The Economy of Guinea

The country of Guinea is among the poorest countries in the world. However, Guinea is richly endowed with minerals, possessing an estimated one-third of the world’s proven reserves of bauxite, gold and diamonds, as well as smaller layers of limestone, construction sand, shingle, gravel, fire clays, and undetermined quantities of uranium. The country also has considerable potential for growth in the agricultural and fishing sectors. The agricultural sector employs 80% of the work force. The mining sector accounted for about 75% of exports in 1998. Land, water, and climatic conditions provide opportunities for large-scale irrigated farming and agro industry.

The government of Guinea adopted policies in the 1990s 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. Corruption and favoritism, lack of long-term political stability, and lack of a transparent budgeting process continue to dampen foreign investor in major projects in Guinea. The government also has eliminated restrictions on agricultural enterprise and foreign trade, liquidated many parastatals, increased spending on education, and vastly downsized the civil service. Even though a new road connecting Guinea and Mali is established in 2005, most major roadways connecting the country’s trade centers remain in poor condition, slowing the delivery of goods to local markets. The electricity and water shortages of the country are frequent and continuous, and many businesses are forced to use expensive power generators and fuel to stay open.

Involved in the development of Guinea’s economy are the IMF and the World Bank, and many bilateral donor nations, including 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 2%, as well as increasing government revenues while restraining official expenditures.