African Energy Chamber, (https://EnergyChamber.org) Thursday joined Equatorial Guinea’s Minister of Mines and Hydrocarbons, H.E. Gabriel Mbaga Obiang Lima and H.E. Cesar A. Mba Abogo, Minister of Finance, Economy and Planning to discuss the COVID-19 pandemic and oil price impacts.
Panelists during the Open for Business Webinar, which includes Executive Chairman, African Energy Chambers (AEC); NJ Ayuk and Leoncio Amada Nze; AEC President for the CEMAC region, agreed that economic diversification will be the best solution for Equatorial Guinea to ensure stability. The Ministry of Mines and Hydrocarbons will thus revise Petroleum regulations with incentives in order to attract further foreign investment. To this end, Equatorial Guinea will update indexes to share information on these new developments.
The Open for Business Webinar focused on ‘Analysis on Equatorial Guinea’s Oil and Gas Spectrum and COVID-19 Effects’ with the high powered panel discussing subjects ranging from the future of Equatorial Guinea’s (EG) oil and gas industry, the advancement of the country’s economy, development of its midstream and downstream sectors, local content policies and job creation, economic diversification, fiscal regulations, tax incentives and the creation of information indexes.
H.E. Gabriel Mbaga Obiang Lima shared the MMH’s objectives to increase exploration and advance EG’s refining and processing sector as a means to commercialize the value chain, encourage local participation and boost entrepreneurship.
In tune with this, Minister Mba Abogo noted that because EG is heavily reliant on oil, it has been placed in a compromising position as a result of the price war and the COVID- 19. He explained that, in order to ensure stability and avoid lasting impacts on economic growth, the country needed to diversify its economy and look into industries such as tourism, agriculture, and mining – a sentiment that was shared by Leoncio Amada Nze, President for the CEMAC region at the African Energy Chamber who said: “Oil presents an economic advantage and stands to unlock opportunities for economic diversification.”
Advancing Equatorial Guinea’s economy in the next 20 years
In an effort to position itself as a regional and international investment hub, Equatorial Guinea launched the Year of Investment (YoI) 2020 campaign. The YoI initiative is targeting $1 billion in foreign direct investment to be directed towards diversifying the country’s energy sector, boost entrepreneurship, generate profit for investors and create jobs.
Encouraging EG to continue on this aspirational route towards growth and development despite the current economic environment, Executive Chairman of the African Energy Chamber, NJ Ayuk stressed the importance of local participation in achieving long-lasting greater growth.
“We need to get back to basics, we need to invest in education. By developing these skills, we are more likely to not only get investors to enter our markets but also, we are able to get companies to stay,” said Ayuk. Agreeing with this, Minister Mba Abogo said, “Opportunities presented by our aspirations do not make sense if our people are not benefitting from them.”
Price War impacts on Africa
With many African oil-producing countries having budgeted for and an oil price of no less than $50, the continents oil economies are set to take a hard hit. When asked of the impacts of the low oil price and the COVID-19 pandemic, Minister Obiang Lima said the MMH was actively working to ensure that it continues on with its projects and initiatives, stating that, “the impact [of the low oil price and the COVID-19 pandemic] will be harder on the new producers, especially because many of them had projects in the pipeline.” Referring to EG’s long history in the oil industry as a source of comfort in managing through the crisis.
In attracting further business into the Equatoguinean market, Minister Mba Abogo said ease of doing business is essential. And, in adapting to the current state of the global economy and pushing business operations to continue, he said EG needed to be creative with its approaches to its finances and take lessons from other African countries.
“Oil has been our blessing in Equatorial Guinea’s diversity and we should use it to build a thriving future,” he said.
In providing tax and regulatory incentives for new and continued business, Minister Obiang Lima said EG would modify its petroleum regulations, release a ministerial decree to enhance the effectiveness of its industry and a new mining operating regulation in a few weeks.
Beyond the regulations, Minister Mba Abogo noted that EG has an issue of a negative perceived narrative that stood in the way of it attracting new business. In addressing this, the minister revealed that the Ministry of Finance, Economy and Planning would be compiling a business index and ease of doing business report which will track the country’s growth and development.
The African Energy Chamber is pleased to have participated in the webinar and welcomes the plans of the Ministry of Mines and Hydrocarbons and the Ministry of Finance, Economy and Planning as a constructive way forward in ensuring that the country does not experience setbacks, especially at a time where it is poised for lasting growth.