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- GDP (PPP):
- $15.0 billion
- 0.4% growth
- 2.5% 5-year compound annual growth
- $1,313 per capita
- Inflation (CPI):
- FDI Inflow:
Limited attempts at structural reform have generated uneven progress in economic development, and the emergence of a dynamic private sector remains constrained by institutionalized weaknesses. The judicial system remains inefficient and vulnerable to political interference, and corruption is perceived as widespread.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 53.3 (up 1.2 points)
- Economic Freedom Status: Mostly Unfree
- Global Ranking: 136th
- Regional Ranking: 30th in Sub-Saharan Africa
- Notable Successes: Control of Government Spending
- Concerns: Property Rights, Corruption, and Open Markets
- Overall Score Change Since 2012: +2.5
In 2010, Alpha Condé won Guinea’s first presidential election since independence from France in 1958; the election was marred by irregularities and political violence. In 2013, Condé’s Rally of the Guinean People party won a majority of seats in flawed parliamentary elections. In the run-up to presidential elections slated for October 2015, the government’s announcement of a change in election timetables that contravened a 2013 agreement led to street protests. The Ebola epidemic that erupted in West Africa in 2014 badly damaged Guinea’s health system and economy. Guinea has two-thirds of the world’s bauxite reserves and large deposits of iron ore, gold, and diamonds, but the population remains impoverished because of rampant corruption, poor government administration, limited infrastructure, political instability, and the lack of property rights.
Although corruption remains pervasive, leaving the majority of Guineans in poverty despite the country’s rich natural resources, the government took important steps toward resolving the country’s most severe bribery scandal in years by suspending the mining license awarded to BSG Resources by former President Lansana Conté. The court system is subject to political interference. The protection of property rights is weak.
The top personal income tax rate is 40 percent, and the top corporate tax rate is 35 percent. Other taxes include a value-added tax and an inheritance tax. The overall tax burden equals 17.9 percent of total domestic income. Government spending amounts to 25.1 percent of total domestic output. Public debt equals 37 percent of GDP. The Ebola epidemic has taken a heavy toll, and spending pressures continue to increase.
Establishing a business is time-consuming, and other regulatory requirements remain burdensome. Minimum capital requirements exceed three times the average annual income. The formal labor market is underdeveloped. Due to the economic impact of the Ebola outbreak, Guinea received higher levels of international aid in 2014 from the IMF and the EU to subsidize electricity and food.
Guinea’s average tariff rate is 11.9 percent. Non-tariff barriers include a ban on imports including rice, flour, and sugar. Foreign investment in the media sector is capped, but there are no limits on investment in most other sectors of the economy. Underdevelopment in the financial sector is a serious impediment to private-sector growth. Most economic activity remains outside of the formal banking sector.