The West African nation of Guinea spans an area of 245,860 kilometers and shares borders with Guinea-Bissau, Senegal, and Mali in the north, and with Sierra Leone, Liberia, and Cote d’Ivoire in the south. According to an April 2014 population census, Guinea has a population of 11 million, with women making up more than half of the population.
President Alpha Condé was re-elected on October 31, 2015 to a second term in the first round of the country's disputed presidential election, with 57% of the votes. He was sworn in on December 14, 2015, less than three weeks before Guinea was declared Ebola free. On December 26, 2015, President Condé appointed Mamady Youla as the country’s prime minister. Youla, a 54-year old economist, has worked both in the private sector and the government. The new 31-strong cabinet has seven women who have key ministerial roles in finance, foreign affairs and agriculture.
The new government is ready to implement an ambitious post-Ebola-recovery plan, which was endorsed by the international community, including the World Bank Group (WBG). However, the fiscal situation in the country remains extremely fragile requiring close monitoring by the World Bank and the International Monetary Fund (IMF) as well as financial assistance both in the short term and the long term.
After good growth performances in 2011 and 2012, Guinea’s economy has suffered a number of setbacks, including the Ebola crisis and a sharp drop in new investment in the mining sector. These external shocks were further compounded by political unrest in the run-up to legislative elections in 2013. As a result, GDP growth dropped to 0.4% in 2014 and 0.1% in 2015 respectively. The services and mining sectors were adversely affected by Ebola in 2015 with strong contraction in the mining sector, while the agricultural sector showed resilience and was the key driver of growth in 2015.
The fiscal situation deteriorated sharply in 2015. A large part of expenditures to address the Ebola epidemic in 2014 and 2015 was financed by donors, both through and outside the budget. However, the stagnating economy affected revenue by more than 2% of GDP, while the presidential elections and attempts to boost economic activity drove an increase in spending. Following the end of the Ebola epidemic, economic growth is projected to rebound to 4% in 2016 and to 5-6% in 2017-18, although considerable downside risks remain. Agricultural production should continue to grow at the rapid pace of the previous years, and manufacturing and services should benefit from the resumption of international and domestic travel and trade, as well as the improved electricity supply in Conakry. However, the projected rebound in mining production will depend on quick improvements in the regulatory environment and in the outlook for international metal prices.
According to a World Bank and International Monetary Fund (IMF) Debt Sustainability Analysis (DSA) from January 2015, Guinea continues to be assessed at a moderate risk of debt distress. Using a higher and unified discount rate of 5% (previously 3%), which was introduced in October 2013, the team found no changes in the underlying conditions. The moderate rating is based on Guinea’s vulnerability to adverse shocks to growth, exports, FDI inflows, fiscal performance, and delays in the implementation of mining projects. The Bank and IMF teams are working closely with the authorities to ensure that all new loans in 2016 and onward are contracted with a high degree of concessionality and a strong development impact.
Poverty affected about 55% of Guinea’s population in 2012, up from 49% in 2003, and is likely to have increased further as a result of the Ebola crisis and economic stagnation. The poverty headcount rate remained far higher in rural areas (65% in 2012) than in urban centers (35%). Poverty rates also varied significantly by region, with the highest rates observed in the remote Nzérékoré and central Labe provinces and the lowest rate recorded in the capital, Conakry.
These rates have certainly increased as the result of the Ebola crisis and economic stagnation in 2014 and 2015. This is particularly true for Macenta and Gueckedou, the two areas in the southeast that have been most affected by Ebola and that already had poverty rates above the national average.
A recently conducted mobile phone survey in September 2015, based on interviews with close to 2,500 households across Guinea, confirmed that Ebola had a strong impact on Guinean households. Welfare levels based on asset ownership deteriorated, particularly for rural households, which is consistent with a pronounced income decline by more than 30% for rural households and women in areas severely affected by Ebola, as well as decline in food consumption. In parallel, urban unemployment doubled from 8% in 2012 to 16% in 2015 in the aftermath of Ebola, and close to 10% of households withdrew their children from school, with the large majority citing Ebola as the main factor. Surprisingly, agriculture production remained resilient and food prices were stable.
Despite great success in stopping the spread of the Ebola epidemic, serious challenges remain in addressing the impact of the epidemic. In December 2015, the epidemic had cost the lives of more than 11,300 people in Guinea, Sierra Leone, and Liberia, including more than 500 health care workers. The number of new cases peaked at more than 50 per week in early 2015 before gradually declining as containment efforts took effect.
The Guinea Ebola Recovery Plan, presented at the World Bank Spring Meetings in April 2015, represents the government’s ambitious and wide-ranging attempt to relaunch the economy in the aftermath of Ebola. In terms of financing, the total estimated cost of this plan over the 2015-2017 period amounts to almost $3 billion, with $857 million for 2015, $1.2 billion for 2016, and $864 million for 2017.
As part of the international response, the World Bank Group significantly scaled up its support to the Ebola-affected countries. Overall, the WBG has mobilized close to $1.6 billion in financing for the countries hardest hit by the crisis, including $400 million announced in August and September 2014 for the emergency response. The funds have financed Ebola-containment efforts in Guinea, Liberia, and Sierra Leone, helped families and communities cope with the economic impact of the crisis, and rebuilt essential public health systems to guard against future disease outbreaks.
Last Updated: Apr 13, 2016