From Wealth to Inclusion: Pathways for Poverty Reduction and Middle-Class Expansion in Equatorial Guinea – World Bank Group

Equatorial Guinea’s Development Crossroads: A Report on Poverty, Equity, and the Sustainable Development Goals

Executive Summary

A World Bank Group assessment, “The Equatorial Guinea Poverty and Equity Assessment,” reveals a critical divergence between Equatorial Guinea’s upper-middle-income status and the well-being of its populace. Despite significant oil wealth, the nation faces substantial challenges in achieving key Sustainable Development Goals (SDGs), particularly SDG 1 (No Poverty), with nearly half the population living below the national poverty line. As oil revenues decline, the country must implement critical reforms to prevent a rise in poverty and translate its natural wealth into sustainable human development.

Key Challenges to SDG Achievement

The report identifies three primary structural impediments that limit progress towards the SDGs and constrain the income-generating capacity of the poor.

• Human Capital Deficit: Low public investment in social sectors, approximately 2% of GDP, severely hampers progress on SDG 3 (Good Health and Well-being) and SDG 4 (Quality Education). This underinvestment results in a significant loss of potential, with children born today expected to achieve only half of their productive capacity.
• Labor Market and Economic Growth Failures: The current labor market structure is a major barrier to SDG 8 (Decent Work and Economic Growth). Fewer than one in five workers holds a formal job, and job creation in non-oil sectors is insufficient to absorb new entrants, undermining efforts to reduce poverty and inequality.
• Inadequate Social Protection and Resilience: A weak social protection system fails to shield households from economic and climate-related shocks. This lack of a safety net increases vulnerability and directly threatens progress on SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities).

Policy Recommendations for an SDG-Aligned Future

To reverse the trend of rising poverty and align with the 2030 Agenda, the report proposes a coordinated policy package focused on three core areas.

1. Invest in Human Capital: Prioritize investments that directly support SDG 3 and SDG 4. This includes enhancing early childhood nutrition, ensuring access to quality public education and affordable health services, and implementing social assistance programs designed to break the intergenerational cycle of poverty, a cornerstone of achieving SDG 1.
2. Enable Inclusive and Sustainable Economic Growth: Foster a vibrant private sector to advance SDG 8. Key actions include improving the business environment, expanding access to finance for entrepreneurs, and easing regulatory and tax burdens that currently constrain firm growth and job creation.
3. Strengthen Household Resilience: Develop adaptive social protection systems and implement fiscal policies that protect vulnerable households during economic downturns. This is crucial for building resilience and ensuring sustained progress towards SDG 1 and SDG 10.

Strategic Sequencing and Conclusion

The report emphasizes that for reforms to be effective, strategic sequencing is essential. Priority should be given to job creation to utilize the country’s existing human capital, as even the most educated workers currently face significant employment challenges. This focus on SDG 8 is a prerequisite for realizing the full returns on investments in SDG 4.

Ultimately, with coordinated action that prioritizes human development, supports entrepreneurship, and strengthens resilience, Equatorial Guinea can transform its natural resource wealth into lasting, inclusive prosperity and achieve the Sustainable Development Goals for all its citizens.

SDGs Addressed in the Article

SDG 1: No Poverty

• The article’s central theme is the high poverty rate in Equatorial Guinea, stating that “nearly half of the population still lives in poverty according to the national poverty line.” It directly addresses the goal of eradicating poverty in all its forms.

SDG 3: Good Health and Well-being

• The report points to “relatively low public spending on health” as a key issue limiting human capital. It calls for “affordable health services” and better nutrition, connecting directly to the goal of ensuring healthy lives and promoting well-being.

SDG 4: Quality Education

• The article highlights that low public spending on education limits human capital accumulation. It recommends investing in “quality public education,” especially in “early childhood,” to break the cycle of poverty, which aligns with the goal of inclusive and equitable quality education.

SDG 8: Decent Work and Economic Growth

• The text extensively discusses labor market issues, noting that “fewer than one in five workers has a formal job” and that “job creation in non-oil sectors remains insufficient.” The call to enable “private-sector growth” and improve the business environment to create jobs is a core component of this SDG.

SDG 10: Reduced Inequalities

• The article emphasizes the paradox of a wealthy nation with high poverty, pointing to a need for a more equitable distribution of resources. It calls for “equity-enhancing reforms” and “targeted support to households” to create a “more inclusive and resilient future,” directly addressing the goal of reducing inequality.

Specific SDG Targets Identified

SDG 1: No Poverty

• Target 1.2: By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions. The article’s finding that “nearly half of the population still lives in poverty according to the national poverty line” makes this target central.
• Target 1.3: Implement nationally appropriate social protection systems and measures for all. The article identifies an “inadequate social protection system” as a key problem and recommends strengthening “household resilience through adaptive social protection systems.”

SDG 3: Good Health and Well-being

• Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential health-care services. The recommendation to invest in “affordable health services” directly supports the aim of this target.

SDG 4: Quality Education

• Target 4.2: By 2030, ensure that all girls and boys have access to quality early childhood development, care and pre-primary education. The report specifically calls for “investing in human capital, especially in early childhood, through better nutrition, quality public education.”

SDG 8: Decent Work and Economic Growth

• Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation. The call to enable “private-sector growth by improving the business environment, expanding access to finance, and easing regulatory and tax burdens” aligns perfectly with this target.
• Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men. The article’s concern that “fewer than one in five workers has a formal job” and that “job creation… remains insufficient” highlights the relevance of this target.

SDG 10: Reduced Inequalities

• Target 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality. The recommendation for “fiscal policies that protect vulnerable households during economic downturns” is a direct reference to this target.

Indicators Mentioned or Implied

Indicator for Target 1.2

• Proportion of population living below the national poverty line: The article explicitly states that “nearly half of the population still lives in poverty according to the national poverty line,” making this a direct indicator used in the report.

Indicator for Targets 1.3, 3.8, and 4.2

• Proportion of government spending on essential services (education, health, and social protection): The article provides a specific figure, stating that “public spending on health, education, and social protection—around 2% of GDP—limits the accumulation of human capital.” This serves as a key indicator of government commitment.

Indicator for Target 4.2

• Human Capital Index: The statement that “children born today expected to reach only half of their productive potential” is a direct reference to the concept and findings of the Human Capital Index, which measures the human capital that a child born today can expect to attain by age 18, given the risks of poor health and education in the country where they live.

Indicator for Target 8.5

• Proportion of informal employment in total employment: The article implies this indicator by stating that “fewer than one in five workers has a formal job,” which means that over 80% of workers are in informal employment. This is a direct measure of the lack of decent work.

Summary Table of SDGs, Targets, and Indicators

Source: worldbank.org