2016 Index of Economic Freedom

Guinea-Bissau

overall score51.8
world rank145
Rule of Law

Property Rights20.0

Freedom From Corruption19.0

Limited Government

Government Spending94.1

Fiscal Freedom89.3

Regulatory Efficiency

Business Freedom36.7

Labor Freedom61.1

Monetary Freedom78.5

Open Markets

Trade Freedom59.4

Investment Freedom30.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 1.7 million
  • GDP (PPP):
    • $2.5 billion
    • 2.5% growth
    • 2.8% 5-year compound annual growth
    • $1,436 per capita
  • Unemployment:
    • 6.9%
  • Inflation (CPI):
    • -1.0%
  • FDI Inflow:
    • $21.5 million
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Guinea–Bissau has joined a number of other African countries in embracing the merits of regulatory and budgetary reform. Moderate improvements over the past few years include simplifying the business start-up process and improving the control of public spending.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 51.8 (down 0.2 point)
  • Economic Freedom Status: Mostly Unfree
  • Global Ranking: 145th
  • Regional Ranking: 35th in Sub-Saharan Africa
  • Notable Successes: Monetary Freedom
  • Concerns: Property Rights, Corruption, and Investment Freedom
  • Overall Score Change Since 2012: +1.7

Despite some progress, the institutional setting for economic development remains oppressive. Corruption and weak enforcement of property rights drain economic resources, and the judicial system lacks transparency and independence. The lack of improvement in the trade and investment regimes continues to hold back productivity gains and job growth.

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Background

Guinea–Bissau has been wracked by civil conflict since independence in 1974, including a civil war in the late 1990s and multiple military coups, most recently in April 2012. In May 2014, José Mário Vaz was elected president of the former Portuguese colony. Guinea–Bissau is one of the world’s poorest countries. It also is a major transit point for illegal South American drugs bound for Europe, and several senior military officials are allegedly involved in the drug trade. Guinea–Bissau is highly dependent on subsistence agriculture, the export of cashew nuts (the country’s most important commercial crop), and foreign assistance. International donors pledged €1 billion to assist the country at a conference in March 2015.

Rule of LawView Methodology

Property Rights 20.0 Create a Graph using this measurement

Freedom From Corruption 19.0 Create a Graph using this measurement

Weak governance, a strained economy, international narco-trafficking, and widespread poverty have created an environment conducive to bureaucratic and large-scale corruption at all levels of government and the military. Scant resources and endemic corruption severely challenge judicial independence. Judges and magistrates are poorly trained, irregularly paid, and highly susceptible to graft and political pressure.

Limited GovernmentView Methodology

The top personal income tax rate is 20 percent, and the top corporate tax rate is 25 percent. The sales tax has been reduced to 10 percent on certain commodities. The overall tax burden equals 6.5 percent of total domestic income. Government spending amounts to 14 percent of total domestic output. Oil revenues have kept the budget deficit low. Public debt has increased to over 60 percent of GDP.

Regulatory EfficiencyView Methodology

Business start-ups are now simpler and less time-consuming, but completing licensing requirements continues to be costly. With the labor market relatively underdeveloped, most formal employment remains confined to the public sector. Political progress in 2014 unlocked renewed backing from international donors on condition that the government would make immediate reforms such as reducing fuel subsidies.

Open MarketsView Methodology

Guinea–Bissau has an average tariff rate of 12.8 percent and is a member of the Economic Community of West African States and the West African Economic and Monetary Union. Foreign and domestic investors are treated equally under the law. The underdeveloped financial sector continues to provide a very limited range of services. Many people still rely on informal lending and have no bank accounts.

Country's Score Over Time

Bar Graph of Guinea-Bissau Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Guinea-Bissau to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Mauritius74.7-1.7
2Botswana71.11.3
3Cabo Verde66.50.1
4Rwanda63.1-1.7
5Ghana630.0
6Seychelles62.24.7
7South Africa61.9-0.7
8Namibia61.92.3
9Madagascar61.1-0.6
10Côte d'Ivoire 601.5
11Swaziland59.7-0.2
12Benin59.30.5
13Uganda59.3-0.4
14Burkina Faso59.10.5
15Gabon590.7
16Zambia58.80.1
17Tanzania58.51.0
18Senegal58.10.3
19Kenya57.51.9
20Nigeria57.51.9
21The Gambia57.1-0.4
22São Tomé and Príncipe 56.73.4
23Mali56.50.1
24Djibouti56-1.5
25Mauritania54.81.5
26Niger54.3-0.3
27Cameroon54.22.3
28Burundi53.90.2
29Togo53.60.6
30Guinea53.31.2
31Mozambique 53.2-1.6
32Comoros52.40.3
33Sierra Leone52.30.6
34Liberia52.2-0.5
35Guinea-Bissau51.8-0.2
36Malawi51.8-3.0
37Ethiopia51.50.0
38Lesotho50.61.0
39Angola48.91.0
40Democratic Republic of Congo46.41.4
41Chad46.30.4
42Central African Republic45.2-0.7
43Equatorial Guinea43.73.3
44Republic of Congo 42.80.1
45Eritrea42.73.8
46Zimbabwe38.20.6
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