Poverty profile The Guinea-Bissau poverty assessment found that the incidence and pervasiveness of poverty in Guinea-Bissau are extremely high, even when compared to other Sub-Saharan African counties. Based on a 1991 household expenditure survey, 26.2 percent of the country's total population are classified as living in extreme poverty and another 22.5 percent are classified as being moderately poor. Poverty is also an overwhelmingly rural problem, with 84.5 percent of the poor living in the three regions of Rural Norte, Rural Leste, and Rural Sul. Of the extreme poor, 84 percent have no formal education, while only 14 percent have attended or completed primary school.
Incentive and regulatory framework The government has begun but will need to persevere in the process of removing the existing distortions and rigidities in the macroeconomic and regulatory framework, which not only impede the potential for sustained growth, but also diminish the prospects of the poor participating in that potential growth. Efforts to assist the poor must entail bringing down the high "transaction costs" that limit economic opportunities for the poor in the traditional and informal sectors and that make economic rent-seeking possible in the country's liberalizing market economy.
Public expenditures The government has begun to make only modest improvements in increasing public expenditures for those sectors from which the poor could benefit the most directly, notably health and education. As in other African countries, public expenditures tend to have an urban bias and to be skewed towards those who are better off. Direct targeting of the poor has not been attempted to any appreciable degree.
Safety net As part of its early post-colonial legacy, the government put in place a pension scheme for military veterans and one for retired civil servants. Neither scheme has been able to keep pace with inflation or with the effects of the currency devaluation. Community- and family-based social safety net systems remain the most important means by which the poor and vulnerable cope with economic and social crises.
Poverty strategy The poverty assessment proposes that, for the foreseeable future, the government must pursue a combination of macro-economic and sectoral policies that will achieve sustainable growth as this will reduce the government's budgetary imbalances, while at the same time expanding the process of economic participation by the poor. While attention has focused on the serious consequences of budgetary shortfalls, the poverty reduction aspects of macro policy have not been given as much attention. This involves increasing the poor's access to income-generating assets and employment opportunities based on their enhanced physical and human productivity. Alongside the economic framework, the government has yet to meet the challenge posed by the country's low levels of human resource development. In every case, Guinea-Bissau falls below the social indicators cited for low-income countries in the region and for Sub-Saharan Africa as a whole. In addition to reallocating funds within the central budget to health and education, the government should review the whole problem of under-funded recurrent costs. There is a temptation in Guinea-Bissau to accept foreign funds--without considering the recurrent cost implications--for buildings, equipment, and service systems that cannot be maintained. The government should consider further mechanisms for reducing costs, such as promoting cost-sharing, encouraging people's participation in service management and maintenance, expanding outreach, and raising the efficiency of social services.
Statistical system The assessment does not specifically address the question of Guinea-Bissau's statistical system; however, it should be noted that the government has now created the basis for monitoring poverty through household expenditure surveys and other survey instruments. These efforts are nonetheless heavily dependent upon donor support, and efforts are required to standardize and rationalize the kinds of basic data the government needs to meet its overall statistical requirements.
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