Economic Analysis


Population 13.3 million
GDP per capita 910 US$
Country risk assessment
Business Climate
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major macro economic indicators

  2017 2018 2019 (e) 2020 (f)
GDP growth (%) 10.0 5.8 5.9 3.0
Inflation (yearly average, %) 8.9 9.8 9.6 9.9
Budget balance (% GDP) -2.0 -1.2 -2.5 -2.8
Current account balance (% GDP) -7.1 -18.4 -20.7 -18.1
Public debt (% GDP) 39.7 38.6 45.2 45.0

(e): Estimate. (f): Forecast.


  • One-third of the world’s bauxite reserves
  • Largely untapped deposits of iron, gold, diamonds, uranium and oil
  • Significant hydroelectric potential
  • Gradual improvement in the business climate


  • Reliant on mining and energy prices
  • Dependent on Chinese demand for bauxite
  • Inadequate infrastructure, especially in the electricity sector
  • Difficult business climate

Risk assessment

Slower Chinese demand and political risk threaten robust growth

As in 2019, growth is expected to remain robust in 2020, supported by public and private investment. The public portion will be mainly driven by investment in transport and energy infrastructure, as well as agricultural development within the framework of the National Economic and Social Development Plan (PNDES). Upgrades to the road network, laying of power lines and work on hydroelectric dams (Souapiti, Koukoutamba, Amaria) will make construction an engine of growth. Private investment is also expected to contribute to infrastructure development, but will be mainly concentrated in the mining sector, particularly in bauxite projects. However, investors may delay their decisions in view of concerns about political uncertainties in 2020. The increase in mining production is expected to drive a positive contribution from foreign trade. However, trade will be impacted by cooler Chinese demand. Improved agricultural yields may support private consumption, since more than 80% of the population depends on the sector, but high inflation, particularly with the increase in electricity prices, will erode household incomes. This growth driver could also be affected by growing anxiety as the 2020 elections approach.


Capital investment maintains the current account deficit

After growing due to the increase in electricity subsidies in 2019, the budget deficit is expected to continue to widen in 2020. Despite measures to improve revenue collection, the budget balance is expected to be affected by higher investment and election-related spending. Support for PPPs and efforts to contain current expenditure, in particular by controlling the civil service wage bill, will nevertheless aim to limit the increase in public expenditure. Conversely, the financing needs associated with state-owned company Electricité de Guinée or election-related budgetary slippage could lead to additional expenses. Although the country is endeavouring to rely mainly on domestic borrowing, the use of concessional and non-concessional external financing (particularly from China) is expected to continue. However, the risk of debt distress remains limited.

In 2020, the current account deficit will remain very high, mainly due to imports of capital goods. The trade deficit should, thus, remain substantial, despite the increase in mining exports. The services account will also record a deficit due to freight and construction-related services. Profit repatriations by foreign companies (mainly mining) are expected to sustain the income deficit. The small surplus in the transfer balance, maintained by transfers received from Guineans abroad, will contribute only marginally to reducing the current account deficit. Nevertheless, FDI and project loans should make it possible to finance this deficit. Also, the upward trend in foreign exchange reserves (less than 3.5 months of import coverage) and the stabilization of the Guinean franc may continue, but these trends will remain vulnerable to an external shock.


Heightened tensions as elections approach

Tensions are mounting in Guinea as the October 2020 presidential election draws nearer. A key focus of these tensions is the suspected intention of Alpha Condé, the first democratically elected President in 2010, who was re-elected in 2015, to run for a third term, even though this is prohibited under the country’s constitution. Protests against a third term - which were triggered by the launch in September 2019 of consultations paving the way for a constitutional reform - turned deadly as tensions escalated. Finally confirmed in December 2019, the upcoming constitutional referendum could allow Alpha Condé to stay in power for another 12 years, by instituting a new renewable six-year presidential term. Against this backdrop, the new postponement of parliamentary elections, initially scheduled for September 2018, to February 16, 2020 is a source of frictions with the opposition. While in the current legislature, the RPG Arc-en-ciel (53 seats out of 114) led by President Condé owes its majority to the informal support of the ten members of the Union of Republican Forces (UFR), the goal of legislative elections would be, according to the President’s critics, to secure the two-thirds majority necessary for constitutional reform. These multiple elections in 2020 are therefore expected to be contentious and could exacerbate social frustrations arising from widespread poverty, the perception of corruption and the impact of the mining industry on the environment and the power supply. The risk of violence cannot be ruled out, as previous elections, including the most recent one (February 2018 municipal elections), have featured violent incidents and accusations of fraud. In a country that suffers from an unfavourable business climate (156th out of 190 countries in the Doing Business 2020 ranking), the possibility of violence could frighten off investors.


Last update : February 2020

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