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Guinea’s Economic Recovery Gathers Pace Amidst Transfer Pricing Concerns

Conakry, Guinea - The International Monetary Fund (IMF) has announced that Guinea’s economic recovery is gaining momentum, driven by a resilient mining sector and prudent fiscal policy.

IMF Reports Strong Growth in 2021

According to the IMF’s latest report, Guinea’s economy grew by 4.3% in 2021, with the mining sector playing a significant role in driving growth. The country’s artisanal gold exports reached a record high of 83 tons, up from an average of 7-8 tons per year prior to the pandemic.

Mining Sector Boosts Growth

The non-mining sector, however, was affected by food and fuel price shocks, political uncertainty, and reduced external support following the coup. Despite these challenges, the IMF projects that Guinea’s economy will grow by 4.7% in 2022, driven by an increase in bauxite and gold production.

Challenges Ahead

However, the country is facing several challenges, including:

  • High inflation
  • Food insecurity
  • Socio-political uncertainty
  • Impact of the war in Ukraine on prices and external support

Transfer Pricing Concerns

The IMF has identified transfer pricing issues as a key concern, particularly in the bauxite sector. “We are working closely with the Guinean authorities to address these issues and ensure that prices are set fairly,” said an IMF spokesperson.

Strengthening Public Financial Management (PFM) Procedures

Guinea’s government is committed to strengthening its PFM procedures. The country has made significant progress in this area, with the introduction of a new budget law and improved fiscal transparency.

Addressing Gender Inequality

The IMF has also expressed concern about gender inequality in Guinea, which is among the highest in the region. According to the World Bank’s Human Capital Index, Guinean children are expected to attend only 6.99 years of school, compared to an average of 9-10 years for low and lower-middle income countries.

The IMF has called on the Guinean government to address these issues and improve education outcomes for girls in particular. “Education is key to unlocking Guinea’s economic potential,” said the IMF spokesperson. “We urge the government to take concrete steps to improve access to quality education, particularly for girls.”

Conclusion

While Guinea still faces significant challenges, its economy is showing signs of recovery. The country’s mining sector remains a bright spot, and with continued support from the IMF and other development partners, Guinea has the potential to achieve sustainable economic growth.