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Overview

  • Guinea-Bissau, one of the world’s poorest and most fragile countries, has a population of about 1.9 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.  Held in December 2019, the last Presidential elections were followed by a political crisis, as the defeated candidate, Domingos Simões Pereira, alleging existence of fraud and irregularities, filed a motion to challenge the election results which decision by the Supreme Court is still pending. In April 2020, ECOWAS, followed by the European Union, recognized the election of Umaro Sissoco Embalo as President of the Republic and called for the appointment of a new Prime Minister and government  based on the results of the legislative elections of March 10, 2019. Outcomes of these legislatives elections indicate a configuration of the political picture, with no absolute majority. However, after the Parliamentary session held on June 29, 2020 a new majority seems to be in place after the approval of the de facto Government’s program.

     

    Economic Overview

    ·        Growth reached 4.6% (2.2%in per capita terms), from 3.8% in 2018. The recovery was supported by higher cashew output and higher electricity production due to newly installed power generation capacity. However, growth remained below the potential rate of 5% as pre-election political uncertainty weighed on economic activity. The negative output gap exerted a downward pressure on inflation, which remained low at 0.5%. The overall fiscal deficit increased from 4.8% of GDP in 2018 to 5% in 2019, mainly owing to higher recurrent spending. Tax revenue increased marginally from 8.8% of GDP in 2018 to 9.1% in 2019, due to the pickup in economic activity. However, this was largely offset by weaknesses in customs and non-tax revenue. On the expenditure side, total government spending increased from 19.5% of GDP in 2018 to 23% in 2019.

    ·        Growth is projected to decline to -1.5% (-3.8% in per capita terms) in 2020, as lockdown put in place since the beginning of the COVID-19 pandemic weighs on domestic demand and global cashew demand and price decline. Domestic consumption and investment would be severely affected by the lockdown. Higher public spending to support people and firms affected by the crisis, largely financed by external sources, would help prevent a sharper growth contraction. Inflation is projected to rise from 0.5% in 2019 to 1.1% in 2020, mainly reflecting pressures on food prices caused by negative global supply disruption effects and amplified by local supply shocks.

    The outlook is subject to substantial downside risks. Renewed political instability could cause fiscal slippages and exacerbate the already difficult business environment. Substantially lower cashew prices or quantities exported would also pose a risk given the high export concentration in cashew. The persistence of the COVID-19 crisis could adversely affect household income and increases their risk of falling into poverty. Risks associated with banking instability also remain a threat to macro-financial stability.

    A steep increase in oil prices would also put pressure on the external current account balance and leave less resources for pro-poor government spending. 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: Jul 15, 2020

  • World Bank Engagement in Guinea-Bissau

    The World Bank Group engagement in Guinea Bissau is guided by a Country Partnership Framework  that is reassessed and renewed on average every four to five years. The Country Partnership Framework (FY18-21) has two goals:

    ·        Increase access to quality basic services especially outside of the capital city of Bissau and in the poorest areas of the country

    ·         Expand economic opportunities and enhanced resilience with gender and governance as cross-cutting themes.

    The most recent Systematic Country Diagnostic 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;

    ·        Fragility and weak governance.

    Portfolio: The active World Bank Group portfolio for Guinea-Bissau includes six national projects ($118.11 million), and four regional operations ($194 million) for a total commitment of $312.11 million, funded by the International Development Association.

    COVID-19 Response

    Two new operations to respond to COVID 19 are being prepared with Board approval scheduled before September 2020. Meanwhile the Bank is supporting the COVID-19 response through:

    ·         Regional Project to Strengthen Health Surveillance in West Africa (REDISSE II) for acquisition of medical inputs, personal protective equipment (PPE), laboratory inputs (tests), ambulances and support of health surveillance actions;

    ·         Maternal and Child Health Services Project is expected to provide health staff with COVID 19 training and sensitization through Community health workers;

    ·         Providing technical support to the Ministry of Education in the elaboration of both the National Contingency Plan for the Education Sector in response to COVID-19 pandemic and to prepare the COVID-19 Accelerated Funding Request to be submitted to the Global Partnership for Education.

     

    Last Updated: Jul 15, 2020

  • Private Sector Rehabilitation & Agribusiness Development Project

    ·        Business Plan Competition: 4,559 participants, 600 firms receiving training, 50 firms receiving grants. 78 percent of these firms operating at the end of activity.

    ·        Rural Extension Program supporting the renovation and rehabilitation of 5,673 ha of cashew orchards for 986 farmers.

    ·        4 cashew nuts community processing plants, 4 warehouses, and 4 drying areas installed with direct project support.

    ·        Audit of FUNPI accounts.

    Public Sector Strengthening project

    ·        Increase of registration of new taxpayers, from 10,359 in 2017 to 26708 at end 2019.

    ·        Implementation (ongoing) of a comprehensive Customs reform strategy.

    ·        Training of customs officials: training of 150 customs officers.

     

    ·        Customs information system fully operational including border customs facilities in Gabu, Sao Domingos and Bafata.

    ·        Debt Management and Financial Analysis System (DMFAS), version 6 operational and local staff trained in its usage.

    Emergency Water and Electricity Services Upgrading Project

    ·        A reliable bulk electricity supply for Bissau with KARPOWER (17 MW) is set up since February 2018.

    ·        Ongoing reform of the water and electricity public utility (EAGB).

    ·        66,008.00 people in urban areas provided with access to Improved Water Sources.

    ·        208.000 people benefitting from enhanced electricity services.

    Safety Nets and Basic Services Project

    ·        Over 20,000 individuals have benefited from cash transfers.

    ·        10,500 individuals have been provided access to an all-season road.

    ·        31,200 individuals have been provided access to improved water source in rural areas.

    Last Updated: Jul 15, 2020

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

    Last Updated: Jul 15, 2020

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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
Sr. External Affairs Officer
Dakar, Senegal
+221-33-859-41-00
mademba@worldbank.org
For project-related issues and complaints
guineabissaualert@worldbank.org