Equatorial Guinea has experienced rapid economic growth due to the discovery of large offshore oil reserves, and has become Sub-Saharan Africa’s third largest oil exporter after Nigeria and Angola. According to the World Bank, oil revenues increased in value from $3 million in 1993 to $190 million in 2000 to $3.3 billion in 2006. From 2002 to 2006 the country experienced an average real annual GDP growth of 15.8 percent. Oil exports currently represent over 90 percent of total export earnings. However, a slowdown in oil production has caused GDP growth to decelerate to 6.8 percent in 2007.

Equatorial Guinea is a sub-Saharan African country consisting of a mainland area (Rio Muni province) and a series of islands. The country’s capital, Malabo, is located on Bioko Island, approximately 25 miles off the coast of Cameroon.

Despite the rapid growth in real GDP, allegations abound over how the Equatoguinean government has misappropriated its oil revenues. While the government has made some infrastructure improvements to bolster the oil industry, the average Equatoguinean has yet to experience a higher standard of living from the oil revenues as evidenced by the country’s ranking of 120 (out of 177) on the human development index in 2006. In January 2005, Equatorial Guinea pledged to increase transparency in its oil revenues and is currently implementing the Extractive Industries Transparency Initiative (EITI). Currently, foreign oil companies are beginning to make development related investments in education (Amerada Hess) and malaria prevention (Marathon Oil and Noble Energy).

In recent years, Equatorial Guinea and its neighbors have expanded their offshore oil exploration, which has increased the importance of maritime borders. In March 1999, President Obiang unilaterally adopted an equidistant median line that defined territorial boundaries as stipulated under the U.N. Convention on the Law of the Sea. Cameroon, Sao Tome & Principe, and Nigeria accepted the decision as an improvement over the often disputed traditional boundaries.

Since the 1970’s, Equatorial Guinea and Gabon have disputed the ownership of three islands in the Gulf of Guinea, including Mbagne Island. In July 2004, the two countries reached an agreement allowing joint oil exploration in the disputed territories. In February 2006, the presidents of both countries met in Geneva, Switzerland and under U.N. mediation they agreed to resolve any major outstanding border issues by 2007.