Overview

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

    Political Context

    Guinea’s President Alpha Condé was re-elected to a second term in office with 57% of the vote in a disputed presidential election in October 2015 and sworn in in December—just before Guinea was declared Ebola free. In May 2018, Condé announced a cabinet reshuffle and appointed Fofana Kassory as Prime Minister.

    Economic Overview

    The momentum for economic recovery continued with 8.2% growth in 2017 (down from 10.5% 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’s fiscal imbalances significantly deteriorated, however, in 2017. The fiscal deficit increased to 2.1% of GDP in 2017, from 0.1% the previous year. Compared to 2016, tax revenues were lower as a percent of GDP, while public investment and transfers were higher in the run-up to the 2018 local elections. Mining tax revenues slightly increased to 2.3% of GDP (they had been 2.1% of GDP in 2016) but were significantly lower than expected. Non-mining tax revenues declined to 11% of GDP (11. 9% of GDP in 2016). To cover the shortfall, the government borrowed from the central bank and commercial banks and accumulated domestic arrears of 1.0% of GDP.

    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 IMF Board completed the First Review of the ECF program on June 25, 2018. 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 $650 million ceiling for non-concessional borrowing for the period 2017–2020.

    A World Bank and IMF Debt Sustainability Analysis (DSA) places Guinea at moderate risk of debt distress, with increased vulnerabilities owing to a large, non-concessional loan the government contracted to finance the Souapiti dam project. Guinea plans to take on more non-concessional financing for other new infrastructure, such as the rehabilitation of the RN1 national road and 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.

    In September 2017, Guinea announced that China had agreed to loan it $20 billion over almost 20 years in exchange for mineral concessions, mainly bauxite. About $3 billion was to be made available immediately: priority sectors for investment include infrastructure, energy, health, and the environment.

    The Guinean economy faces two main risks in 2018: the first is sustaining macroeconomic and fiscal reforms, and the second is ensuring socio-political stability. There is a risk that the legislative election period in 2019 could weaken policy discipline and structural reforms, undermining medium-term growth. There has also 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 an economic slowdown in China could undermine growth.

    Development Challenges

    Guinea’s potential lies in sectors such as agriculture and natural resources, as well as in the processing of goods and other services. Agriculture is the main source of employment in Guinea and is critical for poverty reduction and rural development. The sector provides income for 57% of rural households and employment for 52% of the workforce. Importantly, it has the potential for further growth.

    Natural conditions are favorable for growth. However, to realize this potential and speed the process of structural transformation, the country will first have to improve its overall governance. In addition, Guinea is becoming increasingly vulnerable to climate change with an overall increase in average temperatures; a drop in average annual rainfall, especially in North‐West and North‐East Guinea.

    Guinea is also endowed with vast natural resources, especially mining and hydropower resources, which could generate substantial income streams. Its iron ore resources are among the largest and highest quality in the world and include the world’s biggest unexploited iron deposit in Simandou. Guinea also possesses large reserves of bauxite estimated at 7‐8 billion tons, or about one‐third of total global resources. Production of bauxite is comparable to countries such as China, whose reserves are only 15% of Guinea’s endowment. There is enormous scope for increasing the value derived by the country from these natural resources. However, experience in Guinea also shows that mining and hydropower can have serious negative effects, both direct and indirect, on biodiversity and the environment. These potential risks will require careful management.

    Another challenge are the large gender gaps in education, opportunities for work, agricultural productivity and decision‐making powers. Taken together, these factors depress not only the prospects for women, but for the whole country’s development trajectory. Other major constraints include: low levels of human capital (including low levels of literacy); a poor healthcare system; a shortage of quality inputs  for  the agriculture sector; weak sectoral and local government management capabilities; weak management of rapidly growing urban agglomerations like Conakry; inadequate infrastructure; lack of access  to finance; and high unemployment, especially among young people. 

    Last Updated: Nov 16, 2018

  • Guinea had held its Consultative Group meeting with partners in Paris in November 2017, the government securing financing for a new five-year development plan (Plan national de développement economique et social). A total commitment of $21 billion was made by international partners and members of the private sector. The World Bank pledged $1.6 billion and the International Finance Corporation (IFC) $750 million.

    On June 7, 2018, after in-country consultations with stakeholders, the World Bank Board endorsed a new six-year (2018–2023) Country Partnership Framework (CPF). The CPF for Guinea focuses on three pillars:

    • Fiscal and Natural Resource Management,
    • Human Development,
    • Agricultural Productivity and Economic Growth.

    The total proposed program, spanning IDA18 and IDA19, could amount to over $1.5 billion, representing a marked increase in resources available to Guinea. These include Performance‐Based Allocation, a special allocation under the Risk Mitigation Regime, and other windows under IDA 18, including the Scale‐Up Facility, the Private Sector Window, and the Regional Integration Window.

    The current World Bank portfolio in Guinea stands at $803.75m (credits and grants) covering 13 national operations ($442.8 m) and 8 regional operations ($343.2m) with an undisbursed balance of $505.9m (62.94%).

    In 2018, the Government of Guinea and World Bank signed six agreements totaling $294.7 million. They include the Guinea–Mali Interconnection project ($75m) to: increase the electricity supply to eastern Guinea; enable electricity trade between Guinea and Mali; and increase Guinea’s electricity export capability for power exports to other West African Power Pool countries.

    Other parts of the agreement include: a Development Policy Operation ($60m) to support macroeconomic stability; the West Africa Unique Identification for Regional Integration and Inclusion ($49.70m) to increase the number of persons with government-recognized proof of unique identity to facilitate access to services in participating countries; the Guinea Health Service and Capacity ($45m) to improve the utilization of reproductive, maternal, neonatal and child health services in target regions; the Guinea Integrated Agricultural Development Project ($40m) to increase agricultural productivity and market access for producers and agricultural small and medium enterprises in selected value chains in project areas; and the Power Sector Recovery ($25 m) to improve the technical and commercial performance of the national power utility.

    Last Updated: Nov 16, 2018

  • Citizen engagement

    The Village Community Support Project (PACV) has been implemented since 2000 in Guinea by the Ministry of Territorial Administration and Decentralization with support from the World Bank and the Agence française de développement. It has successfully applied a community-driven development approach, and by the current third phase launched in 2016, had materialized some 1,500 microprojects across the 304 rural communes in Guinea, including the building of schools, markets, and health centers.

    Through these activities, citizens are finding that they are part of good local governance and can make positive and concrete contributions to their communities.

    Agricultural transformation

    the West Africa Agricultural Productivity Program (WAAPP), facilitates the adoption of new crop varieties, improved crop management practices, and small-scale food processing technologies. It also strengthened the country’s national seed production and distribution systems to ensure the availability and use of good quality, certified seeds.

    The program is a regional project initiated by the Community of West African States (ECOWAS) to support agriculture in the ECOWAS space. WAAPP is implemented in 13membercountries with two objectives: to generate and disseminate improved agricultural technologies and intensify the adoption of these in the agricultural sectors considered a priority.

    Through an initial grant of $9 million, the program in Guinea has contributed to improving the living conditions of seed producers by creating a gross added value of 4 million Guinean francs ($440) in income per hectare of rice a season.

    In terms of direct impact, over 120,000 people have benefited from this program, which has increased beneficiaries' incomes by 30%. About 40% of the beneficiaries are women.

    The program has a wider indirect impact creating the need for laborers and local artisans beyond Guinea’s borders. The transfer of technology—such as the use of parboiling kits to improve the quality of rice seed has generated 675 million Guinean francs ($74,000) by increasing rice production.

    Social safety nets

    The Productive Social Safety Nets project is being implemented in four regions of Guinea. Over 32,000 beneficiaries have received cash payments totaling $4.2 million to execute 219 micro projects since 2014; 1,668 low income beneficiaries have received a total $333,275 in cash transfers since 2015.

    Another 25,000 beneficiaries will benefit from this initiative through US$16 million additional financing for the program. The project also includes significant community mobilization activities and training for women on income generating productive activities and community project.

    Last Updated: Nov 16, 2018

  • In addition to the Bretton Woods institutions, Guinea’s main development partners are the African Development Bank, European Commission, Islamic Development Bank, and French Development Agency (Agence française de développement). However, on specific issues other institutions and partners are crucial: The United Nations 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 European Union, which has led on support for the justice sector. Non-traditional development partners, including 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: Nov 16, 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