Republic of Equatorial Guinea: Report on the Observance of Standards and Codes - Fiscal Transparency Module, 2005

Republic of Equatorial Guinea: Report on the Observance of Standards and Codes - Fiscal Transparency Module, 2005

International Monetary Fund | April 1, 2005
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A report that outlines the policies and practices that the government of Equatorial Guinea needs to implement to increase fiscal transparency. It includes a set of IMF staff recommendations.

"Equatorial Guinea needs to improve transparency in many of the important elements of the Code of Good Practices on Fiscal Transparency (fiscal transparency code), but a basis is being established to implement key fiscal transparency practices. An improved legal framework for fiscal management, in harmony with regional partners, has been put in place, notably through the 2003 Public Finance Law and the 2004 Tax Code. Most importantly, the authorities at the highest level have indicated their commitment to improving fiscal transparency, particularly with respect to the management of oil revenues. A small cadre of dedicated staff are well aware of the key issues involved and have indicated their willingness to work with the IMF, World Bank, and other donor agencies to implement the practices recommended in the fiscal transparency code and the Extractive Industries Transparency Initiative (EITI).

Several weaknesses in transparency need to be addressed urgently. Priority areas identified for improvement are: establishment of a clear fiscal policy framework for management of petroleum wealth and a firm budget constraint; reporting and reconciliation of oil revenue flows; and clarification of the mandate and corporate governance structure of the national oil company GEPetrol. The authorities are initiating action in some of these areas. Such improvements in transparency of petroleum-related activities are particularly important, but broader reforms are essential for successful and sustainable progress in fiscal management. Weaknesses in administrative capacity and inadequately defined responsibilities and oversight mechanisms present substantial barriers to rapid reform, and these need to be addressed over the long term with a sustained commitment by the authorities..."

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