Equatorial Guinea's Economy Shrinks: World Bank Pushes Jobs Beyond Oil and Gas

The country's economy contracted by an estimated 5.8% in 2025 after recording modest growth of 0.4% in 2024, reflecting the growing impact of falling hydrocarbon production on economic activity.

Equatorial Guinea faces growing economic difficulties as declining oil and gas production weakens national income, reduces government revenue, and raises concerns about employment opportunities nationwide. The World Bank's fourth edition of the Equatorial Guinea Economic Update, titled "Creating Jobs for Diversified and Inclusive Growth," examines the country's economic performance and outlines practical measures to create jobs beyond the hydrocarbon industry. The report highlights the importance of developing new industries, strengthening private businesses and expanding employment opportunities for women and young people as the country prepares for a future with declining oil production.

The country's economy contracted by an estimated 5.8% in 2025 after recording modest growth of 0.4% in 2024, reflecting the growing impact of falling hydrocarbon production on economic activity. Agriculture and services recorded growth during this period, but their contribution was not strong enough to compensate for the sharp decline in industrial output. Preliminary figures from early 2026 suggest economic activity remains weak, raising concerns about household incomes, business investment, and the country's ability to generate sustainable employment.

The World Bank expects Equatorial Guinea's economy to contract by an average of approximately 1% annually during 2026 and 2027, with a modest recovery anticipated in 2028 following the development of new gas projects. The prolonged slowdown is placing pressure on public finances and household spending, making economic diversification increasingly important for protecting livelihoods and supporting future growth. The report identifies investments in education, infrastructure, private enterprise and labour-intensive industries as essential steps toward building an economy that provides more reliable employment opportunities.

Falling Oil Production Deepens Economic and Financial Pressures

Equatorial Guinea's dependence on hydrocarbon exports continues to expose its economy to declining production levels, affecting government finances and reducing the resources available for development. Government revenue dropped to 16.3% of GDP in 2025, with the fiscal deficit remaining at approximately 0.5% of GDP and the current account deficit widening to 1.1% of GDP. These financial pressures make it increasingly difficult for the government to maintain public investment and support economic development without expanding income sources beyond oil and gas.

The economic downturn has affected household living conditions, with poverty increasing despite a slowdown in inflation that has provided some relief from rising prices. Weak income growth and elevated living costs continue to reduce purchasing power, leaving vulnerable families exposed to financial hardship and limited employment prospects. The World Bank expects poverty to increase further in the near term, highlighting the need for stronger social protection systems and economic opportunities that can reach communities across the country.

Better Education, Infrastructure and Business Conditions Could Unlock Jobs

The World Bank identifies three major areas requiring government attention, beginning with improvements in education, skills training, electricity supply, digital connectivity and social protection systems. Stronger learning opportunities and practical workforce training could help young people acquire skills that employers need, improving their chances of finding stable jobs in emerging industries. Reliable infrastructure and better access to essential services would support business development, improve productivity and create conditions for sustained economic growth.

Improving the business environment represents another important priority, particularly for small businesses and entrepreneurs facing difficulties accessing finance and navigating administrative requirements. The report recommends stronger market competition, simpler procedures for starting businesses, easier tax compliance and fewer obstacles to formal employment to encourage private investment and business expansion. World Bank Group Resident Representative Juan Diego Alonso emphasized that Equatorial Guinea has an opportunity to reduce its dependence on oil by strengthening human capital, supporting private investment and creating more opportunities for women and young people.

Agribusiness and Tourism Offer New Opportunities for Economic Growth

Agribusiness has emerged as one of the most promising sectors for large-scale job creation, particularly in rural communities where agricultural development could increase productivity and improve household incomes. The World Bank highlights the green economy as an important source of employment, with investments in agricultural production and related businesses offering opportunities to strengthen local industries. Developing these activities could help diversify national income, expand rural employment and reduce the country's dependence on hydrocarbon revenues.

Tourism represents another promising industry because Equatorial Guinea's biodiversity, landscapes and natural attractions provide opportunities for hospitality businesses, transport services and community-based enterprises. Expanding tourism could create employment for women and young people, with fisheries, digital services and energy-related activities providing additional opportunities for private investment and economic diversification. Greater private-sector participation and better access to investment financing would help these industries develop into sustainable sources of employment.

World Bank Country Economist Djeneba Doumbia, the report's lead author, stressed the urgency of improving education, reducing barriers faced by businesses and directing investment toward industries capable of generating employment on a larger scale. The report calls for consistent economic reforms, stronger cooperation with private investors and closer alignment between education programmes and labour market requirements to address the country's employment challenges. Successful implementation of these measures could help Equatorial Guinea build a more diversified and resilient economy, creating better jobs and improving living conditions for communities facing the consequences of declining oil production.