Guinea-Bissau’s economy is largely based on agriculture with cashew nuts being the country’s key crop. The cashew nuts account for 85 to 99 percent of the country’s total exports and for nearly 50 percent of GDP. Guinea-Bissau’s economic performance declined for three years until 2014 because of the 2012 coup. The economy has since returned to significant growth estimated at 4.8% in 2015 compared to the performance of only 0.8% in 2013 and 2.7% in 2014. The economic growth has been as a result of good demand for cashew-nuts, increase in subsistence food crops, private sector support and public-sector reforms. The economy is projected to grow by 5.7% in 2016 and 6.2% in 2017. The real GDP growth is projected to average 5% over 2016-2018. However the good performance is highly dependent on the social and political climate, the performance of the cashew-nut subsector and on continuation of reforms.
Why invest in Guinea Bissau
- The country has achieved political stability since April 2012;
- It is has untapped potential of ecotourism
- The country is strategically located
- The country is one of the key producers of cashew nuts
Guinea-Bissau is a multiparty republic. It is ruled by a democratically elected government led by President Jose Mario Vaz and Prime Minister Carlos Correia of the African Party for the Independence of Guinea and Cape Verde (PAIGC). Vaz took office in 2014 after an election judged to be free and fair by international observers. Guinea-Bissau has a history of political and institutional vulnerability dating back to its independence from Portugal in 1974. The country is among the most coup-prone and politically unstable countries in the world. In the last 18 months alone the country has had four governments. Vulnerability in Guinea Bissau is mainly a result of unfinished political transformation and disconnect between state and society.
Guinea Bissau’s population is estimated at about 1.79million in 2017 compared to the official population of 1.3 million at the 2002 census. Guinea Bissau is currently growing at a rate of 2.4% per year and it is projected the country will have a population of 1.893 million by 2020 and will pass the two million mark by 2025.
According to World Bank it was estimated that 49.33 % of the total population Guinea Bissau lived in urban areas in 2015. The urbanisation rate has been estimated by World Bank at 4.0%.
Doing business in Guinea Bissau
The highlights of World Bank score of doing business in Guinea Bissau are summarised as follows;
|Topics||World Bank 2017 Rank||World Bank 2016 Rank||Change in Rank|
|Starting a Business||176||178||
|Dealing with Construction Permits||155||163||
|Protecting Minority Investors||137||136||
|Trading across Borders||153||154||
The investment code of 2011 provides freedom to transfer capital, profits and dividends is guaranteed, as is the freedom to exchange currency. Foreign investors can easily transfer the profits earned in Guinea-Bissau to their desired destination.
Guinea Bissau is a member of OHADA, the Organization for the Harmonization of Business Law in Africa since 1995. The OHADA Treaty aims to harmonize business laws in sixteen African countries by adopting common rules adapted to their economies, by setting up appropriate judicial procedures, and by encouraging arbitration for the settlement of contractual disputes.
Key development challenges
- Political instability resulting from the frequent coups and civil wars;
- The country lacks adequate energy supply;
- Guinea-Bissau lacks good infrastructure to support economic development;
- There is overdependence of cashew nut and therefore the country has not diversified its economy;
- Poor regulatory framework and
- Guinea-Bissau lacks a conducive environment for business;
Guinea Bissau ranked number 168 out of the 176 countries that participated and scored 16 points out of 100 in the 2016 corruption perception index survey by Transparency International.
The security situation has remained stable over the last six months.
Unemployment and skilled labour
The current not readily available
Attitude to Foreign Direct Investment
The country is recovering from a prolonged period of political instability and such government is coming up with incentives for attracting foreign direct investment. Fiscal incentives during the operational phase took the form of degressive reductions in the rate of the industrial profits tax for a maximum of seven years. In order to promote projects in locations outside the Bissau region investors in such locations can deduct from their taxes expenditure on building materials for the creation of infrastructures (roads, ports, airports, hospitals) for public use.
The Investment Promotion Agency – Guinea-Bissau Investments (API-GBI) is a public body established by decree in 1991 and operating under the authority of MEPIR – the Ministry responsible for the economy. API provides the interface between the Government and the private sector for purposes of promoting private investment. Since 2006, Guinea-Bissau has been a member of the World Bank’s Multilateral Investment Guarantee Agency (MIGA), which enables eligible foreign companies to receive MIGA’s guarantee coverage for their investments in Guinea-Bissau. This provides protection against the risks of transfer restriction, expropriation, breach of contract, and losses caused by war or civil disturbance. Membership also makes Guinea-Bissau eligible for MIGA’s technical assistance to help it attract foreign investment
Restrictions on Foreign investment
A new draft Investment Code approved by the Government in April 2011, and also promulgated in the same year12, replaces a 2009 code. The new Investment Code is intended to provide a more dependable and stimulating legal framework which makes no distinction between domestic and foreign investors, simplifies the administrative procedures and lays down transparent rules for the granting of privileges and benefits. All investors must receive the same treatment irrespective of their nationality.
Intellectual Property (IP) Rights.
Guinea Bissau is a member of the West African Intellectual Property Organization (OAPI), which sets the legal framework for protecting intellectual property and approves requests for registration. Guinea Bissau is also a member of the World Intellectual Property Organization (WIPO).
Guinea-Bissau’s key natural resources include phosphates, granite, clay, bauxite, unexploited deposits of petroleum and limestone.
Investment Climate in Guinea Bissau has been summarized to include the following
Sources of information