Guinea

Republic of Guinea: Post-Ebola Socio-Economic Recovery Strategy (2015-2017)

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Executive Summary

I. SOCIO-ECONOMIC DEVELOPMENT OVER THE 2011-2013 PERIOD

Since the advent of the Third Republic in December 2010, the Government implemented a series of reforms with the aim of bringing Guinea into the group of emerging countries. In the area of political governance, these reforms have led to the set-up of a Parliament elected through free and transparent elections, and of various republican institutions (the Constitutional Court, the High Communications Authority, a republican political opposition body, etc.). In the area of economic governance, after Professor Alpha Condé was elected President, the Government renewed ties with the Bretton Woods institutions – the International Monetary Fund (IMF) and World Bank – and strengthened its relationship with the international community, notably by adopting a medium-term programme supported by the International Monetary Fund (IMF) under the Extended Credit Facility (ECF).

The effective implementation of this programme and financial discipline have allowed the country to reach the completion point of the heavily indebted poor countries (HIPC) debt relief initiative in September 2012, with, as a key element, the cancellation of two-thirds of the external debt stock, and to regain macro-economic stability. The State‟s base budget deficit was reduced by 11 points, from 13 percent of gross domestic product (GDP) in 2010 to 2 percent of GDP in 2011 and 2012, and 2.8 percent in 2013, due to improved resources mobilization, a sharp decline in tax evasion, and control over public spending. Inflation declined to 10.5 percent in December 2013 and 9.9 percent in May 2014, year on year, compared to 21.4 percent in December 2010. The exchange rate was stabilized against major currencies and trade reserves, which amounted to less than 15 days in 2010, and increased to over 3.6 months of imports at the end of 2013.

Real economic growth reached almost 4 percent in 2011 and 2012, compared to 1.9 percent in 2010. This rate had declined to 2.3 percent in 2013, due primarily to the electric power shortage and difficulties in the socio-political situation before the parliamentary elections of September 2013. In the agricultural sector, the Government has pursued a vigorous policy of recovery since 2011, injecting almost US$30 million per year to support the rural communities towards strengthening food security. The initiative helped to increase real growth in the agricultural sector to approximately 5 percent per year between 2011 and 2013, lower and stabilize prices of basic goods, and improve the living conditions of rural populations, who are among the poorest of Guinea.

Bold reforms in the business environment were also undertaken. Recognizing the leading role of the private sector in achieving quality growth (sustainable, diverse and strong), the Government has made the development of this sector a priority. In this respect and in order to take full advantage of the growth potential of the country, major efforts have been made to provide investors with an investment incentive framework, providing both assets and personal protection. As a result of the introduction of these reforms, Guinea rose by 10 places in the "Doing Business" ranking of the World Bank between 2011 and 2015, which has earned our country a ranking of among the top 20 reformers.

Against this backdrop, the International Conference on Guinea's Investors and Partners was organized by the Government in Abu Dhabi in November 2013. It reflected a resurgence of hope in Guinea within the international community and among investors to see the country move towards economic and social change. Indeed, as a result of this Conference, over US$7 billion of investment was committed to diverse and strategic sectors such as agriculture, energy, mining and infrastructure. In addition, in May 2014, the signing and ratification of the investment framework in an iron ore mining project of Simandou South, amounting to US$20 billion, allowed to confirm that "Guinea is Back" for business and to rely on the return of investors and investments in the country.

To ensure the boost of the economy and progress towards achieving the Millennium Development Goals (MDGs), in 2013, the Government adopted the third Poverty Reduction Strategy Paper, 2013-2015. It forecast a strong and sustainable growth scenario of 7.1 percent per year on average, supported by ambitious policies on agricultural modernization, the development of the country‟s mining and energy potential, constant promotion of the manufacturing industry, and shared social progress marked by a significant decline in unemployment, underemployment, poverty and inequality. This accelerated growth scenario would enable Guinea to achieve its aim of economic emergence. It is in this context of hope that the Ebola hemorrhagic fever broke out during the first quarter of 2014.