The World Bank stresses that Equatorial Guinea must diversify its economy, invest in human capital, and strengthen institutions to mitigate ongoing economic decline. The country has faced recession due to falling oil revenues, and substantial reforms are necessary to achieve sustainable growth. Key recommendations include improving public financial management, governance, and the business environment for private investment, alongside prioritizing education and health outcomes.
The World Bank emphasizes the necessity of economic diversification, investment in human capital, and institutional strengthening to address the economic challenges faced by Equatorial Guinea. According to their latest Country Economic Memorandum, the country has suffered significantly from declining oil revenues and inadequate economic diversification, leading to a recession and reversing social progress. The economy, heavily reliant on hydrocarbons, experienced a decline in national income, which is now less than half of its peak in 2008.
To achieve sustainable and inclusive growth, the report highlights the importance of cultivating human capital and enhancing the business environment. Aissatou Diallo, the World Bank Resident Representative, remarked on Equatorial Guinea’s potential for economic transformation. However, she emphasized that substantial policy reforms are essential to lay the groundwork for diversified and inclusive growth.
The hydrocarbon sector constitutes a substantial portion of the economy, representing 39% of GDP and 86% of government revenues, yet it offers limited employment opportunities. Without effective reforms and amid diminishing hydrocarbon reserves, per capita income is expected to decline further in the coming decades. The report outlines strategies to mitigate economic decline and foster a new, sustainable growth path by prioritizing human capital development, private sector stimulation, and governance improvements.
Key recommendations include:
1. Reducing fiscal instability through disciplined management and establishing a stabilization fund to address oil price fluctuations.
2. Enhancing public financial management by increasing non-oil revenue streams and optimizing public spending.
3. Strengthening governance, particularly through the operationalization of the Anti-Corruption Commission.
4. Investing in human capital by improving education and healthcare outcomes for better social services.
5. Enhancing the business climate to attract investment and foster diversification in sectors such as eco-tourism while overcoming legal and financial barriers.
6. Promoting digitalization and global trade facilitation.
In summary, the World Bank’s report on Equatorial Guinea underscores the urgent need for economic diversification, investment in human capital, and institutional reforms to counter the ongoing economic decline. It identifies clear strategies aimed at building a more resilient economy, emphasizing the role of governance, the private sector, and improved public services. By implementing these measures, Equatorial Guinea can pursue sustainable and inclusive growth, enhancing the welfare of its citizens.
Original Source: www.miragenews.com
