Top-Rated Debt Collection Agency in Equatorial Guinea

The economic risk in Equatorial Guinea

Our analysis shows that the economic risk in Equatorial Guinea is very high (6 out of 6). An economic risk of 6 out of 6 is relatively high in Africa.

GDP and economic growth are critical drivers for economic risk.
The GDP of Equatorial Guinea is 12,27 bn. USD (2021), growing by -0,95% per year.

In terms of the size of its economy, Equatorial Guinea ranks #134 out of 183 countries and has a medium-sized economy.

In terms of growth rate, it is ranked #163 out of 183 countries and is therefore considered a declining economy.

GDP per capita is 8462 USD, ranking Equatorial Guinea number #73 out of 183 countries. This means the purchasing power of citizens in Equatorial Guinea is around the average compared to all other countries.

You can see a more detailed picture of GDP and economic growth in Equatorial Guinea in the table below:

Another critical driver for the economic risk score is the inflation rate and the interest rates. You can see a more detailed picture of monetary KPIs in Equatorial Guinea in the table below:

The business environment risk in Equatorial Guinea

Our analysis shows that the business environment risk in Equatorial Guinea is high (5 out of 6), which is a pretty average risk score in Africa.

The business environment risk are determined by the level of economic freedom and rights in a country. You can see the critical facts for Equatorial Guinea in the table below:

As you can see in the table, the property rights index is 28 in Equatorial Guinea, which is considered low in Africa.

The business freedom index is based on 10 indicators, using data from the World Bank’s Doing Business study. The Index is 36 in Equatorial Guinea, a low score for a country in Africa.

Equatorial Guinea's overall economic freedom index is 49 out of 100 and is based on factors such as the rule of law, regulatory efficiency, and market openness.

The political risk in Equatorial Guinea

The political risk in Equatorial Guinea is very high, with a score of 6/6. This is a relatively high political risk score in Africa.

The governance and political stability indicators are important drivers for political risk. An overview of Equatorial Guinea can be seen in the graphs below:

The rule of law index analyses to which extent agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the quality of the courts, and the police's ability to enforce court orders.

When transacting business in a country, the rule of law index is critical as it describes your ability to enforce commercial contracts.

In Equatorial Guinea, the rule of law index is at -1,2 points, with the score going from -2.5 (weak) to 2.5 (strong). Equatorial Guinea has, therefore, a very low rule of law index, which means it is often close to impossible to enforce your contracts. We, therefore, recommend avoiding credits and recommend charging upfront payment instead.

Other drivers for the very high political risks are the very weak control of corruption, the very weak political stability index, and the large shadow economy that is 31,38% of Equatorial Guinea's GDP.

The commercial risk in Equatorial Guinea

In Equatorial Guinea, the commercial risk score is 4/4, which in our model is a high score. This high commercial risk score is high compared to the average in Africa.

The commercial risk is impacted by a country's international trade relationships. You can see some of the key facts for Equatorial Guinea in the table below:

Equatorial Guinea has a positive trade balance of 8,88% of GDP. The meaning of this is that Equatorial Guinea imports fewer goods and services than the country exports.

The annual growth of exports of goods and services has been growing 4,45% annually - now 55,47% of GDP. Import of goods and services represents 46,59% of the GDP in Equatorial Guinea.

The financing risk in Equatorial Guinea

We have calculated the financing risk to be 3/4, which equals a medium risk. A medium financing risk score is pretty average for countries in Africa.

The country's banking system, efficiency, and stability influence the financing risk. You can find the critical facts for Equatorial Guinea in the table below:

In Equatorial Guinea, the credit information sharing index is 2 on a scale from 0 (low) to 8 (high). The consequence of that number, is that the access and quality of credit information available in Equatorial Guinea is low.

This makes it very difficult for you to understand the credit risk of your counterpart in Equatorial Guinea. Unless you have a strong relationship with your customers in Equatorial Guinea, we highly recommend charging payment upfront or using credit insurance.

Your rights as a creditor are 6 out of 12 and, therefore, weak.