Guinea Economic Outlook
- Economic growth in 2014, estimated at 0.6% versus an initial 4.5% target, was weaker than projected because of the Ebola epidemic.
- Political tensions have endured despite the new parliament set up in January 2014, marking the end of the transition period.
- Ebola increased the social cost of the country’s macroeconomic stabilisation, harmed the living conditions of the most vulnerable people and further reduced the country’s likelihood of achieving the Millennium Development Goals.
Growth in Guinea’s gross domestic product (GDP) shrank from 2.3% in 2013 to a miserly 0.6% in 2014 due to the consequences of the Ebola epidemic, delays in the implementation of structural reforms and electricity shortages. Assuming that the epidemic is brought under control in the first six months of 2015, growth should reach 0.9% in 2015 and 4.3% in 2016 thanks to increased public investment, increased mining and a better electricity supply.
Executing the reforms designated under the programme supported by the International Monetary Fund (IMF) Extended Credit Facility (ECF) has continued successfully. Delays in implementing certain structural measures of the programme are explained by the political tensions of 2013, limited institutional, human and co-ordination capacities, and the need to conduct more thorough consultations with the stakeholders of certain fields.
Inflation continued to move back, down to 8.6% in 2014 from 11.9% in 2013. If the Ebola epidemic is checked soon, the situation should stabilise in 2015 and 2016, with a budget deficit, that is once again sustainable, international reserves amounting to more than three months of imports and a steady exchange rate. Nonetheless, poverty remains alarming and is due to the country’s weak economic growth, governance problems, insufficient infrastructure and basic
services, and a weak private sector thwarted by a business climate that has improved, but is still
not very attractive.
Guinea, whose population is estimated at less than 11 million, comprises four agriculturally and ecologically distinct natural areas. Maritime Guinea and Forest Guinea have agricultural potential and most of the structuring mining projects (bauxite, alumina and iron). In Maritime Guinea, the Conakry area is the most developed, with a poverty rate of 27.4%, versus 55.2% nationally.
In the rural areas, the population density is very low. Most resources are concentrated in urban areas. A weakly linked communications network prevents the country from changing structurally. The concentration of people in the regions with a strong potential are sources of tensions and/or conflicts (land-property conflicts, tensions between farmers and stockbreeders) in a difficult social and political environment. Decentralisation has not yet given way to a real transfer of resources and competences to local authorities. Constraints to implementing spatialdevelopment policies should lead to revising the national regional-planning scheme (Schéma national d’aménagement du territoire, Snat).