Real GDP growth was an estimated 5.9% in 2018. Growth was attributed to the industrial sector (which grew by 8.7%), dominated by mining (15.3%), but the manufacturing sector grew by 3.2%. The primary sector grew by 3.1% and the services sector by 5.1%. Growth was bolstered by reforms aimed at improving the business climate, access to electricity, and investment in the agrofood sector.

The budget deficit increased to an estimated 4.4% of GDP in 2018, from 2.2% in 2017, due largely to loans to finance public investment. Public debt went from 37.4% of GDP in 2017 to 39.0% in 2018, 18% of which is external debt. A debt sustainability analysis released in August 2018 placed the country at a moderate risk of debt distress. Restrictive monetary policy offset the uptick in pump prices for oil products, keeping inflation in check.

Exports of goods increased by an estimated 9.8% in 2018 from 2017. Imports increased more— by 22.7%. The share of exports to Economic Community of West African States countries (0.9% in the first half of 2018) and Europe (1.1%) remained marginal. Some 99% of exports were mining products, 96% of which went to Asia in the first half of 2018, compared with 84% in the first half of 2017. The current account balance reversed from a surplus of 4% of GDP in 2017 to an estimated deficit of 4.9% in 2018.

Real GDP is projected to grow by 6% in 2019 and 2020, underpinned by expansion in services and the extractive subsector, while manufacturing’s contribution remains weak. On the demand side, the return of private investment, particularly in the mining sector, should increase the contribution of capital expenditure to growth.

The private sector is dominated by the informal sector, which accounts for about 95% of jobs in the economy, mainly in agriculture. Investment was an estimated 36% of GDP in 2018 after a record 75% in 2017, when investment in the mining sector was 58% of GDP, investment in other private branches was 10%, and investment in the public sector was 7%.

The National Plan for Agricultural Investment and Food Security (2018–2025) aims to reduce the food trade deficit, which reached $686 million in 2017. Ongoing reforms include a new land code reducing the time required to transfer land ownership and developing 10 agrofood processing zones throughout the country.

Guinea has exceptional mining potential, including two-thirds of the world’s known bauxite reserves, as well as gold, iron, and diamonds. Although the mining sector produces more than 90% of Guinea’s exports, it accounts for only 17% of tax revenue, 12% of GDP, and 2.6% of employment. With about 20 megaprojects planned for the next five years, the mining sector is expected to grow considerably. In response, Guinea will complete by the end of 2019 a strategy paper on the domestic links between mines and other strategic sectors of the economy.

Source: African Economic Outlook (AEO) 2019