2018 Index of Economic Freedom

Guinea

overall score52.2
world rank146
Rule of Law

Property Rights32.4

Government Integrity26.9

Judicial Effectiveness28.2

Government Size

Government Spending80.6

Tax Burden65.9

Fiscal Health61.0

Regulatory Efficiency

Business Freedom54.1

Labor Freedom54.0

Monetary Freedom71.8

Open Markets

Trade Freedom61.2

Investment Freedom50.0

Financial Freedom40.0

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Quick Facts
  • Population:
    • 12.7 million
  • GDP (PPP):
    • $16.0 billion
    • 0.1% growth
    • 2.2% 5-year compound annual growth
    • $1,264 per capita
  • Unemployment:
    • 6.8%
  • Inflation (CPI):
    • 8.2%
  • FDI Inflow:
    • $104.3 million
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Guinea’s economic freedom score is 52.2, making its economy the 146th freest in the 2018 Index. Its overall score has increased by 4.6 points, with impressive improvements in fiscal health, property rights, and judicial effectiveness easily outpacing declines in the tax burden, business freedom, and labor freedom indicators. Guinea is ranked 29th among 47 countries in the Sub-Saharan Africa region, and its overall score is below the regional and world averages.

The biggest threats that Guinea faces are political instability, reemergence of Ebola, and low commodity prices. For macroeconomic stability and enhanced economic growth, the government is committed to liberalizing the exchange rate and improving budget management. The lack of a consistent commitment to structural reform in the past has prevented new investment in the mining sector. Corruption and the judicial system’s vulnerability to political interference have weakened the rule of law and the protection of property rights.

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Background

In 2010, Alpha Condé won Guinea’s first presidential election since independence from France in 1958, but the election was marred by irregularities and political violence. Condé easily won a second five-year term in October 2015 in elections boycotted by the opposition. His Rally of the Guinean People coalition lost its slim majority in parliament in February 2017, but the opposition is not united, and Condé still enjoys relatively wide support. The 2014 West Africa Ebola outbreak badly damaged Guinea’s health care system and economy. Guinea has huge bauxite reserves and large deposits of iron ore, gold, and diamonds. In 1967, Guinea became the first African country to sever diplomatic ties with Israel; it reestablished them in 2016.

Rule of LawView Methodology

Property Rights 32.4 Create a Graph using this measurement

Government Integrity 26.9 Create a Graph using this measurement

Judicial Effectiveness 28.2 Create a Graph using this measurement

Both foreign and Guinean individuals have the right to own property and business enterprises, but enforcement of these rights depends on a corrupt and inefficient legal and administrative system. In addition, land sales and business contracts generally lack transparency. There is a pervasive culture of impunity and corruption within public institutions.

Government SizeView Methodology

The top personal income tax rate is 40 percent, and the top corporate tax rate is 35 percent. Other taxes include value-added and inheritance taxes. The overall tax burden equals 24.1 percent of total domestic income. Over the past three years, government spending has amounted to 25.4 percent of total output (GDP), and budget deficits have averaged 4.5 percent of GDP. Public debt is equivalent to 56.0 percent of GDP.

Regulatory EfficiencyView Methodology

Incorporation and operation of private enterprises face numerous bureaucratic and regulatory hurdles, although in 2016, the government did make it easier for businesses to resolve insolvency. The labor code is not uniformly enforced, and a 2011 report reflects that about 40 percent of children work in hazardous conditions in violation of the code. Despite lower world oil prices, the government has maintained fuel and electricity subsidies.

Open MarketsView Methodology

Trade is significant for Guinea’s economy; the combined value of exports and imports equals 70 percent of GDP. The average applied tariff rate is 11.9 percent. Nontariff barriers impede trade. Government openness to foreign investment is below average. The underdeveloped financial sector is a serious impediment to private-sector growth. Most economic activity remains outside of the formal banking sector.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius75.10.4
2Botswana69.9-0.2
3Rwanda69.11.5
4South Africa630.7
5Uganda621.1
6Côte d'Ivoire 62-1.0
7Seychelles61.6-0.2
8Burkina Faso600.4
9Cabo Verde603.1
10Tanzania59.91.3
11Namibia58.5-4.0
12Nigeria58.51.4
13Gabon58-0.6
14Mali57.6-1.0
15Guinea-Bissau56.90.8
16Madagascar56.8-0.6
17Benin56.7-2.5
18Comoros56.20.4
19Ghana56-0.2
20Swaziland55.9-5.2
21Senegal55.7-0.2
22Kenya54.71.2
23Zambia54.3-1.5
24Mauritania54-0.4
25Lesotho53.90.0
26São Tomé and Príncipe 53.6-1.8
27Ethiopia52.80.1
28The Gambia52.3-1.1
29Guinea52.24.6
30Democratic Republic of Congo52.1-4.3
31Malawi52-0.2
32Cameroon51.90.1
33Sierra Leone51.8-0.8
34Burundi50.9-2.3
35Liberia50.91.8
36Niger49.5-1.3
37Sudan49.40.6
38Chad49.30.3
39Central African Republic49.2-2.6
40Angola48.60.1
41Togo47.8-5.4
42Mozambique 46.3-3.6
43Djibouti45.1-1.6
44Zimbabwe440.0
45Equatorial Guinea42-3.0
46Eritrea41.7-0.5
47Republic of Congo 38.9-1.1
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