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).
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
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
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)
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).
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