Overview
The first confirmed COVID-19 case was reported on March 14, 2020 and the government was proactive in implementing substantial preventive measures at an early stage. As of mid-June and early August, preventive measures have been loosened to a large extent, and the country is now in the second of four stages of normalization. The loosenings lifted the stay-at-home order and closing of the airspace and allow businesses to reopen though some with capacity restrictions. As an additional preventive measures, movement between districts within the country remains restricted and the use of masks in public is being more tightly enforced. Rates of daily new cases have declined steeply since July.
Travel Restrictions
1. Flights to Equatorial Guinea are suspended.
- This does not apply to aircraft in state of emergency.
- This does not apply to humanitarian flights (medevac, repatriation flights).
2. Passengers and airline crew are subject to quarantine.
Source : IATA Timatic
Economic Measures
Key Policy Responses
FISCAL
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Fiscal policy is facing large two shocks: the Coronavirus and lower oil prices.
The government approved a package of measures at end-March to address the crisis. It broadens emergency health spending (0.3 percent of GDP), mainly to improve hospital preparedness to respond to local transmission. It also further improves the first response system, quarantine facilities for incoming travelers, and laboratory facilities/testing which had already been operationalized earlier in March. The package also envisages a social assistance scheme for the most vulnerable and measures to ensure continuity of education. It also provides some targeted and temporary support to the private sector, including by halving withholding tax rates and delaying tax payment deadlines for small and medium-sized firms , while safeguarding public revenues. Finally, a more recent measure reduces electricity bills for firms affected by the Covid crisis, with a focus on SMEs, and for households. In addition, in light of the recent oil price decline, Equatorial Guinea is facing a large fiscal revenue shock, given that hydrocarbons accounted for more than ¾ of fiscal revenues. To address this shock, the government is contemplating to mobilize more financing. The government is also postponing execution of non-priority capital expenditures to the second half of 2020, identifying savings to non-wage current expenditures, as well as to continuing implementation of plans to strengthen the tax administration.
MONETARY AND MACRO-FINANCIAL
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On March 27, 2020, BEAC announced a set of monetary easing measures including a decrease of the policy rate by 25 bps to 3.25 percent, a decrease of the Marginal Lending Facility rate by 100 bps to 5 percent, a suspension of absorption operations, an increase of liquidity provision from FCFA 240 to 500 billion, and a widening of the range of private instruments accepted as collateral in monetary operations. The MPC also supported BEAC’s management’s intent to propose to reduce haircuts applicable to private instruments accepted as collateral for refinancing operations, and to postpone by one-year principal repayment of consolidated central bank’s credits to member states, but these possible additional measures are not effective yet. On March 25, 2020, the COBAC informed banks that they can use their capital conservation buffers of 2.5 percent to absorb pandemic-related losses but requested banks to adopt a restrictive policy with regard to dividend distribution.
EXCHANGE RATE AND BALANCE OF PAYMENTS
Source : IMF & WB
Civic Freedom Tracker
NO DATA
