Guinea

Despite Guinea's immense wealth of natural and mineral resources, however, the country ranks among the least developed countries in the world. The Economic Report on Africa 2002 observes that the root causes may be due to the fact that transition from a socialist regime has not been easy, and the country has faced other serious impediments to development. For one, The domestic political situation has been seriously uinstable and , the system being characterized by inefficiency, corruption and mismanagement, recent coup attempts and such political crises as candidates receiving jail sentences and so on. In addition, conflicts in neighbouring countries, leading to an influx of refugees, created an environment that hampers development. Nevertheless, whilst growth missed the target of 5%, it was up from 1.1% in 2000 to 3.3% in 2001.

The Report notes that, in addition to deteriorating security conditions, unfavourable world price trends for the country's two main exports, bauxite and alumina, acted as a hindrance to growth. The latter underlines one of the main challenges that the economy faces, namely, the need to diversify its productive base. Guinea relies heavily on mining, which accounts for approximately 20% of GDP, 85% of export income and 30% of fiscal revenue, whilst all other industrial sectors are still at an embryonic stage as are other sectors.

The agriculture sector has benefited from some reform efforts and accounts for approximately 21% of GDP. However, developing and modernizing this sector remain major challenges. In the meantime, Guinea's fishing sector, despite a long coastline and huge potential fisheries, contributes to just over 1% of GDP as does the transport sector, which has been in decline over the last few years. An untapped potential is also the tourism sector. Despite its huge potential, fewer than 17,000 tourists visit the country annually, largely for business.

The Government has recently undertaken policy reforms, mainly in budgetary, monetary, financial, external, social and governance areas. Regrettably, the implementation of a national development programme formulated in 1998 was limited by the absence of a coherent government strategy for attracting the participation of various actors, including the support of development partners. In fact, IMF suspended support in 1999.

However, in early 2001, IMF granted a Poverty Reduction and Growth Facility Loan (PRGF). A poverty reduction strategy paper (PRSP) is linked to this Facility, and it seems that conditions are brightening for the country. For one, cCommendable improvements in education and health have been made. Although still low at 56%, gross primary enrolment has increased substantially.

In addition, Guinea's current account deficit has been following a downward trend, standing at 1.2% in 2001. The tax base is now being diversified and this is seen in such measures as elimination of value-added tax exemptions, and quotas for tax-exempt imports have been introduced. Recent reforms have increased public confidence in the financial system, though they appear insufficient for attracting foreign direct investment (FDI). FDI is currently lagging relative to the rest of Africa. Nevertheless, the Report shows that the medium-term outlook for Guinea is positive, a durable peace appears likely and growth is projected to pick up.