The International Monetary Fund (IMF) estimated at the end of last week that the Guinean economy has achieved a 7% increase in its gross domestic product (GDP). This growth has been driven by a booming mining sector that accounts for about 12-15% of the country’s GDP.
One of the highest growth rates in Africa in 2020
However, notes the Bretton Woods institution, despite the implementation of a rapid and well-structured response plan, the pandemic has wreaked havoc in the non-mining economy. This loss represents more than 3/4 of the total GDP and employs a large majority of the population. The monetary institution says the mining sector should continue to support overall growth in 2021.
But Guinea will face a double health shock. The increase in Covid-19 cases coupled with a resurgence of the Ebola epidemic, fortunately, seems to be localized and under control. As such, growth in the non-mining sector is expected to recover only gradually.
On the other hand, according to the IMF, growth should reach 5.2% in 2021, driven by the continued strength of the mining sector. Non-mining growth remains moderate and is not expected to recover fully until 2022.
Is Guinea’s booming economy really sustainable?
In addition, the IMF recommends that the Guinean authorities continue the response to the pandemic, including accelerating large-scale vaccinations. Efforts should also be intensified to support vulnerable populations and to sustain economic recovery. The authorities, the institution stresses, are encouraged to continue their efforts to mobilize domestic revenues – including from the mining sector. This is critical to create fiscal space to finance pressing infrastructure and human capital development needs.
Reforms to strengthen governance and the business climate will stimulate diversification and ensure a more resilient and inclusive recovery.
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