Ever since the financial crisis struck in the fall of 2008, investors and businesses alike have been searching for new opportunities to achieve positive returns. While many of the world’s economic powers struggled with periods of negative growth, the region of Sub-Saharan Africa has managed to consistently achieve GDP growth upwards of 2.8%, according to the International Monetary Foundation. According to World Bank figures, Equatorial Guinea managed a growth of real GDP of 10.67%, and has experienced an average real GDP growth rate of 5.65% between 2008 and 2010.

The country of Equatorial Guinea represents an untapped supply of resources waiting to be put to use. Based on figures provided by the World Bank, the labour participation rate among those 15 years and older was at 65.5%. This represents a total of over 175,000 people who are not currently taking part in the workforce. With a total population of only 700,000, this represents a significant labour surplus and an excellent opportunity for businesses looking to start up operations in the area.

Exported goods play a major role in the country’s economy. In particular, the growth of merchandise exports has been profound during the last 3 decades. In 1980, total merchandise exports for the country were around 14 million US dollars. According to World Bank statistics, this figure has grown by 649% to 9.1 billion US dollars in 2009. The majority of these exports go to high-income economies, with over 80% of merchandise exports being attributed to such countries.

Sub-Saharan countries are often pigeonholed as producers of cheap goods and agricultural products. While this may have been true in the past, it is certainly no longer the case. Services are quickly becoming an important part of the economy in Equatorial Guinea, as evidenced by the 19.8% growth in the services sector realized in 2009. The country has clearly adapted itself well to meet the changing demands of more developed countries.

While Equatorial Guinea has improved in many ways as a host for businesses, there is certainly still work to be done. In a study done by the International Finance Corporation, Equatorial Guinea was ranked 42nd out of 46 African countries in terms of starting a new business. In the same study, the country was ranked 32nd in ease of doing business. If the local governments hope to continue their economic growth trend, they must find ways to entice corporations to set up shop in Equatorial Guinea rather than in neighbouring countries.

If the local governments choose to streamline the process of starting a business in the country, along with promoting the use of local resources, there is no reason to believe the country will not see strong growth in the future. Protecting investors is another crucial element to increasing foreign and domestic investment. In the aforementioned study conducted by the International Finance Corporation, Equatorial Guinea was ranked 12th in terms of contract enforcement, yet only 27th in the protection of investors.
While much of the world continues to struggle with financial and economic uncertainty, it appears that Sub-Saharan Africa will continue its course of economic growth. What was a major economic shock to much of the world was merely a blip on the radar to much of the African region. For those willing to do their due diligence, economic opportunities abound appear ripe for the picking in Equatorial Guinea. [/premium_content]

By Justin Fitchett


*All statistics and data used provided by The World Bank unless otherwise noted.

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