Overview

  • Country Overview

    The West African nation of Guinea shares its northern borders with Guinea-Bissau, Senegal, and Mali, and southern borders with Sierra Leone, Liberia, and Côte d’Ivoire. Guinea has a population of at least 12.4 million (2016).

    Political Context

    President Alpha Condé was re-elected to a second term with 57 percent of the vote in a disputed presidential election in October 2015, and sworn in in December, just before Guinea was declared Ebola free. Conde appointed Mamady Youla prime minister. An economist in his 50s, Youla has worked both in the private sector and in government. His cabinet started out with seven women in key ministerial roles. Local elections took place in February 2018. Mayors and Communal Advisors were elected, and heads of districts appointed in proportion to party results. Legislative elections are scheduled in 2018.

    Guinea held its Consultative Group meeting with partners in Paris in November 2017. The government secured financing for its new, five-year development plan (Plan national de développement economique et social) with a total commitment of US$21 billion made—both by partners and members of the private sector. The Word Bank pledged US$1.6 billion and the International Finance Corporation (IFC) US$750 million. In September 2017, Guinea announced that China had agreed to loan it US$20 billion over almost 20 years in exchange for mineral concessions, mainly bauxite. US$3 billion was available immediately; priority sectors for investment included infrastructure, energy, health, and the environment.

    Economic Overview

    The momentum of economic recovery continued with 6.7 percent growth in 2017, up from 6.6 percent in 2016. Increased mining production (particularly bauxite), resumed construction activity, good agricultural performance, and the improved provision of electricity were the main drivers of the recovery.

    Guinea has pursued sound fiscal and monetary policies to try to stabilize the economy, although its fiscal deficit increased somewhat to 0.4 percent of GDP in 2017, from 0.1 percent in 2016. Revenue mobilization improved to 15.4 percent of GDP in 2017 (up from 15.0 percent in 2016), because of higher mining revenues and direct tax revenues. Mining tax revenues were 2.9 percent of GDP percent (up from 2.2 percent in 2016), reflecting buoyant activity. Direct tax collection increased from 2.5 to 3.0 percent of GDP between 2016 and 2017, reflecting administrative measures that contribute to improved tax compliance.

    Following the conclusion of Guinea’s first ever International Monetary Fund (IMF) program, the IMF approved a new Extended Credit Facility (ECF) in December 2017. The new program accommodates Guinea’s intention to use non-concessional borrowing to finance investment projects in infrastructure, higher education, and water. As such, Guinea has agreed to a US$650 million ceiling for non-concessional borrowing for the period 2017–2020. The first review for the new ECF program was expected in the first half of 2018.

    A World Bank and IMF Debt Sustainability Analysis (DSA) places Guinea at a moderate risk of debt distress, with increased vulnerabilities owing to a large, non-concessional loan the government is contracted to finance the Souapiti dam project. Guinea plans to take on non-concessional financing for other new infrastructure, such as the rehabilitation of the RN1 national road and the Conakry urban road network, the construction of an electrical interconnection line, and the rehabilitation of a university. World Bank and IMF teams are working closely with the Guinean authorities to ensure that all new loans in 2018 and onward have a high degree of concession and strong development impact.

    Social Context

    Poverty affected about 55 percent of Guinea’s population in 2012; this percentage is likely to have increased as a result of the 2014/15 Ebola crisis and the economic stagnation it caused. This is particularly true for the parts of the country most affected by Ebola that already had poverty rates above the national average. A mobile phone survey based on interviews conducted with close to 2,500 households across Guinea in September 2015, confirmed that Ebola had made a strong impact on Guinean households. Levels of welfare based on asset ownership had deteriorated, this result consistent with a pronounced decline in income of more than 30 percent for rural households and for women in areas severely affected by Ebola. A decline in food consumption was also noted in these same households. In parallel, urban unemployment had doubled from 8 percent in 2012 to 16 percent in 2015, and close to 10 percent of households had withdrawn their children from school, with most citing Ebola as the main factor for doing so. Surprisingly, agricultural production remained resilient and food prices were stable. The poverty headcount rate remains far higher in rural areas (65 percent in 2012) than in urban centers (35 percent).

    Development Challenges

    The Guinean economy faces two main risks in 2018: the first is maintaining macroeconomic and fiscal reforms, and the second is ensuring socio-political stability. The legislative election period could weaken policy discipline and structural reforms, undermining medium-term growth. There has been an increase in union-related unrest, particularly in the education sector, as teachers demand higher salaries. On the external front, lower commodity prices and a slowdown of economic growth in China could undermine growth.

    Last Updated: May 17, 2018

  • A new World Bank program for Guinea is being prepared for 2018–2022. The Bank’s current national portfolio consists of 10 projects worth a total commitment of US$271.9 million. The regional portfolio covers six projects for a total of US$218.5 million. IDA’s overall commitments (national and regional) in Guinea therefore stand at US$490.4 million in total and, as of the end of the Bank’s 2017 Financial Year (FY), disbursement had reached 24.2 percent. For FY18, the national portfolio disbursement ratio stands at 16.1 percent as of the end of January 2018.

    In July 2017, the government of Guinea and the World Bank signed two agreements totaling US$52 million. The first is related to the Economic Governance Technical Assistance and Capacity Building (EGTACB) project, with additional funding of US$22 million to consolidate gains made in the initial project and opening-up new strands of development, including for the National Institute of Statistics (Institut national de statistique) to support for a household survey. The second agreement, worth US$30 million, aims to improve the drinking water supply in the city of Conakry. The Bank’s program is helping put in place potentially transformative building blocks in Guinea’s priority sectors, such as energy, agriculture, mining, governance, and regional integration. 

    Last Updated: May 17, 2018

  • The International Development Association (IDA) portfolio consists of 11 approved operations for a total of $270.9 million. The disbursement ratio stood at 11% as of February 2017. There are seven regional projects with an IDA commitment of $236.5 million, including an additional financing of $23 million for the West African Agriculture Productivity Project approved in February 2017 by the Board of Administrators. The World Bank Group’s program is contributing to putting in place potentially transformative building blocks in the priority sectors of energy, agriculture, mining, governance and regional integration in Guinea. The portfolio grew substantially because of additional support related to the Ebola epidemic.

    Last Updated: May 17, 2018

  • In addition to the Bretton Woods institutions, the main development partners in the country are the African Development Bank, European Commission, Islamic Development Bank, and the French Development Agency (Agence française de développement). However, on specific issues, other institutions and partners are crucial. The United Nations (UN) coordinates interventions in security reform with contributions from bilateral aid as well as from ECOWAS and the African Union. USAID plays a crucial role in helping establish democratic institutions, complementing the work of the European Union (EU). The EU has led the work on support for the justice sector. Non-traditional development partners, including some Arab countries, China, Brazil, Russia, and India, have focused on areas closely linked to Guinea’s comparative advantages in mining and agriculture, or on sectors where Public–Private Partnerships could rapidly transform into solely private concerns.

    Last Updated: May 17, 2018

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LENDING

Guinea: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

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Additional Resources

Country Office Contacts

Main Office Contact
Immeuble de l'Archeveche
Face baie des Anges
BP 1420
Conakry, Guinee
+224-624-933-000
For general information and inquiries
Mamadou Bah
Communications Officer
+224-624-933-008
mbah3@worldbank.org
For project-related issues and complaints
guineaalert@worldbank.org