Equatorial Guinea - Building the Foundations for Renewed, More Diversified and Inclusive Growth - Executive Summary - December 2024

Jul 19, 2026

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Equatorial Guinea faces an urgent need to adopt a new development model and better use remaining hydrocarbon resources to create alternative growth. Without stronger reforms, per capita income is projected to keep falling for decades, shrinking fiscal space for development priorities. The hydrocarbon sector still dominates output and revenues, while diversification remains slow. The report outlines a strategy to restore sustainable, inclusive growth through human capital, a business-enabling environment, and strengthened institutions and governance.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages20

Reading Time50 min

Executive Summary

Overview

Economic context and the need for reforms

Growth strategy: human capital, private sector, and governance

Sector performance and diversification challenges

Pub lic Disclosure Authorized Pub lic Disclosure Authorized Pub lic Disclosure Authorized Pub lic Disclosure Authorized EQUATORIAL GUINEA COUNTRY ECONOMIC MEMORANDUM DECEMBER 2024 EQUATORIAL GUINEA Building the Foundations for Renewed, More Diversified and Inclusive Growth EXECUTIVE SUMMARY © [Imago/alamy.com](Imago/alamy.com) 2 Equatorial Guinea-Building the Foundations for Renewed, More Diversified and Inclusive Growth Executive Summary Overview There is an urgent need for Equatorial Guinea to adopt a new development model and better leverage the remaining hydrocarbon resources to unlock alternative sources of growth Without strong reforms, per capita income is projected to continue falling for decades to come. Under the baseline scenario, which assumes a progressive decline in hydrocarbon reserves and the absence of future shocks or major economic reforms, Equatorial Guinea is projected to remain in recession with per capita income decreasing by more than half by 2050. As a result, fiscal space for much needed expenditures for development will diminish. While the Government has planned projects to develop the hydrocarbon sector with a focus on the gas sector, these projects are not expected to compensate for the decline in oil production amid maturing fields. Equatorial Guinea is at a crossroads and the Government must urgently leverage the remaining hydrocarbon resources to diversify the economy. Equatorial Guinea’s natural resource abundance has propelled the country into the exclusive group of African upper-middle income nations. However, as oil reserves dwindle, finding alternative sources of growth has become a top priority. This report proposes elements of a strategy that would help counter the country’s economic decline and enable Equatorial Guinea to embark on a new growth trajectory that is sustainable and inclusive – grounded in the development of human capital, an enabling environment for private sector activities, and strengthened institutions and governance. The government has initiated reforms in all three areas; the challenge is to deepen and sustain the reform agenda. The secular decline of Equatorial Guinea’s hydrocarbon revenues, combined with past shortfalls in diversifying the economy, has resulted ina prolonged recession, reversed notable economic gains, and jeopardizes social progress. The discovery of large oil reserves in the 1990s made Equatorial Guinea the third-largest oil producer in Sub-Saharan Africa (SSA), and one of its fastest-growing economies. Between 1996 and 2004, annual per capita GDP growth averaged 40 percent with Equatorial Guinea reaching Upper-Middle Income status in 2004 (Figure ES1a) . However, growth has faded since 2014, and per capita income has fallen by over 60 percent from its peak in 2008 (Figure ES1b) . The economy has suffered six years of economic contraction since 2015 which, combined with the impact of the COVID-19 pandemic, has likely curtailed progress in shared prosperity and poverty reduction for the country’s estimated population of 1.6 million. This report proposes elements of a strategy that would help counter Equatorial Guinea's economic decline and enable the country to embark on a new growth trajectory that is sustainable and inclusive. Equatorial Guinea-Building the Foundations for Renewed, More Diversified and Inclusive Growth 3 FIGURE ES1 Equatorial Guinea’s income per capita a. GNI per capita (current US$), Equatorial Guinea, 1989-2023 GNI per capita-Atlas method (current US$) Upper middle income (Lower Threshold) Upper middle income (Upper Threshold) 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 b. GDP per capita (constant 2015 US$), Equatorial Guinea and Peers, 1990-2023 16000 14000 12000 100008000 6000 4000 2000 0 Source: World Development Indicators, Equatoguinean authorities, and World Bank staff calculati

FAQs

Why does Equatorial Guinea need a new development model?

The country must leverage remaining hydrocarbon resources while creating alternative sources of growth. Without reforms, income is expected to continue declining for decades.

What baseline projections are highlighted regarding per capita income and recession?

Under assumptions of declining hydrocarbon reserves and no major shocks or reforms, Equatorial Guinea is projected to remain in recession, with per capita income decreasing by more than half by 2050.

What strategy elements does the report propose to support sustainable and inclusive growth?

The strategy focuses on developing human capital, creating an enabling environment for private sector activities, and strengthening institutions and governance, with ongoing reforms needing deeper implementation.

Jul 19, 2026

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