World’s Longest-Serving President May Get Lifeline From IMF
(Bloomberg) -- Equatorial Guinea is seeking a loan from the International Monetary Fund that could help keep afloat a four-decade-old regime accused by prosecutors from the U.S. to France of squandering the tiny African nation’s oil wealth.
The IMF this week gave the green light for a three-year financing program to help the government of Teodoro Obiang Nguema Mbasogo, the longest-serving president in the world, climb out of a crisis that shrank its economy by a third to $13 billion.
The loan, the amount of which has not been revealed, is scheduled to be considered by the IMF executive board in December and meant to “support the recovery of economic activity and foster sustainable and inclusive economic growth,” the Washington-based lender said Oct. 21.
As recently as 2017, Equatorial Guinea was as rich in per-capita terms as its former colonial master Spain. Today, the OPEC member is struggling to pay its debts after oil prices collapsed in 2014. The government has piled up arrears of almost 19% of its gross domestic product with construction firms, according to the World Bank.
In recent years, foreign builders have erected tall, glass-fronted government towers in the capital, Malabo, in an infrastructure spending spree that left little for social investment, according to the United Nations. Less than half of the population of about 1.3 million people has access to clean water.
“The IMF is not helping a poor country -- it is bailing out a country that has squandered its vast resources through corruption and wasteful spending,” Sarah Saadoun, a researcher with Human Rights Watch, said by phone from New York.
“How the IMF addresses corruption in this case is really important for other countries,” she said.
Finance Minister Cesar Mba Abogo said in an interview in September that the administration may seek as much as $700 million from the IMF because it needs to defend its currency.
That’s just more than double the amount Obiang’s eldest son, Teodoro Nguema Obiang Mangue, spent between 2000 and 2011 acquiring luxury properties on four continents and assets including Michael Jackson memorabilia, U.S. Department of Justice lawyers said in a 2013 money-laundering case that was settled the following year.
Obiang’s son, who’s commonly referred to as Teodorin, is currently the country’s vice president and previously served as forestry minister. The target of a spate of corruption probes in recent years, he has always denied wrongdoing.
He received a three-year suspended jail term and a $35 million fine from a French court in 2017 for spending tens of millions of dollars in public funds on a mansion, sports cars and jewelry in France. In September, Swiss authorities raised $27 million in an auction of exclusive cars they’d seized from him, including a limited-edition Lamborghini Veneno roadster that sold for a record $8.4 million.
Calls, text messages and emails to Finance Minister Cesar Mba Abogo seeking comment went unanswered. An IMF spokeswoman didn’t immediately respond to a request for comment.
To sign off on the loan, the IMF has demanded that the administration do more to fight corruption and improve transparency in a country that consistently ranks among the worst in Transparency International’s annual corruption index. Equatorial Guinea is also required to become a member of the Extractive Industries Transparency Initiative, which promotes good governance in the mining and oil sectors.
Since ousting his uncle in a bloody 1979 coup, President Obiang has overseen the arbitrary detention, torture and killing of dissidents, earning his regime a human-rights record comparable to that of Syria and North Korea in the latest ranking of Washington-based thinktank Freedom House.
“For saying some of the same things the IMF is now saying, I was fired from my job, jailed and beat up,” said Alfredo Okenve, an academic and human-rights activist who left the country in August after spending five months under house arrest for unspecified charges.
“The IMF staff sees the fiscal adjustment as a sign the government is willing to change,” he said. “They are betting on a miracle -- this regime will not change.”
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