An oil boom and its reversal

Equatorial Guinea went from one of the poorest countries in Africa to one with the highest income per head on the continent after oil production began in 1996 in the Zafiro field, and output rose from near zero to several hundred thousand barrels a day. The country uses the CFA franc issued by the Bank of Central African States (BEAC), pegged to the euro, so oil revenue did not lead to exchange-rate appreciation; instead it increased imports and public investment, much of it on infrastructure. After peaking around 2008 and 2012, oil production declined as fields matured and prices fell from 2014, and growth turned negative for most years between 2013 and 2021. The oil cycle, together with the lack of a diversified economy, explains the pattern of rapid growth followed by a long contraction in Equatorial Guinea's output series.