Economy - overview: Guinea-Bissau is highly dependent on subsistence agriculture, cashew nut exports, and foreign assistance. Two out of three Bissau-Guineans remain below the absolute poverty line. The legal economy is based on farming and fishing, but illegal logging and trafficking in narcotics are also important economic activities. The combination of limited economic prospects, weak institutions, and favorable geography have made this West African country a way station for drugs bound for Europe while trade in illegal logging, food, and fishing is also significant.
Guinea-Bissau has substantial potential for development of mineral resources including phosphates, bauxite, and mineral sands. The country’s climate and soil make it feasible to grow a wide range of cash crops, fruit, vegetables, and tubers; however, cashews generate more than 80% of export receipts and are the main source of income for many rural communities.
With renewed donor support following elections in April-May 2014 and a successful regional bond issuance, the government of Guinea-Bissau made progress paying salaries, settling domestic arrears, and gaining more control over revenues and expenditures, but was deposed by the President in August 2015. A political stalemate since then has resulted in weak governance.
Definition: This entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique areas of specialization. It also characterizes major economic events and policy changes in the most recent 12 months and may include a statement about one or two key future macroeconomic trends.
Source: CIA World Factbook - This page was last updated on October 8, 2016