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Guinea vs. Liberia

Economy

GuineaLiberia
Economy - overview

Guinea is a poor country of approximately 12.9 million people in 2016 that possesses the world's largest reserves of bauxite and largest untapped high-grade iron ore reserves, as well as gold and diamonds. In addition, Guinea has fertile soil, ample rainfall, and is the source of several West African rivers, including the Senegal, Niger, and Gambia. Guinea's hydro potential is enormous and the country could be a major exporter of electricity. The country also has tremendous agriculture potential. Gold, bauxite, and diamonds are Guinea’s main exports. International investors have shown interest in Guinea's unexplored mineral reserves, which have the potential to propel Guinea's future growth.

Following the death of long-term President Lansana CONTE in 2008 and the coup that followed, international donors, including the G-8, the IMF, and the World Bank, significantly curtailed their development programs in Guinea. However, the IMF approved a 3-year Extended Credit Facility arrangement in 2012, following the December 2010 presidential elections. In September 2012, Guinea achieved Heavily Indebted Poor Countries completion point status. Future access to international assistance and investment will depend on the government’s ability to be transparent, combat corruption, reform its banking system, improve its business environment, and build infrastructure. In April 2013, the government amended its mining code to reduce taxes and royalties. In 2014, Guinea complied with requirements of the Extractive Industries Transparency Initiative by publishing its mining contracts. Guinea completed its program with the IMF in October 2016 even though some targeted reforms have been delayed. Currently Guinea is negotiating a new IMF program which will be based on Guinea’s new five-year economic plan, focusing on the development of higher value-added products, including from the agro-business sector and development of the rural economy.

Political instability, a reintroduction of the Ebola virus epidemic, low international commodity prices, and an enduring legacy of corruption, inefficiency, and lack of government transparency are factors that could impact Guinea’s future growth. Economic recovery will be a long process while the government adjusts to lower inflows of international donor aid following the surge of Ebola-related emergency support. Ebola stalled promising economic growth in the 2014-15 period and impeded several projects, such as offshore oil exploration and the Simandou iron ore project. The economy, however, grew by 6.6% in 2016 and 6.7% in 2017, mainly due to growth from bauxite mining and thermal energy generation as well as the resiliency of the agricultural sector. The 240-megawatt Kaleta Dam, inaugurated in September 2015, has expanded access to electricity for residents of Conakry. An combined with fears of Ebola virus, continue to undermine Guinea's economic viability.

Guinea’s iron ore industry took a hit in 2016 when investors in the Simandou iron ore project announced plans to divest from the project. In 2017, agriculture output and public investment boosted economic growth, while the mining sector continued to play a prominent role in economic performance.

Successive governments have failed to address the country's crumbling infrastructure. Guinea suffers from chronic electricity shortages; poor roads, rail lines and bridges; and a lack of access to clean water - all of which continue to plague economic development. The present government, led by President Alpha CONDE, is working to create an environment to attract foreign investment and hopes to have greater participation from western countries and firms in Guinea's economic development.

Liberia is a low-income country that relies heavily on foreign assistance and remittances from the diaspora. It is richly endowed with water, mineral resources, forests, and a climate favorable to agriculture. Its principal exports are iron ore, rubber, diamonds, and gold. Palm oil and cocoa are emerging as new export products. The government has attempted to revive raw timber extraction and is encouraging oil exploration.

In the 1990s and early 2000s, civil war and government mismanagement destroyed much of Liberia's economy, especially infrastructure in and around the capital. Much of the conflict was fueled by control over Liberia’s natural resources. With the conclusion of fighting and the installation of a democratically elected government in 2006, businesses that had fled the country began to return. The country achieved high growth during the period 2010-13 due to favorable world prices for its commodities. However, during the 2014-2015 Ebola crisis, the economy declined and many foreign-owned businesses departed with their capital and expertise. The epidemic forced the government to divert scarce resources to combat the spread of the virus, reducing funds available for needed public investment. The cost of addressing the Ebola epidemic coincided with decreased economic activity reducing government revenue, although higher donor support significantly offset this loss. During the same period, global commodities prices for key exports fell and have yet to recover to pre-Ebola levels.

In 2017, gold was a key driver of growth, as a new mining project began its first full year of production; iron ore exports are also increased as Arcelor Mittal opened new mines at Mount Gangra. The completion of the rehabilitation of the Mount Coffee Hydroelectric Dam increased electricity production to support ongoing and future economic activity, although electricity tariffs remain high relative to other countries in the region and transmission infrastructure is limited. Presidential and legislative elections in October 2017 generated election-related spending pressures.

Revitalizing the economy in the future will depend on economic diversification, increasing investment and trade, higher global commodity prices, sustained foreign aid and remittances, development of infrastructure and institutions, combating corruption, and maintaining political stability and security.

GDP (purchasing power parity)
$27.97 billion (2017 est.)
$25.84 billion (2016 est.)
$23.39 billion (2015 est.)

note: data are in 2017 dollars

$6.112 billion (2017 est.)
$5.965 billion (2016 est.)
$6.064 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
8.2% (2017 est.)
10.5% (2016 est.)
3.8% (2015 est.)
2.5% (2017 est.)
-1.6% (2016 est.)
0% (2015 est.)
GDP - per capita (PPP)
$2,200 (2017 est.)
$2,000 (2016 est.)
$1,900 (2015 est.)

note: data are in 2017 dollars

$1,300 (2017 est.)
$1,300 (2016 est.)
$1,300 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 19.8% (2017 est.)
industry: 32.1% (2017 est.)
services: 48.1% (2017 est.)
agriculture: 34% (2017 est.)
industry: 13.8% (2017 est.)
services: 52.2% (2017 est.)
Population below poverty line
47% (2006 est.)
54.1% (2014 est.)
Household income or consumption by percentage share
lowest 10%: 2.7%
highest 10%: 30.3% (2007)
lowest 10%: 2.4%
highest 10%: 30.1% (2007)
Inflation rate (consumer prices)
8.9% (2017 est.)
8.2% (2016 est.)
12.4% (2017 est.)
8.8% (2016 est.)
Labor force
5.558 million (2017 est.)
1.677 million (2017 est.)
Labor force - by occupation
agriculture: 76%
industry: 24% (2006 est.)
agriculture: 70%
industry: 8%
services: 22% (2000 est.)
Unemployment rate
2.7% (2017 est.)
2.8% (2016 est.)
2.8% (2014 est.)
Distribution of family income - Gini index
39.4 (2007)
40.3 (1994)
32 (2014)
38.2 (2007)
Budget
revenues: 1.7 billion (2017 est.)
expenditures: 1.748 billion (2017 est.)
revenues: 553.6 million (2017 est.)
expenditures: 693.8 million (2017 est.)
Industries
bauxite, gold, diamonds, iron ore; light manufacturing, agricultural processing
mining (iron ore and gold), rubber processing, palm oil processing, diamonds
Industrial production growth rate
11% (2017 est.)
9% (2017 est.)
Agriculture - products
rice, coffee, pineapples, mangoes, palm kernels, cocoa, cassava (manioc, tapioca), bananas, potatoes, sweet potatoes; cattle, sheep, goats; timber
rubber, coffee, cocoa, rice, cassava (manioc, tapioca), palm oil, sugarcane, bananas; sheep, goats; timber
Exports
$3.514 billion (2017 est.)
$1.954 billion (2016 est.)
$260.6 million (2017 est.)
$169.8 million (2016 est.)
Exports - commodities
bauxite, gold, diamonds, coffee, fish, agricultural products
rubber, timber, iron, diamonds, cocoa, coffee
Exports - partners
China 35.8%, Ghana 20.1%, UAE 11.6%, India 4.3% (2017)
Germany 36.2%, Switzerland 14.2%, UAE 8.8%, US 6.8%, Indonesia 4.7% (2017)
Imports
$4.799 billion (2017 est.)
$4.43 billion (2016 est.)
$1.166 billion (2017 est.)
$1.296 billion (2016 est.)
Imports - commodities
petroleum products, metals, machinery, transport equipment, textiles, grain and other foodstuffs
fuels, chemicals, machinery, transportation equipment, manufactured goods; foodstuffs
Imports - partners
Netherlands 17.2%, China 13.2%, India 11.8%, Belgium 10%, France 6.9%, UAE 4.5% (2017)
Singapore 29.8%, China 24.4%, South Korea 17.5%, Japan 9.4% (2017)
Debt - external
$1.458 billion (31 December 2017 est.)
$1.462 billion (31 December 2016 est.)
$1.036 billion (31 December 2017 est.)
$938.9 million (31 December 2016 est.)
Exchange rates
Guinean francs (GNF) per US dollar -
9,230 (2017 est.)
9,085 (2016 est.)
9,085 (2015 est.)
7,485.5 (2014 est.)
7,014.1 (2013 est.)
Liberian dollars (LRD) per US dollar -
109.4 (2017 est.)
93.4 (2016 est.)
93.4 (2015 est.)
85.3 (2014 est.)
83.893 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
37.9% of GDP (2017 est.)
41.8% of GDP (2016 est.)
34.4% of GDP (2017 est.)
28.3% of GDP (2016 est.)
Reserves of foreign exchange and gold
$331.8 million (31 December 2017 est.)
$383.4 million (31 December 2016 est.)
$459.8 million (31 December 2017 est.)
$528.7 million (31 December 2016 est.)
Current Account Balance
-$705 million (2017 est.)
-$2.705 billion (2016 est.)
-$627 million (2017 est.)
-$464 million (2016 est.)
GDP (official exchange rate)
$10.25 billion (2017 est.)
$3.285 billion (2017 est.)
Stock of direct foreign investment - at home
$3.174 billion (31 December 2017 est.)
$2.391 billion (31 December 2016 est.)
$17.01 billion (31 December 2015 est.)
$16.56 billion (31 December 2014 est.)
Stock of direct foreign investment - abroad
$1.8 million (31 December 2017 est.)
$69.19 million (31 December 2016 est.)
$201 million (31 December 2013 est.)
$201 million (31 December 2012 est.)
Market value of publicly traded shares

NA

NA

Central bank discount rate
22.25% (31 December 2005)
3.2% (2016)
Commercial bank prime lending rate
22.2% (31 December 2017 est.)
22.2% (31 December 2016 est.)
13.3% (31 December 2017 est.)
13.59% (31 December 2016 est.)
Stock of domestic credit
$1.762 billion (31 December 2017 est.)
$1.931 billion (31 December 2016 est.)
$792.3 million (31 December 2017 est.)
$789.4 million (31 December 2016 est.)
Stock of narrow money
$1.84 billion (31 December 2017 est.)
$1.61 billion (31 December 2016 est.)
$423 million (31 December 2017 est.)
$438.3 million (31 December 2016 est.)
Stock of broad money
$1.84 billion (31 December 2017 est.)
$1.61 billion (31 December 2016 est.)
$423 million (31 December 2017 est.)
$438.3 million (31 December 2016 est.)
Taxes and other revenues
16.6% (of GDP) (2017 est.)
16.9% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
-0.5% (of GDP) (2017 est.)
-4.3% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 1%
male: 1.5%
female: 0.6% (2012 est.)
total: 2.3%
male: 2.4%
female: 2.2% (2016 est.)
GDP - composition, by end use
household consumption: 80.8% (2017 est.)
government consumption: 6.6% (2017 est.)
investment in fixed capital: 9.1% (2017 est.)
investment in inventories: 18.5% (2017 est.)
exports of goods and services: 21.9% (2017 est.)
imports of goods and services: -36.9% (2017 est.)
household consumption: 128.8% (2016 est.)
government consumption: 16.7% (2016 est.)
investment in fixed capital: 19.5% (2016 est.)
investment in inventories: 6.7% (2016 est.)
exports of goods and services: 17.5% (2016 est.)
imports of goods and services: -89.2% (2016 est.)
Gross national saving
5.1% of GDP (2017 est.)
-6.3% of GDP (2016 est.)
-5.3% of GDP (2015 est.)
NA% (2017)
-21.9% of GDP (2016 est.)
1.9% of GDP (2016 est.)

Source: CIA Factbook