Country Report Guinea March 2009

Outlook for 2009-10

The long-expected death in December 2008 of the former president, Lansana Conte, has brought an end to the existing political system and has raised serious questions about what will replace it. The Economist Intelligence Unit expects that the military junta, the Conseil national pour la democratie et le developpement (CNDD), headed by Captain Moussa Dadis Camara, will eventually bend to domestic and international pressure and that it will announce an electoral timetable by mid-2009. A Legislative election is likely to take place in late 2009 and a presidential election in the second half of 2010. There is a risk that internal squabbles within the CNDD will cause a derailment in the democratic transition. Real GDP growth is expected to slow in 2009 to 1.8% as activity in the mining sector contracts and a reduction in donor inflows affects the construction sector. Real GDP growth is forecast to accelerate to 3% in 2010 as mining output recovers some ground and higher donor inflows boost private demand. Lower international oil and food prices will help inflation to fall to an average of 10% in 2009 and 9% in 2010.

The political scene

Following the death of Mr Conte a group of young army officers, led by Captain Camara, has taken power in a bloodless coup, promising to oversee a short democratic transition before handing over power to a civilian administration. They have appointed a new government led by a civilian, but the majority of key portfolios have remained under the control of the CNDD. Opposition political parties and trade unions have initially supported the military take over. Most members of the international community have condemned the coup.

Economic policy

The members of the CNDD lack experience in running a public administration. Captain Camara has begun a vigorous campaign to eradicate corruption and has announced that the CNDD intends to revise all mining contracts.

The domestic economy

The impact of the coup on the country's economic activity remains unclear. The Anglo-Australian giant mining company, Rio Tinto, has started talks with the new regime to reach an agreement concerning its rights in mining concessions in the south-east.

Foreign trade and payments

In early December, a few weeks before the coup, the African Development Bank approved a US$200m loan to partly finance a US$6.3bn bauxite-mining and alumina refinery project in Guinea.

This report covers the following industry codes:
SIC Code: 1;39;10
NAICS Code: 11;31;212