The World Bank’s report highlights the necessity for Equatorial Guinea to diversify its economy away from oil, invest in people, and strengthen institutions to reverse economic decline. With six years of recession and a drop in per capita income, the report outlines critical actions for sustainable growth, focusing on human capital, governance, and improving the business environment.
The World Bank emphasizes that for Equatorial Guinea to overcome its economic decline, it must diversify away from oil reliance, invest in human capital, and enhance institutional structures. The nation has struggled with declining oil revenues, resulting in a recession lasting six years since 2015 and falling national per capita income, which is now below half of its 2008 peak.
To promote sustainable growth, Equatorial Guinea should prioritize human capital development and improve its business environment. The report titled “Equatorial Guinea Country Economic Memorandum” outlines a strategy for renewed, diversified, and inclusive growth, urging bold policy initiatives. Aissatou Diallo, the World Bank’s Resident Representative, states that maximizing the country’s economic potential requires foundational reforms.
Currently, the hydrocarbon sector significantly influences the economy, accounting for 39% of GDP and 76% of exports, yet it offers limited employment opportunities. Without major reforms, projected declines in hydrocarbon reserves will likely continue to reduce per capita income over the coming decades.
The report outlines key actions to reverse economic decline, including improving fiscal discipline, enhancing public financial management, and strengthening governance measures. Additionally, it advocates for increased non-oil revenues, operationalizing the anti-corruption agency, and focusing on better data management.
Further, there is a critical need to invest in human capital, as the country ranks poorly on the Human Development Index due to insufficient social spending and service delivery in education and health. Prioritizing quality education, public health improvements, and fostering social safety nets is essential for economic resilience.
Improving the business climate is crucial to attract private investments for diversification. This includes removing entry barriers, addressing legal uncertainties, and enhancing access to credit and digital services, which are all vital for economic growth.
Finally, accelerating digital integration and focusing on diversification efforts, such as eco-tourism, are important steps in reducing dependency on oil markets. Djeneba Doumbia, the report’s lead author, underscores the importance of sustained policy efforts for resilient economic growth.
In summary, Equatorial Guinea must shift towards economic diversification and bolster human capital to overcome its current challenges. Strategic policy actions are necessary to enhance governance, invest in education and health, and promote a sustainable business environment. Through these efforts, the country can achieve long-term inclusive growth and resilience against external shocks in the economy.
Original Source: www.miragenews.com
