EQUATORIALGUINEA
Table 1

Key conditions andchallenges
2023

Population, million

1.7GDP, current US$ billion

12.1

GDP per capita, current US$7051.5

School enrollment, primary (% gross)

a51.2

a60.6

Total GHG emissions (mtCO2e)

16.6

Life expectancy at birth, years

Source: WDI, Macro Poverty Outlook, and official data.
a/ WDI for School enrollment (2019); Life expectancy(2021).

Equatorial Guinea’s economy contracted
by an estimated 5.8 percent in 2023,
mainly due to declining oil reserves. Thefiscal and external balances deterioratedamid declining oil export earnings. The
economy is projected to remain in recession over the medium term. A more-pronounced-than-expected decline in oil production and prices, sustained tighteningof global financial conditions, global tradedisruptions, and a decline in demand
from main export partners represent
downside risks to the outlook.

As a result of declining oil reserves andlower investment, Equatorial Guinea’s oildependent economy has contracted formore than a decade. Between 2013 and2023, the country registered an average
negative 4.2 percent growth per year.
Gross national income (GNI) per capita
has been declining and was at US$ 5,240 in
2022, 58 percent lower than its peak levelin 2008. Structural reforms are needed toprevent the economic decline, by diversifying the growth drivers and building
fiscal stability through domestic revenue
mobilization efforts and more efficientpublic spending.
Reforms have been adopted in recent years
to improve governance and the businessenvironment, including with the passageof an Anti-Corruption law in late 2021, thecompletion of the audits of the largest
state-owned oil and gas companies, andthe signature of a decree establishing atreasury single account. Yet, weaknesses
persist in the governance of extractive revenues and the business environment, preventing the country from attracting investments and creating jobs to achieve sustained and diversified growth.
Actions are also needed to better protect
and include the poor. Despite Equatorial
Guinea’s upper middle-income status, living standards remain low. Life expectancy
at birth is estimated at 60.7 years, compared to 75 years for countries in the same

income group. Around 40 percent ofhouseholds experience at least one day
without electricity per month. Scarcepoverty data remain a challenge to an effective protection of vulnerable groups.
The II National Household Survey report,scheduled to be released in June 2024, will
fill knowledge gaps in poverty and inequality, enabling more evidence-basedsocial protection policies.

Recent developments
After two years of recovery, the Equatoguinean economy fell back into recession
with an estimated real GDP growth rateof -5.8 percent in 2023 (from 3.8 percent
in 2022), driven by the decline in the hydrocarbon sector (-19.3 percent growth in
2023H1 compared to 2022H2). Lower investment contributed to the contraction on
the demand side. The current accountdeficit widened to 1.6 percent of GDP(from 1.0 percent of GDP in 2022) on account of declining export earnings.
Lower oil production and prices led to a 74
percent decline in oil revenues in 2023Q3 (yo-y). The overall fiscal surplus is estimatedto have dropped to 7.3 percent of GDP in
2023 from 13.0 percent in 2022, while thenon-oil fiscal balance in 2023 to 26.4 percentof GDP, compared to 21.3 percent in 2022.
The debt-to-GDP ratio declined in 2023.
Over the period 2019-23, CFAF 572.2 billion(or 9.5 percent of GDP) out of the CFAF
1,382.5 billion outstanding arrears was paid
to construction companies: as of August
2023, outstanding domestic arrears with

FIGURE 1 Equatorial Guinea / Public finances

FIGURE 2 Equatorial Guinea / Non-income poverty
indicators

Percent of GDP
35Percent
250

30200

EqG relative to regional average
EqG relative to MIC average

25150

2015100

1050

500Mortality rate, under-5 Maternal mortality
Mortality rate
(per 1,000 live births)
ratio (modeled
attributed to unsafe
estimate, per 100,000water, unsafe
live births)
sanitation and lack ofhygiene (per 100,000population)

-5-10
2016

2018
Fiscal balance

2020

2022
Revenues

2024f

2026f

Expenditures

Sources: National authorities and World Bank.

Source: World Bank.

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construction companies was 7.9 percent ofGDP. High levels of non-performing loans –32 percent of total loans in 2023Q4 – are asource of banking system vulnerability.
The Bank of Central African States(BEAC) continued to tighten its monetary
policy in 2022 and 2023 to contain inflationary pressures and support the exchange rate arrangement. The BEAC policy rate was maintained at five percent
following a cumulative increase by 175
basis points between November 2021 andMarch 2023. Moreover, the BEAC ended
its weekly liquidity injections in March2023 after steadily scaling them backsince June 2021. Inflation is estimated tohave decreased from 4.9 percent in 2022
to 2.4 percent in 2023, including thanks tocontainment measures by the BEAC, theagreement to import food products fromSerbia, and the reduction of some importtariffs. According to the national instituteof statistics, the prices of food products
increased by 7.1 percent between March
2020 and September 2023, which represents an average loss of the purchasing
power of households of 4.5 percent.

OutlookEquatorial Guinea is expected to remain
in recession in 2024 (with growth of –4.3percent) on the back of declining hydrocarbon production and domestic demand.
Without significant diversification efforts
and progress in structural reforms, declining hydrocarbon production and lower
commodity prices are expected to keep impacting the economy with a negative average growth of 3.5 percent in 2025-2026. Decreasing exports would lead to current account deficits over the medium term. Albeit at a slower pace, imports would also
decrease, on account of declining public
spending due to limited fiscal space. The
fiscal balance is projected to turn to deficits
in 2025-2026, with public expenditure cuts
unable to compensate for the larger decline
in hydrocarbon revenues.
Risks to the outlook are tilted to thedownside. A stronger decline in hydrocarbon production or prices would reduce the fiscal space and risks external

TABLE 2 Equatorial Guinea / Macro poverty outlook indicators

stability. Global trade disruptions affecting food prices amid a protracted war
on Ukraine would increase food insecurity especially for the most vulnerable, as
the country relies heavily on food import.
A further tightening of global financial
conditions and lower demand from China and India, Equatorial Guinea’s main
export partners, could also undermine
growth. The decline in hydrocarbon reserves indicates the need for Equatorial
Guinea to move to a new growth modelby creating the conditions for successful
private sector activities in non-oil sectors
to reinvigorate growth. Ultimately, implementing the economic diversification
vision will require efforts to advancethe governance agenda, facilitate trade,
improve the business environment andpublic financial management. Strengthening the social protection system would
help protect the most vulnerable andreduce inequities, especially as social
spending in Equatorial Guinea was estimated at 1.6 percent of GDP in 2022,
three times lower than the West andCentral Africa average.

(annual percent change unless indicated otherwise)

Real GDP growth, at constant market prices
Private consumption
Government consumption
Gross fixed capital investment
Exports, goods and services
Imports, goods and services

2021
0.3
-0.8
5.2
37.4
0.3
8.5

2022
3.8
9.6
-5.3
-2.0
12.7
19.0

2023e
-5.8
-5.7
7.3
-38.0
-3.7
-1.4

2024f
-4.3
-4.8
20.9
-25.2
-5.9
3.8

2025f
-3.3
2.8
0.3
-11.4
-8.2
-3.3

2026f
-3.6
2.0
-6.2
-9.0
-5.5
-2.8

Real GDP growth, at constant factor prices
Agriculture
IndustryServices

0.4
8.0
-5.9
10.8

3.5
7.5
3.1
3.8-5.8
-9.1
-39.1
43.1

-4.3
-6.5
-23.1
7.5

-3.3
1.5
-19.6
3.9

-3.6
1.6
-14.8
0.1

Inflation (consumer price index)

-0.1

4.9

2.4

4.0

2.5

2.2

Current account balance (% of GDP)Net foreign direct investment inflow (% of GDP)

-2.1
5.2

-1.0
5.6

-1.6
4.5

-3.6
3.4

-4.2
2.5

-4.1
1.9

Fiscal balance (% of GDP)
Revenues (% of GDP)
Debt (% of GDP)
Primary balance (% of GDP)

2.6
15.6
43.4
3.7

13.0
30.1
39.3
14.2

7.3
27.6
36.6
8.7

1.2
20.5
32.6
2.4

-2.4
16.3
32.3
-1.3

-3.7
14.1
34.8
-2.6

GHG emissions growth (mtCO2e)
Energy related GHG emissions (% of total)

22.0
39.0

12.3
44.2

-9.6
41.7

-5.6
40.4

-3.7
39.8

-2.3
39.7

Source: World Bank, Poverty & Equity and Macroeconomics, Trade & Investment Global Practices. Emissions data sourced from CAIT and OECD.
Notes: e = estimate, f = forecast.

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