DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENTINTERNATIONAL DEVELOPMENT ASSOCIATION

Not For Public Use

Report No. AW-37a

THE ECONOMY OF THE REPUBLIC

OF

EQUATORIAL GUINEA

RECENT EVOLUTION AND PROSPECTS

4'\

November 27, 1972

Western Africa Region

This report was prepared for official use only by the Bank Group. It may n,ot be published, quotedor cited without Bank Group authorization. The Bank Group does not accelot responsibility for theaccuracy or completeness of the report.

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CONVERSION TABLE

EG peseta 1 Spanish peseta 1

As of January 1, 1972:

US$ 1 EG pesetas 64.47EG peseta 1 US$ o.o155

Until December 31, 1971

US$ 1 EG pesetas 70EG peseta1 : US$ 0.0142857

This report was prepared by Mr. Adhemar Byl,

after a mission to Equatorial Gt.inea from August

23 to 28, 1971. essrs. AlRredo Soto and Peter

Gyanfi prepared the transport section of the report.

TABLE OF CONTENTS

PagerNo.

COUN]RY DATA

MAP

SITIR4-ARY AND CONCLUSIONS ............................. . - ii

I. GEOGRAPHY, POPULATION, AND MAIN POLITICALAND ECONOMIC INDICATORS .................................. 1

A. GeograDhy and Population ....................... 1B. Tlistory and Political Organization ..................... 2C. Gross Domesti.c Product ......................... 2D. Investment ...................................... 3E. Employment ........................ ........... 5

II. PUBLIC FINANCE ..................................... 5

III. MONEY AN) BAINGMIM............................................. 8

IV. FOREIGN TRADE AND BALANCE OF PAYWENTS ............... 1l

V. PROSPECTS AND MAIN PROBLEMS FOR GRO(TT ............... ..... 11

A. Production ......................... .11B. Extetnal Assistance and Creditworthiness ....... 12

APPENDIX I: SECTOR DEVELOPMhNTS

A. Agriculture 1B. Forestry 3C. Fishíng 51). Mining 6E. Transport 6F. Manufacturing and Public Utilities 10G. Education 11

APPENDIX II: STATISTICAL APP9EDDIX

Table I Geogranlhv and Population.Table II Gross Domestic Product.Tables III - V Public Finance.Tables VI - VIII I4oney and Banking.Tables IX - XIII International Trade.Tab les XIV llalance of PaymentsTables XV - XVII Sector Information.

COUNTRY. 1DATA

AREA 2 POPULATION DENSITY28,051 km (mid-1970) 300;000 (estivrate) lo.7 per km2

Rate o£ Growth: 1.h (froml970 tol975) 136 per km2 of arable land/b

POPULATIOIN CItARACTERISTICS (1270) HEALTH (1966)Crude Birth lLate (per 1,000): 34.6 Population per physician: 5,130Crude DeaLth Rate (per 1,000): 21.0 Population per hospital bed : 200 (1967)Iinfant Mortality (per 1,000 live births): 53.212-

INCOME DISTRIBUTION (year) DISTRIBUTION OF LAND OWNERSHIP (year)7. of national íncome, lowest quintile % owned by top 10% of oswnershighest quintile % owned by smallest 10% of owners

ACCESS TO PPTTED WATER. (year) ACCESS TO ELECTRICITY (year)% of population - urban % of population - urban

- rural - rural

NUTRITIlON (year) EDUCATION (yeat)Calorie intake as % of requirements Adult literacy rate 7.Per capita protein intake Primary school enrollment % 90 (1967)

1/GDP PER CAPITA i.n 1970 :US $ 212

GROSS D0IWSTIC PRODUC.T IN 1970 ANIUAL RATE OF GROWTH (%, constant prices)

US $ Mln. % 1962-66 1965-70 1971GDP aL Market Prices 63,7 100.0 11.2 1.1Gross Domestic Investment 12.1 19.0 10.9 5.8Gross Dormostic Saving z45 22.7 10.8Current Accotnt Balance 3.1 4.9 .0Exports of Goods, NFS 25.o 39.2Imports of Goods, NFS 22.6 35.5 .e

OUTPUT, LABOR FORCE ANDPRODUCTIVITY IN 1970

Value Added Labor Force2 V. A. Per WorkerUS $ Mln. 7% Mln. % US $ %

Agriculture 34.3 53.8 .. .. .0Industry 15.1 23.7 ' . e.Servi;ces 143 22.5

* Oo

Unallocated 0 - e -cTotal/Average 1 100.0 100.-O

GOVERNIENT F1NAY CEGeneral Governuaent Central Governinert

( Mn.) 7. of GDP (EG pesMln.) 7. of GDU197 197 196 -7 1970 1970 1968-70

Current Receipts .. * 950 21.3 17.6Current Expenditure .6h6 1iJ 13,0 OCurrent Surplus .. . , 30° 6.8 5.3 /CCapital Expenditures .. .. o. 651 1h.6 8.0 eExternal Assistance (net) . .. .. - - -

1/ The Per Capita GDP estimate is at 1968 market prices, calculated by the same conversionteclinique as the 1972 World Atlas. All other conversions to dollars in this table areat the average exchange rate prevailing duríng the period covered.

2/ Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consistsmainly of unemployed workers seeking their first job.

not available.not applicable

a/ UN figure based on very inadequate rogistration systom. Actual rate may well be two or three times bigger.P/Per km2 under permanent cultivation (2,210 kmc.2)1/ 969 and 1970 only.

COUNRY DATA

MONEY, CREDIT and PRICES 1965 1969 1970 1973. 1971 l97-(Million pesé outstanding end period)

Money and Quasí Money . 968 763 8312Bank Credit to-Public Sector . -738 -57054 o7

Bank Credit to Private Sector e 1498 603 491 ee

(Percentages or Index Ntunbers)

Money and Quasí Money as'7. of GDP .e7.1 7o1General Price Index (1963 = 100)

Annual percentage changes in: e. o e eGeneral Price Index:Bank credit to Public Sector (1969 n 100) 100l 0 75.7 95.4 e o.Bank credit to Private Sector (1969 100) 100.0 121.1 98.6 ..

BALANCE OF PAYMENTS .MERCHANDISE JSXPORTS (AVERAUE 1967-70) b

196 197 1970 US $Mn %(Millions US $ Cocoa 16.3 62.7i

Exports of Goods, NFS 25eO Coi'fee 5.4 20e8Imports of Goods, NFS 22.6 Wood 3.1 11i9Resource Gap (jeficit -) - .4

Interest Payments (net) ) 1.8/ All other cornitodities 12 146Workers' Remittances ) Total 26.0 lO.Q,0Other Factor Payments (net)Net Transfers -3.7 EXTERNAL DEBT, DECEMBER 31, 197Balance on Current Account -3.1

Direct Foreign InvestmentNet MLT Borrowing ,. Public Debt, íncl. guaranteed

Disbursements -4.2 Non-Guaranteed Private DebtAmortization 1.0 Total outstanding & DisbursedSubtotal - 1/

Capital Grants DEBT SERVICE RATIO for 1971-Other Capital (net) 7Other items n.e.iIncrease in Reserves (+) Public Debt, incl. guaranteed 7

Non-Guaranteed Private DabtGross Peserves (end year) Total outstanding & DisbursedNet Reserves (end year)

RATE OF EXCHANGE IBRD1IIDA LENDING, (latest month) (Million US $),

Through Dec. 31i 1971 IBRD IDAUS $ 1.00 S EG pes. 70

EG pes. 1.00 - US $ 0.014 Outstanding & DisbursedUndiebursed

Since Dec. 31,1971 outstanding íncl. UndisbursedUS $ 1.00 a EG pes. 6>1cd73701

EG pes. 1.00 = US $ 0.0155

1/ Ratio of Debt Service to Exports of Goods and Non-Factor Services. IIM' estlate.

L/ End of April data.g/ Average of 1967 and 1.970 data because 1968 and 1969 data are incomplete./ 1ainly viorkers reirittnr.ces.

not avaílable

not applicable

July 18, 1972EPD/PRD

IBRD 10259

91 lo. DECEMBER 1972¡. j¿Douala

rSANT ISABEL -j , EQUATORIAL GUINEA,U-SANTA ISABEL X

Baney - Existing asphcqlt roadsBaloerl Exist[ng laterite roads

Planned roads

INSULAR GUINEA . r r RiversSan Carlos Moeri (Fernando Poo) > Ports

Batete | + Airports/ Concepcion Bridges

Na -k International boundaries

EbolowaGulf o f G u i ne a

i ~CAMEROON¡n

Rio Campo , ¡,9 ;

30 30

Emb fyamí Kenimen

-2° -tu 2°-

ANNOBON 1 aTemelon(Insular Guineo) BATGu

-1053,0,' 1e,3U W \

SUIMMARY AND CONCLUSIONS

i. Equatorial Guinea consists of Continental Guinea, or Rio Muni, lo-cated on the African mainland between Cameroon and Gabon, and of InsularGuinea,which is mainly the island FernandoPoo in the Bight of Biafra, 50kilometers off the coast of Cameroon. The country, a former overseas provinceof Spain, received autonomy in December 1963 and became independent in October1968. At that time it was agreed that the Spanish administrative and technícalstaff would remain to supplement local administrators until sufficient na-tionals could be trained. However, sínce then, many expatriates have left,and the country has a shortage of skilled administrators in the public andprívate sectors.

ii. In 1970 the total population of Equatorial Guinea was estimated atabout 300,000. Per capita GDP at 1968 market prices was estimated at $212.Farnando Poo, with a population of about 90,000 and about 7 percent of thecountry's surface, is one of the most fertile regions of Tropical Africa. Ithas also one of the highest per capita export figures and accounts for abouthalf of the GDP of the country. Per capita income in Fernando Poo was about$350, while in Rio Muni it was only about $150. Two-thirds of the FernandoPoo population consisted of Nigerian contract and long-term migrant laborersand their famíiles (some 64,000 in total). Their number is decreasing andit has proven very hard to replace them.

iii. Production of cocoa, coffee, and wood, which accountsfor almost90 percent of all exports, have declined since 1969. The Government hasfound it difficult to revitalize large numbers of abandoned plantations andforest coricessions. To restore production will require improved confidenceof the private sector and a solution to the increasingly pressing manpowerproblems. Continued emigration of Nigerian workers would thwart the restora-tion of production, unless sufficíent numbers of workers from continentalGuinea can be employed and trained. The Government is considering to restoreproduction by letting some former owners return, and by letting the newlycreated National Deposit and Development Bank of Equatorial Guinea run theremaining plantations and forest concessions. Hc:wever, the new bank willhave to concentrate its initial efforts on commercial banking.

iv. Considerable work will be necessary before wood production can beresumed at previous levels. The Forestry Service needs to be re-organizedand restaffed. At a later stage, a forestry inventory, a replanting scheme,and a transport study will become imperative. In the meantime, the roadsystem needs maintenance.

v. Trade with Spain, after independence, continued to account for 90percent of exports and 80 percent of imports. The country has a bilateralCommercial and Payments Agreement with Spain, which provides for a clearingsystem in multilateral trade and facilities to encourage bilateral trade.

vi. Declining production has not as yet seriously affected the Govern-ment's foreign exchange reserves and budgetary situation. In fact, foreignexchange reserves have continued to increase, and Spanish budget aid, althoughdisbursed immediately after independence, was not needed until 1971. Foreignreserves rose by US$20 million (or more than one year of imports) as a result

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*of the low capital expenditures in 1968 and 1969. However, in the period

ahead, the foreign exchange position ís likely to be affected by the in-

crease in public works. These include a port and official buildings for

which expenditures are only partly covered by external financing.

vii. The budget surplus in 1969 resulted, on the one hana, from the de-crease in goverranent expenditures for wages and sal2nries (associated with

the departure of expatriates) and for investnent, and on the otiher hand,

from continued increase in Government revenues, partly due to inereasedtaxation, but mainly due to rather large amounts of extraordlnary revenues,such as those from oil prospectina.

viii. In 1970, actual government expenditures exceeded revenues, but thedeficit was still substantially smaller than the EG pes. 426 million budgetsupport provided by Spain in 1969. Total public investnent rose from a low

of EG pes. 86 million in 1969, to EG pes. 651 million (US$10 millíon) in1970. It is expected to continue at that level at least through 1971 and1972.

ix. Gross private investment has been rather high between 1964 and 1968,mainly because of large investments in petroleum exploration. In 1969 and1970, some petroleum exploration continued and some hotel construction tookplace. The value of this construction is probably offset by low capitalreplacement and by disinvestnents taking place in other sectors.

x. The balance of payments showed a deficit of some US$6 million in1970. There was a trade surplus on current account (goods and non-factorservices) of some US$2.4 million, which was largely offset by payments onGovernrment transactions, by deficits on the private capital. account (US$4million), and by unrequited transfer payments, mainly to Nigeria and Spain.The deficit is likely to continue as long as production for export will notbe restored to previous levels.

xi. The debt ser'lce ratio has grown because of supplier credits for

public works, but probabl-y still remains below 5 percent of exports of goodsand servíces. In the interest of efficient utilization of resources, theGover,aent should be cautious in contracting new supplier credits.

xii. Restoration of productive capacity deserves high priority. Also,the Governnent should improve its control of the cost and quality of projects.Thus, while external capital assistance will be required, its associationwith technical assistance is crucial. Specialized aid agencies should be

encouraged to hxelp improve the administration.

xiii. In the years ahead, both the budget and the balance of payments arelikely to be under strain. The budget is likely to suffer froin the absence ofinstitutions capaible of controlling expenditures. In view of the poverty ofContinental Guinea and the overall weakness of the administration, the coun-try's ability to raise internal resources for development is severely limited.External financiers will therefore need to provide a high proportion of in-vestment cost on concessionary terms. External finance will also have toprovide for a large part of the local cost of development projects.

I. GEOGRAPHY, POPULATION, AND MAIN POLITICAL AND ECONOMIC INDICATORS

A. Geography and Population

1. Equatorial Guinea consists of two geographically separate provinces:Continental Guinea, or Rio Muni and Insular Guinea, or Fernando Poo. Togetherthey cover an area of 28,051 sq. kilometers. Santa Isabel, capital of FernandoPoo, is also the national capital. Bata is the provincial capital of Río Muni,the largest of the two provinces (93 nercent of the total area of the country).Rio Muní is located along the WJest African coastline wíth Cameroon to the Northand Gabon to the South and East. It is flat along the coast and hilly inland,with the highest point only 1,200 meters. The southern border with Gabon con-sists partly of the estuary of several rivers, of which the Muni River is themost important. The ports of Cogo (formerly Iradier) in the Rio Muni Provinceand Cocobeach in Gabon face each other across this estuary, which also containsa few almost uninhabited islands. The smaller, but economically more importantprovince is Insular Guinea, named after the island Fernando Poo, in the Bightof Biafra, about 250 km away from Rio Muni, but only 50 km off the coast ofCameroon. The island is of volcanic orígin and the highest point is the SantaIsabel Mountain which reaches 3,O00 meters. The economically unimportantisland of Annobon, which belongs to the Insular province, is almost 600 kmsoutheast of Santa Isabel (below the. Portuguese islands San Tome and Principe).It causes expensive administrative and communication Droblems.

2. In 1970 Equatorial Guinea had a Dopulation of about 300,000, 1/ ofwhich an estimated 2 10,000 in Rio Muní (Appendix Table I). About 90 percentof the mainlanders were Fang, a population group whose territory extends intonorthern Gabon and southern Cameroon. Several small fishing tribes along thecoast, usually known as Playeros, accounted for the remainder. Once, therewere 3,000 Europeans (mainly Spaníards) in Rio Muní, and 5,000 in Fernando Poo.Their number was estimated in 1970 at maxirmum 800 in Rio MIuni and 800 inFernando Poo.

3. Of the Fernando Poo populati.on of about 90,000 in 1970, some 64,000were Nigerian contract workers and their famílies. The rest consisted mainlyof some 15,000 Bubis, 5,000 Fernandinos, and about 5,000 Fang from the main-land. Most of the latter were associated wi.th the Government administration,the army, and police. The Buibis are the original inhabitants of the islandand the Fernandinos are descendants of people from former British territories(such as Sierra Leone) who came during the hrief períod of British rule in thefírst half of the nineteenth century, and descendants of Liberian familieswho were brought in as plantation laborers in the beginníng of the twentiethcentury. The diverse ethnic composition of the island and the mainland compli-cates Governmeent administration.

4. The official language of the countrv is Spanish. Each ethnic grouphas its own African language, but the Bubi and Fernandino, both among them-selves and in their relations with the Nigerian workers, use nidgin English.

1/ This figure is based on the 1960 Spanish population census projectedforward at a rate of 2 percent per year and adjusted downward for thedeparture of some 7,000 Spaniards.

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B. History and Political Organization

5. Real development dates only from the post-World-War-II-period, whenthe Spanish Administration started subsidizíng cocoa and coffee exports andopened up new tribal lands for Spanlsh companies in Fernando Poo. On July 30,1959, Rio Nuni and Fernando Poo became two overseas provinces of Spain underthe name Equatorial Region. The region became autonomous in Noveniber 1963and Lndependent on October 12, 1968.

C. Gross Domestic Product (GDP)

6. GDP estimates for the period 1962-1970 (at 1968 market prices) mdi-cate a growth rate of 6 percent a year. Per capita GDP at constant 1968 mar-ket prices was estimated at US$217 in 1966 and at US$212 in 1970, a decreaseof 2.4 percent (8.5 percent between 1968 and 197Q). Much of this decreasehowever is due to the departure of 7,000 Spaniards. A further real declinein GDP is expected in 1971 because of lower wood and cocoa production. Largeinfrastructure investments underway in 1970 increased the share of constructionin GDP from 9 to 15 percent (Appendix Table II).

7. There are significant differences between the economic structuresof the island and the mainland. The economy of Fernando Poo is heavily mo-netized and accounts for about 65 percent of the value of imports, for about55 percent of the value of exports (Appendix Table XIII), and for about 50percent of total GDP. The island accounts for only 30 percent of total pop-ulation. This would imply that per capita GDP there was about US$354 in 1970compared with US$152 per capita in Rio Muni, where the population and thesubsistence sector are much larger.

.

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Table 1: GROSS DOMESTIC PRODUCT AT MARKET PRICES IN SELECTED YEARS, 1962-1970

(In millions of EG pesetas)

1962-a 1966 1968 1970at 1968 prices

Consumption 2,041- 3,140 3,143 3,442Private 1,755 2,665 n.a. 3,053Public 285 475 n.a. 389

Gross Investment 447 676 983 846

Exports - Imports 299 450 600 168

GDP 2,787 4,266 4 726 4 456

of whichGross domestic saving 746 1,126 1,583 1,014

GDP per capita (in pes.) 10,840 15,170 16,058 14,850

GDP per capita (in US$) 155 217 230 212

/a The Spanish wlholesale price index wjas used to obtain constant price es-timate.

/b Difference due to rounding.Source: Spain, Plan de Desarrollo Economico v Social, anos 1964 a 1967,

Madrid, 1964; Appendix TabJ.e II; and mission estimates.

D. Irnvestment

8. GDP estimates show average investment at between 16 and 21 percentof GDP since 1962. The good quality of Equatorial Guinea's infrastructure isthe r.result of these large investments in the past.

9. The Spanish 1964-67 DeveloDment Plan foresaw public investmentsin Equatorial Guinea of 1,651 million pesetas. Actual investment duringthat period was estimated at 1,375 million pesetas or 83 percent of theplanned level. Capi.tal expenditures bv the Government reached 570 millionpesetas in 1968 but fell to EG nes. 86 million during the first year of in-dependence. In 1970 public capital expenditures increased to almost 15 per-cent of GDP (Table 2).

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Table 2: PLANNED AND ACTUAL GROSS INVESTMENT, 1964-1970

(In millíons of EG pesetas)

1964 1965 1966 1967 1968 1969 1970 1971

Governnent investment

Planned 357 389 414 191 n.a. 189 524 524

Actual 21 0 A 34 7/- 364 454 570 86 651- n.a.

Private investment

Planned 190 218 250 270 n.a. n.a, n.a. n.a.

Actual 379 377 397 457 513 230 272 n.a.

/a Includes investments carried out through the Spanish Aíd and Collabor-ation Budgets.

lb Including EG pes. 287 million for the port of Bata only, and EG pes.164 million extrabudgetary for construction of hospítals and militarybarracks. The remainder was also ,nainly for construction, e.g., ofCentral Bank buildings in Santa Isabel and Bata.

/c Includes an estimated EG pes. 100 million per year in petroleum explora-tion.

Source: Spain, Anexo al Plan de Desarrollo Economico y Social, 1964-1967,Madrid, 1964; data supplied by the Equatoríal Guinea authoritiesand the United Nations and missíon estimates.

10. Gross private investment, which has been projected at about halfthe public investment í¡i the Development Plan, generally has been hígIher,principally because of the rather large investments ín petroleum exDloration(more than EG pes. 1 billion between 1960 and 1970). Since independence, itis estimated at only half of previously attained levels. The few nrivate in-vestments include some luxurv hotels along the coast in Bata. The economicvalue of these gross investments is partly offset by low capital replacementand disinvestments apparently taking place in other sectors.

11. Thne Government is not currently working on a conprehensive devel-opment plan. What would seem almost essential for future economic develop-ment in the formulatíon of a strategy to restore production, and the prepara-tion of a list of priority investrnents, wlose implementation should be phasedover timr in relation to financing capacity, and which should eventually pointthe w"y towards further development i.n such key sectors as education and man-power. The economíc priorities appear to be as follows:

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(a) get the agricultural and forestry production process goingagain;

(b) improve government administration to make this possible;

(c) reorganize the maintenance of a rather good but rapídlydeteriorating economic and social infrastructure (roads,power plants, hospítals, and schools);

(d) plan for medium and long term economic growth and develop-ment through careful screening of non-priority projects.

E. Employment

12. The employment picture in Equatorial Guinea, and especially inFernando Poo, is dominated by the presence of a large number of foreignworkers, mainly Nigerians (some 40,000). In 1969, Government employment wasestimated at 3,500 by the Government. Most employment in the private sectoris on the Fernando Poo cocoa plantations and in forestry concessions in RioMuni.

13. Most Nigerian workers are in Fernando Poo, although in Rio Muni'sforestry concessions there are a considerable number of Nigerians. InDecember 1968, 4,265 people were contractually employed by the forestrysector in Rio Muní; of this amount, 2,310 or 54 percent were Nigerians.The contractually employed do not include an estimated equal number of tasklaborers (destajistas) and farmers in part-time forestry activities. Some*of the destajistas are also Nigerians, but most are probably nationals.

14. The total forestry employment figures for 1968 do not accuratelyreflect the current situation because many concessions have been abandoned(see below). In July 1969 for example, only 8 of the 135 Europeans employedin this sector at the end of 1968 were still in the country. Some 6,000former contractual and task laborera may well be unemployed presently.

II. PUBLIC FINANCE

15. During the first years of independence, the Government disposed ofsufficient financial means to meet its expenditures. This was due to the de-cline of expenditures during the transition period and the availability ofexternal budget support. Since current and capital expenditures are boundto rise, the condition of public finance might become more difficult in thenext few years, unless the Government is able to raise additional revenue aswell as foreign aid to help finance its capital expenditures.

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Table 3: GOVERNMENT FINANCE, 1968-1971

(In millíons of EG pesetas)

1968 1969 1970 1971

(budget)la la

Revenue 738 732-- 950- 900

lbCurrent expenditures 766- 546 646 1179

Current surplus or deficit (-) n.a. 186 304 -279

Capital expenditures n.a. 86 651 524

Overall surplus or deficit (-) -28 100 L= -347-- -803

Financing:Change in domestic balances n.a. -577 174 n.a.Foreign grants n.a. 426 - n.a.Foreign suppliers' credíts n.a. 52 172 n.a.

/a Includes EG pesetas 72 million and EG pesetas 195 million in extra-ordinary revenues in 1969 and 1970 respectively (mainly one time pay-ments of fees for oíl exploration).

lb Includes capital expenditures./c Difference due to rounding.Source: Equatorial Guinea, Ministry of Finance.

16. The 1969 independence budget forecasted a deficit of EG pesetas426 million, for which the Spanish Government deposited an equal amount ofbudget support in the Central Bank. However, the 1969 budget was consíderablyunder-spent because the civil service was under-staffed and little investmentwas undertaken, due to the unexpected departure of the large number of Spanishnationals serving in the Equatorial Guinean administration. These vacancieshave now only partly been filled, due to the shortage of local skills. Ac-tual total receipts in 1969 were only about 1 percent below receípts in 1968,but they included EG pes. 72 million in extrabudgetary revenue. Ordinaryreceipts were therefore about 11 percent below the 1968 actual level. Itappears that this was the result of a decline in imports and a decrease inincome tax collections due to the departure of large numbers of expatriates.

17. The 1970 budget, presented in November, foresaw a deficit of EG pes.866 million, due mainly te a further increase in expenditures to EG pes. 1,703million. The actual deficit turned out to be only EG Des. 346 million. Cur-rent expenditures increased by only EG pes. 7no million in part because salarypaynents fell short of budget provision as a result of the departure of ex-patriates. Capital expenditures rose from EG pes. 86 million in 1969 to

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EG pes. 651 million. The actual 1970 ordinary revenue was still 14 percentabove the 1969 ordinary revenue. This was mainly due to tax receipts onlarge imports for inventory renewal or for investment.

18. Because it was published late in the year, the Government decidedto use the 1970 budget also as a basis for its 1971 budget. However, in viewof the tax increase of December 1; 1970, and the underestimation of 1970 rev-enues. we increased the revenue estimates upward to EG pes. 900 million, aconservative estimate.

19. From January 1969 until the end of March 19'.1, the Governnentaccumulated an overall defícit of EG pes. 184 mlllion. Duríng this periodthe Government received EG pes. 520 million in external credits and budgetgrants. In all, external credits exceeded the budget deficit and the Gov-ernment increased its balance with the Central Bank by EG pes. 537 million.

20. The public sector in Equatorial Guinea comprises the Central Gov-ernment and the municipal authorities. The Municipal Electric Service isexpected to be self-financing. The 18 municipal authorit4es of the countryare responsible for the provision and maintenance of municipal services.Some 35 percent of total municipal revenues are derived from transfers bythe Central Government; the rest from the collection of property taxes andlicense fees. Santa Isabel and Bata, with the two largest municipal budgets,account for about 70 percent of total municipal fínancial operations. Nodetails on the municipal budgets are available.

21. The tax structure in Equatorial Guinea continues to be similar tothat of Spain. Hawever, the tax rates are believed to be somewhat lower andmore exemptions are allowed than in Spain. They could probably be increasedimmediately and there will probably be scope for general tax increases. In-direct taxes account for about 50 percent of government revenue and directtaxes for about 40 percent (Appendix Table IV). Indirect taxes are mainlyconsumption taxes and taxes on foreign trade. Direct taxes are mainly leviedon agricultural income (about 20 percent of total government revenue). Thelow customs taxes are an inheritance of the pre-independence tariff system,which did not need to be protective since Spanish goods were usually cheaper thanimported goods.

22. In November 1970, the Government introduced a number of measures toraise revenues. Land and income taxes were revised and taxes on internationaltransactions of income and on sales were introduced. The sales tax will belevied at the rate of 10 percent on luxury goods and 3 percent on other goodsand services except basic foodstuffs.

23. An economic classification of budgeted expenditures is shown inTable 4. Wages and salaries and capital expenditures were expected to absorb45 and 31 percent respectively of all expenditures in 1971. Although theactual results are not available, it is clear that capital expenditures willtake a larger share and personnel expenditures a lower share of the total.

Table 4: ECONOMIC CLASSIFICATION OF BUDGETED EXPENDITURES,1969 and 1971

(In millions of EG pesetas)

1969 1971Amount - Amount

Current budget 950 83.4 11,179 69.2

Wages and Salaries 626 55.0 758 44.5

Goods and Services 203 17.8 195 19.5

Transfers and Other 121 10.6 226 13.2

Capital budget 189 16.6 524 30.8

TOTAL 1,139 100.0 1,703 100.0

Source: Equatorial Guinea, Miniotry of Finance.

III. MONEY AND BANKING

24. The banking sector in Equatorial Guinea comprises a central bank,twQ commercial banks, and a savings bank. Prior to the establishment of theCentral Bank in 1969, Equatorial Guinea was an integral part of the Spanishmonetary area. The currency in circulation was the Spanish peseta and theregulation of monetary matters was the responsibility of the Bank of Spain.Private banks operating within the country were branches of Spanish institu-tions.

25. The introduction of the Equatorial Guinean peseta was concurrentwith the establishbnent of the Central Bank, for which the IMF gave tech-nical assistance. The Central Bank has sole responsibility for the issue oflegal tender, and is empowered to regulate the banking system. It is alsothe banker to the Government and is authorized to lend to the banking sysucií.In agreement with the Government, it may establish whatever exchange contrioisit deems necessary and has the sole responsibility for their implementatíon.Because of the shortage of qualified staff in the Central Bank, it was neces-sary to temporarily designate one of the commercial banks as the Governnent'Sagent for transactions connected with the bilateral agreement with Spain aidfor a substantial part of other foreign exchange operations, in the framewortof exehange controls which were issued by the Central Bank shortly after Itsestablishment.

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26. The Central Bank is also authorized to undertake commercial bankingoperations, and until recently, such operations were concentrated within acommercial bankíng department. On October 12, 1971, however, a new state-owned commercial bank, the National Deposit and Development Bank (BNDD) wasopened. The BNDD was founded by taking over the local branches of the BancoExterior, which historically had been the principal of the two Spanish com-mercial banking institutions. The new Bank removes the Central Bank fromthe commercial banking field and will allow the Guinean public to make moreuse of the banking system.

27. Total credit to the private sector increased from EG pes 498 millionin December 1969 to EG pes. 603 million in December 1970 (Table 5) and peakedat EG pes. 703 million in January 1971. These figures included a considerableamount of Central Bank credit to the private sector (EG pes.202 míllíon inDecember 1970 - Appendix Table VII).

28. Commercial bank credit to the private sector decreased from EGpes. 496 mullion in December 1969 to EG pes. 241 million in September 1970(Appendix Table VIII). The decline was caused by reluctance of commercialbanks to expand credit, pending clarification of their legal status. Sincethen the Central Bank relied on the commercial banks for financing of the1970/71 cocoa crop. By January 1971, conmercial bank credit to the privatesector had increased to EG pesetas 509 millioín, more than twice the September1970 level and 9 percent above that of December 1969.

Table 5: MONETARY SIURVEY 1969-1971

(In millions of EG pesetas)

1969 1970 1971Dec. March Dec. March April

ASSETS

Foreign reserves (net) 1,319 1,588 892 1,251 1,346

Domestic credit -326 -481 13 -219 -311

of which to Government -738 -719 -559 -693 -704to Private Sector 498 357 603 510 491

LIABILITIES

To private sector 993 1,037 834 904 906

of which Currency 362 337 417 413 437Demand deposits 527 565 253 324 282Savings 75 84 85 96 98

SDR allocation - 71 71 131 131

Source: Appendix Table VI.

- 10 -

29. The Government has maintained large deposits in the Central Bank ín1969-71. Foreign assets, which declined in 1970 recovered by April 1971 uponreceípt of cocoa earnings. Net foreign exchange reserves at that time amountedto EG pes. 1,376 (about US$20 million) or about one year of imports (AppendixTable VII).

30. The interest rate structure has remained substantially what it wasprior to the establishment of the Central Bank. Commercial banks are permit-ted to charge 7 percent and a commission of 0.25 percent per quarter on loans.The Central Bank charges the same rates in its dealings with the privatesector. However, its rediscount rate is 3.5 percent. The payment of in-terest and commission charges are subject to a servíce tax that raises theeffective rate of borrowing by an additional 0.2 percent.

IV. FOREIGN TRADE AND BALANCE OF PAYMIMNTS

31. Guinea's balance of payments tends to have a surplus on merchandiseaccount, a deficit in other current transactions, and an approximate balanceon capital account. For most of the sixties, the capital account probablyyielded a surplus or was in balance, as Equatorial Guinea usually receivedofficial transfers and private investment capital from Spain. The last re-corded official capital transfer from Spain, a budgetary grant, was receivedin 1969.

Table 6: BALANCE OF PAYMENTS, 1970

(In millions of US dollars)

Credit Debit Net

Goods and services 25.0 22.6 2.4

Goods 24.9 21.0 3.9Non-factor services 0.1 1.6 -1.4 la

Factor Services 1.6 3.4 -1.8

Unrequited transfers (private) - 3.7 -3.7

Capital account 0.2 4.4 -4.2

SDRs allocation 1.0 - 1.0

Errors and omissions 0.5 0.3 0.2

TOTAL 28.3 34.4 -6.1

/a Difference due to rounding.Source: Appendix Table XIV.

32. In 1970, the balance of payments showed a surplus of US$2.4 million(EG pes. 168 míllaon) on goods and servíces transactions, but a rather largedeficit in private transfer payments and private short terni capital movements(Table 6). The overall deficit thus amounted to about US$6.1 míllaon (EG pes.427 million) of which US$5.32 million (EG pes. 371 million) represented thedeficit in transactions with Spain. The systematc recording of EquatorialGuinea's foreign exchange transactions started only in 1970. Transactionswhich do not have an immediate foreign exchange counterpart, such as importstied to an aid program or capital inflows in the form of goods and services,are excluded. Trade data are incomplete and must often be derived framSpanish data. Trade with Spain accounts for over 90 percent of exportsand between 60 and 80 percent of imports (Appendix Table IX).

33, Trade data for the period 1963-69. indicate that the country hastended to enjoy a large surplus, especially with Spain, which was onlypartly offset by a deficit with the rest of the world. The rather largeamount of outward transfers in 1970 was caused by remittances of wages andsalaries by Spanish expatriates and foreign contract labor.

34. Export and import levels are high: about EG pes. 5,000 (US$75)of annual exports per capita and almost that amount in imports. This isUS$35 more than exports per capita in Cameroon and only US$25 less than inIvory Coast. Cocoa, coffee, and wood have traditíonally accounted for morethan 90 percent of all exports.

35. Consumer goods such as textiles and clothing, food, beverages andtobacco accounted for 43 percent of the imports in 1970 (Appendix Table XII).More than half of the imports are going to Fernando Poo, winere the livingstandard is highest (Appendix Table XIII). Imports doubled in 1970. Whilethe data are unreliable, this trend can be explained by the normalizationof communications, replenishment of inventories, and a step-up of Governmentinvestment.

V. PROSPECTS AND MAIN PROBLEMS FOR GROWTI

A. Production

36. After independence, production declined. Prospects in general dependon the measures taken to restore production. Cocoa projections made in 1969by FAO foresaw a production of same 40,000 tons of cocoa per season, for thenext four seasons (Appendix Lable XV), Ilowever, this figure may have to beadjusted to an average of 30 to 33,000 tons, unless new labor contracts aresigned with Nigeria (see Appendix I). Prospects in the cocoa sector inFernando Poo depend on the effectiveness of xnew arrangements for 15,000immigrant workers which have just been completed.

37. The outlook for mainland forestry may improve if Guineans obtainedgreater participation in profits and eventually in management. However, severalyears will be required to bring about structural reform and to introduce exten-sive training programs.

- 12 -

38. Restoration of coffee and palm oil production may be achieved moreeasily. Cultivation is partly on family plots, mainly on the mainland, andtherefore less dependent on solution of managerial problems besetting thelarge plantations.

39. The presence of off-shore oíl in Gabon and Congo has raised hopesfor oil strikes in Equatorial Guinea. There is also speculation about theprésence of other minerals, but further exploration and mapping are neces-sary.

B. External Assistance and Creditworthiness

40. Equatoriál Guinea has received a substantial amount of technicaland financial assittance from the United Nations and its agencies, from theOrganizatlon for African Unity (OAU) and from bilateral donors.

41. In the years ahead, both the budget and the balance of payments arelikely to be under strain because of the absence of institutions capable ofcontrolling expenditures. In view of the poverty of Continental Guinea andthe overall weakness of the administration, the country's ability to raiseintetnal resources for development is severely limited. External financierswill therefore need to provide a high proportion of investment cost on con-cessionary terms. External finance will also have to provide for a largepart of the local cost of development projects.

APPENDIX IPage 1

SECTOR DEVELOPMENTS

A. Agrículture

Il. The main export crops are cocoa and coffee, but some palm kernels,coconuts and yams are also exported. Cocoa is mainly grown in Fernando Poo,while the other export products are mainly produced ín Rio Muní (Table A).

Table A: EQUATORIAL GUINEA - AGRICULTURAL PRODUCTION, 1965-1971

(In thousands of metric tons)

1965 1966 1967 1968 1969 1970 1971(8 months)

Wood (Rio Muni) 3 9 5 .1La 358.1!a 3 6 2 .4a 335.0 170.0 80.0 16.0Cacao 34.7 35.5 38.7 33.6 38.3 28.9 n.a.

Fernando Poo 31.3 31.0 35.4 30.1 36.4 26.9 n.a.Rio Muni 3.4 4.5 3.3 3.5 1.9 2.0 3.3

Coffee 6.7Ž. 6.4 6.1 8.5 6.5 6.0 n.a.

Fernando Poo 1.3 1.4 n.a. 2.1 1.9 1.8 n.a.Rio Muni 5.3 5.0 n.a. 6.4 4.6 4.2 3.8

ter/c ___c_Other 6. - 5.7-- n.a. 11.3 6.0 3.5 1.0

Fernando Poo n.a. n.a. n.a. 3.3 2.0 1.6 n.a.Rio Muní 6.3 5.7 n.a. 8.0 4.0 1.9 1.0

/a In thousands of cubic meters.7- Difference due to rounding./c Coconut, palm oíl, and palm kernel from Rio Muni only.

Source: Spain9 Direccion General de Plazas Y Provincias Africanas, ResumenEstadistico del Africa Espanola, 1965-1966, de LAVALLEE, El cacao ysus posibilidades, ONUDI, and data supplied by the Government.

a. Cocoa

I2. Equatorial Guinea produced 3.8 percent of the world's cocoa in 1968(Appendix Table XV). Production averaged about 34,900 tons between 1965 and1970 (Table A). More than 90 percent of all cocoa is produced in Fernando Poo

APPENDIX 1Page 2

in some 50 modern plantations (fincas) some of which are now run by Africatimanagers. There are a total of about 1,000 plantations in Fernando Poo ofwhich over 800 belong to Africans. Production methods in Fernando Poo aremore modern than in other African countries because they include drying undercover in wood-fueled installations. In Rio Muni, as elsewhere in Africa,cocoa is produced on small family plots. Some African producers are organizedin cooperatives. About 50,000 hectares are under cocoa on the island and about10,000 on the mainland. It would be possible to expand this area if additionalroads were to be built. The first priority, however, is to restore productionon the existing plantations.

I3. Cocoa production has suffered considerably since independence be-cause of the departure of fr.:elgn labor and management. Some of the planta-tíons owned by Spaniards have been sold to Africans. Some Nigerian workers,who returned home after the civil war in Nigeria, were replaced by workersfrom the mainland, but many were not replaced because mainland workers lacktraining in the relatively sophisticated production methods of the island.

I4. Restoring production will require new effective arrangements forexpatriate labor and for plantation management, possibly including creditsfor capable African managers to expand their plantations and their workertraining programs, and possibly including cooperative arrangements. OnApril 11, 1972, negotiations started in Lagos to recruit 15,000 Nigeriansto replace the 20,000 Nigerians which reportedly had returned home aftercompleting contracts. These negociations have in the mean time heen succesfullyconcluded, but the agreement has not been implemented in time for the 1971crop.

15. The Government is planning to restore production by allowing someformer owners to return, and by letting the newly created National Depositand Development Bank of Equatorial Guinea (BNDD) run the abandoned planta-tions. The BNDD must initially concentrate on commercial banking, becausemanaging plantaticns is a rather specialized operation for a newly createdinstitution.

i6. Since the 1969 Commercial Agreement, the firet 20,000 tons of thecocoa crop have to be sold to Spain. Only very small qu¿ntities are sold tothe United Kingdom, the Netherlands, and Germany.

b. Coffee

I7. The last six years an average of about 6,700 tons of coffee peryear were produced in Equatorial Cuinea; about 75 percent of that was pro-duced by smallholders in Rio Muni. The rest wa$ produced on the FernandoPoo plantations, mostly as a second crop (Table A). The Rio Muni crop ismainly robusta, but some is of the Liberia variety. The quality of theproduction is not high and, judging by the condition of some of the planta-tions, may have declineA over the past couple of years.

APPENDIX IPage 3

c. Other Crops

I8. All other export crops amounted to a total of 6,300 tons in 1965and 3,500 tons in 1970 (Table A). The fruits of the palm tree--which grewmostly spontaneously in both Fernando Poo and Rio Muní--are the major export.There are a few large palm tree plantations in Rio Muni. They require lesslabor chan coffee and cocoa plantations. Unfortunately, some of these palmtree plantations have been abandoned and need to be put back in productionsoon to save them from the already encroaching spontaneous vegetation. Pro-duction of palm oíl fell from 3,700 tons in 1965 to 700 tons in 1970 and ex-ports of palm kernels declined from 1,600 tons to 200 tons over the sameperiod.

I9. Between 1957 and 1960, Equatorial Guinea's plantations exportedabout 14,000 tons of bananas per yeer through the port of San Carlos inFernando Poo. The bananas were of the "Gros Michel" variety, which is ap-parently very susceptible to the "Panama" and the "Sigatoka"' diseases. Thebattle against these diseases became uneconomic, and the plantations wereabandoned in the early 1960's.

I10. The Spanish saw a bright future for pineapple production in thevolcanic soils of Fernando Poo, They also wanted to try out hevea and sisalproduction, the former in Fernando Poo and Rio Muni, and the latter in RioMuni only. These ideas may be worth some follow up study.

B. Forestry

ii. Forestry exploitation is, after cocoa and coffee production, themost important economic activity. Although, in the future, some forestryexploitatión may be possible in Fernando Poo, at present, all forestry con-cessions are in Rio Muni, mainly along the coast and the lower reaches ofthe Rio Benito. Exploitation is moving inland as exhaustion occurs. Thisindustry is heavily mechanized and requires considerable investment. It isentirely in the hands of Europeans except where related to landclearing,which is maínly done by Africans. The Forestry Service is also in charge ofpalm and coconut tree plantations. FAO has already advised the Governnentthat it would be wise to shift this activity to the Ministry of Agriculture.

I12. Wood is floated to the coast via the Rio Benito and other rivers,and the companies are required to construct their own forestry access roads.The state is thus relieved of considerable responsibility. According to anFAO expert, global forestry revenues fc>r the state are considerably higherthan in neighboring Gabon. This is mainly due to the fact that Spanish con-sumers have been accustomed to buying a broader variety of species and lowerquality logs, which allows an average volume exploited per ha of about 25cubic meters, compared with 10 cubíc meters per ha in Gabon. This higheryield per ha ls confirmed by the fact ithat okume averages only 22 percentof total log prodtuction in Equatorial Guinea, versus up to 80 percent inGabon, although the occurrence of okume is about the same in both countries.

APPENDIX IPage 4

113. Total forestry production between 1963 and 1968 averaged 364,000cubic meters per year, but has decreased considerably since then. In fact,the major forestry operations have almost come to a standstill. Data onvolume submiitted by the Forestry Service and the Chamber of Commerce ofBata confirm this, but general trade data, although confirming the declin-ing trend, also show that the value of wood exports in 1970 is again biggerthan the previous year, despite the acknowledged production difficulties.(Appendíx Tables XI and XVII).

I14. The structure of the forestry industry is very concentrated. 2:Jghtgroups of fírms divide the market unevenly. Six of these eight groups possessplywood or furniture factories in Spain and the other two have their commer-cial outlets in the Iberian Peninsula. Only the latter two companies wouldoccasionally sell a few selected logs on the European market at higher prices.Only two companies saw the logs which are not good enough for export and thusrecuperate part of the wood. Lumber production remains less than 10 percentof total wood production (Appendix Table XVII). Two industrial sawmills-closed down a couple of years ago and only two medium-size ones and eightsmall ones remain in operation.

I15. The forestry manpower situiatíon has been explained in Chapter I,Section E of the main text of this report. Table B summarises the availabledata.

Table B: CONTRACTUAL EMPLOYMENT IN THE FORESTRZY SECTOR BY NATIONALITY,DECEMBER 1968

(number of people)

percentNation- Nige- Euro- Total Nige- Euro-

als rnans peans ríans peans

Forestry Sector 1,820 2,310 135 4,265 54 3

Forestry exploitation 1,600 2,250 135 3,985 56 3

Sawmills 220 60 n.a. 280 20 n.a.

Source: VANNIERE, B., Situation Forestiere en Guinée Equatoriale, FAO,June-July 1969.

I16. The most urgent task now is to give forestry exploitation a newstart and to establish the basís for cooperation between the foresters andGovernment. The Government has realized that continued access to the Spanishmarket is essential for Equatorial Guinea. In the commercial agreement withSpain it has agreed to sell to Spain 200,000 tons of logs, and 9,000 tons oflumber annually. To accomplish this, a plan in needed to exploit the morethan fifty percent of untouched forest (estimated at 800,000 ha). However,the Forestry Service has lost most of its technical experts. The secondtask, therefore, is to strengthen the forestry service by recruiting experts

4 " S '' ç ..' L B' i 2.: - L.: L A< ̂ ' ^ lior:i 5L? A=,g.>, tÇ A-' M"b;sX tl;v:.Z:> .~ ;................................................. e ~-;l >v.; -,. : Bat ¡.:.[» , -,t,b. z -, ;j.M: S . .. ....... .,....: --.1.. .

APPENDIX 1Page 5

abroad as long as qualif ied Equatorial Guineans are not available. Third,the service should tackle the difficult task of making a forestry inventory

and establish the basis for a forestry management system in the long run. A

preparatory study for an inventory was made in 1968 by an engineer of the

Forestry Service. (See the above-mentioned FAO report of 1969).

I17. The Covernment has recently introduced a reforestation tax, indi-

cating concern iibout the problem. The Government would also like to revive

the sawmills and create a small wood industry. However, in view of the small

market and the competition from neighboring countries, it may be best to con-

centrate in the short run on valorization of unexportable logs with existingequipment, thes increasing the overall efficiency of the sector.

C. Fishing

I18. According to a study by French experts on Sea-Fish Distribution in

ithe Central African Atlantic region, fish is very important in the diet of

Equatorial Guineans. They consumed more than 46 kg of fish per capita in 1967

(9 times more than their meat protein consumption and three times more than

the regional average). In that year, about 3,434 tons of fish were produced

(Table C) and 10,000 tons were imported. Modern sea-fish production increased

considerably in 1968 (1,595 tons versus 1,133 in 1967). No data are available

JEor subsequent years. A team of Russian fishing experts visited Fernando Poo

recently and some Russian boats have now joined local and Spanish fishing

vessels. The 1970 export figures mention EG pes. 4 million in sea-food exports

(mainly high value products such as lobster and shrimp). The French study

expects a deficit of some 8,500 tons of fish in 1980, even when total pro-

duction would rise to 5,500 tons by that time. The further development of

fishing activity therefore should be of high priority for the Government.

Table C: FISH PRODUCTION BY MODE OF PRODUCTION, 1967

(Quantity in tons, value in pesetas)

Kind of fish andMode of fishing Quantity Value

Sea-fish 3,134 41 199

Traditional artisan 2,000 18,000

Modern artisan 257 4,715

Industrial 877 18,484

Sweet water fish 300 5,400

TOTAL 46_699

Source: LAGOIN, Y., and SALMON, G., Etude Technique et Economique Comparéede la Distribution du Poisson de Mer dans les Pays de l'Afrique

Centrale Atlantique: Guinée Equatoriale, Paris, SCET Cooperation,

Dec. 1970, p. 18.

AjPENDIX 1Page 6

D. Mining

I19. No minerals have been discovered so far except for some alluvialore exploited by artisans in Rio Muni. In 1970, production amounted to2.2 kg. There seems to be, however, considerable hope for the discoveryof minerals, especially petroleum. About US$15 million has been investedin petroleum exploration since 1960, but so far without positi-ve result.According to a recent Report on Mineral and Petroleum Policy by a U.N. expertfor the Government of Equatorial Guinea, this should not lead to pessimism.Oil was found in neighboring countries such as Gabon and Nigeria after con-siderably more drillings than the 7 attempts made so far in Equatorial Guinea.

I20. The repqrt mentions that necessary geological conditions are pre-sent for petroleum strikes but that basic geophysical and geochemical infor-mation necessary for the discovery of other minerals is not available. Thereport therefore suggests collecting such information, starting with an infra-red photographic survey of Rio Muni. Such a survey, which already exists fortwenty five percent of the surface of Rio Muni, could also supply valuable ín-formation for the forestry sector, and would cost between US$50,000 andUS$100,000. An aero-geophysical survey has been performed by an American con-sultant for an American oil company looking for oíl in Rio Muni. Based onthis survey, a geo-chemical field investigation could now be started but thecreation of the necessary Government infrastructure and the training of localpersonnel are needed. In 1969 an American Steel Company oLfered to exploreall of Rio Mluní for possible minerals. The Governnent did not accept theoffer because it found the money offered and the estimated maximum lnvestmenttoo low. The Government also did not like the company' s request for monopolyr-ghts in the search for all minerals.

E. Transport

I21. There is little transport between Continental and Insular EquatorialGuinea. Fernando Poo is connected to Rio Muni by alr and by sea, but onlyfreight is shipped by sea. Efforts are now being made to improve shippingand aviation between the mainland and the island portions of the country.The estuaries of the rivers are used Lor floating lumber to the sea.

122. Local transport consists almost exclusively of road transport andinvestment in transport infrastruicture during the last decade (1960-1970)has been mainly for roads. There is no transport investment plan for thefuture. The projects currently being carried out or contemplated seem tobe wíthout solíd economic base. However, planning in the highway sub-sectoris expected to improve as a consequence of the proposed highway projectbeing prepared by IDA. Planning for the rest of the transport sector -- andindeed for the rest of the economy -- is a matter of high prioríty.

a) Roads

I23. Tle highway network consists of about 1,300 km of national roads,700 km of local tracks, and a substantial length of forestry roads whíchwere constructed and maintained by the lumber companies before they left

APPENDIX IPage 7

country in 1969. About one-third of the national network (400 km) is paved,and most of the rest consists of good, all-weather laterite roads (lateritedeposits are of generally good quality). The island of Fernando Poo has 220km of national roads, four-fifths of which are paved. The road system servesboth the island and the mainland reasonably well in terms of accessibilityto the main areas of economic activity (agiculture and forestry). Thesystem has adequate capacity to handle the present low traffic volumes andthe needs of the immediate future. However, lack of maintenance has causedsome paved roads to deteriorate badly. Lateríte roads are generally inbetter condition than the paved roads, but here also the effects of poormaintenance are evident. The government has no organized maintenancedivision; routine maintenance is performed by small teams of laborers,while special maintenance is contracted to local firms managed by Spaniards.Supervision of local firms is insufficient.

Table D: CLASSIFICATION AND LENGTH OF NATIONAL ROADS,JANUARY, 1971

(In kilometers)

Type of SurfaceProvince Road Classification Asphalt Lateríte Total

Fernando Poo 177 42 219

Primary 138 30 168Secondary 39 12 51

Rio Muni 219 843 1,062

Primary 219 225 444Secondary - 478 478Tertiary - 140 140

TOTAL Equatorial Guinea 396 885 1,281

Source: Equatorial Guinea, Ministry of Public Works, Housing & Transport.

I24. The Governnent is aware of the poor road administration andmaintenance. It has asked the Association and the UNDP for financial andtechnical assistance in carrying out a program under which would be providedmanagerial and operational support to the highway administration.and someessential road maintenance equipment, and which would include a small roadrehabilitation project. Assistance would be given by a team of four UNDP-experts for a period of about two years. These experts would develop re-alistic maintenance and construction budgets, would assist the Directorateof Highways of the Ministry of Public Works to improve the efficiency ofnanagement, and would train local counterparts and lower-level non-professionalequipment operators and mechanics. The project is expected to begin in 1973.

APPENDIX IPage 8

I25. In 1970, there were 6,700 registered vehicles, of which 23 percentwere trucks and 10 percent buses. About 55 percent of the vehicles are inRio Muni. The average annual rate of growth in the number of road vehiclesduring the period 1964-1970 was about 10 percent. Traffíc decreased consider-ably, however, after independence as evidenced by the decline in fuel consump-tion (Table E). In 1971 importation of vehicles was restricted for balanceof payments reasons.

I26. The only transport regulations in Equatorial Guinea are weight andsize limits. Lumber trucks and those hauling heavy machinery are requiredto obtain a special permit to use national roads. Companies had to buildand maintain their own roads. These forest roads have not been properlymaintained since independence because of the sharp production decline.

/aTable E: FUEL CONSUMPTION 1967-1970-(in millions of liters)

Kind ofGasoline 1967 1968 1969 1970

TOTAL 25.3 25.4 16.3 16.2

Regular 3.9 3.9 3.4 3.6

Super 1.0 1.1 0.8 0.9

Diesel 20.4 20.4 12.1 11.7

/a Road vehicles are estimated to have consumed 100 percentof super, 95 percent of regular, and between 30 percent(1967) and 60 percent (1970) of diesel. Consequently thesharp reduction in the latter reflects to a large degreedecreases in other uses.

Source: Equatorial Guinea, Governnent Statistics Office.

I27. There is free entry and free competition in road transport. Roaduser charges are low compared with those of other West African countries.Passenger transport is supplied by two bus lines: one privately owned(Transportes Africanos) and another recently created government owned "BusesEstatales".

b) Maritime Transport

I28. There are two seaports on the island, Santa Isabel and San Carlosand two on the mainland, Bata and Rio Benito. The port of Santa Isabel islocated in a small bay which provides a natural deep harbor, adequate forexisting traffic. There are, however, plans to expand this port at a cost ofabout US$3 million. The port of San Carlos was used for the export of cocoa,bananas, and some wood, but its importance has diminished due to the slunpin banana productiíon. Due to excessive siltation, the existing port at Bata

APPENDIX IPage 9

can only accommodate sea-going vessels as a surf port. There is only onelighter for this operation. A new port capable of receiving 4 ships of20,000 tons is being constructed at Bata at a cost of more than US$11 mil-lion. No feasibility study preceeded the decision to build this port andthe size can only be justified on the basis of its potential use as an ex-port harbor for neighboring Cameroon and Gabon. Rio Benito is the majorwood port in the country.

I29. The volume of foreign trade handled by the ports totalled almost500,000 tons in 1968; 388,400 tons of exports and 111,000 tons of imports.In 1970 the volume of exports had declined to 151,000 tons and of importsto 86,000 tons. These data, however, are difficult to reconcile with thevalue of export and import figures (Appendix Tables IX and X`.

I30. Foreign trade is carried mainly by the subsidized Spanish Trans-mediterranean Lines and, to a lesser extent, by ships from Russia and theFederal RepMblic of Germany. There are plans to purchase passenger andcargo ships for service between Santa Isabel and Bata (abQit 250 km).

c) Air Transport

I31. There are two main airports in Equatorial Guinea: the inter-national airport at Santa Isabel, capable of handling jet airplanes up toD.C. 8's, and the airport at Bata, adequate for two-engine, turbo-prop air-craft. The Government has plans to enlarge the Bata airport, at a cost ofabout US$3 million, to enable it to handle jet aircraft. This investmentis in line with implicit Government policy to provide Bata with infrastruc-ture comparable to that existing in Santa Isabel. However, no economic fea-sibility study exists to our knowledge. About 5 smaller airports are, orwill shortly be under construction in Rio Muni. The economic justifícationfor these airports has still to be established. The distances betweentowns are very short, demand is low, and excellent bus transport servicesare available. The longest distance between major towns is less than 220km.

I32. The Government's own airline, LAGE, (Lineas Aereas de GuineaEcuatorial), is equipped and operated by the Spanish company IBERIA. Thelatter has a weekly service from Santa Isabel to Madrid, IAGE has dailyservices between Santa Isabel and Bata. Passenger traffic between SantaIsabel and Madrid has decreased sharply since independence, while internalpassenger and cargo traffic has increased substantially.

d) Transport Policy, Planning and Coordination

I33. All Government transport activities are centralized in the Ministryof Public Works, Housing and Transport, but, in practice, all major decisions ontransport policy and planning, and on economic policy in general, rest with thePresident of the Rapublic.

APPENDIX IPage 10

F. Manufacturing and Public Utilities

a. Manufacturing

I34. Industrialization is minimal in this predominantly agriculturalcountry, mainly due to the small market and the liberal import policies forSpanish goods. Some cocoa and coffee processing is done locally, but thoseactivities have declined. Exports of processed cocoa were valued at EG pes.16 million in 1969 and only EG pes. 9 million in 1970. Lumber production,is marginal (10 percent of total wood production) and declining (see para. I14and Apperndix Table XVII).

b. Electric Power

I35. Electric power supplies are all diesel generated. There are twoprincipal stations, one in Santa Isabel and another in Bata. There are alsoa few isolated generators in the smaller centers and at logging sites.

I36. The Santa Isabel station is having difficulties. Power cuts arefrequent. Peak demand in Santa Isabel is said to be 2.2 mw. While generat-ing capacity consists of one 2 mw generator and three 1.2 mw units, however,at one time the only unit which remained in operation had a capacity of 800 kwbecause of inadequate maintenance. Spanish and UN experts have made inventoryof the necessary spare parts required to get all generators operating again.It may, however, be necessary to purchase a new unit of 2 to 3 mw. The Govern-ment is interested in hydroelectricity and potential sites exist close to SantaIsabel on the Chocolate and Alen mountains. However, no study has been made ofthese potential sites.

I37. Bata's electrícity situation seems to be somewhat better. Two newgenerators are being installed and by 1972 will meet the existing demand. Infact, there may be considerable excess generating capacity. The Governnenthas plans to bring energy to some areas in the interior, now seéLved by un-reliable small generators. Financing for this operation would be on supplíer'scredit.

I38. Electricity is generated and supplied in Santa Isabel by theServicio Electrico MunicJ.pal, a department of the Town Hall (Ayuntamiento)and in Bata by an independent corporation whose president ís the Minister ofIndustry. The Bata corporation barely generates enough revenue for workingexpenditures, but subsidizes the Government by not collecting for the elec-tricity supply. Because of staffing problems, and the small scale of opera-tions, it would be very difficult to create one autonomous agency forelectricity.

c. Telecommunications

I39. Telecommunications services are provided to 22 localities (eighton the island and fourteen on the mainland). Total installed capacity pro-vides for 1,540 lines. There are two inter-urban services (Santa Isabel-San

APPENDIX IPage 11

Carlos and Bata-Niefang) of about 70 km each. Communication between SantaIsabel and Bata is by HF radio. There are also radio-telegraph links betweenBata and three other towns. International service consists of some part-timepoor quality HF radio circuits between Santa Isabel and Madrid. There is alsosorne HF service with Lagos and Douala.

I40. In 1968, a few months before independence, the telecommunicationsservices were taken over from a Spanish private company and have since thenbeen operated as a General Directorate under the Ministry of the Interior.The facilities are limited and obsolete. All expatríate staff have leftand there is practically no senior managerial staff. In 1969, there was almostcomplete standstill. Several unsuccessful attempts were made to reinstate theservices through temporary outside help from the Spanish National TelephoneCompany (CTNE), UNDP and others. Limited traffic was restored late in 1969,after the Governnent had entered into an agreement with the Spanish Foreign AVIAgency for the provision of more permanent technical assistance. One super-visor expert and four technicians from CTNE have now been in Equatorial Guineafor about a year to supervise operations, maintenance, and repair of facilities.There has also been some replacement of unserviceable equipment, some assistancein development planning and training, and some material aid to effect a límitedemergency rehabilitation of the international telephone service with Spain. Atpresent about two-thirds of the previously available capacity has been restoredto service, but under precarious conditions due to obsolescence.

I41. An overall study of the immediate and long-term requirements wasmade in 1969 under UNDP/ITU auspices. Following this, a detailed developmentprogram covering requirements until 1977 was prepared by CTNE exports. TheCTNE study has been accepted by the Government as the basis for the country'stelecommunications investment plan. Total cost of the program is estímated atUS$2.7 million to be disbursed over a five-year pernod. The program coverslocal telephone systems, inter-urban and interprovincial networks, and interna-tional facílities. A Bank reconnaíssance mission of August 1971 felt that underthe present organization and with the very limited staff and financíal resourcesavailable locally, the Telecommunications Directorate would not be capable ofundertaking and executing a program of the size envisaged. The mission alsofelt that the present level of economic and social development in the countrymay not warrant the need for the entire program at once. Therefore, it suggestedthat the program be carried out in stages. In any case, the mission foreseesthat full scale outside assistance would be required during a long period forboth development and operation.

G. Education

I42. Primary school attendance has been above 90 percent for at least adecade. In the school year 1968/69, there were almost 50,000 pupils, whichis close to the total school age population (6-14 years). Their number drop-ped to 48,000 in 1969/70 (Table F). This indicates that the sudden departureof most Spaniards including many school teachers, has had only a small negativeeffect on primary school attendance. More than 60 percent of the primaryteachers have no teaching diploma at all and must teach an average of 54 pupi}la(sometimes up to 15.0).

APPENDIX IPage 12

Table F: PRIMARY SCHOOL ATTENDANCE 1968/69-1969/70

(In thousands of pupils)

1968/1969 1969/70Male Female Total Total

la - la

TOTAL 29 2OU 5c 4 48

Official schools 20 13 33 n.a.

Rural schools 8 5 13 n.a.

Church schoóls 1 3 4 n.a.

la Difference due to rounding.

Source: Equatorial Guinea, Direccion General de Ensenanza Primaria.

I43. Elementary schooling is not the major problem in Equatorial Guinea.The problem is at higher levels where participation is minimal and the de-parture of foreign teachers created serious difficulties. Six months afterindependence, the country had 99 national secondary school teachers, includ-ing only three college graduates and eight priests. The teachers had toteach 30 hours per week to three groups of 50 pupils each. They were assisted by77 foreign teachers (UNESCO and Spain). As this number of foreign teacherswas inadequate, the Government was compelled to utilize less qualified na-tional personnel, among others some civil servants teaching on a part-timebasis.

Table G: FERNANDO POO ATTENDANCE AT OFFICIAL AND CHURCH SCHOOLS, 1969/70(number of pupils)

Level Year Boys Girls Total

Primary 1 1,298 1,251 2,5492 514 412 9263 415 330 7454 398 294 692

Secondary 5 30 36 666 24 16 407 8 5 138 3 3 6

-TOTAL 2,690 2,347 5,037

Source: Data supplied by the authorities of Equatorial Guinea.

APPENDTX IPage 13

I44. Table G indicates the pyramid for primary and secondary educationin Fernando Poo's official and religíous schools. As Fernando Poo was the mostadvanced area of the country, this clearly shows how great the problem of in-termediate education must be elsewhere. University educated people are evenscarcer. At índependence, only sixteen Guineans had university degrees,eleven of them acquired in Spain and five elsewhere abroad. Seven of thesegraduates were medical doctors, six lawyers, two engineers, and an economist.In 1969/70, there were about 260 Guineans studying abroad.

I45. It will be essential to maintain assistance to secondary educationand to train new secondary school teachers to replace foreign personnel andcivil servants now involved in part-time teaching and to retrain the unqualifiedsecondary teachers. New primary school teachers will also have to be trainedand the cultural and pedagogical levels of the unqualified primary teachersmust be improved.

I46. The training of new primary and secondary teachera and the retrain-ing of those already in service cannot be effective wíthout the implementationof a new curriculum and a new methodology. A complete reform of the nation'seducation system is therefore necessary (curriculum, methods, planning). In1971, the Government requested the assistance of UNESCO:

- to analyze the country's education system;

- to prepare an inventory of the educational requirements(specially in teacher training);

- to help the Ministry of Education draft a UNDP SpecialFund request for assistance to establish a Center forthe Development of Education.

I47. The UNESCO mission concluded that the establishment of a Centerfor the Development of Education was a first priority need. The objectivesof thís Institution were defined as follows:

- pedagogical research geared at reform of the curricula andthe structure of the present system;

- coordination with the Ministry of Agriculture to integrateagricultural teaching into general education;

- production of teaching materials and audio-visual equipmentas well as publication of schoolbooks and an educationalbulletin;

- organization of seminars for primary education inspectors.

I48. The implementation of the project will, during the first five-yearphase, help the Center for the Development of Education to carry out the fol-lowing activities:

APPENDIX IPage 14

training of primary and first-cycle secondary school teachers;

preparing a survey to evaluate the manpower re-quirements and technical training needs of the dif-ferent sectors of the economy;

retrainíng courses for the technical teachers of thevocational center of Bata, and coordination with theTechnícal School in Bata;

studying the possibility of training second cycle secondary(senior high) and technical teachers;

deterrntning during the fourth year of the project theneed for further assistance during the second fiveyear period.

APP$NDIX IISTATISTICS

LIST OF TABLES

Table L. Geograpby and Population, 1960 and 1970

II. Composition and Evolution of Gross Domestic Product, 1966 and 1970

III. Governnent-Budgeted and Actual Receipts and Expenditures, 1959-71

IV. Tax Structure, Actuals 1966-69, and Budget Estimates, 1966-70

V. Budgeted Government Expenditures in 1969 and 1970

VI. Summary Accounts of the Banking System and other FinancialInstitutions, 1969-71

VII. Sunmary Accounts of the Central Bank, 1969-71

VIII. Summary Accounts of the Coimercial Banks, 1969-71

IX. Value of Exports and Imports, 1963-70

X. Volume of Exports and Importa, 1963-70

XI. Conmposition and Direction of Exports, 1968-70

XII. Composition and Origin of Imports, 1967-70

XIII. Provincial Breakdown of Trade with Spain, 1963-68

XIV. Balance of Payments with Spain and Rest of the World, 1970

XV. World Exports of Cocoa Beans by Volumez, 1966/68

XVI. Cocoa, World Production Projected to 1974/75

XVII. Wood Exports by Companies in Volume and Value, 1963-71

Table 1: EQUATORIAL GUINEA - GEOGRAPHY AND POPULATION, 1960 and 1970

(In thousarnds of' sq. Km and people)

Po0p u 1a tio nSu,rfac e 1960 1970¿~ Growth

Total European Total Eu.ropean

Total 28.051 246.o 7.1 300.0 i.6 20b

Rio Mhmii 26.017 183.4 2.9 210.0 0.8 1.4hof' whi chCorisco 15 0.6 n.a. n.a. n.a. n.a.Elobeys 2 8.1 n.a. n.a. n.a. n.a.

Fernando Boa 2.034 62.6 4.2 90.0 0.8 3.7of whichAnnobon 17 1.4 n.a.. n.a. n.a. n.a.

Urban 'O-Pulation LC. 57.6 6.5¿.-d 7 5 -c¿Á í..~¿ 2.7Sant Isabch (2>4.4%) (24.3%)

Sat sbl199 2.1 38.0 0.8 6.7Bata 3.6 1Á. 28.0 0.7 22.0Sani Carlos 2.3 0.4 n.a. n.a. n.a.Ebeiyin 1.3 0.2 n.a. n.a. n.a.Cogo 1.2 0.1 nea. n.a. n.a.Rio Benito í.1 0.2 n.a. n.a. n.a.

a/ Based on a, silEple forvard projectíoni of '1950 and 1960 conaus data.,assiiming no change In ar of the co.ipoaenta o:f the grovth rate forthe Africani populatíon, a.nd new estíuatea of hurop.tan popuJ.tíon.The Gaverrumnt ola.¡i that the 1960 census data were grossl.yundoems.mated and ls now c onducting its own census.

bJThis figure ís lower thani the average growth rate of 2.2% because ofthe sudden departure of 6j,500 Europeari ini 1969.

o] Thla numxber assuios the presence of sco 64,o00 Nigerians (40o,000 laborers).Their number has apparently dwíndled to abaait 40,000 ín 1972 (25,000laborers).

More than 1,000 ínhabi:tarnts.

e/ Estinaates.

Source: Equate-rial (iuinea, ,Anexo al Plan de DesaroUo Economíico y Social1964-1967. and mnilsion estiniates.

Table II: EQUATORIAL GUINMA - COMPOSITION AND EVOLJTION OF GROSS DOMETICPRCDUCT, 1966 and 1970

(n milions of 13G pesetas at 1968 prices)

Sectors 1966 1970-r -S .l i %Amourlt %

AgriculXte 1 76 39.6

Cacao l2 2963Coffee 350 8.2 328 7.4

Other 294 6.9 272 6.1

Huntlng, Forestlr,Livestock and Fishíng 690 16.2 6V o la/

Wood 413 9.7 243 5.5

Other forest products 115 2.7 150 3.4

Livestock 109 2.6 155 3.5

Fishing 53 1.2 92 2.1

110 2.6 100 2.2

Industrie 574 13. 51 952 21 4Constru.ction 377 679

Food 44 1.0 70 1.6

Energy, Electricity 2 - 3 0.1

Handicraft 151 3.5 200 4,5

Services 987 23.1 1 001 2 .

Public Adndnistration 440 10.3 9.o

Cemuerce and Finance 291 6.8 285 6.4

Transport andConwmnicatiors 50 1.2 66 1.5

Other 206 4.8 250 5.6

TOTAL 4,266 oo. oa- 4,456 100.o0

of whichConsumption 3.12hO 73.6 3,42 77.2

Private 2,6655 6. Ó 073 6b.Publio 475 l. 389 8.7

Groses Investment 676 15.8 846 19.0

Exports -Imports hLO 10.5 168 2

a/ Difference due to rounding

Soxrce: Sr. Adolfo E. Aramayo, U.N. Expert, Problemas Generales de la

2 based on figures of the Delegacion

de Estadisticas of the Central Bank and of the Intituto des

Estudios Africanoe, plus his and our own estimtes.

Table III: EQUATORIAL GUINEA - GOVERNMENT-BUDGETED AND ACTUAL RECEIPTS

AND EXPENDITURES, 1959-1971

(In millions of EG pesetas)

Total TotalReceipts Expenditures Balance

Year Budget Actual Budget Actual Budget Actual

1960 310 389 310 374 --- 15

1916 311 451 311 452 - -1

1962 367 419 367 391 - 28

1963 462 n.a. 462 n.a. - n.a.

1964 422 n.a. 422 na. - n.a.

1965 428 434 428 n.a. - n.a.

1966 500 611 500 500 - 111

1967 500 630 500 500 - 130

1968 500 738 500 766 - -28

1969 713 732 1 139 632 -426 100

1970 837 950 1 703 1 296 -866 -346

1971 900a/ n.a. 1 703 n.a. -803 n.a.

1971.Lb 320 298 426 18 b -106 110(3 months)

a/ The Government decided to use thie budget it published at the end of 1970,also in 1971. We have increased the revenue estimates somewhat becausetaxes were increased as of December 1, 1970.

b/ Three months only.o/ Does not include capital expenditures financed by supplier's credit.

Source: Presupuesto de la Rep. de Guinea Ecuatorial (1959-65); Espana,Anuario Estadistico 1963-68; Equatorial Guinea, GovernmentBudget (1969); data supplied by the Ministry of Finance andrmission estimates.

Table IT: SUATCRIAL GUINEA - TAX STRUCTUJRE, ACTlJAIS 1966-1969, AND BUDGET

ESTIMNATES, 1966-1970

1966 1967 1968 l969áa 1

Actuals Budget

(iln Ii1lions of' E G pesetas)

Direct Taxes 268.5 261.2 291.2 261.6 289.0

of wzbhich:

Agricultural Income lhl.6 125.5 149.1 143.0 146.0

Profit taxes 65.2 67.6 69.2 50.2 70.0

Wages and Salaries 30.1 37.6 40.6 30.1 45.0

Indirect Taxes 269.1 301.8 385.8 365.0 3o o

of which:

Consumption taxes 82.5 135.5 198.8 180.0 172.0

Import and Export taxes 97.1 135.8 161.3 155.0 153.0

Sales taxes 80.0 13.9 13.4 10.0 15.0

Other 73.0 61.2 105.0

TOTAL 61o.6 ir-4 738.2 7391 76125ú

(In percent)

Direct Taxes 44.0 4,1 9. 35.8 o.6

of which:

Agricultural Income 23.2 19.9 20.2 19.5 20.5

Profit taxes 10.7 10.7 9.4 6.9 9.8

Wages and Salaries 4.9 5.9 5.5 4.1 6.3

Indirect Taxes 44.1 47.9 42.3 49.9 49.1

of which:

Consumnption taxes 13.5 21.5 26.9 24.6 24.1

Inport and Export taxes 15.9 21'5 21.8 21.2 21.5

Sales taxes 13.1 2.2 1.8 1.4 2.1

Other 11.9 10.7

TOTAL 100.0 100.0 100.0 100.0 100.0

a/ Breakdown mission estimate.bJ Actual revenues were considerably longer (13& pes. 950 million incl uding

E1G pes. 112 irlion in extra bu.dgetary revenues).

Source: Ministry of Finance.

Table V: SUAT0RIAL GUINEA - BUDGETED GOVERNNT EXPENDITUREF IN 1969 AND 1970

(in millioris of G pesetas and in percent)

19 1970 and 1 9 71¡aPercent Percent

of ofCurrent Capital Total Total Total Total

I. Economic Services 82 -, . 4 258 L83 22.7ki 590.23 3h.6

Public Works, llg,7n 166.0 202.1 17.8 49Y9 29.2

Finance 17.6 - 46.1 2.7IndustyMines 1. 2-1.7 1.0 14.1 07A.rigculture 1 2.4 -. 1. 4 sCommerce -5 - -.6 - .

II. General Services 399.6 9.1 408.7 35.9 561.3 33.1

Defense 142.6 1 1h4S.7 12.8 243.3 14.3GWermnent Councils 1079 - 107.9 9 5

of which ProvincialCouncils 105.6 - 105.6 9.3 105.6 6.2

Foren Affirs - 5.0 72.2 4.2Presidency and Assemby35

of which Presidency 21.7 - 21.7 1.9 41.9 2.5Interior 6.0 46 .3.1 57.9 3 jJustice l8 - 1.5 13

III. Social Services 271.2 2.0 273.2 20 335.2 12.6

Education 1 31.1 11.5 166.7 9.8Health 132, 32.0 13§4 9 1 9.3

..- - .Iabor 7.- 7.7 0.7 9 04 ___

IV. 0-ther Non-.FnctionalExpend itures TorState 194.9 4.0 198.9 17.h 215.9 12.7

TOTAL 950.6 188

Table VI: EQUATORIAL GUINEA - SUMWIRY ACCOUNTS OF THE BANKING SYSTEM AND OTHERFINANCIAL INSTITUIONS, 1969-1971

(la miMlious of EG pesetas)

199 1969 1971Dec. March June Sept. Dec. March April

ASSETS

A. Net Forereserves 1 588La 1 875 892 22a 1. 3L6áó

1. Foreignassets 1 3h6 1 619 1 378 1 224 1130 1 284 1 406

2. Foreignliabilities -28 -30 -66 -349 -238 -31 -59

B. Domestic Credit -4-81 i -118 -219

1. To Govern-ment (net) -738 -719 -599 -561 -559 -693 -70h

2. To privatesector 498 357 359 483 603 510 491

3. O'ficial cap-ital and re-serves -105 -124 -i!L -161 -178 -191 -136

h. Net unclassi-fied assets 18 45 98 135 1i7 lO

5. Net Interinsti-tutions float¿• 1 -ha -10 23 11 8 65

LIABIIITIE3

A. ILiabilities t9_ 1ri-vate sector ___4 906_

1. Currency incirculation 362 337 307 302 h17 413 437

2. Demand deposits 527 h6 428 247 253 324 2823. Savings deposits 75 814 76 73 85 96 984. Tize deposits 2 1 1 0 1 1 15. Foreign currency

deposits 3 3 8 15 7 13 126. Other 25 46 8h 4h8 71 56 75

B. Liabilíties toGoveinment

SDR al-location - 71 71 71 71 1 232

a] Difference due to raunding.bj Large differences in balances reported by institutions are due to t,@he

fact that the accounts of the largest commercial bank do not show theposition at enid of period.

Souxrce: Dat.a supplied by the IM.

Table VII: -HQUTJTORTAL GUINEA - SI4MARY ACCOUNTS OF THE CENTRAL BANK, 1969-1971

(In xillions of EG pesetas)

1991970 1971

Deco A2pril June Dec. March April

AS1JETS

A. Net Foreívn Re.serves 1 322 1 650 1 328¿a- 911 1 272 1 376¿a

1. Foreign a,ssets 1 322 1 650 1 3 2 8 a1 119 1 272 1 376¿a

a. `or>irgn banks & corresp. 815 1 291 1 170 945 970 1 1171.> BEalance of payments

egreem.ent 14314 206 15 - 90 149c. or(.ign cmrrency 38 147 38 33 11 10d. lNlF gold subscription 35 35 35 70 70 70e. "P-, boldings - 71 71 71 131 131

2. 2orf-l liabilities - 208 - _

B. Domestic Crelit - 8 1 6 á - 7 8 6 á -601 -301 -502 -14314

1. To G'overnment (net) -738 -690 -599 -559 -693¿a- -7014

a.. Adv,nces 100 119 100 136 156 120b, TreaGury deposits -766 -699 -594 -1470 -600 -567c. GOtbhr official deposits -72 -110 -105 -183 -208 -215d. Special deposits - - -42 -)42 -142

2, To bannks & financial instit. - 125 150 150

3. To P,ivase sector 2 1 b 202 12 - 119

4, Ofi cia.l ca ital & reserves -105 -130 -14 - -191: -35. Net nlassified 3T -17 109 108 137

LIABIIITI.ES

A. Liabilities to Privarte Sector 369 3148a 31 14148 458 479_ a

1. Currency in circulation 361 331 307 417 413 4372. Den,and deposit,s 3 16 7 9 18 1>3. Froreign curreney - - 5 7 13 1214. OthEr 5 - - 15 14 15

B. Liabilities to bank:s & firnancial

i t uuias 137 14146 337 91 182a 333

1. Currency boldings 42 33 141 29 114 232. Deposits 95 413 296 62 167 310

C. Lia.bilities to Goverxnment - 71 71 71 131 131

SDR a.lloca,tions - 71 71 71 131 131

a/ Differ.nce due to romding.

Saurce: Central Bank of the Republic of Ecquatorial Guinea.

Table VIII: EQUATORIAL GUINEA: SUMMARY ACCOUNTS OF THE COMECIAL BANKS, 1969-71¿a

(In millioris of EG pesetas)

1969 1970 1971Dec. Mar. June Sept. Dec. Mar. .Apr.

ASSETS 616 683 588 363 509 58o1Ž 569

Net foreign reserves -3 2 -16 -14 -18á -19 -29

Foreign assets 25 32 50 45 11 12 30Foreign liabilities 28 -30 -66 -59 -30 -31 -59

Revenues 124 322k 324 120 96 174 250

Deposits with Central 93á 293/b 286¿.- 971Ž 70L2 1601Ž 229Bank

Currency holdings 31 30 39 23 26 13 21

Domestic credit 495 359 280 257 431 426 348

To private sector 496 356 295 241 402 387 372To banks and other 3 - 5 1 3 1 9financial institutions

Net unclassified assets -3 2 -21 L4 27 39 -33

LIABILITIES 6161Ž 683 5881Ž 363 509 580 569

Liabílities to private 614 676 572 3531Ž 369 422 4.011Žsector

Demand deposits 523 550 418 236 241 303 264Savings deposits 67 76 67 65 72 77 77Time deposits 1 1 0 - O o oForeign currency deposits 3 3 3 3 - - -Other 20 46 84 48 56 42 59

Liabilities to Central Bank - - - - 125 150 150

Liabilities to banks and 3 7 17 10 15 8 18other financial institu-tions

a/ Owing to banking legielation requirements ini Spain the accounts of the largestcomnercial bank close a few days prior to the end of month.

b/ Difference due to rounding.

Sources: Central Bank of the Republic of RBiatorial Guinea, and staff estimatesand adjustments.

Table IX: EQUATORIAL GUINEA: VALUE OF EXPORTS AND IMPORTS, 1963-70

(In millions of EG pesetas)

Exports Imports Tra.de Balance,¿

Yea.r Spa.in Other Total Spain Spain Other Total Spain Total withc.i.f. fo.b. aB % f.ob c.i.fe a.s % Spa.inof total of total

1962 1 h96 27 1 523 98 777 371 1 148 68 375 7191963 1 573 95 1 668 9h 6U 305 916 72 752 9621964 1 729 221 1 950 89 776 h21 1 197 65 753 9531965 1 582 54 1 636 97 750 534 1 284 58 25íLd 8321966 1 643 175 1 817Ld 90 775 503 1 279/d 61 53 8681967 1 752 1)4o 1 892 93 962 496 1 459Ld 66 h31¡4 7901968 1 325 754' 1 hOOLb 95 305na 7l8 n.a. 682 1 0201969 1 644 55h 1 69qZb 97 557 344i 901 ¿b 62 799L- 1 0871970 1 576 (fob) 165 1 7141 91 1 184(¢if) 288 1 472 80 269 392

a/ Exporta are derived from Spniah import etatistica which are c.i.f.., and iíporta are derivd fromSpanish export statistics, whicb a.re f.o.b. The urplue ¡s tYWrefore overotated, bocause if datawould have been obta.ined from a conventional Equatorial Guinea source, exports would have beenf.o.b. and importe c.if. Only the la.st line ls adjusted.bJ Estimate based on total exchange with Spain.£1 Does not include imnports frorn Canary Is1ands, Cueta, Nelila, Ifni and the Spanish Sabara., whichusua.lly accounts for more than 50 percent of all imnports./ Difference due to rounding.Source: Spain, Estadistics del Comercio Exterior de Espana, Comercio por Zonas; and Comercio porproductos, por paises, (1965-69) and data. provided by the Equatorial Guinean authorities,

Table X-: BQUATORIAL GUINEA - VOLUME OF EXPORTS ANI IMPORTS, 1963-1970

(In thousands of tons)

Year Exports Iuports Total Balance

1962 304 103 408¿d 2031

1963 293 94 387 199

1964 382 92 474 290

1965 330 lo5 435 225

1966 281 102 383 179

1967 n.a. n.a. n.a. n.a.

1968 338 ,,ia h99 278Ld

1969 221 52/ 273 169

1970 5 ¿ & Lc2 86¿a 237 65

2/ These figures are based on port statistics. Spaxish trade data,which do nat include a.o. petroleum products (whicb accounted formore than 30,000 tono per year later) mention omly 27,900 tons in1968 and 52 and 63 thousand tons respectively in 1969 and 19