High notes sounded for Equatorial Guinea’s quest to reverse dependency on oil

Malabo, 13 July 2018 (ECA - www.uneca.org/sro-ca) – Members of Government, State technocrats, private-sector players and non-State actors of Equatorial Guinea have concurred with officials of the UN Economic Commission for Africa (ECA) that that the country’s macroeconomic difficulties stemming from a nose-dive in oil prices must inspire it to industrialize and diversify its productive base as sure pathways to sustainable development.

This resolve is coming out of an ECA scoping mission to Equatorial Guinea and a high-level policy dialogue on economic diversification, jointly convened by the country’s Ministry of Finance, the Economy and Planning and the Subregional Office for Central Africa of ECA, in which experts also called for the pursuit of a dynamic and even “aggressive” industrial policy, that is continual and evolutionary and for the acquisition of the required technology to transform products on the spot.

A 100-strong audience of national experts from the breadth of development ministries and agencies in the country, the private sector and the civil society systematically reviewed why Equatorial Guinea’s Vision to emerge by 2020 slackened and what they must do to steady the cause. It was noted that with the advent of oil in the early 1990’s, the country quickly engaged in an infrastructure revolution which was to be followed by economic diversification and boosting of productive sectors. This second segment has been thrown out of balance, given the slump in the price of oil which accounted for most of the State’s fiscal earnings, warranting a review and recalibration of the vision.

“We were used to working on cocoa, coffee and forest resources,” said Mr. Antonio Nve Nseng – a former Minister of Planning who currently advises Government.

“Then came oil, with a lot of good. But we were shoved into dependence and are now facing the Dutch Disease,” he continued candidly, adding that the country had to move quickly out of circle of oil booms and bursts.

Mr. Nsue’s candor was re-echoed by the head of the ECA mission and Director of the Commission’s Subregional Office in Central Africa who, Mr. Antonio Pedro, in a step-by-step decortication of the contours of economic diversification. “It is during commodity price slumps that countercyclical measures should be considered because now it should be more than evident to everyone that an export-led growth model based on the export of raw commodities exposes countries to external shocks,” argued Pedro.
He said “Saudi Arabia is doing it: In preparation for a world beyond oil, the Kingdom is establishing a $2trillion sovereign wealth fund by selling ARAMCO shares to private investors via an initial public offering.”

The debaters went along with ECA insights that successful industrial policy requires a pragmatic developmental state with a solid industrial and diversification coordination hub overseen by the highest authorities of the State; a government that engages into partnerships with the people but also has the clairvoyance to create the enabling environment needed for business to thrive, guarantees judicial security to investors and capitalizes on local comparative advantages.
Clear examples of where African countries have made a difference with such approaches were enumerated: Ethiopia for its successes in the leather, textile and garments, flowers and cement manufacturing sectors; and Rwanda for the boom in its ICT-based services and development of its tourist sector.

A Government in deep cogitation
The expansive debate on the practical route for Equatorial Guinea to follow resounded with the urgent concerns of members of Government who had dedicated sessions with the ECA team.
The Minister of Agriculture, Livestock, Forests and the Environment – Mr. NICOLÁS HOUTONJI ACAPO said his department was strategizing to markedly increase the volume and quality for organic farm produce to access high niche markets, for instance, by training and equipping youths, incentivizing owners of huge capital through land-allocation and zoning and encouraging rural farmers to retain their interest in agriculture.

In a working session with the ECA team, the Minister of Transport, Postal Services and Telecommunications – Mr. EUCARIO BACALE ANGÜE said Equatorial Guinea would count on the Commission’s recognized expertise in evidence-based analysis in supporting policy and decision making – which many countries in the Central Africa are grappling with. “We are the one country in the sub-region that is totally covered by optic fiber cable but we still haven’t seen much change in terms of lower prices and improvement in telecommunications services,” said the Minister, who added that his team would be keen working with ECA to diagnose the underlying issues and proffer solutions.

The Secretary of State for Industry and Energy – Mr. Cesar Hinestrosa Gomez said one of Equatorial Guinea’s inherent difficulties was the limited policy coordination and coherence across different Government departments and beckoned on ECA to consider helping with a diagnosis of and schema out of the difficulty.

He said the Douala Consensus reached by representatives of countries of Central Africa during the 2017 session of the Intergovernmental Committee of Experts, convened by ECA, was an impressive overall pointer towards industrialization and diversification in the subregion. “I have told my collaborators that this Consensus should be the basis of our industrial action plan because it covers everything that we need,” Mr. Gomez said.

Meanwhile the Secretary of State for the Horizon 2020 Agency, Mr. Cesar Augusto Mba, who open the Dialogue on behalf of the Minister of Finance the Economy and Planning – Mr. LUCAS ABAGA NCHAMA, said Equatorial Guinea’s crisis experience was a reminder for it to pursue policies of resilience and inclusive growth. “We are receiving the kind of support we expect from ECA and this dialogue will enable us customize the way we work together” as well as inspire proceedings of our 3rd National Economic Conference in 2019 to further strategize on how to diversify our economy, he said.

Message uptake and synergies
Technical Adviser at the Presidency of Equatorial Guinea – Mr. Rafael Tung Nsue Bilogo, who closed the dialogue, promised to impress the recommendations of the debate on the highest authorities in Government for appropriation and uptake in policies and actions geared towards the diversification of the economy.

To the Resident Coordinator of the UN System in the country – Ms. Coumba Mar Gadio, the ECA’s commitment in accompanying Equatorial Guinea on its path to diversification was timely and welcome, and that synergy will be built with other UN agencies with the necessary remits to give consolidated support to the country.

“We are very happy with your mission which we think should open up a vista of cooperation between us especially at this time when diversification is top on our agenda” the Deputy Minister for Foreign Affairs, Cooperation and Missions – Bonifacio Mitogo Edjang told the ECA mission team.

-ENDS HERE-

Issued by:

The Sub-Regional Office for Central Africa
UN Economic Commission for Africa (ECA)
P.O. Box 14935 Yaounde, Cameroon
Tel: (+237) 222504348 / 222504315 / 222504321
Email: sroca@uneca.org

Media Contact
Abel Akara Ticha – Communication Officer
Tel: 237 222504348