Guinea | problems and reforms
In 2002, the
Under then-Prime Minister Diallo, the government began a rigorous reform agenda in December 2004 designed to return Guinea to a PRGF with the IMF. Exchange rates have been allowed to float, price controls on gasoline have been loosened, and government spending has been reduced while tax collection has been improved. These reforms have not reduced inflation, which hit 27% in 2004 and 30% in 2005.
Despite the opening in 2005 of a new road connecting Guinea and Mali, most major roadways remain in poor repair, slowing the delivery of goods to local markets. Electricity and water shortages are frequent and sustained, and many businesses are forced to use expensive power generators and fuel to stay open.
Even though there are many problems plaguing Guinea's economy, not all foreign investors are reluctant to come to Guinea. Global Alumina's proposed alumina refinery has a price tag above $2 billion. Alcoa and Alcan are proposing a slightly smaller refinery worth about $1.5 billion. Taken together, they represent the largest private investment in
On 13 October 2009, Guinean Mines Minister Mahmoud Thiam announced that the
Youth unemployment remains a large problem. Guinea needs an adequate policy to address the concerns of urban youth. One problem is the disparity between their life and what they see on television. For youth who cannot find jobs, seeing the economic power and consumerism of richer countries only serves to frustrate them further.
Guinea has large reserves of the steel-making raw material, iron ore.
In 2009 the government of Guinea gave the northern half of Simandou to BSGR for an $165 million investment in the project and a pledge to spend $1 billion on railways, saying that Rio Tinto wasn't moving into production fast enough. The US Justice Department investigated allegations that BSGR had bribed President Conté's wife to get him the concession, and so did the
In April 2014 the Guinean government cancelled the company's mining rights in Simandou. BSGR has denied any wrongdoing, and in May 2014 sought arbitration over the government of Guinea's decision to expropriate its mining rights.
In 2010 Rio Tinto signed a binding agreement with
Further, In November 2016, the former mining minister of Guinea, Mahmoud Thiam, accused head of Rio Tinto’s Guinea operation department of offering him a bribe in 2010 to regain Rio Tinto's control over half of the undeveloped Simandou project.
In September 2011, Guinea adopted a new mining code. The law set up a commission to review government deals struck during the chaotic days between the end of dictatorship in 2008 and Condé coming to power.
In September 2015, the French Financial Public Prosecutor’s Office launched an investigation into President Alpha Conde’s son, Mohamed Alpha Condé. He was charged with embezzlement of public funds and receiving financial and other benefits from French companies that were interested in the Guinean mining industry.
In August 2016, son of a former Prime Minister of Gabon, who worked for Och-Ziff’s Africa Management Ltd, a subsidiary of the U.S. hedge fund Och-Ziff, was arrested in the US and charged with bribing officials in Guinea, Chad and Niger on behalf of the company in order to secure mining concessions and gain access to relevant confidential information. The investigation also revealed that he was involved in rewriting Guinea’s mining law during President Conde’s rule. In December 2016, the US Department of Justice announced that the man pleaded guilty to conspiring to make corrupt payments to government officials in Africa.
According to a Global Witness report, Sable Mining sought iron ore explorations rights to Mount Nimba in Guinea by getting close to Conde towards the 2010 elections, backing his campaign for presidency and bribing his son. These allegations have not been verified yet but in March 2016 Guinean authorities ordered an investigation into the matter.
The Conde government investigated two other contracts as well, one which left Hyperdynamic with a third of Guinea's offshore lease allocations as well as
According to Anastasia Gage, an associate professor at