Last updated March 2008  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 9.95 million in 2005. 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. The current government in Guinea under the leadership of Prime-Minister Lansana Kouyaté came to power at the end of March 2007. This was the result of after a general strike and popular unrest early in the year 2007 over increasingly deteriorating living conditions for Guinea. Economy Guinea has abundant natural resources, including 50 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 is estimated to have increased to 54 percent since the last household survey of 2002, which concluded a poverty rate of 49 percent. After reaching Decision Point under the enhanced HIPC Debt Initiative in late 2000, the IMF approved in May 2001 an arrangement under the Poverty Reduction Growth Facility (PRGF). A full Poverty Reduction Strategy Paper (PRSP) was endorsed by the executive boards of the Bank and the Fund in July 2002. However, the combination of budgetary pressures linked to the security situation and lax monetary policies undermined price stability, and sent the PGRF off track in December 2002 while also undermining the process towards HIPC Completion Point. Security concerns continued into 2003, a presidential election year, and exacerbated an already weak macroeconomic condition. In early 2004, the government adopted an urgently needed economic recovery program to strengthen fiscal policies, improve revenue mobilization, reduce tax exemptions, and cut public expenditures. While some expenditure cuts were made, they were at the expense of important social expenditures, worsening the overall composition of public spending. Overall, these measures fell short of what was required to reverse the crisis. In late 2004, the reform policies were strengthened and the government restructured under the leadership of the then new Prime Minister Cellou Dalein Diallo. The government sought closer collaboration with its development partners and implemented successfully from April 2005 to March 2006 an IMF Staff Monitored Program (SMP). However, political tensions over the direction of polices led to the dismissal of the government under with Prime Minister Cellou Dalein Diallo in early April 2006. The subsequent government could not solve these tensions either, and in early 2007 a general strike broke out in Guinea, which brought to the fore the degree of dissatisfaction over economic, social and political conditions,. The new government under the leadership of Prime-Minister Lansana Kouyaté, in power since late March 2007, is considered a consensus government bringing together the interests and aspirations of the strike movement and the interest of the political establishment in Guinea. During recent attempts to stabilize the macro economy, restoring the fiscal balance could generally be achieved, albeit often at the expense of poverty reduction expenditures, while monetary policy implementation remained weak. Consequently the year-to-year inflation rate reached about 40 percent at end 2006. Real GDP growth remained sluggish, with around 2 percent and far below the potential of what is needed to reduce poverty. The Guinean Franc had depreciated by about 300 percent at the end of 2006 compared to the rate of early 2005. The new government under Lansana Kouyaté had implemented stringent controls over budget execution, took up reforms at the Central Bank and has elevated the improvement in governance as the key policy concern. Initial fiscal results are encouraging in terms of achieving a balance and in terms of expenditure composition. Monetary policies appear to be in line with the overall economic policy orientation in contrast to earlier periods. The inflation has subsided and runs below 20 percent. The Guinean Franc has appreciated substantially and evolves since August 2007 on a stable path. The government obtained in December 2007 the approval by the IMF Board for a reform program supported by an arrangement under the IMF’s Poverty Reduction and Growth Facility. If followed through, these reforms will help to restore macroeconomic stability, help to conclude the HIPC process, and form the base for sustainable growth and future poverty reduction, while also inviting a closer engagement from its development partners. 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. This government is working today to renew with the donor community, to open the country to investors and restore the economy. The upcoming legislative elections scheduled for November 2008, will be a very important step and test to judge the capacity of this Government to hold free and transparent elections. 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, from which , including three are regional projects and totaling about US$23853 million in (commitments), with US$13747 million remaining to be disbursed... 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 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 at an early stage of revising its Country Assistance Strategy which is likely to focus on support to the Government for the implementation of further measures to improve economic governances, urgent investments in water and electricity, and capacity building for better governance of the mining sector and improved use of mining revenue resources. . IFC IFC currently has a small portfolio of investments totaling about $4.6 million. The Corporation’s activities in Guinea are covered from Accra, Ghana, where IFC’s country manager is based. The focus of IFC’s activities in Guinea has been the mining sector, where IFC has been working with the World Bank to assist the government in addressing the key governance constraints plaguing the sector. During the past year, the Government of Guinea has made credible initiatives to improve governance in the mining sector, specifically on its implementation of the Extractive Industries Transparency Initiative (EITI), as well as reaching agreement with sponsors of key mining concession contracts. The government, with the support of the World Bank Mining Policy Team, will continue to work to address issues of governance and transparency to allow IFC to provide financial support to various projects under development in the country. On April 12, 2006, IFC, after an eight-year absence, has approved its first investment project in Guinea: “the acquisition of a 5 percent stake in Simfer S.A., a locally incorporated subsidiary for Rio Tinto’s Simandou iron ore project in eastern Guinea.” IFC’s involvement in the project will support Rio Tinto and the Guinean government in conducting the feasibility studies, environmental and social studies, and ore transportation studies for the development of the project, which will contribute significantly to the country's economic development by creating jobs, improving infrastructure, increasing foreign exchange earnings, and diversifying the mining sector. MIGA Exposure. 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 $68.8 million. In its most recent project, MIGA issued guarantees (against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract) to Sonatel of Senegal for its equity investment in Orange Guinée S.A. The project involves the operations and maintenance of a GSM cellular network. It is one of the largest foreign investments made in Guinea and offers a number of benefits, among which are government revenues in the form of taxes, license and monthly and fees and direct employment and training to about 400 Guineans. This project is aligned with the World Bank Group’s support to improving Guinea’s investment climate. Overall growth and economic diversification in the country have been hampered by a weak investment climate, including weaknesses in the telecommunications sector. MIGA’s participation in this project supports several agency priorities including South-South investment, investment in Africa, and investment in the infrastructure sector. Pipeline. MIGA does not expect to underwrite any investments in Guinea during the remainder of FY08. WBI Guinea is not a WBI focus country. As a result, the number of Guinean participants in WBI activities has decreased since WBI instituted the “focus country approach” as part of its move from training to capacity building. WBI programs for Guinea have been increasingly delivered via distance learning, using the Bank Office V/C facility in Conakry. In FY05, more than half of the participants were reached through videoconferencing. No face-to-face WBI activity is being delivered in Guinea; the few in which Guineans participate are regional events held outside Guinea. Education and Gender Mainstreaming attracted the largest numbers of Guinean participants in FY05. Contacts Ishac Diwan, Country Director
World Bank
Address: 69 Dr. Isert Road
North Ridge Residential Area
Accra, Ghana
(postal address: P.O. Box M. 27)
Tel.: (233-21) 21 41 00
fax.: (233-21) 227887
Email: Idiwan@worldbank.org
Web: http://www.wordlbank.org/gh Siaka Bakayoko, Country Manager for Guinea
Address: Banque Mondiale
Immeuble de l’Archevéché
Face Baie des Anges
Conakry, Guinea
Mailing Address: Banque Mondiale, B.P. 1420
Conakry, Guinea
Tel: (224) 415 059
Fax: (224) 415 094
Email Sbakayoko@worldbank.org Michelle Keane, Acting Country Program Coordinator for Guinea
World Bank
1818 H Street, N.W., MSN J8-806
Washington, DC 20433
Tel: 202 473 2534
Fax: 202 473 5139
Email: Mkeane1@worldbank.org Wilfried Engelke, Sr. Country Economist
World Bank
1818 H Street, N.W. MSN J9-903
Washington, DC 20433
Tel: 202 473 2062
Fax: 202 614 1302
Email: Wengelke@worldbank.org Asmaou Diallo-Bah, Sr. Country Program Assistant for Guinea
World Bank
1818 H Street, N.W.MSN J8-806
Washington, DC 20433
Tel: 202 473 6046
Fax: 202 473 5139
Email: Adiallobah@worldbank.org |
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