Guinea Economy

Economy

Guinea possesses major mineral, hydropower, and agricultural resources, yet remains an underdeveloped nation. The country possesses over 30% of the world's bauxite reserves and is the second-largest bauxite producer. The mining sector accounted for about 75% of exports in 1999. Long-run improvements in government fiscal arrangements, literacy, and the legal framework are needed if the country is to move out of poverty. Fighting along the Sierra Leonean and Liberian borders, as well as refugee movements, have caused major economic disruptions, aggravating a loss in investor confidence. Foreign mining companies have reduced expatriate staff. Panic buying has created food shortages and inflation and caused riots in local markets. Guinea is not receiving multilateral aid. The IMF and World Bank cut off most assistance in 2003. Growth rose slightly in 2004, primarily due to increases in global demand and commodity prices on world markets.