Country Brief

Last updated March 2009

Guinea covers 94,000 square miles and is divided into four natural regions: the coast of lower Guinea; the central, mountainous Fouta Djallon; the savanna of upper Guinea; and the forest in the southeast. Guinea had a population of about 9.4 million in 2007. Up to half a million refugees arrived during the ten years of civil war in the 90s from neighboring countries. The capital city is Conakry, with 1.8 million inhabitants.

History

The population of Guinea evolved over thousands of many years. In the tenth century A.D., Soussou and Malinke groups began to move into the area, and the currently known structure of population groups developed. The Fulani moved into Guinea in the 17th century, bringing Islam with them and pushing the Soussou to coastal areas. Upper Guinea was part of the Ghana Empire in the 10th and 11th centuries, then the Mali Empire until the 14th century, and finally the Songhai Empire until the 19th century. French rule began in the 19th century.

After World War II, several labor movements and political parties were established, including the Parti Démocratique de Guinée led by Ahmed Sekou Touré. In 1958, this party organized support to vote against Charles de Gaulle’s, France President, proposed French community. The party then went on and then declared independence the same year which led France by reaction to retreat completely and to cutting off financial aid and other assistance to Guinea. Other Western nations also shunned the country. Because of Guinea’s relative isolation, the country developed a strong national identity and opted for a socialist development path with strong ties with the former Soviet Union and other Eastern European countries. Sekou Touré, the first President, governed a one-party state from 1958 and progressively developed strong dictatorial tendencies. He survived several attempted coups and continued to rule Guinea until his death in 1984.

Two weeks after Sekou Touré’s death, the military took control of the government and established the Second Guinean Republic under Lansana Conté, a military officer. Following a complete revision of the constitution to reflect Guinea’s shift to a democratic society and market based economy, first presidential and parliamentary elections took place in late 1993; and Lansana Conté was declared president. He won the presidential elections again in 1998 for a five-year term.

While President Conté was serving what would normally have been his final term in office, a constitutional amendment was approved in 2001, through a referendum, removing presidential term limits and extending the mandate to seven years. President Conté was subsequently re-elected a third time in December 2003 for a third seven-year term. Following violent clashes in 2007 between security forces and demonstrators calling for improved governance (200 people were killed), the President nominated a reform-minded Prime Minister, Lansana Kouyaté vetted by civil society, political parties and trade unions. However, in May 2008, President Conté sacked Mr. Kouyaté in favor of the former Minister of Mines, Ahmed Tidiane Souaré. Although, coordination between the Presidency and the Prime Minister’s office appears to have improved, Government effectiveness remains limited and the political situation fragile.

On December 23, 2008, just hours after President Lansana Conté’s death on December 22, a group of military officers staged a coup citing the illegality of the Parliament and the irrelevance of the Constitution which had been so often amended that it could no longer be relied upon to address a Transition, The coup leader, Captain Moussa Dadis Camara, proclaimed himself President, established the National Council for Democracy and Development (Conseil national pour la démocratie et le développement, CDNN), suspended the Constitution and dissolved the Parliament, the Supreme Court and all the State Institutions. On December 30, 2008, the self-proclaimed President appointed a civilian Prime Minister, Mr. Kabiné Komara, a Sr. staff from the African Development Bank’s Exim Bank. The new Prime Minister has confirmed his commitment to the reforms program initiated under Prime Minister Lansana Kouyaté and maintained under Souaré.

Economy

Guinea has abundant natural resources, including 30 percent of the world’s known bauxite reserves, along with diamonds, gold, and other metals. The country also has great potential for hydroelectric power. While bauxite is currently the major exports product, the Guinean government encourages the broadening of the mining sector through adding higher value refining capacity for its traditional bauxite exports as well as through developing the country ‘s large iron ore resources. Large foreign investors are currently investing or exploring to invest in these areas.

Apart from the mining industry, the country’s industries are mainly based in the processing of agricultural inputs, including a plant for beer, juices, soft drinks, and tobacco processing. The rural population represents 64 percent of the poor and 80 percent of the population. Women are the mainstay of subsistence farming, accounting for 80 percent of food crop production. The government encourages a free market economy and is determined to promote foreign investment.

Although Guinea has always preserved internal peace since its independence, conflicts in neighboring countries have had an adverse impact on the economic performance. They caused unplanned defense and security expenditures, and social costs to accommodate the inflow of refugees. In combination with falling terms of trade, which persisted until early this decade, such events undermined the fiscal balance, compounded by an inefficient tax and customs administration and a weak monetary policy implementation. Poverty has increased to 53 percent since the last household survey of 2002, which concluded a poverty rate of 49 percent.

A second generation Poverty Reduction Strategy Paper (PRSP) was launched in August 2007. An Annual Progress Report has been issued in fall 2008 confirming the difficult context of the first year of implementation. .A three-year PRGF arrangement for Guinea was approved by the IMF Executive Board on December 21, 2007 following successful economic stabilization and structural measures. Satisfactory first review under PRGF arrangements were completed on July 28, 2008. A second review of the PRGF could not be completed because of the military takeover following the death of President Conté on December 22 nd, 2008, delaying also reaching the HIPC Completion Point.

The new Government wishes to continue implementation of the PRGF arrangement. The decline of international commodity prices, especially for aluminum, and the difficulty to arrange financing for large projects in a high risk environment, have undermined mining output, mining revenues and the pace of foreign direct investments. The resulting worsening of economic conditions in Guinea and continuous high debt payment obligations at an unsustainable level, are likely to undermine the poverty reduction aimed at in the PRSP and require swift action by the government to facilitate external support.

Politics

Since the fall of Sekou Touré’s socialist regime, Guinea has undergone substantial political liberalization, enshrined in the Constitution approved by referendum in December 1990, and which paved the way for a multi-party system in 1994 and legislative elections in 1995.

However, the subsequent imprisonment of Alpha Condé, one of the main opposition leaders, was perceived as a reversal of this trend and, although he was later released from prison, both foreign observers and national opposition groups continue to claim that the democratization process remains flawed. All opposition parties except one boycotted the July 2002 legislative elections to express their dissatisfaction with the conduct of the elections. Guinea’s bilateral partners also voiced their concerns with regard to the referendum and parliamentary elections, touching mainly on the mandate and independence of the electoral committee, the neutrality of the public service, and the access of political parties to the media. The 2005 local elections were set to be having been an important test for improving the framework for the next national elections, now foreseen for late 2008.

Severe electricity and water shortages in the capital and major cities, compounded by an increase in fuel, food (mainly rice), and other prices led to civil unrest in mid-2004. The continuous difficulties to contain inflation in 2005 and 2006 eroded the real value of income and contributed to two major strikes in early March and July 2006, which ended peacefully based on a negotiated agreement on wage increases and other government concessions.

While most refugees from Sierra Leone and Liberia have returned home (many who came to Guinea remained) and the peace agreement reached in Côte d’Ivoire in 2007 has stopped the inflow of refugees, the ongoing instability in Côte d’Ivoire is fueling a fresh influx of refugees and adding to Guinea’s security challenges. There is close collaboration among the presidents of Guinea, Côte d’Ivoire, Liberia, and Sierra Leone to review security and cooperation matters in the framework of the Mano River Convention.

In December 2004, Mr. Cellou Dalein Diallo was appointed prime minister. His government was viewed as a major attempt to overcome the country’s difficult situation. Indeed, Mr. Diallo took on a number of initiatives aiming at: (i) resuming the political dialogue between the authorities and the opposition, thus lightening the political climate; (ii) restoring fiscal discipline and financial orthodoxy, as well as reinforcing governance; and (iii) establishing a candid social dialogue with unions and other civil society members.

Mr. Diallo was relieved of his responsibilities as prime minister early April, 2006. From that time to early January 2007, the government was coordinated directly from the president’s office. It claimed to continue the reform policies. Then due to the poor living conditions of the population the country went though two major strikes that lead to the nomination of a consensual Prime minister in March 2007. In May 2008, the Prime Minister of consensus was sacked and replaced by Dr. Souaré a former Mining and Education Minister under past President Conté governments. Although the sacking of PM Kouyaté was a breach of the 2007 Agreement between Trade Unions, Civil Society Organizations, President Conté and political parties, the new PM was widely accepted on the conditions that he sticks to the reforms initiated since March 2007.

The legislative elections were initially planned for June 2007 but were subsequently postponed for lack of adequate preparation and resources. As a result, the mandate of the Parliament which was due to expire the same month was consequently extended till December 31, 2007, while legislative elections were rescheduled for November 2007. As that date approached, the elections were once again rescheduled for November 2008. During the summer of that year, the elections were again postponed till March 2009. Meanwhile, no legal action was considered to extend the mandate of the National Assembly to be aligned with the new date of the elections. Finally, the President passed away on December 22, 2008 and the Constitution was suspended and the Parliament dissolved.

Recently however and under the pressure of the International Community represented by the International Contact Group – Guinea (ICG-G), President Moussa Dadis Camara, agreed to a roadmap proposed by key stakeholders, a coalition of 40 Political Parties, Trade Unions, Civil Society Organizations and Leader of Private Sector companies, This roadmap calls for the establishment of a National Transitional Council (Conseil national de transition, CNT) by the end of April 2009 to act as a National Assembly, legislative election on October 11, 2009 and the first round of the presidential elections on December 13, 2009, followed by the second round on December 27, 2009. Meanwhile, President Dadis has declared that neither himself, members of the CNDD nor the current government will be running for any office. He has also wowed to allow all eligible Guineans to run.

Donor Involvement

Donor assistance to Guinea has focused on investments to reconstruct or expand economic infrastructure (with substantial concentration on rural development) and improve the public administration’s management capacity. France is among the largest bilateral donors. The Bretton Woods institutions have been very supportive of Guinea's economic rehabilitation and reform program since 1986. The EU is also strongly involved in Guinea, especially in the infrastructure and governance sector. Other donors include the African Development Bank, UNDP, the Islamic Development Bank, the United States, Germany and Japan. Spain is considering joining the donor community in Guinea.

NGOs play an important role in project implementation in Guinea and help reduce dependency on the public administration. They have played particularly useful roles in the agriculture, education and health sectors, and are key implementing agencies in the ongoing cross-cutting World Bank-funded Village Support Program (FY99) aimed at reducing rural poverty and promoting sustainable rural development.

World Bank

The World Bank now supports a portfolio of eleven projects including three regional projects and totaling about US$224 million in IDA commitments, with US$120 million remaining undisbursed. These projects are concentrated in the following areas: community development, rural infrastructure, education, transport, electricity, Health/HIV/AIDS, water basin management, and rural electrification. In July 2007, the Bank has approved the second phases of both the Village Community Support Project and the Third Urban Project. As the macroeconomic situation and governance improve, the lending options will be enhanced. The Bank is revising its Country Assistance Strategy. The upcoming Interim Strategy Note (early 2009) will cover Bank activities for 2009 and 2010. Given the limited IDA allocation the Bank’s new operations will therefore aim to leverage non-Bank financing and to have a catalytic impact. The team will seek maximum effectiveness in the use of remaining funds in the current portfolio, as well as to maximize trust fund use. Four priorities have been identified around which to build the ISN: (i) to improve mining sector governance through the implementation of a holistic approach, (ii) to help government continue to deliver and if possible improve the current level of basic services, regardless of political ups and downs, (iii) to demonstrate that better management of utilities can improve water and electricity service delivery, and (iv) to prioritize binding constraints on agriculture and propose or begin to implement solutions.

IFC Role in Country Strategy:

• In Guinea, IFC focuses primarily on supporting the mining sector as well as improving access to finance for SMEs and the agribusiness sectors, via financial intermediaries. In the Mining Sector, IFC has a strong pipeline of high profile investments with strategic partners, which projects are at various stages of development and total over US$15 billion. Also, IFC already has a 5% stake in the Simandou Iron Ore Project being developed by Rio Tinto. While IFC’s is willing to support private sector involvement in the infrastructure, mining and agribusiness sector, the current situation surrounding the Rio Tinto concession, will limit IFC’s ability to invest in Guinea in such strategic sectors for the country.
• Also, IFC has a team in Conakry working on developing a linkages program to provide opportunities for SMEs to access contracts for goods and services from the mining sector.
• IFC’s most recent investment in Guinea is a US$35million investment in Simfer, the mining company which operates in Simandou.

As of February 28, 2009, IFC’s committed portfolio in Guinea stands at US$35 million with US$8.4 outstanding.

MIGA Role in Country Strategy :

MIGA’s portfolio in Guinea consists of two projects (issued to investors from Luxembourg, Senegal and Switzerland) in support of the country’s agribusiness and infrastructure (telecommunications) sectors. The outstanding gross exposure from these investments is US$58.8 million.

World Bank Institute (WBI):

WBI has embarked on Strategic Renewal resulting in a focus on four cross-cutting themes that are responsive both to corporate priorities and to strong country demand, including: Fragile and Conflict-affected States, the Global Economic Crisis, Governance, and Climate Change. Three sectoral themes will also feature prominently: Health Systems, Public-Private Partnerships in Infrastructure, and Sustainable Urban Development. Several new business lines will be used to support these themes: structured learning programs; just-in-time practitioner knowledge exchanges (South-South; MIC-OECD); and innovation platforms to identify and incubate innovative ideas, and nurture practitioner-generated, replicable solutions to development challenges. The Institute will extend its reach and connect experts around the globe by partnering with country and regional organizations and practitioner networks and by applying new learning technologies more broadly.

There have been no specific capacity building activities delivered for Guinea in the past few fiscal years. However, participants from Guinea have participated in regional events, particularly in the area of Environment and Natural Resources, Trade, and Education.