Problems of Agricultural Sector in Oil-Producing Countries of Africa: Equatorial Guinea

Abstract

The Republic of Equatorial Guinea (REG) is one of the least populated countries in Africa. Prior to the discovery of large oil and gas reserves on its shelf, it was one of the poorest countries in the world in terms of income. Being a typical backward agricultural country with a monocultural export structure, the REG provided the bulk of its foreign exchange earnings through the supply of cocoa beans to foreign markets, the cultivation of which was established on the island of Fernando Po (now Bioco) during the Spanish rule. With the onset of the oil boom, the REG has a new income item, and the economic importance of agriculture in creating GDP fell sharply. With an increase of the inflow of petrodollars, the bulk of the budget funds intended for the development of the economy was spent on the realization and maintenance of expensive infrastructure projects. Stagnant agriculture, unable to meet the needs of the population not engaged in agricultural production, remained outside the scope of the state’s financial and economic policy. Together with the rapidly increasing rural-urban migration this inevitably exacerbated the problem of food security. It was accompanied by a fall in export agricultural production. Since the beginning of the 2000s, the unfavorable global situation in the hydrocarbon market has led to the cessation of the inflow of new foreign investments and a reduction in oil production. The REG authorities have developed a program to diversify the sources of economic growth through the development of industries not related to the exploitation of irreplaceable natural raw materials. First of all, this applies to agriculture, which has a large and underexploited resource potential.