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Concept
Economy of Equatorial Guinea
Summary
The economy of Equatorial Guinea has traditionally been dependent on commodities such as cocoa and coffee, but is now heavily dependent on petroleum due to the discovery and exploitation of significant oil reserves in the 1980s. In 2017, it graduated from "Least Developed Country" status, the only Sub-Saharan African nation that managed to do so besides Botswana, Gabon, Namibia, Seychelles, and Angola.
However, despite the economic growth and improving infrastructure, the country has been ranked only 138th out of 188 countries on the United Nations Human Development Index in 2015 and despite its impressive GNI figure, it is still plagued by extreme poverty because its Gini coefficient of 65.0 is the highest in the entire world . After the oil price collapsed in 2014, the economy went into a free fall which put growth in a downward spiral from around 15% to −10%.
Pre-independence Equatorial Guinea counted on cocoa production for hard currency earnings. In 1959 it had the highest per capita income of Africa which it still has, after several decades as one of the poorest countries in the world.
The discovery of large oil reserves in 1996 and their subsequent exploitation have contributed to a dramatic increase in government revenue. As of 2004, Equatorial Guinea was the third-largest oil producer in Sub-Saharan Africa. Its oil production had then risen to , up from only two years earlier.
Forestry, farming, and fishing are also major components of GDP. Subsistence farming predominates. Although pre-independence Equatorial Guinea counted on cocoa production for hard currency earnings, the neglect of the rural economy under successive regimes has diminished potential for agriculture-led growth. However, the government has stated its intention to reinvest some oil revenue into agriculture. A number of aid programs sponsored by the World Bank and the IMF have been cut off since 1993 because of corruption and mismanagement.
Official source
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