A new World Bank Group report highlights that Equatorial Guinea is at a critical juncture. Despite its oil wealth, which has positioned the country as an upper-middle-income economy and one of the richest in Sub-Saharan Africa, nearly half of the population still lives in poverty according to the national poverty line. As oil revenues decline and alternative sources of growth remain limited, the country faces the risk of rising poverty unless key reforms are implemented. Juan Diego Alonso, World Bank Group Resident Representative for Equatorial Guinea, emphasized that the country has a unique opportunity to convert its natural wealth into human capital, with decisions made today determining whether it will enter a cycle of declining opportunities or achieve a more inclusive and resilient future.
The report identifies three structural constraints limiting the income-generating capacity of the poor: human capital, access to good jobs, and household resilience. Public spending on health, education, and social protection is low, at around 2% of GDP, which restricts human capital accumulation and leaves children expected to reach only half of their productive potential. Labor markets are also insufficiently developed, with fewer than one in five workers employed formally and limited non-oil sector job creation. Additionally, an inadequate social protection system reduces household resilience, increasing vulnerability to shocks for both poor and non-poor families.
Daniel Valderrama, Poverty Economist for Equatorial Guinea, stressed that economic growth alone will not reverse poverty. Equity-enhancing reforms targeting human capital, job creation, and household resilience are essential. The report notes that structural reforms that boost productivity and investment may slow poverty growth, but reversing the trend requires targeted support for households alongside these growth-oriented measures.
The report recommends a policy package focused on three main areas. First, investing in human capital through early childhood development, improved nutrition, quality public education, affordable health services, and social assistance programs to break the cycle of poverty. Second, enabling private-sector growth by improving the business environment, expanding access to finance, and reducing regulatory and tax burdens on firms. Third, strengthening household resilience through adaptive social protection systems and fiscal policies that protect vulnerable populations during economic downturns and climate-related shocks.
Sequencing and complementarity of reforms are critical. Ana María Oviedo, Lead Economist in the Poverty Division of the Central and West Africa Region, emphasized that job creation should come first, as the existing human capital is not being fully utilized, and even the most educated workers face challenges in finding employment. The report concludes that with coordinated action prioritizing people, supporting entrepreneurship, and strengthening resilience, Equatorial Guinea can transform its natural wealth into sustainable and inclusive prosperity.
