Equatorial Guinea Economic Outlook
- Growth rebounded strongly in 2011 and should remain high in 2012/13.
- The oil wealth brings no benefit to most of the population, 75% of whom live below the poverty threshold.
- Unemployment among the young continues to grow and economic activity does not make it possible to create enough jobs.
The economic upturn of 2011 was backed by a rise in activity in the oil sector and public investment but the growth outlook for 2012 and 2013 remains moderate. Equatorial Guinea remains heavily dependent on oil which provides 78% of Gross Domestic Product (GDP) formation even though the government has considerable financial means at its disposal to diversify the economy. An increase in public spending and higher imports, in particular of food, mean that the rate of inflation should stabilise at above 7% in2012. Management of the public finances performed badly for reasons connected to an inadequate planning of investment spending. Equatorial Guinea has one of the highest per capita GDPs on the continent and the country has become one of the largest oil producers in sub-Saharan Africa and a prime destination in Africa for private foreign investment. But there has been no positive effect on the diversification of the economy, poverty reduction or improvement in the population’s standard of living.
Between 2010 and 2020 between 25 000 to 49 000 young people should enter the labour market each year. But job creation takes place on a very limited scale, in particular because the non-oil sector is too small but also because the oil sector accounts for only 4% of the workforce. In addition the young people have few or no qualifications, do not reach the minimum criteria for entering the labour market and do not really have access to information about job opportunities. The national economic and social development plan (NESDP) which aims at diversifying the economy envisages a number of measures which indirectly contribute to youth employment but for the time being little progress has been made.
