Africa

Screenshot 2019-09-11 at 12.12.43 PMBy Baba Thiam Hady, Thiam & Associes

 

 

Recent reports from three respected international organisations sketch a relatively upbeat picture of economic prospects in the west African state of Guinea. This might be surprising to an uninformed outsider as Guinea has been a notorious case-study in governance and economic failure for more than half a century.

The country — sometimes known as Guinea-Conakry — is still one of the poorest in Africa and continues to face big developmental challenges, but the World Bank, the African Development Bank and the US Commerce Department all see glimmers of hope on the horizon.

A World Bank country overview in May 2019 highlights “robust growth” of 10 percent in 2016 and 2017 and 5.8 percent in 2018 — off a low base — driven by foreign direct investment in the mining sector. It adds that “investment in infrastructure and the expansion of the primary and tertiary sectors” remains strong.

The ADB says this growth is “bolstered by reforms aimed at improving the business climate, access to electricity, and investment in the agro-food sector” and predicts that real GDP will grow by 6 percent in 2019 and 2020.

“Guinea has exceptional mining potential, including two-thirds of the world’s known bauxite reserves, as well as gold, iron and diamonds,” says the ADB.

The US Commerce Department informs potential American investors in Guinea: “The return of political stability and the inauguration of a democratically elected president in 2010 facilitated international engagement” in the former French colony.

Anyone with Africa’s interests at heart will hope these words herald a new beginning for a country epitomising the continent’s malaise of underdevelopment, conflict and poverty.

From independence in 1958 onward, Guineans suffered under the rule of ruthless dictators and calamitous socialist policies.

The first democratic elections in 2010 saw long-time persecuted opposition leader Alpha Conde take control and a new dawn beckoning. However, the outbreak of Ebola in 2014 was a crippling blow, while conflict in neighbouring Sierra Leone and Liberia saw hundreds of thousands of refugees further straining Guinea’s struggling economy.

Internal political rumblings have also sapped optimism, with elections due in 2019 being postponed to 2020 and Conde intimating he wants to change the constitution to give himself a presidential third term — something he was once strongly against and which has inflamed the opposition.

Nonetheless, some of the world’s top economists see Guinea’s general trend as being upwards.

At present, mineral exports make up more than 90 percent of exports. The bauxite deposits are a glittering prize for bold investors. High-grade iron ore is already being exploited, though legal issues and falling global commodity prices have put a brake on the sector’s progress. Gold, diamonds and undetermined amounts of uranium and oil contribute to Guinea being one of the mineral-wealthiest places in Africa.

The US Commerce Department flags “great potential for companies which can contribute to Guinea’s infrastructure development” — in other words, build roads, railways and ports to facilitate activities.

It also points potential investors to opportunities in hydroelectric power, with numerous rivers and abundant rainfall suggesting Guinea could be a sub-regional power hub of note.

All this has the World Bank saying “natural conditions are favourable for growth”. But it cautions: “Guinea must improve its governance if it hopes to fully realise this potential and step up the structural transformation process.”

 

____________________________

LEX Africa is an alliance of law firms with over 600 lawyers in 25 African countries formed in 1993. More information may be found on www.lexafrica.com.

 

Screen Shot 2018-03-13 at 1.28.45 PM

 

 

 

 

E: babahady.thiam@thiam-associes.com
W: www.thiam-associes.com

Related Articles by Firm
Africa: The effect of Covid-19 and business resilience
Companies worldwide are, or will inevitably be, affected in the short and medium-term by the coronavirus pandemic (Covid-19). Decline in commodity prices due to the falling demand in China, travel restrictions ...
Africa: Boon for investors as Zimbabwe enacts new investment promotion law
On February 7, 2020 the Zimbabwe Government gazetted the long-awaited Zimbabwe Investment and Development Agency Act (Chapter 14;37). The new law comes in against the backdrop of promoting the ease of doing business in the country ...
Africa: Community issues and resource nationalism adding pressure on the mining industry
As if mining by its very nature is not difficult enough from a technical, financial, environmental and labour point of view ...
Opening the money taps into Africa
Akinwumi Adesina is not a name most people in Africa would recognise, yet it belongs to a man who is, arguably, doing the most to haul the continent out of a rut of underdevelopment and improve the lives of its ...
Coal-driven power train is running out of steam
The African Development Bank that it is making a surprise policy turn away from fossil-fuel investment and ploughing a new renewable energy path ...
Sun, wind and water stir up Africa’s energy mix
Obstacles to faster development of green energy abound everywhere, but the trend is clear and the momentum unstoppable.
AFRICA: How Nigeria is going local
Promoting “indigenisation” in the Nigerian economy was the subject of a recent Lex Africa seminar, which asked how foreign investors were forging partnerships with local players, using local content and local manufacturing capacity and transferring valuable work skills ...
Local content and participation in Ghana’s electricity supply industry
In line with the national push for a more structured approach to increasing local content and participation, the Regulations came into force on December 22, 2017 ...
One small step for Africa
On April 2 the Gambia’s parliament wrote itself into modern African history when it ratified the Africa Continental Free Trade Agreement (AfCFTA) ...
Zimbabwe’s ratification of the WTO Trade Facilitation Agreement
Recently, Zimbabwe, a member of the WTO since 1995, ratified the WTO Trade Facilitation Agreement (TFA) becoming the 139th WTO Member State to ratify this Agreement ...
African competition law developments in 2018 and the outlook for 2019
Africa is sometimes described as the “last frontier” of competition law because many African countries have only recently adopted modern competition laws ...
Blockchain, cryptocurrencies and the law in Uganda
By far the most significant headline-grabbing development in 2017 and 2018 relates to the stunning rise of blockchain ...
Tanzanian government releases Microfinance Bill
In a bid to ensure proper licensing, regulation, monitoring and supervision of microfinance business in Tanzania, the Minister for Finance has issued a draft Bill on Microfinance to be tabled in the National Assembly very soon ...
Ethiopia’s arbitration law challenges
Arbitration is perceived as one of the alternative solutions to congestion in the court system ...
Developments in competition law in Africa
At LEX Africa’s June seminar on developments in competition law in Africa, speakers discussed the increasing trend of governments to try and use competition law as an important part of their industrial policy ...
Zimbabwe holds massive potential for private equity investors
The country’s infrastructure is broken, but there is room for smart investors to capitalise on its rehabilitation.
Impact of the amendment of the Legal Guarantee of Stability in respect of existing mining projects in the DRC
The Government of the Democratic Republic of Congo (DRC) commenced the review process in respect of its Act No. 007/2002 of July 11, 2002 on Mining Code (Mining Code) in 2012. The process eventually culminated in the promulgation by the President of the Republic ...
Mozambique is addressing economic reform in a big way in 2018
Significant strides in Mozambique’s legislation and policies could see a rapid turnaround in the country’s economic situation. In 2016, inflation peaked at 26 percent ...
Increasing importance of African regulatory issues for M&A, trade and investment
It is important to remember that Africa is not a country but consists of 54 sovereign states and a huge diversity of cultures, customs, languages, ethnic groups and religions ...
Related Articles
Financing PPP projects in Vietnam
The selection of financing structures for PPPs needs to be carefully considered.
Further changes to civil litigation in the UAE
The amendments bring about some important changes to how matters will be litigated in the UAE courts.
Bahrain’s reaction to the global pandemic
Bahrain has implemented various limitations and requirements, and continues to monitor and extend the applicable timeframes.
Related Articles by Jurisdiction
Africa: Community issues and resource nationalism adding pressure on the mining industry
As if mining by its very nature is not difficult enough from a technical, financial, environmental and labour point of view ...
Africa: Guinea emerging from the shadows
Recent reports from three respected international organisations sketch a relatively upbeat picture of economic prospects in the west African state of Guinea ...
Tanzanian government releases Microfinance Bill
In a bid to ensure proper licensing, regulation, monitoring and supervision of microfinance business in Tanzania, the Minister for Finance has issued a draft Bill on Microfinance to be tabled in the National Assembly very soon ...
Latest Articles
Financing PPP projects in Vietnam
The selection of financing structures for PPPs needs to be carefully considered.
Further changes to civil litigation in the UAE
The amendments bring about some important changes to how matters will be litigated in the UAE courts.
In-House Community Counsels of the Year e-Ceremony 2020
The results of our virtual awards ceremony are in — we list the winners in all categories and round up a successful evening.