The World Bank identifies economic diversification away from oil as vital for Equatorial Guinea’s growth. The country’s dependency on oil has led to economic decline since 2015, highlighted by falling per capita income. Key strategies include fiscal reform, improved governance, human capital investments, and creating a better business climate to promote sustainable growth.
The World Bank advocates for economic diversification in Equatorial Guinea, emphasizing that moving away from an oil-dependent economy, investing in human capital, and enhancing institutional frameworks are essential for reversing the economic decline. With a prolonged recession tied to diminishing oil revenues and insufficient diversification, the country faces a critical situation amidst a drop in per capita income since 2008.
Despite its significant oil wealth, which accounts for nearly 40% of GDP and most government revenue, the economic benefits have not translated into widespread job creation. The report warns that without substantial reforms in managing hydrocarbon resources and developing a diversified economy, per capita income is expected to stagnate or decline in the coming decades.
The report outlines strategic actions needed for fostering sustainable, inclusive growth in Equatorial Guinea: reducing fiscal instability by creating stabilization funds, enhancing transparency regarding the Sovereign Wealth Fund, and improving public financial management through better tax policies and efficiency in spending.
Governance must also be strengthened, focusing on effectively operationalizing the Anti-Corruption Commission and improving statistical capabilities. Investments in human capital are crucial, given the country’s low rankings in education and health. Targeted initiatives in primary education, skill development, and public health must be prioritized.
To promote economic diversification, the business environment needs improvement by eliminating barriers that hinder private sector investment. This includes addressing legal challenges, improving land access, and enhancing digital services. Additionally, fostering greater integration into the global market and diversifying economic activities, such as eco-tourism, are recommended.
The report concludes that a multifaceted approach to policy reform is necessary, aiming to reduce dependence on global oil markets. Sustained commitment to building the non-oil sector, enhancing human capital, and reinforcing governance structures can pave the way for resilient and inclusive economic growth in Equatorial Guinea.
The World Bank’s report highlights the urgent need for Equatorial Guinea to diversify its economy beyond oil, manage fiscal policies effectively, and bolster human capital development. Key reforms in governance and the business environment are critical for attracting investment and fostering inclusive growth. Without these interventions, the country risks continued economic stagnation and social challenges.
Original Source: www.miragenews.com
