The World Bank’s latest report emphasizes the urgent need for Equatorial Guinea to diversify its economy away from oil dependency. The country faces prolonged economic decline due to decreasing oil revenues, necessitating investment in human capital and institutional reform. Key recommendations include improving public financial management, enhancing governance, investing in education and health, and fostering a more conducive business environment.
A recent report by the World Bank underscores the necessity for Equatorial Guinea to diversify its economy away from oil reliance, develop its human capital, and reinforce institutional structures to combat ongoing economic deterioration. The findings highlight the detrimental effects of declining oil revenues, leading to a recession that has persisted since 2015, adversely impacting social development and economic stability in the nation.
Equatorial Guinea, once categorized among Africa’s upper-middle-income nations thanks to its substantial oil resources, is now suffering from a significant economic downturn, with per capita income dropping to less than half of what it was in 2008. The World Bank report, titled “Equatorial Guinea Country Economic Memorandum – Building the Foundations for Renewed, More Diversified and Inclusive Growth,” emphasizes the crucial need for strategic actions to revitalize and diversify the economy.
According to Aissatou Diallo, the World Bank Resident Representative for Equatorial Guinea, bold policy measures are essential for transforming the nation’s economic landscape. The hydrocarbon sector contributes 39% to the GDP and a staggering 86% to government revenues, yet it fails to create adequate employment opportunities. Continued reliance on oil, amidst dwindling reserves, threatens to leave per capita income stagnant or declining for decades.
The report outlines a comprehensive strategy to reverse economic decline, focusing on human capital development, market facilitation for the private sector, and institutional enhancement. Recommended priority actions include: enforcing fiscal discipline while managing oil price volatility, improving public financial governance, establishing the Anti-Corruption Commission, investing in education and health, enhancing the business environment, and accelerating digital commerce and trade.
Djeneba Doumbia, the lead author of the report, adds that the decline in hydrocarbon production sheds light on the urgency for Equatorial Guinea to lessen its dependency on global commodities. Tackling these challenges through sustained policy reforms can foster resilient and inclusive growth for the future.
In conclusion, the World Bank’s report identifies critical path forward for Equatorial Guinea to emerge from its economic struggles. By prioritizing economic diversification, human capital development, and strong governance, the nation can build a more resilient and sustainable future. Strategic actions addressing fiscal instability, governance, education, and private sector engagement are pivotal in reversing economic decline and facilitating inclusive growth.
Original Source: www.zawya.com
