HE 78 ; =8EGS7?D@ GD8H7: 8B 1JN A?D9?E7J

K
*<= AD<9?6 ;D? @8C?=?C F6<EG ;E -!YKZ AD89?66 <E =8G;D<7:@6J .:? 9FDD?E7 >?;DU6 8<= AD<9? <6 ?67<@;7?C F6<EG 7:?
AD?R<8F6 >?;D AD<9? ;EC ; D;EC8@ R;D<;O=? Y ZP &248;
#
=A B &248;
#.C
=B
#
M H:?D? [NJNLXM [NJ\NM ;EC

]0YNMNJ2\ZJ
.:?6? A;D;@?7?D6 H?D? ?67<@;7?C F6<EG C;7; BD8@ 7:? %# ^7;7<67<9;= !?R<?H 2NKK 98R?D<EG K\W\T2NKN 98E7D8==<EG B8D
; A866<O=? D?G<@? 9:;EG? <E 7:? 8<= @;DI?7 <E K\_`J
2
3;9D8?98E8@<9 #8=<9> +D;@?H8DI6 B8D !?68FD9?S!<9: 5?R?=8A<EG (8FE7D<?6 Y'3+ #8=<9> #;A?Da -FGF67 2`M 2NK2ZJ
!"#$%&'( *+ ",$-.*!'-& /$'0"-
'0."!0-.'*0-& 3*0".-!4 +$05 11

A',(. 6@B@ CD)'*02$'( E)$+.'F G.(.&*./ C&0+03$& 6+/$&'*02%H =IB=9JI
2NK2 2NK1 2NKW 2N2N 2N2L 2N1N
!?;= E8ES:>CD89;DO8E /5# KKJ_ 2JX 2J` `J` `JN 1J2
!?;= :>CD89;DO8E /5# SKJX S`J2 1JK SKLJ\ SKWJL SKWJW
!?;= /5# 2J_ SKJ_ 2JX S`JX SNJ\ KJW
*<= AD<9? Y$J^J C8==;D6 ; O;DD?=Z KN2 KNK X\ XL XL XL
!?@;<E<EG D?6?DR?6 Y@<==<8E %O=6JZ X2\ _1` `_2 2LK KK1 WN
(8E6F@?D AD<9?6 Y;EEF;= ;R?D;G?Z LJL LJN LJN 1J2 2JX 2JL
Y-EEF;= A?D9?E7 9:;EG?M FE=?66 87:?DH<6? <EC<9;7?CZ
^8FD9?P '3+ 67;BB 9;=9F=;7<8E6

!"#'*$#+ #(+ &234./-3 &+?+& 21 #(+ 9:;< 3++,+, #2 *$'3#$'3 $ 4'?+3 &+?+& 21 6+$&#(>
1
-B7?D 2N2NM <7
<6 ;66F@?C 7:;7 7:? 0!#5 H8F=C C?9=<E? GD;CF;==> 78 D?;9: ; =?R?= 8B bF67 8R?D K A?D9?E7 8B E8ES
:>CD89;DO8E /5#M H:<9: H8F=C O? 98E6<67?E7 H<7: @;<E7;<E<EG 787;= E?7 H?;=7: ;7 ;O8F7
KNN A?D9?E7 8B E8ES :>CD89;DO8E /5# <E 2N1NJ 'E7?D?67 D;7?6 ;D? ;66F@?C 78 ;R?D;G?
WJL A?D9?E7M K A?D9?E7 ;O8R? 7:? =8EGSDFE GD8H7: 8B E8@<E;= /5# Y+<GFD? 'JKZJ

1
0?7 H?;=7: <6 C?B<E?C ;6 7:? 6F@ 8B 7:? AD?6?E7 R;=F? 8B BF7FD? 8<= D?R?EF? A=F6 E?7 B<E;E9<;= ;66?76J +8D ; B8D@;=
C?B<E<7<8E 8B 7:? E?7 H?;=7:S67;O<=<c<EG =?R?= 8B 7:? 0!#5M 6?? 7:? ;EE?V 78 d3;9D8?98E8@<9 #8=<9> +D;@?H8DI6 B8D
!?68FD9?S!<9: 5?R?=8A<EG (8FE7D<?6e Y'3+ #8=<9> #;A?Da -FGF67 2`M 2NK2ZJ


+?ODG< 'Y 5Y "ZDI;9G?IM /D?: 09:F!<@9DGQ< #G?EIG_ K<H?Q?;[ +?:I:Q?IM
-@@<;@ I:C R<IM;S
(PercenL o non-hydrocarbon CDP)
0
00
200
300
400
500
600
700
800
900
202 204 206 208 2020 2022 2024 2026 2028 2030 2032 2034
0
20
40
60
80
00
20
40
60
Non-oil primary deiciL (leL hand axis)
1oLal wealLh (righL hand axis)
NeL inancial asseLs (righL hand axis)

Source. lMF sLa calculaLions.

Cclibrcte cssumticns cj jisccl clicy tc ensure ccnsistency with the jisccl sustcincbility jrcmewcrl
cssumeJ. An illusLraLive iscal composiLion is presenLed in 1able l.2. RelecLing lower levels o
revenue in Lhe long Lerm, because o Lhe depleLion o hydrocarbon wealLh, governmenL capiLal
spending declines Lo around 5 percenL o non-hydrocarbon CDP. 1his is similar Lo Lhe raLio
observed in oLher high-income economies and would ollow more Lhan Lwo decades o rising
governmenL capiLal sLock. AL Lhe same Lime, primary currenL expendiLure is expecLed Lo increase
(Lo around 25 percenL o non-resource CDP), driven by Lhe higher cosLs o uLilizing Lhe
enhanced capiLal sLock and improved provision o social services. A subsLanLial increase in non-
resource revenue mobilizaLion (almosL doubling rom 5 Lo 30 percenL o non-hydrocarbon
CDP) will be required Lo cover Lhis level o expendiLure when hydrocarbon revenues all. 1his
would likely enLail a comprehensive approach Lo revenue mobilizaLion LhaL would include
reorms o Lax adminisLraLion and enorcemenL aimed aL increasing Lax collecLion (Lhe process is
already sLarLing in Lhe cusLoms area), Lhe cenLralizaLion o Lax auLhoriLy and collecLion, and Lhe
curLailmenL o Lax exempLions (in line wiLh Lhe 203 budgeL decree) and broadening Lhe income
Lax base.

.IPM< 'Y3Y "ZDI;9G?IM /D?: 1<M<Q;<C +?@QIM I:C +?:I:Q?IM ':C?QI;9G@ 3455g34`4
20 202 203 206 2020 2025 2030
Non-hydrocarbon revenue 3.7 6.5 6.3 4.3 3.4 9.5 29.9
Primary expendiLure 42.3 5.3 32.4 93.5 49. 3.7 30.9
CapiLal 7.7 29.3 09.7 69.0 23.4 5.9 5.5
Primary currenL 24.6 22.0 22.7 24.5 25.7 25.8 25.4
Non-hydrocarbon primary balance (NRP8) -28.6 -34.8 -6. -79.2 -35.7 -2.2 -.
Hydrocarbon revenue 34.3 26.0 2.2 73.5 33. 0.2 2.5
NeL inancial asseLs 39.7 2.4 26.7 26.3 .8 95.4 95.4
NaLural hydrocarbon wealLh 0.0 72.4 592.3 324.9 27.3 36.3 3.8
1oLal wealLh 930.0 829.3 79.0 45.2 239. 3.7 09.2
(PercenL o non-resource CDP)
Sources. FquaLoguinean auLhoriLies, and lMF sLa esLimaLes and projecLions.

-@ ;S< <=<GQ?@< IP9L< C<E9:@;GI;<@[ JS?M< I OGICDIM Q9:@9M?CI;?9: 9H QIN?;IM <=N<:C?;DG< ;SI;
J9DMC IMM9J Q9ENM<;?9: 9H ;S< 0K# QI: P< Q9:@?@;<:; J?;S H?@QIM @D@;I?:IP?M?;_[ ?; J9DMC <:;I?M
CGIJ?:O C9J: I EIa9G?;_ 9H ;S< NDPM?Q @<Q;9G\@ <=?@;?:O J<IM;SY 1his policy, i coupled wiLh
reorms aimed aL sLrengLhening public inancial managemenL and Lransparency, could Lransorm
inancial wealLh inLo growLh-enhancing physical and social inrasLrucLure. SusLainabiliLy o Lhe iscal
posiLion in Lhe long run would also require a pronounced increase in non-oil revenues.
-::<= ''Y K9J:@?C< 1Q<:IG?9 -:IM_@?@

': ;S< EI?: NG9a<Q;?9:@ ?: ;S?@ G<N9G;[ 9?M NG?Q<@ IG< I@@DE<C ;9 C<QM?:< 9:M_ E9C<@;M_ ?: G<IM
;<GE@ 9L<G ;S< E<C?DE ;<GE[ Q9:@?@;<:; J?;S I @;<IC_ PD; E9C<@; G<Q9L<G_ ?: ;S< J9GMC
<Q9:9E_ I@ 9D;M?:<C ?: ;S< PI@<M?:< QI@< 9H ;S< 91$2. *71'1:&7 ;#/211< ]R"*^[ *Q;9P<G
3453Y However, among Lhe more prominenL global risks idenLiied in Lhe WFO, is a "lower global
growLh" scenario LhaL would depress demand or commodiLies over a susLained period and lead Lo
subsLanLially lower commodiLy prices, parLicularly or energy. 8y 206, global oil prices would be
30 percenL below Lhe levels o Lhe baseline case.
.S< ?ENM?QI;?9:@ 9H ;S< jM9J<G OM9PIM OG9J;Sk @Q<:IG?9 H9G ;S< <Q9:9E_ 9H "ZDI;9G?IM /D?:<I
J9DMC P< @DP@;I:;?IM[ O?L<: ;S< C<N<:C<:Q< 9H P9;S O9L<G:E<:; G<L<:D< I:C H9G<?O:
QDGG<:Q_ <IG:?:O@ 9: S_CG9QIGP9: NG9CDQ;?9:Y lndeed, i governmenL spending were Lo ollow
Lhe same paLh as in Lhe main projecLions in Lhis reporL, simulaLions suggesL Lhe reducLion in
hydrocarbon receipLs would drain Lhe bulk o governmenL savings and oicial reserves wiLhin ive
years, wiLh boLh alling Lo abouL 20 percenL o Lheir 202 levels. ln conLrasL, provided conidence was
mainLained, Lhe impacL on CDP would be relaLively small because, ouLside Lhe hydrocarbon secLors,
Lhe economy is noL direcLly dependenL Lo any signiicanL exLenL on world demand, invesLmenL, or
Lransers, and lower energy prices would buLLress invesLmenL and consumpLion.
-@@DE?:O[ S9J<L<G[ ;SI; ;S< O9L<G:E<:; J9DMC ?: HIQ; QD; @N<:C?:O ?: G<@N9:@< ;9 ;S< M9J<G
9?M G<L<:D< [ ;S< CGI?: 9: @IL?:O@ I:C G<@<GL<@ J9DMC P< Q9:@?C<GIPM_ G<CDQ<CfPD; I; I Q9@;
?: ;<GE@ 9H C9E<@;?Q C<EI:C I:C S<:Q< /K#Y ln Lhe example below, expendiLure is reduced in
parallel Lo Lhe all in prices, buL less Lhan proporLionaLely. 1his miLigaLes Lhe poLenLial impacL on
CDP, buL is noL enough Lo preserve iscal balance. Under such a scenario, governmenL savings would
mainLain abouL 70 percenL o iLs 202 levels wiLhouL a subsLanLial decline o real CDP growLh.

-M;<G:I;?L< 1Q<:IG?9 J?;S #9M?Q_ !<IQ;?9:
*?M #G?Q< -@@DEN;?9:@
(U.S. dollars a barrel)
!<IM /K# /G9J;S
(PercenL)
0
20
40
60
80
00
20
202 203 204 205 206 207
8aseline AlLernaLive scenario
-0
-8
-6
-4
-2
0
2
4
6
8
0
202 203 204 205 206 207

*L<GIMM +?@QIM %IMI:Q<
(PercenL o CDP)

(DGG<:; -QQ9D:;
(PercenL o CDP
-6
-4
-2
0
2
4
6
202 203 204 205 206 207

-25
-20
-5
-0
-5
0
202 203 204 205 206 207

*HH?Q?IM !<@<GL< ?: %"-(
(Millions o U.S. dollars

/9L<G:E<:; 1IL?:O@
(8illions o CFAF)
0
200
400
600
800
000
200
400
202 203 204 205 206 207
0
500
000
500
2000
2500
3000
202 203 204 205 206 207

Source. lMF sLa calculaLions.

!"#$%&'( *+ ",$-.*!'-& /$'0"-
1.-++ !"#*!. +*! .2" 3453 -!.'(&" '6 (*01$&.-.'*0
7'0+*!8-.'*0-& -00"9

"#$%&#$' ()

*+$ ,-#./&0 1$%&#23$02
4.0 /506782&2.50 9.2+ 52+$# '$%&#23$026:

!"&-.'*01 :'.2 .2" +$0; <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< 3
!"&-.'*01 :'.2 .2" :*!&; %-0= /!*$# <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< >
1.-.'1.'(-& '11$"1 <<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<< ?

(*0."0.1
1$/$3;$# <=> ?@<?
!"#$%&'( *+ ",$-.*!'-& /$'0"-
! '0."!0-.'*0-& 1*0".-!2 +$03
43! 1566578 #9:;98< -667;=<578
09< ;>?>6=<5@9
=667;=<578
ABCDE BFFCFF
G76H58IJ DBCBK KLCKD
"#$%&'()* ,'&- &-# ./)0
M-J 7N 07@9?O9: AFP DFBDQ

'1 234536789: *;<;=7R S7589HR BDTDDTBEKE -:<5;69 U'''

''1 >3?36<@ "37A=6B37 %BBA=?;R

'''1 *0" 03:<6;43?;C

'D1 (=;7;<?E9?F G=6B8<737 <?E $A<?7C 0789

D1 $<;37; .9?<?B9<@ %66<?F343?;7R

D'1 G6AH3B;3E G<I43?;7 ;A ;83 .=?E
M43! 1566578V O=J9H 78 9W5J<58I >J9 7N :9J7>:;9J =8H X:9J98< Y76H58IJ 7N 43!JQR

43! 1566578 #9:;98< ,>7<=
,>7<= ZDCAF BFFCFF
.7<=6 Y76H58IJ 7N
;>::98;[
\LCA] EFCZE
!9J9:@9 X7J5<578
58 <Y9 +>8H
\CEA EC\D
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3=<9 7N
-::98I9?98<
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-?7>8<
-XX:7@9H
M43! 1566578Q
-?7>8< 3:=^8
M43! 1566578Q
"(+ M+7:?9:6[ #!/+Q +9OC FAP BEEA +9OC FDP BEEK BDC]] \CKF
4-+ 39;C FLP BE]] 39;C FKP BEEB BDC]] ECDF
4<=8H_%[ S>8C D]P BE]Z S>8C DLP BE]K ECDF ZC\F
DFBA DFB\ DFBZ DFBK
#:58;5X=6
(Y=:I9JT'8<9:9J< FCFB FCFB FCFB FCFB
.7<=6 FCFB FCFB FCFB FCFB
!"#$%&'( *+ ",$-.*!'-& /$'0"-
'0."!0-.'*0-& 1*0".-!2 +$03 J
D''1 '4:@343?;<;9A? AK -'GL '?9;9<;9M3R 07< -XX65;=O69

D'''1 '4:@343?;<;9A? AK 2=@;9@<;36<@ 035; "3@93K '?9;9<;9M3 N20"'OC 07< -XX65;=O69

'P1 '4:@343?;<;9A? AK GA7;QL<;<7;6A:83 035; "3@93K NGL0"OC 07< -XX65;=O69

P1 *<K3F=<6E %7737743?;7C .Y9 %=8` 7N <Y9 (98<:=6 -N:5;=8 4<=<9J M%"-(Q 5J <Y9 :9I578=6
;98<:=6 O=8`C .Y9 ?7J< :9;98< J=N9I>=:HJ =JJ9JJ?98< 7N <Y9 %"-( ^=J ;7?X69<9H 78 S>6[ KP DFFEC
.Y9 N58H58IJ 7N <Y5J =JJ9JJ?98< 58H5;=<9H <Y=< 5?X69?98<=<578 7N X:9@57>J J=N9I>=:HJ
:9;7??98H=<578J 78 N58=8;5=6 :9X7:<58IP 58<9:8=6 =>H55:9H N>:<Y9: =;<578J <7
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Public nformation Notice (PN) No. 13/37
FOR MMEDATE RELEASE
March 28, 2013

IMF Executive Board ConcIudes 2012 ArticIe IV ConsuItation with
EquatoriaI Guinea

On January 11, 2013, the Executive Board of the nternational Monetary Fund (MF) concluded
the 2012 Article V consultation with Equatorial Guinea.
1

Background

Driven by hydrocarbon extraction, which accounts for about three-quarters of estimated gross
domestic product (GDP), Equatorial Guinea has the highest level of per capita income in sub-
Saharan Africa. Over the last five years, a burst in public investment under the 200820
National Development Plan (NDP), largely financed by hydrocarbon revenue, has upgraded
transport and power infrastructure and established several national prestige facilities. The
resulting stimulus to construction is estimated to have helped raise average growth rates in the
non-hydrocarbon sector to about 15 percent.

Reducing poverty and generating sustained productive private sector activity remain urgent
challenges. The most recent poverty estimates suggest that three-quarters of the population
were living below the national poverty line in 2006. Reflecting high government sector demand
and limited production capacity, inflation has remained above the regional convergence criterion
(3 percent), eroding external competitiveness.

"
Under Article V of the MF's Articles of Agreement, the MF holds bilateral discussions with
members, usually every year. A staff team visits the country, collects economic and financial
information, and discusses with officials the country's economic developments and policies. On
return to headquarters, the staff prepares a report, which forms the basis for discussion by the
Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the
Board, summarizes the views of Executive Directors, and this summary is transmitted to the
country's authorities. An explanation of any qualifiers used in summings up can be found here:
http://www.imf.org/external/np/sec/misc/qualifiers.htm.
nternational Monetary Fund
700 19
th
Street, NW
Washington, D. C. 20431 USA

2

Higher oil prices restored the overall fiscal balance to a small surplus in 2011 despite
government capital spending levels that continued to exceed non-hydrocarbon GDP. The
external current account also improved, but remained in deficit because of high imports of
capital goods and hydrocarbon earnings to overseas parent companies. The external deficit
was largely financed by foreign direct investment. The government deposited CFAF 474 billion
at the Bank of Central African States (BEAC) and other government foreign currency deposits,
held at commercial banks in contravention of regional surrender requirements, fell sharply.

Perceptions of an unwelcoming business climate continue to deter investment in the non-
hydrocarbon sector and broader governance issues remain of considerable concern to the
international community. Limitations on civil society participation undermined Equatorial
Guinea's unsuccessful candidacy in the Extractive ndustries Transparency nitiative (ET).
Macroeconomic and socio-demographic data are also deficient in quality, timing and coverage,
and even the most basic data are very hard for the public to access.

With hydrocarbon production now past its peak, according to official projections, the outlook for
GDP is slow or negative growth over the medium term. To address fiscal and external
sustainability concerns, fiscal policy will need to target a declining path for the non-resource
primary fiscal deficit, which stood at 130 percent of non-hydrocarbon GDP in 2011. There
should nevertheless be room for higher pro-poor current spending because government
investment is expected to be significantly lower in the next phase of the NDP.

Executive Board Assessment

Executive Directors noted that, despite substantial revenues from oil, natural gas, and
derivative production, reducing poverty remains an urgent challenge. Accordingly, Directors
encouraged the Equatorial Guinea authorities to improve policy frameworks and undertake
further reforms in a variety of areas to promote inclusive growth and bolster the business
environment.

Directors considered that the adoption of a transparent medium-term fiscal framework would
anchor spending decisions in the face of oil price volatility and the expected decline in
hydrocarbon production. They recommended targeting a path for the non-resource primary
balance that would establish fiscal buffers and reflect financing and absorption constraints. n
this context, Directors saw the need to reduce public investment levels, rebalance public
spending toward social programs, better target subsidies, broaden the revenue base, and
enhance tax collection. More broadly, they encouraged the authorities to strengthen public
financial management.

Directors agreed that scaling down public works after the recent surge would safeguard
external stability. They observed that infrastructure-related imports are a major factor in the

3

high deficit in the external current account. At the same time, the pressure on domestic
demand has kept inflation rates above those in other Central African Economic and Monetary
Community (CEMAC) member countries, leading to a substantial appreciation of the real
effective exchange rate and a loss of external competitiveness.

Directors welcomed Equatorial Guinea's recent contributions to the regional pool of official
foreign exchange reserves, but noted that the bulk of the government's foreign currency
deposits remains outside the BEAC. They urged the authorities to hold these deposits at the
BEAC to comply with the monetary union's surrender obligations.

Directors underscored that improving the business climate is critical to fostering private sector
participation in the economy and broad-based growth. They called for stepped up efforts to
strengthen governance and improve workers' skills and health. Promoting greater access to
credit for small- and medium-sized enterprises should also be a priority. Directors looked
forward to Equatorial Guinea's reinvigorated efforts to participate in the Extractive ndustries
Transparency nitiative.

Noting the persistent inadequacy of economic statistics, Directors encouraged the authorities to
participate in the General Data Dissemination System and establish a publication timetable for
macroeconomic data.

Public Information Notices (PINs) form part of the MF's efforts to promote transparency of the MF's
views and analysis of economic developments and policies. With the consent of the country
(or countries) concerned, PNs are issued after Executive Board discussions of Article V consultations
with member countries, of its surveillance of developments at the regional level, of post-program
monitoring, and of ex post assessments of member countries with longer-term program engagements.
PNs are also issued after Executive Board discussions of general policy matters, unless otherwise
decided by the Executive Board in a particular case. The staff report (use the free Adobe Acrobat
Reader to view this pdf file) for the 2012 Article V Consultation with Equatorial Guinea is also available.

EquatoriaI Guinea: SeIected Economic and FinanciaI Indicators, 2009-13
2009 2010 2011 2012 2013

Est. Est. Est. Proj. Proj.
Production, prices, and money
Real GDP 0.8 -1.7 4.9 2.5 -1.7
Hydrocarbon sectors -10.8 -3.9 4.7 -1.8 -4.2
Oil and gas primary production -18.9 -2.3 2.1 -0.6 -6.1
Hydrocarbon secondary production
1
10.8 -6.9 10.0 -4.1 -0.6
Non-hydrocarbon sectors 40.9 3.0 5.5 11.1 2.8
2
58.0 75.3 100.3 102.4 101.3
Consumer prices (end of period) 5.0 5.4 4.9 5.9 5.2
Broad money 18.8 48.9 6.1 4.7 7.1
Nominal effective exchange rate (- = depreciation) -1.3 -4.5 -1.1 n.a. n.a.
Real effective exchange rate (- = depreciation) 3.1 1.1 4.0 n.a. n.a.
Production, prices, and money
Real GDP 0.8 -1.7 4.9 2.5 -1.7
Hydrocarbon sectors -10.8 -3.9 4.7 -1.8 -4.2
Oil and gas primary production -18.9 -2.3 2.1 -0.6 -6.1
Hydrocarbon secondary production
1
10.8 -6.9 10.0 -4.1 -0.6
Non-hydrocarbon sectors 40.9 3.0 5.5 11.1 2.8
2
58.0 75.3 100.3 102.4 101.3
Consumer prices (end of period) 5.0 5.4 4.9 5.9 5.2

(Percent of GDP, unless otherwise specified)
Government finance
Revenue 48.4 35.4 35.9 34.6 35.7
!" $%&'%: resource revenue 43.7 31.0 32.6 30.7 31.6
Expenditure 57.8 41.4 34.9 37.1 34.7
Overall fiscal balance after grants -9.4 -6.0 1.0 -2.5 1.0
Non-resource primary balance (percent of non-
hydrocarbon GDP)
3
-164.4 -130.9 -128.6 -137.4 -118.5
Gross government deposits (billions of CFAF) 3,367.9 3,261.9 2,961.2 2,833.8 2,730.7
ExternaI sector
Current account balance (including official transfers; - =
deficit) -20.9 -22.8 -9.3 -15.0 -10.5
Outstanding medium- and long-term public debt 5.8 5.9 8.8 8.3 8.0
Debt service-to-exports ratio (percent) 0.2 0.3 0.3 1.1 3.3
External debt service/government revenue (percent)
4
0.8 1.6 1.4 5.1 14.7
Sources: Data provided by the Equatoguinean authorities; and staff estimates and projections.
1
ncluding LNG, LPG, butane, propane, and methanol.
2
The price of oil is the average of three spot prices: dated Brent, West Texas ntermediate, and Dubai Fateh; and includes a
discount for quality.
3
Excluding oil revenues, oil-related expenditures, and interest earned and paid.
4
The rise in external debt service starting in 2012 reflects the amortization of Chinese loans under a 2006 US$2 billion credit
line from the Chinese government. The loans are earmarked for infrastructure, including four projects in electrification and
improvements to Bata harbor. Loan terms are non-concessional, carrying an interest rate of 5 percent, five years maturity
with two years grace.

Statement by Mr. !gueto Yambaye, Alternate Executive Director for
the Republic of Equatorial Guinea
1anuary 11, 2013

On behalI on my Equatorial Guinean authorities, I would like to thank staII Ior the
IruitIul dialogue held in Malabo during the 2012 Article IV Consultation. My appreciation also
goes to management, Ior the continued support oI the Fund to the development eIIorts the
authorities are undertaking. My Equatoguinean authorities are especially thankIul oI the Fund`s
valuable technical assistance (TA) which has beneIitted Equatorial Guinea in recent years.

Recent Economic Developments

Economic development in Equatorial Guinea remains mostly driven by the oil sector,
notably by gas derivatives, which partly compensate Ior the sharp decline experienced in
primary oil output. Robust investment in the construction and inIrastructure-related sectors also
contribute to economic activity. As a result, real GDP which grew by 4.9 percent in 2011 is
estimated to have decreased to 2.5 percent in 2012, with a decline oI about 1.7 percent,
projected Ior 2013, mostly due to lower output in the hydrocarbon sector. InIlation has
remained stable at single digit, although above regional average, as a result oI intense
construction activities and the related increased domestic demand. The external current account
remains in deIicit, mainly due to high level oI imports oI capital goods and services.

As regards fiscal policy, the Iocus has been to use revenue Irom oil to build and upgrade
basic inIrastructure. The inIrastructure created and upgraded has generated new opportunities
Ior private sector activity and raised living standard. As staII note, the public investment
program has been undertaken in a Iiscally responsible manner, with limited external borrowing.
As a result, the Iiscal accounts have returned to surplus in 2011, in line with CEMAC
convergence criteria.

With the culmination oI the Iirst phase oI the National Development Plan (NDP) (2008-
2012) mainly Iocused on putting in place the basic inIrastructure that would support economic
diversiIication, attention is now to tighten policy targets. Thus, the volume oI public investment
is planned to be scaled down to 2010 levels, as contemplated in the 2013 budget Iramework,
Iocusing on economic diversiIication and social sectors development.

For the medium-term, in view oI the decreasing available revenue and needed urgent
actions to productive and social sectors, my authorities are contemplating a more conservative
spending program that is closely adaptive to broad base growth. In this regard, the authorities
are giving Iull consideration to the staII`s advice and recommendations. However, a major issue
is weak capacity in Iiscal administration. My authorities are addressing this issue with Fund
technical assistance and are hopeIul that their request Ior renewal Ior the contract oI the resident
advisor will be approved soon.

"

In the monetary and financial sector, memberships in the Bank oI Central AIrican
States (BEAC) and the pegged exchange rate regime have served the economy oI Equatorial
Guinea well. Key Iundamental Iinancial indicators are sound. Additionally, limited exposure to
outside risky banking systems have also contributed to the resiliency oI the sector. Nonetheless,
steps to enhance competitiveness will be ongoing. Although the Iinancial system remains
healthy, Iurther eIIorts are needed to increase private sector development and Iinancing, while
maintaining a lower rate oI None PerIorming Loans (NPLs), so as to Iurther boost the non-oil
economic growth and deepen Iinancial intermediations.

Outlook

Over the medium term, the authorities expect the growth rate to slow down, along with
the declining production activities in oil sector, together with the scaled down capital spending
in the construction sector. However, the authorities would note the accelerated pace to which the
Iirst phase oI NDP was implemented, and which have resulted in important outcomes, as several
oI the desired social, economic and Iinancial objectives are being accomplished. The authorities
are undertaking a review oI the Iirst phase oI implementation, and lessons learned Irom that
exercise will help to improve on the implementation oI the next phase oI their development
planning. The hydrocarbon sector will continue to support the diversiIication initiatives at least
beyond this second phase oI the strategy, which should make its objectives a bit more
achievable.
The authorities will pursue their eIIorts to reduce the non-oil primary deIicit as the Iocus
oI this second phase is to strengthen economic diversiIication away Irom resource sectors. Fiscal
targets are currently met through quarterly reviews oI the budget and subsequent adjustments
when needed. Targeting expenditure on priority sectors, including public service provision,
poverty reduction initiatives will be improved. On the revenue side, eIIorts will continue
towards the broadening oI the tax base and revenue collection, including better monitoring, with
the provision oI taxpayer identiIication number, strengthening custom administration through
computerization, and the adoption oI pre-shipment inspections. These, together with the creation
oI a single unit in charge oI large tax-payers should enhance non-resources revenue collection.
My authorities remain committed to pursue their eIIorts geared towards combating over
invoicing and tax evasion. They will also continue their eIIorts to strengthen capacity in the
Iiscal sector with assistance Irom the Fund, the World Bank and the AIrican Union.

Improving the business climate and external competitiveness, coupled with promoting
the private sector led growth, and reducing poverty constitute the main Iocus and key objectives
oI the authorities` next development phase. Structural reIorms toward achieving such objectives
are being undertaking. Important emphasis is being placed on capacity building within the local
work Iorce, together with eIIorts to improve access to credit, in addition to improving Iinancial
and property legal Iramework. With regard to data shortcomings, the recent changes and
improvements within the Ministry oI Planning and Statistics Department should help address the
issue.
#

Reducing poverty and improving the standard oI living oI the population remain major
objectives oI the authorities. Much has been accomplished in the past Iew years and the data
reIerred to by the staII which is Irom 2006 do not reIlect Iully the progress that has been
achieved. Progress is continuing in all areas: education, health and importantly in inIrastructure
building. My authorities agree that that much remains to be done and they intend to pursue their
eIIorts to improve the standard oI living oI the Equatoguinean population with determination.

Conclusion

Despite the many challenges, Equatorial Guinea has made considerable progress towards
achieving its development goals. Lack oI readily available statistics constitutes one oI those
challenges preventing a Iull appreciation oI the progress achieved. While there are downside
risks to the economy due to its dependency on the hydrocarbon sector, there are also upside
opportunities. The hydrocarbon sector has supported the development oI the country and the
authorities expect this sector to continue playing a vital role in Iuture development, and enabling
the country to implement the required policies. Strengthening human capital, developing a
strong non-hydrocarbon sector, and creating a conducive environment Ior private sector
development constitute some oI the upmost objectives presently at the authorities` development
agenda.

!"#$%&'( *+ ,-$./*0'.& 1$'2".
Ministry oI Finance and Budget

Number: 345

Malabo, February 28, 2013

67889!:;9< =!78 >?, 17@,!!8,!> 7= >?,
!,A9BC:6 7= ,;9D>7!:DC 19:!,D 7! >?, 4EF4 D!>:6C, :@ 67!G9C>D>:7!G
BH D 8:GG:7! 7= >?, :!>,!!D>:7!DC 87!,>D!H =9!I

The Republic oI Equatorial Guinea would like to thank the International Monetary Fund
(IMF) Ior its very useIul economic policy advice in the context oI the 2012 Article IV
consultations.

The government is aware that economic and social policy Iormulation is handicapped by the
absence oI a system Ior the preparation, compilation, and dissemination oI macroeconomic,
social, and demographic data. For that reason, the National Statistics Institute was recently
established and has already begun working on the preparation oI the censuses and surveys
planned Ior 2013, including the population and housing censuses. Nevertheless, we
acknowledge that the paucity oI data makes it is diIIicult to measure changes in the economic
and social indicators, as was discussed during the Article IV consultations.

The government would like to highlight the eIIorts made to achieve the Millennium
Development Goals and implement the National Economic and Social Development Plan
(PNDES), under which the inIrastructure needed to develop the productive sector and
signiIicantly improve the living conditions oI the population was built during the Iirst phase
Irom 2008 to 2012. Today, Iollowing the implementation oI the PNDES, potable water and
electricity are in regular supply and telecommunications systems, social housing, a hospital
network, school buildings, hotels, convention centers, as well as road inIrastructure, and
ports and airports oI international standard have all been put in place.

The government remains committed to strengthening public administration management and
Iostering transparency as well as to supporting productive and business development with a
view to generating sustainable economic growth over the medium- and long-term. Against
that backdrop, a reIerendum was held in 2011 to update the Basic Law oI the Republic oI
Equatorial Guinea, resulting in the creation oI several important institutions such as the Court
oI Auditors, the National Economic and Social Development Council, and the OIIice oI the
Ombudsman. Further, with support Irom the World Bank, great strides have been made
towards accession to the Extractive Industry Transparency Initiative (EITI).

2

With a view to putting government Iinances on a stable and sustainable path, short-term
measures, Ior immediate implementation, have been taken to streamline public expenditure
and increase non-oil revenues. In parallel, work is continuing on several projects, including,
the recently launched 'Strengthening Public Finances project supported by the AIrican
Development Bank, which has an important capacity-building component in addition to its
Iocus on computerization oI the public sector. IMF Technical Assistance is also being
stepped up, a massive eIIort is underway to strengthen the capacities oI public servants, and a
Iaculty oI Public Financial Administration is being set up with support Irom the World Bank.

In relation to compliance with regional commitments, the government has asked the Bank oI
Central AIrican States (BEAC) to prepare a proposal to resolve the issue and Iacilitate
compliance with the CEMAC Agreements with respect to community reserves and bilateral
agreements signed with Iriendly countries with which the Republic oI Equatorial Guinea
enjoys good economic relations and cooperation.

Concerning investments made during the Iirst phase oI the National Development Plan, we
welcome the IMF`s commendation on the creation and coming on stream oI economic and
social inIrastructure. However, we think it is inappropriate to talk about waste
1
in this context
bearing in mind that the administration Iaces a Iactual technical capacity deIicit in the areas
oI awarding contracts and inspecting projects. In that regard, the government has established
a dedicated, independent entity to deal with the evaluation, design, monitoring, and
inspection oI public works, which over time has been strengthening its project evaluation,
design, and monitoring capabilities. We are, thereIore, conIident and can aIIirm that the
government is moving in the right direction.

Taking into account the above observations, the government oI the Republic oI Equatorial
Guinea consents to the publication oI the attached 2012 Article IV Report, together with this
communique.

/s/ /stamp/

The Minister oI Finance and Budget

1
Translation note: the word despilIarro` was used in paragraph 33 oI the Spanish text provided to the
Equatorial Guinean authorities as a translation oI the English word wastage`. DespilIarro` can sometimes
imply a strong element oI intent. An alternative translation could have been desperdicio'.

IMF Staff Report - Equatorial Guinea

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!"#$% '()*+(,)-.(,/ 0.

0.8 -6.9 0.0 -4. -0.6 -2.2 -3.8 0.8 2.8

-37.6 38.2 47.3 25.7 2. .5 -0.4 -0.4 -0.

-33.8 22. 76.8 0.6 -0.4 -0.8 -4.3 9.7 2.5

,560 ,905 3,367 3,724 3,708 3,680 3,55 3,463 3,549

lncluding LNC, LPC, buLane, propane, and meLhanol.

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