The International Monetary Fund (IMF) on Friday welcomed Equatorial Guinea’s decision to publish oil and gas contracts, which started this week as a way of bringing more transparency into an industry known for its opacity.
The IMF also urged Equatorial Guinea to maintain a strong fiscal discipline and improve its tax and customs administration to further strengthen the public finances and meet economic targets for 2020.
“Preliminary data suggests that the overall fiscal balance improved in 2019, with a significant reduction in the non-oil primary balance,” said Lisandro Abrego who led an IMF mission to Malabo from February 5 to 13, 2020, to discuss with authorities there and take stock of progress on Equatorial Guinea’s economic reform program supported by the IMF’s EFF.
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Mr. Abrego said the economic outcome was aided by “the operationalization of tighter expenditure approval and tracking mechanisms put in place last year”.
“This also supported a reduction in the stock of domestic arrears. While the authorities’ 2020 budget is consistent with the program quantitative targets for this year, continued fiscal discipline and significant improvements in tax and customs administration will be necessary to further strengthen the public finances and meet program targets for 2020”.
The mission also emphasized the importance of addressing weaknesses in the banking sector to foster financial stability and support the recovery of the non-oil economy and economic diversification.
It stressed the need to clear domestic arrears and enforce compliance with prudential regulation in the banking system while maintaining close supervision of it.
“These actions require strong coordination among the Equatoguinean authorities and the regional financial regulator (COBAC). The mission also highlighted the need to continue making progress on improving the business climate, which is also key to promoting the recovery of the non-oil economy and diversification,” Mr. Abrego added.