Equatorial Guinea : Public Investment Management Review
The chapter offers concise diagnostics of the public investment management (PIM) system in Equatorial Guinea. It provides specific examples of how underperforming institutions throughout the investment process raise the risk of selecting white elep...
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| Format: | Public Investment Review |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2009/01/23068415/equatorial-guinea-public-investment-management-review http://hdl.handle.net/10986/21054 |
| Summary: | The chapter offers concise diagnostics
of the public investment management (PIM) system in
Equatorial Guinea. It provides specific examples of how
underperforming institutions throughout the investment
process raise the risk of selecting white elephants,
reducing the value for money of investment projects and
undermining the quality of completed projects. Politically
compatible recommendations unlock the opportunities for
overcoming the major institutional and procedural binding
constraints to improve the country s PIM in a sequenced
manner. The set of analysis and derived policy implications
provides policy insights for countries in similar situations
that need clear and pragmatic guidance on where to start
building a better performing investment system in a
challenging country context. Equatorial Guinea, one of the
poorest countries in Africa prior to the discovery of
hydrocarbons in the 1990s, has made a significant effort to
transform this new wealth into public infrastructure. After
a first phase focus on improving the dilapidated
infrastructure and supply of capital in the country, the
Government embarked on a second investment round to
implement the National Development Plan, adopted in 2007
with the aim of diversifying the economy out of petroleum
production and improving living standards. However, the
country is ill equipped for such a massive investment
effort, with oil comprising 22 percent of GDP in 2008.
Public expenditure is thwarted by cumbersome administrative
procedures encouraging informal shortcuts that render the
rigorous capital budgeting both irrelevant and impossible.
The absence of reliable budget data undermines the
monitoring of budget implementation. As a result, the public
budget fails as a tool for resource allocation and control.
The country s business laws promote a liberalized economy
but the overall business climate remains poor. Efforts to
create an atmosphere conducive to investor interest have not
been sufficient and application of the laws remains
selective, corruption among officials is widespread, and
business rules and institutions are nontransparent. The
Government is attempting to create a more favorable
investment climate to promote foreign investment, for
example, by adding numerous incentives to its investment
code for job creation, such as training, promotion of
nontraditional exports, support of development projects and
indigenous capital participation, freedom for repatriation
of profits, exemption from certain taxes and capital, and
other benefits. |
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