Between the 90’s and 00’s, Equatorial Guinea was envied by everyone Africa thanks to its incredible rate of oil production, an activity that led the country to have a GDP (Gross Domestic Product) greater than that of Spain.
However, That rapid growth led to a furious fall in his wealth over the last 12 years.. What was prosperity for years is now a crisis, and it is a deep one, requiring a structural fix to avoid further fissures.
Equatorial Guinea: the oil discovery that changed its luck
Independent in 1968Equatorial Guinea was not going through a better time when the 90’s arrived; a stagnant economy and a bad reputation for human rights abuse They led one to think that prosperity would not come to the Central African country.
The country was supported by cocoa production -contributed 75% of the GDP- until it arrived Walter Internationala subsidiary of Walter Oil & Gas. The American firm started in December 1991 to explore the deposits of these lands until achieving a modest production of liquids derived from gas in the Alba field.
Equatorial Guinea was already among the oil producing countries when In 1995 Mobi, the firm that later became ExxonMobil, found oil in its Zafiro field.. From that moment on, the oil industry grew so much that, in the period until 2004, The daily production of barrels of crude oil went from 2,000 to 400,000.
The boom was brutal; GDP was growing at an average of 41.6% per year, the country became one of the largest recipients of foreign direct investment in sub-Saharan Africa, and up to 3,000 American workers arrived in Equatorial Guinea, prompting the United States to reopen its embassy.
The GDP per capita in purchasing power parity of Equatorial Guinea reached $38,000surpassing the 33,000 in Spain. However, the way these numbers were looked at was not correct, since This wealth was distributed among a few beneficiaries of the oil business.
Equatorial Guinea: why it is now immersed in a crisis
The economic crisis of 2008 wreaked havoc on Equatorial Guineawho began to feel the depletion of the oil industry. On the other hand, bad management combined with bribery agreements meant that, Since 2013, the country has suffered an economic contraction for nine consecutive years.
The Covid-19 pandemic did not help to improve the situation and, despite a brief growth of 3.8%, experts point out that the country is close to facing a black decade. He IMF regrets that Guinea has not used oil as an impetus to adjust its fiscal policies and provide economic balance. At the moment, The alternatives – tourism, fishing, petrochemicals and agriculture – do not have enough investment to help in this scenario..
Source: Ambito
