Investment Incentives

The Investment Code provides preferential tax treatment for investments meeting certain criteria (See Screening of FDI). Some mining companies currently benefit from preferential tax treatment. Other exemptions can be agreed to during contract negotiations with the government. The government’s priority investments categories are: promotion of small- and medium-sized Guinean businesses, development of non-traditional exports, processing of local natural resources and local raw materials, and establishment of activities in economically less developed regions. Priority activities include agricultural promotion, especially of food, and rural development; commercial farming involving processing and packaging; livestock, especially when coupled with veterinary services; fisheries; fertilizer production, chemical or mechanical preparation and processing industries for vegetable, animal, or mineral products; health and education-related businesses; tourism facilities and hotel operations; socially beneficial real estate development; and investment banks or any credit institutions settled outside specified population centers. Detailed information on each of these opportunities is available at http://invest.gov.gn 

Foreign Trade Zones/Free Ports/Trade Facilitation

Guinea currently has no foreign trade zones or free ports. In 2017, a presidential decree created a special economic zone in the Boke corridor of western Guinea.

Performance and Data Localization Requirements

Under the 2011 Mining Code, mining companies are required to have Guinean citizens as a certain percentage of their staff , to eventually transition to a Guinean country director, and to award a certain percentage of contracts to Guinean-owned firms. The percentage varies based on employment category and the chronological phase of the project. The Mining Code requires that 20 percent of senior managers be Guinean; however, the Code does not define what constitutes senior management. The Code also aims to liberalize mining development and promote investment. In 2013, the Code called for the creation of a Mining Promotion and Development Center, a One Stop Shop for mining administrative processes for investors. The Development Center opened in May 2016. Guinea has no forced localization policy related to the use of domestic content in goods or technology, and there are no requirements for foreign IT providers to turn over source code or provide access to surveillance or to store data within Guinea.

In 2019, the government launched an e-visa platform allowing for online visa applications at http://www.paf.gov.gn . Fees vary depending on citizenship.

Capital Markets and Portfolio Investment

Commercial credit for private and public enterprises is difficult and expensive to obtain in Guinea. The FY 2020 Millennium Challenge Corporation score for Access to Credit in Guinea dropped from a 23 percent score in 2019, to 21 percent, and was at 50 percent in FY 2017.

The legislature passed a Build, Operate, and Transfer (BOT) convention law in 1998 (changed to the Public-Private Partnership, or PPP, in 2018), which provides rules and guidelines for PPP and related infrastructure development projects. The law lays out the obligations and responsibilities of the government and investors and stipulates the guarantees provided by the government for such projects. The Investment Code allows income derived from investment in Guinea, the proceeds of liquidating that investment, and the compensation paid in the event of nationalization, to be transferred to any country in convertible currency. The legal and regulatory procedures, based on French civil law, are not always applied uniformly or transparently.

Individuals or legal entities making foreign investments in Guinea are guaranteed the freedom to transfer the original foreign capital, profits resulting from investment, capital gains on disposal of investment, and fair compensation paid in the case of nationalization or expropriation of the investment to any country of their choice. The Guinean franc is subject to a managed floating exchange rate. The few commercial banks in Guinea are dependent on the BCRG for foreign exchange liquidity, making large transfers of foreign currency difficult.

Laws governing takeovers, mergers, acquisitions, and cross-shareholding are limited to rules for documenting financial transactions and filing any change of status documents with the economic register. There are no laws or regulations that specifically authorize private firms to adopt articles of incorporation that limit or prohibit investment.

Money and Banking System

Guinea’s financial system is small and dominated by the banking sector. It comprises 16 active banks, 13 insurance companies and 26 microfinance institutions. Guinea’s banking sector is overseen by the BCRG, which also serves as the agent of the government treasury for overseeing banking and credit operations in Guinea and abroad. The BCRG manages foreign exchange reserves on behalf of the State. The Office of Technical Assistance of the Department of the Treasury assesses that Guinea does not properly manage debt and that its treasury is too involved in the process, although improvements made in 2017-2018 point to a better future. Further information on the BCRG can be found in French at http://www.bcrg-guinee.org .

Due to the difficulty of accessing funding from commercial banks, small commercial and agricultural enterprises have increasingly turned to microfinance, which has been growing rapidly with a net increase in deposits and loans. The quality of products in the microfinance sector remains mediocre, with bad debt accounting for five percent of loans with approximately 17 percent of gross loans outstanding.

Guinea plans to broaden the country’s SME base through investment climate reform, improved access to finance, and the establishment of SME growth corridors. Severely limited access to finance (especially for SMEs), inadequate infrastructure, deficiencies in logistics and trade facilitation, corruption and the diminished capacity of the government, inflation, and poor education of the workforce has seriously undermined investor confidence in Guinean institutions. Guinea’s weak enabling environment for business, its history of poor governance, erratic policy, and inconsistent regulatory enforcement exacerbate the country’s poor reputation as an investment destination. As a result, private participation in the economy remains low and firms’ productivity measured by value added is one of the lowest in Africa. Firms’ links with the financial sector are weak: only 3.9 percent of firms surveyed in the 2016 World Bank Enterprise survey had a bank loan. http://www.enterprisesurveys.org/data/exploreeconomies/2016/guinea#finance 

Credit to the private sector is low, at around 8.9 percent of GDP in 2018, a decrease from 14 percent in 2015. Commercial banks are reluctant to extend loans due to the lack of credit history reporting for potential borrowers. The Guinean government, through the central bank, is in the process of establishing a credit information bureau to overcome this asymmetry of credit information.

Guinea is a cash-based society driven by trade, agriculture, and the informal sector, which all function outside the banking sector. The banking sector is highly concentrated in Conakry, and technologically behind. Banks in Guinea tend to favor short-term lending at high interest rates. In collaboration with the U.S. Treasury’s Office of Technical Assistance, the central bank is implementing a bank deposit insurance scheme. The deposit coverage limit has not been set yet, but the central bank began to collect premiums from commercial banks in 2019.

While the microfinance sector grew strongly from a small base, microfinance institutions were hit hard during the Ebola crisis; they are not profitable and need capacity and technology upgrades. Furthermore, many of these microfinance institutions struggle to meet the higher minimum capital requirements imposed by the central bank since 2019. This heightened financial hurdle will likely lead to a consolidation of the microfinance sector. Finally, the efficiency and the use of payment services by all potential users needs to be improved, with an emphasis on greater financial inclusion.

The penetration of digital cellphone fund transfers is increasing. Two foreign e-money (or mobile banking) institutions lead the effort to digitize payments and improve access to financial services in the underserved and rural segments of the population. However, the vast majority of operations processed by these e-money institutions remain cash-in cash-out transactions within their own network. In an effort to modernize payment methods, the government is implementing a national switch, a nationwide platform that will interface all electronic payment systems and facilitate payment processing between service providers.

Generally, there are no restrictions on foreigners’ ability to establish bank accounts in Guinea. EcoBank is the preferred bank for most U.S. dealings with Foreign Account Tax Compliant Act (FACTA) reporting requirements. In collaboration with the U.S. Treasury’s Office of Technical Assistance, the central bank is implementing a bank deposit insurance scheme. The deposit coverage limit has not been set yet, but the central bank began to collect premiums from commercial banks in 2019.

In collaboration with the U.S. Treasury’s Office of Technical Assistance, the central bank is implementing a bank deposit insurance scheme. The deposit coverage limit has not been set yet, but the central bank began to collect premiums from commercial banks in 2019.

Foreign Exchange and Remittances

Foreign Exchange

There are no restrictions or limitations placed on foreign investors for converting, transferring, or repatriating funds associated with an investment. Although there have been no recent changes to remittance policies, it is difficult to obtain foreign exchange in Guinea. Guinea has experienced significantly weakened liquidity levels over the last several years due to government mismanagement, populist policies, corruption, and a decrease in mining revenue due to lower global commodity prices. Commercial banks’ liquidity levels are affected by tight reserve requirements (22 percent of deposits) that are in line with IMF performance criteria.

Until December 2015, the exchange rate was managed by the BCRG and held to a four percent variance from the unofficial rate. The exchange rate has remained relatively stable since 2013 and has only recently depreciated versus the U.S. dollar. Between 2013 and 2015, the Guinean franc maintained a value of between 7,000 and 7,500 GNF/USD. In late 2015, the unofficial rate reached a value 10 percent higher than the official rate, during which Guinea had nearly exhausted its foreign currency reserves. The IMF recommended the BCRG float the GNF and the official rate jumped to just over 9,000 GNF/USD by March 2016. The Annual Report on Exchange Arrangements and Exchange Restrictions, published by the IMF, describes the foreign exchange regimes of every IMF member. https://www.imf.org/en/Publications/Annual-Report-on-Exchange-Arrangements-and-Exchange-Restrictions/Issues/2017/01/25/Annual-Report-on-Exchange-Arrangements-and-Exchange-Restrictions-2016-43741 

Remittance Policies

Guinea has no limitations on the conversion and transfer of money or the repatriation of capital and earnings, including branch profits, dividends, interest, royalties, or management or technical service fees. The BCRG needs to be informed of any major transfers, and the wait time to remit investment returns is less than 60 days. Guinea is a member of the Inter-Governmental Action Group against Money Laundering in West Africa, but is not included on the Financial Action Task Force. Guinea does not have a country report in the 2020 International Narcotics Control Strategy Report.

There are no limits on the conversion of U.S. dollars to Guinean francs. The official exchange rate retains the capacity for volatility, but is currently holding at approximately 9,400 GNF/USD (as of April 2020). A weakened economy largely resulting from low commodity prices caused the GNF to depreciate from an average of 7,000 GNF/USD in early 2015. Since mid-2016, the official exchange rate has been keeping pace with the rate in the parallel black market.

Sovereign Wealth Funds

Guinea does not have a sovereign wealth fund.

Guinea has a young population and a high unemployment rate. Potential employees often lack specialized skills. The country has a poor educational system and lacks professionals in all sectors of the economy. Guinea generally lacks the specialized skills needed for large-scale projects of any kind.

According to a 2019 World Bank report on “Employment, productivity and inclusion of youth”, in 2017 Guinea’s economy was based on services (49 percent of GDP), mining and industry (37 percent) and agriculture (10 percent). The tendencies show that employment in Guinea is similar to other countries in the region, with a high level of employment in the informal sector. According to the 2018 World Bank Development Indicators, approximately 65 percent of Guineans above 15 years old, (56 percent males and 44 percent females) were employed in the formal or informal sectors. Of those employed, 52 percent were working in agricultural sector, 34 percent in commerce, and 14 percent in industry and manufacturing.

Guinea’s National Assembly adopted a new labor code in February 2014 which protects the rights of employees and is enforced by the Ministry of Technical Education, Vocational Training, Employment and Labor. The Labor Code sets forth guidelines in various sectors, the most stringent being the mining sector. Guidelines cover wages, holidays, work schedules, overtime pay, vacation, and sick leave. The Labor Code also outlaws all discrimination in hiring, including on the basis of sex, disability, and ethnicity. It also prohibits all forms of workplace harassment, including sexual harassment. However, the law does not provide antidiscrimination protections for persons based on sexual orientation and/or gender identity.

Although the law provides for the rights of workers to organize and join independent unions, engage in strikes, and bargain collectively, the law also places restrictions on the free exercise of these rights. The Labor Code requires unions to obtain the support of 20 percent of the workers in a company, region, or trade that the union claims to represent. The code mandates that unions provide ten days’ notice to the labor ministry before striking, but the code does allow work slowdowns. Strikes are only permitted for professional claims. The Labor Code does not apply to government workers or members of the armed forces. While the Labor Code protects union officials from anti-union discrimination, it does not extend that same protection to other workers.

The law prohibits child labor in the formal sector and sets forth penalties of three to ten years imprisonment and confiscation of resulting profits. The law does not protect children in the informal sector. The minimum age for employment is 16. Exceptions allow children to work at age twelve as apprentices for light work in such sectors as domestic service and agriculture, and at 14 for other work. A new child code was adopted at the National Assembly in December 2019 and is waiting enactment by the President. The new child code provides more severe sentences for violations related to child labor.

The Labor Code allows the government to set a minimum monthly wage through the Consultative Commission for Labor and Social Laws. The minimum wage for all sectors was established in 2013 at 440,000 GNF (approximately USD50). There is no known official poverty income level established by the government.

The law mandates that regular work should not exceed ten-hour days or 48-hour weeks, and it mandates a period of at least 24 consecutive hours of rest each week, usually on Sunday. Every salaried worker has the legal right to an annual paid vacation, accumulated at the rate of at least two workdays per month of work. There also are provisions in the law for overtime and night wages, which are a fixed percentage of the regular wage. The law stipulates a maximum of 100 hours of compulsory overtime a year.

The law contains general provisions regarding occupational safety and health, but the government has not established a set of practical workplace health and safety standards. Moreover, it has not issued any orders laying out the specific safety requirements for certain occupations or for certain methods of work called for in the Labor Code. All workers, foreign and migrant included, have the right to refuse to work in unsafe conditions without penalty.

Authorities rarely monitored work practices or enforced the workweek standards and the overtime rules. Teachers’ wages are low, and teachers sometimes went for months without pay. Salary arrears were not paid, and some teachers lived in abject poverty. From 2016-2018, teachers conducted regular strikes and as a result, and were promised a 40 percent increase in pay. Initially they received only ten percent, but in March 2018, the government began to pay the remaining 30 percent. In February 2019, the teachers union accepted the government proposal at the time and returned to work. In January 2020, the teachers started an indefinite strike demanding higher wages and the re-running of a census of currently employed teachers. As of end of March 2020, the teachers’ strike was put on hold due to the COVID-19 pandemic.

Despite legal protection against working in unsafe conditions, many workers feared retaliation and did not exercise their right to refuse to work under unsafe conditions. Accidents in unsafe working conditions remain common. The government banned artisanal mining during the rainy season to prevent deaths from mudslides, but the practice continues.

Pursuant to the Labor Code, any person is considered a worker, regardless of gender or nationality, who is engaged in any occupational activity in return for remuneration, under the direction and authority of another individual or entity, whether public or private, secular or religious. In accordance with this code, forced or compulsory labor means any work or services extracted from an individual under threat of a penalty and for which the individual concerned has not offered himself willingly.

A contract of employment is a contract under which a person agrees to be at the disposal and under the direction of another person in return for remuneration. The contract may be agreed upon for an indefinite or a fixed term and may only be agreed upon by individuals of at least 16 years of age, although minors under the age of 16 may be contracted only with the authorization of the minor’s parent or guardian. An unjustified dismissal provides the employee the right to receive compensation from the employer in an amount equal to at least six months’ salary with the last gross wage paid to the employee being used as the basis for calculating the compensation due.

The Investment Code obliges new companies to prioritize hiring local employees and provide capacity training and promotion opportunities for Guineans.

Table 3: Sources and Destination of FDI
Data not available.

Table 4: Sources of Portfolio Investment
Data not available.