Equatorial Guinea's economy: offshore wells that paid for a city in the forest

What cocoa on Bioko paid for before oil

Before petroleum, the money in Equatorial Guinea grew on one island. In the last quarter of the 19th century the Krio planters of Fernando Po, now Bioko, moved from trading palm oil to growing cocoa, and by the late 1920s the crop was grown on estates of up to 2,000 hectares known as fincas. Bioko had the volcanic soil and the rain for intensive cultivation, and Spain subsidised the cocoa and coffee it bought from the colony. Most of the country's cocoa is still grown on the island.

The labour was brought in. The plantations ran on contract workers from Liberia and later from Nigeria, and a League of Nations inquiry between 1923 and 1930 into recruitment from Liberia found that the abuse arose from conditions on Fernando Po itself, where planters kept workers on and failed to pay their contracts. Liberia stopped labour traders from contracting its citizens.

At independence in 1968 cocoa accounted for 75% of GDP, a figure the geographer Thomas Wikle cited in 2019. The colony produced 36,161 tons of it in 1969. The regime of Francisco Macías Nguema then took the plantation economy apart. Nigerian and local workers left, maintenance and quality fell, and by 1976 the Nigerian government had repatriated its nationals from the estates. Cocoa exports dropped to a tenth of their former level, and output was 4,800 tons in 2000. Coffee exports from island and mainland almost stopped, apart from small harvests of robusta grown by Fang farmers in Río Muni.

The currency changed hands as well. The ekwele, issued after independence, was tied to the Spanish peseta. Equatorial Guinea joined the Customs and Economic Union of Central Africa in December 1983 and on 1 January 1985 replaced the ekwele with the CFA franc, joining a franc zone whose African members had until then all been French-speaking. The CFA franc was pegged to the French franc, and to the euro after the changeover of 1999 to 2002.

How the offshore fields were found and lost

Spanish government geologists found the first evidence of oil in the waters off Bioko, but with no national oil company and no deepwater expertise nothing was developed. Gas came first. The Alba field was discovered in 1984 and began producing in 1991.

Mobil found Zafiro in 1995, with estimated reserves of 400 million barrels, and production began in 1996. The field lies about 42 miles northwest of Bioko, close to the coast of Cameroon, and it was worked from floating production, storage and offloading vessels moored over the wells, so its crude passed from the seabed to tankers without touching land. Mobil became ExxonMobil in 1999, and by 2024 ExxonMobil held 71.25% of Zafiro, the national oil company GEPetrol 23.75% and the government 5%.

The published peaks disagree. Wikle gives Zafiro 375,000 barrels a day in 2005, the same order as the national figure, while the GIS factbox puts Zafiro's own peak in 2004 at about 280,000. Both agree on the direction. The 2024 total the IMF counted works out at about 80,000 barrels a day, the rate the fields had reached in 1998.

The terms shifted in the government's favour once. A revised production-sharing contract in 1998 raised domestic receipts from 13% to 20% of oil export revenue. Triton Energy found La Ceiba off the mainland in late 1999, and the last discovery of any kind was the Aseng field in 2007. In 2022 water leaked into a production vessel at Zafiro, and the platform was retired two months later.

Equatorial Guinea joined OPEC in May 2017. Nigeria had joined in 1971, Gabon in 1975 and Angola in 2007, each while its output was rising; Equatorial Guinea joined with production at half its peak. The World Bank read the decision as an attempt to draw investment and technology from other members, especially those in the Persian Gulf. In February 2024 ExxonMobil announced that it was leaving, ending a presence of nearly three decades.

Why the gas has outlasted the oil

All of the gas runs through one headland. At Punta Europa, west of Malabo, the Alba plant operated by Marathon Oil strips propane, butane and condensate from the gas piped ashore from Alba. Most of what is left goes to a liquefaction plant run by EG LNG, which began operating in May 2007, and a share goes to the Atlantic Methanol Production Company, built as a US$300 million plant that entered production in 2000. All three load their products onto ocean-going tankers. The liquefaction plant can take five billion cubic metres a year.

Gas production peaked in 2013 and has fallen more gently than oil. In 2024 the IMF counted 51.8 million barrels of oil equivalent of liquefied gas, propane, butane and methanol, against 29.1 million barrels of crude and condensate. The Alba field remains the only source of feed gas for the liquefaction plant. Its cargoes were split between Europe at 37%, Asia and the Pacific at 34% and Latin America at 29% in the International Gas Union's 2023 report.

The government's plan is to keep the plant full with gas from elsewhere: to process gas from Cameroon and Nigeria at Punta Europa and export it as a regional hub. The cross-border agreements, the supplies and the pipelines it needs had not been settled by early 2024.

How the state has tried to bring drillers back

A licensing round offered 27 blocks in 2019 and awarded three, all to smaller companies, among them Africa Oil Corp of Canada and Panoro Energy of London. In 2023 the government switched to an open-door policy under which any company can negotiate directly, and Panoro took a further block that year. From 2024 the corporate income tax rate was cut from 35% to 25%. Malabo also tried to persuade Eni to take over ExxonMobil's share of Zafiro, without result by the time the departure was reported.

Where Equatorial Guinea's oil revenue went

The first oil money arrived fast. Foreign reserves rose from US$40,000 to more than US$3.1 billion between 1997 and 2001, according to figures Wikle took from a 2004 study. The 2001 budget foresaw revenue of about 154 billion CFA francs, roughly US$200 million and up about 50% on 2000, with oil supplying about two thirds of it. New investment projects took about 40% of planned spending that year, and gross fixed investment was put at 46.3% of GDP in 2005.

Most of it was built. Wikle's 2019 survey describes office towers, apartment blocks and government buildings in Malabo and Bata, with new hospitals and stadiums beside four-star hotels, conference centres and golf courses, joined by a highway system he compared to Europe's. Oil also brought foreign workers, and with them a housing shortage that companies met with barracks for labourers, dormitories for skilled staff and gated compounds for managers.

Ciudad de la Paz carried the building inland. It was announced in 2011 under the name Oyala and renamed in 2017, and it sits 172 kilometres inland from the Atlantic coast of Río Muni. Its infrastructure includes a Chinese-built hydroelectric plant and twin 500-metre suspension bridges over the Wele River, and its Avenida de la Justicia is 81 metres wide. It was projected to be complete in 2020. A decree in January 2026 made it the capital, while ministries, the World Bank noted in its 2026 overview, were still working from Malabo and Bata.

Not all of the revenue reached a budget. A United States Senate investigation published in July 2004 into Riggs Bank, the Washington bank into which most of the oil revenue had been paid, found at least US$35 million siphoned off by the president, his family and senior officials. Wikle, citing a 2004 report, gives a much larger figure: more than US$700 million laundered through the bank for the president and his family. The two numbers measure different things and neither has been reconciled in the sources. Freedom House's 2026 report states that oil wealth and political power are concentrated in the president's family, and in 2025 the authorities decided not to publish the asset declarations of public officials, against long-standing commitments made to the IMF.

The spending left gaps that the World Bank's 2026 overview records: 24% of the population without electricity and 32.4% without piped water.

Who works in Equatorial Guinea and at what

Oil employs few people. Drilling and production are capital intensive, and Wikle's 2019 survey found that most of the jobs the industry did create went to skilled expatriates. Lower-paid work as drivers or guards was handed out through hiring agencies controlled by associates of the president, which, citing a 2017 study, he describes as requiring party membership and a share of the wage.

Farming employs the most. Agriculture provides work for 52% of the workforce and income for 57% of rural households, much of it subsistence farming on land cleared by burning. The crops are cassava, sweet potatoes, plantains, bananas, oil palm fruit and coconuts, with some coffee and cacao, and sheep, goats, pigs and cattle are raised. Only 8% of the land supports agriculture, and nearly all basic foodstuffs are imported, according to Wikle in 2019.

The two halves of the country carry different weights. Bioko, with the gas plant and Malabo, had 335,048 inhabitants at the 2015 census, of whom 271,008 lived in the district of Malabo. The rest of a population the record puts at 1,847,549 in 2023 lives mostly on the mainland, in the forest of Río Muni, which makes up 26,017 of the country's 28,051 square kilometres.

The measures of how people live differ by source. The World Bank put poverty at 58.1% in 2022 and 61% in 2025, unemployment at 13.7% and formal jobs at 17% of the total. The African Development Bank gave poverty as 50.7% in 2024, extreme poverty at about 8% and unemployment at 8.3% in 2025. Life expectancy was 60.7 years in the World Bank's 2026 overview.

Why the economy has shrunk for a decade

Output has fallen with the oil. GDP per head at purchasing power was US$19,850 in 2008 and US$7,182 in 2022, and the World Bank calculated that the economy contracted at an average of 4.2% a year between 2013 and 2023. The collapse in oil prices in 2014 began it, and by 2020 the country was in its eighth year of recession. Gross national income per head, at US$4,134.4 in constant 2015 dollars in 2024, was well below its level of 2008.

The years since have moved with the fields. After a strong contraction in 2023 the economy grew 0.9% in 2024, by the IMF's count. For 2025 the World Bank estimated a contraction of 5.4% and the African Development Bank one of 6.0%, driven by a 16.8% fall in oil production from shutdowns, ageing fields and the lack of new sites. Both are deeper than the 1.6% fall the IMF had projected in July 2025. The non-oil economy grew 2.3% in 2025.

The table shows the imbalance in its plainest form. Hydrocarbons were less than a third of output in 2024 by the IMF's accounts and still more than four fifths of what the state collected. The African Development Bank projects contractions of 1.7% in 2026 and 1.4% in 2027, both traced to the fall in oil output, while fisheries and construction lift the rest of the economy by 2.9% in 2026.

What the forest and the sea still yield

Timber was shipped out under Spain alongside cocoa and coffee, and it is still shipped. It earned about 12.4% of export income in 1996 to 1999, and wood exports reached 789,000 cubic metres in 1999 as demand from Asia, mainly China, rose after the 1998 crisis. Most of it is okoumé, and only 3% was processed in the country. By 2000 timber was about 5% of export revenue, against more than 90% for crude. The mainland ports of Mbini and Cogo are now used mainly for logs, and most logging is done by foreign firms.

The export list beyond petroleum is short and partly the gas plant's own: lumber, acyclic alcohols, the trade category that holds the methanol from Punta Europa, and wood veneer, in the Observatory of Economic Complexity figures Wikle cited in 2019. Industry outside hydrocarbons consists of sawmills and a few plants making cement or bleach.

The sea is the other resource the plans name. Commercial fishing can export tuna, perch, shark and crayfish, and under Agenda 2035 the government groups its diversification into blue, green, yellow and digital economies, with tourism alongside. Gold, titanium, manganese, iron ore and uranium are known but undeveloped. At Monte Alen, the mainland national park meant to carry ecotourism, the lodge had fallen out of use by 2019.

How the state is trying to tax something else

The state collected 3.7% of GDP in non-hydrocarbon taxes in 2025, according to the African Development Bank. The same year hydrocarbons accounted for about 80% of government revenue, which is why every fall in output reaches the budget directly: the deficit widened from 0.6% of GDP in 2024 to 2.1% in 2025.

The reforms of 2024 and 2025 ran under an IMF Staff Monitored Program, extended for twelve months on 25 June 2025. The government enacted a new tax law to broaden the base, prepared a plan to end fuel subsidies, began payments under a new strategy for clearing arrears and reformed the customs administration. The non-hydrocarbon primary deficit narrowed from 22.3% of non-hydrocarbon GDP in 2023 to 17.0% in 2024, and public debt fell from 39.1% to 36.4% of GDP. A procurement law of 2025, No. 11/2025, replaced procedures that dated back to independence in 1968.

The banks carry a weakness of their own. They were undercapitalised in 2024, with the system's average capital ratio just below the regulatory minimum, and non-performing loans were 30.0% of the total in 2025, against 32.5% in 2023. The country's contribution to the pooled reserves at the regional central bank was negative in 2024.

Transparency is the condition the lenders keep returning to. Equatorial Guinea became a candidate of the Extractive Industries Transparency Initiative on 22 February 2008 and was refused an extension when it asked for more time to be validated. In 2025 it published its extractive contracts, and the IMF extension asked for an annual report on financial flows in the extractive sector to EITI standards in place of the asset declarations.