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- GDP (PPP):
- $11.5 billion
- 3.6% growth
- 2.4% 5-year compound annual growth
- $1,083 per capita
- Inflation (CPI):
- FDI Inflow:
Guinea’s economic freedom score is 51.2, making its economy the 137th freest in the 2013 Index. Its overall score is 0.4 point higher than last year, reflecting improvements in business freedom and freedom from corruption that offset declines in monetary and labor freedoms. Guinea is ranked 29th out of 46 countries in the Sub-Saharan Africa region, and its overall score is below the world and regional averages.
The Guinean government’s limited attempts at structural reform have had uneven success, and economic growth remains constrained by institutionalized weaknesses that erode the foundations for long-term economic development. In particular, the judicial system remains inefficient and vulnerable to political interference. Corruption, perceived as widespread, is a serious problem.
The overall regulatory framework is not conducive to the emergence of a dynamic private sector and discourages broad-based employment growth. Potentially dynamic economic gains from trade continue to be undercut by the absence of progress in reforming the financial and investment areas that are critical to sustaining efficient open markets.
In 2008, a military junta led by Captain Moussa Dadis Camara seized power and suspended the constitution. The first free democratic presidential election since independence took place in November 2010. Alpha Conde won the presidency, but Prime Minister Jean Marie Dore also declared himself the winner. Conde’s victory was upheld, and he was inaugurated in December. Because of fighting and instability in Côte d’Ivoire, Sierra Leone, and Liberia, Guinea is host to hundreds of thousands of refugees. Electricity and water shortages are common, and much of the population is engaged in subsistence agriculture. Guinea has two-thirds of the world’s bauxite reserves and large deposits of iron ore, gold, and diamonds. However, the population remains impoverished due to the absence of property rights, rampant corruption, government mismanagement, poor infrastructure, and political instability.
The rule of law is uneven, and protection of property rights is very weak. The court system remains subject to political interference and lacks transparency. After 50 years of misrule and authoritarianism, the political culture and political participation remain weak despite the emergence of democratic changes in the past two years. Civil liberties are not well respected, and a culture of impunity and corruption pervades public institutions.
The top income tax rate is 40 percent, and the top corporate tax rate is 35 percent. Other taxes include a value-added tax (VAT) and an inheritance tax. The overall tax burden is equal to 14.7 percent of total domestic income. Government spending amounts to 24.1 percent of total domestic output. Public debt has fallen to 72.2 percent of GDP. The deficit has dropped due to improved agriculture, mining, and construction output.
Establishing a business is time-consuming, and other regulatory requirements remain burdensome. The business start-up process takes 35 days on average, and minimum capital requirements exceed three times the average level of annual income. The formal labor market is underdeveloped. Very high inflation has weakened monetary stability. The government maintains administrative price controls for key products and services.
The trade-weighted average tariff rate is quite high at more than 11.9 percent, and non-tariff barriers further constrain freedom to trade. Corruption and an unreliable judicial system discourage foreign investment. The underdeveloped financial sector is a serious impediment to private-sector growth. Most economic activity remains outside of the formal banking sector, and medium and long-term financing are not easily accessible.