The World Bank’s first Country Economic Memorandum for Equatorial Guinea identifies critical areas for renewed growth, including strengthening institutions, increasing investment in education and health, improving the business climate, and enhancing digitalization and trade. The report underscores the necessity of diversifying the economy away from oil dependency to achieve sustainable development.
The World Bank has released its inaugural Country Economic Memorandum report on Equatorial Guinea, titled “Equatorial Guinea Country Economic Memorandum – Building the Foundations for Renewed, More Diversified and Inclusive Growth.” The report outlines critical areas for enhancing economic performance and resilience.
Equatorial Guinea’s rapid rise in the 1990s owing to oil discoveries made it one of Sub-Saharan Africa’s fastest-growing economies. However, declining hydrocarbon production and inadequate economic diversification since 2015 have resulted in a recession, threatening social advancements. Strengthening institutions and establishing effective fiscal policies are paramount to achieving sustainable growth. Public revenues heavily rely on oil, highlighting the need for diversification and improved fiscal management, bolstered by appropriate sovereign wealth funds.
Investment in education, healthcare, and social protection is indispensable for developing human capital. Despite recent expansions in access to education, spending remains inadequate, with only 0.9% of GDP allocated in 2022. Similarly, public healthcare expenditure is a mere 0.7% of GDP. Moreover, Equatorial Guinea lacks a national social assistance program, as spending on social support is among the lowest globally at 0.1% of GDP.
Fostering a favorable business climate is essential for supporting the government’s National Sustainable Development Strategy and economic diversification initiatives. Current regulatory challenges hinder private sector development, including entry barriers and legal uncertainties. Improvements to business registration processes, procurement systems, and market competition are crucial for enhancing the investment environment and stimulating economic growth.
Enhancing trade, digitalization, and ecotourism can facilitate deeper integration into the global economy. While trade openness is higher than that of many peers, the impact of declining oil prices has diminished trade’s role in the economy. Strengthening digital infrastructure and logistics while developing the ecotourism sector can help bridge gaps and stimulate diversification through connectivity and innovation.
The World Bank’s report emphasizes the need for Equatorial Guinea to diversify its economy and develop critical sectors such as education, healthcare, and social protection. The findings advocate for improved regulatory frameworks to enhance the business environment and promote private sector growth. Additionally, integrating digitalization and trade initiatives, alongside leveraging ecotourism, are highlighted as essential strategies for fostering sustainable economic development and resilience in Equatorial Guinea.
Original Source: www.worldbank.org
