Human Resources Obstacle Hinders Implementation of Financial Sector Reforms in Guinea
A recent report by the World Bank highlights a significant obstacle to the implementation of financial sector reforms in Guinea: available human resources.
Limited Human Resources Constrain Progress
According to experts from country desks and TA missions, despite authorities’ commitment to implementing recommendations proposed during TA missions, delays are frequent due to the lack of qualified staff. This constraint hinders the effective implementation of financial sector reforms, which is crucial for the development of Guinea’s financial system.
Guinea’s Financial System: A Developing Landscape
Guinea’s financial system is still developing, with total financial sector assets representing just 22% of GDP and a largely cash-ased economy. While the country has made progress in recent years, particularly in mobile financial services, which have contributed to increased financial inclusion, there is still much work to be done.
Dominance of Commercial Banks
The financial sector remains dominated by commercial banks, with foreign ownership playing a significant role. Only one bank provides Islamic banking services, while two others offer Islamic banking windows.
Cross-Border Cooperation Essential
The report also highlights the need for cross-border cooperation, as only one bank belongs to a domestic group, while the majority of commercial banks are subsidiaries of foreign groups.
Challenges Beyond Human Resources
In addition to human resources constraints, the report notes that nonbank deposit-taking institutions and insurance companies have seen their share in the total assets of the financial sector decline due to performance issues and slow growth rates.
Recommendations for Reform
The report concludes by emphasizing the need for Guinea’s authorities to address the availability of qualified staff and implement reforms to strengthen the country’s financial sector. Specifically, it recommends:
- Addressing human resources constraints by developing training programs and attracting skilled professionals
- Implementing reforms to strengthen the financial sector, including improving regulation and supervision, enhancing governance, and promoting financial inclusion
- Fostering cross-border cooperation to promote regional integration and stability
By addressing these challenges and implementing reforms, Guinea can unlock its full economic potential and create a more robust and resilient financial system.