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Ministry of Trade & Business Promotion works towards improving the ease of doing business in Equatorial Guinea

Interview - March 17, 2015

H.E. Minister Bacale Obiang elaborates on the government’s plans to diversify the economy from oil and gas industries and enhancing the business climate to make other sectors attractive to investment.

H.E. MR. CELESTINO BONIFACIO BACALE OBIANG, FORMER MINISTER OF TRADE AND BUSINESS PROMOTION
H.E. MR. CELESTINO BONIFACIO BACALE OBIANG, MINISTER OF TRADE AND BUSINESS PROMOTION | FORMER MINISTER OF TRADE AND BUSINESS PROMOTION

First of all, regarding the economy, what are the objectives Equatorial Guinea has set?

Equatorial Guinea depends entirely on oil, which accounts for 90% of its revenues. Besides it being a non-renewable resource, oil prices have dropped more than 50%, which means a serious problem for the state coffers. Because of this situation, we have set the objective of diversifying our economy seeking other sources of growth. Among these sources are agriculture, fisheries, tourism and other small sectors. We are sure that growth will greatly increase our GDP (gross domestic product) and thus reduce the dependence of the country now on oil. I believe we have laid the foundations to diversify our economy, to bring in investment and now we hope both the United States and other countries will come and invest here. We are committed to creating a middle class because we know they will be the largest consumer group and if there is higher consumption, there will be an increased demand for production and this will mean greater demand for labor. So, also, in our country we are taking steps to improve the education of our young people and to improve vocational training in order to be prepared for that demand and, therefore, to cut down our need for foreign labor. We are laying the groundwork for Guinea to become the leading production platform in Africa.

There has been a whole institutional reform to make it much easier for companies to come here. Could you tell us more about this reform?

We are making efforts to improve the business climate of the country, so what we are doing and have done is to reform our laws pointing to a more flexible legislation. We have made capital repatriation not as expensive or complicated. Also, we have made companies tell us their opinion at the time of drafting this new legislation. We want them to tell us what appeals to them so that in this competitive world people can find in this country the best conditions to invest in Africa.

How do you see the type of relationship between the public sector and the private sector in Equatorial Guinea?

We want independence of the private sector from the public sector. The legislative reform that we discussed gives the private sector a leading role. The public sector can have influence as a facilitator, but it does not directly have power over the private sector. What we hope is that the private sector will act according to the standards that we will set together.

We cannot avoid talking about small and medium-sized enterprises (SMEs), which are the largest generators of employment in the economy. How are you helping and promoting the creation of SMEs? Can you tell us about the Development Fund that you have set up with the National Bank of Equatorial Guinea (BANGE)?

The other day I was talking to the director of BANGE and we are happy because the test we prepared is running fine. Through this fund, numerous small companies took loans for €30,000. This year we aim to extend the fund because there can be no sustainable growth, employment generation on a large scale, or development if the SMEs are not working.

When we speak of international investors we know you are working on the single window. What stage is this project in?

The project has come a long way, we have been working on it for a year and a half and the goal is that before the beginning of the year the single window will be a reality in Guinea. We have signed an agreement with the World Bank which will help us establish this window. This will allow us to take an important step in improving the business climate because it will greatly reduce the time of establishment of a company, since it will greatly reduce red tape that remains a hurdle for companies and people that want to invest in the country.

The US – Africa Leaders’ Summit took place last year with the attendance of President Obiang. During the summit, President Obama said that " Africa will help shape the world as never before. Moreover, Africa's progress is being led by Africans.” What is the role that Equatorial Guinea, as a leader in the region, has in shaping this African success? In addition, President Obama said “Africa's rise means opportunity for all of us, including the opportunity to transform the relationship between the United States and Africa. It’s time for a new model of partnership between America and Africa -- a partnership of equals.” What priorities would you point out in this change of relationship between the US and Africa and, in this specific case, with Equatorial Guinea?

Guinea became the center of that conference. This means that Equatorial Guinea is already ahead President Obama’s forecast, for example, regarding banking. We have also organized a forum to attract investment in Washington that will bring significant benefits for the country in the short term. This type of event is very new to the region.

On the other hand, adding to the fact that the president of Guinea has a strong relationship with President Obama, our country has always maintained relations with the United States. One example is the oil companies, which are all American. These companies are the ones that have contributed significantly to the growth of Guinea and this was possible thanks to the guarantees we offer. We have an agreement for mutual protection of investments and now at the summit an Open Skies agreement was signed, so that American companies could fly to any place in Equatorial Guinea and Equatorial Guinea airlines could fly to any place in the United States. We believe that the US and Equatorial Guinea have walked together for many years. Relations are deepening both commercially and politically. Another expression of the good relationship is the exchange between the ambassadors of both countries. In many African countries there is no US embassy and, though Equatorial Guinea is a small country, we have a large embassy. Something to note is that today in America there are about a thousand Guinean students training and others who have been trained in previous years.

This means that this relationship is not new, that it is getting better and that this promotion of equality President Obama mentioned is being fulfilled. Both in the United States and Equatorial Guinea we believe that we will go on walking together to make an ever better world and to keep our relationships as they have been until now: win-win relationships.

As Minister of Trade and Business Promotion, what successful example of collaboration between the public sector and the private sector in Equatorial Guinea would you like to point out?

At the moment there are no companies working with the government in collaboration between the public sector and the private sector. In order to change this situation, we have created the Joint Investment Guarantee Fund. This will be a test between the state and private sectors and it will take place when the government put money in the private sector and act as facilitator for the development of an activity of interest to the people. We want the private sector to develop, earn money and, thus, create employment, because lack of employment is a serious problem for our government.

I think it's a good moment to invest in Equatorial Guinea. We are in a society with many young people eager to learn and work and in a country eager to grow and progress. Therefore, the government will provide all facilities and guarantees to attract more investment and to avoid the disappointment of investors. We believe we are doing things right and we are taking suggestions from investors on what to modify to create a more suitable environment. We are already doing this job with the recommendations of the World Bank and the International Monetary Fund.

Given that the Newsweek magazine is one of the best-known worldwide and has historically been the second most widely read magazine in the United States, what opportunities would you like to present to the American reader?

The biggest opportunity is the Co-Investment Fund we have created. The government will help those investing in projects that are interesting for the country. Another important opportunity is that our legislation, as I mentioned, is quite flexible. Also, our openness to dialogue with investors is very important, as it will help avoid conflicts and generate solid foundations between the two sides. The other big opportunity is that Guinea’s treasury - unlike 80% of African countries’ treasuries - is not empty. So, people can be sure it is safe to do business here, having the American companies in the oil sector I mentioned as an example. These companies are our best ambassadors in the United States because other investors see that they are making money and say: "Let's try to explore other sectors to do the same." Another good point about us is that even though it is true that Guinea has a population of approximately 1 million inhabitants, we are in a subregion of Africa which has about 200 million. Guinea is a country that is very well located in the region and offers the best infrastructure in the area, a network of excellent roads that connect easily with the other countries and with excellent ports that, according to our geographical position, could become the gateway to many American companies. We believe these are important advantages when it comes to investing in any country.

Finally, I would like to ask you a personal question. Who is the person behind the Minister of Trade and Business Development? How would you describe yourself?

I am an open person, a little impulsive and sincere when it comes to expressing my opinion. I am more direct than diplomatic. I am not so spiteful, I say what I think, I may argue but it all ends there. This has helped people understand and accept me as I am, and to understand that we are all different in the world and that we set joint benefits to benefit the most people.

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