The World Bank highlights the urgency of economic diversification in Equatorial Guinea due to declining oil revenues and a persistent recession. A recent report calls for investments in human capital, improved institutional frameworks, and strategic policy reforms to enable sustainable, inclusive growth. The hydrocarbon sector remains dominant yet insufficient for job creation, necessitating a focus on diverse economic opportunities.
The World Bank emphasizes the necessity of diversifying Equatorial Guinea’s economy, investing in human capital, and enhancing institutional frameworks to avert ongoing economic decline. The latest report reveals that dwindling oil revenues have led to a recession, reversing years of economic progress and social advancements. Despite once being an upper-middle-income nation due to its oil wealth, the economy has been stagnant since 2015, impacting per capita income significantly.
To foster sustainable and inclusive growth, the report titled “Equatorial Guinea Country Economic Memorandum – Building the Foundations for Renewed, More Diversified and Inclusive Growth” highlights the importance of human capital development and a conducive business environment. Aissatou Diallo, the World Bank Resident Representative, asserts that strategic policy reforms are critical for economic transformation and improvement in citizens’ lives.
Currently, the hydrocarbon sector comprises 39% of GDP, accounts for 76% of exports, and generates around 86% of government revenues, yet offers limited employment opportunities. The report suggests that without substantial reforms and amid declining oil reserves, per capita income may continue to deteriorate for decades. Priorities outlined for economic revitalization include:
1. Reducing fiscal instability and enhancing the transparency of the Sovereign Wealth Fund.
2. Increasing non-oil revenues, reducing subsidies, and improving public expenditure efficiency.
3. Strengthening governance through operationalizing the Anti-Corruption Commission.
4. Investing in human capital to improve educational and health indices.
5. Enhancing the business climate to encourage private sector investment and address barriers.
6. Promoting digitalization, international trade integration, and eco-tourism for diversification.
Djeneba Doumbia, the report’s lead author, stresses the urgency of decreasing reliance on global commodities. She advocates for robust policy measures that foster resilience, inclusive growth, and significant development in the non-oil sector regarding economic sustainability.
In summary, the World Bank’s report on Equatorial Guinea underscores the critical need for diversification away from oil dependency to achieve lasting economic growth. Key recommendations include prioritizing human capital development, improving governance, and fostering a favorable business climate. With targeted policy reforms, Equatorial Guinea can work towards a more sustainable economic future, reducing vulnerability to external shocks and ensuring better outcomes for its citizens.
Original Source: www.miragenews.com
