Interview with Marcelino Owono Edu, Minister of Finance. African Business met Equatorial Guinea’s Minister of Finance, Marcelino Owono Edu in London ahead of the Emerging Equatorial Guinea Conference in Malabo this month. He was part of a delegation that made presentations to international investors.
How would you rate the economic performance of your country over the last two years?
There are a number of ways of evaluating our performance these last two years, but let me try and focus on three aspects, the political, economic and social dimension.
Economically, we have achieved what we have set out in our Vision 2020 (Plan Horizonte 2020), that is, to create some solid foundations on which to drive our economic development.
The priority was to strengthen the country’s infrastructure, the building of roads, bridges, ports and hospitals, and provide at a countrywide level, potable water, electricity, access to telecom networks. These foundations were part of the first phase of our 2020 vision, that is the years 2007–2013. We feel we have delivered successfully on this initial phase.
There have also been other notable achievements but it was important that we delivered on the vision we had set out, within the ambitious time frames we had set ourselves.
The second dimension, the political one, has also seen considerable changes. We have seen through constitutional reform and have created new organs that will ensure better governance.
We have created a number of independent bodies to better monitor and evaluate government and state institutions. We have created audit bureaux and a national economic council. We are confident these will ensure there is more transparency in the management of public institutions, and as such better governance.
On the social side, human development is key. That means a strong emphasis in strengthening the education system, public health and the integration of youth and women into public life and the jobs market.
Regarding women and youth, how have you gone about achieving this?
From the government side, we have created a number of openings and positions and have been encouraging women and the youth to apply for these posts. It is important that the youth and women play an active role in the development of the country and that they are present at the decision making process of policy.
Does that mean you have established quotas?
We give opportunities to all, without any prejudices or discrimination. So we will recruit based on competencies but we have reached out to different groups to diversify the make-up of the public sector in terms of staff and we have made a special effort to encourage women and the youth to apply for these positions.
Infrastructure was identified as a key sector of the Vision 2020 initial phase. How much of the country’s budget is spent on infrastructure?
Over the past seven years, or the first phase of Vision 2020, we have put vast resources to infrastructure. In the last five years, we have spent on average 80% of the national budget on infrastructure.
But as we enter our second phase, this investment in infrastructure as a proportion of total government spend will fall. There are still ongoing infrastructure projects, but more resources will be focused on other sectors, with the objective of fast-tracking growth and wealth creation now that the foundations have been firmly laid.
Economic development has largely been concentrated on Bioko. What plans does the government have to encourage development on the mainland?
Whoever has said this is mistaken. The politics of the government is a national one, throughout the whole territory. There are currently 1,600 [infrastructure] projects taking place simultaneously throughout the country. What you may have seen in Malabo [the capital on Bioko Island], the same is happening in Bata [on the mainland] and throughout the country.
And I should add, that in the continental part of the country, we have invested considerably more than what we have in Bioko, which is logical given the size of that part of the country and the number of people living there.
When you mention 1,600 projects, what do they focus on exactly?
When we talk of 1,600 simultaneous projects, we are talking about the wide-ranging works, highways, electricity plants, water plants, social housing, bridges, airports, rural electrification… the list is long.
Are you worried, as Minister of Finance of a country that is still dependent on oil, that the price of oil may fall, especially with the advent of shale gas?
This is an issue which is being much debated. As the Minister of Finance, it is obvious that I am paying much attention to developments in the shale gas industry and its impact on international oil and gas markets. For this year, we estimated the price of oil at $90/barrel.
What are you doing therefore to be less reliant on oil?
We are aware that our oil and gas reserves are finite. Also the oil and gas industry does not create many jobs. That is why the second phase of our Vision 2020 will be focused on diversifying the economy and building strong industries in a number of sectors. The strategic sectors which have been identified for growth are agriculture, fishing, petrochemicals, mining, financial services and tourism.
Equatorial Guinea is part of CEMAC. Is being linked to this economic bloc an advantage for your country?
Today, it’s important to be part of larger economic blocs, and being part of this economic bloc has numerous advantages. First of all, the use of one common currency facilitates trade amongst our countries and as part of this regional economic community, it gives us access to a much larger market.
There will be, like everywhere else where this is taking place, some problems along the way as we work out the best way to integrate our economies, but the strength of our currency, of our central bank all show that we are on the right path.
And what role do you see yourselves playing in this market?
We are working at developing our country, and we hope this will benefit the whole region. We don’t want to have a dominant position but rather to play our role in strengthening our regional bloc as a whole.
Yes, but do you want to become the financial centre for the region, the leaders in petrochemicals industry?
In line with our Vision 2020 master plan, yes, we want to develop our tourism industry and resorts to become a touristic centre for the region and indeed we want to create a financial hub for central Africa.
When you talk about a financial hub, what is it you are talking about exactly – do you want to have a stock exchange?
Amongst other things, yes. We want to develop a strong financial centre which will become an investment platform for the whole region.
That may include a stock exchange, a base for investment banks, insurance companies and other financial institutions. We are talking to experts in London, New York and other important financial centres to learn from their experience and help us draw plans to quickly move forward with this project.
We had heard that with the Luba Freeport, and with your ambitions to diversify into derived products and petrochemicals, the country had ambitions to be an important oil and gas centre for the whole Gulf of Guinea.
The Minister of Hydrocarbons and Mines does have ambitious plans, including that of derived petro products, and serving the entire region. We also have plans to use the gas being flared in the Gulf of Guinea and to transform this. The ports of Bata and Malabo, the biggest in the sub-region, will enable us to become an important trading hub for the entire west coast of Africa.
If you had to describe Equatorial Guinea in three words, what would those be?
Equatorial Guinea, an Emerging Economy by 2020.