Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 7/1/2019

Despite past fiscal mismanagement, the long-term economic prognosis for Guinea remains promising, buoyed by strong endowments of natural resources, energy opportunities, arable land, and ample, reliable rainfall. Constrained by an austere budget, Guinea has increasingly looked to foreign investment to stimulate growth. China has dramatically increased its role through investment agreements in recent years, as exemplified by its September 2017 decision to loan USD 20 billion to Guinea over a 20-year timeline. Guinea remains one of the world’s poorest countries, with a GDP of USD 10.49 billion and Gross National Income (GNI) per capita of USD 820 in 2019. Underdevelopment has limited its exposure to international trade. Guinea is not a major trading partner of the United States. In 2018, imports to and exports from the United States represented about two percent of the total value of goods passing through Guinea’s ports. While Guinea’s largest single trading partner is China, the European Union collectively accounts for over 40 percent of Guinea’s imports.

Endowed with abundant mineral resources, Guinea has the potential to be an economic leader in the extractives industry. Guinea is home to 35 percent of the world’s reserves of bauxite (aluminum ore). Bauxite is the most active mining sector in Guinea, accounting for 34 percent of Guinea’s exports. Guinea also possesses over an estimated four billion tons of untapped high-grade iron ore, significant gold and diamond reserves, undetermined amounts of uranium, as well as prospective off-shore oil reserves. In 2018, mineral resources, primarily gold and bauxite, accounted for 87 percent of Guinea’s exports. Most of the country’s bauxite is exported by two firms: Sino-Franco-Singaporean conglomerate Société Minière de Boké-Winning Africa (SMB-WAP, or simply “SMB”) via the Rio
Nunez river and Compagnie des Bauxites de Guinee (CBG) via a designated port in Kamsar. CBG is a joint venture between the government of Guinea, Halco, U.S.-based Alcoa, and the Anglo-Australian firm Rio Tinto. New investment in CBG, in addition to new market entrants, are expected to significantly increase Guinea’s bauxite output over the next five to ten years. However, depressed commodities markets have slowed mining development in other areas, including the once-promising iron ore deposit in Guinea’s interior known as Simandou.  Despite this, mining companies still remain interested in Guinea’s iron.


Guinea’s abundant rainfall, sunny weather, and natural geography create advantageous conditions for hydroelectric and renewable energy production.  Until recently, the most significant energy investment in Guinea was the 240MW Kaleta project, which began operating its first hydro turbine in May 2015. Built and financed (USD 526 million) by China, Kaleta more than doubled Guinea’s electricity supply and for the first time furnished Conakry with relatively dependable power. A second major dam, the 450MW Souapiti project, is already under construction with Chinese backing and scheduled for completion in 2020 (it may regulate water for Kaleta beginning September 2019).  The government is seeking to become an energy supplier in West Africa while investing in solar and other energy sources to compensate for lost hydroelectric production during Guinea’s dry season.

President Alpha Conde has repeatedly emphasized that the future of Guinea is in agriculture, not extractives.  Agriculture and fisheries are an area of opportunity for 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. The sector has suffered from decades of neglect and mismanagement and was hit the hardest by the 2014-2015 Ebola crisis. Guinea remains an importer of rice, its primary staple food.  In 2017, the agricultural sector accounted for 68 percent of total employment in Guinea.

Guinea’s macroeconomic and financial situation is weak but improved in 2017-2019. Ebola crippled Guinea’s economic growth prospects 2014-2016, leaving the government with fewer financial resources to support the Guinean economy.  Decreased natural resource revenues strained an already sparse budget. GDP growth hit 10 percent in 2016 and remained at a healthy 6.7 percent in 2017 and 9.9 percent in 2018 but inflation (8.9 percent) nearly matched GDP growth in the same period. The government is under pressure to deliver tangible development progress with elections pending in 2019 and 2020. The demand for credit, particularly for small and medium sized enterprises, exceeds available supply. The government is looking to international investment to spur growth and job creation. 

Guinea has recently updated its Investment Code and renewed efforts to attract international investors. Guinea’s investment promotion agency has a website (www.invest.gov.gn) to increase transparency and streamline investment procedures.  However, the reality is that businesses often wait months or years to receive final approvals from one ministry or another (depending on the sector.)  Guinea’s capacity to enforce its more investor-friendly laws is compromised by a weak and unreliable legal system. Some especially large-scale enterprises or extractives industry firms must wait for final permission from the President himself to begin operations.  These facts make personal relationships with high ranking officials desirable and indeed almost essential.

 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Guinea Trade Development and Promotion