Oil makes Equatorial Guinea to Africa's rising star

Nov 17, 2002 01:00 AM

Thanks to its oil reserves, the tiny West African nation of Equatorial Guinea, home to just 500 000 people, has become Africa's rising economic star. Last year, it reported a staggering growth rate of about 65 % -- making it the fastest-expanding economy in Africa, if not the world.

Equatorial Guinea -- previously unheard of by corporate America -- has become the fourth largest recipient of US foreign funding, after South Africa, Nigeria and Angola. Incredibly, Equatorial Guinea's vast reserves of oil remained largely untapped until the mid-1990s.
But since 1996, the country's oil production has increased more than tenfold -- and is expected to rise to a daily average of more than 200 000 barrels this year and possibly about 300 000 barrels sometime next year. "It's a very good challenge -- to grow our country, to allow a better standard of living, to give our citizens housing and hospitals," Energy Minister Cristobal Manana Ela told.
"If you come to Equatorial Guinea you can see a lot of projects going on -- building roads, hospitals, schools, electricity generation," he said.

Despite the country's economic growth, its government has been criticised because little of the oil boom's benefits have been passed on to the country's desperately poor. One reason for this is that many oil contracts are structured so that oil firms take an early share of the profits to help them recoup heavy investments in both exploration and extraction.
But the government's share of oil revenues is increasing steadily -- and Manana Ela insists that development projects are being implemented around the entire country and not just in oil-rich areas.

The International Monetary Fund has called on Equatorial Guinea to implement better fiscal discipline and improve its transparency with independent external audits of the oil sector and full disclosure of details of government bank accounts abroad.

Source: Sunday Times
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