Political sketch
Formerly Gulf of Guinea and Spanish Guinea; the constituent parts are Río Muni, Fernando Pó, and Annobón. Independent from Spain on 12 October 1968.
Spain claimed Equatorial Guinea from the late 1700s and was ceded the island of Fernando Pó (now Bioko) by Portugal in 1778. The British administered Fernando Pó from 1827 to 1858 before Spain officially took control. After the Spanish-American War of 1898, Equatorial Guinea became the only Spanish colony distant from Spain. Spain did not effectively occupy the mainland (Río Muni) until 1926, although it and Fernando Pó officially became the Spanish territory of Gulf of Guinea in 1904 and later known as Spanish Guinea. The colony was a backwater. In 1960 the territory was divided into the two provinces of Río Muni and Fernando Pó, but they were reunited in 1963 as an autonomous region. The region became independent as Equatorial Guinea on 12 October 1968. Its first president, Macías Nguema, became a dictator by 1972. Under his rule, characterized by mass murder, the economy deteriorated greatly. He was overthrown on 3 August 1979 and later executed. His nephew and successor, Teodoro Obiang Nguema Mbasogo, is still in power today (2005). One-party rule, in effect since July 1970, formally ended in 1991, but the ruling party continues to rig elections. Oil was discovered in 1984 and has become the biggest export.
Convertibility
Spanish colonies:
Spain established exchange rate controls on 31 May 1931 as a result of the Great Depression. It established multiple exchange rates on 3 December 1948 and unified the exchange rate on 20 July 1959. Exchange controls continued until after Spain ceased to have colonies.
Equatorial Guinea alone:
Equatorial Guinea introduced a system of import licenses in 1969 (Equatorial Guinea, Decree-Law No 1 of 1969).
Other
"CFA" in CFA franc means Communauté Financière Africaine (African financial community) for the member countries of the Banque Centrale des États de l'Afrique de l'Ouest (BCEAO, opened 4 April 1959). It came to mean Coopération Financière en Afrique Centrale (financial cooperation in Central Africa) for the member countries of the Banque Centrale des États de l'Afrique Équatoriale et du Cameroun (BCEAC, also opened 4 April 1959), which since 22 November 1972 has been called the Banque des États de l'Afrique Centrale (BEAC).
Defaults on or restructurings of debt to the private sector (mainly from Purcell and Kaufman 1993 and Standard & Poor's 2004): None.
Banking crises (data since 1970s mainly from Caprio and Klingebiel 1999 and Frydl 1999): Two of the largest banks were liquidated 1983-1985; more problems in 1995.
Frankel and Rose (1996) list of currency crashes: 1981.
References
Primary sources:
--Laws and decrees:
CEMAC. Gazette. 1999-present. Communauté Économique et Monétaire de l'Afrique Centrale (or en Afrique Centrale). Bulletin officiel. Bangui: Communauté Économique et Monétaire de l'Afrique Centrale. (Successor to UDEAC gazette.)
Equatorial Guinea. Gazette. 1969?-present. Boletin oficial del Estado. Malabo: Foincog, S.A.
Great Britain (United Kingdom). Gazette. 1665-present. Oxford Gazette (1996-1666); London Gazette (1666-present). Oxford (1665-1666); London (1666-present): His/Her Majesty's Stationery Office from 1903. Online at <http://www.gazettes.online.co.uk>; as of September 2005, gazettes since 1900 are available. 1969?-present. Boletin oficial del Estado. Malabo: Foincog, S.A.
Spain. Gazette. 1836-present. Gazeta de Madrid (1836-1936); Gaceta de la República (1936-1939, Republican forces); Boletín oficial del Estado (1936-1939, Fascist forces; 1939-1961, Spain); Boletín oficial del Estado-Gaceta de Madrid (1961-1986); Boletín oficial del Estado (1986-present). Madrid: Imprenta Real (1836-1936); Imprenta Nacional (1936-present). (The Fascist gazette was printed in Burgos 1936-1939). Online at <http://www.boe.es>.
UDEAC. Gazette. 1966-1999. Union Douanière et Économique de l'Afrique Centrale. Journal officiel de l'Union douanière et économique de l'Afrique centrale. Douala: Union Douanière et Économique de l'Afrique Centrale. (Succeeded by CEMAC gazette.)
--Publications of monetary authorities:
Banco de España. Annual report. 1856-1969. Memoria (1856-1960); Informe sobre la evolución de la economía española (1961-1962; from 1957-1960, published as part of the Memoria); Informe sobre la economía española (1963-1965); Informe anual (1966-1969). Madrid: Banco de España.
BEAC. Banque des États de l'Afrique Centrale. Annual report. 1973-present. Rapport d'activité. Paris (1973-1976); Yaoundé (1977-present): Banque des États de l'Afrique Centrale.
BEAC. Banque des États de l'Afrique Centrale. Bulletin. 1973-present. Études et statistiques: bulletin mensuel (1973-1979); Études et statistiques (1980-present). Paris (1973-1977); Yaoundé (1977-present): Banque des États de l'Afrique Centrale.
--Web site of the current monetary authority (viewed 20 September 2005):
<http://www.beac.int>
--Other publications or Web sites:
Comité Monétaire de la Zone Franc. Secrétariat. 1953-present. Premier [etc.] rapport annuel du Comité de la zone franc établi en exécution du décret du 5 fevrier 1952 (art. 4, §2) (1953-1956); La zone franc en 1957: cinquième rapport annuel du Comité Monétaire de la Zone Franc (1957); La zone franc en ...: rapport publié par le Secrétariat du Comité Monétaire de la Zone Franc (1958-1983); La zone franc: rapport ...: publié par le Secrétariat du Comité Monétaire de la Zone Franc (1984-1991); La zone franc: rappport annuel ...; publié par le Secrétariat du Comité Monétaire de la Zone Franc (1992-2003; inside page says La zone franc en ...); Rapport annuel de la zone franc (2004-present; inside cover says La zone franc: rapport annuel ...). Paris: Imprimerie Nationale (1953-1956); Secrétariat du Comité Monétaire de la Zone Franc (1957-1991; 1957 is a mimeo with no explicit publication information); Banque de France (1992-present). Recent issues are available on the Web site of the Banque de France, <http://www.banque-france.fr/fr/eurosys/zonefr/zonefr.htm>.
Main secondary sources:
Fry, Richard. 1976. Bankers in West Africa: The Story of the Bank of British West Africa Limited. London: Hutchison.
García-Trevijano, Antonio. 1977. Toda la verdad: mi intervención en Guinea. Barcelona: Ediciones Dronte. (Concerns Equatorial Guinea, not Guinea, as the title might seem to indicate to non-Spaniards.)
Hamilton, Earl J[efferson]. 1965 [1934]. American Treasure and the Price Revolution in Spain, 1501-1650. New York: Octagon Books.
IMF ARER. 1950-present. International Monetary Fund. Annual Report on Exchange Restrictions (1950-1978), Annual Report on Exchange Arrangements and Exchange Restrictions (1979-1988), Exchange Arrangements and Exchange Restrictions: Annual Report (1989-present). Washington: International Monetary Fund. (Contains information on IMF member countries and some of their dependencies.)
Liniger-Goumaz, Max. 1988. Small is Not Always Beautiful: The Story of Equatorial Guinea. Translated by John Wood. London: C. Hurst and Company.
Liniger-Goumaz, Max. 1989. Comment on s'empare un pays, v. 1: La Guinée Équatoriale. Geneva : Les Éditions du Temps.
Liniger-Goumaz, Max. 2000. Historical Dictionary of Equatorial Guinea, 3rd edition. Lanham, Maryland: Scarecrow Press.
Mateu y Llopis, Felipe. 1948. La moneda española (breve historia monetaria de España). Barcelona: Editorial Alberto Martín. (History of Spanish currency.)
Monetary authorities: Equatorial Guinea
| Dates | Type | Name | Source | Remarks |
| by 1909
-11 October 1969 |
dollarization | Spanish peseta (issued by central bank Banco de España [headquarters Madrid, Spain]) | United Kingdom, incorporation papers of Bank of British West Africa, 31 March 1894, cited in Richard Fry (1976: 26) | The first bank was apparently the Bank of British West Africa (headquarters Liverpool, later London, England), which established an agency in Santa Isabel (now Malabo), sometime from 1905-1909; the agency became a branch in 1917 (Richard Fry 1976: 62, 89). The first two Spanish banks were the Banco Exterior de España and the Banco Español de Crédito (headquarters for both Madrid, Spain), in Santa Isabel (now Malabo); at least one established a branch by the 1940s, though I could not find dates (see Liniger-Goumaz 2000: 48). |
| 12 October 1969
-31 December 1984 |
own central bank | Banco Central de la República de Guinea Ecuatorial / Banco Popular de Guinea Ecuatorial from 29 September? 1975 / Banco de Guinea Ecuatorial from 1979 (headquarters for all Santa Isabel [now Malabo], Equatorial Guinea) | IMF ARER (1970: 159) | Equatorial Guinea created a central bank upon achieving independence from Spain. The first local coins were issued on 12 October 1969, by the central bank. Equatorial Guinea joined the IMF on 22 December 1969. |
| 1 January 1985
-present (2005) |
joint central bank (as part of a currency union) | Banque des États de l'Afrique Centrale (BEAC) (headquarters Yaoundé, Cameroon) | Equatorial Guinea and Banque des États de l'Afrique Centrale, treaty of membership, 27 August 1984, cited in BEAC annual report 1984/1985: 77 | Joined the Banque des États de l'Afrique Centrale (BEAC) to promote regional economic integration and import greater monetary stability. Notes for different member countries were issued with different serial number codes to provide a basis for calculating each country's share of seigniorage. |
Exchange rate arrangements: Equatorial Guinea
| Dates | Official arrangement | Source | Unofficial arrangement, if different | Remarks |
| 1778
-1827 |
fixed; used Spanish currency, especially Spanish silver real | Spain (Castile), royal decree of 13 June 1497 (regarding Spanish real), cited in Hamilton (1965 [1934]: 51) | Portugal ceded what is now Equatorial Guinea to Spain in 1778. During its long history, the Spanish real was frequently devalued. In 1686, the Spanish king Carlos (Charles) II introduced the real de vellón. The piece of eight (piastre) was worth 20 reales de vellón, or 10 of the new reals introduced in 1737. "Real" is Spanish for "royal." Vellón is an alloy of silver and copper. | |
| 1827
-1843 |
fixed, bimetallic | United Kingdom, Order in Council, 23 March 1825; Chalmers (1893: 209) | In practice, Spanish silver $1 = UK 4 shillings 4 pence (52 pence) (see Remarks). | I have been unable to find any account of monetary arrangements in the period of British administration of Fernando Pó (now Bioko), but I am guessing that the arrangements in effect in nearby British African colonies applied. In British colonies, Spanish and other silver dollars and gold doubloons were the most common larger coins of this period; "cut dollars," dollars divided into four, were widely used as quarter-dollars. The mainland continued to be administered by Spain, though its control was limited to the coast. |
| 1843
-1858 |
fixed, bimetallic (but different in practice from previous period) | United Kingdom, two Orders in Council, 10 June 1843 | In practice, Spanish silver $4.80 = UKŁ1, or Spanish silver $1 = UK 4 shillings 2 pence (50 pence) (see Remarks). | Again, I am making a guess. In nearby British African colonies, British coins and French 5-franc silver pieces predominated; certain French, and Spanish coins were also legal tender in British possessions in West Africa. In 1852 US gold coins were made legal tender in British possessions in West Africa (United Kingdom, Order in Council and Proclamation, 20 June 1852), but they were never widely used. |
| 1858
-30 June 1865? |
fixed; used Spanish currency | Spain, decree of 15 April 1848, cited in Mateu y Llopis (1946: 286) | Spanish rule in Fernando Pó (now Bioko) brought Spanish currency. The Spanish real of the type in use from 1848 was a decimal currency, unlike its predecessors. In principle, Spain had a bimetallic currency, with the real as the main unit of account. The major gold coin was the Spanish doubloon, equal to 100 reals or 23.4g gold. The major silver coin was the Spanish duro, equal to 20 reales or 22.5g silver. In practice, the system became a gold standard because gold discoveries starting in 1849 made the world price of gold fall against silver. The basis in practice of the Spanish monetary system was small-denomination vellón coins, which contrary to the general practice of the time were token coins. | |
| 1 July 1865?
-30 June 1870? |
fixed; used Spanish escudo | Spain, law of 26 June 1864, cited in Mateu y Llopis (1946: 287-8) | Spanish law mandated use of the escudo as the monetary unit of all Spanish colonies (1 escudo = 11.682g silver = 10 silver reals, and 10 escudos = 1 gold doubloon). Escudo is Spanish for "shield." Within Spain, the multiple note-issuing banks of the time issued continued to issue notes in reals until the Banco de España received a monopoly of note issue in 1874. The remark above about vellón coins continued to apply. | |
| 1 July 1870?
-11 October 1969 |
fixed; used Spanish peseta | Spain, decree of 19 October 1868, cited in Mateu y Llopis (1946: 289-90) | See the table for Spain on parallel market data for the Spanish peseta. | Spain created the peseta as its standard monetary unit (2.5 pesetas = 1 escudo and 1 peseta = 4 reales). The first peseta coins were not issued in Spain until 1869. Spanish bank notes continued to be denominated in escudos, and the first peseta notes were not issued until 1 July 1874. "Peseta" was the name of a type of coin issued in Catalonia as early as the early 1400s. The peseta and its subsidiary coins replaced the vellón coins. Officially the peseta was at first bimetallic, worth either 5.04g of silver or 0.3215g gold. These weights made it worth slightly more than the currencies of the Latin Monetary Union (French, Belgian, and Swiss francs; Italian lira; and Greek drachma). The Latin Monetary Union placed restrictions on the coinage of silver in 1878--a step toward the gold standard. Spain took the opposite tack and ceased coining gold in 1883, making the peseta a silver standard currency. |
| 12 October 1969
-26 October 1970 |
pegged; 1 Equatorial Guinea peseta = 0.0126953g gold = 1 Spanish peseta | IMF ARER (1970: 159) | Pick's Currency Yearbook and its successors contain no parallel market data for Equatorial Guinea. | Equatorial Guinea established its own currency at independence. The currency was issued by a central bank, so the exchange rate changed from fixed to pegged. Locally, the currency was called the ekwele; its plural was bipkwele. The ekwele was an iron lance-tip used as currency in precolonial times. Equatorial Guinea never registered a gold parity with the IMF. |
| 27 October 1970
-22 August 1971 |
pegged, dual rate; official rate 1 Equatorial Guinea peseta = 0.0126953g gold = 1 Spanish peseta | Equatorial Guinea, Law No. 1/1970, 27 October 1970, cited in IMF ARER (1971: 139) | Established taxes on certain payments abroad--a form of dual exchange rate. | |
| 23 August 1971
-28 September 1975 |
pegged, dual rate; official rate 1 Equatorial Guinea peseta = 0.0126953g gold (nominally) = 1 Spanish peseta | IMF ARER (1972: 144) | Gold convertibility for all countries ended in practice when the United States abandoned the gold standard on 15 August 1971. Equatorial Guinea was pegged to the Spanish peseta and to gold rather than to the US dollar. | |
| 29 September 1975
-11 July 1977 |
pegged, dual rate; official rate 1 Equatorial Guinea ekuele = 0.0126953g gold (nominally) = 1 Spanish peseta | IMF ARER (1976: 169) | Changed the name of the currency to ekuele (plural bipkwele); 1 Equatorial Guinea ekuele = 1 Equatorial Guinea peseta. The currency had unofficially been knwn as the ekuele before. On the origin of the name, see above. | |
| 12 July 1977
-31 March 1978 |
flexible basket, dual rate; official rate 1 Equatorial Guinea ekuele = 0.0126953g gold (nominally) | IMF ARER (1978: 146) | Changed to an undisclosed basket as the anchor after Spain allowed a substantial one-step depreciation of the Spanish peseta on 12 July 1977. Few transactions were allowed, and the link to gold was only nominal. | |
| 1 April 1978
-8 April 1979 |
flexible basket, dual rate | International Monetary Fund, Board of Governors, Resolution No. 31-4, 30 April 1976 ("Second Amendment") (see Remarks) | The system of gold par values officially ended by agreement of IMF members. I place the end of the notional gold parity here and describe the legal basis as the Second Amendment even though Equatorial Guinea never registered a gold parity with the IMF. | |
| 9 April 1979
-5 August 1979 |
pegged to rigid basket, dual rate; official rate 90 Equatorial Guinea bipkwele = 1 SDR | IMF ARER (1980: 142) | Restored some measure of convertibility. | |
| 6 August 1979
-20 June 1980 |
pegged, dual rate; official rate 1 Equatorial Guinea ekwele = 1 Spanish peseta | IMF ARER (1980: 142) | RR: Band width +/-2%; no parallel market data available. | Returned to the Spanish peseta as the anchor currency following a coup of 3 August 1979. |
| 21 June 1980
-15 March 1981 |
pegged, dual rate; official rate 2 Equatorial Guinea bipkwele = 1 Spanish peseta | IMF ARER (1981: 153) | RR: Band width +/-2%; no parallel market data available. | Devalued. |
| 16 March 1981
-1 January 1985 |
pegged, dual rate; official rate 2 Equatorial Guinea bipkwele = 1 Spanish peseta | IMF ARER (1982: 166) | In 1983 the black-market rate was 11
Equatorial Guinea
bipkwele = 1 Spanish
peseta (Liniger-Goumaz 1988: 111).
RR: Band width +/-2%. |
Changed the name of the currency to ekwele (the plural remained bipkwele), with 1 Equatorial Guinea ekwele = 1 Equatorial Guinea ekuele. I was unable to find the origin of the word "ekwele." IMF ARER (1982: 166) says that the name of the currency in the singular was initially the epkwele, and that on 8 August 1981 the government informed the IMF that the name had changed to the ekwele. The black market rate in 1983 was 11 Equatorial Guinea bipkwele = 1 Spanish peseta. |
| 2 January 1985
-1 August 1993 |
pegged (as part of a currency union); 50 (Central African) CFA francs = 1 French franc | Equatorial Guinea and Banque des États de l'Afrique Centrale, treaty of membership, 27 August 1984, cited in BEAC annual report 1984/1985: 77; BEAC bulletin, January 1985: 7-11 | The country replaced its national currency with the CFA franc at 4 bipkwele = 1 CFA franc upon joining the Banque des États de l'Afrique Centrale (BEAC). The CFA franc did not have a dual exchange rate, therefore the dual rate previously effective in Equatorial Guinea ended. The name "franc" for the currency came from the French franc; in Spanish, the currency is called the franco. For the meaning of CFA, see the category "Other" in the country information above. | |
| 2 August 1993
-11 January 1994 |
pegged (as part of a currency union); 50 (Central African) CFA francs = 1 French franc, with restricted convertibility | Banque des États de l'Afrique Centrale, decision of 2 August 1993, cited in news reports of that date | Members of the Banque des États de l'Afrique Centrale (BEAC) ceased redeeming CFA franc notes issued by the BEAC circulating outside their borders. | |
| 12 January 1994
-31 December 1998 |
pegged (as part of a currency union); 100 (Central African) CFA francs = 1 French franc | Déclaration commune des chefs d'État et de gouvernement des pays africains membres de la zone UMOA et BEAC, 11 January 1994, in BEAC bulletin, January 1994: 3-4 | The CFA franc was devalued after years of bad credit extended by CFA franc zone central banks to government enterprises depleted foreign reserves. Convertibility of the CFA franc into the French franc resumed. | |
| 1 January 1999
-present (2005) |
pegged (as part of a currency union); 655.957 (Central African) CFA francs = 1 European euro | Conseil des Ministres de l'Union Économique de l'Afrique Centrale, decision of December 1998, cited in news reports | The French franc ended its existence as a separate currency, replaced by the European euro. The CFA franc switched to the European euro as its anchor currency, at the prevailing cross rate with the French franc. |