The World Bank has released its inaugural Country Economic Memorandum report on Equatorial Guinea, titled "Equatorial Guinea Country Economic Memorandum – Building the Foundations for Renewed, More Diversified and Inclusive Growth." The report provides a comprehensive analysis of the country's economic landscape and suggests reforms to foster growth.
Equatorial Guinea experienced rapid economic growth in the late 1990s due to large oil reserves, becoming one of Sub-Saharan Africa's top oil producers. However, since 2015, a decline in hydrocarbon production and insufficient diversification efforts have led to a prolonged recession. The report emphasizes the need for strong institutions and effective fiscal policies to manage economic volatility and promote diversified growth.
"Strong institutions and well-designed fiscal policy are critical for managing the economy and achieving sustained and diversified growth," states the report. It suggests that Sovereign Wealth Funds could finance diversification efforts while advocating for better domestic revenue mobilization.
In terms of social investments, access to education has improved but remains below peers. Public spending on education was only 0.9% of GDP in 2022. Health expenditure is similarly low at 0.7% of GDP, with poor maternal and child health outcomes highlighted as major concerns. A new Social Protection Law aiming for universal coverage is drafted but not yet approved.
The business environment poses challenges with regulatory constraints affecting private sector development. Legal uncertainties, land titling issues, limited credit access, and inadequate digital services are identified as barriers. The Bertelsmann Transformation Index ranks Equatorial Guinea below its peers in market organization.
For economic diversification, enhancing digitalization, trade integration, and ecotourism is vital. Although trade openness is relatively high, declining global oil prices have affected revenues. Improving digital connectivity can reduce trade costs and foster economic ties globally.
"Exploiting opportunities from the global economy through digitalization, trade, and ecotourism would allow Equatorial Guinea to further connect with the world," notes the report. Strengthening telecom competitiveness and developing ecotourism infrastructure are recommended steps forward.