Guinea’s Economy Sees Positive Outlook Amid Strong Reserves and Foreign Investment

Conakry, Guinea - A Boost in Economic Outlook

The West African nation of Guinea has witnessed a significant improvement in its economic outlook, driven by strong foreign direct investment in the mining sector and infrastructure projects. According to latest figures, Guinea’s gross international reserves have increased to 3.6 months of imports at end-March 2019, up from 3.3 months at the end of 2018.

Strong Capital Inflows and Business Climate

The government has implemented measures to improve the business climate and increase the supply of electricity to the economy, which should support the development of the private sector in the medium term. This upward trend is expected to continue, supported by significant capital inflows.

Environmental Concerns and Financial Stability

In a move aimed at strengthening financial stability, the country’s central bank has prohibited the use of certain chemical products for environmental reasons, which has disrupted artisanal gold production. However, this is seen as a positive step towards ensuring the long-term sustainability of the economy.

Regional Cooperation and Monetary Union

Guinea’s financial system is expected to benefit from the convergence criteria established by the West African Monetary Zone (WAMZ) for the creation of a monetary union. The country is also working closely with other regional economic bodies, including the Economic Community of West African States (ECOWAS).

Financial Inclusion and Banking Sector

Despite its shallow and informal financial system, Guinea has made significant progress in recent years. Mobile financial services have played a key role in promoting financial inclusion, with around 13.8 percent of the population having access to a mobile wallet by end-2017.

• The banking sector dominates the financial system, accounting for 94.6 percent of total financial sector assets.
• Non-deposit-taking institutions and insurance companies have seen their share of total assets decline in recent years due to slow growth rates.

Cross-Border Cooperation

In a move aimed at promoting cross-border cooperation, all commercial banks in Guinea are subsidiaries of foreign groups, with three major banks representing around 57.4 percent of total banking sector assets.

Overall Outlook

Overall, the outlook for Guinea’s economy remains positive, driven by strong foreign investment and government efforts to improve the business climate and financial stability.