Overview

  • Guinea-Bissau, one of the world’s poorest and most fragile countries, has a population of about 1.8 million. Guinea-Bissau’s Atlantic Ocean coast is composed of an archipelago, the Bijagos, of more than 100 islands. It borders Senegal to the north and Guinea to the south and east, and despite its size, is host to a large variety of ethnic groups, languages, and religions.

    Political Context

    Guinea-Bissau has a history of political and institutional fragility dating back to its independence from Portugal in 1974. The country is one of the most coup-prone and politically unstable countries in the world. Since independence, four successful coups have been recorded in Guinea-Bissau, with another 16 coups attempted, plotted, or alleged. In addition to military coups, frequent changes in government are another manifestation of the country’s political instability.

    After nearly two years of political crisis, Aristides Gomes, former Prime Minister (2005-2007) was appointed new Prime Minister on April 17, 2018. In line with the 2016 ECOWAS-mediated Conakry Agreement, he was the “consensual” choice. Prime Minister Gomes, also leading the Ministry of Economy and Finance, has since formed an inclusive transitional cabinet and the National Assembly has resumed plenary meeting. Legislative and presidential elections are expected to take place in 2019.

    Economic Overview

    Guinea-Bissau’s economy continues to expand despite political gridlock and the suspension of donor flows to the country. Economic growth reached 5.9% in 2017, largely reflecting high international cashew prices and good cashew production. However, economic activity has slowed down in 2018 due mainly to lower cashew production, caused by adverse weather, and declining cashew prices. Fluctuations in international cashew prices continue to have significant growth and fiscal implications given the country’s high export concentration in cashew. Inflation is expected to gradually pick up with the pace of economic activities, increased capital spending, and rising global oil prices but should remain well below 3%. The fiscal situation is still strained by political instability and the suspension of budget support.

    Available information points to a continued consolidation in central government operations in response to the suspension of budget support by donors (approximately 2% of gross domestic product (GDP). Improved revenue mobilization and tighter control of spending helped reduce the fiscal deficit to 1.5% in 2017, from 4.3% of GDP in 2016. Total expenditure declined from 21% of GDP in 2016 to about 20% in 2017, mainly reflecting a decline in transfers to State-owned enterprises. Project grants increased by 46% in 2017, while budget support remains subdued. Government operations were funded primarily from regional resources.

    Development Challenges

    Real GDP growth is expected to slow down to 4.7% (2.2% in per capita terms) in 2018, primarily due to lower cashew production and a slowdown in global cashew prices, and gradually rebound to about 5.2% by 2020. This projection assumes relatively high cashew prices, improvements in electricity supply, and increased investment in road and other key infrastructure. It is also assumed that the political stability would be maintained. Inflation is expected to rise slightly in view of higher global oil prices and rising domestic demand, but it should remain below 3% over the medium-term. This growth path also reflects the assumption of a recovery in electricity and water generation.

    Given the history of fragility in Guinea-Bissau, the outlook is uncertain, with pronounced risks to growth and poverty reduction. The reliance on cashew nuts for economic livelihood exposes two-thirds of the population to terms-of-trade shocks. Further diversification, either through moving up the value chain—with agricultural technology and market support systems—or through capitalizing on other green shoots in the agriculture sector will be key to bolstering the resilience of the economy. The resurgence of political tensions in the run-up to the 2018 legislative and 2019 presidential elections may cause fiscal slippages, discourage private investment, and impede economic growth. Risks associated with banking instability (high NPLs, undercapitalization, and unresolved bank bailout controversy) could further hamper private sector growth.

    In addition, a sharper-than-expected rebound in oil prices would put pressure on the current account and leave less resources for pro-poor government spending. Government needs to anticipate these risks and mitigate their impact on the poorest populations. Addressing high inequality in the country also requires efforts to improve service delivery and enhance access to basic services. However, accelerating or even sustaining the pace of poverty reduction will be difficult if the political situation remains unresolved, and if the major development challenges that constrain growth, inclusiveness, and sustainability are not addressed.

     

    Last Updated: Nov 01, 2018

  • World Bank Portfolio in Guinea-Bissau

    The active portfolio for Guinea-Bissau comprises seven national International Development Association (IDA) projects ($141 million), and three regional IDA operations ($134 million) for a total commitment amount of $275 million. Guinea-Bissau’s national allocation under IDA18 is $87.50 million.

    Four projects are planned for delivery in FY19, and of those, three have been approved by the World Bank Board of Executive Directors. They include safety nets, health and education projects, increasing the Human Development component in the portfolio.

    The Guinea-Bissau Country Partnership Framework (FY18-21) proposes a selective and flexible WBG program. The CPF focus areas are two: (i) Increased access to quality basic services especially outside of the capital city of Bissau and in the poorest areas of the country and (ii) Expanded economic opportunities and enhanced resilience with gender and governance as cross-cutting themes.

    The most recent World Bank Systematic Country Diagnostic, Turning Challenges into Opportunities, identified several interconnected binding constraints to sustainably reducing poverty and increasing shared prosperity, including:

    • Lack of inclusiveness and low rural productivity
    • Low and unstable economic growth, and
    • Fragility and weak governance

     

    Last Updated: Nov 01, 2018

  • Emergency Food Security Support Project

    At the request of the government of Guinea-Bissau, the World Bank implemented the Emergency Food Security Support Project (EFSSP) as a response to the 2008 international food price crisis. The objective of the project was to improve food security for the most vulnerable populations, including children, and increase smallholder rice production in project areas.

    Under this project, the number of students receiving one meal a day on average was 14,102, 49% of whom were girls. The project also generated 285,000 work days, against the lower target of 160,000 work days initially planned. About 9,100 tons of paddy rice is estimated to have been produced on rehabilitated rice land, exceeding the project’s target of 7,500 tons.

    The support of this project was strengthened by a second parallel operation funded by the European Union Food Crisis Rapid Response Facility Trust Fund (EUFRF). The food-for-work program dealt with the rehabilitation of rural feeder roads critical to enhancing welfare by improving access to the project’s areas. Under this trust fund (now closed), the number of students receiving one meal a day on average was 28,030, 48% of whom were girls. The project generated 165,000 work days against a target of 162,000 work days. The direct beneficiaries under the food for work program were 7,310 participants, and indirect beneficiaries were 43,860, with a total of 51,170 beneficiaries against a planned target of 18,900 beneficiaries by the end of the project.

    Support for this project continued in 2015 with a $7 million trust fund from the Global Food Crisis Response Program (GFCR). The operation successfully achieved its four development objectives:

    • Providing one meal a day for 17,500 students for a period of 160 days and take home rations for 2,500 girl students for 160 days. The World Food Program (WFP) started the provision of school feeding in February, 2015 and completed it in June, 2015. In total, the WFP provided one meal a day to 35,115 students of which 17,052 were female in 150 schools. Take home rations benefitted 5,299 girls who received a total of 105.8 tons of rice.
    • Generation of employment for 250,000 work days (100 days per participant for 2,500 farmer participants) and provision of food rations to 17,500 direct and indirect farmer household beneficiaries under the food-for-work program to rehabilitate land.  Under this activity, there were 4,402 participants which translates into 30,814 beneficiaries.
    • Rehabilitation of 5,000 hectares of land for rice cultivation, of which 2,532 hectares were mangrove land and 2,769 hectares were low land.
    • Provision of agricultural inputs to at least 4,000 smallholder farmers involved in rice cultivation.

    Last Updated: Oct 19, 2017

  • Guinea-Bissau’s main development partners are the European Union (EU), together with European bilateral donors, the Economic Community of West African States (ECOWAS), the West Africa Economic Monetary Union (WAEMU), the West Africa Development Bank (BOAD), African Development Bank (AfDB), United Nations agencies, World Bank Group and the International Monetary Fund.

    Important emerging non-traditional donors are Angola, China, and Iran.

     

    Last Updated: Nov 01, 2018

Api


LENDING

Guinea Bissau: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments



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Additional Resources

Country Office Contacts

Main Office Contact
Amadou Oumar Ba
Resident Representative
Predio das Nacoes Unidas
Rua Rui Djassi
Bissau
Guinea-Bissau
+245 95 5240092
aba1@worldbank.org
For general information and inquiries
Mademba Ndiaye
Senior Communications Officer
Dakar, Senegal
+221-33-859-41-00
mademba@worldbank.org
For project-related issues and complaints
guineabissaualert@worldbank.org