Guinea: Investing

FDI in Figures

According to UNCTAD's World Investment Report 2022, FDI inflows into Guinea increased exponentially from USD 44 million to USD 176 million between 2019 and 2020, despite the global economic crisis triggered by the Covid-19 pandemic, and remained on the same level in 2021 (USD 173 million). In the same year, the stock of FDI increased to USD 5 billion, representing around 28.9% of the country’s GDP. As Guinea has large reserves of iron ore, gold, diamonds and bauxite, the mining sector receives the vast majority of foreign investment. The main investors in Guinea are China, the United States, France, Canada, and the United Kingdom. In 2020, a consortium owned by Singaporean, Chinese and French investors, with a 10% stake held by the Guinean government, obtained a 25-year concession to develop the Simandou iron ore deposits, committing to invest USD 16 billion. The project was halted twice in 2022, as the Guinean junta aimed at securing better job and fiscal conditions for their economy, as well as a roadmap for constructing the 650 km-long TGR (Trans-Guinean Railway), which would facilitate the transportation of ore to the coast. As a result, the "Compagnie du TransGuinéen" joint venture agreement was formed between Guinea, the Anglo-Australian company "Rio Tinto-Simfer," and the Chinese company "Winning Consortium Simandou". The joint venture would give the Guinean government a 15% stake in the railway and the new deepwater port of Conakry, which would not be subject to dilution. Therefore, the project is expected to restart in 2023.

The government aims to increase investments in several sectors, including agriculture (over 13 million hectares of arable land), energy (600MW potential in hydroelectricity), infrastructure, and tourism. Reforms adopted to improve the business climate include a reduction of property transfer fees from 2% to 1.2% of the property’s value, the creation of a single desk to register new businesses, a reduction of the time required to secure a construction permit and improved import procedures. Besides these reforms, the country’s vast natural resources are also a major asset to attract investments. However, the latter are threatened by poor infrastructures, corruption, power supply issues, and a lack of skilled labour. Both foreigners and citizens have the right to own property and businesses and are guaranteed the freedom to transfer the original foreign capital, profits resulting from investment, and capital gains on disposal of investment. However, enforcement of these rights depends on a corrupt and inefficient legal and administrative system. In fact, Guinea has lagged notably in promoting the effective rule of law: the judicial system remains vulnerable to political interference, property rights are not strongly protected and lingering corruption further undermines judicial effectiveness and government integrity (the country ranked 147th out of 180 in Transparency International's 2022 Corruption Perception Index). Furthermore, the military coup d'état that took place in September 2021 undermined the country’s credibility (with the new junta suspending the constitution and National Assembly), worsening the business environment. Guinea ranks 120th out of 176 countries in the 2023 Index of Economic Freedom.

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Latest Update: May 2023