The West African nation of Guinea covers an area of 245,860 square kilometers and shares borders with Guinea-Bissau, Senegal, and Mali in the north, and with Sierra Leone, Liberia, and Côte d’Ivoire in the south. Guinea has a population of 12.6 million, according to World Bank estimates in 2016.
President Alpha Condé was re-elected to a second term in office with 57% of the vote on 31 October 2015 in a disputed presidential election. He was sworn in on 14 December, just three weeks before Guinea was declared Ebola free. Conde appointed Mamady Youla prime minister. An economist in his mid-50s, Youla had worked both in the private sector and in government, and his cabinet started out with seven women in key ministerial roles.
The Government of Guinea has a new development plan for 2016–20. The plan is its only development document, replacing the third Poverty Reduction Strategy Paper (PRSP3) for 2013–15; the Quinquennial Plan (2011–15); and the Post-Ebola Recovery Plan (2015–17). It was passed by Guinea's Council of Ministers in February 2017 and adopted by its National Assembly in June.
A revision of the electoral code, proposed by both the government and the main opposition parties, was adopted by the National Assembly in February 2017, with President Conde giving it his official backing in July. District heads will now be appointed in proportion to political party results in local elections, in line with a 2016 agreement between the government and opposition. Local elections were initially scheduled for 2013. Legislative elections are expected in 2018.
In September 2017, the government announced that China had agreed to loan Guinea US$20 billion over almost 20 years in exchange for mineral concessions, mainly to bauxite. US$3 billion is available immediately. Priority sectors for investment include infrastructure, energy, health and environment.
Guinea is slowly emerging from the Ebola and low commodity price shocks that adversely affected its economy in 2014 and 2015. Gross Domestic Product (GDP) grew at 6.6% in 2016, driven by an increase in production of bauxite and gold, as well as by a resilient agriculture sector. And, although services and manufacturing continue to stagnate in the aftermath of Ebola, GDP growth is projected at 6.7% for 2017. Following Guinea's completion of an ECF (Extended Credit Facility) program with the International Monetary Fund (IMF), negotiations are also ongoing for the next ECF program.
Guinea’s overall fiscal situation improved in 2016, with a smaller fiscal deficit of 1.4% compared to a 8.1% deficit of GDP in 2015. Government revenue (excluding grants) increased to 15.0% of GDP in 2016, compared to 13.7% of GDP in 2015. Fiscal performance reflected a number of policy measures to improve domestic revenue mobilization, coupled with a reduction in expenditure. Despite reduced public spending, pro-poor expenditures were preserved, as illustrated by an increase in the share the health sector has had in the national budget, up from 2.5% in 2015 to 4% in 2016. The expected deficit for 2017 is 2.8% of GDP. Inflation may increase to 8.5% in 2017 (up from 8.2% in 2015), owing to currency depreciation and a rise in domestic prices.
A World Bank and IMF Debt Sustainability Analysis (DSA) places Guinea at a moderate risk of debt distress, with increased vulnerabilities. The World Bank and IMF teams are working closely with the Guinean authorities to ensure that all new loans in 2017 and onward are contracted with a high degree of concession and a strong development impact.
Poverty affected about 55% of Guinea’s population in 2012, and this percentage is likely to have increased as a result of the Ebola crisis in 2014 and 2015 and the economic stagnation it contributed to. 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 conducted 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 had deteriorated, a result consistent with a pronounced decline of more than 30% in income 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% in 2012 to 16% in 2015, and close to 10% 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% in 2012) than in urban centers (35%). (A new household survey will contribute to updating information about poverty in Guinea, see below.)
The Guinean economy faced two main risks in 2017: The first was maintaining macroeconomic and fiscal reforms; and the second was ensuring socio-political stability.
Another particularly difficult challenge for Guinea has been the suspension of the $20 billion Simandou Project. This ambitious project, involving Rio Tinto and others, was expected to bring high quality iron ore to the international market, and create up to 50,000 jobs. In July 2016, Rio Tinto announced a scaling down of its presence in Conakry and in the country as a whole.
In October 2016, Rio Tinto announced it had signed a non-binding agreement to sell its stake in the project to the Chinese state-owned firm, Chinalco Mining Corporation. Negotiations were to reach agreement by the end of 2017.
Last Updated: Oct 05, 2017