In Guinea-Bissau, Economic Growth Depends on Strengthening Gender Equality and Education

BISSAU, February 17, 2023 - Guinea-Bissau has the highest proportion of natural wealth per capita in West Africa. However, poverty remains widespread, with high levels of inequality and increasing rural-urban disparities, while human development indicators remain among the lowest in the world, and low access to basic services contribute to exclusion and marginalization.

What is holding Guinea-Bissau’s growth back? Fragility and political instability, a weak human capital base, and a “missing” private sector are the three main constraints identified by both the Country Economic Memorandum and the Economic Update reports.

Guinea-Bissau has a history of political and institutional fragility dating back to its independence from Portugal. Chronic political instability has been detrimental to the economy in several ways, including through causing a sharp decline in investment and development financing.

The structure of the economy in the country has barely changed in the last two decades and is almost entirely dependent on a single crop of cashew, which accounts for 90-98% of total export earnings. Agriculture accounts for more than 45% of GDP and employs 80% of the labor force, mainly women. The poorly diversified economy makes the country highly vulnerable to global shocks and adverse climatic conditions.

In addition, private investment in Guinea-Bissau is low—the second lowest in Africa—because of political instability and due to the difficult business environment.

These constraints were further exacerbated by the COVID-19 crisis.

In 2022, inflation more than doubled to 7.8% due to the high costs of food and energy imports, which limited private consumption and contributed to slower economic growth. Weak cashew export performance has limited fiscal revenues, and higher-than-expected current expenditures, especially on wage bills, have led to high fiscal deficit and rising debt. However, the authorities are committed to fiscal consolidation to ensure medium-term sustainability, and despite the weak performance of the 2022 cashew campaign, the 2023 campaign is expected to be strong and support real economic growth at 4.5%.

In terms of the education system, despite some progress in expanding access to basic education, there are still large gender and regional disparities. A third of children between the ages of 6 and 11 have never attended school and the education quality remains low.

Another constraint that is holding back growth is high gender inequality, which has negatively impacted a wide range of development outcomes. The direct cost of gender inequality in earnings in terms of lost human capital wealth is estimated to be as high as $ 5.6 billion.

In the country, 97% of women experienced gender-based violence in the last eight years, the majority of which (86%) in their homes. Women have less opportunities in terms of employment and are much less likely to earn a wage than man, which limits their economic autonomy.

Also, girls are much less likely to finish school than boys, and there are high rates of child marriages and early childbearing. Educating girls is thus essential for girls to have agency, not only within their household, but also in the labor market and in their communities. In addition to delaying marriage and childbearing, improving girls’ education provides a range of other benefits, including higher earnings in adulthood, and it is also essential for countries to reach their full development potential.

Turning the narrative around

Despite this scenario, there are many opportunities for Guinea-Bissau to turn the narrative around.

The Economic Update and the Country Economic Memorandum give a comprehensive overview of the economic sector and present a series of policy options that the government could implement to overcome the main constraints identified. Strengthening governance, investing in human capital with a focus on education and gender equality, and improving the business climate are key pillars for Guinea-Bissau to break out of the fragility cycle towards sustainable and inclusive growth.

A stronger economy can help bolster governance by empowering citizens and better governance allows the government to carry out policies needed to support the private sector. It also means that the proceeds of growth can be distributed through public services or social assistance programs.

It is also vital to reduce gender disparities by, among other measures, improving girl’s access to education, reducing child marriage and early childbearing, strengthening women’s voices, addressing gender-based violence and improving laws and the regulatory framework for women’s economic autonomy, employment, and income opportunities.