Equatorial Guinea’s ailing economy has been dented by the pandemic and a series of deadly dynamite explosions in 2021 despite government efforts to mitigate the impact of these shocks on the oil-producing nation, the International Monetary Fund (IMF) said on Friday.
The former Spanish colony on the west coast of central Africa suffered a double economic shock in 2020 due to the coronavirus outbreak and a drop in the price of crude, which provides around three-quarters of state revenue.
It took another hit in March 2021, when the negligent handling of dynamite stored at an army base caused a series of explosions in the coastal city of Bata, killing over 100 and injuring hundreds more.
While non-hydrocarbon GDP is estimated to have increased by 1.3 percent in 2021 due to a drop in coronavirus cases and the easing of containment measures, real GDP is estimated to have declined by 3.5 percent, the IMF said in a statement.
The country had already seen seven consecutive years of economic decline before the pandemic, it added.
Although real GDP is projected to grow by around 6 percent in 2022 due to the base affects of lower-than-expected gas production the previous year, and the start of reconstruction in Bata, longer-term prospects remain bleak.
Hydrocarbon output is expected to fall in the medium-term as major oil fields mature and investments in exploration slow, the IMF said.
The global rise in food and fertilizer prices is also likely to affect food security among already vulnerable population groups and fuel inflation.
Most of the country’s 1.2 million inhabitants live in poverty despite Equatorial Guinea’s vast oil reserves.
The government sought to recover the pandemic and Bata explosion fallout by spending more money on the health sector, cutting non-priority expenditure and giving the private sector temporary tax relief.