Since the 1990s, oil and gas has dominated Equatorial Guinea’s economic landscape, but a change has begun, as the government embarks on a strategic plan to diversify economic development while providing much-needed quality of life improvements to the country’s population, through the creation of vital infrastructure.
The new approach is starting to pay off, with the country’s economic growth now being attributed to “public investment aimed at developing and improving basic infrastructure such as roads, ports and airports,” according to the 2014 African Economic Outlook, which also noted that, “Public capital expenditure has grown constantly in recent years, and this trend should continue into 2014 and 2015.”
The frenzy of building that preceded the African Cup of Nations soccer tournament, which took place in 2012 in host cities Malabo and Bata, typifies the ongoing energy with which Equatorial Guinea is remaking itself. The housing sector, in particular, has picked up significant momentum, with the government’s plan to complete 10,000 new residences around the country over the next few years.
To put the scale of this transformation in perspective, investment in Equatorial Guinea regularly tops 50% of the country’s total annual economic output, according to the International Monetary Fund, compared to less than 20% in the United States and European Union. For businesses and workers in Equatorial Guinea, this means a steady stream of new opportunities. From 2013-2020, the government has committed a significant portion of its oil wealth to over 1,500 infrastructure projects deemed critical to national development. The new construction comes in many areas: transport, oil and gas infrastructure, information and telecommunications, as well as expanding the country’s electricity grid and improving facilities such as schools, hospitals, public housing and water supply systems. The Horizon 2020 plan, as it is known, aims to establish Equatorial Guinea as an emerging economy in just a few short years, while boosting the economy and providing much-needed jobs and services for its citizens.
| The frenzy of building that preceded the African Cup of Nations soccer tournament, which took place in 2012 in host cities Malabo and Bata, typifies the ongoing energy with which Equatorial Guinea is remaking itself. |
Public health features at the top of this ambitious agenda. The country has worked toward increasing access to medical care, and now counts one hospital for every 50 square miles of territory, in addition to a new university where Equatorial Guinea’s first domestically instructed doctors have been trained.
Currently, major towns have access to potable water, but poor maintenance and an aging delivery system make access unreliable. Addressing this issue, the government created a major initiative to provide safe, clean drinking water for the entire country, including new canals and pipelines in Malabo and Bata, while villages and rural areas have been equipped with generators and water pumps.
The government has also launched several large-scale regional projects as part of its long-term growth strategy. In just the past few years, new infrastructure plans on the long-neglected island of Annobón have been put into motion, including a new $130 million seaport as well as a new airport. These new facilities will provide room for the overall growth of the national economy in the coming years, while a further $260 million investment in social projects on the island, including new sanitation works and a new school, have given the local population some immediate benefits.
The government’s Horizon 2020 plan focuses on balanced development and sustainable growth. This means substantial expenditures in the oil and gas industry as well, so that it continues to provide the fuel to power economic growth. The government has not only increased spending exponentially over the past five years, but has also opened the country to investment deals and partnerships with foreign companies, an area where American companies have been particularly active.
Last year, to take just one example, U.S.-owned Noble Energy began production at the offshore Alen gasfield, which will eventually produce 40 million barrels per day of natural gas condensate, while another U.S.-based company, McDermott International, obtained the contract to build and install the production platform at this field, complete with living quarters.
Tremendous potential growth and investment also awaits with the upgrading of Equatorial Guinea’s transportation network. Extending the country’s network of paved roads, which can better withstand the challenges posed by the country’s muddy rainy season, is one of the most significant improvements to the transportation network in the country’s history.
Approximately 80% of national roads have now been paved. The improved roads, in turn, facilitate government planning and access to build up its network of schools and hospitals, as well as its electrical and telecommunications lines.
Crisscrossing Equatorial Guinea’s deep forests and mountainous terrain, these roads, though difficult to put into place, create an essential mechanism for socioeconomic development, putting the country on the path to achieve its paramount Horizon 2020 goals.
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