Guinea
Poverty Reduction Strategy Paper: Annual Progress Report

Guinea’s 2007–10 Poverty Reduction Strategy Paper is intended to reestablish strong, sustainable economic growth in a favorable political and institutional context. The percentage of underweight children under age five has increased from 25.8 percent in 2005 to 26.1 percent in 2008, indicating a slight increase in malnutrition. The coverage of vaccination against measles for children under age one declined from 85.3 percent in 2007 to 65.4 percent in 2008. The number of health centers nationwide remains unsatisfactory despite a modest increase from 399 in 2007 to 410 in 2009.

Abstract

Guinea’s 2007–10 Poverty Reduction Strategy Paper is intended to reestablish strong, sustainable economic growth in a favorable political and institutional context. The percentage of underweight children under age five has increased from 25.8 percent in 2005 to 26.1 percent in 2008, indicating a slight increase in malnutrition. The coverage of vaccination against measles for children under age one declined from 85.3 percent in 2007 to 65.4 percent in 2008. The number of health centers nationwide remains unsatisfactory despite a modest increase from 399 in 2007 to 410 in 2009.

Introduction

In view of grave institutional and political instability, a weak democracy, and a particularly difficult economic situation resulting in heightened social tensions, the PRSP2 was not properly implemented. However, two status reports were prepared for 2007 and 2008 to report on progress in implementation. Their findings were that no progress had been made in the fight against poverty, as the incidence of poverty was on the order of 58 percent in 2010 compared to 49.2 percent in 2002, the year when the first PRSP was prepared and implemented.

The country is unable to support strong and sustainable growth. The following data on the economy’s growth provide a sad illustration of this fact: economic growth, which increased from 1.8 percent in 2007 to 4.9 percent in 2008, fell to -0.3 percent in 2009.

At 20.8 percent, annual inflation is clearly above the target of 3.0 percent for 2010. Moreover, international reserves covered only one month of imports in 2008. This underperformance significantly impacted the achievement of PRSP2 objectives as well as the Millennium Development Goals (MDGs).

At the time of the 2011-2012 PRSP was prepared, only six of the 10 triggers of the HIPC completion point had been achieved. These were the indicators related to improving the poverty database, implementing a regulatory framework for microfinance institutions, publishing the annual report of the National Governance and Anticorruption Agency (ANBGLC), improving the primary school gross enrollment ratio, recruiting 1,500 teachers per year, and expanding DPT3 vaccination coverage as part of the effort to control diseases under the Expanded Vaccination Program (PEV). The four indicators that were not achieved relate to satisfactory implementation of the PRSP, the audit of large public contracts, increasing the rate of prenatal consultations, and the Poverty Reduction and Growth Facility, which could not be finalized because of the December 2008 coup. The effort ahead will involve not only preserving gains in the areas of the six triggers achieved, but above all achieving the four triggers still pending.

The suspension of the Constitution and dissolution of civilian government institutions, chiefly the National Assembly, by the junta that came to power on December 23, 2008, was a blow to democracy in Guinea. One of the consequences was suspension of the program concluded with the IMF.

The return to constitutional order will allow Guinea to regain the trust of its development partners – which, as we know, make their assistance contingent on progress in the areas of democracy, good governance, and respect for human rights. But any resumption must be part of a consistent strategic framework encompassing all the interventions. Hence the government’s decision to prepare a new poverty reduction strategy.

This new framework extends the PRSP2 to 2012. It incorporates the main issues addressed in the PRSP2 and places particular emphasis on problems of governance, including the urgency of reforming defense and security forces, consolidating peace, and reforming the legal and judicial system. The macroeconomic objectives are also revised and distributed over the period. Achievement of those objectives is subject to the implementation of new economic and financial policy measures. Following the implementation of this PRS, a more detailed PRSP3 will be prepared at end-2012 covering a period of three years.

This document includes three sections. The first section describes the general context of the 2011-2012 PRSP, the lessons drawn from PRSP II and the assessment of poverty in Guinea.

The second section addresses the strategy and priority actions, namely:

  • ✓ improving governance and strengthening institutional and human capacities;

  • ✓ accelerating growth and creating job opportunities for all; and

  • ✓ improving access to quality social services.

The third section addresses implementation, monitoring, and evaluation of the poverty reduction strategy.

PART I: GENERAL CONTEXT AND POVERTY ASSESSMENT

Chapter 1. General context and lessons drawn from PRSP2

I.1.1. Political context

The presidential election of November 7, 2010 marked the beginning of Guinea’s return to constitutional order following a December 23, 2008 coup that brought a military junta to power. The junta had suspended the Constitution and dissolved the National Assembly, plunging the country into a constitutional void that impacted the functioning of government.

This new context raises immense hopes on the part of Guineans and hope that new prospects for the country, which has suffered economic difficulties for many years that have considerably hindered its development.

It is important to remember that the crisis faced by the country is primarily due to mismanagement of public resources; weaknesses in the institutional, legal, and regulatory framework for businesses; and absence of dialogue with political parties, civil society, and the private sector.

Under the new framework, it is now possible to put an end to the unsound practices that have characterized the management of public resources. This opportunity offers the new authorities the chance to work to improve macroeconomic and financial management by establishing and implementing policy measures, particularly in the area of budget and monetary policy. The implementation of these new measures are expected to improve budget execution in accordance with the PRSP priorities.

Also, the reform of defense and security forces now under way should be continued. The objective here is to transform these units into a republican corps committed exclusively to territorial defense and integrity and the protection of persons and property. Likewise, reform of the justice system and the fight against corruption should take on a new dimension, in the interest of establishing an independent, professional legal system able to reassure investors and provide the security for investments that is essential to economic and social development. All judicial and related decisions should be systematically enforced. This new environment will attract foreign private investment, thereby helping to improve the business climate.

I.1.2. Economic context

In 2010, all the macroeconomic indicators point to a difficult situation for the country. The economic growth rate is calculated at 1.9 percent, insufficient to push back the tide of poverty. The inflation rate of 20.8 percent projected for 2010 is high and, from all indications, has seriously eroded citizens’ purchasing power. According to the results of the 2007 Limited Poverty Assessment Survey (ELEP) the incidence of poverty, which was 49.2 percent in 2002, stood at 53 percent in 2007 and will be 58 percent in 2010.

Foreign reserves have dwindled to the point of covering only two months of imports. Domestic and external arrears have increased sharply, making it difficult to improve the economic framework. All of this is due to mismanagement of public finances, which has failed to reconcile the high pressure of expenditures with particularly weak revenue.

Moreover, debt continues to weigh heavily on meager public resources. At end-2010, Guinea’s stock of external debt totaled US$3 billion with average debt service of approximately US$175 million. This situation is of great concern today, because it prevents the financing of the sectors essential to reducing poverty. Debt represents 67 percent of GDP, and the ratio of debt service to tax revenue in 2010 was 31.95 percent. It is very clear, then, that the debt greatly constrains the government’s ability to finance its antipoverty interventions from the budget. In a context of declining public investment, the government has no choice but to accumulate arrears in order to maintain certain domestic expenditures. Debt relief will enable the government to focus the budget on innovative anti-poverty programs. From this standpoint, reaching the HIPC completion point is a key objective because it will free resources to finance priority sectors. Aggravating this scenario are the drastic reduction in both bilateral and multilateral public development assistance, and the continually increasing prices of key imports such as food and petroleum products.

In fact, between 2004 and 2007 the prices of Guinea’s principal imported products increased on the order of 26 percent overall. This pace accelerated beginning in 2006 and continued through the second half of 2008, when international prices of food products, which represent 32 percent of the country’s imports, increased by 89 percent. This was driven by the price of grains (rice and wheat), which increased by an average of 132 percent. During the same period, the price of oil climbed from US$65 to US$122 per barrel, or an increase of 86 percent. In July 2008, the price of wheat had increased by 130 percent, the price of rice by 124 percent, and the price of oil by 81 percent compared to the same period the previous year. In the grains market, the increased price in dollars was compounded by the weakening of the dollar vis-à-vis the currencies of the principal rice exporters (Thailand, Vietnam, China).

The impact of the global financial and economic crisis was reflected in fiscal revenue. During the first eight months of 2009, fiscal revenue from the mining sector declined sharply at an average of 3 percent per month compared to an increase of approximately 16 percent per month over the same period of 2008. Mining receipts represented 22 percent of fiscal revenue in 2008 (15 percent for the period January – August 2009). They contributed in equal proportion to the deterioration of the current account balance (commitment basis), which declined from a monthly average of GNF 14 billion between January and August 2008 to -GNF 35 billion during the same period of 2009.

At this rate, it would be extremely difficult for the country to reach the HIPC completion point unless this trend is quickly reversed.

I.1.3. Lessons drawn from implementation of the PRSP2 (2007-2010)

I.1.3.1. Improving governance and strengthening institutional and human capacities

Although the PRSP2 placed considerable emphasis on governance because of its impact on economic growth and poverty reduction, it must be acknowledged that little progress was made in this area. We recall in this regard that political problems resulting from the military coup aggravated institutional instability and the absence of dialogue between the various stakeholders, the most serious consequence of which were the events of September 28, 2009. To resolve these problems, it is a matter of urgency to reform the defense and security forces, strengthen the legal system, deepen the dialogue between different stakeholders, and consolidate the peace.

The lack of institutional stability and macroeconomic mismanagement have produced adverse consequences that continue to produce effects for Guinea’s development and the struggle against poverty.

In regard to fighting corruption, results have been limited due to factors including those discussed above. In light of impunity and mismanagement that has characterized the national economy since 2007, the objective of reducing the corruption index from 36 percent in 2003 to 10 percent in 2010 was not achieved. Similarly, little progress was made in advancing the status of women. Of the 114 deputies in the national assembly in 2008, only 22 were women, and only 39 of the 159 members of the National Transition Council, or 24 percent, are women. This is far from the 40 percent objective established in the PRSP2.

Table 1:

Trends in principal governance indicators

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Source: PRSP2 implementation reports

In regard to primary school parity, the girl/boy ratio increased to 0.83 in 2007; the ratio was expected to reach roughly 0.92 in 2010, in line with PRSP2 objectives.

It is important to note the significant progress made in regard to creating private radio stations, which expanded from a total of five in 2006 to 42 in 2010, including 25 commercial and foreign stations. This represents genuine progress in media coverage.

I.1.3.2. Accelerating growth and creating job opportunities for all

The results in terms of economic growth and job creation were quite mixed. Economic growth averaged 2.1 percent between 2007 and 2009, with annual rates of 1.8 percent in 2007, 4.9 percent in 2008, -0.3 percent in 2009, and 1.9 percent in 2010 according to the most recent macroeconomic framing. This indicator is well below the PRSP2 target of 5.3 percent that was to bring the poverty rate to 49.7 percent compared to 53.6 percent in 2005.

Graph 1.
Graph 1.

Real GDP growth, 2007 - 2010

Citation: IMF Staff Country Reports 2012, 061; 10.5089/9781475502534.002.A001

Key: Blue = Real GDP (actual)Red = Real GDP (target)Source: macroeconomic framing, National Directorate of Planning (DNP)

Year-on-year inflation stood at 12.8 percent, 13.5 percent, 7.9 percent, and 20.8 percent, respectively, in 2007, 2008, 2009, and 2010 for an annual average of 13.7 percent for the period. This is well above the PRSP2 objective by 3 percent. This result, combined with an average 1.1 percent decline in per capita GDP (compared to a target of +1.9 percent), is a sure indicator of increased poverty.

Graph 2.
Graph 2.

Year-on-year inflation, 2007 - 2010

Citation: IMF Staff Country Reports 2012, 061; 10.5089/9781475502534.002.A001

Key: Blue = Year-on-year inflationRed = Target in 2010Source: macroeconomic framing, DNP

Gains were made with regard to investment. The investment rate averaged 21.3 percent over the period compared to an objective of 17.4 percent. Despite the improvement, however, investments failed to boost growth and substantially reduce poverty. This is essentially because investments were geared toward nonproductive sectors such as security and defense. Moreover, given the suspension of foreign aid, these investments were financed largely from the national development budget. This served to aggravate the budget deficit, which averaged 5.7 percent over the period compared to a target of 1.5 percent.

Debt service expressed as a percentage of exports of goods and services stood at 13.7 percent on average compared to a target of 10 percent, reflecting the continued burden of foreign debt on Guinea’s meager public resources.

The following table summarizes the trends in the principal macroeconomic indicators for the period 2007-2010.

Table 2:

Principal macroeconomic indicators, 2007 – 2010

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Source: Macroeconomic framing, DNP
I.1.3.3. Improving access to quality social services

The objectives in the PRSP2 were not achieved for a number of reasons, including inadequate financing for the sector and the suspension of certain external financing. In the education sector, for example, human resources management fell short of the objective of rational, optimal use of teaching staff to cover needs. In particular, certain urban centers were overstaffed.

This situation led to setbacks in a number of key indicators for achieving the MDGs. Nationwide, the gross enrollment ratio fell from 79 percent in 2007-2008 to 77 percent in 2008-2009 versus an objective of 83 percent. The rate among girls declined from 71 percent in 2007-2008 to 70 percent in 2008-2009. The gross registration rates, in turn, increased from 60 percent in 2000 (55 percent for girls) to 82 percent in 2007 (78 percent for girls).

In the health sector, the results of PRSP2 implementation were mixed. The measles vaccination coverage rates for children under age 1 declined from 85.3 percent in 2007 to 65.4 percent in 2008. This situation is attributable to a number of factors:

  • ✓ inadequate financing for the sector;

  • ✓ lack of qualified personnel and poor allocation of personnel, particularly midwives in rural areas;

  • ✓ poor allocation of personnel due to the concentration of professionals in urban areas; and

  • ✓ limited access to medicine, particularly for persons living in rural areas, due to income constraints and inadequate quality of health care structures.

The proportion of tuberculosis cases detected and treated improved in recent years, increasing from 66.0 percent in 2007 to 71 percent in 2008.

With respect to housing and sanitation, little progress was made in either sector. Not all of the housing and sanitation projects planned were effectively implemented, with the result that housing continues to be inadequate and unhealthy. For example, over 20 percent of households lacked toilets, and roughly 82.6 percent of households dump their waste in the environment. Only 1.1 percent of households have access to a sewer system. However, the formulation of the Guinean national housing policy (PNHG), under the name “Vision Habitat 2021,” is a hopeful sign and its implementation is a step toward improving housing and sanitation in Guinea. The PNHG is representative of a forward-looking approach, and reflects the government’s intention to address the issue of chaotic housing development and uncontrolled urban growth by relying on a participatory and inclusive approach.

In regard to electric power, electrification continues to be limited. In 2007, the rate of access to electricity was 18.1 percent nationwide, with great disparities between urban areas (68.9 percent) and rural areas (2 percent). The drinking water sector, like other sectors, was impacted by financing problems. The rate of access to clean drinking water, while improved, with only 73.8 percent in 2007, representing an increase of 11.6 percentage points in five years; at that pace, the national rate of access to safe drinking water would be only 81 percent in 2010 compared to an objective of 90 percent.

In conclusion, one could say that the promulgation of the new constitution, the free, transparent election of the President of the Republic, the prospect of future legislative and local elections, also free and transparent, are factors conducive to the installation of good governance in managing public affairs. Provided such efforts are made, Guinea can regain the trust of its development partners and return to the path of strong growth that can significantly reduce poverty.

It is against this fragile sociopolitical backdrop that the 2011-2012 PRSP will be implemented. The challenges to overcome are many, and are political as well as economic. From a political standpoint, our country must build strong, modern institutions in order to consolidate the peace and democracy essential to social and economic progress. From an economic standpoint, efforts should focus on restoring a sound macroeconomic framework through effective mobilization of domestic and external resources and improvement of the quality of public expenditure.

I.1.4. Participatory process

Like its predecessors, the 2011-2012 PRSP reflects the principle of participation and empowerment as recommended in the Policy Letter on Poverty Reduction issued by the government in February 2000. As in previous PRSPs, the involvement of stakeholders in the preparation process is greatly appreciated.

The approach was dictated by number of concerns: (i) to ensure that the strategy was relevant and adapted to the essential concerns of our citizens, especially the poorest; (ii) to improve the quality of decisions and the decision-making process in managing public affairs; and (iii) to ensure greater efficiency in public action and consolidate gains.

The objective was to understand poverty as it is experienced by citizens in their everyday lives, and to debate the roles of different stakeholders in formulating, managing, monitoring, and evaluating development actions.

To this end, the government, through the Permanent Secretariat for the Poverty Reduction Strategy (SP-SRP) and with support from the development partners, organized a series of consultations and workshops on the aspects summarized below:

  • Preparation of two PRSP2 (2007-2010) implementation reports for 2007 and 2008. These reports evaluated the results achieved between 2007 and 2008 and proposed specific measures for the 2011-2012 PRSP.

  • Preparation and presentation of regional PRSP implementation status reports. These progress reports on implementation of the PRS were all prepared and presented by the Regional Monitoring and Evaluation Units at a workshop in Mamou attended by all the stakeholders involved in the process of implementing regional poverty reduction strategies. The reports served as inputs to preparation of the 2011-2012 PRSP.

  • Organization of a workshop to develop the framework for monitoring PRSP results. The workshop was held January 25-27, 2011 at the SP-SRP for members of the technical monitoring and evaluation groups (GTSE) with technical support from the World Bank. The workshop prepared a matrix for monitoring PRSP outcomes.

  • Presentation of the PRSP to regional and other beneficiaries. Two regional workshops were organized outside the capital to present the PRSP and promote appropriation by citizens. The first, held on January 27-28, 2011 in the Kindia administrative region, was attended by about 100 participants from all the prefectures and communes from the natural regions of Lower Guinea and Mid-Guinea. The second workshop was held in Kankan during January 31-February 1, 2011 and was attended by some hundred participants from the natural regions of Upper Guinea and Forested Guinea. Both workshops were also attended by government officials, members of civil society organizations, unions, local elected officials, NGOs, academics, etc.

  • Presentation of the PRSP to members of government. In light of the importance the government attaches to the PRSP, a presentation on the PRSP was given to members of the government during a seminar held at Mariador Palace in Conakry on January 27-29, 2011.

  • Presentation of the PRSP to key government bodies (National Transition Council (CNT), Economic and Social Council (CES)). The workshop was attended by some 60 members of the CNT and CES to facilitate their appropriation of the document.

  • Organization of a national PRSP validation workshop. This workshop, chaired by the Prime Minister, brought together all of the stakeholders involved, including civil society, unions, NGOs, local elected officials, etc. it was also attended by several ministers and representatives of international institutions and a number of ambassadors appointed to Guinea.

Concomitant with the national and regional presentations of the PRSP, a subjective survey of all workshop participants was conducted with technical support from the World Bank to determine their perceptions of poverty.

One of the findings at the conclusion of the study was the idea that poverty is to a large extent understood in terms of personal experience, that is to say, basic unmet needs. We would note above all the lack of access to basic social services and low per capita income. Accordingly, the study found that the persons surveyed perceived their condition of poverty and that of their community in terms of inadequate nutrition, lack of access to safe drinking water, and low income.

I.1.5. The 2011-2012 Poverty Reduction Strategy Paper and Priority Action Plan

The key strategies time in response to Guinea’s current political and economic situation are, first, to reform the defense and security forces and preserve and consolidate social peace, and second, to restart the process of economic and social development. From this perspective, according to the program address by the President of the Republic, the government’s priority actions focus on the short and medium term.

To restart the development process, the government has established a priority action plan based on five main pillars aligned with the pillars of the 2011-2012 PRSP: (i) improving overall governance; (ii) combating poverty; (iii) developing basic infrastructures; (iv) developing and expanding the economy; and (v) reforming the defense and security forces.

The 2011-2012 PRSP comes within the framework of achieving short-term development objectives, including the MDGs, by 2015. Focused on the period 2011-2012, it aims to build on the achievements of the priority action plan, particularly in the areas of governance, developing basic infrastructures and social services, re-launching sustainable economic growth, and accelerating the achievement of MDGs in Guinea.

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1-2012 PRSP and Priority Action Plan Linkages

Citation: IMF Staff Country Reports 2012, 061; 10.5089/9781475502534.002.A001

Chapter 2. Poverty assessment

Poverty is perceived as a multidimensional phenomenon that embraces all aspects of people’s lives. During the surveys among individual Guineans, 7.2 percent of respondents considered poverty to be defined by a lack of decent housing; 11.2 percent by unemployment; 15 percent by lack of income; and 25 percent by the inability to afford food.

This demonstrates that the poverty analysis should address all areas that influence living conditions: macroeconomic situation, consumption, energy, sanitation, etc.

A number of statistical sources of information are available in connection with monitoring and evaluating implementation of the PRSP-II. However, most of the statistical information utilized comes from the results of various surveys of poverty conducted in Guinea.

All of the analyses of poverty indicators are based on the results of three surveys: the 1994 Comprehensive Consumption Budget Survey (EIBC 1994), the 2002 Comprehensive Poverty Evaluation Baseline Survey (EIBEP 2002), and the 2007 Limited Poverty Assessment Survey (ELEP 2007). However, the comparability of these three series of results is limited by the different methodologies used in the surveys. This is particularly the case for analyses of trends where the magnitude of the differences is attributable to a methodological factor that was not estimated and that could affect the results.

I.2.1. Population characteristics

The population of Guinea is young, relatively uneducated (particularly heads of households), primarily rural, and employed in agriculture or the informal sector. In 2007, the population was estimated at 9.68 million, with 51.9 percent women and 48.1 percent men. Half the population was under age 16, and only 4.5 percent were age 65 or older. The population grows at a high rate of 3.1 percent per year. In light of the mode of social organization, women are not usually heads of households: 85 percent of Guineans live in households headed by a man. Women are heads of households only when widowed, married to a polygamist who is declared the head of another household, or married to an absent husband. These three situations account for nearly all households headed by women.

While significant gains have been made in the last 20 years in terms of education in Guinea, it goes without saying that heads of household, whose average age is close to 52, are mostly from the generation of Guineans who had few opportunities to attend school (according to 2007 survey data, two-thirds of persons age 15-19 attend or have attended school compared to one-fifth of those age 50-54). As a result, over three-fourths of the population live in households headed by an individual who has never attend school, while only 4 percent of the population live in households headed by an individual who has attended university. While this configuration represents the majority of households, there are variations, particularly between Conakry and the regions. In Conakry, one-half of heads of household have had no schooling and 15 percent have attended university.

An analysis dividing households into five socioeconomic groups based on the occupation of the head of household -- i.e., civil servants, private sector employees including agricultural employees, independent agricultural workers, independent non-agricultural workers, and unemployed – shows the predominance of agriculture in rural areas. Guinea’s weakness in regard to schooling leaves little choice or diversity in terms of economic activities. As a result, over 56 percent of Guineans support themselves through agriculture.

Subsistence agriculture is family based, as reflected by the fact that two out of three households include three or more persons employed in agriculture.

In addition, paid jobs are relatively few in Guinea. After subsistence agriculture, the main activities that provide for the population’s needs are crafts and unskilled trades. These activities, generally part of the informal sector, support one out of five Guineans. Also, while agriculture is the principal rural occupation, it accounts for only a small proportion of the inhabitants of Conakry (1.4 percent), where crafts and unskilled trades, particularly small-scale retail trade, feed the largest share of the population (42.2 percent). Conakry is also the city where two other significant categories may be found: individuals working as employees (one out of three) and persons living in households where the head of household is unemployed (one out of four individuals). It should be mentioned here that Guinea has fairly high labor force participation rates and low unemployment, but that summary masks other less favorable characteristics. In Conakry, where a genuine labor market exists, the unemployment rate for the population age 15 and older was 10.2 percent in 2002-2003.

However, if we define underemployment (in relation to job duration) as working less than 39 weeks per year, nearly 11.8 percent of the active workforce age 15 and older are underemployed. Also, in 2002-2003, three-fourths of the unemployed were long-term unemployed (over one year).

I.2.2. Poverty profile

On a nationwide basis, poverty declined significantly over the period 1994-2002. While 62.6 percent of the population lived below the poverty line in 1994, the percentage decreased to 49.2 percent in 2002, a reduction of 13.4 percent in absolute terms and nearly 27.2 percent in relative terms. In addition to the incidence of poverty, all other poverty indicators declined significantly as well. In 1994, the poverty gap was 28.5 percent; in other words, the average poor individual would require 28.5 percent of the value of the poverty line to escape poverty. In 2002, the proportion had decreased to 17.2 percent of the poverty line. Similarly, the severity of poverty decreased from nearly 16.1 percent in 1994 to 8.1 percent in 2002, showing that the situation had improved for the poorest segments of the population.

Table 3.

Poverty by residential setting

(1994 - 2007)

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Source: Authors’ calculations based on EIBC, EIBEP and ELEP data.

After 2002-2003, however, the situation deteriorated for reasons including poor governance and gross mismanagement of public assets, leading to the suspension of the Poverty Reduction and Growth Facility (PRGF) program. The trends show an increase of 3.1 percentage points in the incidence of poverty and a smaller percentage increase in the other poverty indicators. The increase was greater in urban than in rural areas. The variations in poverty were larger in the administrative regions.1 The analysis shows that the increase in poverty reflects a larger share of the population situated further below the poverty line in 2007 than in 2002/03.

However, the economic and social reforms undertaken by the government served to improve a good number of macroeconomic indicators. The rate of inflation, which was 39.2 percent in 2006, was reduced to 12.5 percent in 2007; the growth rate was estimated at over 4 percent in 2008, giving hope to the population, including the poorest, in accordance with the initial Emergency Minimum Program objectives of: (i) reviving hope among populations through concrete responses to their priority expectations; (ii) consolidating the rule of law through strengthened political and social dialogue in regard to holding free, transparent, and credible elections; and (iii) creating the bases to resume the process of economic development.

After 2007, however, poor governance, political and institutional instability on multiple fronts, and the death of the President of the Republic in December 2008 opened the way for the National Counsel for Democracy and Development (CNDD) to take power. The socioeconomic and political situation sharply deteriorated. The implementation of key projects and programs supporting the PRS, such as the Village Communities Support Program, were slowed and the formal three-year PRGF program was suspended, triggering a deterioration of macroeconomic indicators. In 2009, the real growth rate was estimated at -0.3 percent and per capita growth rate was -1.3 percent, which could lead to increased poverty.

With a view to determining the impact of this economic and political situation on household living conditions, we used the approach based on poverty-growth elasticity over the period 2002-2007, given the fact that the MSEGUI/PAMS tool has not been finalized (cf. Box 2 on MSEGUI-PAMS).

Graph 3.
Graph 3.

Likely trends in general poverty indicators, 2007 - 2010

Citation: IMF Staff Country Reports 2012, 061; 10.5089/9781475502534.002.A001

Key: Green = Severity of povertyRed = Depth of povertyBlue = Poverty rateSources: ELEP 2007 and SP-SRP Technical Unit estimates.

The simulation showed that with poverty-growth elasticity of -0.12 between 2002 and 2007, the poverty rate could reach 58 percent in 2010. This would be far from the objectives established in the PRSP2, which were to reduce poverty to 49.7 percent in 2010. At the same time, the depth and severity of poverty increased to 20.1 percent and 10.2 percent, respectively, in 2010.

It is important to note that the decline of poverty over the period 1994-2002 was primarily the result of economic growth but also of reduced inequality. Per capita income grew an average of 2% per annum over the period, and inequality, measured by the dispersion ratio between the richest (Q5) and poorest (Q1) quintiles, declined over the same period. The ratio was 12 in 2002, meaning that the richest group consumed 12 times as much as the poorest, and declined to 5 in 2007. The Gini coefficient2 declined from 0.480 in 1994/95 to 0.415 in 2002/03, followed by 0.326 in 2007. While the indices reflect decreased inequality, they also reflect a reduction in spending by the richest. However, we also note a slight improvement in meeting the needs of the poorest, as indicated above by the dispersion ratio.

Table 4.

Satisfaction of households’ needs in previous 5 years (2003 – 2007)

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Source: ELEP 2007

Households’ perceptions confirm the extent of poverty. They feel that the situation has not improved in the last five years. As Table 5 demonstrates, 39.4 percent of households report no change in terms of their basic needs being met. Only 10.8 percent of households reported an improvement, while 50.9 percent of households reported a deterioration. These proportions are fairly similar in different areas (Conakry, urban areas, rural areas), but the proportion of households reporting an improvement is higher among the well-off (fifth quintile, 15 percent of respondents who perceive improvement).

Households basically associate poverty with the inability to afford food, lack of income, and lack of jobs. According to data from the 2002/03 EIBEP, 25 percent of all households associate poverty primarily with inadequate resources to buy food, 15 percent with lack of income, 11.6 percent with lack of work, 11.2 percent with the inability to obtain medical care, and 7.2 percent with the inability to obtain decent housing.

In 2007, 53 percent of Guineans, or 5.1 million inhabitants, were poor. The incidence of poverty was 30.5 percent in urban areas and 63 percent in rural areas. Urban areas, which account for 30.7 percent of the population, represent only 17.7 percent of the poor, while rural areas, with 69.3 percent of the total population, account for 82.3 percent of support. While poverty is clearly less prevalent in Conakry, it is high everywhere else, as the poverty rates in other regions range from 50 percent to 64 percent. The regions with the lowest incidence of poverty are Mamou, Boké, and Faranah. Based on this regional profile, three regions (Nzérékoré, Kindia, and Kankan) alone account for nearly 55 percent of the poor. In addition, food consumption (including cash, farm consumption, picking, and barter) represented 69.2 percent of total consumption in 2007, while in 2002 it represented 53 percent of total consumption. Shoes and clothing represented only 4.1 percent in 2007 compared to 9.5 percent of total consumption in 2002. Transport represented 5 percent, and health-related expenditures 3.8 percent.

The level of poverty varies according to characteristics of the head of household. Women generally have less human capital than men and are more often the victims of workplace discrimination. However, according to household surveys, we observe that one-half of persons living in households headed by a man are poor compared to 46 percent of households headed by a woman. In reality, this result may be due to the typology of households headed by women. While half of those households were headed by a widow or divorcee, the other half were headed by married women who were heads of households only because the husband was absent. In the latter case, the husband, who continues to be the rightful head of the family, continues to provide for the household’s needs.

I.2.3. Determinants of poverty in Guinea

A linear regression analysis of the determinants of poverty using per capita spending as a percentage of the poverty line as the dependent variable shows that the educational level of the head of household and spouse are significant determinants of poverty, but the effect of head of household educational level on poverty reduction is only substantial for secondary school or higher.

In general, women’s skills are not as highly valued in rural as in urban job markets due to the shortage of attractive jobs. Also, the status of head of household employed in private enterprise is associated with a higher standard of living than that of an independent worker.

In regard to access to infrastructures, weak access to infrastructures imposes high transaction costs that also reduce populations’ well-being. In rural areas for example, the travel time to the closest health care center is higher for the poorest households, which means that those households live in localities where this type of service is located at a distance or the means of transportation are nonexistent.

Results of survey of subjective poverty3 February 2011

In the context of updating the poverty data, the Guinean government, with support from the World Bank, conducted a survey during the validation workshops for this PRSP. The purpose of the survey was to conduct the most recent participatory assessment of subjective poverty. The survey provided an idea of poverty as it is currently perceived by the participants in the PRSP validation workshops and by certain residents in the cities where the workshops were held (Kindia, Kankan, and Conakry). The method used for the survey was the administration of a brief individual questionnaire to 658 persons, of whom 229 were workshop participants. Based on that sample, the study not only confirmed the increasing trend of all aspects of poverty in Guinea since 2007, but also revealed that the persons surveyed have formed specific conceptions of poverty.

Of the persons surveyed, 44 percent stated that poverty was above all inadequate nutrition. The second element the respondents considered a source of poverty was lack of income (14 percent), followed, respectively, by lack of employment (13 percent), lack of health care (7 percent), lack of support (6 percent), and lack of education (3 percent). It bears mention as well that contrary to what one might expect in a process of constructing democracy, lack of power (0 percent) was not considered a source of poverty by the respondents.

The majority of persons surveyed viewed poverty above all as a handicap in meeting biological needs, in this case, nutritional needs, which means that for those persons, food security should be central to the poverty reduction strategy, followed by increasing household income through access to paying jobs.

In regard to the incidence of poverty, 70 percent of the persons surveyed said their household was poor, only 5 percent considered the household standard of living good, approximately 85 percent of respondents said their households lacked stable income, and 51 percent of them considered the household income low for the past three years. In regard to nutrition, 75 percent of the respondents reported that their households consume fewer than three meals per day, and 52 percent stated that the household lacked sufficient quantities and quality of food. Only 9 percent reported that the household was well fed in terms of quantity and quality. In other words, 91 percent of the respondents’ households faced nutritional problems.

In regard to access to basic social services, 24 percent of the persons surveyed stated that at least one member of the household had been excluded from school during the previous 12 months for non-payment of school fees, and 31 out of 100 respondents stated that at least one member of the household had been unable to receive health care in the prior 12 months because they could not afford it.

In regard to the perception of poverty in the geographic area where the respondents live, 46 percent said that the majority of residents of their locality were poor, and 21 percent considered all of the residents poor. According to those result, 67 percent of respondents viewed the inhabitants of their locality as poor. For those persons, poverty is the most widely shared aspect of their immediate environment.

To identify the actions to be undertaken to quickly reduce from poverty, the respondents were asked to identify the strategies they would employ to improve their household’s standard of living, on the one hand, and the actions they considered priorities to improve their communities’ standards of living, on the other. According to their responses, the principal strategies chosen to improve the household standard of living were essentially finding a decent job (19 percent), using credit (18 percent), and taking on additional work (16 percent). Accordingly, the principal strategy the majority of respondents (35 percent) would employ to improve their household’s standard of living was to find a decent job.

Finally, with regard to the community priorities in the fight against poverty, the principal priorities cited by the respondents were: the drinking water supply, which headed the list of priorities (21 percent) followed by the fight against food insecurity (19 percent), and in third place the promotion of productive activities (12 percent). Other priorities also cited by the respondents were jobs for youths (10 percent), school construction (7 percent), the construction of health care facilities (6 percent) children’s education (6 percent), and road construction (5 percent). For our respondents, then, access to nutrition was a constant concern in regard to the fight against poverty.

Source: Participatory survey, 2011. World Bank

Contrary to the descriptive analyses, households headed by women are less well off than those headed by men. All other things being equal, the difference in terms of per capita spending between male- and female-headed households was significant, on the order of 33 percent lower for female-headed households in cities and 11 percent in the country. Households headed by women appear to be more vulnerable, then. Also, households with a large number of persons of each age group had lower per capita consumption and therefore a greater probability of being poor. We note that low per capita consumption takes account of economies of scale within the household.

Finally, geographic location is important, even after taking account of other household characteristics. Regional offerings in terms of job opportunities, infrastructure, climate, etc. influence the standard of living. In general, residing in a region other than the capital is associated with a lower standard of living. However, the gap is less pronounced for two regions, Kankan and Mamou. On the other hand, the Nzérékoré, Kindia, and Labé regions are more disadvantaged. For example, rates of access to electricity are as follows: Nzérékoré 1.5 percent, Kindia 17.2 percent, and Labé 4 percent.

I.2.4. Poverty and food insecurity

Hunger is a symptom, consequences, and expression of poverty. The extremely poor live in a situation of food insecurity and are highly vulnerable. However, the poor are not always vulnerable to food insecurity. Certain populations may have low incomes without facing a situation of food insecurity.

Food security exists when all individuals have the physical and economic access at all times to sufficient healthy and nourishing food to satisfy their energy requirements and food preferences in order to lead a healthy, active life.

Three conditions must be met to ensure food security: (i) sufficient supply or availability of food; (ii) stability of the supply of accessible, affordable food, without fluctuation or shortages from one season or year to the next; and (iii) the quality of food and individuals’ consumption of food.

The first MDG is to reduce by half the proportion of the population suffering from hunger by 2015. According to the results of WFP food security surveys conducted in Guinea in 2009 (National Food Security Survey and Food Security Survey in Conakry), 32 percent of rural Guinean households, representing 2,302,000 individuals, experienced food insecurity, while 8 percent of those households (602,000 individuals) experienced low food security, and only 24 percent of households (1,700,000 individuals) had reached the threshold of food security.

Table 6 shows that the administrative regions in general are characterized by high food insecurity as well as high poverty rates. The food insecurity rate in the administrative region of Nzérékoré is 52.7 percent and the poverty rate approximately 64.3 percent, making it the poorest region and hardest hit by food insecurity. The regions of Boké and Conakry occupy seventh and eighth place, respectively, for both food security and poverty.

Graph 4.
Graph 4.

Poverty and food insecurity by administrative region

Citation: IMF Staff Country Reports 2012, 061; 10.5089/9781475502534.002.A001

Key: Blue = Food insecurity rateRed = Poverty rateSource: ELEP 2007 and ENSA.

This graph shows a positive correlation between food insecurity and poverty. In other words, increased food insecurity in the region will have a strong impact on poverty.

I.2.5. Poverty and access to education and literacy

An analysis of the data indicates that the net primary school enrollment rate increased from 57 percent in 2002 to 62 percent in 2008 and, notably, from 52 percent to 57 percent for girls. According to the ELEP,4 the national rate was 57.1 percent in 2007 compared to 54.1 percent in 2002. Both sources show that perceptible progress was made. However, sector performance indicators show a relative decline since 2005.

The performance observed between 2002 and 2008 is largely due to the increased supply of educational infrastructure, which remains one of the major gains of the Education Sector Adjustment Program, part of the Education for All initiative, and the Education Sector Program now being executed.5 However, the increase in the net enrollment rate conceals significant disparities between regions and urban and rural areas. In fact, the ELEP shows a striking imbalance between the net urban enrollment rate (81 percent) and the net rural rate (48.5 percent). The same survey also reveals that 60 percent of boys were or had been enrolled in primary school compared to 54.1 percent of girls (these rates were estimated at 59.4 percent and 48.7 percent, respectively, in the 2002 EIBEP).

It is important to note that while the quantitative gains in terms of school enrollment are significant, little progress has been made with respect to the quality of education. According to the Educational Planning and Statistics Service, this is due to multiple factors including: (i) the very high student/teacher ratio (particularly in urban areas), resulting in crowded classrooms that undermine the effectiveness of educational administration; (ii) the low textbook/student ratio; (iii) the existence of schools offering incomplete cycles, resulting in dropouts and attrition; (iv) classes without teachers; and (v) high teacher absenteeism in rural areas. In terms of equity, the gap between boys and girls, which was 10.7 percentage points in 2002-2003, declined to six percentage points in 2007.

The proportion of schoolchildren who complete the first cycle of primary school increased from 29 percent in 2002 to 59 percent in 2007 (49 percent for girls) before declining to 50 percent in 2008 (42 percent for girls). The factors identified above, which have a strong impact on school enrollment, also account for the low primary school completion rate. Added to those factors are: (i) inadequate basic and pedagogical training for many teachers (particularly primary school teachers); (ii) inadequate monitoring of and assistance to teachers; and (iii) dropping out, although this occurs infrequently (3.6 percent) in primary school.

With regard to adult literacy, a significant gap was observed between men and women, but overall indicators remained low. In 2003, the national rate was 45.7 percent for men compared to only 14.1 percent for women (or 28.3 percent for men and women combined).6 In other words, the literacy rate for men is 3.2 times higher than for women. In 2005, the literacy rate was 16.1 percent for women and 44.1 percent for men. Efforts by the government in 2007 brought the rate to 49.9 percent for men compared to 21.5 percent for women. From 2005 to 2007, women gained roughly 5.4 points compared to 5.8 points for men. Regional adult literacy rates vary considerably, from a low of 6 percent in Kankan to a high of 39.5 percent in Conakry in 2007.

In view of the rate of increase for each of the three indicators during recent years, and considering the persistence of of the causes mentioned above, none of the indicators will meet the objectives established for 2015 unless special efforts are made in the sector.

These quantitative results conceal difficulties relating to financing of the education sector. Investment expenditures (National Development Budget) are low.

At no time during the past decade did the share of education in GDP exceed 3 percent. From 2000 to 2010, the share of the national budget allocated to education spending did not exceed 12 percent. From 9.6 percent in 2003, it continued to decline to a low of 5.7 percent in 2006. However, the government has made significant efforts since 2007, which raised the rate to 11.3 percent in 2009.

I.2.6. Poverty, malnutrition and mortality

The infant-child mortality rate in Guinea declined from 177 per thousand in 1999 to 163 per thousand in 2005, or a reduction of 14 percentage points in six years. If this trend continues, the rate would be roughly 142 per thousand in 2010. In regard to residential setting, the infant-child mortality rate was higher in rural areas in 2005 (204 per thousand) than in urban areas (133 per thousand), and higher for boys (200 per thousand) than for girls (174 per thousand). In addition, children in the poorest households had rates twice as high (217 per thousand) as those from [words omitted] households, for which the rate was still quite high. The mortality rate for children under age 5 declined significantly in Forested Guinea (215 per thousand) and Upper Guinea (199 per thousand) during 1999-2005, while the rates in Lower Guinea and Mid-Guinea increased by 3.4 percent and 0.4 percent, respectively.

The national infant mortality rate showed a marked decline between 1999 and 2005, from 98 per thousand to 91 per thousand, or an average of one death per thousand live births. If this trend continues, infant mortality could decline to about 85 per thousand in 2010.

The results of the Expanded Vaccination Program (PEV) show that vaccination coverage against the major diseases has improved since 2002, with rates above the average. This improvement is due to wider availability of vaccines, the engagement of health care providers, citizens’ acceptance of vaccination, the integration of curative and preventive services, strengthened supervision, and the support of the development partners. DPT3 coverage remained consistently above the 80 percent bar despite underperformance observed in recent years, declining from 88 percent in 2006 to 87 percent in 2007 and 84 percent in 2008. The vitamin A supplementation campaign covered 64 percent of the target, with 97.3 percent of children age 6 to 59 months receiving two doses of vitamin A during July and December 2008, and 95.8 percent of children age 12 to 59 months receiving two doses of antiparasitic drugs during the same period. In addition, 50 percent of women received one dose of vitamin A during the postpartum period.

In Guinea, the elevated maternal mortality rate (980 per 100,000 live births) is linked to the small proportion of assisted birth, which increased from 35 percent in 1999 to 38.0 percent in 2005, or an increase of three percentage points over the period. Despite this increase, performance is far from the target of 95 percent by 2010. The marked disparity in favor urban areas (the figure is only slightly more than 20 percent in rural areas) is a contributing factor in the failure to reach the established objectives.

The prenatal consultation rate improved considerably, from 82.1 percent to 88.2 percent over the period 2005-2007. This outcome is the product of outreach campaigns and numerous projects providing technical support to the health sector over the past 10 years. It is important to recall that the government’s objective in regard to prenatal consultations was 85 percent in 2002. In the interest of improving access to health care for women, particularly in rural areas, government recently adopted measures to provide assistance at birth, prenatal consultations, and cesarean sections free of charge.

The results of the 2008 National Survey on Nutritional Status and Monitoring of Principal Indicators of Childhood Survival (UNICEF/WFP) indicate that 40 percent of Guinean children under age 5 suffer from chronic malnutrition (WHO standard), and 20.7 percent of them suffer from severe chronic malnutrition. In comparison with the 2005 Demographic and Health Survey (NCHS/CDC/WHO standard), chronic malnutrition has increased by 1.4 percentage points, from 34.8 percent to 36.2 percent. Likewise, severe chronic malnutrition has increased from 15.3 percent to 17.4 percent, or 2.1 percentage points over the period 2005-2008. This is the result of the deterioration of households’ socioeconomic situation and the environment in which they live, in particular the shortage of safe drinking water and worsening conditions in regard to health and hygiene. The situation also reflects the gradual increase in the price of foodstuffs. Moderate emaciation afflicts 8.3 percent of Guinean children under age 5, of whom 2.8 percent suffer severe emaciation (WHO standard). In addition, nearly 21 percent of Guinean children under age 5 are underweight (WHO standards). Among them, 6.7 percent are severely underweight. A comparison with the results of the 2005 Demographic and Health Survey using the NCHS/CDC/WHO reference population reveals that moderate underweight status has remained quite stable over the period 2005-2008, increasing from 25.8 percent in 2005 to 26.1 percent in 2008. Similarly, severe underweight status increased from 7.1 percent in 2005 to 7.3 percent in 2008. Admittedly, most of the indicators appear to be moving in the right direction, and the Ministry of Health and Public Hygiene recently initiated an evaluation of the National Health Development Plan to support reformulation of its policy and preparation of a new plan that would take account of poverty trends.

I.2.7. Poverty and access to safe drinking water

Supplying citizens with safe drinking water was one of the government’s priorities for the past five years. In regard to assessing the actions taken in this area, the statistics reveal that 62 percent of Guineans had access7 to safe drinking water in 2002, and the rate increased to 73.8 percent nationwide in 2007, or an increase of 11.6 percentage points between 2002 and 2007, or roughly 2.4 percent per year. Local rates ranged from 94.1 percent in Conakry to 85.6 percent in other urban centers and 52.8 in rural areas. At this pace, the rate of access is expected to reach 81.0 percent in 2010, with progress much more pronounced in rural than urban areas.

Graph 5.
Graph 5.

Poverty and access to safe drinking water by administrative region, 2007

Citation: IMF Staff Country Reports 2012, 061; 10.5089/9781475502534.002.A001

Key: Blue = Access to safe drinking waterRed = Poverty rateSource: ELEP 2007.

According to the ELEP, the rate of access in 2007 was 67.1 percent in rural areas compared to over 91.2 percent in urban areas. The rate for Conakry was about 98 percent, and Kankan and Faranah had the highest rates, averaging 87.9 percent and 83.1 percent, respectively. Apart from Kindia (55.7 percent) and Mamou (45.4 percent), rates in the other regions ranged between 66 and 77 percent.

This progress reflects investments in wells and emergency programs to improve supplies of water to Conakry and cities in other regions of the country. The National Water Point Improvement Service (SNAPE) completed 728 modern water points in 2007 and 679 in 2008, bringing the total number of modern water points close to the target of 15,000 by 2010 established at the start of the project in 1978. At this date, 14,792 water points have been completed, representing an execution rate of 98.6 percent.

Despite this progress, the sector continues to face problems including limited production and water treatment capacity relative to demand, limited geographic coverage of the water distribution network, significant technical losses and commercial fraud, unavailability of installed capacity due to lack of maintenance or fuel, and weaknesses in the legal and institutional framework.

I.2.8. Poverty and HIV/AIDS

The prevalence of HIV in Guinea has reached the generalized phase (1.5 percent). The prevalence of HIV among persons age 15 to 24 is clearly below the national average. Women are twice as vulnerable as men among the population at large as well as the 15-24 age group. Early sexual relations do not appear to be associated with the prevalence of HIV. However, high fertility rates among this age group (154 per thousand) reflect the proportion of unprotected sexual relations and to a certain extent represents a threat. If appropriate policies are implemented, with the Global Fund in particular, the current prevalence could be reduced substantially by end-2015.

Despite remarkable progress, risky behavior such as high-risk unprotected sex or relations with multiple partners remains the principal cause of the spread of HIV in Guinea.

According to the EDS-2005, more than half (53.6 percent) of all sexually active men report having had high-risk sexual relations during the 12 months preceding the survey, a proportion three times higher than for women (15.6 percent). The proportion is 94.8 percent among young men age 15-24 compared to 36.0 percent for young women in the same age group. However, if the trend observed between 2005 and 2007 continued, the objective established for 2015 (90 percent) […] would already have been achieved in 2008.

Concerns remain, however, since the fight against HIV/AIDS is too dependent on external resources. The government should devote additional efforts to cover these expenditures during periods when disbursements are suspended. To achieve a reduction in HIV prevalence, the various stakeholders involved must be able to cooperate without interruption.

I.2.9. Poverty and access to energy

Storm lanterns were the main source of light for 47 percent of households in 2007. In rural areas, the proportion of households using this source was 56 percent, and in poor urban areas the proportion was 32 percent. Depending on place of residence, storm lamps are used by over 50 percent of households in all regions except the capital, where the rate is 1.9 percent. This circumstance is the direct consequence of low energy consumption in Guinea and weaknesses in the electricity network.

The 2007 ELEP found that electricity is used by only 18.1 percent of households in Guinea. This glaring weakness is compounded by a clear disparity based on residential setting. While 68.9 percent of urban households have access to electricity,8 only 62.4 percent use it. In rural areas, the rate of access is 2 percent compared to 0.9 percent utilization. In poor urban areas, the access rate is 54.3 percent compared to 48.8 percent utilization, while in poor rural areas the rates are 1.5 percent and 0.5 percent, respectively.

Graph 6.
Graph 6.

Poverty and access to electricity by administrative region, 2007

Citation: IMF Staff Country Reports 2012, 061; 10.5089/9781475502534.002.A001

Key: Blue = Access to electricityRed = Poverty rateSource: ELEP 2007

There are also enormous disparities between the different administrative regions: in Boké, the rate of access to electricity is 16.3 percent versus 14.8 percent utilization. The rates are 1.5 percent and 0.1 percent in Nzérékore; 3.4 percent and 2.1 percent in Faranah; 0.3 percent and 0 percent in Kancan; and 17.2 percent and 10.2 percent in Kindia, but 94.7 percent and 89.1 percent in Conakry.

The low utilization of electricity is largely due to the lack of investment in all segments of the sector. The main difficulties include lack of production capacity and insufficient high-voltage/low-voltage transport with respect to strong growth in demand (6 to 8 percent per year); unavailability of installed production capacity due to lack of maintenance and fuel; significant technical and commercial bosses over the network; limited coverage of the distribution network, and inadequate legal and institutional framework.

The use of wood and charcoal for cooking is widespread in Guinea: 78 percent of households use wood for cooking. The proportion is 96.2 percent in rural areas and 43 percent among the urban poor. Among rural households, 98.3 percent use both wood and charcoal compared to 96.0 percent in urban areas. The large percentage of households using these sources of energy represents a major concern for environmental protection.

I.2.10. Poverty and access to decent housing and sanitation

The housing sector is a crosscutting sector that impacts all other sectors of economic and social life in Guinea. This crosscutting aspect reflects the multiplicity of stakeholders, complexity of problems, and multiple strategies. In this regard, it is important to bear in mind the correlation between housing and poverty, which go hand in hand and the impact of one on the other calls for appropriate measures. Accordingly, the approach going forward is aligned with the country’s strategic framework:

  • ✓ the MDGs, in particular Goal 7 on achieving a sustainable environment, and Goal 11, to significantly improve living conditions for at least 100 million slum dwellers throughout the world by 2020. In this context, indicator 32 concerns “proportion of households with access to secure housing tenancy”;

  • ✓ the PRSP, which also incorporates the issue of housing, given the strong correlation between poverty and housing. The problems and issues identified call for alternative, shared solutions based on sustainable development of housing, in line with the government’s strategic development options.

The burgeoning population and accelerated urbanization in Guinea create increased needs for basic social facilities and infrastructures. According to the 2007 ELEP, households devote 5.8 percent of spending to housing, water, and energy. Various government initiatives and interventions by numerous other entities have been deployed in an attempt to meet these needs. However, the trends and constraints described below continue to impact the housing and sanitation sector.

The urban landscape is particularly uneven in terms of spatial development and land management. The city of Conakry, in particular, occupies less than 1 percent of the national territory but represents one-fifth of the total population and over 40 percent of administrative and commercial activities. This high concentration of population and socioeconomic activities is likely to cause deterioration of the inhabitants’ living conditions and natural ecosystems.

The constraints on land management are insecure land tenure and land conflicts that arise over unauthorized subdivisions being developed in disregard of real estate and property rules established by law.

In regard to the supply of new housing, production is constrained by: (i) lack of appropriate financing mechanisms; (ii) the absence of a bank dedicated to (social) housing and absence of mortgage lines of credit among products offered by the traditional banking and finance segments; (iii) the weak framework promotes self-help construction and impacts the production of rural housing in particular, which concerns over 70 percent of the Guinean population; and (iv) the extent of poverty, which prevents a large proportion of Guineans from accessing housing because of high production costs.

Over 80 percent of existing housing consists of improvised dwellings located in unauthorized developments completely lacking in infrastructure. These areas are also the focal point of micro-businesses believed to help the majority of poor populations. Improving this type of housing should include restructuring, legalization, and re-plotting land.

Accordingly, housing construction materials and the number of persons occupying one room are the principal indicators used to identify slums and overcrowding in urban housing.

In 2007, 67.9 percent of Guinean homes had corrugated sheet metal, tile/slate, or concrete/cement roofs, and 31.9 percent had thatch or straw. In urban areas, nearly all homes (90 percent) had metal roofing, while 42 percent of rural homes were covered with thatch or straw. In regard to flooring, 48.8 percent of homes nationwide and 11.8 percent of urban homes had dirt floors in 2003. In 2005, the rates were 56 percent nationwide and 9.3 percent in urban areas. The 2007 estimates were 53 percent nationwide and 17 percent for urban areas.

In regard to occupancy density (number of persons per room), the figure was 2.7 in Conakry and 2.4 in the other urban centers in 1994. The rate was virtually unchanged in 2007 at 2.64 for Conakry and 2.54 for other urban centers.

In the area of sanitation, access to basic services is a major challenge for urban centers in general and the capital in particular. The analysis focuses essentially on access to improved toilets and the mode of eliminating sewage and household waste.

In 2007, 31.3 percent of households had adequate toilets (flushing, covered latrines, or improved ventilated latrines) compared to 25.4 percent in 2002, or an annual increase of 1.2 percent. Households with flushing toilets were rare (fewer than 3 percent). Barely 1 percent of households had access to a sewage system, and those households were concentrated mostly in Conakry. Even in Conakry, that rate was 2.2 percent in 2007. In all, roughly 21 percent of households lack toilets. With current trends, only 34.9 percent of households will have adequate toilets in 2010. Over 9 out of 10 homes (90.7 percent) dispose of wastewater in the street or the environment. In urban areas, this rate is 76.1 percent.

In regard to household waste, 80 percent of households nationwide and 53.6 percent of urban households dispose of waste in the environment. On the other hand, the proportion of households using private or trash collection services or public refuse containers declined perceptibly, from 12.8 percent in 2002/03 to 9.4 percent in 2007. In regard to trash collection service, 9.8 percent of households use such services or public trash containers. This practice is seen most often in urban centers, particularly Conakry, where over half the households use specialized services to dispose of waste. However, only 6.7 percent of households practice a sanitary mode of waste disposal. The elimination of garbage and pollutants from water remains a crucial health problem in urban areas in addition to the problem of wastewater elimination, repeated flooding of certain neighborhoods can lead to alarming public health situations.

I.2.11. Poverty and Employment

According to the 2007 ELEP, the unemployment rate increased from 10.2 percent to 15 percent in Conakry and declined from 6.7 percent to 3.2 percent in other cities between 2002 and 2007. Of the total workforce, 9.1 percent were underemployed in 2007 compared to 11.8 percent in 2002. Women are 1.4 times more likely to be underemployed than men, with rates of 7.5 percent for men and 10.5 percent for women in 2007.

In comparison with 2002, the rate of underemployment declined significantly for all groups, particularly for women, for whom it declined from 13.3 percent to 10.5 percent. The rate of underemployment increases with the individuals’ age. A larger proportion of the underemployed workforce comes from rural (11.1 percent) than urban areas (5.4 percent). The proportion is slightly higher among the poor.

Among the working population, 67.1 percent were independent workers in 2007 compared to 53.3 percent in 2002. The proportion working in family-based businesses declined from 36.5 percent in 2002 to 23.8 percent in 2007. These results show that among the working population, independent work is gaining on family-based activities, but also on other types of employment including as wage-earners. The draw of working for oneself among the working population is not by chance: formal enterprises are rarely created in Guinea, and the supply of wage-earning positions is quite limited. The result is a multitude of informal activities that barely provide a living.

These outcomes show the difficulties faced by Guinea in providing full employment and enabling citizens to find decent, productive work. This situation is of particular concern for the young, and calls for greater mobilization and initiative on their part to access decent jobs.

I.2.12. Poverty, gender and equity

The promotion of women with a view toward full participation in decision-making processes at all levels is an integral part of the government’s development policy and one of its priority areas.

It regard to parity in primary school, gender statistics indicate that the girl/boy ratio, which was 0.72 in 2002, stood at 0.76 and 0.83 in 2005 and 2007, respectively, or an annual increase of 0.01 point. If the increase continues, the ratio should stand at about 0.92 in 2010. In secondary education, the girl/boy ratio was 0.45 in 2005 and 0.55 in 2008. In universities, the girl/boy ratio was 0.18 in 2002, and improved to 0.25 and 0.29 in 2005 and 2007, respectively. Following the same trend, the ratio was expected to be 0.3 in 2008.

The proportion of female employees in non-agricultural sectors increased to 27.1 percent in 2002. In the civil service, out of the total staff of 68,715, only 18,229 were women (26 percent). In the education sector, the proportion of female teachers remains low and relatively stable. Among primary school teachers, the ratio of women to men was 0.35 in 2007; in the same year, the ratio for secondary school was estimated at 0.06. The prevalence of food insecurity is also higher among female-headed households, at 42.4 percent, compared to 30.2 percent among households headed by men.

At end-2006, the number of women holding seats in the National Assembly was 22 out of a total of 114 deputies, or 19.3 percent. The number was reduced to 19 in 2007 (16.7 percent) following the deaths of three of them (cf. Table 1). In the Bureau of the National Assembly, only 12 percent of the positions of responsibility were held by women. In parliamentary administration, that rate was 23 percent. However, there were no female Quaestors or chairpersons on any parliamentary committee or group. On the Supreme Court, three of the 17 judges are women, or a ratio of 21 percent. The Economic and Social Council includes 11 women out of a total of 45 members, or 24 percent. The National Communication Council includes only one woman among its nine members. In total, only 36 of the 208 decision-makers of these key institutions, or 17 percent, are women (see Guinea’s 2009 national progress report on the MDGs).

Women’s participation in positions of responsibility at the different levels of the administrative hierarchy is identical to the situation described above: of a total of 3,003 positions of responsibility identified within the various central government agencies, only 520 are held by women (17 percent). An analysis of decision-making positions throughout the government found that women were most frequently appointed Deputy National Director (23 percent), followed by advisor (22 percent); among chief of staff positions, 21 percent are held by women compared to 79 percent by men, and the women serving as secretary-generals of ministries can be counted on the fingers of one hand (4 percent). In diplomatic posts, 15 of the 214 slots are currently held by women, or 23 percent.

These indicators should be viewed in parallel with women’s educational attainment, which remains low but is improving. In general, Guinea has made notable progress in reducing disparities between the sexes, particularly in terms of school attendance. Progress in education is particularly marked at the elementary level, where the girl/boy ratio reached 0.83 in 2007. The ratio falls to 0.3, however, for higher education and university. Similarly, while the proportion of women employed in the non-agricultural sector has increased, it is still quite small (27 percent). In Parliament, as in other key government Institutions, progress is insufficient. The proportions are still quite low in the civil service as well. However, with the emphasis now placed on educating girls, the ratio is expected to visibly improve in the future.

I.2.13. Poverty and governance

The proper functioning of the defense and security forces and legal system today will shape the country’s future. These institutions are responsible for maintaining a calm, secure environment compatible with investment and development. However, both sectors face problems that impact their effectiveness and practices that tarnish their image, resulting in harsh criticism from public opinion throughout Guinea.

The weaknesses in defense and security forces relate first of all to the recruiting system, which places criteria of ethnicity above strict rules based on the intellectual and physical aptitudes of recruits. The system has excluded numerous potentially qualified youths from the defense and security forces and considerably reduced the national character of those forces.

The difference in treatment between the senior ranks and the rest of the troops has provoked considerable unrest, including mutinies in which soldiers demand the removal of their commanding officers. Lack of discipline has taken hold in the army, police and paramilitary Gendarmerie, undermining their operations and creating a climate of insecurity throughout the country.

Even more serious is the involvement of defense and security forces in drug trafficking. Seizures of contraband are not always reported for purposes of incineration, allowing them to be reintroduced in the drug trafficking circuit.

The fierce criticisms levied against the Guinean legal system also reflect a crisis of confidence between citizens and the institutions that embody the law. According to the 2007 ELEP, the great majority of citizens (roughly 74 percent) do not trust the legal system, which they consider ineffective, biased, and corrupt.

Violations of basic human rights have continued and even worsened in the last three years, as illustrated by the bloody repression of the September 28, 2009 demonstrations and accompanying attacks on human dignity. Corruption has assumed even larger proportions than in the past, notably within the justice, finance, security, and decentralization ministries and the agencies responsible for water and electricity. The 2007 ELEP found that 89 percent of the population considered corruption a significant problem that hinders development and serves to aggravate poverty.

The decentralization process, despite a degree of progress, still suffers from gaps and deficiencies. Transfers of funds from the national budget to local governments have not been fully implemented, particularly since 2007, due to the instability of Guinean institutions. Weaknesses in regard to human resources, particularly on the part of local administrators and elected officials, is a considerable constraint on the development of local and municipal administrations. The administration faces weaknesses in regard to its structures as well as the rules and regulations governing its operations. The recruitment, promotion, and assignment of civil servants is based on inappropriate criteria that provoke feelings of unfairness within the administration. Over 30 percent of the population feel the administration’s credibility is undermined by a lack of professionalism, respect for ethics, and sense of civic duty. The administration is also accused of corruption and collusion with business interests, and misappropriation of public assets is widespread; all of these factors serve as obstacles to growth and poverty reduction.

The foregoing demonstrates clearly that strengthening human and institutional capacities is the sine qua non of economic and social progress in Guinea.

Table 5.

Trends in principal PRSP2 monitoring and evaluation indicators

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PART II - STRATEGY AND PRIORITY ACTIONS

Chapter 1. Improving governance and strengthening human and institutional capacities

The 2005 PRSP assessment revealed a serious deficit of governance in all sectors of national activity. It concluded at the time that poor governance was a root cause of increased poverty in Guinea, and had

The poor quality of governance, particularly in managing public resources, has adversely impacted economic growth. Rather than decreasing, inflation has increased, undermining citizens’ purchasing power.

As constitutional order is being reestablished, it is important that the security of property and persons be guaranteed. Moreover, judicial administration, which has sided with the accused, must regain its independence and credibility, because an independent judiciary that upholds the law is a guarantee of development and a secure, viable environment for the investors and the technical and financial partners.

The defense and security forces must also be confined to their original mission of protecting republican values. In that capacity they contribute to promoting the private sector as the engine of development and growth. Accordingly, reform of the defense and security forces and the legal system is a central theme of this document.

The fight against corruption is necessary and essential. To that end, the respect and effective enforcement of our laws will strengthen the fight against this phenomenon, which pervades the political and administrative system to the point of poisoning every aspect of life in our country. According to the 2003 National Survey of Corruption and Governance in Guinea, substantial sums of money that could have financed poverty reduction initiatives went instead to greasing palms.

Modernization of the administration is also an imperative, as is strengthening decentralization. Professionalization of the corrupt and ineffective civil service is essential to good governance, which is a prerequisite to economic performance. Decentralization, understood as a transfer of authority and resources to local governments, should be continued and deepened if we hope to create rapid, sustained growth for the economy, the fruits of which, equitably distributed, will help improve living conditions for citizens.

A national dialogue among all sectors of society, including civil society and the political parties in particular, is the tried and tested guarantee of national unity. Guinea’s development is heavily dependent on it. For all of these reasons, this PRSP attaches central importance to the problem of governance.

II.1.1. Reform of defense and security forces

The events that occurred in Guinea since the army’s seizure of power on December 23, 2008 illustrate the fragility of the country’s sociopolitical and, by consequence, security situation. This led the authorities to include the reform of defense and security forces among their priorities by means of a number of measures to strengthen discipline within those forces and create a climate of peace and security for all.

Currently, military spending represents 10 percent of GDP and roughly 37 percent of the central government budget. The government’s principal objective is to gradually and steadily reduce military spending in order to bring it within reasonable proportions. This process may extend beyond the period covered by this document.

To summarize, the objective of the reform of defense and security forces is twofold: to devote the majority of budget resources to financing priority sectors (education, health, roads, agriculture) by reducing military spending, and ensure the integrity of national territory while protecting persons and property.

The following measures are planned to achieve this dual objective:

  • ✓ the assumption of a substantial portion of the cost of reform by certain partners;

  • ✓ the preparation of a reform plan extending over at least five years;

  • ✓ that continued restoration of quarters and construction of infrastructures to enable defense and security forces to live in barracks in accordance with military regulations;

  • ✓ logistics support and training of officers, noncommissioned officers, and enlisted men in republican principles of good governance and democracy;

  • ✓ clarification of the status of defense and security forces by army corps, professionalization of each specialty corps, and reappraisal of working conditions and compensation;

  • ✓ improvement of the recruiting process to promote multiethnic participation and comply with applicable laws and regulations;

  • ✓ inclusion of civic education in the training program for new recruits;

  • ✓ redeployment of certain members of the defense and security forces in honorary capacities or as appointees (diplomatic missions, international institutions);

  • ✓ reintegration of discharged staff and units into civilian society;

  • ✓ continuation and intensification of efforts against drug trafficking, proliferation of small arms, and trafficking in children;

  • ✓ creation of a social service and mutual support association for each entity (army, police, and Gendarmerie);

  • ✓ promoting and increasing participation by defense and security forces in the electoral process, dialogue, reconciliation, and sustainable human development actions;

  • ✓ strengthening civilian-military dialogue, including through seminars on civilian-military relations;

  • ✓ participation in defense and security missions in connection with UN peacekeeping missions and regional and subregional organizations;

  • ✓ strengthening subregional and regional integration of technical assistance and international cooperation in the area of defense and security;

  • ✓ professionalization of community and local police forces;

  • ✓ strengthening neighborhood security through the recruitment of sufficient numbers of policemen;

  • ✓ restructuring and revitalizing fire brigades by increasing personnel and material resources; and

  • ✓ preparing, adopting, and disseminating a framework law on the police force.

II.1.2. Strengthening capacities to consolidate peace and manage conflict

Poverty reduction can only be achieved in an environment of peace, stability, and security. That heavy price paid in terms of human lives and material and financial costs during the events of January-February 2007 and December 28, 2009 call out to all Guinea’s stakeholders and partners to prevent all conflicts of any kind: these events should never happen again.

To this end, the implementation of mechanisms to prevent, manage, and resolve conflicts and consolidate the peace are essential. Furthermore, these mechanisms should be combined with an early warning system to identify potential and actual sources of conflict, monitor the evolution of warning signs, and formulate appropriate recommendations.

Measures that can contribute to the resolution of conflicts and consolidation of peace are summarized below:

  • ✓ strengthening civilian-military dialogue;

  • ✓ implementation of a permanent framework for dialogue and reconciliation at the national and local level composed of representatives of all stakeholders (administration, civil society, private sector, media, and defense and security forces);

  • ✓ development of a national plan to prevent, manage, and resolve conflicts and consolidate peace;

  • ✓ implementation of a national and local early warning and conflict prevention system, supported by the entities on which the communities are founded (groups of elders, religious institutions, media, women, youths, security and defense);

  • ✓ continued training of defense and security forces in issues of human rights and humanitarian law;

  • ✓ decentralization of the office of Mediator of the Republic to the regional and prefectural level;

  • ✓ outreach on texts relating to the role and responsibilities of the mediator; and

  • ✓ strengthening capacities of civil society organizations, particularly those active in the area of promoting peace, protecting human rights, and upholding humanitarian law.

II.1.3. Improving judicial governance

One of the major problems of the judicial system is the inadequate number of judges, roughly 250, or a ratio of one judge per 38,000 inhabitants. The accepted standard is one per 10,000 inhabitants; in other words, the target of one judge per 28,000 inhabitants established in the PRSP2 has not been achieved. This situation is the result of the system’s ineffectiveness and demonstrates the importance of efforts to improve the sector’s performance.

The objective in regard to judicial governance is to strengthen the credibility and authority of the legal system to restore its independence and integrity and make justice accessible to all. The actions planned relate essentially to two areas:

The following actions could be added to the aforementioned two actions:

  • ✓ increasing the budget for the justice sector, which is currently quite low at roughly 1 percent of the national budget;

  • ✓ implementing targeted, positive measures to redeploy and motivate judiciary personnel (judges, clerks, and other staff), particularly at the prefectural and regional courts and tribunals;

  • ✓ implementing a continuing education program for judges and judiciary personnel;

  • ✓ strengthening the capacities of the professional associations of solicitors, notaries, process-servers, and auctioneers to ensure that decisions of the courts and tribunals are properly executed;

  • ✓ rebuilding the central courthouse; and

  • ✓ organizing judiciary conferences.

II.1.4. Improving political and democratic governance

The weakness of the central government is manifest in its inability to promote development. For more than a decade, the country has faced numerous challenges including a loosening of the rules of the political game, deteriorating relations among communities, deteriorating economic and social infrastructures, and the lack of a forceful, politically legitimate authority.

The objectives in regard to improving political and economic governance are: (i) increasing participation by political actors and civil society in the democratic process through the organization of free and transparent local and community elections; and (ii) improving the work of the institutions responsible for conducting the democratic process.

The strategic actions to achieve these objectives will entail:

  • ✓ strengthening the capacities of the National Transition Council or the National Assembly through support for constitutional reforms and accompanying outreach throughout the country;

  • ✓ institutional reform and strengthening of the National Independent Election Commission so as to ensure effective participation by political actors in activities to promote democracy;

  • ✓ strengthening the capacities of the High Authority on Communication (HAC) through enactment of the new press law in June 20109 to enable it to fulfill its role of regulating media operations;

  • ✓ consolidating peace through increased national dialogue, achieved by enhancing the frameworks and forums for civilian-military consultation such as the regional and prefectural coordinating offices and religious institutions;

  • ✓ strengthening the capacities of the Constitutional Court and Court of Accounts as independent jurisdictions, in order to enhance the transparency of voting results and public spending; and

  • ✓ implementing sanctions to punish offenses committed during the election period.

The objectives in regard to enhancing social cohesion are to build democracy, ensure peace, and strengthen civic and political participation by educating citizens and political activists as to their rights and obligations before, during, and after the transition period.

II.1.5. Promoting human rights

Human rights are universal and inalienable. Respect and protection of human rights are the basis of social peace and a condition for ensuring the development of society as a whole.

In light of the events that engulfed the country between 2006 and 2010 and to a large extent compromised its development, the promotion and protection of fundamental human rights becomes a central issue for governance, as emphasized in this poverty reduction strategy paper.

The measures taken to promote human rights are as follows:

  • ✓ develop a program to strengthen capacities of the legal system through the creation of an office on human rights;

  • ✓ implement programs for young men and women to introduce the principles of human rights;

  • ✓ introduce courses on the principles of human rights, conflict management, and consolidation of the peace in school curricula;

  • ✓ ensure equality of the sexes before the law, particularly as regards property rights and working conditions;

  • ✓ improve prison conditions for all detainees, particularly women and minors;

  • ✓ enforce the procedures for summons, police custody, and detention; and

  • ✓ implement the International Convention on Human Rights.

II.1.6. Fighting corruption and impunity

Corruption and similar practices are obstacles to economic development and poverty reduction. Studies of this phenomenon indicate economic agents pay a total of GNF 500 billion per year in bribes and spend a considerable amount of time understanding the constantly changing tax and customs administration rules.

Audits of public finances have been conducted in the past four years and have resulted in recoveries. In 2007, 13 purchase contracts worth over GNF 100 million were audited and the results were published in 2008.

As part of its efforts to strengthen transparency in the management of public affairs and fight corruption, the government instituted a system of quarterly audits, which is one of the triggers for the HIPC completion point. An interministerial committee was established to recover debts to the government, and succeeded in recovering GNF 138,782,271,394 for the Treasury, taxes, and cooperation account. In addition, training sessions were conducted for government audit personnel.

To improve and maximize results, the government recommends the following pillars of intervention:

  • ✓ strengthening the institutional framework of the National Governance and Anti-Corruption Agency (ANBGLC) through the adoption of an anticorruption law transposing the provisions of UN and African Union anti-corruption conventions into national law;

  • ✓ preparing the proposed framework law on the national good governance and anticorruption program;

  • ✓ conducting a survey to determine the level of corruption in Guinea;

  • ✓ improving transparency in the management of natural resources in the context of the Extractive

    Industries Transparency Initiative, the Kimberly process and the Rio Convention, by strengthening the partnership between all stakeholders concerned (administration, private institutions, civil society, rule population, and decentralized administrations);

  • ✓ strengthening the capacities of the ANBGLC complaints bureau and implementing decentralized mechanisms to receive public complaints of corruption and similar practices;

  • ✓ continuing the establishment of regional governance and anticorruption offices with a view toward expanding the chain of partnership with civil society in implementing citizen control of local resources and fighting corruption at the local and regional level;

  • ✓ organizing citizen awareness and mobilization campaign against corruption through outreach on anticorruption conventions, laws, and regulations, including the content of the central government budget and the rules and procedures governing the award of public contracts;

  • ✓ continuing with the project to improve the public contracting framework;

  • ✓ continuing the audits of all central and decentralized agencies; and

  • ✓ outreach concerning the African Peer Review Mechanism with a view toward Guinea’s accession to this mechanism of good governance in the very near future.

II.1.7. Improving administrative governance

This component seeks to reform the civil service by:

  • ✓ increasing transparency in regard to recruiting, employment, compensation, incentives, and retirement. As provided in the labor code reform, controlling staff through biometric identification of civil servants and contractual employees;

  • ✓ strengthening the institutional mechanisms of social security (national social security agency, pension fund, minimum starting salary and guaranteed minimum salary);

  • ✓ strengthening the capacities of social stakeholders (unions and institutions established to resolve workplace conflicts);

  • ✓ establishing a labor tribunal to protect workers’ rights; and

  • ✓ defining an institutional framework for utilization of information and communication technologies in the public administration to promote good governance.

II.1.8. Improving local governance

Decentralization is, above all, the transfer of authority, responsibility, and resources from the center to the periphery. The decentralization policy instituted by the government is founded on the following fundamental objectives: (i) deepening the democratic process, which formally repositions civil society and the government in their respective roles and responsibilities; (ii) promoting participatory local development and promoting transparency in the management of local affairs. The measures to be implemented to further these objectives are:

  • ✓ continued preparation of the National Policy Letter on Decentralization;

  • ✓ drafting and promulgation of orders implementing the framework law on local governments (CCL);

  • ✓ continued outreach on the CCL to promote appropriation by all local stakeholders and organizations and the populations represented;

  • ✓ strengthening of the organizational framework of local governments and renewal of the terms of local authorities (commune, local development community), taking account of their level of education;

  • ✓ strengthening local executives’ capacities in preparing and executing local budgets, allocating resources, awarding contracts, and verifying services rendered;

  • ✓ strengthening local elected officials’ capacities in human, material, and financial resources management and security management;

  • ✓ promoting participatory development by expanding local development plans and annual investment plans to all local and regional administrations; and

  • ✓ improving the management of vital statistics registries.

II.1.9. Promoting gender equality

Equality of the sexes is one of the objectives of the Millennium Declaration. The strategies recommended to this end are:

  • ✓ strengthening laws protecting women and vulnerable persons;

  • ✓ increasing women’s autonomy through improved access to microcredit and domestic and foreign markets through the establishment and implementation of the National Fund to Support Women’s Economic Activities;

  • ✓ developing microfinance to mobilize savings and development for Financial Services Associations in the prefectures and sub-prefectures;

  • ✓ equal access and full participation for women and youths in power structures and decision-making bodies;

  • ✓ promoting measures for women and youths to prevent and protect against HIV-AIDS, malaria, and tuberculosis through screening measures and techniques, the provision of antiretroviral drugs, and continuation of the outreach campaign on the distribution and use of insecticide-treated mosquito nets;

  • ✓ implementation of the measure to provide cesarean sections free of charge;

  • ✓ implementation of microfinance institutions in the prefectures and sub-prefectures to create income-producing activities for women and young girls; and

  • ✓ enactment and enforcement of Law L/010/AN 2000 of 10 July promoting on reproductive health and prohibiting female genital mutilation.

II.1.10. Improving economic governance and strengthening management capacities

The actions recommended by the government essentially concern:

  • ✓ the quarterly audit of public contracts valued at over GNF 100 million;

  • ✓ strengthening capacities for design, planning, and strategic analysis;

  • ✓ strengthening capacities to produce statistical information for the nation, the ministerial departments, and decentralized administrations through implementation of the 2009-2013 action plan under the National Statistics Development Strategy;

  • ✓ improved capacities for programming, managing, and monitoring public finances; and

  • ✓ continued efforts to link the Guinean Economy Simulation Model (MSEGUI) to the Macroeconomic Simulator for Poverty Analysis (PAMS).

The following two boxes discuss the strengthening of our capacities in the areas of macroeconomic analysis and monitoring of the strategy.

Integrated MSEGUI/PAMS tool

The current version of the Guinean Economy Simulation Model (MSEGUI) represents an important step in adapting the instruments of macroeconomic analysis. For purposes of simulation, the National Directorate of Planning (DNP) combined the Macroeconomic Simulator for Poverty Analysis (PAMS) with the MSEGUI to take account of the impact of development policy decisions on poverty.

In this context, the source and application of funds table (TRE) was integrated into the model and new modules were created specifically to determine the property profile and income distribution of different socioeconomic groups. It should be noted that a data calibration was performed so as to migrate the data from the MSEGUI to the new version without TRE. However, the model is not yet fully operational.

In the area of improving budget and tax policy, the measures concern: (i) strict adherence to the principle of centralized cash management through the closing of special accounts and transfer of credit balances to the main Treasury account; (ii) cash-based budget execution accompanied by a monthly cash management plan supervised by the Treasury Committee; (iii) strict deference to the ministries’ payment authorization authority by increasing their responsibilities in regard to managing the budgets allocated to them; (iv) reinstatement of the Medium Term Expenditure Framework (MTEFs) unit and expansion of such units to all departments; (v) the drafting and execution of employment contracts for senior positions in the revenue-collecting agencies (customs, tax administrations); (vi) control of all imports of merchandise; (vii) elimination of all ad hoc exemptions and intensified control of legally established exemptions; (viii) improved collection of administrative revenue, particularly revenue associated with mobile telephone service; and (ix) compliance with established procedures for the award of public contracts.

National Statistics Development Strategy

In 2008, the government adopted the National Statistics Development Strategy (SNDS), which provides for an action plan covering the period 2009-2013. The SNDS is based on four strategic pillars:

  • - improvement of the institutional and regulatory framework for the national statistics system;

  • - improved coverage and quality of statistics produced;

  • - strengthening of the personnel, material, and financial resources of the national statistics system;

  • - improved dissemination and archiving of data through the use of new information and communication technologies; and

  • - mobilization of US$34.3 million from the technical and financial partners for implementation of the SNDS, which will cost a total of US$44.2 million.

Also, in the context of implementing the Strategic Plan for Public Finance Reform, the government plans a certain number of measures that will improve the public finance system. The six priority measures identified are summarized in the box below.

Matrix of government financial management reforms

Urgent Actions

Adopt an appropriate legal framework for government finances that incorporates reforms being enacted in the subregion

  • Framework law on government finance

  • Budget nomenclature

  • General public accounting regulations

  • Central government chart of accounts

  • Prepare reliable accounting trial balances and make up for delays in approval of budget review laws (lois de règlement)

  • Audit public contracts 10

  • Work toward implementation of Single Treasury Account

  • Update payroll and civil service files

  • Develop a roadmap to supplement the assessment and ensure consistency between the numerous initiatives under way to improve effectiveness when implemented

  • Clear the Treasury liability vis-à-vis the BCRG and domestic arrears

Source: Excerpt of government financial management reform matrix (cf. annexes)
Table 6:

USAID and EU portfolio

(US$ thousands)

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Source: USAID and European Commission.1 Euro = US$1.3834

Chapter 2. Accelerating growth and expanding job and income opportunities for all

Guinea, formerly known as “les Rivières du Sud” and West Africa’s Water Tower, is a country brimming with immense natural resources that provide sufficient growth potential to lifted from poverty.

These abundant and varied resources are a major advantage for diversification of the economy, and range from mining resources (gold, diamonds, bauxite, iron, uranium), forest resources, and fishing resources to hydraulic resources (several rivers, including the Niger and Senegal rivers, have their source in Guinea).

The diversity of its agrosystems enables Guinea to grow a wide range of food crops. The climate is tropical and semi-humid or Sudano-Guinean. It has two very distinct seasons: a dry season of 4 to 7 months, and a rainy season of 5 to 8 months depending on the region. The average rainfall is from 1,200 to 4,200 mm per year. Guinea therefore has strong potential for agricultural development, which could be supported both by improving yields, which are still quite low, and by expanding cultivated areas (low-lying river basins, mangroves, irrigation systems).

Guinea’s arable land is estimated at 6.2 million hectares, or 25 percent of the national territory. Of those 6.2 million hectares, less than 2,000,000 hectares is actually exploited each year, and the rest lies fallow. Hydro-agricultural potential is estimated at 180,000 hectares, divided into 157,000 hectares of planes and 23,000 hectares of low-lying river basins [data from the Technical Center for Agricultural and Rural Cooperation (CTA)]. The capacities for expansion of cultivated agricultural lands are therefore significant. Agriculture employs over 80 percent of the rural population, and 80 percent of growers cultivate rice. According to the joint CILSS-FAO-GG assessment of the 2010/2011 crop year, gross rice production could reach 1,604,348 tons per rice paddy (an increase of 7 percent relative to 2009) or roughly 1,123,044 tons of brown rice,11 making Guinea one of the principal rice-growing regions of West Africa.

Guinea’s exploited fishing potential is estimated between 150,000 and 250,000 tons of fish per year and consists of pelagic, demersal, and cephalopod species and shrimp. The pelagic species have high capture potential, while the state of demersal species ranges from full exploitation to over-exploitation.

Agricultural potential is considered significant in Forested Guinea, especially for aquaculture in rice fields, and in Lower Guinea for the development of shrimp farming along the coast, oyster culture, sea cage aquaculture, and inland aquaculture. In Upper Guinea, ponds and other reservoirs offer excellent conditions for aquaculture. In Mid-Guinea, floodplains and agricultural and hydroelectric dams provide opportunities for aquaculture. Fishing is one of the resources and opportunities available to Guinea for accelerated economic growth and diversification of the economy. Fishery products contribute in the range of 40 percent of animal protein requirements. The annual individual consumption of fish has increased from 13 kg prior to 2003 to the current average of 17 kg in 2010.

In the mining sector, Guinea attracts the largest multinationals in the different mining areas (e.g., Rio Tinto, BHP Billiton, Alcan, Alcoa). Its flows of foreign direct investment (FDI) have increased from US$30 million in 2002 to US$111 million in 2007, a 270 percent increase in five years. Other megaprojects planned for the next 10 years (alumina and aluminum refinery projects) are estimated at over US$24 billion.

As we see, the judicious utilization of Guinea’s enormous potentialities should lead to sustained, accelerated growth in the coming years so as to reduce poverty.

However, economic growth does not automatically ensure a reduction in poverty. The link depends essentially on the sector composition of growth. Growth is needed most of all in the branches and sectors that occupy the majority of the poor. However, Guinea’s poor population are concentrated in rural areas and earn their living from agriculture, livestock raising, and fishing. It is growth in that sector that is most likely to rapidly reduce poverty in Guinea.

However, a more diversified economy supported by multiple productive sectors is a more reliable guarantee of sustainable, long-term improvement of living conditions for the poor. Diversification of the economy is another essential factor in the link between growth and poverty reduction. In this regard, the mining sector should play a key role by increasing its value added through the processing of raw materials.

The rural sector (agriculture, fishing, livestock) can also contribute added value by establishing competitive processing industries.

To summarize, growth driven by the rural sector and financed by revenue from the mining sector should serve to reduce poverty. In fact, the establishment of agrifood industries, increased value added in the mining sector, and Guinea’s participation in regional and international trade would likely provide citizens with sufficient income to satisfy their needs and provide taxes and duties to the government, enabling it to provide citizens with good quality basic social services.

However, the availability of appropriate, productive, basic economic infrastructures to serve as levers of growth is a sine qua non. The construction of hydroelectric dams to provide water and electricity and the interconnection of the principal cities with production areas are essential to accomplish the development objectives.

II.2.1. Macroeconomic objectives

The macroeconomic objectives are: (i) achieve annual growth in production of 4 percent in 2011 and 5.5 percent in 2012 to increase per capita GDP by 0.7 percent in 2011 and 2.2 percent in 2012; (ii) reduce year-on-year inflation to 17.1 percent in 2011 and 5.3 percent in 2012; (iii) increase gross international reserves to the equivalent of 1.7 months of imports of goods and services for the period 2011-2012 compared to 1.4 months and 1.9 months of imports, respectively, in 2009 and 2010. Total revenue (excluding grants) should increase from 18.0 percent of GDP in 2011 and 19.3 percent of GDP in 2012, and the budget deficit (commitment basis, excluding grants) should be reduced to -5.1 percent of GDP in 2011 and -2.6 percent in 2012. Total expenditures as a proportion of GDP should be 16.8 percent in 2011 and 16.1 percent in 2012. In addition, foreign debt service should be reduced to 57.7 percent of GDP in 2011 and 51.3 percent of GDP in 2012.

Graph 7.
Graph 7.

Real economic growth, 2007-2012

Citation: IMF Staff Country Reports 2012, 061; 10.5089/9781475502534.002.A001

Key: Blue = Year-on-year inflationRed = TargetSource. Macroeconomic framing, April 2011, DNP

Five measures are planned to achieve these objectives: (i) consolidation of the macroeconomic framework; (ii) implementation of an effective, prudent monetary policy accompanied by strengthening of the financial system; (iii) improvement of budget and tax policies; (iv) effective debt management; and (v) incorporation of the regional dimension of economic and financial integration.

a) In regard to improving the macroeconomic framework, the immediate challenge facing the government is to restore macroeconomic and budget stability. The government’s first task will be to control the budget deficit and reduce the high rate of inflation that disproportionately affect the most disadvantaged Guineans and threaten social stability. The success of these stabilization policies will enable the government to plan and implement medium-term policies that will reduce poverty and ensure stronger growth and the resumption of the debt relief process under the HIPC.

b) In regard to the budget policy, the 2011 budget is intended to drastically reduce the excessive spending of previous years and, consequently, avoid supplemental bank financing. The initial budget estimates, which already provide for significantly reduced spending compared to the previous year’s budget and include the government’s emergency action plan to address certain of the citizens’ needs, present a financing requirements of close to 13 percent of GDP. This would have led to considerable bank financing and would have further accelerated inflation. To avoid this situation, additional measures representing 4.1 percent of GDP are expected to reduce the budget balance (commitment basis) from about -11.7 percent of GDP in 2010 to -5.1 percent in 2011 and -2.6 percent in 2012. The measures taken to achieve these results include the following:

  • ✓ increasing revenue by about GNF 1,000 billion, or 3 percent of GDP;

  • ✓ increasing receipts by GNF 50 billion through tax revenue, including collections for prior years;

  • ✓ intensified efforts by revenue-collecting authorities;

  • ✓ cutting back the excessive public spending of recent years;

  • ✓ reducing the rapid growth of the public sector wage bill;

  • ✓ meeting the population’s most urgent needs;

  • ✓ implementing the corrective measures required by means of a supplementary budget law developed in cooperation with the IMF;

  • ✓ executing expenditures on a cash basis throughout fiscal year 2011;

  • ✓ reforming the civil service;

  • ✓ improving the management of finances;

  • ✓ re-starting implementation of the expanded public finance reforms based on the 2008 Public Finance Reform Strategy;

  • ✓ reducing the excessive pressure of the money supply on the inflation and exchange rates;

  • ✓ stepping up surveillance of commercial banks;

  • ✓ improving the management of public enterprises; and

  • ✓ adopting a new mining code and model mining contract.

Graph 8.
Graph 8.

Budget balance (commitment basis), 2007 – 2012

Citation: IMF Staff Country Reports 2012, 061; 10.5089/9781475502534.002.A001

Key: Blue = Budget balance (commitment basis)Source. Macroeconomic framing, April 2011, DNP

c) In regard to improving monetary policy, efforts will focus on reducing the pressure exerted by excessive growth of the money supply from 2009 two 2010 on inflation and the exchange rate. The main cause of this growth was the excessive use of central bank (BCRG) advances to finance the budget. This supplemental financing must be avoided if inflation is to be reduced. The policy will be supported by measures to sterilize excess liquidity in the economy to the extent possible and encourage private savings by providing for positive real interest rates.

The BCRG will take all measures necessary to stabilize the Guinean franc: (i) raising commercial bank reserve requirements from 9.5 percent to 17.5 percent; (ii) placing nonnegotiable Treasury bills with banks recording especially high levels of liquidity, in close cooperation with the Ministry of Economy and Finance; (iii) converting a portion of the existing stock of government advances to Treasury bills; (iv) prohibiting advances to the government; (v) adjusting the BCRG policy rate according to the results of Treasury bill auctions; (vi) refraining from re-injecting the proceeds of sales of farm products into the economy, in order to further absorb liquidity; (vii) monthly publication of a summary bulletin and brief analysis of the monetary outlook in the local press in order to reduce uncertainty in the incipient financial market; and (viii) instituting periodic meetings with the professional bankers association at least once a month to discuss the monetary outlook.

The BCRG plans to reinstate the interbank market for national currency in order to optimize the allocation of liquidity in the banking system. This would enable the BCRG to serve in its role of lender of last resort and significantly reduce pressure on the currency caused by demand from commercial banks. The table below summarizes the principal macroeconomic and poverty indicators for the period 2010-2013.

The assumptions for growth in 2011 are based on the following factors:

  • ✓ a return to constitutional order and restoration of the development partners’ trust;

  • ✓ continued reform of public finances;

  • ✓ implementation of the National Agricultural Investment Program;

  • ✓ improvement of Guinea’s business climate and attractiveness to investors; and

  • ✓ a gradual increase in the price of mining products.

In the context of increasing support the banking system to reduce credit-related risks, the BCRG is focusing its efforts on improving the risk unit and implementing a payment risk management unit. It also plans the following new measures: (i) increasing international reserves; (ii) improving the operation of the foreign exchange market; (iii) limiting the use of Treasury bills to finance the budget deficit to a maximum of 5 percent of average tax revenue for the previous three years and to a term of no more than 92 days, as provided by the BCRG charter; (iv) strengthening existing financial intermediation institutions and opening additional branches outside the capital; (v) establishing new financial intermediation institutions to provide increased density and diversification of financial services.

d) In regard to debt management and mobilization of resources, the objective is to sustainably control the external debt burden by reducing the outstanding balance as a percentage of GDP from 66.6 percent in 2009 to 64.8 percent in 2011 and 57.0 percent in 2012. The following measures are planned to this end: (i) the formulation of a debt policy based on at least 35 percent grants; (ii) a conversion of the debt that promotes investment in the priority sectors; (iii) strengthening negotiating capacities, including techniques for redemption and conversion of debt on a case-by-case basis; (iv) creating a flexible, dynamic interministerial structure for consultation, coordination, and development of debt management strategies appropriate for the international environment. In addition, the achievement of the completion point under the HIPC Initiative could serve to reduce Guinea’s external debt.

There are also other worthwhile avenues for mobilizing resources. The signature of the 10th European Development Fund will enable Guinea to mobilize substantial financial resources, estimated at €205.8 billion, including €189.6 billion from envelope A for development projects and programs, and €16.2 billion from envelope B for budgetary assistance.

Another source of new financing are the innovative financing mechanisms introduced in international debate at the summit of the March 18-22, 2002 Monterey conference on development financing. A pilot group on solidarity contributions to support development was established for this purpose. Unfortunately, however, there have been delays with respect to its membership and the establishment of mechanisms that could enable it to mobilize additional resources for Guinea’s development.

For example, Guinea might receive an estimated €70 million in nonreimbursable subsidies to purchase drugs to control pandemics during the period 2007-2011, through the project financed by funds from the tax on airline tickets the government has yet to institute.

Table 7:

Principal macroeconomic and poverty indicators

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Source: Excerpt of macroeconomic framing, December 2010 MSEGUI

e) In the area of regional integration, the policies contemplated will entail more rigorous macroeconomic and financial management and improvement of the mechanism for reporting and monitoring the member countries’ economic and financial performance. In particular, the government will commit to timely payment of Guinea’s contributions to the regional and sub-regional cooperative organizations.

II.2.2. Sector objectives

II. 2.2.1. Development of sectors with strong growth potential

The objectives and measures to be implemented are described for each sector below:

a) In the agriculture sector, the principal objectives are to:

  • ✓ ensure food security;

  • ✓ develop food crops and export crops; and

  • ✓ create jobs and income for populations, particularly those living in rural areas.

To accomplish this, the sector must achieve a growth rate of 4.1 percent in 2011 and 5.7 percent in 2012, with a stable GDP contribution of 14.2 percent in 2011 and 2012. The achievement of this growth rate will depend essentially on economic consistency and effectiveness, social equity and sustainability, the decentralization policy, the ECOWAS common agricultural policy, and the African Union’s Comprehensive African Agricultural Development Program/New Partnership for Africa’s Development.

The specific objectives are to: (i) increase the production and productivity of family-owned operations; (ii) promote agricultural entrepreneurship by stimulating private initiative; (iii) improve access to markets for agricultural products; and (iv) ensure sustainable utilization of natural resources and the environment. The achievement of these objectives calls for:

  • ✓ developing rice cultivation in order to meet the population’s growing needs;

  • ✓ diversifying agriculture through the development of other food crops;

  • ✓ adopting an integrated approach to managing natural resources;

  • ✓ strengthening institutional capacities and program coordination;

  • ✓ strengthening the capacities of agronomy research centers; and

  • ✓ strengthening the capacities of chambers of agriculture and commerce.

Accordingly, the agricultural development strategy is primarily based on expanding irrigated areas in order to reduce the high dependence on rain-fed farming, and increasing production through increased use of agricultural inputs in order to significantly increase productivity. Crosscutting support measures to ensure the effectiveness of investment will be based, inter alia, on: (i) improving the legal and regulatory environment; (ii) increasing the productivity of agricultural operations by improving soil fertility; (iii) improving access to the factors and means of production (land, inputs, technologies, training, equipment, and information); and (iv) developing a viable system of financing for producers in the different agricultural segments.

Promoting food security

  • ✓ Increase the availability and stability of the food supply by increasing crop, animal, and fishery production and their respective added values.

  • ✓ Ensure greater economic and physical access to food for households by reducing poverty in Guinea, particularly in the most vulnerable areas.

  • ✓ Effectively reduce malnutrition through measures that will improve the nutritional situation of the most vulnerable groups in the short term.

  • ✓ Implement appropriate lines of defense to protect populations from natural and other disasters.

  • ✓ Stabilize the food supply: (i) leverage the agricultural potential of lands, waters, livestock, and forests; (ii) improve the performance of production systems: access to inputs, distribution of technology packages, etc.; (iii) use appropriate conservation and processing technologies; (iv) facilitate access to credit; and (v) sustainably manage natural resources.

  • ✓ Increase access to food: improved integration of livestock grazing and food security programs; (ii) development of income-generating activities.

  • ✓ Greater involvement of women in the processes of production and resource management.

  • ✓ Implement an institutional framework for food security that actively involves all stakeholders and sectors concerned in analysis and decision making. This should be the cornerstone of Guinea’s food security strategy, given the multisector aspect of interventions and actors in the area of food security, which is a departure from the strictly agricultural interpretation of food security currently observed in Guinea.

  • ✓ One of the major weaknesses in Guinea is the unavailability of information required to analyze food and nutritional situations in order to guide investments. An information system on the food and nutritional situation of Guinea’s populations is essential and is a priority pillar of the strategy.

  • ✓ Strengthen the capacities of professionals and professional organizations in the different agricultural, animal, forest, and fishery segments of the rural sector.

  • ✓ Improve management of and access to the different resources that support food security: (i) increase the stability of supply of agricultural, animal, and fishery productions to reduce significant post-production losses and facilitate the population’ access to food products (post-production technologies, market operations, price liberalization, elimination of unjustified taxes); (ii) strengthen services supporting rural areas (research, outreach, policy, control, etc.) that exhibit weaknesses in terms of human, financial, and material resources to enable them to provide the support necessary to improve production in rural areas; (iii) increase the competitiveness of Guinea’s agricultural products in the regional and international market; (iv) develop mechanisms to support activities for women in the area of food security, since women play a key role in the household’s food security; (v) develop strategies to reduce malnutrition in order to combat transitory food insecurity so as to provide relief to the most vulnerable groups and those at risk (children under age 5, pregnant and breast-feeding women); (vi) develop consistent food assistance strategies for populations facing emergency situations (refugees, persons displaced by disasters), areas of extreme poverty and or vulnerable groups in Upper and Mid-Guinea (specific funds to support youth and women in developing cash crops, livestock production, and trade and artisanal activities during dry seasons); (vii) develop strategies to improve populations’ economic and physical access to food products; and (viii) develop specific strategies for the natural regions that take account of their constraints.

b) In the livestock segment, the objectives are to significantly increase the population and national production of meat, milk, and eggs, which have great potential for meeting the population’s food requirements. Through implementation of the pasture policy, the government also intends to increase added value in the sector by close to 3.9 percent in 2011 and 5.6 percent in 2012 compared to 5.5 percent in 2010.

To achieve this rate of growth, the sector will require: (i) increased access to microcredit and inputs; (ii) sedentation of livestock farmers (organization, training, animal health, outreach, planning); (iii) intensified livestock breeding; (iv) breeding of livestock with shorter gestation periods; (v) effective integration of agriculture and livestock breeding; (vi) development of the pasture code; and (vii) close cooperation with neighboring countries in efforts to control epizootic disease.

These actions will be supported by two strategic pillars: (i) the crosscutting strategic pillar, or program approach, that supports traditional livestock breeding systems through actions to be carried out by the government with the participation of livestock breeder groups; and (ii) the vertical strategic pillar, or segment approach, that will support the improve cattle breeding system or semi-intensive periurban system.

c) The fishery and aquaculture sector is one of the principal sources of animal protein for the populations and means of mobilizing revenues. The government’s fisheries policy aims to increase the sector contribution to GDP by increasing growth to 4.5 percent in 2011 and 4.8 percent in 2012.

The implementation of the following three strategic pillars, defined in the policy letter on the development of fisheries and aquaculture, is expected to achieve this objective: (i) strengthening of sector institutional and professional capacities; (ii) the sustainable management of fishery resources through improved research and surveillance; (iii) developing/promoting fishery and aquaculture products. Specifically, this will involve implementing the following actions provided in the Ministry of Fisheries and Aquaculture 2008-2011 the emergency program:

  • ✓ improving production services through the implementation of a national policy;

  • ✓ developing infrastructures for downloading, storing, processing, packaging, and marketing fishery products;

  • ✓ managing fishery capacities and reducing illegal, unreported, and unregulated fishing through the implementation of fishery management plans and efforts to combat illegal fishing;

  • ✓ improving upstream and post-capture services to increase products’ competitiveness by making landing facilities viable, creating commercial fishing enterprises on par with international standards, bringing the means of production up to standards, and establishing sensory analysis and microbiology labs;

  • ✓ reinstating the village aquaculture development support program in Forested Guinea, the pond and basin development program in Upper Guinea, and the artisanal fishery program in Maritime Guinea;

  • ✓ combating illegal fishing by strengthening the operational capacities of the National Fishery Surveillance Center;

  • ✓ improving knowledge of resources by increasing the operational capacities of the Boussoura National FisheryHalieutic Sciences Center; and

  • ✓ restoring and preserving aquatic (maritime and inland) ecosystems.

It should be noted that the National Agricultural Investment and Food Security Program (PNIASA) encompasses the agriculture, livestock, fishery and environment sectors. The following table presents the PNIASA costs and financing plan.

Table 8:

Cost of Interventions

(USD millions)

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d) The mining sector: Of all the sectors with growth potential, the mining sector is the most important and provides the largest contribution to exports. Because production declined following the downturn in global demand, the sector’s share of GDP decreased to 14.7 percent in 2009 compared to 15.8 percent in 2008. It continued to decline, to 14.5 percent in 2010 and 14.2 percent in 2011, but is expected to recover to 14.5 percent in 2012.

The overall mining policy objective is to maximize mining receipts and increase the benefits of mining operations to citizens through job- and income-creating activities. The rate of growth expected in 2011 is on the order of 1.8 percent and in 2012, 4.6 percent.

The achievement of this objective relies essentially on measures to consolidate the mining rights register and review mining contracts with a view toward potentially renegotiating them and making them more advantageous for the public treasury. The mining sector should also contribute to a large extent to the fight against poverty.

The measures will include: (i) the execution of megaprojects such as GAC, Rio Tinto, BSGR, etc.; (ii) improvement of basic services through the sector’s contribution to central government revenue as well as local authorities’ budgets and direct actions on the ground; (iii) a contribution toward reducing unemployment, particularly for young graduates; and (iv) strengthening Guinea’s liquidity position in foreign currency.

To meet this challenge, the government expects to promote large mining projects in the iron and aluminum segments. To this end, it will facilitate the creation of infrastructures to support these projects (trans-Guinea railroad, deepwater mining port). These megaprojects will help accelerate economic growth, create decent jobs, and generate income.

The mining policy will be implemented through two pillars, intensification of mining activity and better leveraging of mining products.

In this regard, the government is in the process of implementing structural reforms in the sector. The mining code and the system of taxes on bauxite, which date from 1995, are being revised to incorporate changes in the national and international market.

Guinea’s accession to the Extractive Industries Transparency Initiative (EITI) in April 2005 marks the government’s intention to establish transparency in the management of mining resources. In particular, it will promote rational use of the resources generated by the extractive industries to ensure that they serve as an engine of economic growth. In 2005, the first year, data collection, reconciliation, and audits were completed for six large mining enterprises – ACG, CBG, CBK, SAG, SMD, and SEMAFO – and a report of the findings was published the same year. The report for 2006 has been completed but is not yet published.

In the context of efforts to improve the legal and regulatory framework, the mining and petroleum codes must be amended to address the new realities in those sectors. From that standpoint, [words omitted] which was selected for the review, with financing from the African Development Bank in the amount of €300,000. The review will include the statute itself, the implementing regulations, including a model mining contract, and finalization of the policy letter on the mining sector.

The review is expected to significantly increase the local development tax, which would be raised from 0.4 percent of revenues to 1 percent. This will entail better distribution of receipts from the mining sector between the national budget and local government budgets.

In the context of support for the negotiation of mining and petroleum agreements, capacity building may prove necessary for potential renegotiation of existing and future agreements. In the past, Guinea has signed one-sided contracts granting exorbitant customs and tax advantages to certain companies while eliminating others. The model mining contract is expected to put all companies on an equal footing. The estimated cost is US$250,000.

The Center for Mining Promotion and Development has a mining rights register that must be maintained. In view of taxes of US$10/KM2, it is an important source of revenue for the central government and local governments. The estimated cost is US$350,000.

Principal private-sector mining projects

  • ✓ Global Alumina project with partners BHP-Billiton, Dubal and Mudabala, for production of 10 million tons of bauxite and 4 million tons of alumina at Sangaredi for a cost of US$4.5 billion;

  • ✓ Dian-Dian project with partner Rusal, for production of 13.4 million tons of bauxite and 2.8 million tons of alumina for a cost of US$4 billion;

  • ✓ Alumina plant construction project at Kamsar with partners Alcoa and Rio Tinto/Alcan, for initial production of 1.5 million tons of alumina, with possible expansion to 3 million tons using bauxite produced by CBG; for a cost of US$1 billion;

  • ✓ Dabola /Tougué project in partnership with Iran, for production of 10 million tons of bauxite and 1 million tons of bauxite for a cost of US$4 billion;

  • ✓ Boffa alumina plant project with partner BHP-Billiton;

  • ✓ Gaoual bauxite project with partner Alliance Mining Corporation;

  • ✓ four iron extraction projects being developed at Simandou with Rio-Tinto, at Mont Nimba with BHP-Billiton, at Kalia, Faranah with the Australian company Belle Zone, and at Zogota, Nzérékoré with BSGR.

  • ✓ Program consolidating support to the National Confederation of Rural Organizations (PACNOP), €1,600,000;

  • ✓ Thematic facility for non-state actors and local authorities, €1,425,000; and

  • ✓ European Instrument for Democracy and Human Rights, €100,000.

These mining projects will create varying numbers of direct jobs depending on the nature of the mining project. The following table presents the jobs created in the mining sector.

Table 9:

Direct jobs created by mining projects

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Source: National Directorate of Multiyear Programming

e) The industrial development policy will pursue the following objectives:

  • ✓ the creation of an industrial fabric that will add value to our natural resources through local processing;

  • ✓ the creation of an agrifood industry enabling us to leverage our agripastoral products;

  • ✓ integration in international and subregional trade; and

  • ✓ the creation of an attractive climate for high-labor-intensive industries in order to take advantage of industrial relocations.

The achievement of these objectives will lead to the creation of sustainable jobs and income for our graduates and rural population groups working in the various agricultural segments. To accomplish this, the sector will require a better organized private sector and framework, a better adapted business climate, and basic infrastructures (roads, water and electricity, transportation, etc.). These in turn will open the possibility of achieving growth in manufacturing sector value added from 1.2 percent in 2010 to 4.4 percent in 2011 and 5.1 percent in 2012.

To achieve this growth rate, the government is committed to consolidating the business climate, increasing support to the private sector, facilitating access to credit, and improving the system of institutional support by finalizing and implementing the Policy Letter on Private-Sector Promotion.

f) The trade development policy, the key objectives of which are identified in the Diagnostic Assessments of Trade Integration, places trade among the priority sectors of the poverty reduction strategy in Guinea.

In 2009, trade increased only slightly, by 0.8 percent, due to the downturn in trade activities in response to a national sociopolitical climate marked by a wait-and-see attitude on the part of economic operators.

In the coming years, the trade sector could increase its rate of growth by 3.8 percent in 2011 and 4.9 percent in 2012 compared to 1.0 percent in 2010 by improving the institutional and regulatory environment, establishing basic infrastructures, and increasing the supply chain capacity for products intended for the domestic and international market.

The expected implementation of the Enhanced Integrated Framework is expected to contribute to this objective by implementing the following components of the trade policy:

  • ✓ modernizing and establishing qualifications for the sales profession;

  • ✓ strengthening supply chain capacities while diversifying exports, giving priority to processed, high-value-added products;

  • ✓ increasing foreign currency revenue resulting from exports and repatriation of products;

  • ✓ monitoring foreign trade statistics; and

  • ✓ improving Guinea’s brand image in the international arena by enhancing commercial diplomacy.

These actions will enable the trade sector to fulfill its role as a factor of growth and engine of economic development for Guinea, with a GDP share ranging from 17 percent to 20-25 percent in the next three years.

In this regard, the trade sector will benefit from attention from the development partner authorities, particularly in terms of allocating the financial resources needed to achieve the above objectives.

g) The tourism and artisanal development policy is expected to contribute to Guinea’s economic and social dynamic. The overall objective of the sector policy is to strengthen and accelerate economic development to produce a positive impact on living conditions for citizens, particularly those living in poverty.

Specifically, the objectives are to: (i) help speed the pace of economic growth; (ii) promote jobs and wide distribution of income; and (iii) contribute to the mobilization of foreign currency.

The interventions contemplated to achieve these objectives include: (i) increasing the sector’s productivity and competitiveness; (ii) creating productive, stable jobs; (iii) enhancing technical skills and management while contributing to the development of the industrial base; (iv) implementing the Policy Letter on Artisanal Sector Development; and (v) implementing projects to support the artisanal sector, such as those included in the Framework Program to Support Private Sector Development.

h) Promoting the private sector and employment: the objective is to promote the creation of decent jobs and significant income for all, particularly for the poor. This will require attracting private local investment and foreign direct investment in the mining sector as well as other high-value-added sectors; supporting local entrepreneurship; giving particular attention to microenterprises and small and medium-size businesses; and decentralizing the key agencies supporting enterprises and employment for the young.

The measures planned to support private sector development will seek to:

  • ✓ finalize and implement the Policy Letter on Private-Sector

    Promotion;

  • ✓ improve the investment climate;

  • ✓ increase financial and nonfinancial support to the private sector;

  • ✓ consolidate viable industrial zones and create industrial free zones;

  • ✓ strengthen the managerial capacities of Guinean sponsors; and

  • ✓ facilitate access to markets through regional integration.

The measures will entail a review of the investment code, which dates from 1995 and needs to be updated to make investment more attractive.

These various actions will result in implementation of an institutional framework that includes ministries in charge of private-sector promotion, private-sector promotion and support offices, professional organizations, consular chambers, banking system, and all other support mechanisms (research and assistance funds, guarantee funds, investment funds) initiated by the government and the development partners.

In regard to the institutional framework, the government plans to implement a Private Investment Promotion Agency, replacing the Office of Private Investment Promotion, whose mission will be expanded to include: (i) the creation of a one-stop window to facilitate and improve monitoring of the formalities of creating, amending, and dissolving companies and enterprises; (ii) consistency between the SME/SMI investment code and sector codes; and (iii) harmonization with other ECOWAS agencies.

Table 10:

Cost of SME, trade, and artisanal sector projects, 2010-2012

(GNF millions)

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Source: National Directorate of Multiyear Programming

The above table presents a breakdown of the GNF 421,953 for interventions to promote the private sector, notably industry, SMEs, trade, and the artisanal sector, for the period 2010-2012. The majority of financing is provided by the national development budget.

i) Promoting sustainable development: The objective is to integrate the principles of sustainable development in international policies and programs, reversing the current trend of depletion of environmental resources and loss of biodiversity. The ultimate goal is to improve living conditions for current generations and protect the environment without mortgaging the productive base for future generations.

The strategy for managing water resources and protecting species is essentially based on: (i) expanding the proportion of protected areas; (ii) involving population groups in the conservation of ecosystems and resources; (iii) increasing protections to prevent water sources and riverbeds from drying out; and (iv) strengthening protections for endangered species.

The interventions will involve rational, sustainable management focused on natural resources and protection of the environment and soils; control of desertification and brush fires; protected forests and areas; catchment areas, marine ecosystems, coasts, fisheries, and water resources; and consideration of environmental impact studies in implementing infrastructure projects and programs.

Table 11:

USAID and EU portfolio

(US$ thousands)

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II. 2. 2.2. Development of basic infrastructure

(a) The energy and water sector development policy is aimed at improving the living conditions of the people and sustaining economic growth. The objective is significantly to improve the people’s access to energy services. To do so, the sector should achieve a growth rate of 6.2 percent in 2011 and 7.4 percent in 2012, as compared to 1.7 percent in 2010.

Specifically, this entails: (i) improving electricity supply in the city of Conakry; (ii) improving electricity supply in the outlying cities; and (iii) improving the efficiency of the electricity sector.

At the national level, the interventions planned for the electricity subsector involve:

  • ✓ Revision of the petroleum code and its implementing provisions;

  • ✓ Rehabilitation and extension of the MT/LT distribution grid to Conakry, Nzérékoré, Kankan, Faranah, and Labé;

  • ✓ Improvement to the efficiency of the electricity sector in Conakry, with efforts to combat fraud;

  • ✓ Implementation of a micro-power plant program.

For urban water supply, the aim is to: (i) rehabilitate and expand capacities for the production, transport, and distribution of drinking water; and (ii) improve the productivity of the subsector and carry out institutional reforms of the subsector to improve its management.

Accordingly, the government intends to create a viable institutional and legal framework for the subsector. In addition, other technical interventions will be focused on tapping the value of the hydroelectric potential, promoting energy savings, rural electrification, and alternate energy sources.

At the subregional level, ECOWAS participation should make it possible to move forward with integrating the markets for electric interconnections and developing small-scale hydropower.

Table 12:

Costs of energy and water supply projects

(in millions of Guinea francs)

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The government further intends to strengthen its participation in the subregional river organizations through integrating projects, in particular with regard to the plan to interconnect electricity grids and production. By way of illustration, mention may be made of the energy project of the Gambia River Development Authority (OMVG), the Fomi dam project headed up by the Niger Basin Authority (NBA), and the Koukoutamba, Boureya, and Balassa projects of the Senegal River Development Authority (OMVS).

With regard to meeting energy requirements using biomass and renewable energy sources, interventions will focus primarily on: (i) the rational use of forest resources with the increased accountability of subnational governments; and (ii) continuing the program on improved stoves and the promotion of substitute renewable energy sources (butane), biogas, and solar power.

Furthermore, other ways of covering energy needs merit exploration, such as hydrocarbons for household use in order to reduce the pressure on biomass. In cooperation with its Technical and Financial Partners (TFPs), the government has already identified relevant projects in this area.

(b) The transport sector development policy is aimed at meeting transport requirements at the lowest possible cost for the people while ensuring acceptable quality of service and safety. To achieve this objective, the sector should grow by 3.6 percent in 2011 and 4.3 percent in 2012, as compared to 1.4 percent in 2010.

In addition to the efforts recently made by the government by establishing a fledgling road transport network in the city of Conakry and rehabilitating the suburban train by introducing Conakry-Express, there are plans to rehabilitate the heavy duty rail line between Conakry and Kankan (662 kilometers in length) and then Kankan-Kérouané (under the agreement recently signed with the BSGR firm).

Table 13:

Costs of transport sector and public works contracts

(in millions of Guinea francs)

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Source: National Multiyear Planning Directorate.