(Bloomberg) -- Equatorial Guinea’s leader Teodoro Obiang Nguema Mbasogo, the world’s longest-serving president, should declare his assets before the nation receives more financial support, according to the International Monetary Fund.
The central African country needs an IMF bailout to deal with a crisis that shrank its economy by a third to $13 billion last year. Under a program agreed to last week, the state will be required to increase transparency, improve governance and implement reforms to fight corruption, Lisandro Abrego, the lender’s mission chief for Equatorial Guinea, said in an interview.
“Authorities will implement an asset-declaration regime for senior public officials as part of the program’s requirements,” he said by phone from Washington. “It’s our understanding that the law will apply to all senior government officials.”
Obiang, in power since August 1979, and his regime have been accused by prosecutors in the U.S. and France of squandering the tiny Central African’s vast oil wealth. As recently as 2017, Equatorial Guinea was as rich in per-capita terms as its former colonial master Spain. Today, OPEC’s smallest member is struggling to pay its debts after oil prices collapsed in 2014. The government has piled up arrears with construction firms that equate to almost 19% of its gross domestic product, according to the World Bank.
“The economy has been hit hard by the decline in oil and gas prices, which has affected export earnings and led to a virtual depletion of foreign assets,” Lisandro said. “The economy has also been affected by longstanding governance and corruption problems.”
Audits by the government of state-owned oil and gas companies are already under way and should be completed by mid-2020, Lisandro said. All active oil and gas contracts are expected to be made public by March, he said.
The IMF will also require Equatorial Guinea to join the Extractive Industries Transparency Initiative, which promotes good governance in the oil and mining industries. The country initially applied in 2008 and has since implemented several reforms to meet the membership requirements. Authorities filed a new application last month, Lisandro said.
Calls and text messages to Finance Minister Cesar Mba Abogo seeking comment went unanswered. A Finance Ministry official didn’t reply to questions sent by text message.
The IMF last week gave the green light to a $280 million loan to Equatorial Guinea, $40 million of which has already been dispersed. The loan roughly equates to what Obiang’s oldest son and vice president, Teodoro Nguema Obiang Mangue, spent between 2000 and 2011 buying luxury properties on four continents and assets including Michael Jackson memorabilia, documents filed in a 2013 U.S. Department of Justice money-laundering case show. The case was settled the following year.
The president’s son 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 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 $8.4 million. He’s denied any wrongdoing.
Human-rights and anti-corruption advocates have questioned why the IMF is lending its credibility to “a regime with no previous record of serious reform,” Sarah Saadoun, a researcher with Human Rights Watch, said in an interview.
“With no external pressure, besides the IMF, there’s a risk that the loan will fund the same lifestyle that the oil wealth has upheld for 25 years,” Saadoun said by phone from New York.
Oil was discovered in Equatorial Guinea in the 1990s. Revenues from offshore oil fields supported investments in large infrastructure programs but left little room for social projects. Less than half of the 1.3 million population has access to clean drinking water and 20% of children die before the age of five, according to United Nations data.
(Corrects headline and first paragraph to say Obiang is the world’s longest-serving president.)
--With assistance from Mike Cohen.
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