Malabo is in turmoil. The entire cabinet of Equatorial Guinea has resigned. President Teodoro Obiang Nguema Mbasogo accepted their resignations this morning. The trigger: failure to meet economic targets. The oil price crash has bitten hard. Production is down. Revenues are drying up.
For British oil firms, this is a flashing red light. BP and Tullow Oil have significant interests in the region. Their risk assessments are now being rewritten. The question: can a new cabinet stabilise the economy? Or is this the start of a deeper crisis?
Sources in Westminster tell me the Foreign Office is watching closely. Quietly. They fear a contagion effect. If Equatorial Guinea defaults on debt, it could spook investors across the Gulf of Guinea. British firms are already reducing exposure. They are calling in loans. They are pausing new projects.
The resignations were not entirely unexpected. Back channels had been buzzing for weeks. The president has been frustrated with his ministers. He wanted growth. He got stagnation. Now, he will appoint a new team. But who? The talent pool is shallow. Loyalty is prized over competence. That is the Obiang way.
I hear whispers of a possible finance minister from the banking sector. A technocrat. But will he have real power? The president controls the oil. He controls the money. Any new minister will be a figurehead.
For the British, the calculus is clear. They need stability. They need reliable partners. They are getting neither. The risk is now rated 'high' by several London-based analysts. Insurance premiums are rising. Insurrection is a distant possibility, but not impossible. The president has been in power for 45 years. He has crushed dissent before. But the economic pain is spreading.
A senior Conservative backbencher told me this morning: "We should be preparing for the worst. British lives and investments are at stake." The Foreign Office is remaining tight-lipped. They always do. But I know they are dusting off contingency plans.
The key dates: the appointment of a new cabinet within a week. Then a policy statement on the economy. If it is mere rhetoric, expect further downgrades. If it shows genuine reform, there may be a reprieve.
But don't hold your breath. This is Equatorial Guinea. The game is the same. The players change. The outcome is always the same. Power remains. The people suffer. British firms count the cost.
I will be watching the auctions for Malabo's debt later this week. That will tell us who is betting on recovery and who is betting on collapse.
