Page 19 - AfrOil Week 33

AfrOil NEWS IN BRIEF AfrOil

FBNQuest and LOGL have agreed to restructure fall in international oil prices, which, due to growth, industrialization and diversification of
the existing three interest-bearing term bank the strong dependence of the economy on the sources of growth, strengthening the financial
loans into one secured loan under the following oil sector, has strongly impacted our economic system as a key driver of growth in the non-oil
terms: An extension of loan tenor with new term and financial indicators. However, it is impor- sector, improving the business climate and gov-
loan maturity date of March 31, 2024. This repre- tant to highlight that, despite the strong effects ernance and combating corruption will help us
sents an increase on the average maturity of the of the crisis. Equatorial Guinea continues to be a to overcome the current crisis on achieve social
three existing bank loans by 15 months. Interest highly solvent economy with enormous poten- inclusion and economic sustainability as out-
will be paid quarterly in arrears with the pricing tial for development and growth thanks to the line in our National Strategy for Sustainable and
remaining at LIBOR + 10.0%. Sculpted quarterly significant stock of high-level economic and Inclusive Economic and Social Development,
term loan principal repayment delivering a cash social infrastructures and new developments in Equatorial Guinea 2035.
saving as compared to the previous loan struc- the gas sector, as well as the prevailing political In the current situation, following the eco-
tures of over US$3.0mn over the next 15 months. and social stability. nomic crisis, many countries are facing sig-
This restructured loan now comprises all LOGL’s Despite the sharp fall in international oil nificant political and social pressures that
outstanding external bank debt. prices in mid-2014, which sharply deteriorate further deepen the crisis. However, in Equatorial
Lekan Akinyanmi, LEKOIL’s CEO, com- macroeconomic and financial indicators, eco- Guinea, thanks to the leadership of the President
mented: “We are pleased with our relationship nomic activity fell from a drop of more than 9% of the Republic, His Excellency Obiang Nguema
with FBNQuest, who continue to provide strong of GDP in 2015 to less than 6% of GDP in 2019, Mbasogo, the measures taken in a timely man-
support as a financial partner in developing our debt levels remain sustainable, at around 40% of ner to curb the pandemic and the economic
asset portfolio. By restructuring our term loans, GDP, well below the convergence criterion estab- incentives and support for the most vulnerable
we have been able to significantly reduce our lished by CEMAC. Similarly, public finances sectors and the business sector, we have a medi-
near term quarterly amortisations thus provid- have been adjusting, with a reduction in the um-term recovery plan that also has the over-
ing further flexibility and liquidity for the Com- fiscal deficit of more than 10% of GDP between sight and support of international economic and
pany as macro-economic sentiments improve.” 2014 and 2019, thanks to the policy of ration- financial institutions.
LEKOIL, August 17 2020 alization and reorientation of public spending African Energy Chamber, August 18 2020
designed within the fiscal and macroeconomic
framework recently endorsed with the signing Democratic Republic of
POLICY of a financial programme with the international
Monetary Fund (IMF). Congo expresses strong
Equatoguinean Ministry GDP would fall by about 6% in 2020, compared political will for gas
After the recent crisis, it is estimated that our
of Finance, Economy to an initial forecast of a 1.6% drop. In a more monetisation projects
pessimistic scenario, we would be talking about a
and Planning replies to fall in GDP of between 8 and 9%, which although
a significant deterioration would be well below Surrounded by major African oil and gas pro-
comments on government the levels of many developed and developing ducers Republic of Congo and Angola, the
economies that estimate negative double-digit Democratic Republic of Congo (DRC) has so
resignation growth rates. far remained relatively absent of Africa’s league
The national financial system, which was of hydrocarbons producers. In 2019, only French
The following communique is a complement the other major sector affected by the crisis, has independent Perenco produced from the DRC,
to the announcement following the meeting the support of the Government to maintain its at an average rate of 25,000 boepd from 11
of the Council of Ministers held on Friday, solvency and comply with the prudential stand- onshore fields.
August 14, 2020. The Government of Equatorial ards of the Banking Supervision Commission In this context, the administration of Presi-
Guinea wishes to state that it is obliged to take (COBAC). Although the Government’s debt dent Félix Antoine Tshisekedi has made energy
strict measures to mitigate the effects of a severe with construction companies, one of the main security and investment its top priority, seek-
economic downturn and forestall political and clients of the financial system, has increased the ing to get massive hydropower projects off the
social instability. Banks’ non-performing loans, it is expected that, ground but also to diversify the country’s energy
Consequently, the Government of Equato- after the regularization of this debt with the issu- basket and create jobs in the process.
rial Guinea will adopt precautionary measures ance of Public Bonds, which is quite advance, the
given current economic and financial conditions Bank’s balance sheets will improve substantially,
deriving from the COVID-19 pandemic. as well as their access to greater refinancing with
To this end, the Government has decided the Central Bank.
to restructure its ministerial cabinet in order to On the other hand, the commitments of
accelerate the implementation of economic and the Heads of State of CEMAC countries to
structural measures currently under way. strengthen the currency through financial sup-
Equatorial Guinea, like most countries in port supported by the IMF are progressing in
the world, is facing an unprecedented economic accordance with the agreements and thanks to
crisis, the extent of which is still unknown given this support Equatorial Guinea is guaranteed
the uncertainty about the evolution and dura- budgetary support to finance the 2020-2022
tion of the pandemic. In fact, since March of this budgets, and the facility of extraordinary credits
year, our economy has been severely hit by the to attend the pandemic.
double crisis, on the one hand, the appearance We are convinced that the entire package of
of Covid-19, and, on the other hand, the sharp structural reforms aimed at restoring economic

Week 33 19•August•2020 www. NEWSBASE .com P19