The World Bank’s 2025 report on Equatorial Guinea identifies key areas for economic revitalization: strengthening institutions, enhancing human capital through education and health, improving the business environment, and integrating further into the global economy through digitalization and ecotourism.
On March 4, 2025, the World Bank released its inaugural Country Economic Memorandum report for Equatorial Guinea, titled “Building the Foundations for Renewed, More Diversified and Inclusive Growth.” The report emphasizes the need for effective institutions, investment in human capital, a friendly business climate, and enhancements in digital capabilities and ecotourism to foster sustainable economic development.
The discovery of substantial oil reserves propelled Equatorial Guinea to become a significant oil producer in Sub-Saharan Africa. While the economy experienced substantial per capita GDP growth from 1996 to 2004, a decline in hydrocarbon production since 2015 has resulted in a prolonged recession. The report underscores the importance of strong institutions and fiscal policies to diversify the economy, improve public revenue management, and establish sovereign wealth funds for financing diversification efforts.
Investments in education, health, and social protection are critical to boost human capital. Despite some expansion in educational access, government spending remains low at 0.9% of GDP, lagging behind regional averages. The country also lacks a national social assistance program, with spending on social assistance at a mere 0.1% of GDP. Increased funding for education and health is essential for ensuring productive human capital and improving overall welfare.
To promote private sector-led growth, the regulatory environment must be improved. While some reforms have been undertaken, businesses face barriers such as legal uncertainty and limited access to credit, making a compelling case for enhancing the business climate. Recommendations include streamlining the registration process, digitizing services, and enhancing competitive public procurement to support private enterprise development.
Lastly, Equatorial Guinea must integrate more with the global economy, particularly in non-hydrocarbon sectors. Although the country has better trade openness compared to peers, high trade costs and weak logistics hinder economic performance. Strengthening digital connectivity and developing the ecotourism sector can serve as significant catalysts for economic diversification and growth, given the country’s existing infrastructure and potential in these areas.
In conclusion, the World Bank’s report highlights the urgent need for Equatorial Guinea to establish strong institutions, enhance human capital investments, improve the business environment, and embrace global trade opportunities. These measures are foundational to fostering a diversified and inclusive economy, vital for sustaining growth and enhancing the welfare of the population.
Original Source: www.worldbank.org
