Guinea WT/TPR/S/251 
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  I. ECONOMIC ENVIRONMENT 
(1) MAIN FEATURES OF THE ECONOMY  
1. Guinea is a medium-sized West African country covering an area of around 245,957 km2.  It 
has an abundance of natural resources, including around one third of the world's reserves of bauxite, 
as well as deposits of diamonds, gold and iron among others .  It also has a coastlin e rich in fish, vast 
hydroelectric potential and significant areas suitable for agriculture (Chapter IV). 
2. Guinea has been unable to attract the capita l necessary to exploit its immense potential 
because the country's business environment is hardly  conducive to investment.  The World Bank's 
Doing Business  report for 2011 notes the extreme difficulties associated with pursuing economic 
activities in Guinea, and ranks the country 179th out of 183 economies.  The severe lack of energy 
capacity and finance (even at very high interest  rates), obsolescent transport infrastructure and 
governance problems are all factors undermining th e business climate in Guinea and hampering not 
only the exploitation but also the processing of its resources.  Consequently, such an environment 
does little to foster development of the country's fledgling manufacturing sector (Table I.1). 
3. Foreign investment, scant though it is, has been channelled into mining and quarrying, which 
have expanded considerably  from 18 per cent of GDP in 2005 to 22 per cent in 2009, partly as a result 
of the trend in world prices of mining products in recent years.  In the absence of local processing, 
however, these products are generally exported in their natural state.  The Fria alumina plant, which 
carries out the initial processing of bauxite or e into alumina, is still an exception. 
4. For lack of investment and despite Guinea' s strong points (including its geographical 
advantages), agriculture remains for the most part a subsistence sector and hence a largely informal 
activity using rudimentary cultivation practices, w ith low productivity.  Although it contributes 
around 25 per cent of GDP, the agricultural sector (inc luding livestock, forestry and fishing) is still 
the principal source of employment (56 per cent of the economically active population).  The country's few agricultural exports are unprocessed products. 
5. For the same reasons, performance is well belo w potential in the services sector.  Except for 
telecommunications, whereas in other countries grow th has been considerab le, the performance of 
other services has been poor, especially in the tran sport sector (including in the maritime, financial 
and tourism-related fields). 
6. Overall, in spite of its significant resources Guinea remains a least developed country (LDC) 
with per capita GDP of US$439 in 2008, and a Hu man Development Index which fell from 0.466 in 
2005 to 0.340 in 2010.
1  The poverty rate rose from around 49 pe r cent in 2002 to 54 per cent in 2005, 
and then to 58 per cent in 2010, with unempl oyment estimated at around 11.8 per cent of the 
economically active population (age 15 years and ove r).  The high level of unemployment, combined 
with strong fiscal pressure (around 16.4 per cent of  GDP), and the difficulties involved in creating 
small and medium-sized enterprises (including de lays, constraints, complex procedures, and a 
multiplicity of fees and charges) serve to stimul ate development of the informal sector, which 
employs between 45 per cent and 80 per cent of the economically active population and accounts for 
around half of GDP.2 
                                                      
1 Human Development Reports of 2005 and 2010. 
2 UNDP online information, January 2006.  Vi ewed at:  http://www.g n.undp.org/Docs/presse/ 
012406.htm. WT/TPR/S/251 Trade Policy Review 
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  7. The national currency is the Guinean franc (G F), a managed floating currency with no 
predetermined path since 2005.3  Greater flexibility has been intr oduced into the foreign exchange 
system through the establishment of an inter-bank cu rrency market and a freely determined exchange 
rate. 
8. There are grounds for optimism that the economic situation in Guinea will improve following 
the country's first democratic elections in 2010.  This should go some way to restoring confidence and 
helping attract the foreign investment that is  essential for Guinea to drive its economy forward. 
Table I.1 
Selected macroeconomic  indicators, 2005-2010 
 2005  2006  2007  2008  2009  2010  
Miscellaneous              
Population (millions) 9.2 9.4 9.6 9.8 10.1 n.a. 
Life expectancy at birth (years) 56.2 56.8 57.3 57.8 58.4 n.a. 
Gross school enrolment ratio (%) n.a. n.a. n.a. n.a. n.a. n.a. 
Nominal GDP (GF billion) 10,703.7 15,094.2 17,354.2 20,893.0 23,598.8 26,948.0 
Nominal GDP (US$ million) 2,937.1 2,821.3 4,209.3 3,798.7 4,634.9 4,500.5 
Real GDP (annual variation %) 3.0 2.5 1.8 4.7 4.9 n.a. 
Per capita GDP (at current prices, in US$) 319.2 300.1 438.5 387.6 458.9 n.a. 
Unemployment rate (%) n.a. n.a. n.a. n.a. n.a. n.a. 
Terms of trade (annual variation %) -6.7 10.2 -8.2 -8.5 -3.1 4.0 
Gross official reserves (end of period - US$ million) 53.7 51.0 45.2 137.5 240.2 374.2 
Gross official reserves (months of imports)c 0.5 0.8 0.4 1.0 2.0 3.0 
Medium- and long-term external public debt (US$ million) 3,235.0 3,188.0 3,242.0 2,997.0 2,873.0 n.a. 
Medium- and long-term external public debt (% of GDP) 110.1 113.0 77.0 78.9 62.0 n.a. 
Sectoral breakdown of GDP (% of GDP)              
Agriculture 22.3 21.9 23.4 22.7 22.4 n.a. 
Industries 32.1 36.7 36.5 38.0 37.0 n.a. 
 Mining and quarrying 17.4 21.9 19.5 21.4 20.2 n.a. 
 Manufacturing industries 6.1 5.7 6.5 6.4 6.4 n.a. 
 Electricity, gas and water 0.4 0.4 0.4 0.4 0.4 n.a. 
 Construction and public works 8.2 8.7 10.0 9.8 10.1 n.a. 
Services 37.9 33.4 32.4 30.9 31.2 n.a. 
 Wholesale and retail trade, restaurants and hotels 17.4 14.7 16.8 15.6 15.9 n.a. 
 Banking, insurance and real estate 2.6 2.4 2.5 2.4 2.4 n.a. 
 Transport and telecommunications 6.1 5.2 5.8 5.6 5.7 n.a. 
 Government and defence 11.8 11.1 7.4 7.3 7.2 n.a. 
National accounts at market prices 
(as a percentage of GDP)        
Final consumption 78.2 81.7 85.3 83.2 80.0 88.2 
 Public consumption 6.3 7.1 6.7 8.9 9.5 12.3 
 Household consumption 71.9 74.6 78.7 74.2 70.6 75.8 
Gross fixed capital formation  23.3 22.4 19.4 22.4 24.3 18.0 
Variation in inventories 2.0 0.8 0.5 0.6 0.6 0.0 
Exports of goods and services 31.6 38.2 27.5 32.6 31.3 33.0 
                                                      
3 Guinea accepted the Article VIII ob ligations under the Articles of Agreement of the International 
Monetary Fund (IMF) on 17 November 1995.  IMF (2006). Guinea WT/TPR/S/251 
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   2005  2006  2007  2008  2009  2010  
Imports of goods and services 35.1 43.1 32.8 38.8 36.2 39.2 
Gross national savings, as a percentage of GDP 21.8 18.3 14.7 16.8 20.0 n.a. 
Prices and interest rates              
Inflation (annual average) 31.4 34.7 22.9 18.4 4.8 15.5 
Discount rate (%) n.a. n.a. n.a. n.a. n.a. n.a. 
Monetary aggregates (end of period)              
Money supply and quasi-money M2 (percentage of GDP) 13.8 14.6 14.6 16.2 20.7 33.4 
Notes and coins in circulation (percentage of GDP) 7.3 8.7 8.2 7.9 9.0 14.8 
Public sector debt (GF billion) 1,134.4 2,002.7 2,110.5 2,984.5 4,190.1 8,440.6 
 Net claims on Government (GF billion) 1,129.5 1,998.8 2,085.4 2,934.1 4,147.4 8,369.0 
 Claims on public enterprises (GF billion) 4.9 3.9 25.1 50.4 42.7 71.6 
Claims on private sector (GF billion) 699.6 960.9 950.0 987.0 1,140.4 1,639.4 
Public sector debt (percentage of GDP) 10.6 13.3 12.2 14.3 17.8 31.3 
 Net claims on Government (percentage of GDP) 10.6 13.2 12.0 14.0 17.6 31.1 
 Claims on public enterprises (percentage of GDP) 0.0 0.0 0.1 0.2 0.2 0.3 
Claims on private sector (percentage of GDP) 6.5 6.4 5.5 4.7 4.8 6.1 
Exchange rate              
Guinean francs per US$ (annual average)  3,644.3 5,350.0 4,122.8 5,500.0 n.a. n.a. 
Real effective exchange rate (end of period, 
variation %;  - = depreciation) -21.3 -10.1 43.7 n.a. n.a. n.a. 
Nominal effective exchange rate (end of period) -38.0 -31.4 19.4 n.a. n.a. n.a. 
Public finances  Percentage of GDP 
Total revenue and grants 15.2 17.6 15.7 16.1 17.8 n.a. 
 Tax revenue 13.4 14.2 13.5 14.6 14.2 n.a. 
 Non-tax revenue 1.2 1.8 0.7 1.0 1.4 n.a. 
 Grants 0.7 1.6 1.4 0.5 2.3 n.a. 
Total expenditure and net lending 16.1 18.0 15.2 17.3 18.2 n.a. 
 Current expenditure 11.4 13.4 11.3 13.3 13.4 n.a. 
 Wages and salaries 3.1 2.9 3.5 4.1 5.2 n.a. 
 Capital expenditure 4.7 4.5 3.9 4.0 4.8 n.a. 
 Net lending 0.0 0.1 0.0 0.0 0.0 n.a. 
Overall balance (including grants) -0.9 -0.3 0.5 -1.2 -0.4 n.a. 
Memorandum items              
Overall balance (as a percentage of GDP) -7.1 -10.1 -7.7 -19.1 -41.2 -13.3 
Trade balance (as a percentage of GDP) -14.0 -16.8 -7.0 -25.6 -35.0 -39.2 
Current account balance (as a percentage of GDP) -21.1 -12.2 -5.8 -20.5 -20.0 -30.3 
n.a. Not available. 
Source : IMF, Country Report No. 08/275;  West African Monetary Agency, viewed at:  
http://www.amaowama.org/Report/Macro1en.asp;  Ministry of the Environment and Fi nance;  Economic Studies 
and Projections Department   Ec onomy Division;  and African Develo pment Bank, Afri can Statistical 
Yearbook 2010. 
(2) RECENT ECONOMIC DEVELOPMENTS  
9. Since its previous Trade Policy Review (TPR), Guinea's macroeconomic imbalances have 
worsened as a result of shortcomings in public mana gement and a series of socio-political crises.  The 
second Poverty Reduction Strategy Paper (PRSP) envisaged 5.3 per cent growth for the past WT/TPR/S/251 Trade Policy Review 
Page 4 
  
  four years to reduce the poverty rate to 49.7 per cent.  In reality, however, growth has been below 
5 per cent since 1990 and has fallen noticeably over th e last six years while inflation has remained 
fairly high, despite a downward trend (Table I.1).  In the light of these factors it will be difficult for 
Guinea to achieve the Millennium Development Goals.   Despite Guinea's efforts before 2008 to attain 
the completion point under the Heavily Indebted P oor Countries (HIPC) Initiative, the process stalled 
when the National Council for Democracy and Development (CNDD) came to power on 23 December 2008. 
10. In 2007 the Government undertook, with IMF support,  to maintain a strict fiscal policy in the 
face of economic problems and social demands.  The policy, which was ratified in the July 2007 
finance law, reined in the budget deficit excluding gr ants to 0.5 per cent of GDP (Table I.1).  The 
process was aided by the restoration of financial control, the imposition of monthly expenditure ceilings on the various ministries and the prohibitio n on extrabudgetary expenditure and ad hoc fiscal 
and customs exemptions.  Moreover, implemen tation of the measures provided for under the 
Extractive Industries Transparency Initiative (EIT I), to which Guinea had adhered in 2005, had 
begun.
4 
11. Public finances deteriorated when the military  elements of the CNDD took power in 2009.  
Parliament was dissolved and public expenditure w as disbursed outside the framework of a finance 
law.  The budget deficit, which had been on a downward path since 2005, widened appreciably in 
2009 and 2010 (Table I.1).  Fiscal revenue remained stable, however, despite a slight fall in mining 
revenues. 
12. The Guinean economy declined in 2009 with a 0.3 per cent drop in real GDP, reflecting 
deterioration in the political framework and a slump in the secondary sector, which accounts for 
around one third of GDP formation.  The global econom ic and financial crisis caused the price of 
aluminium - the main derivative of bauxite, which is Guinea's principal export product - to plummet 
by more than 40 per cent.  The slowdown in th e construction and public works sector in 2009 also 
played a role;  nonetheless, this was stemmed by e fforts to consolidate and control the mining sector, 
to refurbish barracks and universities, and to im plement the emergency minimum programme "water 
and electricity for all".5 
13. Guinea had reached the decision point of th e HIPC Initiative in December 2000.  The 
macroeconomic reforms of 2007 ha d led towards the HIPC completion point, but as a result of the 
country's political problems that objective could not be achieved.  The stock of public debt has 
remained at around US$3 billion since 2005.  Debt-ser vicing as a percentage of  exports of goods and 
services rose from 11.5 per cent (US$100 million) in 2005 to 11.8 per cent (US$174 million) in 2010.  Guinea is experiencing structural fiscal difficulties.  The onerous burden of the wage bill (27 per cent 
of all expenditure in 2009) is exacerbating downw ard rigidity of public expenditure.  Capital 
expenditure accounts for a small share of the State budget (around one quarter of  public expenditure).  
Since the beginning of 2011, the Government has taken a number of measures to increase revenue and 
restore fiscal health.  The measures relate in particul ar to strict observance of the principle of a unified 
treasury ( unicité de caisse ) with the closure of special accounts and transfer of credit balances on the 
principal Treasury accounts;  budget execution on a cash basis accompanied by a monthly cash-flow 
plan;  the establishment of a medium-term expenditu re framework (CMDT);  the abolition of all ad 
hoc exemptions and the enhancem ent of controls on agreed exemptions;  and compliance with 
government procurement procedures. 
                                                      
4 IMF (2008). 
5 Online information.  Viewed at: http://www.afri caneconomicoutlook.org/en/countries/.west-africa/ 
guinea/. Guinea WT/TPR/S/251 
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  14. Monetary policy is framed and implemented by the Central Bank of the Republic of 
Guinea (BCRG), although in practice the BCRG's aut onomy is very limited.  The principal objective 
of monetary policy is price stability.6  According to the authorities, the BCRG's policy instruments are 
the key policy rate, which increased from 16.75 per cent in 2010 to 22 per cent in 2011, and the 
reserve requirement, which rose from 9.5 per cent in 2010 to 17 per cent in 2011.  Reserves can be 
held only in Guinean francs.  Th e BCRG also uses repurchase agreements and engages in open market 
operations. 
15. In principle, the monetary financing of the public  deficit is limited to 5 per cent of the average 
revenue of the previous three financial years for a pe riod of 92 days at the market rate.  However, that 
proportion stood at 54.7 per cent in 2010.  Although private financing fell from 6.5 per cent of GDP in 
2005 to 4.8 per cent of GDP in 2010, public financing by the BCRG rose almost  eightfold (in value) 
over the same period (10.6 per cent of GDP in 2005 and 31 per cent of GDP in 2010).  The new Government has decided not to have recourse to BCRG  financing and to make reducing the State debt 
a priority. 
16. Inflation has been very high in Guinea over r ecent years, but has trended downwards since 
2010.  It declined from 31 per cent in 2005 to around 15.5 per cent in 2010.  The high rate of inflation 
is largely associated with significant expansi on of the money supply (and the considerable and 
sustained depreciation that ensued), traders' specu lative expectations and the surge in import prices.
7 
17. The period from 2005 to 2006 was notable for the ineffectiveness of monetary policy, the 
relaxation of macroeconomic  reforms, principally in the form of excessive monetary financing of 
public deficits, multiple exchange rates, and the en suing erosion in net external assets (Table I.1).  
The monetary base has increased significantly in re cent years.  Such expansion has encouraged lax 
fiscal policy, which has had an adverse impact on the value of the currency and has stoked both inflation and the beginnings of dollarization of th e economy.  The new Government, however, appears 
to have taken measures to prohibit invoicing in  foreign currency for any domestic transactions. 
18. The current account balance has posted a deficit for the last six years, which has widened 
substantially since 2008 (Table I.2).  One of the main  reasons for this trend is a strong rise in imports 
associated with major mining projects and a significant increase in petroleum and food prices. 
Table I.2 
Balance-of-payments developments, 2005-2010 
(US$ million) 
 2005  2006  2007  2008  2009  2010a 
Current balance  -620.4  -365.4  -242.8  -778.6  -927.8  -1,363.1  
Trade balance -411.4 -475.0 -294.2 -972.3 -1,621.8 -1,764.6 
 Exports 1,582.6 1,721.4 1,818.9 1,657.3 1,591.3 1,927.2 
 Imports 1,994.0 2,196.5 2,113.1 2,629.5 3,213.1 3,691.8 
Services (net) -174.9 -120.9 -143.3 -207.0 -31.7 -61.0 
 Credits 276.7 234.0 198.0 168.5 415.1 446.0 
 Debits 451.6 354.9 341.4 375.5 446.7 507.0 
Income (net) -197.1 -208.7 -245.3 -224.2 -200.4 -199.9 
 Interest on public debt:       
Current transfers (net) 163.1 439.4 439.9 624.9 926.0 662.4 
                                                      
6 Ordinance No. O/2009/046/CNDD on the status of the Central Bank of the Republic of Guinea. 
7 Monnaie, change et inflation en Guinée , Touré, 2010. WT/TPR/S/251 Trade Policy Review 
Page 6 
  
   2005  2006  2007  2008  2009  2010a 
 Credits 174.0 452.9 451.8 637.4 938.8 675.6 
 Debits 10.9 13.6 11.9 12.4 12.8 13.3 
Capital account  2.7 87.5 166.2  272.7  -556.5  766.4  
Grants 27.0 56.8 42.3 72.7 391.0 300.0 
Direct investment 101.7 40.0 65.8 51.6 105.0 85.0 
Portfolio investment -11.9 -34.0 -27.5 0.0 67.0 95.0 
Long-term capital (net) -203.7 -120.7 12.1 -174.0 -127.9 11.1 
 Government -123.7 -58.5 -95.6 -226.5 -141.0 -118.1 
 State-owned enterprises -67.4 -56.7 -25.9 57.3 -39.4 -51.3 
 Private sector -12.6 -5.4 133.6 -4.8 52.5 180.5 
Short-term capital (net) 89.7 145.4 73.4 322.4 -991.4 275.1 
 Government 0.0 0.0 0.0 0.0 -1,200.0 0.0 
 State-owned enterprises 106.7 122.4 75.1 275.1 0.0 0.0 
 Private sector -17.0 23.0 -1.7 6.8 257.0 252.2 
 Variation in commercial banks' net extern al assets -3.6 -94.9 -289.9 40.4 -48.6 22.9 
Errors and omissions 409.3 -8.3 -246.2 -219.4 -424.2 0.0 
Overall balance -208.4 -286.2 -322.9 -725.2 -1,908.5 -596.7 
a Projections. 
Source : African Development Bank. 
(3) TRADE AND INVESTMENT PERFORMANCE  
(i) Trade in goods and services 
19. The share of exports in GDP increased from 34 per cent in 2005 to 41 per cent in 2009, albeit 
with a slight dip in 2008 (33 per cent).8  Although on an upward trend since the 2000s, 
Guinean exports continue to be concentrated ar ound mining products, in par ticular bauxite, diamonds 
and gold.  Mining products account for over 90 per cent of the value of Guinean exports;  the share of 
manufactures declined between 2004 and 2008, while  the share in agricultural products remained 
stable (Chart I.1 and Table AI.1). 
20. The European Union (EU) continues to be the principal destination of products from Guinea;  
trade with African countries remains weak (Chart I.2 and Table AI.3). 
21. Imports are very diverse, ranging from capita l goods to goods for direct consumption 
(Chart I.1 and Table AI.2).  Guinea is heavily de pendent on imports, especially food products.  The 
EU is the leading source of imports;  around 28 pe r cent of imports come from the African continent 
(Chart I.2 and Table AI.4). 
22. Guinea is a net importer of services.  Since 2008 the bulk of imports of services has been for 
major mining projects.  Business services (engineering,  auditing, etc.) have been expanding steadily 
since 2006 and are the main items in terms of services imports (Table I.3). 
                                                      
8 WDI, World Bank, December 2010. Guinea WT/TPR/S/251 
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  Table I.3 
Structure of Guinea's imports of services 
(US$ million) 
Item  2006  2007  2008  2009  
Maritime and air transport 77.38 81.50 122.35 91.16 
Travel 10.89 11.47 17.21 12.83 
Communications services 6.00 2.01 3.08 0.00 
Construction and public works services 2.70 2.84 4.26 3.18 
Insurance services 21.38 22.52 33.81 25.19 
Computing and information services 3.85 4.05 6.00 4.53 
Royalties and licence fees 0.19 0.20 0.30 0.22 
Personal, cultural and recreational services 0.00 0.00 0.00 0.00 
Services provided or received by government 39.53 41.62 62.50 46.57 
Other business services (operational leasing, legal, auditing, engineering, etc.) 119.11 129.77 194.82 147.39 
Total imports of services  281.01  295.97  444.33  331.07  
Source : BCRG. WT/TPR/S/251 Trade Policy Review 
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  Chart I.1
Structure of merchandise trade, 2004 and 2008
2004 2008
(a)  Exports (f.o.b.)
Total:  US$628.7 million Total:  US$1,430.5 million
(b)  Imports (c.i.f.)
Total:  US$955.0 million Total:  US$1,835.5 millionPer cent
WTO Secretariat calculations, based on data taken from the UNSD Comtrade database (SITC Rev.3).Manufactures
54.2Manufactures
53.2Food products
19.3
Fuels
24.7
Chemicals
9.0Other
semi-manufactures
12.4Electrical 
machinery
5.8Transport 
equipment
7.7
Iron and 
steel
3.8Other
1.8
Non-electrical 
machinery
8.6Textiles and 
clothing
2.5Agriculture
4.4
Aluminum ores
77.3Manufactures
17.3Gold
0.4Other
0.3
Food products
13.2
Fuels
33.0
Chemicals
7.4Other
semi-manufactures
9.2Electrical 
machinery
7.2Transport 
equipment
8.5
Iron and 
steel
2.5Other
0.6
Non-electrical 
machinery
13.6Other consumer 
goods
4.3
Source :Agriculture
5.0
Aluminum ores
40.1
Manufacturers
10.4Gold
32.0Other
0.0
Other mining and 
quarrying products
12.5Other mining 
and quarrying 
products
0.3
Textiles and 
clothing
1.2Other consumer 
goods
3.5
 Guinea WT/TPR/S/251 
 Page 9 
 
 
  Chart I.2Direction of merchandise trade, 2004 and 2008
2004 2008
(a) Exports (f.o.b.)
(b) Imports (c.i.f.)Per cent
Source :Total:   US$955.0 millionUnited 
States
7.7
China 7.7
Belgium
7.9The 
Americas
12.1
Other 
European 
countries
9.2Autres
4,6
Middle East
2.3France
10.8Total:   US$628.7 millionOther 
countries in 
the Americas
3.4
Germany
9.0Community of 
Independent States
4.6Africa
2.4
The 
Americas
18.3
EU (27)
59.9
Total:  US$1,430.5 million
Total:   US$1,835.5 millionAutres pays 
d'Asie  10.6
Africa 28.0Asia  20.7
EU (27)
32.2Other countries 
in the Americas
4.4
Japan 2.5United States
14.9
Other European 
countries 14.5
Ireland
13.7Spain
21.8Other EU 
(27) countries
6.8France
8.7
Netherlands  
3.2Other
0.4
Africa
2.7
United 
Kingdom
1.1
WTO Secretariat calculations, based on data taken from the UNSD Comtrade database (SITC Rev.3).Other 
countries in 
the Americas
4.0
Germany
5.9Community of 
Independent States
14.1
The 
Americas
10.8
EU (27)
49.6United 
States
6.7
Other 
European 
countries 
20.0
Ireland
7.4Spain
9.9Other EU (27) 
countries
1.9France
24.5Other
2.8
United 
States
7.7
China 7.7
Belgium
7.9Other EU 
countries
9.2Other
4.6
Middle East
2.3
France
10.8Other Asian 
countries
10.6
Africa
28.0Other countries in 
the Americas
4.4
Japan 2.5
Netherlands 
3.2
United 
Kingdom
1.1
 WT/TPR/S/251 Trade Policy Review 
Page 10 
  
  (ii) Direct investment 
23. Despite the willingness of various governments to make a number of sectors attractive to 
foreign direct investment (FDI), mining continues to be the top FDI destination in Guinea (Table I.4).  
Nevertheless, in 2006 the largest amount of invest ment went to the telecommunications sector and 
was used to open up mobile telephony.  Accordi ng to UNCTAD, the leading investor countries are 
China, France and Russia. 
Table I.4 
Distribution of foreign direct investment, 2005-2009 
(US$ million) 
Year  Sector   
Mining  Telecommunications  Electricity 
and water  Manufacturing  Finance  Transport  Agriculture  Fishing  Total 
2005  n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 105.00  
2006  6.25 100.00 0.00 0.00 18.75 0.00 0.00 0.00 125.00  
2007  231.54 135.07 0.00 0.00 19.30 0.00 0.00 0.00 385.91  
2008  378.40 2.11 0.00  0.00 1.37 0.00 0.00 0.00 381.88  
2009  135.67 1.08 0.00 0.00 4.10 0.00 0.00 0.00 140.85  
n.a. Not available. 
Source : BCRG. 
24. On a general level, Guinea remains unattractive for FDI, owing to the high level of corruption 
in government, the continuing lack of basic infrastru cture, and lack of transparency in the judicial 
system.  Moreover, the high cost of and constrai nts on access to credit are hampering the growth of a 
dynamic private sector.  The index of investor prot ection is still low in Guinea at 2.7, as compared to 
an average of 4.4 for sub-Saharan Africa.9 
Table I.5 
Foreign direct investment position, 2007-2009 
 2007  2008  2009  
FDI inflows (US$ million) 386 382 141 
FDI stock (US$ million) 1,091.6 1,473.5 1,614.3 
Performance indexa (ranking out of 141 economies) 26 34 59 
Potential indexb (ranking out of 141 economies) 134 136 n.a. 
Inward FDI (as a percentage of GFCFc) 83.5 54.2 4.0 
FDI stock (as a percentage of GDP) 27.0 29.6 33.4 
n.a. Not available. 
a The UNCTAD performance index is based on a ratio of the count ry's share in global FDI inflows and its share in global GDP. 
b The UNCTAD potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures,  
energy use, R&D, education, and country risk. 
c Gross fixed capital formation (GFCF) is an indicator measuri ng the total amount of physical i nvestment over a one-year period . 
Source : UNCTAD online information.  Viewed at:  http://www. expert-comptable-internatio nal.com/fr/pays/guinea/ 
investor-3. 
25. Guinea's wealthy mining sector has driven st eady growth in inward FDI since 2005.  
Nonetheless, FDI flows shrank in 2009 as a result of the political crisis in the country (Table I.5). 
                                                      
9 Online information.  Viewed at:  http://w ww.expert-comptable-international.com/fr/pays/ 
guinea/investir-3. Guinea WT/TPR/S/251 
 Page 11 
 
 
  (4) OUTLOOK  
26. The short-term outlook for growth in the Guin ean economy is good, although the country may 
find it difficult to recover from the disastrous econom ic situation inherited from the military regimes.  
The gradual rise in the prices of the main mi ning products exported by Guinea and the political 
stability established in December 2010 should revive investment in the country's mining sector.  
Subject to the resumption of donor support, which Guinea has not had for the last two years, the continued recovery in bauxite prices and the im plementation of the reforms announced by the new 
Government, the macroeconomic projections forecast  annual GDP growth of 4 per cent in 2011 and 
5.5 per cent in 2012;  an increase in per capita GDP of 0.7 per cent in 2011 and 2.2 per cent in 2012;  
a reduction in inflation to 5.3 per cent in 2012;  and the accumulation of gross exchange reserves 
equivalent to 1.7 months of im ports of goods and services for the period 2011-2012.  Furthermore, 
total receipts (excluding grants) should reach 18 per cent of GDP in 2011 and 19.3 per cent of GDP in 
2012, and the budget deficit (excludi ng grants) should shrink to 5.1 per cent of GDP in 2011 and to 
2.6 per cent in 2012.  Total expenditure as a percen tage of GDP should stand at 16.8 per cent in 2011 
and 16.1 per cent in 2012.
10 
27. In March 2011 the Prime Minister announced the major areas for development over the next 
five years, without however specifying quantifie d targets for economic growth or controlling 
inflation.  The measures announced include  improving economic governance through sound 
management of the public finances and a prud ent monetary policy;  developing economic 
infrastructure;  and reducing poverty. 
28. The projections for Guinea's economic perform ance are still subject to some risk.  The 
process of democratization should be pursued in the form of transparent legislative elections:  any 
resulting political crisis and social disturbances c ould jeopardize the resumption of donor support and 
undermine foreign investors' confidence. 
                                                      
10 PRSP 2011-2012, May 2011.