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Guinea analysis. Country risk summary |
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Political risks |
4.25 |
The political system in Guinea is under significant pressure. The transition from
military government to multiparty democracy, which began in 1991, is as yet
incomplete and political authority remains almost exclusively within the
presidency, the military and the patronage networks that run between the two.
At the summit of the political system stands President Lansana Conté, in power
since 1984. However, Conté's position is also extremely precarious. He suffers
from acute diabetes and heart trouble, and rumours persistently circulate about
his imminent death. He lacks an obvious successor and competition amongst his
lieutenants is intensifying. Meanwhile, the political opposition is becoming
restless, anxious that it will be unable to assert its role within Guinean politics
unless it has some control over a managed succession. Recent calls from
parliamentarians for the army to seize power and establish a transitional
administration are deeply worrying, but are a clear sign of a political system in
crisis. Conté has issued fervent warnings for his enemies to avoid politicising the
army in the run-up to the polls, scheduled for December 2003. His control over
the coercive apparatus of the state has tightened since reaching a military
agreement with the US in 2001, but the ever-present threat of instability in the
border regions with Liberia and Sierra Leone may provide a pretext for
ambitious officers to listen carefully to the politicians' requests. |
Economic risks |
3.75 |
Guinea is among the poorest countries in the world. Nevertheless, it has great
untapped economic potential, notably in the development of agriculture and
mining (especially bauxite, gold and diamonds). The government has made
far-reaching free market reforms since abandoning Marxism during the
mid-1980s. Although it has strengthened commercial ties with France, Guinea
remains outside the regional bloc of other former French colonies (UEMOA).
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Legal risks |
4.00 |
The legal system follows the French model. However, in practice, it is opaque
and offers inadequate protection to foreign investors. Guinea has harmonised its
legal framework with that of other francophone countries under the OHADA
(Organisation for the Harmonisation of Commercial Law) treaty, which has
strengthened its business related laws. |
Tax risks |
4.00 |
Guinea has a small formal sector and therefore a narrow tax base. The main
burden of taxation falls disproportionately on businesses, especially in the
capital Conakry. Mining companies, for example, provide about 35% of
government revenue. The Investment Code provides a number of tax
incentives, but these are limited. |
Operational risks |
4.00 |
The government has gone some way towards making Guinea more amenable to
foreign investors. However, corruption and bureaucracy remain formidable
impediments to doing business in the country. The transport infrastructure is
poor and the supply of water and electricity are erratic. |
Security risks |
4.00 |
Guinea is prone to political unrest, which can swiftly develop into violent
demonstrations or rioting. Although this latent threat may not directly affect
foreign personnel, that of violent crime does. Foreigners have been the targets
of muggings. |
Overall risks |
4.00
VERY
HIGH |
Guinea is a politically brittle country, surrounded by others prone to turmoil -
Liberia, Sierra Leone and Guinea Bissau - and burdened with thousands of refugees fleeing regional conflict. As such, security is threatened by occasional
political unrest and tensions in some border regions. After the government
introduced free market reforms in the mid-1980s, there was an initial boom in
foreign investment. However, this tapered off after 1988 as investors came up
against the formidable impediments of bureaucracy and corruption, and the
obstacles posed by poor infrastructure. The tax and legal systems also present
obstacles to foreign investors. |
Comparative Historical Risk
Risk Change History
1 |
4.00 VERY HIGH |
01-Nov-98 |
- |
4.00 |
4.00 |
4.00 |
4.00 |
4.00 |
4.00 |
2 |
4.00 VERY HIGH |
24-Apr-03 |
View article |
4.25 |
3.75 |
4.00 |
4.00 |
4.00 |
4.00 |
© 2003 World Markets Research Centre. All rights reserved. Important Notice
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