The World Bank’s inaugural Country Economic Memorandum for Equatorial Guinea outlines the critical need for institutional reforms, increased investments in human capital, and a business-friendly climate to support diversified and inclusive economic growth. Key sectors identified for improvement include education, health, and integration into the global economy through trade and ecotourism.
On March 4, 2025, the World Bank published its inaugural Country Economic Memorandum for Equatorial Guinea, analyzing the foundations necessary for renewed and diversified economic growth. The report highlights critical challenges and proposed pathways to enhance institutional integrity, human capital, and a conducive business environment, vital for the country’s economic transformation.
The report begins by underlining the importance of effective institutions and robust fiscal policies for sustainable growth. With oil revenues accounting for 80% of total public revenues, the reliance on hydrocarbon resources has led to significant economic vulnerabilities. Major reforms in fiscal management and the establishment of Sovereign Wealth Funds could help diversify revenue sources and stabilize public spending, essential for achieving development goals and inclusive growth.
In terms of education and health, while access has improved, Equatorial Guinea’s investments remain lower than its peers, with education spending at only 0.9% of GDP. Enhancing funding for primary and secondary education, strengthening healthcare outcomes, and establishing a national social assistance program is crucial for fostering human capital development and ensuring social protection. Current expenditures on these sectors indicate an urgent need for reform to boost human capital productivity.
The business climate poses additional challenges, as legal uncertainties and regulatory barriers deter private sector growth, despite some recent reforms. To support the National Sustainable Development Strategy and Economic Diversification Initiative, measures such as digitizing public services, easing registration processes, and fostering healthy competition through procurement reforms are essential. These steps aim to mitigate operational risks and revive per capita income growth.
The report acknowledges that Equatorial Guinea’s integration into the global economy is vital, particularly in non-hydrocarbon sectors. Improving digital connectivity, investing in logistics, and promoting ecotourism can enhance trade and diversification efforts. While the country boasts good physical infrastructure, shortcomings in trade facilitation must be addressed. Leveraging the burgeoning digital economy and the ecotourism sector has the potential to significantly transform the economic landscape.
Overall, the World Bank’s Country Economic Memorandum sheds light on the urgent reforms needed in Equatorial Guinea to ensure sustainable, diversified, and inclusive growth. Actively addressing issues related to institutions, education, business environments, and global integration is imperative for revitalizing the economy.
The World Bank’s Country Economic Memorandum emphasizes the urgent need for Equatorial Guinea to reform its institutions, invest in human capital, and improve the business environment for sustainable economic diversification. The heavy reliance on hydrocarbon revenues must be mitigated by enhancing fiscal management and developing new economic sectors. Strategic investment in education, health, and trade infrastructure will be crucial to support the nation’s long-term growth ambitions.
Original Source: www.worldbank.org
