An official website of the United States Government Here's how you know

Official websites use .gov

A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS

A lock ( ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

Guinea

Executive Summary

On September 5, 2021 Colonel Mamadi Doumbouya and Guinean military special forces seized power and detained former President Alpha Conde through a coup d’état.  COL Doumbouya declared himself Guinea’s head of state, dissolved the government and National Assembly and suspended the constitution.  Guinea is currently governed by the National Committee for Reunification and Development (CNRD), which is led by COL Doumbouya and comprised primarily of military officials.  On September 27, 2021 COL Doumbouya released the Transitional Charter which supersedes the constitution until a new Constitution is promulgated; Guinea’s penal and civil codes remains in force.  On October 1, 2021 the Supreme Court Justice installed COL Doumbouya as Head of State, Transition President, CNRD President, and Commander-in-Chief of Security Forces.  On January 22, 2022 the National Transition Council, the transition government’s legislative body, was installed but no timeline for future elections or return to civilian rule was provided as of April 2022.

Guinea enjoys sizeable endowments of natural resources, energy opportunities, and arable land.

These seeming advantages have not yet resulted in economic development, and may in fact hinder it, in an example of the famous “resource curse.”  Guinea’s economy has been based on extraction of primary resources, from at least the French colonial era and the slave trade before it.  This extractive paradigm and legacy of underdevelopment, combined with low levels of education, and longstanding patterns of nondemocratic governance dating back to the colonial era, limit the potential for broad-based economic growth based on value addition, innovation, and productive as opposed to extractive or rent-seeking investment.  At the same time, a sense of national identity and unity, and both formal and informal practices of solidarity that tend towards wealth redistribution may prove to be assets for the country’s development, if the government and the private sector can harness them productively.

The 2021 coup d’etat, persistent corruption, and fiscal mismanagement make the near-term economic prognosis for Guinea mixed.  In this context, Guinea has looked to foreign investment to bolster tax and export revenues and to support infrastructure projects and overall economic growth.  China, Guinea’s largest trading partner, dramatically increased its role in years leading up to the coup with a variety of infrastructure investments.  Investors should proceed with caution, understanding that the potential for profits comes with significant political risk.  Weak institutions mean that investors may secure lucrative concessions from the government in the short term, but these could be open to renegotiation or rescission in the long term.  Prior to the coup, former President Conde’s government implemented reforms to improve various aspects of the investment climate.  For example, the former government reduced property transfers fees from 2 to 1.2 percent of property value.  The time required to obtain a construction permit was reduced and import procedures were improved.  Since 2019, Guinea has implemented a permanent taxpayer identification number system that requires all payments to be made by “Real Time Gross System” (RTGS) immediate transfers.

Since the coup d’etat, the transition government has spoken extensively about fighting corruption and increasing transparency.  Transition President COL Doumbouya created the Court to Repress Economic and Financial Crimes (CRIEF) to handle cases involving embezzlement, corruption, and misuse of public funds over one billion GNF (approximately $110,000) in December 2021.  As of April 2022, the court has focused on collecting evidence for corruption cases against businesses tied to and officials that served in former President Conde’s government.

Endowed with abundant mineral resources, Guinea has the raw materials to be an economic leader in the extractives industry.  Guinea is home to a third of the world’s reserves of bauxite (aluminum ore), and bauxite accounts for over half of Guinea’s present exports.  Historically, most of the country’s bauxite was exported by Compagnie des Bauxites de Guinee (CBG) (Bauxite Company of Guinea) [a joint venture between the Government of Guinea, U.S.-based Alcoa, the Anglo-Australian firm Rio Tinto, and Dadco Investments of the Channel Islands], via a designated port in Kamsar.  While CBG still retains the largest reserves, the Societe Miniere de Boke (SMB) (Mineral Company of Boke), a Sino-Singaporean conglomerate, recently surpassed CBG as the largest single producer of bauxite.  New investment by SMB and CBG, in addition to new market entrants, are expected to significantly increase Guinea’s bauxite output over the next five to ten years.  Guinea also possesses over four billion tons of untapped high-grade iron ore, significant gold and diamond reserves, undetermined amounts of uranium, as well as prospective offshore oil reserves.  Artisanal and medium-sized industrial gold mining in the Siguiri region is a significant contributor to the Guinean economy, but some suspect much of the gold leaves the country clandestinely, without generating any government revenue.  In the long term, both former President Conde’s government and the transition government project that Guinea’s greatest potential economic driver will be the Simandou iron ore project, which is slated to be the largest greenfield project ever developed in Africa.  The transition government reached an ambitious agreement with Rio Tinto and the SMB-Winning Consortium (WCS) in March 2022 to develop the rail and port infrastructure to bring ore from Simandou to market by early 2025.  In 2017, the governments of Guinea and China signed a USD 20 billion framework agreement giving Guinea potentially USD 1 billion per year in infrastructure projects in exchange for increased access to mineral wealth.  In 2018, the Chinese Group TBEA invested USD 2.89 billion in the bauxite and alumina sector.  The project includes development of a bauxite mine, the construction of a port, railroad, and power plant to facilitate the supply chain.  The project is estimated to generate USD 406 million in annual revenue for Guinea.

The amended 2013 Mining Code stipulates that raw ore producers in Guinea begin processing raw ore into refined or processed products within a few years of development, depending on the terms of the individual investment and the mandate with the Ministry of Mines and Geology.  In April 2022, the transition government called upon bauxite concessionaires to solidify refining plans by May 2022.  U.S.-based companies are in varying stages of proposing LNG projects to furnish this upcoming tremendous energy need.  China is reportedly offering coal-based solutions to meet the potential demand.

Guinea’s abundant rainfall and natural geography bode well for hydroelectric and renewable energy production. The largest energy sector investment in Guinea is the 450MW Souapiti dam project (valued at USD 2.1 billion), begun in late 2015 with Chinese investment, which likewise completed the 240MW Kaleta Dam (valued at USD 526 million) in May 2015.  Kaleta more than doubled Guinea’s electricity supply, and for the first-time furnished Conakry with more reliable, albeit seasonal, electricity (May-November). Souapiti began producing electricity in 2021. A third hydroelectric dam on the same river, dubbed Amaria, began construction in January 2019 and is expected to be operational in 2024. The Chinese mining firm TBEA is providing financing for the Amaria power plant (300 MW, USD 1.2 billion investment).  If corresponding distribution infrastructure is built, and pricing enables it, these projects could make Guinea an energy exporter in West Africa. In addition, U.S.-based Endeavor began operating Project Te in November 2020, a 50MW thermal plant on the outskirts of the capital.  Former President Conde’s government also signed an emergency agreement in December 2019 to buy power from the 105 MW Turkish Karpowership barge anchored off Conakry’s coast.  Former President Conde’s government emphasized investment in solar and other energy sources to compensate for hydroelectric deficits during Guinea’s dry season.  Toward that end, former President Conde’s government entered into several Memoranda of Understanding with the private sector to develop solar projects.

Agriculture and fisheries hold other areas of opportunity and growth in Guinea.  Already an exporter of fruits, vegetables, and palm oil to its immediate neighbors, Guinea is climatically well suited for large-scale agricultural production and export.  However, the sector has suffered from decades of neglect and mismanagement, lack of transportation infrastructure, and lack of electricity and a reliable cold chain.  Guinea is an importer of rice, its primary staple crop.

Guinea’s macroeconomic and financial situation is weak.  The aftermath of the 2014-2016 Ebola crisis left former President Conde’s government with few financial resources to invest in social services and infrastructure.  Lower natural resource revenues stemming from a drop in world commodities prices and ill-advised government loans strained an already tight budget.  In 2018 the government borrowed excessively from the Central Bank (BCRG), which threatened the first review of Guinea’s current International Monetary Fund (IMF) program.  Lower than forecast natural resource revenues in 2019 due to heavy rains and political violence threatened the fourth review, which Guinea passed in April 2020.  In December 2020, the Executive Board of the IMF completed its fifth and sixth reviews of Guinea’s economic performance. The completion of these reviews enabled the immediate disbursement of USD 49.47 million – bringing total disbursements under Guinea’s third extended credit facility to USD 66.60 million before the program’s end.

A shortage of credit persists, particularly for small- and medium-sized enterprises, and the government is increasingly looking to international investment to increase growth, provide jobs, and kick-start the economy. On March 13, 2020, Guinea confirmed its first Covid-19 case. The pandemic negatively impacted the well-being of households, particularly those working in the informal sector, who have limited access to savings and financial services.  Guinea experienced an Ebola epidemic from February to June 2021.  Despite its able handling of the epidemic, which kept deaths to a minimum, cross-border trade with Liberia, Ivory Coast, and Sierra Leone was reduced temporarily during the outbreak.  Violence surrounding the March 2020 legislative election and constitutional referendum, as well as the October 2020 presidential election, all negatively impacted Guinea’s growth prospects.  The transition government has worked to maintain economic stability since the 2021 coup d’etat, though without a timeline for elections, the uncertain political situation further limits potential growth.

Prior to the coup, Guinea passed and implemented an anti-corruption law, updated its Investment Code, and renewed efforts to attract international investors, including a new investment promotion website put in place in 2016 by Guinea’s investment promotion agency to increase transparency and streamline processes for new investors.  However, Guinea’s capacity to enforce its more investor-friendly laws is compromised by a weak and unreliable legal system.  Then President Conde inaugurated the first Trade Court of Guinea on March 20, 2018.  Transition President COL Doumbouya created the Court to Repress Economic and Financial Crimes (CRIEF) to handle cases involving embezzlement, corruption, and misuse of public funds over one billion GNF (approximately $110,000) in December 2021.  As of April 2022, the court has focused on collecting evidence for corruption cases against businesses tied to and officials that served in former President Conde’s government.

To attract foreign investment, the Private Investment Promotion Agency (APIP) and the Ministry of Commerce, Industry, and Small and Medium Enterprises hosted the second annual Guinea Investment Forum (GUIF) in Dubai in February 2022, following the inaugural event in Guinea in February 2021.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 150 of 175 http://www.transparency.org/research/cpi/overview
Global Innovation Index 2021 130 of 132 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2020 $278 million https://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2020 $1,020 https://data.worldbank.org/indicator/NY.GNP.PCAP.CD
Investment Climate Statements
Edit Your Custom Report

01 / Select A Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future