Economy of Guinea

Guinea is richly endowed with minerals, possessing an estimated quarter of the world's proven reserves of bauxite,[1] more than 1.8 billion metric tons (2.0 billion short tons) of high-grade iron ore, significant diamond and gold deposits, and undetermined quantities of uranium.

Guinea also has considerable potential for growth in the agricultural and fishing sectors. Land, water, and climatic conditions provide opportunities for large-scale irrigated farming and agroindustry. Remittances from Guineans living and working abroad and coffee exports account for the rest of Guinea's foreign exchange.

Economic history

A proportional representation of Guinea's exports.

Since 1985, the Guinean Government has adopted policies to return commercial activity to the private sector, promote investment, reduce the role of the state in the economy, and improve the administrative and judicial framework. The government has eliminated restrictions on agricultural enterprise and foreign trade, liquidated many parastatals, increased spending on education, and vastly downsized the civil service. The government also has made major strides in restructuring the public finances.

The IMF and the World Bank are heavily involved in the development of Guinea's economy, as are many bilateral donor nations, including the United States. Guinea's economic reforms have had recent notable success, improving the rate of economic to 5% and reducing the rate of inflation to about 99%, as well as increasing government revenues while restraining official expenditures. Although Guinea's external debt burden remains high, the country is now current on external debt payments.

Current GDP per capita of Guinea shrank by 16% in the 1990s.

The government revised the private investment code in 1998 to stimulate economic activity in the spirit of a free enterprise. The code does not discriminate between foreigners and nationals and provides for repatriation of profits. Foreign investments outside Conakry are entitled to especially favorable conditions. A national investment commission has been formed to review all investment proposals. The United States and Guinea have signed an investment guarantee agreement that offers political risk insurance to American investors through OPIC. Guinea plans to inaugurate an arbitration court system to allow for the quick resolution of commercial disputes.

Mean wages were $0.45 per manhour in 2009.

Economic sectors

Mining

Bauxite mining and alumina production provide about 80% of Guinea's foreign exchange. Several U.S. companies are active in this sector. Diamonds and gold also are mined and exported on a large scale, providing additional foreign exchange. Concession agreements have been signed for future exploitation of Guinea's extensive iron ore deposits.

Guinea is richly endowed with minerals, possessing an estimated one-third of the world's proven reserves of bauxite, more than 1.8 billion metric tons (MT) (2.0 billion short tons) of high-grade iron ore, significant diamond and gold deposits, and undetermined quantities of uranium.

Lately, with the increase of alumina demand thanks to booming China, there is a renew interest in Guinea riches. The consortium Alcan and Alcoa, partner with the Guinean government in the CBG mining in north western Guinea, have announced the feasibility study for the construction of a 1 million TPa alumina smelter. This comes with a similar project from Canadian start-up Global Alumina trying to come with a 2 billion dollar alumina plant in the same region. As of April 2005, the National Assembly of Guinea has not ratified Global's project.

Revenue from bauxite mining is expected to fall significantly in 2010 due mainly to the world economic situation.[2]

Agriculture

Further information: Agriculture in Guinea

Guinea also has considerable potential for growth in the agricultural and fishing sectors. Land, water, and climatic conditions provide opportunities for large-scale irrigated farming and agroindustry. Possibilities for investment and commercial activities exist in all these areas, but Guinea's poorly developed infrastructure continues to present obstacles to investment projects.

Energy

Further information: Energy in Guinea

Three primary energy sources make up the energy mix in Guinea - biomass, oil and hydropower. With 78%, biomass (mostly charcoal) makes the largest contribution in primary energy consumption in Guinea. It is locally produced, while Guinea imports all petroleum products.

Communications

Further information: Telecommunications in Guinea

The people of Guinea are among the poorest in West Africa[3] and this reality is reflected in the development of the country's telecommunications environment. Radio is the most important source of information for the public in Guinea, and the only one to reach the entire country.

There is a single government-owned radio network, a growing number of private radio stations, and one government TV station. The fixed telephone system is inadequate, with just 18,000 lines to serve the country's 10.5 million inhabitants in 2012. The mobile cellular system is growing rapidly and had an estimated 4.8 million lines in 2012. Internet usage is very low, reaching just 1.5% of the population in 2012.

Economic statistics

Guinea's export destinations in 2006.

GDP: purchasing power parity - $19.5 billion (2004 est.)

GDP - real growth rate: 1% (2004 est.)

GDP - per capita: purchasing power parity - $2,100 (2004 est.)

GDP - composition by sector:
agriculture: 25%
industry: 38.2%
services: 36.8% (2004 est.)

Population below poverty line: 40% (2002 est.)

Household income or consumption by percentage share:
lowest 10%: 2.6% (1994)
highest 10%: 32% (1994)

Inflation rate (consumer prices): 18% (2004 est.)

Labor force: 3 million (1999)

Labor force - by occupation: agriculture 80%, industry and services 20% (2000 est.)

Unemployment rate: NA%

Ease of Doing Business Rank 179th[4]

Budget:
revenues: $382.7 million
expenditures: $711.4 million, including capital expenditures of NA (2004 est.)

Industries: bauxite, gold, diamonds; alumina refining; light manufacturing and agricultural processing industries

Industrial production growth rate: 3.2% (1994)

Electricity - production: 855 GWh (2002)

Electricity - production by source:
fossil fuel: 63.55%
hydro: 36.45%
nuclear: 0%
other: 0% (1998)

Electricity - consumption: 795.2 GWh (1998)

Electricity - exports: 0 kWh (1998)

Electricity - imports: 0 kWh (1998)

Agriculture - products: rice, coffee, pineapples, palm kernels, cassava (tapioca), bananas, sweet potatoes; cattle, sheep, goats; timber

Exports: $709.2 million f.o.b. (2004 est.)

Exports - commodities: bauxite, alumina, gold, diamonds, coffee, fish, agricultural products

Exports - partners: India 26.6%, South Korea 7.7%, Spain 7.4%, Ireland 5.5%, Ukraine 5.2%, United States 4.8%, Germany 4.7% (2013)

Imports: $641.5 million f.o.b. (2004 est.)

Imports - commodities: petroleum products, metals, machinery, transport equipment, textiles, grain and other foodstuffs (1997)

Imports - partners: China 15.3%, Netherlands 9.8%, United Kingdom 4.2% (2013)

Debt - external: $3.25 billion (2001 est.)

Economic aid - recipient: $359.2 million (1998)

Currency: 1 Guinean franc (GNF) = 100 centimes

See also

Further reading

References

  1. ↑ "Bauxite and alumina" (PDF), Mineral Resources Program (U.S. Geological Survey), January 2009
  2. ↑ Mining Weekly, "Guinea bauxite income seen down 60% in 2010" 28 September 2009 (original source: Reuters)
  3. ↑ "", BBC News, 14 March 2012. Retrieved 4 February 2014.
  4. ↑ "Doing Business in Guinea 2012". World Bank. Retrieved 2011-11-18.

External links

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