Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

GUINEA

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of December 31, 2006)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: November 17, 1995.
Exchange Measures
Restrictions and/or multiple currency practicesThe staff report for the 2005 Article IV consultation with Guinea states that as of December 5, 2005, Guinea maintained a multiple currency practice arising from the potential divergence of the official reference rate and the interbank market rate of more than 2%. (Country Report No. 06/37)
International security restrictions
Other security restrictionsYes.
References to legal instruments and hyperlinksn.a.
Exchange Arrangement
CurrencyThe currency of Guinea is the Guinean franc.
Other legal tenderSilver commemorative coins are also legal tender.
Exchange rate structure
DualThe calculation of the reference rate is based mainly on transactions of commercial banks and authorized exchange bureaus. A large unofficial foreign exchange market continues to function outside of formal market dealers. The average rate in commercial banks and authorized exchange houses often differs from the average rate in the informal exchange market by more than 2%. All the official sector transactions are conducted at the reference rate. Effective January 1, 2006, the exchange rate structure was reclassified to dual due to technical correction in the classification.
Classification
Managed floating with no predetermined path for the exchange rateThe Central Bank of the Republic of Guinea (CBRG) publishes a daily reference exchange rate, calculated as the weighted average of the rates reported by commercial banks and authorized foreign exchange bureaus. Guinea announced its participation in the W-ERM II of the WAMZ, which formally limits the fluctuations of the Guinean franc to ±15% around a central rate vis-à-vis the dollar. This has yet to be implemented, however.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketNo.
References to legal instruments and hyperlinksn.a.
Arrangements for Payments and Receipts
Prescription of currency requirementsAll current transactions effected in Guinea must be settled in Guinean francs. Settlements for transactions covered by bilateral payments agreements are made in currencies prescribed by, and through accounts established under, the provisions of the agreements. Settlements with countries other than members of the WAMZ are made in designated convertible currencies quoted by the CBRG.
Controls on the use of domestic currencyn.a.
Use of foreign exchange among residentsAll payments and transactions among residents must be made or settled in Guinean francs.
Payments arrangements
Bilateral payments arrangements
InoperativeGuinea maintains bilateral payments agreements with Bulgaria, China, the Czech Republic, Egypt, Romania, and the Russian Federation.
Clearing agreementsA multilateral clearing agreement exists between the WAEMU members and Cape Verde, The Gambia, Ghana, Guinea, Liberia, Nigeria, and Sierra Leone.
Administration of controlExchange control authority is vested in the CBRG, which has delegated to commercial banks the authority to (1) sign import descriptions and import applications, (2) allocate foreign exchange to travelers holding airline tickets for travel abroad, and (3) manage foreign currency accounts. All international settlements, including payments for imports, may be effected by commercial banks.
Payments arrears
OfficialYes.
PrivateYes.
Controls on trade in gold (coins and/or bullion)The CBRG purchases gold only in Guinean francs at international prices.
On domestic ownership and/or tradeTransactions in nonmonetary gold are not subject to restrictions.
On external tradeThe exportation of gold is subject to prior authorization by the CBRG and requires the payment of applicable taxes.
Controls on exports and imports of banknotes
On exports
Domestic currencyExports are limited to GF 100,000 a person a trip.
Foreign currencyExports of foreign currency are subject to prior authorization by the CBRG. There is no limit on exports; however, travelers must provide supporting documents for amounts exceeding the equivalent of $5,000.
On imports
Domestic currencyImports are limited to GF 100,000 a person a trip.
Foreign currencyDeclaration on entry is required.
References to legal instruments and hyperlinksn.a.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyResidents are free to open foreign exchange accounts with local banks. Exporters may hold all their earnings in foreign currency in local bank accounts.
Held abroadThese accounts are permitted, but prior approval of the CBRG is required for juridical persons, and a simple notification to the CBRG is required for natural persons.
Approval requiredYes.
Accounts in domestic currency held abroadNo.
Accounts in domestic currency convertible into foreign currencyAccounts in convertible Guinean francs may be credited with deposits in foreign exchange, irrespective of their origin. The accounts may be debited freely and converted by commercial banks into foreign currencies without prior authorization from the CBRG. Interest rates on these accounts are negotiated between the account holder and the bank.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsThe regulations governing resident accounts apply.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
Imports and Import Payments
Foreign exchange budgetYes.
Financing requirements for imports
Minimum financing requirementsThe minimum financing requirement is $2,000 or its equivalent.
Advance payment requirementsAdvance payments may be made on the basis of commercial contracts.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementYes.
Preshipment inspectionYes.
Letters of creditYes.
OtherExchange authorization, invoices, and export-import cards are required.
Import licenses and other nontariff measures
Negative listImports of armaments, ammunition, and narcotics are prohibited.
Import taxes and/or tariffsImports are subject to a VAT, a fiscal import duty (DFI), excise taxes, and other applicable taxes and fees. The VAT rate is 18%, except for essential social and food products, which are exempt. The DFI has three rates: 5% for staples, crude raw materials, and capital goods; 10% for semifinished products and industrial inputs; and 15% for all other goods for final consumption; essential social and food products are exempt from duty. There are three excise rates: 5% for used cars more than five years old, perfumes, and cosmetics; 15% for tobacco products and jewelry; and 45% for alcohol. In addition, a temporary protection surtax applies to certain goods, with two rates: 10% and 15%.
State import monopolyNo.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsPrivate traders may retain all their proceeds to finance authorized imports. Gold exporters and vendors may retain all their proceeds. Semipublic enterprises may retain abroad all their proceeds and may use them for import payments, operating expenses, and external debt service.
Financing requirementsNo.
Documentation requirements
Letters of creditYes.
GuaranteesYes.
DomiciliationAll private sector exports require domiciliation with a commercial bank and submission of an export description aimed at preventing shortages of goods needed for domestic consumption and at identifying capital outflows. Mining sector exports are exempt from this requirement.
Preshipment inspectionYes.
Export licensesThe exportation of wild animals (dead or alive), meats, articles of historic or ethnographic interest, jewelry, articles made of precious metals, and plants and seeds requires special authorization from designated agencies.
Without quotasThese are applicable to agricultural exports.
With quotasThere are quotas on the export of wild animals and articles of historic or ethnographic interest.
Export taxesExports are subject to a fiscal export duty (DFE) and other taxes and fees set for specific products. The DFE rate for exports of gold and diamonds is 5% for mining companies and 3% for the CBRG and individuals; the rate for other exported commodities is 2%; agricultural and industrial products are exempt. For bauxite exports, specific tax rates are set depending on the exporting company and the quality of product.
Other export taxesYes.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfers
Trade-related paymentsThere are no controls on payments of unloading and storage expenses.
Indicative limits/bona fide testYes.
Investment-related payments
Prior approvalPrior approval is required for government operations.
Indicative limits/bona fide testYes.
Payments for travel
Quantitative limitsYes.
Indicative limits/bona fide testYes.
Personal payments
Prior approvalPrior approval is required for payments of pensions.
Indicative limits/bona fide testThere are no indicative limits or bona fide rates for payments of pensions.
Foreign workers’ wages
Prior approvalApproval is granted only for contracts approved by the Ministry of Labor.
Quantitative limitsForeign workers may transfer up to 50% of their taxable income.
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsYes.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsn.a.
Surrender requirementsn.a.
Controls on capital and money market instrumentsAll capital transfers require authorization from the CBRG.
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Bonds or other debt securitiesThere are currently no transactions involving bonds.
On money market instruments
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
On collective investment securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Controls on derivatives and other instruments
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Controls on credit operationsThere are controls on all credit and guarantee operations.
Controls on direct investment
Outward direct investmentAuthorization by the CBRG is required.
Inward direct investmentThere are no limits on the amount nonresidents may invest in Guinea, and all Guinean and foreign nationals may hold controlling interests in Guinean enterprises.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsAuthorization by the CBRG is required for all real estate transactions.
Controls on personal capital transactionsThere are controls on all these operations.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
Provisions specific to commercial banks and other credit institutionsEffective May 1, 2006, the minimum capital for foreign exchange bureaus was increased to GF 50 million from GF 5 million.
Borrowing abroadYes.
Maintenance of accounts abroadYes.
Lending to nonresidents (financial or commercial credits)The only form of lending to nonresidents allowed is overdraft protection on checking accounts denominated in domestic currency.
Lending locally in foreign exchangeYes.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsYes.
Liquid asset requirementsYes.
Interest rate controlsYes.
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidents
Liquid asset requirementsYes.
Interest rate controlsYes.
Credit controlsYes.
Investment regulations
Abroad by banksYes.
In banks by nonresidentsYes.
Provisions specific to institutional investors
Pension fundsn.a.
Investment firms and collective investment fundsn.a.
References to legal instruments and hyperlinksn.a.
Changes during 2006
Exchange arrangementJanuary 1. The exchange rate structure was reclassified to dual due to technical correction in the classification.
Provisions specific to the financial sector
Provisions specific to commercial banks and other credit institutionsMay 1. The minimum capital for foreign exchange bureaus was increased to GF 50 million from GF 5 million.

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