Guinea is located between Sierra Leone and Guinea-Bissau, with its capital, Conakry, located on the Atlantic Ocean. With a population of approximately seven million, the country is blessed with plentiful land and mineral resources, abundant rainfall, and significant hydroelectric potential. Many economic management issues, however, must be resolved in order to create a stable environment for further private sector growth.
In July 1996, in order to address this weakness, President Lansana Conte appointed a new government, which promised major economic reforms, including financial and judicial reform, rationalization of public expenditures, and improved government revenue collection. A concerted effort by the government to implement this program has succeeded in advancing Guinea's economy and commercial sector into the intermediate stages of development, expanding international trade, and manufacturing capabilities. The informal sector continues to be a major contributor to the economy.
Guinea's 1997 GDP was composed as follows: trade - 27.7 percent, mining - 15.8 percent, agriculture/livestock - 20.4 percent, services - 8.8 percent, public works - 7.1 percent, transport - 5.9 percent, and manufacturing - 3.8 percent. Outside of the mining sector, donor projects continue to provide the largest source of business opportunity for expatriate firms and are a critical driving force for Guinea's infrastructural development. Donor projects include roads, schools, and water systems construction, and ongoing improvements in energy, telecommunications, trade, transport and agricultural production capabilities. Guinea hosted an investor's forum in May 1998 to present more than 100 public and private investment opportunities, totaling over US$ 150 million.
Guinea's imports, worth approximately US$ 763.1 million in 1997, represent 22.3 percent of GDP. Leading imports include; machinery, equipment and construction materials -29.9 percent; other consumer goods, services and technology -13.2 percent; petroleum products 12.9 percent.
Although U.S. investors and exporters profit from a healthy public and private interest in U.S. goods, services and technology, third-country competition for markets is strong. The French, Guinea's major suppliers, are present in a variety of sectors. Guinea's leading sources of imports in 1997 were France, the United States and Cote d'Ivoire. In 1996, Malaysia made significant investments in the banking and telecommunication industries, and indicated interest in investing in agriculture, construction, and tourism. A large retail sector exists in Guinea, the most visible part of which is traders of Lebanese origin.
The government of Guinea has committed itself to economic and judicial reform in order to attract foreign investment and develop the private sector. However, Guinea lacks a well-trained cadre of managerial and technical personnel and labor productivity is low. The commercial banking sector, which is being restructured with help from the IMF and the World Bank, provides limited and expensive services with restricted financing options. Finally, corruption is rampant, and it has a negative impact on even the most straightforward business transactions.
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