Guidance

Overseas Business Risk - Guinea

Updated 14 June 2022

1. Overview

Guinea is one of the poorest countries in Africa yet has a remarkable and largely untapped natural resource wealth, including the world’s largest, relatively accessible bauxite reserves as well as high-quality iron-ore. Guinea was a young and fragile democracy in the period from 2010 to 2021, with President Alpha Condé being its first elected president. President Condé won a disputed third term in the October 2020 presidential elections, but was removed from power in a coup lead by the head of the Special Forces Colonel, Mamadi Doumbouya on 5 September 2021.

Mining represents around 35% of GDP in Guinea. While the country has large reserves, the development of many of its minerals has been constrained by a lack of infrastructure, legal spats and alleged corruption.

Guinea is the world’s second largest producer of bauxite and home to the world’s largest reserves of bauxite at 7.4 billion tonnes. Bauxite is the main source of aluminum, much of which is processed in China. Guinea accounts for about 22% of the world’s production of bauxite, producing 82 million tonnes in 2020, according to the U.S. Geological Survey (USGS). Bauxite exports have recently increased due to a rapid upscale in production by Chinese-led SMB.

Société Minière de Boké (SMB), Compagnie des Bauxites de Guinée (CBG), Rusal, and Global Aluminium Corporation (GAC) are Guinea’s top bauxite producers. Other bauxite and iron-ore projects are currently under government consideration. Industrial gold production play an important role in the Guinean economy, including by Anglo Gold Ashanti (South Africa). Artisanal gold and diamond mining is also an important revenue stream.

In March 2022, Guinea renegotiated a framework agreement of Simandou, with the Chinese consortium SMB Winning (blocks 1 & 2) and Rio Tinto (blocks 3 & 4) for a 15% stake in the rail, port and mine operations, with new infrastructure to become Guinea State property upon completion. Rio Tinto has held rights to Simandou since 1997.

It owns a 45.05% stake in the southern half, blocks 3 and 4, of the deposit, with Chinalco holding 39.95% and Guinea’s government the remaining 15%. Under the US$15 billion agreement, the consortium will build the mine and a railway line that will connect the mine to the deep-water port at Matakong, with plans for infrastructure projects to be completed by December 2024 and commercial production to start by 31 March 2025. Simandou is the largest known deposit of its kind, holding more than 2 billion tonnes of high-grade iron ore.

Agriculture is an important opportunity for Guinea, which in 1958 was the largest exporter of pineapples and bananas in Africa. Coffee, cocoa, fruit and vegetables are already exported in small quantities via neighbouring countries but not marked as Guinean origin. Poor road, rail and port facilities currently make export of fresh products difficult.

With support from the International Monetary Fund (IMF), World Bank, the African Development Bank (AfDB) and other international donors, work is underway to increase infrastructure investment, to strengthen public procurement procedures and to encourage a broad range of trade and investment partners. Guinea has been committed to improving the business climate and its efforts are reflected in the country moving up the Ease of Doing Business Index in recent years.

The British Embassy in Conakry has been open since 2003. UK Government support to commercial activity in Guinea is limited and focused mainly on the mining, infrastructure and energy sectors.

2. Political

Guinea gained its independence from France in 1958. The first President of Guinea, Sekou Touré, held power from 1958 until 1984. The second, Lansana Conté, held power from 1984 until he died in 2008. A military junta led by Captain Dadis Camara took power in 2008 until an assassination attempt in December 2009 caused him to flee the country. A transition government took over and organised democratic Presidential elections in 2010, which President Alpha Condé won. Condé was re-elected in 2015.

After changing the constitution in March 2020, Condé ran for a third term, which he won with 59.5% of the votes in October 2020. Condé was ousted on Sunday, 5 September 2021 by the head of the Special Forces, Colonel Mamadi Doumbouya. The National Committee of Reconciliation and Development (CNRD) was established quickly after the coup as the central body made up of defence and security forces. The constitution and state institutions, including the Parliament, were suspended.

On 6 September 2021, Doumbouya announced that mining companies would continue operations and that the new regime would respect international business commitments. The new authorities published a Charter saying that a new unity government and a National Council of Transition led by the CNRD would be in charge of conducting the transition. Doumbouya was sworn in as transitional President on 1 October 2021. He appointed Mohamed Beavogui as Prime Minister on 6 October 2021.

Violence has been sporadic in Guinea, with short outbreaks particularly around election periods and mostly along ethnic lines, reflecting the largely ethnic based political parties. Violence also reflects popular frustration at the continuing low level of development, despite Guinea’s natural resource wealth.

Violence occurred during protests organised by the National Front for the Defense of the Constitution (FNDC), a coalition of opposition political parties and civil society organisations opposed to a change in the constitution that would allow President Condé to run for a third term. Large-scale protests and social unrest marked the legislative elections and the constitutional referendum held in March 2020 and the presidential election in October 2020.

Unlike most of the neighbouring countries, Guinea has not had any major civil conflict but has received refugees from previously conflict ridden neighbours.

3. Political

Guinea gained its independence from France in 1958. The first President of Guinea, Sekou Touré, held power from 1958 until 1984. The second, Lansana Conté, held power from 1984 until he died in 2008. A military junta led by Captain Dadis Camara took power in 2008 until an assassination attempt in December 2009 caused him to flee the country. A transition government took over and organised democratic Presidential elections in 2010, which President Alpha Condé won. Condé was re-elected in 2015.

Violence has been sporadic in Guinea, with short outbreaks particularly around election periods and mostly along ethnic lines, reflecting the largely ethnic based political parties. Violence also reflects popular frustration at the continuing low level of development despite Guinea’s natural resource wealth. Violence occurred during protests organised by the National Front for the Defence of the Constitution (FNDC), a coalition of opposition political parties and civil society organisations opposed to changing the constitution that would allow President Condé to run for a third term. Large-scale protests and social unrest marked the legislative elections and the constitutional referendum held in March 2020 and the presidential election in October 2020.

After changing the constitution in March 2020, Condé ran for a third term, which he won with 59.5% of the vote in October 2020. Condé was ousted by a coup d’état on Sunday, 5 September 2021 by the head of the Special Forces Colonel Mamadi Doumbouya. The National Committee of Reconciliation and Development (CNRD) was established quickly after the coup as the central body made up of defence and security forces. The constitution and state institutions, including the Parliament, were suspended.

On 6 September, Doumbouya announced that mining companies would continue operations and that the new regime would respect international business commitments. The new authorities published a Charter saying that a new unity government and a National Council of Transition led by the CNRD would be in charge of conducting the transition.

Doumbouya was sworn in as transitional President on 1 October. He appointed Mohamed Béavogui as Prime Minister on 6 October. President Doumbouya appointed members of the legislative body for the transition, the National Transitional Council (CNT) on 22 January 2022.

The CNT adopted on 11 May the timetable for the transition of 3 years, leading to a return to civilian rule. On 13 May the CNRD announced a ban, until the election campaign periods, on demonstrations compromising social peace and the execution of the transition timetable. Alpha Condé has been charged along with 26 of his former aides for crimes committed during his tenure. In February, the junta began reclaiming government land in Conakry for government use.

Unlike most of the neighbouring countries, Guinea has not had any major civil conflict but has received refugees from previously conflict ridden neighbours.

4. Economy

Despite having some of the world’s biggest and most extensive bauxite reserves, world-class iron-ore, gold, diamonds and other minerals, Guinea’s massive resource wealth remains largely undeveloped. Guinea is also known as ‘the water tower of West Africa’, with 4 major rivers rising there, which gives it strong hydro potential.

However, little investment over the years has left minimal and poorly maintained infrastructure. Electricity supply has improved in the capital Conakry and the coastal areas thanks to Kaleta (240Mw) and Souapiti (450Mw) hydroelectric dams, and other dams are under construction.

In 2014 to 2015 the Ebola epidemic left Guinea not only with a high death toll but also zero GDP growth in 2015 and a 7% budget deficit. A much smaller outbreak of Ebola occurred between February and June 2021.

The Guinean economy was significantly hit by the COVID-19 pandemic but has remained resilient. According to the IMF, growth remained robust in 2021, at 5.2%, as the mining sector continued to expand and it is expected to remain at 5.1% in 2022. At 12%, inflation continues to increase due to a spike in transportation and food prices, and supply disruptions reflecting the compounding impact of COVID-19 and more recently, the Russia – Ukraine war.

The spread of the virus combined with measures imposed by the government to curb further spread adversely impacted activities such as retail trade, transport, and tourism. Despite the resilience of the agricultural sector, delays and disruption to transport logistics hinder the domestic movement of perishable goods and export of agricultural products.

A study conducted by the International Monetary Fund (IMF) after COVID-19 broke out indicates that the crisis could reverse gains in poverty reduction achieved in recent years, with a significant impact on household and business income, particularly on the informal sector, arising both from income losses and the impact of inflation.

Guinea’s economy is heavily dependent on the mining and exports of minerals, particularly the mining of bauxite. Bauxite production was boosted by the earlier-than-expected start of production by new companies and faster recovery in demand from China. Artisanal gold mining activity was also buoyant; the first half of 2021 recorded higher-than-usual artisanal gold exports, reflecting higher international gold prices, which drew more workers into the sector.

Several new bauxite mines are expected to come online, and growth in the non-mining sector is expected to recover gradually, reaching pre-pandemic levels in 2022. Over the medium term, growth is projected to remain above 5% as new mining investments materialise, in particular the Simandou iron ore project.

The threat of the COVID-19 to the Guinean economy remains, the immediate risk is the potential political crisis that could result from the 5 September coup. Commodity price shocks remain a significant vulnerability, given the rising concentration of growth in the mining sector. The unrest did not have any immediate impact on bauxite operations, which are key to Guinea’s economy as its main foreign currency earner.

The business climate as measured by the Ease of Doing Business indicator has declined. Poor-quality infrastructure and costly/ difficult access to energy and credit significantly impair the attractiveness of the Guinean economy to international investors.

Under the Economic Community of West African States (ECOWAS) embargo since January 2022, the Guinean junta has kept its borders with Mali open and intends to take advantage of this to rehabilitate the corridor between the 2 countries. This will increase Guinea’s export to Mali and traffic at the port of Conakry.

Despite the focus on mining, economic diversification will be key to setting Guinea’s economy on a higher, sustainable growth path. The success of this will rest on ability of the government to increase infrastructure investment (e.g. construction and public works) to increase Guinea’s growth potential.

5. Human rights

Today Guinea has a positive record on freedom of expression in the media and on religious tolerance. Civil society is strong across the board and includes a range of organisations advocating for a more transparent governance. However, there are continuing concerns about human rights abuses.

Victims of the 28 September 2009 massacre and human rights organisations are still awaiting investigation into the killing of 150 unarmed demonstrators and the rape of over 100 women by the security forces. Since the beginning of protests in 2019, organised by the National Front for the Defense of the Constitution (FNDC) against Condé’s third term, many human rights abuses including killings of protesters and kidnapping by the security forces have been reported by local and international NGOs including Human Rights Watch.

Other human rights issues include the environmental impact of mining activities on local communities and the conditions in prison and detention centres, gender violence including forced and early marriage, and Female Genital Mutilation (FGM). Guinea has the second highest recorded rate of FGM in Africa.

6. Bribery and corruption

Bribery is illegal. Under the UK Bribery Act 2010, it is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or as Scottish partnership to bribe anywhere in the world. In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case, it does not matter whether the acts or omissions, which form part of the offence, take place in the UK or elsewhere.

Those involved in trading gold and diamonds should take particular care; this trade attracts criminal gangs, who are known to resort to kidnapping and extortion. Trading frauds involving diamonds, gold export and gold certification have been reported.

Guinea has a poor record on bribery and corruption despite efforts made to address this. Reforms have been implemented including a complete review of all mining contracts to check for corrupt practices. The mining cadaster was refreshed and a reformed process for granting permits and licenses established. The Mining Code of 2013 is generally seen as a positive measure by investors in the mining sector, though capacity to implement it fully is lacking. In 2019, a Tribunal of commerce was established to mitigate commercial disputes.

The Investment Promotion Agency is active in promoting Guinea, and has established a one-stop shop for creating new companies (within 72 hours), with a clearly published list of services and fees. Guinea is ranked 150 out of 180 countries on Transparency International’ Corruption Perceptions Index for 2021 falling 13 places from 2020.

In December 2021, in the fight against corruption, President Doumbouya created the Court of Repression of Economic and Financial Offences (CRIEF). A first and second-degree criminal justice court in the Republic of Guinea that is tasked with examining and prosecuting economic and financial crimes.

7. Terrorism and security

No terrorist attacks are reported to have taken place in Guinea. However, the neighbouring countries of Mali, Burkina Faso and Cote d’Ivoire have all experienced terrorist attacks in recent years. Guinea is around 85% Muslim (and 10% Christian) and is proud of its strong tradition of religious tolerance and moderate Islam.

Please read the information provided on the terrorism page of the FCDO Travel Advice.

8. Cyber security

Internet use in the capital Conakry is common, but far more limited elsewhere in the country. We are not aware of cyber security being a significant issue in Guinea.

9. Intellectual property (IP)

Guinea is a member of both the African Intellectual Property Organization (OAPI) and the World Intellectual Property Organization (WIPO). The OAPI falls under the signatory to the Paris Convention for several intellectual property right laws such as the Protection of Industrial Property, the Patent Cooperation Treaty, the TRIPS agreement as well as the Bern Convention for the Protection of Literary and Artistic Works.

In 2000, in order to align with established international standards, Guinea modified its intellectual property right laws. Over the past few years, despite the general lack of law enforcement capability, Guinea has made a conscious effort to enact legislation that provides protection for intellectual property rights. For more specific and additional information about treaty obligations and points of contact in Guinea’s IP office, see WIPO’s country profile.