Thursday, Oct 19, 2017
Mining | Africa | Equatorial Guinea

Opportunities in Equatorial Guinea

Holding 2020 partners private sector to unlock ground-floor opportunities


2 years ago

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Private sector know-how and public-private collaborations will add value to the country’s raw materials and benefit the nation on both social and economic levels

Private enterprise figures large in the plans of Equatorial Guinea to meet three ambitious goals for

the 21st century: diversify the economy away from hydrocarbons, attract foreign investors with know-how for priority sectors, and provide jobs and training for citizens to boost their income and well being.

Major local investors and multinationals are expected to take part in this push for private investment as part of the government’s Horizon 2020 scheme, but smaller investors from both inside and outside the country are also welcome.

“We have the determination to achieve the creation of small and medium-sized enterprises that will help ensure the country’s economic diversification,” declares Equatorial Guinea’s President Teodoro Obiang Nguema Mbasogo.

In its bid to attract private enterprise, the government has come up with a series of incentive programs covering taxes, customs, and other fiscal issues, as well as streamlined bureaucracy for those companies wanting to invest.

The plan also includes a co-investment fund, called Holding 2020, of $1 billion to match investments by the private sector and provide fiscal safeguards for investors. “We designed this initiative following a series of conferences on how to best diversify our economy, with a special emphasis on private sector involvement in agribusiness and livestock, energy and mining, fishing, tourism and services,” explains Holding 2020’s General Director Mariola Bindang Obiang.

“The co-investment fund was created at the same time as Holding 2020 and provides the tools to drive those sectors which we consider a priority.  This fund is at the disposal of any investor interested in coming here.

“If an investor has an idea for a project of a certain size and cannot finance it on their own or wants to share the risk, Holding 2020 is here to assume part of that risk.”

Holding 2020 officials are also quick to note that the projects must be profitable and highlight its role as a supportive financial partner helping create new industries for the country.

“What interests us at this moment are investors who possess the knowledge that we do not,” Ms. Bindang emphasizes. “We cannot try to create these industries right now by ourselves as we lack the know-how.”

Equatorial Guinea is keen to ensure that the plan does not fail as similar schemes have in other petroleum export-dependent countries through mismanagement, corruption, and other bad practices.

“It is important the international community understands that this is a commitment conceived and adopted by the government of Equatorial Guinea itself and was not suggested or forced by outsiders,” the general director adds.

According to officials, private enterprise is the key to the country’s development. Equatorial Guinea is adamant about not wanting to establish more state-owned and operated companies, but Ms. Bindang admits that it will be a challenge.

“At the national level, the private sector is still in its infancy and people still have a lot to learn, especially about issues regarding balancing their books, using trained accountants, obtaining financing, and putting up collateral to guarantee a loan,” she says.

Many foreign investors taking a look at Africa get the impression that perhaps it is too late, that all the opportunities have been grabbed and there are no new markets to target. But the Holding 2020 chief disputes that notion, arguing this is certainly not the case in Equatorial Guinea as the private sector is starting from scratch and a virgin market still exists.

“Of course it is not too late because the industries we want to establish do not exist. This is the ideal moment to invest in this country because we want to produce just about everything,” she explains. “Let me give you an example. We produce no fruit juices but Equatorial Guineans are big consumers of fruit juices, which have to be imported. We have the raw materials – oranges, mangos and guava – so all we need is for someone to come here and use these fruits to make and bottle juice.

“We also grow pineapples and we could export them to European Union member countries like so many other African countries are doing. If they can do it, why not us?”

A juice factory, pineapple processing plant or any other manufacturing project, would provide jobs for local people, especially the young, which in turn would generate income to improve the standard of living.

“This will reduce our levels of poverty, which is another major goal of the government’s overall macroeconomic plan: implement methods to help eliminate poverty and increase the well being of all,” Ms. Bindang adds.

Successful private businesses turning out in-demand products will also make the country more economically self-sufficient, reduce the country’s import bill and foreign exchange outlay, and could even lead to Equatorial Guinea exporting a range of goods to markets near and far.

“Among the economic sectors we have identified as priorities, we cannot right now point to a specific market for whatever we produce,” the general director says. “First, we will have to see which of our products are competitive in which foreign markets and take it from there.”

For now, Holding 2020 wants to get the word out to the world on the plan, its targeted sectors, and the advantages, incentives, guarantees and requirements for investors.

“Our PR strategy includes articles in the printed press, the internet, and advertising on the leading global television channels,” says Ms. Bindang. “And we are considering organizing a type of international road-show to let potential investors know just how smart it would be to bet on Equatorial Guinea’s future.”



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