African Business / December 2001
By Larry Luxner
Famous among philatelists for producing some of Africa's most beautiful and colorful postage stamps, Equatorial Guinea is also the continent's only Spanish-speaking nation -- and for decades, it's been one of Africa's poorest.
No more. An oil boom that began only five years ago has transformed this once-isolated and repressed little country into one of sub-Saharan Africa's largest oil producers, giving the 522,000 people of Equatorial Guinea an unprecedented chance for prosperity.
Today, the Guinness Book of World Records lists Equatorial Guinea as the world's most industrialized nation, with over 66% of its revenues coming from petroleum. Per-capita income already stands at $1,170, up from $390 in 1995. In 1999, Equatorial Guinea's GDP jumped by an astonishing 23%. Growth last year came to an impressive 12%, and the Economist Intelligence Unit (EIU) forecasts 15% growth for 2001.
Teodoro Biyogo Nsue, the country's ambassador to the United States, says some people are even starting to call Equatorial Guinea the "Kuwait of Africa."
"American companies have invested around $5 billion in our country," says Biyogo. "That ranks us fourth in sub-Saharan Africa after South Africa, Nigeria and Angola."
In June, the Washington-based Corporate Council on Africa released a 54-page investment guide entitled "Equatorial Guinea: A Country Profile for U.S. Businesses." The report was underwritten by ExxonMobil, Chevron, CMS Energy, Ocean Energy, Triton Energy, Vanco Energy, AfricaGlobal and Oceaneering International.
"Equatorial Guinea represents an enormous opportunity for American companies, and this guide provides unprecedented insight into doing business in the country," said CCA President Stephen Hayes. The country profile includes macroeconomic and business information, profiles of principal growth sectors, statistical data and contact information for key government and business leaders.
Equatorial Guinea, which was first colonized by the Portuguese in 1471, consists of a rectangular-shaped mainland territory, Rio Muni, which is bordered by Cameroon to the north and Gabon to the east and south. Five small islands -- Bioko, Corisco, Annobon, Small Elobey and Great Elobey -- are also part of the country. The capital is Malabo, which is located on the island of Bioko.
In 1778, the territory became Spanish Guinea, and over the next two centuries Spain became the dominant influence, exploiting its colony's rich cocoa fields while most of the inhabitants remained mired in poverty.
Equatorial Guinea eventually won its independence from Spain on Oct. 12, 1968, yet for more than 10 years after independence, the country suffered under the dictatorship of President Francisco Macias Nguema. He was overthrown and executed in 1979 by his nephew, Teodoro Obiang Nguema. The latter was named president in 1982; upon taking office, he promised to restore human rights, resume economic development and re-establish ties with traditionally friendly nations.
In 1996 -- the same year oil was discovered in Equatorial Guinea -- Obiang won 98% of the vote in a national election which the U.S. State Department said was "marred by extensive fraud and intimidation."
According to the EIU report, Equatorial Guinea is now pumping 210,000 barrels of oil a day, a number that could climb by 20% next year. If current trends continue, production is likely to reach 475,000 barrels within three years.
All the more surprising, then, that there's no U.S. Embassy in Malabo.
"In Malabo we have embassies from Spain, France, China and many African countries, but no U.S. embassy," says Biyogo, who was interviewed at his country's tiny chancery on Sixteenth Street (curiously, two of Biyogo's six employees are Bolivians, hired for their Spanish-speaking abilities).
The main reason for that is the less-than-stellar relationship between the United States and Equatorial Guinea. According to a recent Washington Post article, the U.S. has not posted an ambasssador to Equatorial Guinea since 1994, a year after the last one, John F. Bennett, was accused of practicing witchcraft at the graves of 10 British airmen who were killed when their plane crashed there during World War II.
After Bennett departed in 1994, naming the government's most notorious torturers in his farewell address, no new envoy was appointed. The U.S. Embassy in Malabo was closed in 1996, leaving its affairs to be handled by the embassy in neighboring Cameroon.
In March, Obiang -- during an official visit to Washington -- asked the State Department to reopen the embassy he had helped to close, saying "the lack of a U.S. diplomatic presence is definitely holding back economic growth."
Biyogo agrees, arguing that Equatorial Guinea has become a model of democracy in a region noted for oppression and brutality.
"We're trying to open an official American presence in my country," says the 47-year-old diplomat. "Today, there's lots of political stability. We have 13 political parties. There's no other country in Central Africa that's as politically stable."
Before coming to Washington in September, Biyogo served for five years as a minister at his country's United Nations mission in New York. Biyogo, who studied international relations in both Madrid and Moscow, speaks Spanish, French, English and Russian in addition to various local dialects.
"Spanish is the official language, though we also have five or six dialects," he said. "French is also widely spoken because we're a member of the CFA," a regional economic grouping that uses the Central African franc as its common currency.
Biyogo says between 500 and 800 Americans live in Equatorial Guinea, while only 100 to 150 Equatorial Guineans -- mainly students -- live in the United States. In Spain, however, there are thousands.
"Relations with Spain have always been preferential," he said. "Never has a former colonial power been seen in a good light, but in our case, we have good cooperation, because they always treated us as an independent country, not just like a colony."
In his current capacity in Washington, the ambassador, who recently traveled to Mexico to present his credentials there, is accredited to all of Latin America and the Caribbean.
"We have excellent relations throughout Latin America, especially Cuba," he said. "There are 200 Cuban doctors working in Equatorial Guinea. We also have good relations with Argentina, which has sent professors to teach at the University of Malabo."
Despite the sometimes rocky relations between Equatorial Guinea and the United States, U.S. investment there continues to grow.
In June, CMS Oil and Gas Co. announced that it had successfully completed and tested a major offshore natural-gas and condensate development well in Equatorial Guinea's Alba Field, more than doubling the field's proven and probable reserves. The well, located 18 miles north of Bioko Island, tested at a rate of 37.5 million cubic feet of gas per day and 2,400 barrels of condensate per day. CMS predicts that the well is capable of a daily production of 100 million cubic feet of gas and 6,200 barrels of condensate.
CMS says approximately 105 million cubic feet of gas per day is being utilized in a $420 million methanol plant that just began operation on Bioko Island, and that the remaining gas will be re-injected into the reservoir. "Due to the expanded resource base," says a CMS spokesman, "we are actively evaluating development scenarios to significantly expand the facilities to increase condensate and natural-gas liquids production."
Besides oil and gas, Equatorial Guinea derives foreign exchange from production of cacao, wood products and tuna-fish exports. Tourism, an important source of revenue in many other African countries, was never encouraged much, and today is virtually non-existent.
"We don't have tourism of any kind, though we'd like to promote tourism now," says Biyogo, adding that "any U.S. citizen can come without a visa" to Equatorial Guinea.
"The attraction is the people themselves," he says. "We don't have safaris like in Kenya, but we do have great beaches and virgin forests."