The First Annual Edition of the Guinea Economic Update: Natural Resource Management for Development presents an overview of Guinea’s evolving macroeconomic position, recent economic developments, macroeconomic outlook, and risks. It highlights the importance of agriculture for structural transformation and climate-proofing Guinea’s economy. It also includes measures that could help the Guinean Government foster agricultural growth that is more productive, inclusive, resilient to climate change risks, and contributes less to climate change. Here are some highlights from the report:
1. Macroeconomic and Poverty Developments and Outlook
- Growth Acceleration: In 2023, GDP growth accelerated to 7.1%, driven by a 22 percent surge in bauxite production and strong performance in the mining sector. Inflation slowed to 9.3% at the end of 2023, supported by stable transportation costs and prudent fiscal and monetary policies.
- Challenges: Despite robust growth in recent years, the mining sector's weak linkages to the domestic economy has limited job creation and poverty reduction. The global economic disruptions caused by the COVID-19 pandemic and the conflict following Russia's war in Ukraine further constrained job creation and poverty reduction efforts.
2. Importance of Agriculture for Structural Transformation and Climate Proofing
- Natural Resource Management: Guinea has abundant natural resources, including significant reserves of bauxite, iron ore, gold, and diamonds. The country also has substantial hydropower potential and excellent agro-climatic conditions for agriculture.
- Challenges and Opportunities: Effective management of these resources is crucial for Guinea’s long-term development. The country faces challenges such as climate change, poor quality roads, and limited water management infrastructure. Addressing these issues can help unlock Guinea’s wealth creation potential and strengthen its resilience to climate-induced shocks.