The economy of Equatorial Guinea has changed out of all recognition over the past few years on the back of rapid expansion in the oil and gas sector. A string of major discoveries have pushed the country up the league table of Sub-Saharan oil producers so that it now vies with Gabon and Congo-Brazzaville for third place, although all three still lie some way behind Angola and Nigeria.
Yet the Central African state's success largely rests on a single incident--the discovery of the Ceiba field by Triton Energy in 1999--a discovery which revolutionised the economy and led some to dub Equatorial Guinea 'the African Kuwait'.
Until the oil boom, Equatorial Guinea largely depended on the agricultural and forestry sectors. Aside from timber production in the mainland province of Rio Muni, cocoa and coffee were the most significant foreign exchange earners.
The economic growth generated by the oil industry expansion has been magnified by the low base from which the economy grew in the mid-1990s. GDP increased by a staggering 71.2% in 1997 and although the level of annual growth has fluctuated wildly over the subsequent six years in tandem with field development, it has remained steadfastly high. Figures of 45.5% were recorded in 2001, followed by 24% in 2002 and an estimated 15% for 2003. This almost certainly makes Equatorial Guinea the world's most rapidly expanding economy.
Government revenues rose by 1,200% between 1994 and 2000, while oil accounted for almost 90% of export earnings in 2001, a figure which is likely to rise in the short term.
In the longer term, however, gas sector development may provide a modicum of diversification. The doubling of real per capita GDP over the period 1997 and 2002 has created inflationary pressures and led to a consumer price index (CPI) of 5-8%. However, as in other African oil producers, the country's oil wealth has yet to impact upon key human development indicators. This area is the focus of the government's development efforts.
Equatorial Guinea has a particular identity as the only Spanish speaking country in Sub-Saharan Africa, having once been under the rule of Madrid. Francisco Macias Nguema held power from independence in 1968 until 1979 when he was overthrown by President Teodoro Obiang Nguema Mbasogo, who has held power ever since.
From the 1930s until independence, Equatorial Guinea relied very heavily upon cocoa production but output plummeted by an estimated 90% during the first...