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 10.63 million, with women making up more than half of the population.
The November 2010 presidential election marked Guinea’s return to constitutional order after the army seized power in December 2008. After a difficult period of military transition, the election of the first democratically elected president, Alpha Condé, and a new political context, paved the way for new economic opportunities in Guinea. Several reforms were introduced and Guinea reached the completion point for the Heavily Indebted Poor Countries (HIPC) Initiative in September 2012. Legislative elections took place in September 2013, and official results were approved by the Supreme Court in November 2013 in spite of allegations of fraud declared by both the opponents and the ruling regime. The political transition will be completed through the organization of local elections which have been postponed several times due to a lack of consensus among the political players. The next presidential elections are scheduled for October 11, 2015.
Guinea’s medium-term potential remains encouraging; however growth is projected to remain well below the levels initially anticipated before the Ebola outbreak for the coming years. In 2013-14, real GDP growth rates were projected around 5%, accelerating sharply to close to 20% in 2015-16 following the start of the major Simandou iron ore project. However, as a result of the drop in mining investment and political unrest, growth dropped to a level slightly negative in per capita terms in 2013. As a result of the Ebola epidemic, growth is estimated at only about 1% in 2014 and could be close to nil in 2015; inflation remains within the single digits. Economic activity could resume rapidly once Guinea is declared Ebola-free, provided the elections are completed quickly and political stability is maintained. That said, annual growth will likely not exceed 4 to 5% in FY16-17.
A January 2015 debt sustainability analysis shows that the external debt/GDP ratio went up from 22% in 2013 to 26% in 2014 and is projected to further increase to 31% in 2015 due to low growth and increased short-term borrowing. The country is still at a moderate rate of debt distress, but it is important to monitor new borrowing carefully and to ensure that any non-concessional borrowing has a high grant element and large projected returns. Domestic debt should, at 14% of GDP, be closely monitored.
With elusive and volatile growth, the poverty rate increased from 53% in 2007 to 55% in 2012. Declining average per capita consumption contributed to the increase in poverty, but a mild reduction of inequality, notably in rural areas, somewhat contained the overall increase in poverty. Rural – urban migrations, and the sharp increase in food prices explain why rural areas fared better than urban areas in terms of poverty reduction, even if poverty rates remain higher in rural areas (65% of the population in 2012) than in urban areas (35% of the population in 2012). Meanwhile, extreme poverty (the inability to satisfy basic food needs) increased from 12% to 18% between 2007 and 2012. The most important determinants of poverty are location, gender, and education of the head of household. Guinea ranked 179th out of 187 countries on the United Nations Human Development Index (HDI).
Guinea has undergone several shocks over the past two years; the most devastating being that of the Ebola epidemic which began in early 2014. In 2013, investment in the mining sector came to an abrupt halt due to delays in completing the legal framework for the major Simandou iron ore project and a sharp negative turn in the medium-term outlook for international mineral prices. The Ebola epidemic has already cost close to 2,500 lives in Guinea and has had a devastating effect on the economy. The declining rate of new infections since the end of 2014 shows promise that the epidemic can be stopped in 2015 but it will take considerable time and effort to redress the damage contain the risks of future flare-ups.
Bringing the Ebola epidemic under control, preventing its reoccurrence, and addressing its social and economic impact has become a new and urgent development issue for Guinea. To this end, the Government of Guinea has prepared a Post-Ebola Priority Actions Plan (Plan d'Actions Prioritaires Post-Ebola—PAPP) for the period 2015-2017. The PAPP is based on the 2013-15 Poverty Reduction Strategy, maintaining its main focus areas and policies, but emphasizes measures to bring the Ebola epidemic under control, to prevent similar outbreaks in the future, and to address the immediate social and economic needs of those most affected by the epidemic. In addition to new budget support and other assistance to help the country address the impact of the epidemic, the World Bank Group has supported the government with the preparation of the recovery strategy.
Last Updated: Jun 09, 2015