2023 Investment Climate Statements: Equatorial Guinea

Policies Towards Foreign Direct Investment

Foreign investment is concentrated in the hydrocarbon and construction sectors. Total amounts of foreign investment, therefore, have declined due to fluctuating oil and gas prices, declining oil production, and non-payment of construction contracts. U.S. companies dominate Equatorial Guinea’s oil and gas sector, European companies are present in fuel distribution, while Chinese, Middle Eastern, and European companies dominate investment in the country’s construction sector.

Article 27 of the country’s fundamental law states “the State protects, guarantees, and controls the investment of foreign capital that contributes to the development of the country.” In Article 12 of Law No. 7/1992 on the Investment Regime, the government again commits to fair and equitable treatment for all investors. Law No. 7/1992 also creates an Investment Promotion Center (IPC) to advise the government on investment policies, promote investments, and support both domestic and international investors with information and in the resolution of conflicts. These laws also create a National Investment Commission (NIC). In the same vein, Equatorial Guinea also guarantees currency convertibility and repatriation of profits and protects against expropriation. However, it is not a member of the International Centre for Settlement of Investment Disputes and has not signed the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (i.e. the New York Convention), which weakens investor confidence in the country. Historically, the president has had de facto final approval on large contracts with foreign investors; however, since 2020, the vice president has largely taken over this role. Foreign-owned companies pay higher registration fees than local companies and are often subject to taxes that more informal local businesses avoid.

Following his appointment in February 2023, the new Minister of Planning and Economic Diversification had announced his plans to expedite the implementation of the Investment Promotion Agency to facilitate foreign investment. This Agency will be the result of a collaboration with existing joint venture fund Holding 2020, created by the government to promote investments in strategic sectors.

In general, the government focuses its efforts on recruiting investments in large capital projects over small ventures, as large-scale projects are more likely to create new employment opportunities for Equatorial Guinea’s largely unskilled workforce and provide greater fiscal benefits for the government under its underdeveloped and poorly implemented taxation system. The government is increasingly seeking South-South FDI from new partners in countries like Brazil, China, Egypt, India, Turkey, and Venezuela. The government sometimes focuses on recruiting new partners in lieu of maintaining existing partnerships, neglecting improvements to its operating environment, and damaging its prospects for longer term returns from investments.

Limits on Foreign Control and Right to Private Ownership and Establishment

Law No 72/ 2018 reviewed Decree No 127/2004 to facilitate investments within the country. The new law eliminated the local partner obligation for investors outside the oil sector, however the mandate is still in force for enterprises in the oil sector, requesting 35% local ownership.

Foreign investors are still subject to specific provisions related to land acquisition and must comply with local content rules that vary by sector. The acquisition of land titles by foreign individuals or legal entities requires presidential authorization, in accordance with Decree 140/2013. In addition, local content rules dictate that foreign workers may not represent more than 10 percent of all workers (30 percent in the extractive and agricultural sectors). A percentage of domestic content in goods and technologies from companies with foreign investors must also be included. Local content rules are inconsistently applied, creating disincentives to foreign investment.

The oil and gas sector is regulated by specific legislation. Some particularities that govern it are that: the entry into force of contracts depends on the ratification by the president, and non-Equatoguinean contractors must establish a local branch. Prior to being authorized by the local government, a foreign investor can be required to provide an investment guarantee as proof of its financial capacity to conduct the solicitated investment, as evidenced by opening an account in a local bank and transferring significant amount of money into it. Also in the oil sector, production sharing agreements require oil companies to transfer ownership of their facilities, material, and equipment to the host country upon conclusion of the contracts.

Other Investment Policy Reviews

Prior to approving an Extended Fund Facility in 2019, the IMF conducted several rounds of staff-monitored assessments of the government’s structural, fiscal, and monetary reforms. The results of these assessments, which include investment policy recommendations, can be found on the IMF’s website: https://www.imf.org/en/Countries/GNQ .

Civil society organizations in Equatorial Guinea remain weak, hampered by difficulties in registering for legalization through the Ministry of Interior and Local Corporations, and thus are unable to provide oversight of investment policy-related concerns.

Business Facilitation

In January 2019, the Ministry of Commerce launched its Single Business Window (abbreviated VUE for its Spanish name Ventanilla Unica Empresarial) at its headquarters in Malabo. The VUE reduced the time required to register a business from an average of 33 days to five. In July 2021, the ministry opened a second VUE office in the mainland city of Bata. Registration still must take place in person, however, as there is no online registration page nor a working VUE website. Individuals choosing to register their businesses without utilizing the VUE must complete the following steps through a variety of government agencies:

Outward Investment

Although Equatoguinean citizens may legally invest outside the country, the government does not actively promote foreign investment and there are minimal mechanisms to do so since foreign currency availability is restricted and there is only one local bank with international operations. There are no known restrictions on foreign investment, but some individuals and companies have faced delays when transferring money overseas or converting local currency into foreign exchange, which has been exacerbated by new CEMAC rules on foreign currency reserves enacted in 2019. The National Bank of Equatorial Guinea (BANGE) – majority-owned by the government – launched two subsidiary offices in neighboring Cameroon.

Transparency of the Regulatory System

Regulations governing the investment environment in Equatorial Guinea are implemented at the national level and can be introduced and enacted in one of three ways:

1. As a law, which begins as a draft bill presented by the relevant government ministry to the Council of Ministers before being submitted to Parliament for review and a vote.
2. Through a decree (at times referred to as a “decree-law”) issued directly by the president.
3. Through a ministerial order issued by the relevant ministry, in this case often the Ministry of Commerce and Business Promotion; the Ministry of Labor, Employment Promotion, and Social Security; or the Ministry of Finance and Budget

The government does not make draft versions of bills and regulations available for public comment at any stage of the approval process. Civil society groups complain that they are not consulted in the drafting of relevant laws and regulations.

The regulatory regime suffers from both a lack of public information and shortcomings in implementation and enforcement. Online versions of laws and regulations are difficult to find and sometimes completely unavailable. To comply with the IMF’s 2019 required reforms, the Ministry of Finance created both a website ( https://minhacienda-gob.com/biblioteca-juridica/ ) and physical office to facilitate public access to commercial regulations, but in practice limited documentation is available. In 2020, the government launched the official webpage of the state bulletin ( https://boe.gob.gq/# ) to improve public access to laws and regulations. No substantial information on EG regulation has been uploaded to webpage so far. Despite these efforts at digitalization, most of the information on regulations is still only accessible in hard copies for a fee through the Office of the National State Bulletin.

As a member country of the Organization for the Harmonization of Business Law in Africa (OHADA), Equatorial Guinea’s accounting standards are governed by the organization’s uniform act on accounting law and financial information (AUDCIF). However, due to a lack of local expertise on OHADA’s accounting standards, the government uses the Spanish model for its general accounting system. In 2020, a World Bank-sponsored program to strengthen the investment climate in the OHADA region established an office in Equatorial Guinea to train local accountants on OHADA accounting law. Of the 10 accountants registered through the office, currently only two are Equatoguineans. Officially, only these accredited accountants can audit and certify companies’ financial statements, while in practice non-accredited accounts still prepare the declaration of statistical and fiscal information for SMEs.

Equatorial Guinea did not make major improvements from last report’s Fiscal Transparency performance, and despite activating its Court of Accounts as Supreme Auditing Institution, significant operative measures were not introduced, and thus Equatorial Guinea does not meet the minimum requirements of fiscal transparency as established by the U.S. Department of State. While the government’s published budget provides a substantially complete picture of its planned expenditures and revenue streams, including natural resource revenues, in 2022 it failed again to disclose its total debt obligations and produce audited financial statements for state-owned enterprises (SOEs). However a list of SOEs for privatization was published and, for the first time, assets declaration statements of public officials were made public. Additional information is included in the Department of State’s annual Fiscal Transparency Report: https://www.state.gov/fiscal-transparency-report/.

International Regulatory Considerations

As a CEMAC member, Equatorial Guinea’s investment-related regulations are based on CEMAC policies. Implementation of some policies at the national level remains pending, such as the commitment to free movement of people and goods between member countries. Equatorial Guinea is not a member of the World Trade Organization (WTO) but has been an observer since 2002. In 2013, the government applied for full WTO membership. A Memorandum of Foreign Trade Regime was submitted in 2023 as part of the country’s application to accede the WTO.

Legal System and Judicial Independence

The Fundamental Law of Equatorial Guinea, officially promulgated on February 16, 2012 followed a constitutional reform approved by referendum on November 13, 2011 set much of the law in Equatorial Guinea. The penal code and judicial system is still largely based on the Spanish colonial model.

The President of the Republic is the Head of State and exercises the Executive Power as Head of Government. According to the Constitution, he is also the Chief Magistrate. He is in charge of determining the policy of the nation, arbitrating and moderating the functioning of the institutions of the state, promulgating and sanctioning laws, directing the armed forces, presiding over the Council of Ministers and other powers recognized in the Fundamental Law. The current president is Teodoro Obiang Nguema Mbasogo, who was re-elected in November 2022, and has served as president for 44 years after deposing the previous leader in a coup in 1979. He is the longest serving Head of State in the world. There are multiple instances of high-level government officials or well-connected relatives of the ruling family interfering in the judicial system.

Weaknesses in the justice system contribute to legal insecurity in Equatorial Guinea. There is no institutionalized mechanism for the selection, appointment, tenure or promotion of judges and judicial personnel that guarantees the independence of judicial decisions. Judges are appointed directly by the executive and can be removed at any time. In practice, there are no minimum requirements to be a judge. In Equatorial Guinea, judges do not receive sufficient training, resulting in inconsistent judicial decisions. While the justice system has evolved since 2009 towards greater specialization with the creation of courts for labour and family matters, commercial cases are processed the same as civil cases in the courts of first instance. Among the CEMAC economies, only Equatorial Guinea and Gabon lack specialized commercial courts. In addition, the country lacks an arbitration and mediation center, which could be created in the context of existing OHADA legislation to promote alternative dispute resolution. The current judicial process is not considered procedurally competent, fair, or reliable.

Laws and Regulations on Foreign Direct Investment

The primary legal instrument governing foreign investment in Equatorial Guinea is Law No. 7/1992 on the Investment Regime in Equatorial Guinea, which was last updated by in 1994 by No. 2/1994. Due to the difficulty in passing new laws, subsequent changes have mostly been implemented through more than two dozen presidential decrees, which are summarized in a document published on the Ministry of Finance’s website: https://minhacienda-gob.com/materia-de-inversion-3/ . The government published Decree 45/2020 in April 2020 reducing the minimum amount of capital needed to register a limited-liability company from one million XAF (approximately $1,650) to 100,000 XAF (approximately $165). Specific regulations governing investments in the hydrocarbon and mining sectors are summarized on the Ministry of Mines and Hydrocarbon’s website at https://mmie.gob.gq/ , although the English version of the page has not been updated since 2017.

In February, the new Ministry of Planning and Economic diversification announced that one of his priorities was to create an investment promotion agency to serve as a center to provides information relevant to investing in Equatorial Guinea. In addition, the Ministry of Finance has now hosted a virtual legal library on its website, which includes laws and regulations of about most aspects of the EG economy, including trade and investment. (https://minhacienda-gob.com/biblioteca-juridica/)

Competition and Antitrust Laws

Due to Equatorial Guinea’s membership in OHADA, OHADA competition laws should be applied to such cases. Information on all OHADA uniform acts and case law can be found at https://www.ohada.org/en/ .

The CEMAC Community competition regime is governed by two sets of rules: the regulation on anticompetitive business practices and the regulation on state practices affecting trade between member States. The entities responsible for community competition law are the Community Competition Surveillance Authority, the Community Court of Justice and the national competition control structures. CEMAC legislation does not preclude the adoption of national competition laws. CEMAC competition law provides for good coordination between these two levels of competition law, which complement each other and whose respective fields of application are clearly delimited. The application of CEMAC competition law is the responsibility of a CEMAC competition authority, a CEMAC court and the national competition authorities. The Directorate for Competitiveness and Consumer Protection of the Ministry of Trade and Promotion of Small and Medium-Sized Enterprises has been designated the national competition authority for Equatorial Guinea. However, in practice national competition authorities in CEMAC are not operational, with the exception of Cameroon. The regional agency has not yet been established, but the CEMAC Commission has already reviewed and approved two company merger requests.

In some sectors, specific laws refer to competition principles. For example, Law No. 7/2005, General Telecommunications Law, provides that, in the telecommunications sector, tariffs are freely set by the officially established operators, within the framework of the principles of transparency, objectivity and equal treatment.

Expropriation and Compensation

Law No. 7/1992 states that the government will not expropriate foreign investments except when acting in the public interest with fair, just, and proper compensation. The government does not generally nationalize or expropriate foreign investments, although there are alleged cases of local private companies cooperating with the government to expropriate property from foreign investors after falsely accusing them of breach of contract. This practice has become less common since 2018, when the government eliminated the requirement for foreign investors to identify a local business partner. The government has an extensive record, however, of expropriating locally owned property, frequently offering little or no compensation.

Dispute Settlement

ICSID Convention and New York Convention

Equatorial Guinea is not a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention, also known as the Washington Convention), although Law No. 7/1992 states that international arbitration may be based on the ICSID rules. The government has stated that its action plan for improving the national business climate includes joining ICSID. The country is not a party to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Investor-State Dispute Settlement

Equatorial Guinea is member of the Multilateral Investment Guarantee Agency (MIGA). Over the past 10 years, there have been a few investment disputes involving a U.S. or other foreign investor and the government, a limited number of which were brought before international arbitration tribunals. While Equatorial Guinea is not a signatory to the ICSID Convention, one case was brought before a tribunal in 2012, but was dismissed. In 2014, a French court ordered the government to pay 150 million euro to a French-based telecommunications company for violating a clause in their contract. The government made payments pursuant to this judgement between October 2016 and October 2018.

As of 2021, two U.S.-owned companies were awaiting payment from the government for services rendered since 2019. Separately, a European agriculture company claims the government has neglected to fulfill its part of a contract by failing to provide its promised co-investment funding after the investor had transferred capital into a local bank.

International Commercial Arbitration and Foreign Courts

Law No. 7/1992 states that disputes that cannot be resolved through direct negotiation by the involved parties shall be referred to Equatoguinean courts. Either party can also submit the dispute for international arbitration. In their initial application to invest in the country, foreigners must declare their desired international arbitration venue, though arbitration must take place in a neutral location with Spanish as the official language. Under OHADA’s Uniform Arbitration Law, parties can also bring disputes before the Common Court of Justice and Arbitration (CCJA). The CCJA is based in Abidjan but can hear cases within the borders of any one of its member countries. There are no recent relevant cases in Equatorial Guinea demonstrating whether local courts recognize and enforce foreign arbitral judgments and awards. Equatorial Guinea does not have and arbitration and mediation center.

Bankruptcy Regulations

OHADA’s uniform code and case law on bankruptcy applies in Equatorial Guinea. However, despite being an OHADA member country and therefore having recourse to insolvency and debt recovery proceedings, the country has no legal practice or expertise in judicial reorganization, judicial liquidation, or debt enforcement. Creditors are therefore likely to face difficulty in recovering their money through a formal legal process in insolvency cases.

Investment Incentives

To stimulate investment and job creation, Law No. 7/1992 on the Investment Regime establishes the following incentives, which have been in place since 1992:

• A reduction in the company’s tax base equivalent to 50 percent of the salary of an employee in a newly created position.
• A reduction in the company’s personal income tax equivalent to 200 percent of the cost of training offered to local employees.
• A credit worth 15 percent the value of non-traditional exports, which can be used in the payment of any fiscal obligations.
• Additional incentives offered to investors operating in the country’s rural areas, as described in the government’s tax law.

In addition, since the start of the pandemic the government has attempted to incentivize local business creation by reducing the minimum capital investment threshold for registering an LLC. The government does not currently offer any incentives for clean energy investments or for businesses owned by underrepresented investors, such as women.

In accordance with CEMAC provisions, newly established companies in the agricultural, industrial, mining or forestry sectors are eligible for an exemption from taxes on profits during their first three years of operation. Although the rate of depreciation of investments is set at the Community level, companies may make degressive and accelerated depreciation if they have invested in these specific sectors. In the first years of operation, they are allowed to carry forward negative results to subsequent years. Tax reductions are also provided for in the event of reinvestment of profits.
Companies with subsidiaries may deduct from their taxable profit from shares or participations in such subsidiaries, subject to the following conditions: both companies must have their headquarters in CEMAC countries and the parent company must hold at least 50 percent of the capital of the subsidiary and retain such participation for at least two consecutive years.
In 2014, the government established Holding Equatorial Guinea (HOLDING G.E.) to manage a $1.6 million investment fund created to finance its joint ventures with private companies in sectors identified as key to its economic diversification strategy. Previously, the government allocated up to 20 percent of the country’s general budget to this fund every three years, but now it provides funding on a case-by-case basis when HOLDING G.E. identifies co-investment opportunities. Information on investment opportunities in strategic sectors is available on HOLDING G.E.’s website ( https://www.holdingequatorialguinea.com/ ), as is the agency’s “Equatorial Guinea Investment Guide,” which has not been updated since 2018.

Foreign Trade Zones/Free Ports/Trade Facilitation

The CEMAC Customs Code recognizes the right of member States to establish export processing zones (EPZs) exempted from the customs regime. Goods admitted to commercial free zones may undergo the necessary operations to ensure their preservation, improve their presentation or commercial quality, or be packaged for transport. The processing operations applicable to goods in export processing zones depend, however, on national legislation.
Three entities have tax-free status: the Luba Free Port, the Port of Bata, and the K5 Free Port Oil Centre. Goods that are properly cleared through a fellow CEMAC member country are not taxed when entering Equatorial Guinea. In addition to tariff and VAT exemptions for imported goods (normally equipment and supplies for oil companies), the ports offer tax advantages for companies setting up their tax-free zones, including exemptions from: corporate income tax; VAT; personal income tax; sales tax; and dividend tax. These exemptions are not automatic, however, and require separate applications to the the government in order to qualify.
In January 2021, Presidential Decree 2/2021 introduced new regulations on cross-border trade with neighboring Cameroon and Gabon, including establishing an import-export office.

Performance and Data Localization Requirements

Under Equatorial Guinea’s Local Content Law, a significant percentage of the goods and technology used by foreign hydrocarbon companies must be produced or assembled locally or within the CEMAC region. The Ministry of Mines and Hydrocarbons has fined, suspended, and expelled companies perceived to be noncompliant with local content laws, although such cases are more often related to the failure to hire local nationals rather than the failure to use equipment and technology produced in the region.

The government requires internet service providers, whether local or foreign, to turn over source code or to allow surveillance. According to Article 15 of the Telecommunication Law 7, dated November 7, 2015, the Regulating Organ of Telecommunications (ORTEL) oversees official communication lines and networks. The government has no requirements regarding locating data storage within the country.

Real Property

Despite existing laws protecting the rights of property owners, the government selectively enforces those rights and uses the judicial system to seize land “in the public interest” with little to no due process. Mortgages are offered under a “Social Housing Program” in which payments are made to the government via the commercial bank CCEI Bank. Mortgage terms vary and can be more than 20 years, and interest rates are high, ranging from 12 to 18 percent. Non-payment for six months results in foreclosure on the property.

Intellectual Property Rights

While Equatorial Guinea still faces challenges in registering and protecting intellectual property, it was not included in the Office of the U.S. Trade Representative’s 2020 Review of Notorious Markets for Counterfeiting and Piracy nor in its 2021 Special 301 Report.

Equatorial Guinea is a member of the World Intellectual Property Organization (WIPO) and a contracting party to the Berne, Paris, and Nairobi Conventions, as well as Patent Cooperation Treaties (PCT). At the regional level, Equatorial Guinea is a member of the African Intellectual Property Organization (OAPI), which serves as the national intellectual property service and whose national structures are responsible for the promotion and defence of industrial property rights in accordance with the minimum standards of protection set out in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). OAPI ensures a common system of administrative procedures for the registration of rights in this area.

On September 2022, the draft bill on intellectual property, drafted by the Minister of Culture, Tourism and Artisanal Promotion, with assistance of EU Intellectual Property Rights and Innovation (AfrIP), the OAPI, and the EG’s Council for Scientific and Technical Research (CICTE) was presented to the government. The draft bill is pending parliamentary approval. During the same period, the government inaugurated the Intellectual Property Documentation Center, which aims to provide scientific and technical information on intellectual property, technological innovation, and creativity for artisans, researchers, creators, businessmen and women, teachers, students, and other actors in the scientific and technological field.

The scope of the Bangui agreement covers patents for inventions, utility models, trademarks or service marks, industrial designs, trade names, geographical indications, copyright and related rights and protection against unfair competition.

The competent institution at the national level for the formulation of intellectual property policy is the Council for Scientific and Technological Research (CICTE), an autonomous body under the Office of the Head of Government, established on 7 August 1987 by Decree-Law No. 7/1987. Its mandate is to register scientific patents, trademarks and authors, process application files, grant titles and other services related to intellectual property. Within CICTE, the Directorate General of Intellectual Property is in charge of issuing patents. The protection of the intellectual property rights recognized by law is understood to be applicable to industry and trade in all forms, including agricultural, forestry, livestock and biological industries, as well as protection against unfair competition and counterfeiting of trademarks of all kinds (products and services).
For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Capital Markets and Portfolio Investment

The government is encouraging portfolio investment thorough the National Bank of Equatorial Guinea’s (BANGE) brokerage agency BANGE Sociedad de Valores (BANGE SV), which initiated an awareness-raising campaign to inform on the investment opportunities available through this institution for any investor. BANGE SV is listed in the subregional stock market (BVMAC) and is currently working on listing the national electric company SEGESA and national telecom company GETESA on the BVMAC as well. Currently, the country does not have its own stock market, but it does participate in the subregional stock market. BANGE SV had to meet all requirements demanded by the BVMAC in order to participate as broker dealer and is supervised by the Central African Banking Commission (COBAC) to complain with mandatory regulations.

CEMAC’s Bank of Central African States (BEAC) regulates interest rates in member countries by setting the discount rate. The COBAC is the supervising body of the central bank with the mandate to verify that banks operate withing the regulatory framework established by the Central Bank. However, the COBAC’s human capacity in the country is limited and thus banks in Equatorial Guinea fail to comply with most of Central Bank’s directives. For instance, some banks still charge fees for banking services such as for issuing account holder certificates or banks statements that should be free.

Private sector actors can access credit instruments like loans and bank overdrafts after meeting certain requirements, however, the volume of financing available for small and medium-sized enterprises is very low, and microcredits are relatively rare, unlike in in other sub-Saharan countries. Foreigners must provide proof of residency to establish a bank account.

Money and Banking System

Per the Central Bank’s estimations, the country has the highest rate of financial inclusion within the CEMAC region, with 35 percent of EG population having access to financial services. However, the banking sector is underdeveloped with only five commercial banks operating nationwide. While banks have branches throughout the country, they are concentrated in urban centers. BANGE has the most branches (31), while CCEI/CCIW Bank de Guinea Equatorial, which has been wholly owned by the government since 2021, is the largest bank in the country in terms of total assets under management. BGFI Bank Guinea Equatorial operates as a subsidiary of BGFI Holding Corporation (Gabon). Pan-African EcoBank (Togo) and Societe Générale (France) also operate in Equatorial Guinea. Foreigners must provide proof of residency to establish a bank account.

Per the IMF last article IV consultation, regarding the banking sector, the aggregate short-term liquidity ratio remains above the prudential minimum, although deposits continue to decrease. EG banking sector has one of the lowest credit-deposit ratios in the subregion, a particularity that had served as buffer to withstand external shocks, added to its lower banking penetration. However, the banking sector has been weighed down by many nonperforming loans (NPLs), undercapitalization, and low liquidity at some banks. High NPL rates and low coverage ratio are mainly driven by government arrears with construction firms (for which provisioning is not compulsory). Many of the NPLs are concentrated in CCEI, in which the government acquired a majority stake in 2020. Following COBAC’s alignment of capital definition with Basel II framework at end of 2019, the banking sector is deeply undercapitalized. The aggregate short-term liquidity ratio remains above the prudential minimum, although deposits continua to decrease.

CEMAC members do not have their own central banks, but instead host national BEAC branches. Three BEAC branches are located in Equatorial Guinea in: Ebibeyin, a small city on the borders with Cameroon and Gabon; Bata, the most populous city in Equatorial Guinea, located on the Atlantic Coast; and Malabo, the capital, located on Bioko Island 75 km from mainland Equatorial Guinea. BEAC’s Central Africa Banking Commission (COBAC) regulates the region’s banking systems and provides authorization for commercial banks to operate in each member country. The Ministry of Finance provides information on establishing a financial institution within the CEMAC region on its website at https://minhacienda-gob.com/condiciones-para-la-solicitud-de-una-acreditacion-de-actividades-financieras-en-la-cemac/ .

Foreign Exchange and Remittances

Foreign Exchange

As a CEMAC member, Equatorial Guinea uses the Central African franc (XAF), which is backed by the French treasury and pegged to the euro at a fixed rate of 655.957 XAF/EUR. The XAF/USD exchange rate thus fluctuates with the value of the euro. Foreign currency is not widely available in the XAF zone but can be physically obtained in Equatorial Guinea in small quantities. There have been reports of arbitrary restrictions on access to or transfers in and out of foreign currency accounts held by Equatoguinean citizens.

In December 2018, CEMAC approved Regulation No. 02/18/CEMAC/UMAC/CM, instituting new foreign currency exchange rules for all businesses and individuals residing within the subregion. A few of the more notable rules under the new regulations include:

• Companies and individuals residing in CEMAC countries must receive authorization from BEAC to hold offshore and onshore foreign currency accounts, thus forcing most companies to maintain their bank accounts in XAF rather than a foreign currency. If BEAC does not act on the request within 30 days, it is considered to be approved.
• Export proceeds over 5 million XAF (approximately $8,250) must be repatriated to a commercial bank within the CEMAC region within 150 days.
• Companies must declare the importation of services to the BEAC, and export proceeds over 5 million XAF (approximately $8,250) must be held in a CEMAC bank.

These regulations have caused an increase in delays for transfers or exchanges of local currency into foreign denominations. In September 2020, BEAC instituted an online “e-transfer” application to ensure credit establishments comply with the new regulations. The online application automates the entire process of transfer requests and monitors the progress of each request in real time. The new regulations went into force in March 2019, but following pushback from the extractive industry, CEMAC granted an extension until December 31, 2020 for compliance by hydrocarbon and mining companies. CEMAC granted an additional extension until December 31, 2021 in response to the COVID-19 pandemic. In the months leading up to the deadline, the extractive industry negotiated with CEMAC to adapt the regulations to meet their unique foreign currency needs. Following these negotiations, CEMAC released updated instructions for mining and hydrocarbon companies in December 2021 and February 2022, under which:

• Certain transactions can be conducted using an onshore or offshore foreign currency account, including the payment of external transactions or the repayment of loans;
• Only 35 percent of proceeds must be repatriated, rather than 100 percent; and
• Contractors can be paid in foreign currency so long as the transactions are handled through onshore foreign currency accounts.

While not formally included, CEMAC verbally agreed to a 10-month grace period ending October 31, 2022 to provide addition time for extractive industry countries to fully comply with the updated regulations. In general, oil and gas companies operating in Equatorial Guinea have been able to adapt their financial processes to meet the new requirements, although they have been unable to find a local bank that can handle their account balance and transaction needs, forcing them to open accounts in Cameroon to comply with repatriation requirements, and adding additional administrative and compliance burdens. In addition, CEMAC has not yet defined how funds from abandonment and decommissioning of assets will be handled, a point of concern for foreign hydrocarbon companies.

Remittance Policies

Remittances and money transfers in general are regulated by CEMAC’s Exchange Regulation nº02/18/CEMAC/UMAC/CM. Additionally, Ministerial Order 3221 released by the government in June 2017 regulates rapid money transfers via money transfer agencies. Transfers of remittances are limited to the equivalent of 1 million XAF (approximately $1,663) per sender per month and to 400 million XAF (approximately $666,331) per financial institution per month. Western Union wire transfers are no longer available in the country, and informal money transfer operations have become more commonplace.

Sovereign Wealth Funds

The government established the Fund for Future Generations as its sovereign wealth fund in 2002. The fund receives 0.5% of all oil revenues and is governed and managed by BEAC. The Sovereign Wealth Fund Institute estimates that the fund has approximately $165.5 million under management, although there is no publicly available information on its allocations or the regulations directing its maintenance and management.

Privatization Program

To comply with the IMF’s recommendations, the government also committed to the privatization several of its SOEs. In April 2022, it announced that it would be privatizing GETESA, SEGESA, GITGE, and Ceiba Intercontinental, as well as its mail delivery service (GECOTEL) and vehicle inspection service (ITV). The government also stated that it will undertake privatization of undefined assets in the hospitality, health, and education sectors, as well as at the airports and ports. The government did not provide any details on the timeline or process for the privatization process, but it instructed the Ministry of Finance to establish the relevant procedures, including a transparent public bidding process that is open to international investors. The government is in active negotiations with BANGE SV to restructure SEOs SEGESA and GETESA in order for those entities to be listed in the subregional stock market.

Additional Resources

Department of State

• Country Reports on Human Rights Practices ( https://www.state.gov/reports/2022-country-reports-on-human-rights-practices/equatorial-guinea)
• Trafficking in Persons Report ( https://www.state.gov/reports/2022-trafficking-in-persons-report/equatorial-guinea/)

• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ( https://www.state.gov/key-topics-bureau-of-democracy-human-rights-and-labor/due-diligence-guidance/)
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises ( https://www.state.gov/u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises/)
• Xinjiang Supply Chain Business Advisory ( https://www.state.gov/xinjiang-supply-chain-business-advisory/)

Department of the Treasury

• OFAC Recent Actions ( https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions )

Department of Labor

• Findings on the Worst Forms of Child Labor Report ( https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings  )
• List of Goods Produced by Child Labor or Forced Labor ( https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods )
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World ( https://www.dol.gov/general/apps/ilab )
• Comply Chain ( https://www.dol.gov/ilab/complychain/ )

Climate Issues

Equatorial Guinea’s national climate change policy is established in the following documents:

• National Food Security Program (NFSP), adopted in 2012;
• National Climate Change Action Plan (NCCAP), prepared in 2013;
• Nationally Determined Contributions (NDCs) plan, adopted in October 2015;
• National action plan to mitigate CO2 emissions in international aviation, adopted in 2016;
• Reducing Emissions from Deforestation and Forest Degradation National Strategy (NS-REDD+), adopted in 2018;
• 2018-2025 National Renewable Energy Action Plan (NREAP), adopted in 2018; and
• REDD+ national investment plan (NIP-REDD+), adopted in 2020.

Through its existing NDC, the government sets a target of a 20 percent reduction of CO2 emissions by 2030 and a 50 percent reduction 2050 compared to 2010 levels. The NDC plan includes a variety of initiatives designed to help meet this goal and improve Equatorial Guinea’s overall climate adaptation, including: installation of early alert systems for climate risks and natural disasters; periodic resiliency reviews of critical infrastructure; increased use of renewable energy with a focus on hydropower; greater public transportation options; and greater use of new technology, including more fuel-efficient machinery, vehicles, and airplanes. In late 2021, a representative of the Ministry of Agriculture, Livestock, Forests, and Environment (MAGBMA) stated that the government would be releasing its updated NDCs in April 2022, which would include more aggressive targets. Both Ministry officials and third-party observers admit that the government does not currently have the capacity or resources to meet its existing targets, and little tangible progress has been made.

Equatorial Guinea’s Hydrocarbon Law No. 8/2006 requires all hydrocarbon operations to be undertaken in a manner that protects and preserves the environment and allows the Ministry of Mines and Hydrocarbons to suspend the operations of any company that damages the country’s natural resources. Law No. 7/2003 on the Environment further requires all companies to present environment protection plans, including environmental impact studies and rehabilitation plans, to the Ministry. There are no known regulatory incentives to achieve policy outcomes that preserve biodiversity, clean air, or other desirable ecological benefits, and it is unknown if the government’s public procurement policies include environmental considerations.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

The government has not provided contact information for the newly created office of the anti-corruption prosecutor. The National Committee on the Prevention and Fight Against Corruption (CNPCC) created under Law No. 1/2020 is designed, among other things, to receive reports of suspected corruption cases, but it has yet to be fully established.

Contact at a “watchdog” organization:

The European Union-funded project APROFORT reports on issues of corruption and transparency in the country. Its legal clinic is primarily designed to provide services to human rights activities, civil society organizations, women and girls in vulnerable situations, and LGTBQI+ communities, but it also takes on whistleblower cases. The clinic can be contacted at:

Legal Aid Service
APROFORT
Calle del Botuku Luba, s/n
Malabo, Bioko Norte, Equatorial Guinea
(+240) 333 099 118
secretariado@transparencia.pt