Information about Sub-Saharan Africa África subsahariana
Journal Issue
Share
Article

Guinea

Author(s):
International Monetary Fund
Published Date:
January 2008
Share
  • ShareShare
Information about Sub-Saharan Africa África subsahariana
Show Summary Details

The Bauxite and Alumina Industry: A Macroeconomic Perspective1

I. Introduction

1. Guinea is endowed with the world’s largest deposits of bauxite; it accounts for more than one-third of the world’s known reserves. Its production of bauxite, sourced from three mines located at Sangarédi, Kindia and Fria, is among the largest in the world. At present, crude bauxite and alumina constitute about 60 percent of Guinea’s exports and generate a quarter of its tax revenues.2

2. However, Guinea has not realized the full potential of its mineral resources. Annual production of bauxite is very low considering the proven reserves. Production of alumina relative to bauxite is also low compared to other bauxite producing countries. The contribution of the sector to GDP declined from 13 percent in the early 1990s to 10 percent in recent years. The country has one alumina plant and no aluminum refinery. Hence, only about 4 percent of total bauxite production is locally transformed into alumina whereas the rest is exported as unrefined ore.

3. The contribution of the bauxite and alumina industry to government revenue has been falling over the years. Its share in government revenue was 60 percent in 1993, but only 20 percent in 2005. One possible reason for this decline is the persistent fall in Guinea’s bauxite export price since the early 1990s, which appears to be the outcome of price renegotiations in the late 1980s that were conducted at the request of the mining companies. The share of bauxite and alumina in total exports has also fallen, from over 70 percent in 1990 to about 60 percent in 2005. However, the latter trend is expected to reverse in the next few years as several planned large-scale mining projects begin operations.

4. This paper reviews the main reasons for the lackluster performance of Guinea’s bauxite and alumina sector, paying particular attention to taxation and transparency issues. It also examines the structure of the sector and discusses current investment and reform initiatives. The analysis reveals that growth of the sector has been constrained by such factors as inconsistency in mining taxation; lack of transparency in negotiations between the government and mining companies on pricing and taxation issues; and a generally weak investment climate.

5. Section B reviews the performance and structure of the bauxite and alumina industry in Guinea and looks at its medium-term prospects. Section C discusses the current mining tax system and reviews efforts to reform it. Section D highlights the transparency and governance concerns in the sector. Section E draws conclusions.

II. The Bauxite and Alumina Industry in Guinea: Background and Trends

A. Performance, Structure, and Medium-term Prospects

6. The bauxite and alumina sector generates more than 60 percent of Guinea’s exports and at least 20 percent of its tax revenues. The country is a major supplier of bauxite to alumina plants in the United States, Canada, and Europe. However, the relative importance of the sector has been decreasing since the early 1990s and its contribution to the mining sector, domestic output, exports, and revenues has declined noticeably (see Text Table 1).

Text Table 1.Guinea: Contribution of the Bauxite and Alumina Industry to Guinea’s Economy, 1990–05 1
1990–931994–971998–20012002–05
Value-added (percent of mining)8583.573.866.9
Value-added (percent of GDP)12.910.611.110.2
Exports (percent of total exports)71.663.462.661.5
Tax revenue (percent of total tax revenue)40.427.527.620.5
Tax revenue (percent of industry’s exports)32.227.12418.1
Sources: Guinean authorities and IMF staff estimates.

Reported statistics are period averages.

Sources: Guinean authorities and IMF staff estimates.

Reported statistics are period averages.

7. The performance of Guinea’s bauxite and alumina sector has been very volatile for years (Text Figure 1). While the average annual growth rate of real GDP was 3.4 percent and of the mining sector was 3.7 percent, the bauxite and alumina sector grew on average at 2.5 percent only during 1995–2005. Meanwhile, world production was growing at a fairly stable annual rate of 4 percent (Text Figure 2). Since the sector constitutes over 60 percent of total exports, its volatile performance dampened the overall export growth, and real exports grew on average at 1.2 percent annually in 1995–20053

Text Figure 1.Real Growth Rates of GDP and Mining, 1995–2005

(Percent)

Source: IMF staff estimates.

Text Figure 2.Real Growth Rates of Bauxite and Alumina, 1995–05

(Percent)

8. Guinea is estimated to have about one-third of the world’s bauxite deposits, most of which are high grade and remain unexploited. A comparison of Guinea’s bauxite reserves and production pattern with other major world producers shows that whereas Guinea has the largest known bauxite reserves in the world, its production is at par with countries like China and India that have only one-tenth of its reserves (see Text Figure 3).

Text Figure 3.Major Bauxite Producers, 2004

(Million dry tons)

9. Guinea has the lowest alumina to bauxite production ratio of all the major bauxite and alumina producing countries (Text Figure 4).4 The country has only one alumina refinery plant which has a production capacity of about 0.6 million tons, hence, more than 95 percent of the bauxite is exported raw.

Text Figure 4.Major Producers: Bauxite and Alumina, 2004

(Million tons)

Source: IMF staff estimates.

10. An important reason for the poor performance of the sector is insufficient emphasis on local transformation. Campbell and Clapp (1995) observe that although the Guinean government had encouraged local transformation in the 1960s and 1970s, the emphasis weakened in the 1980s. This may have been because the international aluminum industry was restructured. Multinational companies diversified their bauxite sources and preferred to build alumina plants in locations that had favorable policy conditions, lower production costs (especially for energy), and proximity to large markets. As a result, bauxite- exporting developing countries like Guinea lost their bargaining power, and had to renegotiate pricing and fiscal arrangements with foreign companies at their request.

11. Power supply constraints and a generally weak investment climate are other possible reasons for low growth in the sector. Power supply, which is vital to production of alumina and aluminum, is a major constraint in Guinea.5 Poor transport infrastructure and lack of human capital and organizational capacity are also serious concerns. The adult literacy rate is only 29 percent; a majority of those employed by mining companies are illiterate. Firms find it difficult to obtain reliable engineering and subcontracting services locally. Political uncertainty and security challenges have also hemmed in the bauxite and alumina sector. For example, one large international bauxite-producing firm complained that it regularly faces problems in securing shipments because the rails are blocked by ordinary citizens who demand compensation to release goods.6

12. Guinea’s bauxite and alumina industry is dominated by three producers: Alumina Compagnie de Guinée (ACG), Compagnie des Bauxites de Guinée (CBG), and Compagnie des Bauxites de Kindia (CBK). CBK and ACG are controlled by the Russian aluminum giant RUSAL; they export primarily to Russia and Ukraine. CBG is a joint venture between the American aluminum firm Alcoa Inc., the Canadian aluminum firm Alcan Inc., and the government of Guinea.7 Its main export markets are North America and Europe (see Box 1 for details).

13. In recent years, a number of large investment initiatives have been proposed to increase bauxite and alumina production in Guinea. These include construction of six new alumina refineries and extension of ACG’s existing alumina refinery. The total investment generated by these projects is estimated at about US$20 billion (see Appendix I for details). Rough estimates show that by 2010 the output of bauxite and alumina would increase almost five-fold for bauxite and ten-fold for alumina if these projects are implemented on time (see Text Figure 4).8 As a result, exports and the tax revenue generated by this sector are expected to rise significantly.

14. The surge in global demand for aluminum is the main reason for the renewed interest of multinational companies in Guinea. World alumina and aluminum demand is expected to increase by at least 4 percent annually in the medium term, driven mainly by the boom in construction, transportation, and manufacturing in China.9 Guinea is expected to play a critical role in meeting this demand because of its unexploited bauxite reserves. International mining companies seem keen to invest heavily in Guinea and enhance its refining capacity. All planned alumina refineries will be built near bauxite reserves to avoid the high costs of transporting bauxite to alumina refineries elsewhere. Investing firms plan to overcome the infrastructural and energy constraints by investing locally in power generation, rail transport, and shipment and storage facilities.

Box 1.Composition of the Bauxite and Alumina Industry in Guinea

The Compagnie des Bauxites de Guinée (CBG), based at Sangaredi, was established in 1963 as a joint venture between the government, which owns 49 percent of the shares, and an international consortium, Halco Mining, which owns the rest. Presently, Halco Mining is owned by Alcoa World Alumina LLC (45 percent), Alcan Inc. (45 percent), and Dadco Investments Ltd. (10 percent). CBG began mining in 1973 and has exclusive rights to bauxite reserves in the Sangaredi Plateau. It also operates a port in Kamsar for drying and shipping bauxite and exports 11 to 14 million metric tons of high-grade bauxite annually to alumina refineries in North America and Europe.

The Compagnie des Bauxites de Kindia (CBK) began its mining operations as Office des Bauxites de Kindia (OBK) in 1974. OBK was created as a wholly state-owned enterprise but was transformed into a limited liability company, Société des Bauxites de Kindia (SBK), in 1992 after it ran into serious financial difficulties. In 2001 SBK was transferred to a Russian conglomerate, RUSAL, for a 25-year term and it has since been operating as CBK. CBK has annual production capacity of 3.1 million tons of bauxite. It supplies over 65 percent of its total bauxite output to the Nikolaev alumina refinery in Ukraine whereas the rest is exported to other locations.

The Alumina Compagnie de Guinée (ACG), also known as Friguia Alumina Refinery, has a long history of mining operations at Fria. It is a vertically integrated company that refines the bauxite it produces into alumina for export. Its mining operations began in 1957 and were controlled by a French firm, Pechiney Ugine, and then by an international consortium, Fria Company (Frialco), in which Pechiney Ugine had a 26.5 percent share. In 1973, Frialco signed an agreement with the government to create a joint venture, Friguia, in which the government stake was 49 percent. When Friguia faced serious financial difficulties, Frialco sold its share to the Government for a symbolic US$1 in 1998. The government formed ACG as a management company in 2000 to operate Friguia with assistance from Reynolds Metals. The government retained full rights to the refinery and had a 15 percent stake in ACG. However, Reynolds Metals sold its share to RUSAL in December 2002, and in April 2006, RUSAL and the government reached an agreement in which both the Friguia refinery and the government’s 15 percent share in ACG were sold to RUSAL. The current estimated annual capacity of the refinery is 640,000 tons of alumina and 1.9 million tons of bauxite.

Sources: Campbell and Clapp (1995), Bermudez-Lugo (2005), and Africa Research Bulletin (2007).

B. Trends in Bauxite and Alumina Prices and Export Revenues

15. Bauxite prices are only weakly correlated with world aluminum prices (Text Figure 5). 10 This is an outcome of the way bauxite prices are determined in Guinea. As is the norm worldwide, Guinea’s bauxite and alumina producers are vertically integrated in aluminum production chains and sell their output abroad on prenegotiated prices to firms endorsed by their owners. Prices negotiated between mining companies and the government are based on long-term contracts, which typically imply a smaller and slower pass-through of world aluminum price changes.11 Hence, the government does not immediately and fully benefit from any increase in world aluminum prices. This observation is supported by our formal econometric analysis shows that the world aluminum price has no immediate effect on bauxite prices in Guinea (see Appendix II). However, there is a long-run relationship between CBG and world aluminum prices: a 1 percent increase in the latter eventually translates into about an 0.4 percent increase in CBG’s prices.

Text Figure 5.Guinea: Prices and Export Revenues for Bauxite and Alumina, 1974–2004

Sources: Guinean authorities, IMF (2006).

16. Bauxite prices have been declining since the early 1990s. The sharp fall in the price of bauxite may be the outcome of the negotiations in the late 1980s to restructure the pricing and taxation formulas for crude bauxite. The renegotiations, conducted with CBG and Friguia, favored the mining companies and were aimed at significantly reducing bauxite’s export price. The restructuring of the international aluminum industry in the 1980s when major international companies diversified their bauxite sources resulted in a general decline in the bargaining power of bauxite exporters, especially developing countries, and affected bauxite prices throughout the world. This observation is supported by a comparison of Guinea’s bauxite export prices with those of other major exporters to the United States. Bauxite prices in Guyana, Jamaica, and Suriname—three countries that supply over 50 percent of all the bauxite the U.S. imports—have also been declining since the early 1990s (see Text Figure 6).

Text Figure 6.Guinea and Major Bauxite and Alumina Exporters to the US: Export Prices, 1974–2004

Source: Guinean authorities, U.S. Geological Survey.

17. The nominal export revenues earned by the bauxite sector were fairly stable in the 1990s because although bauxite prices declined, the exports of CBG increased on average at about 1 percent a year, which somewhat stabilized the earnings of the sector. Recovering since 2000, CBK’s export earnings have increased by about 10 percent. However, in terms of value and volume, they are still below the pre-1990 level.

18. The price of alumina follows the world aluminum price more closely than the bauxite price. The econometric analysis supports this observation and shows that although there is no contemporaneous effect of world aluminum prices on Guinea’s alumina prices, the long-run effect is almost twice that on bauxite prices. Further, the adjustment of prices toward the world aluminum price is also faster for alumina than for bauxite.12Text Figure 6 shows that Guinea’s export price of alumina is in line with those of other alumina producers, such as Australia, Jamaica, and Suriname.

III. Taxation of the Bauxite and Alumina Industry in Guinea

A. Background and Present Scenario

19. Tax payments made by the bauxite and alumina sector relative to total tax revenues and to total exports of the sector have declined since the early 1990s (Text Figure 7). This may be the result of three factors. First, as noted in the previous section, export revenues of bauxite producers have remained fairly constant as export prices decreased. This, combined with a reported increase in their production costs, has reduced corporate taxable income, which has translated into lower revenues for the government. Second, the tax payments of ACG and CBK declined in the 1990s when they experienced significant financial problems. Third, the renegotiation of individual pricing and taxation arrangements with the major bauxite producers in early 1990s, at their request, reduced their tax payments (Campbell and Clapp, 1995).13

Text Figure 7.Tax Payments by Bauxite and Alumina Sector, 1990–2005

20. The taxation of mining companies is not uniform. Excise and export duties, and corporate income tax rates differ for the three firms (Table 2). This is because the taxation of companies is regulated by conventions specific to each firm and not by the Mining Code of 1995. The individual conventions were passed at different times and were negotiated on an ad hoc basis, giving different fiscal incentives to each firm. Thus, for example, CBG seems to be taxed more heavily because its payments include the government’s profit share.

Text Table 2.Current Tax Rates in Bauxite and Alumina Industry(Percent)
Excise and Export DutiesIncome TaxDividend Withholding TaxImport Duties
CBG-65155.6
CBK0.6 US$/ton of bauxite351--
ACG0.5 US$/ton of bauxite30155.6
Sources: Guinean authorities and IMF staff estimates.

CBK is exempt from income tax until 2010.

Sources: Guinean authorities and IMF staff estimates.

CBK is exempt from income tax until 2010.

21. The Guinean Mining Code issued in 1995 is largely irrelevant in the present fiscal environment. The code is not particularly unfavorable for investment compared to the fiscal regimes of other mineral-rich developing countries, but it has been only partially implemented because individual conventions remained in force.14 For example, provisions relating to the reduced government share of equity were implemented when the ownership of CBK and Friguia changed, but other provisions, such as a universal tax rate of 35 percent on mining firms, were not. Similarly, conventions ratified in 2005 with a few new investors grant them tax holidays for 15 years, although the code permits only tax holidays of up to eight years.

B. Reform of Mining Sector Taxation

22. The Government of Guinea has embarked upon mining taxation reform in recent years. It is seeking assistance from the World Bank to pursue the reforms, which aim to streamline the current regime and align it with best international practices.15 The government plans to introduce a standard Mining Convention and a new Mining Code (CM) as part of the reforms, which are expected to modernize and unify mining taxation.16

23. The authorities plan to adopt the standard convention before the new CM to proceed with the planned large-scale mining projects. However, the convention will not be a substitute for the CM; it will apply only to projects with a minimum investment of US$50 million. The draft convention is currently being reviewed by the Ministry of Mines and Geology in order to clarify certain elements, such as methods of granting, renewing, or removing permits for exploration; the surface area of a mining concession; the business income tax rate; social development conventions; and the role of the Ministry of Mines and Geology. The authorities plan to amend the draft in light of the review before it is adopted by the Council of Ministers.

24. The government has also initiated a review of current mining contracts, focusing on taxation obligations. An interministerial committee, Comité Interministériel de Renégociation des Conventions et Accords Miniers (CIRCAM), was established for this purpose in June 2007. The CIRCAM draws its members from the government (ministries of Mines and Geology, Finance, and Justice), the Central Bank, unions, and civil society. Its mandate is to identify shortcomings in individual mining contracts and renegotiate with the companies involved. CIRCAM plans to review and renegotiate 13 conventions and contracts, including the agreement for CBK.

IV. Transparency and Governance Issues

25. As in other mineral-rich countries, transparency and good governance in the management of mineral wealth are crucial for Guinea.17 An important concern for Guinea is transparency in negotiations conducted with individual mining companies. The principles guiding previous negotiations were kept confidential; nor were revenue-sharing and tax arrangements made public. This lack of transparency created a complicated and fragmented mining taxation system in the country. Another concern relates to the principles governing the award of exploration permits and the determination of fees for exclusive rights to explore, which are not clear and potentially undermine government revenue.

26. The government is undertaking efforts to improve transparency and governance in the mining sector. In April 2005 it joined the Extractive Industries Transparency Initiative (EITI). Under the EITI, the government pledged to regularly publish payments made by companies and revenues received by the government; reconcile and audit the two sets of statistics; initiate a participative process in which all stakeholders are actively involved in defining, organizing, and supervising EITI responsibilities; and prepare an action plan to move the initiative forward.18

27. Collection and reconciliation of 2005 payment and revenue data for the EITI were completed in October 2006. 19 A team of independent local and international consultants was recruited for this purpose and a report of the unaudited data was published. The reconciled data shows that the tax payment statistics reported by the companies and the authorities correspond. The payments and revenues were then audited by an independent international consulting firm. Its findings were presented on October 15, 2007, at a press conference in Conakry chaired by the Prime Minister.

28. The process of collecting, reconciling, and auditing the data from 2006 began in April 2007. The authorities have expanded the scope of the audits: the auditors will now also establish if the payments mining companies made in 2006 fulfill their contractual obligations.

V. Conclusions

29. Guinea’s bauxite and alumina industry is underdeveloped and producing significantly below potential. Insufficient emphasis on local processing of bauxite into alumina, power supply constraints, and a generally weak investment climate may have constrained development of the sector. These factors have discouraged foreign investment in the country and adversely affected expansion, productivity, and development of the sector.

30. The export of raw bauxite has made Guinea vulnerable to the persistent decline in its bauxite export prices, which are only weakly correlated with world aluminum prices. This has reduced government revenue substantially. State agreements with individual mining companies on prices, revenue sharing, and taxation arrangements that appear to be unfavorable for the government are another reason for lower government revenue from this sector.

31. However, considering the rising global demand for alumina and aluminum and the potentially high profitability of the sector, its medium-term prospects are encouraging. Several international mining companies plan to invest about US$20 billion in bauxite exploration and alumina refining in Guinea. This will help increase output and exports and improve Guinea’s fiscal situation. The proposed projects could also pave the way for the much-needed industrialization of the economy.

32. To reap the full benefits of the expected increase in revenues, it is imperative for Guinea to accelerate fiscal reforms and adopt a standardized Convention and Mining Code that embodies best international practices. This will unify and streamline fiscal arrangements in the mining sector and improve the efficiency of the taxation regime. Current conventions may then be renegotiated to align them with the new convention and code.

33. The efforts of the Guinean authorities to improve transparency and governance in the mining sector are commendable. Joining the EITI is a step in the right direction and the government should continue to make all necessary efforts to comply with the EITI obligations. It is recommended that the government publicly disclose all future negotiations and agreements with the mining companies. Improved openness will raise public awareness and make both the public and private sectors more accountable on pricing and taxation arrangements.

References

    Africa Research Bulletin2007Bauxite: GuineaAfrica Research Bulletin: Economic Financial and Technical Series Vol. 43 (11) pp. 17198C99A.

    • Search Google Scholar
    • Export Citation

    AutyR.M.1997Natural Resource Endowment, the State and Development StrategyJournal of International Development Vol. 9 No. 4 pp. 65163.

    • Search Google Scholar
    • Export Citation

    BaunsgaardT.2001A Primer on Mineral TaxationWorking Paper 01/139 (Washington: International Monetary Fund).

    Bermudez-LugoO.2004The Mineral Industry of GuineaU.S. Geological Survey Minerals Yearbook (Washington: U.S. Geological Survey).

    • Search Google Scholar
    • Export Citation

    CampbellB.1991Negotiating the Bauxite/aluminum Sector Under Narrow ConstraintsReview of African Political Economy Vol. 18 No. 51 pp. 2749.

    • Search Google Scholar
    • Export Citation

    CampbellB. and J.Clapp1995Guinea’s Economic Performance Under Structural Adjustment: Importance of Mining and AgricultureJournal of Modern African Studies Vol. 33 No. 3 pp. 42549.

    • Search Google Scholar
    • Export Citation

    EIU (Economist Intelligence Unit)2006Country Profile: GuineaLondon: EIU)

    International Aluminum Institute2007Historical IAI Statistics (London: IAI).

    International Monetary Fund1970 through 1999. Guinea: Recent Economic Developments 1970 1972 1974 1976 1979 1981 1986 1987 1999 (Washington: IMF).

    • Search Google Scholar
    • Export Citation

    International Monetary Fund1993Appendix IIGuinea: Recent Economic Developments 1993 (Washington: IMF).

    International Monetary Fund2006International Financial Statistics (Washington: IMF).

    International Monetary Fund2007Guide on Resource Revenue Transparency (2007) (Washington: IMF).

    IzonD.1995The Mineral Industry of GuineaU.S. Geological Survey Minerals Yearbook 1995 (Washington: U.S. Geological Survey).

    • Search Google Scholar
    • Export Citation

    KatzM.A.BessahaG.DevauxT.Ehrbeck and J.Ntamantungiro1995Guinea: Background Paper (Washington: IMF).

    Metal Bulletin Aluminium SupplementSeptember2004Alumina Booms..

    OttoJ.M.2005Guinean Mining Taxation System: Analysis and Recommendations for Reform,” Unpublished report.

    Roskill2005The Economics of Bauxite & Alumina6th Edition (London: Roskill Information Services, Ltd.).

    SachsJ.D.and A.M.Warner2000. “Natural Resource Abundance and Economic GrowthLeading Issues in Economic Development (7th ed.) ed. by G.M.Meier andJ.E.Rauch (New York: Oxford University Press).

    • Search Google Scholar
    • Export Citation

    U.S. Geological Survey2005Minerals Yearbook 2005 (Washington: U.S. Geological Survey).

    U.S. Geological Survey2007Mineral Commodity Summaries (Washington: U.S. Geological Survey).

    World Bank1990Republic of Guinea: Country Economic Memorandum” Vol. 2 Rep. No. 8774 (Washington: World Bank).

    World Bank1996Republic of Guinea. Mining Sector Investment Promotion Project. Staff Appraisal Report” Rep. No. 15291 (Washington: World Bank).

    • Search Google Scholar
    • Export Citation

    World Bank2007World Development Indicators 2007 (Washington: World Bank).

Appendix I. Large Projects in Guinea
PROJECTTYPEDATECAPACITYINVESTMENTINVESTORSEMPLOYMENTCREATION
StartFinishYearsAt startExtensionTo date2007-10TotalConstructionExploitation
Alumina plant at SangarédiAlumina refinery2006200943.0 mt/yr.5.4 mt/yr.US$300 mln.US$2.9 bin.US$3.2 bin.Global Alumina/BHP Billiton/Dubai Mubadala7,000-10,0001,200-1,500
Alumina plant at KamsarAlumina refinery2008201141.5 mt./yr.3.0 mt/yr.US$10 mln.US$1.49 0 bln.US$1.5 bin.Alcoa / Alcan4,000-5,0001,000-1,200
ACG FriguiaExtension2008201021.2 mt/yr.1.5 mt/yr.US$70 mln.US$230 mln.US$300 mln.Ruski Alumini
Dian-Dian ProjectBauxite mining200820091US$18 mln.US$3.98 2 bin.US$4.0 bin.Ruski Alumini7,000-10,0002,000-3,000
Alumina refinery201111.2 mt/yr.2.8 mt/yr.
SBDTBauxite mining200814.0 mt/yr.4.0 mt/yr.US$30 mln.US$2.47 bin.US$2.5 bin.IMIDRO-IRAN5,0001,000-2,000
Alumina refinery201031.0 mt/yr.
3PL TradeBauxite mining Alumina refinery201031.5 mt/yr.US$1.5 bin.US$1.5 bin.3PL Trade / CATIC
Simandou (SIMFER)Iron ore production20102013470.0 mt/yr.100.0 mt/yr.US$30 mln.US$5.94 bin.US$6.0 bin.Rio Tinto10,000-15,0007,500
TransguinéenTransport of iron ore201020134100.0 mt/yr.US$30 mln.Govt. of Guinea / Rio Tinto Euro-Nimba25,0002,000-3,000
Nimba20102013420.0 mt/yr.30.0 mt/yr.US$20 mln.US$1.28 bin.US$1.3 bin.Euro-Nimba7,0003,000
SMD ExtensionGold production200620071300,000 ouncesUS$220 mln.US$220 mln.Crew Gold Corporation
Konkouré ProjectBauxite mining Alumina refinery2008201571.4 mt/yr.5.0 mt/yr.US$20 mln.US$6.27 bin.US$6.3 bin.Govt. of Guinea/Eximbank Chaico/Synohydro15,000-20,0005,000-7,000
Energy725 MW1,025 MW
production
Alumina foundry240,000 t/yr.
Hydroelectric dam in CogonElectricity supply to Boké mining complex20092011350 MW80 MWUS$1.05 mln.US$177 mln.US$178 mln.Govt. of Guinea/CBG/ACDI5,10020-30
TotalUS$749.05 mln.US$23.3 4mln.US$27.00 bin.60,100-102,10022,720-28,220
Source: Ministry of Mines and Geology. Government of Guinea.
Source: Ministry of Mines and Geology. Government of Guinea.
Appendix II. Econometric Analysis of the relationship Between the World Aluminum Price and Prices for Guinea’s Exports of Bauxite and Alumina

1. An error correction model (ECM) is used to analyze the short- and long-run dynamics of the relationship between the world aluminum price and the prices of bauxite and alumina exports from Guinea. The ECM is estimated in two steps. First, unit root and cointegration tests are conducted on the relevant variables (logs of price of CBG (prCBG), price of CBK (prCBK), price of ACG (prACG), and world price of alumina (prALM)) to determine their integration order and to test for the existence of long-run relationships between world aluminum price and Guinea’s bauxite and alumina prices. The results suggest that all prices are nonstationary and integrated of order 1 (Table II.1).

Appendix Table II. 1.Augmented Dickey Fuller Regression Results of Stationarity Tests, 1974–2007
Null HypothesisLog(prCBG)Log(prCBK)Log(prACG)Log(prALM)
Unit root in levels-2.43-2.09-2.9-2.77
Unit root in first differences-4.39**-8.99**-3.84**-4.76**
Notes: Values correspond to the estimated t-statistic on the coefficient of the lagged dependent variable in the Augmented Dickey Fuller (ADF) regression; lag length is based on the Akaike Information Crietrion (AIC); trend and constant included in all regressions; * and ** represent significance at the 5 and 1 percent levels, respectively.
Notes: Values correspond to the estimated t-statistic on the coefficient of the lagged dependent variable in the Augmented Dickey Fuller (ADF) regression; lag length is based on the Akaike Information Crietrion (AIC); trend and constant included in all regressions; * and ** represent significance at the 5 and 1 percent levels, respectively.

2. To test for cointegration between the variables, Johansen’s VAR approach is used and the structural break in the CBG and CBK series that occurred in 1990 is accounted for by including a dummy variable in the equation. The optimal lag length in each case is determined by using the standard Akaike Information Criterion. The cointegration results show that the hypothesis of no cointegration can be rejected in each case (Table A.2).

Appendix Table II. 2.Cointegration Results for World Aluminum Price and Guinea’s Export Prices, 1974–07
Log(prCBG) and Log(prALM)Log(prCBK) and Log(prALM)Log(prACG) and Log(prALM)
Rank = 0Rank ≤ 1Rank = 0Rank ≤ 1Rank = 0Rank ≤ 1
Trace-statistic25.80**7.98**23.43**9.82**34.04**11.97
Max-statistic17.82**7.98**13.619.82**22.07*11.97
Log likelihood30.87 39.7914.7521.5522.3535.35
Lag-length121
Observations313031
Weak exogeneity of Log(prALM): c2 statistic00.190
Notes: Time series for prCBG and prCBK begins from 1976; results are based on Johansen’s Vector Autoregressive (VAR) analysis; a dummy variable for 1990 onwards included in the VAR for Log(prCBG) and Log(prCBK); trend included in the VAR for Log(prACG); lag-length selected on the basis of AIC; * and ** indicate significance at the 5 and 1 percent levels, respectively.
Notes: Time series for prCBG and prCBK begins from 1976; results are based on Johansen’s Vector Autoregressive (VAR) analysis; a dummy variable for 1990 onwards included in the VAR for Log(prCBG) and Log(prCBK); trend included in the VAR for Log(prACG); lag-length selected on the basis of AIC; * and ** indicate significance at the 5 and 1 percent levels, respectively.

3. The long-run equilibrium conditions or cointegrating vectors that are obtained from the cointegration analysis are given in equations A.1–A.3. A 1 percent increase in the level of world aluminum prices causes the level of CBG export prices to increase by 0.45 percent (equation A.1).20 The dummy variable for the years 1990 and onwards is negative, indicating that on average CBG export prices are 35 percent lower than before 1990. Equation A.2 indicates a negligible long-run causal effect of world aluminum prices on CBL export prices. The dummy variable for 1990 onwards is negative and the estimated coefficient suggests that CBK prices are 96 percent lower than before 1990. Equation A.3 shows that a 1 percent increase in world aluminum prices increases ACG prices by about 0.80 percent. This indicates a higher pass-through in the long run of an increase in world aluminum prices to alumina prices than to bauxite prices and supports the observation made in Section II of a low correlation between world aluminum and bauxite prices.

4. Since the existence of cointegration between variables implies an ECM, in the second step, a single-equation ECM is estimated to examine the short-run dynamics of the relationship between (i) prALM and prCBG, (ii) prALM and prCBK and (iii)prALM and prACG21 The estimation results for the ECMs show that any change in the world price of aluminum has no contemporaneous effect on CBG, CBK, or ACG export prices (see Table A.3).22 However, the estimated coefficients of the error correction terms implied by the cointegrating vectors are negative and significant. This indicates that the long-run equilibrium conditions hold and Guinea’s bauxite and alumina prices respond to any deviations from equilibrium in a stable manner. For CBG, on average, about 0.35 percent of the deviation is eliminated every year. This implies that if there are no further changes in the world aluminum price, about half of the gap would be closed in two years. For CBK, about 0.29 percent of the deviation is eliminated every year, implying that the half life of deviation is 2.5 years. However, for ACG the long-run effect occurs at a faster rate of 0.52 percent, which reduces the half-life of deviation to 1.3 years.

Appendix Table II.3.Results of the ECM for Guinea’s Bauxite and Alumina Export Prices, 1974–2007
VariablesΔLog (prtCBG )ΔLog (prtCBK )ΔLog (prtACG )
ΔLog (prt-1)CBK-0.470***

-0.16
ΔLog(prtALM)-0.052-0.1360.038
-0.086-0.172-0.13
ΔLog(prt -1ALM)-0.203
-0.185
Error correction term-0.349***-0.287***-0.518***
-0.099-0.114-0.13
Dummy1990-0.122***-0.276***
-0.036-0.078
Constant0.0930.976-0.225
-0.66-1.456-0.959
Half-life of deviation22.51.3
Observations313033
Log-likelihood34.6416.1524.75
F-statistic5.16**3.98**6.69**
Durbin-Watson Statistic1.922.22.27
R-squared0.440.510.49
Notes: Values in parentheses are reported standard errors; a dummy variable was included both regressions to capture the effect of persistently declining bauxite prices since 1990 but was found to be insignificant inall cases; *, ** and *** indicate significance at 10, 5 and 1 percent levels, respectively.
Notes: Values in parentheses are reported standard errors; a dummy variable was included both regressions to capture the effect of persistently declining bauxite prices since 1990 but was found to be insignificant inall cases; *, ** and *** indicate significance at 10, 5 and 1 percent levels, respectively.
Appendix III. Key Characteristics of the Mining (non-oil) Fiscal Regime in Guinea and Selected Developing Countries
RoyaltiesIncome Tax RateResource Rent Tax1Dividend Withholding TaxExport DutiesInvestment Incentives2State Equity3/
Angola2-5%35%None
BotswanaYes25%15%Yes (E,U)None
Côte d’Ivoire2.5-3%35%Excess Pr.12%Yes (A,I,H)10% (C)
EthiopiaNone35%None10%
Ghana3-12%35%25%10%Yes (A,U,I)10-30%
Guinea (before 1995)None65%4NoneNoneYes49%
Guinea (Mining Code, 1995)5-10%35%50%515%NoneYes (H, I)615%
NamibiaFormula25-45%10%Yes (E,U,I)None
South AfricaNoneFormulaProgress.12.50%Yes (E,U,I)None
Tanzania3-5%30%None10%Yes (E,U,I)None
Zambia2%35%None15%Yes (E,U,I)None
ZimbabweNone37.5%None20%Yes (E,O)None
Cambodia5-12.5%30%NoneNoneYes (E)None
IndonesiaYes30%None20%Yes (I,E)None
P.N.G.2%30%20-25%10%Yes (I,Cr)30%
Philippines3%32%Excess15-32%Yes (I,H,A,E)None
Solomon Isl.Yes35%YesNoneYes (Cr)None
Argentina<3%35%None35%Yes (E,H,A,I)None
Bolivia1-7%25%25%12.50%Yes (U)None
ChileNone15%None35%Yes (A,U)None
Guatemala5%27.5%None10%Yes (E)None
PeruNone20%NoneNoneYes (E,A)None
KazakhstanNegotiable30%4-30%15%Yes (E,O,U)7.5-20%
Uzbekistan1-24%33%None15%Yes (H,I)Negotiable
Sources: Baunsgaard (2001), Guinean authorities.

Resource rent tax is based on the rate of return. See Baunsgaard (2001) for discussion.

Investment incentives include tax holidays (H), accelerated depreciation (A), tax credit (Cr), current expensing of exploration and development cost (E), exemption of imports of equipment and capital goods (I), unlimited loss-carry forward (U), and other (O).

The maximum equity share that the state can select to take, often on a carried basis (C).

For CBK and Friguia.

This is known as the Additional Benefits Tax in Guinea.

Tax holidays of 3–8 years.

Sources: Baunsgaard (2001), Guinean authorities.

Resource rent tax is based on the rate of return. See Baunsgaard (2001) for discussion.

Investment incentives include tax holidays (H), accelerated depreciation (A), tax credit (Cr), current expensing of exploration and development cost (E), exemption of imports of equipment and capital goods (I), unlimited loss-carry forward (U), and other (O).

The maximum equity share that the state can select to take, often on a carried basis (C).

For CBK and Friguia.

This is known as the Additional Benefits Tax in Guinea.

Tax holidays of 3–8 years.

Appendix IV. IMF’s Principles on Good Fiscal Transparency Practices for Resource Revenue Management

Realizing the distinct issues and challenges faced by the natural-resource-rich countries, the IMF’s Guide on Resource Revenue Transparency puts forward principles of good fiscal transparency practices for these countries. These practices are based on the experience of individual countries and include elements that are critical for resource-revenue transparency and fiscal management design.

The practices are grouped into four categories:

1. Clarity of Roles and Responsibilities

  • Define government’s ownership of resources and its legal power to grant exploration, production and selling rights
  • Disclose the policy and legal frameworks for taxation or production-sharing agreements with resource companies and government’s equity stake in the companies
  • Specify fiscal authority and disclosure of resource revenue and borrowings in the law
  • Clearly define the ownership structure of national resource companies, their fiscal and commercial roles, and their quasi-fiscal activities
  • Clearly define how resource revenues are shared between the central and subnational governments

2. Open Budget Process

  • Specify the rate of exploitation of resources and the management of resource revenues in the budget
  • Specify mechanisms for coordinating the operations of any resource-revenue management funds with other fiscal activities; operational rules applied to resource-related funds; and investment policies for assets accumulated through resource-revenue savings
  • Report government resource revenue receipts in the government accounting system

3. Public Availability of Information

  • Report all resource-revenue-related transactions
  • Disclose government receipts of company resource-revenue payments
  • Present the (primary) nonresource fiscal balance in budget documents
  • Publish direct and indirect collateralization of future resource production in debt reports
  • Disclose government’s domestic and foreign financial assets and estimates of resource asset worth
  • Report government contingent liabilities and the cost of resource company quasi-fiscal activities arising from resource-related contracts
  • Account for the risks associated with resource revenue in annual budget documents

4. Assurances of Integrity

  • Disclose internal control and audit procedures for resource-revenue receipts
  • Ensure that resource companies understand their obligations and rights
  • Ensure that resource companies comply with international accounting and auditing standards and publish accounts
  • Ensure that a national audit office or an independent organization reports revenue flows regularly
Source: IMF (2007).
Statistical Appendix
Table 1.Guinea: Selected Social and Demographic Indicators
Land area (square km)245,720
Population
Population (millions; 2006)9.2
Annual rate of growth (in percent; average 1995-2004)2.0
Density (per square km; 2006)37.4
19902006
GuineaSub-Saharan AfricaGuineaSub-Saharan Africa
Population characteristics
Life expectancy at birth (years)47.050.054.047.21
Infant mortality rate (per 1,000 live births)139.0109.896.096.41
Population under age 15 (% of total)43.345.643.643.3
Income
GNI per capita, Atlas method (current US$)430582410842
Education
Primary school completion rate (% of school-aged children)
Male28.154.6563.8166.01
Female8.745.5544.7155.61
Secondary school enrollment rate (% of school-aged children)
Male13.9526.3439.4135.21
Female8.7521.6421.0128.21
Health
Immunization against measles (% of children ages 12-23 months)35.057.159.0163.61
Access to improved water source (% of population)44.054.5350.0256.22
Source: World Bank, World Development Indicators, September 2007.

Data refer to 2005.

Data refer to 2004.

Data refer to 2000.

Data refer to 1999.

Data refer to 1991.

Source: World Bank, World Development Indicators, September 2007.

Data refer to 2005.

Data refer to 2004.

Data refer to 2000.

Data refer to 1999.

Data refer to 1991.

Table 2.Guinea: Selected Economic and Financial Indicators, 2000–06
2000200120022003200420052006
(Annual percentage change, unless otherwise indicated)
Income
GDP at constant prices2.93.84.21.22.73.32.2
GDP at current prices13.28.97.113.424.332.937.6
GDP deflator10.04.92.812.121.028.634.7
Consumer prices
Average6.85.43.012.917.531.434.7
End of period7.21.16.114.827.629.739.1
External sector
Exports, f.o.b. (US$ terms)4.98.4-2.03.32.312.420.2
Imports, f.o.b. (US$ terms)4.3-3.7-2.65.724.64.724.8
Terms of trade
Percentage change-9.18.1-3.8-3.8-14.2-6.85.0
Average effective exchange rates (depreciation –)
Nominal index-13.8-5.8-3.3-11.2-16.6-38.0-31.4
Real index-10.1-3.0-2.3-4.2-5.8-21.3-10.1
Money and credit
Net foreign assets1-4.812.6-11.9-23.08.55.210.4
Net domestic assets128.22.131.258.228.532.049.0
Net claims on government121.53.734.234.022.27.942.7
Credit to nongovernment sector15.04.33.513.63.215.212.8
Broad money23.414.819.235.337.037.259.4
Reserve money17.011.018.327.433.025.084.1
Treasury bill rate (end of period)7.513.413.314.114.723.422.0
(Percent of GDP)
Central government finances
Total revenue and grants13.214.713.813.311.513.714.7
Revenue10.911.212.010.510.513.113.3
Of which: nonmining revenue8.28.49.89.08.69.99.2
Grants22.33.41.82.81.00.61.4
Current expenditure9.311.612.213.111.411.013.4
Of which: interest payments1.71.51.72.12.52.83.3
Capital expenditure and net lending27.27.36.16.45.14.34.2
Overall budget balance
Including grants (commitment)-3.2-4.1-4.4-6.2-4.9-1.5-2.9
Excluding grants (commitment)-5.5-7.6-6.2-8.9-5.9-2.1-4.3
Basic primary fiscal balance2.50.50.0-2.7-0.53.21.3
Gross investment19.715.413.510.211.414.113.7
Government (fixed capital formation)4.94.94.14.44.03.43.3
Nongovernment14.810.59.35.87.410.710.4
Domestic savings15.414.111.37.87.110.99.1
Government2.30.21.0-1.01.24.73.4
Nongovernment13.113.910.38.85.96.25.7
External current account balance
Including official transfers-6.4-2.7-2.5-3.4-5.8-4.5-5.9
Excluding official transfers-7.1-4.6-3.7-3.9-6.0-4.9-6.5
Overall balance of payments2.2-0.8-2.3-4.7-2.5-0.9-2.7
(Millions of U.S. dollars, unless otherwise indicated)
External public debt (percent of GNFS exports)443.9396.8387.9419.6393.1346.1290.6
Memorandum items:
Exports f.o.b.666.6722.8708.5731.7748.3841.41,011.1
Imports f.o.b.583.3561.9547.2578.5721.0754.9942.0
External current account (including official transfers)-200.2-81.4-79.0-123.2-227.3-146.6-184.7
Overall balance of payments68.5-25.1-74.2-169.4-99.8-30.2-85.6
Net foreign assets (central bank)328.560.726.4-64.7-60.8-38.0-31.4
Gross official reserves (months of imports)42.43.32.50.90.50.50.6
Nominal GDP (GNF billions)5,4375,9206,3407,1888,93211,86916,330
Sources: Guinean authorities and IMF staff estimates and projections.

Percent of broad money stock at the beginning of the period.

Includes expenditure for restructuring.

Gross foreign assets of the central bank less its foreign liabilities.

Excluding imports for large mining projects and those financed by project loans from donors.

Sources: Guinean authorities and IMF staff estimates and projections.

Percent of broad money stock at the beginning of the period.

Includes expenditure for restructuring.

Gross foreign assets of the central bank less its foreign liabilities.

Excluding imports for large mining projects and those financed by project loans from donors.

Table 3.Guinea: GDP at Current Prices by Demand Component, 2000–06
2000200120022003200420052006
(Billions of Guinean francs)
GDP at market prices15,436.95,919.76,340.37,188.28,931.811,868.716,330.4
Consumption4,597.75,085.95,624.26,625.88,301.410,570.914,845.9
Public370.7406.5479.1559.8568.9750.01,227.2
Private4,227.04,679.45,145.16,066.07,732.59,820.913,618.7
Investment1,071.2912.8853.4732.51,015.61,669.32,242.9
Fixed capital formation1,025.2858.8839.5728.71,014.51,668.42,242.3
Government264.1291.8260.8318.8358.1402.7540.2
Other sectors761.2567.0578.6409.8656.41,265.71,702.0
Change in stocks46.054.013.93.81.20.90.6
Foreign balance-232.0-79.0-137.2-170.2-385.2-371.5-758.4
Exports of goods and nonfactor services1,283.21,575.41,550.91,601.71,880.13,363.95,705.1
Imports of goods and nonfactor services1,515.21,654.41,688.21,771.82,265.43,735.56,463.5
(Percent of GDP)
GDP at market prices100.0100.0100.0100.0100.0100.0100.0
Consumption84.685.988.792.292.989.190.9
Public6.86.97.67.86.46.37.5
Private77.779.081.184.486.682.783.4
Investment19.715.413.510.211.414.113.7
Fixed capital formation18.914.513.210.111.414.113.7
Government4.94.94.14.44.03.43.3
Other sectors14.09.69.15.77.310.710.4
Change in stocks1.90.80.20.10.00.00.0
Foreign balance-4.3-1.3-2.2-2.4-4.3-3.1-4.6
Exports of goods and nonfactor services23.626.624.522.321.028.334.9
Imports of goods and nonfactor services27.927.926.624.625.431.539.6
Domestic savings15.414.111.37.87.110.99.1
Gross national savings13.312.711.06.85.69.67.8
External current account balance (including official transfers)-6.4-2.7-2.5-3.4-5.8-4.5-5.9
Sources: Guinean authorities; and IMF staff estimates.

The GDP data for 2003-05 may be subject to revision in line with the recommendations of the West AFRITAC technical assistance on compilation of the national accounts.

Sources: Guinean authorities; and IMF staff estimates.

The GDP data for 2003-05 may be subject to revision in line with the recommendations of the West AFRITAC technical assistance on compilation of the national accounts.

Table 4.Guinea: GDP at Constant 1996 Prices by Sector, 2000–06
2000200120022003200420052006
(Billions of Guinean francs)
GDP at factor cost14,432.64,601.14,758.44,822.04,959.65,087.85,203.2
Primary sector844.9897.6916.9946.1987.21,017.31,057.5
Agriculture550.9587.6596.2616.3648.0671.7702.6
Livestock161.3166.9173.2180.1184.9187.9193.1
Fisheries32.635.837.138.239.139.740.7
Forestry100.0107.3110.5111.6115.2118.1121.0
Secondary sector1,394.51,464.81,536.91,543.91,589.01,653.61,689.0
Mining751.7778.6801.2822.9831.6861.1846.3
Manufacturing179.7189.6200.8192.8198.6201.6206.6
Water and electricity27.528.329.127.527.828.128.2
Construction435.7468.4505.8500.8531.0562.9607.9
Tertiary sector2,193.32,238.72,304.52,332.02,383.42,416.92,456.7
Trade1,201.71,227.01,269.91,283.21,315.31,331.11,351.1
Transport270.3275.3282.4285.3289.7293.5297.6
Administration249.3250.8257.0260.9267.5270.2272.9
Other472.0485.7495.1502.6510.9522.1535.2
Indirect taxes161.5166.2207.5201.8200.2243.6243.8
GDP at constant prices4,594.14,767.34,965.95,023.85,159.85,331.45,447.0
(Percentage change)
GDP at factor cost3.13.83.41.32.92.62.3
Primary sector4.56.22.23.24.33.04.0
Agriculture2.86.71.43.45.23.74.6
Livestock7.83.53.84.02.71.62.8
Fisheries8.99.73.63.02.41.62.6
Forestry7.37.33.01.03.22.52.5
Secondary sector4.15.04.90.52.94.12.1
Mining1.93.62.92.71.13.5-1.7
Manufacturing7.05.55.9-4.03.01.52.5
Water and electricity3.53.03.0-5.50.91.00.5
Construction7.07.58.0-1.06.06.08.0
Tertiary sector2.02.12.91.22.21.41.6
Trade1.92.13.51.12.51.21.5
Transport1.51.92.61.01.61.31.4
Administration1.40.62.51.52.51.01.0
Other2.72.92.01.51.72.22.5
Indirect taxes-2.92.924.9-2.8-0.821.70.1
GDP at constant prices2.93.84.21.22.73.32.2
Sources: Guinean authorities; and IMF staff estimates.

The GDP data for 2003-05 may be subject to revision in line with the recommendations of the West AFRITAC technical assistance on compilation of the national accounts.

Sources: Guinean authorities; and IMF staff estimates.

The GDP data for 2003-05 may be subject to revision in line with the recommendations of the West AFRITAC technical assistance on compilation of the national accounts.

Table 5.Guinea: Consumer Price Index, 2000–06(Period average)
2000200120022003200420052006
(Index, Dec. 1991=100)
Aggregate index1160.6169.2174.2196.6232.7
Food169.6177.2188.1223.6285.4
Nonfood154.0163.4164.2177.2197.2
Clothing129.8136.2139.3145.5145.1
Health165.4170.7175.5185.2218.2
Housing138.9146.1147.4155.9
Electricity and water143.1149.2153.0165.0
Transportation175.2189.4170.9199.0239.4
Leisure and culture170.7190.2208.3218.8233.1
(Annual percentage change)
Aggregate index6.85.43.012.918.3
Food4.04.56.118.927.6
Nonfood9.16.10.57.911.3
Clothing4.24.92.34.5-0.3
Health4.53.22.85.517.8
Housing3.75.20.95.7
Electricity and water9.04.32.57.8
Transportation25.68.1-9.816.420.3
Leisure and culture3.511.49.55.06.5
(Index, 2002=100)
Aggregate index1110.8130.1170.9230.2
Foods, beverages, and tobacco116.1147.1201.6287.3
Nonfood107.6119.9152.5195.9
Clothes and shoes108.0109.8121.9151.6
Housing, water, electricity, and gas104.5114.0142.7174.7
Furniture and equipment108.5120.2138.6175.9
Health104.6121.2156.1186.0
Transport114.6137.8211.8309.1
Entertainment and culture102.6109.0127.7156.2
Education102.3104.0121.0141.0
Hotels, cafés, and restaurants101.8123.1158.9212.8
Other goods and services (Annual perce109.1115.0129.6154.8
Aggregate index17.531.434.7
Foods, beverages, and tobacco26.737.042.5
Nonfood11.527.228.5
Clothes and shoes1.711.024.3
Housing, water, electricity, and gas9.125.222.5
Furniture and equipment10.815.326.9
Health15.928.819.2
Transport20.353.745.9
Entertainment and culture6.217.122.4
Education1.616.416.5
Hotels, cafés, and restaurants20.929.134.0
Other goods and services5.412.819.4
Sources: Guinean authorities and IMF staff estimates.

Change in CPI methodology in 2003 resulted in break in the data series.

Sources: Guinean authorities and IMF staff estimates.

Change in CPI methodology in 2003 resulted in break in the data series.

Table 6.Guinea: Consumer Price Index, 2000–06(End of period)
2000200120022003200420052006
(Index, Dec.1991=100)
Aggregate index1168.1170.0180.4207.1264.4
Food173.2181.4199.4243.3323.0
Nonfood164.4161.8166.6181.0224.7
Clothing134.2137.1144.8147.0150.8
Health168.9171.1178.3195.1262.1
Housing143.3145.6148.8158.0
Electricity and water148.2151.2155.5165.2
Transportation210.4168.1173.6202.5299.4
Leisure and culture172.6208.2210.3224.3253.6
(Annual percentage change)
Aggregate index7.21.16.114.827.6
Food1.84.79.922.032.8
Nonfood11.7-1.63.08.624.1
Clothing4.92.25.61.52.6
Health5.41.34.29.434.3
Housing5.81.62.26.2
Electricity and water5.62.02.86.2
Transportation33.7-20.13.316.647.9
Leisure and culture5.620.61.06.713.1
(Index, 2002=100)
Aggregate index1115.8147.8191.7266.7
Foods, beverages, and tobacco125.4166.5232.4342.0
Nonfood110.0136.6167.2221.4
Clothes and shoes111.2114.1132.9172.9
Housing, water, electricity, and gas105.0128.0152.6212.6
Furniture and equipment111.8130.0150.0200.4
Health108.4145.6166.0203.7
Transport116.6172.4238.5343.3
Entertainment and culture104.9118.6139.6176.6
Education104.1111.8134.5156.6
Hotels, cafés, and restaurants103.2140.1179.8247.7
Other goods and services112.3120.4147.6165.1
(Annual percentage change)
Aggregate index27.629.739.1
Foods, beverages, and tobacco32.839.647.2
Nonfood24.122.432.4
Clothes and shoes2.616.530.1
Housing, water, electricity, and gas21.919.239.3
Furniture and equipment16.315.433.6
Health34.314.022.7
Transport47.938.343.9
Entertainment and culture13.117.726.5
Education7.420.316.4
Hotels, cafés, and restaurants35.828.337.8
Other goods and services7.222.611.9
Sources: Guinean authorities and IMF staff estimates.

Change in CPI methodology in 2003 resulted in break in the data series.

Sources: Guinean authorities and IMF staff estimates.

Change in CPI methodology in 2003 resulted in break in the data series.

Table 7.Guinea: Financial Operations of the Central Government, 2000–06
2000200120022003200420052006
(Billions of Guinean francs)
Revenue and grants719.8868.2876.9952.71,027.41,631.52,397.8
Revenue594.5665.4763.9754.1936.01,556.62,172.3
Mining sector146.4166.6145.4105.9171.0380.6675.0
Nonmining sector448.1498.8618.5648.2765.01,176.01,497.3
Direct taxes58.378.194.9102.4117.6180.6280.0
Indirect taxes335.9362.5452.4497.0584.7872.11,056.8
Goods and services216.8248.5313.2347.9402.8554.4620.3
International trade119.1114.0139.1149.1181.9317.7436.5
Nontax revenue53.958.371.348.962.6123.3160.5
Grants125.3202.8113.0198.691.474.9225.5
Total expenditures and net lending893.01,113.81,157.41,395.31,464.21,807.92,871.4
Current expenditures504.0684.7776.1939.01,015.91,304.42,188.0
Primary current expenditures414.2595.0670.8786.4791.0975.31,651.5
Salary and wage206.2215.1236.9258.6274.8332.5444.4
Goods and services110.4133.9209.9264.5255.7396.1809.6
Transfers and subsidies97.6246.1224.0263.2260.4246.7397.5
Interest on debt89.889.6105.3152.7224.9329.2536.5
Domestic debt15.927.531.269.2104.3161.3262.7
External debt73.962.174.183.4120.6167.9273.8
Capital expenditures386.6423.4368.9453.4444.0500.4672.3
Domestically financed41.634.778.4155.9181.1199.5295.2
Externally financed345.0388.7290.5297.5262.9300.9377.1
Net lending2.45.812.32.94.33.111.1
Basic primary fiscal balance1136.329.92.3-191.0-40.3378.8214.4
Overall balance, commitments basis
Excluding grants-298.5-448.4-393.4-641.2-528.1-251.3-699.1
Including grants-173.2-245.6-280.4-442.6-436.8-176.4-473.7
Financing173.3240.8259.7537.7433.8176.4473.7
Domestic financing57.5-3.8158.0470.4285.5134.0585.7
Bank financing116.45.9176.8311.2163.4134.8616.6
Central bank129.5-18.6110.6150.7120.3-21.1916.2
Commercial banks-13.124.666.2160.643.1155.9-299.6
Nonbank financing-58.9-9.7-18.7159.2122.1-0.8-30.9
Privatization revenue2.02.53.23.787.6284.8
Amortization of domestic debt-13.532.498.842.4-83.0-240.9
Change in arrears-43.3-4.1-49.545.821.40.00.0
Change in float211.418.6-34.8-91.7
Other5.9-4.10.036.029.416.9
External financing115.8244.5101.767.3148.342.4-112.0
Drawings224.3346.5215.8165.2204.9273.4247.7
Amortization due2-140.0-235.7-192.8-253.6-289.7-432.8-830.7
Debt rescheduling and HIPC assistance30.0133.583.1119.776.9143.4103.2
Change in arrears (– = reduction)31.50.2-4.536.0156.258.4367.7
Errors and omissions20.04.820.7-95.13.00.00.0
(Percent of GDP)
Revenue and grants13.214.713.813.311.513.714.7
Expenditure16.418.818.319.416.415.217.6
Basic primary fiscal balance2.50.50.0-2.7-0.53.21.3
Overall balance, commitment basis
Excluding grants-5.5-7.6-6.2-8.9-5.9-2.1-4.3
Including grants-3.2-4.1-4.4-6.2-4.9-1.5-2.9
Sources: Guinean authorities; and IMF staff estimates.

Revenue minus noninterest expenditure and foreign-financed expenditures.

For 2005–06, errors and omissions are included in the change in float.

Committed debt relief.

Sources: Guinean authorities; and IMF staff estimates.

Revenue minus noninterest expenditure and foreign-financed expenditures.

For 2005–06, errors and omissions are included in the change in float.

Committed debt relief.

Table 8.Guinea: Central Government Revenue, 2000–06
2000200120022003200420052006
(Billions of Guinean francs)
Total revenue594.5665.4763.9754.1936.01,556.62,172.3
Mining sector146.4166.6145.4105.9171.0380.6675.0
Profit taxes and dividends6.08.28.79.133.632.679.1
Special tax on mining products140.0154.1131.294.9134.7347.0594.8
Other0.54.35.51.92.81.11.1
Nonmining sector448.1498.8618.5648.2764.961,176.01,497.3
Income and profit taxes58.378.194.9102.4117.61180.6280.0
Taxes on domestic production and trade216.8248.5313.2347.9402.80554.4620.3
Value-added tax (VAT)115.1156.2184.8217.1268.83
Excise surcharge7.210.810.615.114.85
Petroleum excise tax47.272.877.484.388.81125.6136.2
Other47.38.740.531.530.31
Taxes on international trade119.1114.0139.1149.1181.93317.7436.5
Import duties84.388.0108.4112.7144.19
Taxes on exports4.05.25.89.90.64
Other130.820.824.926.637.10
Nontax revenue and miscellaneous53.958.371.348.962.62123.3160.5
(Percent of GDP)
Total revenue10.911.212.010.510.513.113.3
Mining sector2.72.82.31.51.93.24.1
Nonmining sector8.28.49.89.08.69.99.2
Income and profit taxes1.11.31.51.41.31.51.7
Taxes on domestic production and trade4.04.24.94.84.54.73.8
Taxes on international trade2.21.92.22.12.02.72.7
Nontax revenue and miscellaneous1.01.01.10.70.71.01.0
(Annual percentage change)
Total revenue14.911.914.8-1.324.166.339.6
Mining sector24.813.8-12.7-27.261.6122.577.3
Nonmining sector12.111.324.04.818.053.727.3
Income and profit taxes1.033.921.67.914.953.555.1
Taxes on domestic production and trade-5.214.626.111.115.837.611.9
Taxes on international trade47.4-4.322.07.222.074.637.4
Nontax revenue and miscellaneous64.28.222.3-31.428.196.930.2
Sources: Guinean authorities; and IMF staff estimates.

Including recovery of tax arrears.

Sources: Guinean authorities; and IMF staff estimates.

Including recovery of tax arrears.

Table 9.Guinea: Central Government Expenditure, 2000–06
2000200120022003200420052006
(Billions of Guinean francs)
Total expenditures893.01,113.81,157.41,395.31,464.21,807.92,871.4
Current expenditures504.0684.7776.1939.01,015.91,304.42,188.0
Primary current expenditures414.2595.0670.8786.4791.0975.31,651.5
Salary and Wage206.2215.1236.9258.6274.8332.5444.4
Goods and services110.4133.9209.9264.5255.7396.1809.6
Transfers and subsidies97.6246.1224.0263.2260.4246.7397.5
Interest on debt89.889.6105.3152.7224.9329.2536.5
Domestic debt15.927.531.269.2104.3161.3262.7
External debt73.962.174.183.4120.6167.9273.8
Capital expenditures386.6423.4368.9453.4444.0500.4672.3
Domestically financed41.634.778.4155.9181.1199.5295.2
Investment0.033.677.6154.0178.0183.8289.0
Capital transfer0.01.10.91.93.115.76.2
Externally financed345.0388.7290.5297.5262.9300.9377.1
Net lending2.41.34.41.40.70.18.1
Restructuring expenditures0.04.57.91.53.63.03.0
(Percent of GDP)
Total expenditures16.418.818.319.416.415.217.6
Current expenditures9.311.612.213.111.411.013.4
Primary current expenditures7.610.110.610.98.98.210.1
Salary and Wage3.83.63.73.63.12.82.7
Goods and services2.02.33.33.72.93.35.0
Transfers and subsidies1.84.23.53.72.92.12.4
Interest on debt1.71.51.72.12.52.83.3
Domestic debt0.30.50.51.01.21.41.6
External debt1.41.01.21.21.41.41.7
Capital expenditures7.17.25.86.35.04.24.1
Domestically financed0.80.61.22.22.01.71.8
Investment0.00.61.22.12.01.51.8
Capital transfer0.00.00.00.00.00.10.0
Externally financed6.36.64.64.12.92.52.3
Net lending0.00.00.10.00.00.00.0
Restructuring expenditures0.00.10.10.00.00.00.0
(Billions of Guinean francs)
Memorandum items:
Defense expenditure80.3171.1193.8167.0181.8
Priority sector spending, of which:160.5193.2259.8242.0263.9416.3585.9
Education (excluding higher education)74.179.5111.0110.6150.4
Health21.748.847.637.335.2
(Percent of GDP)
Defense expenditure1.52.93.12.32.0
Priority sector spending, of which:3.03.34.13.43.03.53.6
Education (excluding higher education)1.41.31.81.51.7
Health0.40.80.80.50.4
Sources: Guinean authorities; and IMF staff estimates.
Sources: Guinean authorities; and IMF staff estimates.
Table 10.Guinea: Monetary Survey, 2000–06(Billions of Guinean francs, unless otherwise indicated)
2000200120022003200420052006
Central bank
Net foreign assets153.6119.952.1-129.3-155.0-171.0-177.2
(Millions of U.S. dollars)27.960.726.4-64.7-60.8-38.0-31.4
Net domestic assets289.7261.1398.4703.3918.31,125.31,934.2
Domestic credit241.8227.5392.7575.4737.4812.71,764.1
Government (net)252.5249.7414.2525.7723.1685.11,854.0
Of which: gold revaluation claims17.717.617.655.455.455.455.4
Public enterprises5.86.02.72.72.74.81.1
Private sector15.412.926.679.992.1131.3167.9
Claims on deposit money banks-22.0-41.2-50.7-32.9-80.5-8.5-258.9
Of which: sterilization bills (-)-30.0-44.3-60.8-34.5-82.5-23.0-273.0
Other items, net (assets +)48.033.65.7127.9180.9312.6170.1
Reserve money343.3381.0450.5573.9763.3954.31,757.0
Currency outside banks285.2310.1349.8478.1604.1786.31,306.6
Bank reserves36.564.397.293.1154.1159.6443.6
Deposits30.250.078.477.4125.5130.9404.8
Required reserves15.319.524.633.148.139.794.1
Excess reserves14.930.553.844.277.491.2310.7
Cash in vaults6.314.318.815.828.628.738.8
Private sector deposits21.76.63.62.75.18.46.8
Deposit money banks
Net foreign assets74.281.869.566.8185.0277.5495.5
Bank reserves36.564.397.293.1154.1159.6443.6
Deposits at the central bank30.250.078.477.4125.5130.9404.8
Cash in till6.314.318.915.828.628.738.8
Liabilities to central bank (-)22.041.250.732.980.58.5258.9
Of which: sterilization bills30.044.360.834.582.523.0273.0
Domestic credit269.3311.5389.9606.2672.11,012.8940.6
Credit to the government-5.119.584.9245.4288.5444.4144.8
Claims18.047.0115.0285.9386.2532.5325.4
Deposits23.127.530.140.597.788.1180.6
Claims on public enterprises0.20.110.03.90.00.12.8
Claims on the private sector274.2292.0295.1356.9383.6568.3793.0
Other items, net (assets +)-123.4-143.7-159.8-196.6-216.3-216.3-204.8
Liabilities to the private sector278.6355.1447.6602.5875.41,242.01,933.9
Other items, net (assets +)-75.4-110.1-154.1-68.7-35.496.3-34.7
Broad money (M2)585.4671.8801.01,083.31,484.62,036.83,247.3
Currency285.2310.1349.8478.1604.1786.31,306.6
Deposits300.3361.7451.2605.2880.51,250.41,940.7
Of which: foreign currency deposits85.6106.5120.3157.9271.0557.01,044.8
Memorandum items:
Gross reserves (in months of imports)2.43.32.50.90.50.50.6
Broad money (12-month change in percent)23.414.819.235.337.037.259.4
Reserve money (12-month change in percent)17.011.018.327.433.025.084.1
Velocity (GDP/average M2)10.39.48.67.67.06.76.2
Sources: Central Bank of the Republic of Guinea (BCRG); and IMF staff estimates.

For 2003 and 2004, net foreign assets and credit to private sector of the central bank have been adjusted to take account of operations with a private company. The data for 2005-06 reflect revisions in line with external audit findings.

Sources: Central Bank of the Republic of Guinea (BCRG); and IMF staff estimates.

For 2003 and 2004, net foreign assets and credit to private sector of the central bank have been adjusted to take account of operations with a private company. The data for 2005-06 reflect revisions in line with external audit findings.

Table 11.Guinea: Summary Accounts of the Central Bank, 2000-06(Billions of Guinean francs)
2000200120022003200420052006
Net foreign assets153.6119.952.1-129.3-155.0-171.0-177.2
Gold25.416.6183.73.19.48.165.8
IMF-215.4-248.0-268.7-271.7-277.4-389.1-407.0
SDR holdings1.31.62.52.94.79.70.6
Foreign exchange holdings256.2393.3149.6154.4136.4223.9221.8
Short-term liabilities-13.9-43.6-15.1-18.1-28.0-23.5-58.4
Net domestic assets289.7261.1398.4703.3918.31,125.31,934.2
Net domestic credit241.8227.5392.7575.4737.4812.71,764.1
Public sector (net)258.3255.8416.9528.4725.8689.91,855.1
Government (net)252.5249.7414.2525.7723.1685.11,854.0
Public enterprises5.86.02.72.72.74.81.1
Private sector15.412.926.679.992.1131.3167.9
Refinancing8.03.010.01.62.014.514.1
Sterilization bills (-)-30.0-44.3-60.8-34.5-82.5-23.0-273.0
Other items, net (assets +)48.033.65.7127.9180.9312.6170.1
Revaluation accounts4.18.19.753.054.395.8226.4
Adjustment IMF accounts4.93.00.1-9.60.20.10.1
Capital, reserves, and provisions-20.2-25.1-20.4-18.7-26.0-45.5-25.4
SDR allocations-5.8-5.8-5.8-5.8-5.8-5.8-5.8
Other (net)63.051.420.1106.9156.1266.0-27.2
Other (central bank)2.02.02.02.02.02.02.0
Reserve money343.3381.0450.5573.9763.3954.31,757.0
Currency outside banks285.2310.1349.8478.1604.1786.31,306.6
Bank reserves36.564.397.293.1154.1159.6443.6
Cash in vaults6.314.318.815.828.628.738.8
Deposits30.250.078.477.4125.5130.9404.8
Of which: required reserves0.026.124.633.148.139.794.1
Private sector deposits21.76.63.62.75.18.46.8
Of which: in foreign currency4.73.30.20.13.15.40.4
Sources: Central Bank of the Republic of Guinea (BCRG); and IMF staff estimates.

For 2003 and 2004, net foreign assets and credit to private sector of the central bank have been adjusted to take account of operations with a private company. The data for 2005-06 reflect revisions in line with external audit findings.

Sources: Central Bank of the Republic of Guinea (BCRG); and IMF staff estimates.

For 2003 and 2004, net foreign assets and credit to private sector of the central bank have been adjusted to take account of operations with a private company. The data for 2005-06 reflect revisions in line with external audit findings.

Table 12.Guinea: Summary Accounts of Deposit Money Banks, 2000-06(Billions of Guinean francs)
2000200120022003200420052006
Net foreign assets74.281.869.566.8185.0277.5495.5
Assets151.2136.1145.9136.2282.0401.8661.8
Liabilities76.954.376.469.597.0124.3166.3
Claims on central bank57.596.4141.7110.7234.6168.0702.6
Refinancing (-)-9.0-4.8-15.5-6.4-2.0-14.5-14.1
Sterilization bills30.044.360.834.582.523.0273.0
Banks’ reserves36.556.996.482.6154.1159.6443.6
Deposits30.242.677.566.8125.5130.9404.8
Cash in vaults6.314.318.915.828.628.738.8
Domestic credit269.3311.5389.9606.2672.11,012.8940.6
Claims on public sector-4.919.594.8249.3288.5444.5147.6
Government (net)-5.119.584.9245.4288.5444.4144.8
Claims18.047.0115.0285.9386.2532.5325.4
Liabilities23.127.530.140.597.788.1180.6
Public enterprises (PEs)0.20.110.03.90.00.12.8
Claims on private sector274.2292.0295.1356.9383.6568.3793.0
Healthy203.4210.1215.2255.7276.9470.4710.3
Nonperforming70.881.979.9101.3106.797.982.7
Other items, net-122.4-134.6-153.5-181.1-216.3-216.3-204.8
Other assets60.562.181.689.0134.1155.3298.4
Correspondents0.00.10.32.21.323.659.5
Immobilizations24.625.527.130.642.285.4121.4
Other35.836.554.156.290.646.4117.4
Other liabilities-182.9-196.6-235.1-270.1-350.4-371.6-503.1
Correspondents-3.0-11.9-15.8-16.8-13.4-10.7-12.4
Own funds-124.8-134.9-161.5-194.0-229.8-200.9-356.2
Other-55.2-49.9-57.7-59.3-107.2-160.0-134.5
Liabilities to private sector and PEs278.6355.1447.6602.5875.41,242.01,933.9
Deposits in Guinean francs197.7251.8327.5444.7607.4690.4889.5
Demand deposits177.1223.0298.8382.5513.4592.7796.2
Saving and time deposits20.628.828.762.294.097.793.3
Deposits in foreign currency80.9103.3120.1157.8268.0551.61,044.4
Sources: Central Bank of the Republic of Guinea (BCRG); and IMF staff estimates.
Sources: Central Bank of the Republic of Guinea (BCRG); and IMF staff estimates.
Table 13.Guinea: Distribution of Banking Sector Credit by Sector and Maturity, 2000-06(Percent, unless otherwise indicated)
2000200120022003200420052006
Trade60.759.759.953.962.972.976.1
Construction, public works7.78.18.810.09.15.35.3
Agriculture and texiles7.36.95.85.15.74.43.9
Business services7.79.210.08.56.25.45.6
Other manufacturing industries5.67.27.114.710.47.04.3
Transport2.62.83.23.23.53.52.8
Other sectors18.56.15.34.72.21.62.1
Total100.0100.0100.0100.0100.0100.0100.0
Maturity
Total credit utilized68.168.164.772.166.463.463.5
Short term57.559.557.360.159.255.051.9
Medium term10.28.57.111.87.08.411.6
Long term0.40.10.30.10.10.00.1
Guarantees and liabilities31.931.935.327.933.636.636.5
Total100.0100.0100.0100.0100.0100.0100.0
Total (Billions of Guinean francs)397.3411.3436.2477.3537.7863.81254.4
Source: Central Bank of the Republic of Guinea (BCRG).

Includes exploitation of natural resources; extraction and production of minerals; energy and water production; and nonbusiness services.

Source: Central Bank of the Republic of Guinea (BCRG).

Includes exploitation of natural resources; extraction and production of minerals; energy and water production; and nonbusiness services.

Table 14.Guinea: Structure of Interest Rates, 2000-06(Percent per annum; end of period)
2000200120022003200420052006
Central bank and government rates
Central bank refinancing rate111.516.316.316.316.322.322.3
Treasury bills (BDT)14.713.413.313.214.723.922.3
Central bank notes (TRM)13.012.612.511.312.320.320.1
Commercial banks’ rates
Minimum savings deposit rate27.58.26.56.58.414.714.7
Source: Central Bank of the Republic of Guinea (BCRG).

The central bank discontinued refinancing operations since 1993, except for a limited number of on-lent donor lines of credit.

Rate set by the central bank.

Source: Central Bank of the Republic of Guinea (BCRG).

The central bank discontinued refinancing operations since 1993, except for a limited number of on-lent donor lines of credit.

Rate set by the central bank.

Table 15.Guinea: Balance of Payments, 2000–06(Millions of U.S. dollars, unless otherwise indicated)
2000200120022003200420052006
Merchandise trade balance83.3160.9161.3153.227.386.469.2
Exports, f.o.b666.6722.8708.5731.7748.3841.41,011.1
Of which: Mining products570.6636.5619.9627.3674.8760.6908.7
Agricultural and maritime products44.940.375.091.167.267.296.0
Imports, f.o.b.-583.3-561.9-547.2-578.5-721.0-754.9-942.0
Food products-106.2-89.1-98.5-101.8-148.7-130.8-146.9
Other consumption goods-87.4-79.5-93.9-88.2-123.9-106.1-110.9
Petroleum goods-81.5-87.0-88.5-79.2-115.1-161.8-199.1
Intermediate and capital goods-308.3-306.3-266.2-256.7-333.3-356.2-485.1
Services trade balance-242.5-201.5-230.8-238.9-197.2-188.5-215.0
Services exports68.086.076.774.880.782.886.0
Of which: transport15.631.78.96.75.25.86.9
Services imports-310.5-287.4-307.5-313.7-277.9-271.3-301.0
Of which: transport-137.7-112.5-98.6-93.7-92.5-96.8-120.8
Income balance-77.6-87.2-32.6-33.8-59.8-39.9-41.7
Of which: interest on public debt1-55.0-31.9-37.5-42.0-53.2-46.1-52.7
Transfers:10.546.323.1-3.72.3-4.72.9
Of which: Net private transfers-15.0-12.9-15.3-23.1-7.6-17.7-15.6
Official transfers25.538.620.2-0.6-4.81.02.0
HIPC Initiative interim assistance (multilateral)0.020.618.320.014.712.016.5
Current account
Including official transfers-226.4-81.4-79.0-123.2-227.3-146.6-184.7
Excluding official transfers-251.9-140.6-117.4-142.6-237.3-159.6-203.2
Capital account71.781.938.877.725.67.624.9
Public transfers (project grants)71.781.938.877.725.67.624.9
Financial account-1.20.241.926.1114.952.226.6
Public (medium and long term)48.358.310.7-19.5-28.8-43.4-111.0
Project-related loans126.6117.6108.372.190.375.147.6
Program financing1.860.31.011.10.00.00.0
Amortization due1-80.1-119.6-98.6-102.7-119.1-118.5-158.6
Public (short term)0.00.00.00.00.00.00.0
Direct and other private investment (net)-47.2-58.031.255.997.973.7160.1
Private short term-2.30.00.0-10.345.821.9-22.5
Errors and omissions94.6-25.9-75.8-150.0-12.956.647.7
Overall balance-61.3-25.1-74.2-169.4-99.8-30.2-85.6
Financing61.325.174.2169.499.830.285.6
Change in net foreign assets43.3-43.634.491.0-3.9-22.8-6.6
Of which: Fund repayments-8.014.65.4-14.7-19.5-25.7-19.4
Change in gross official reserves51.4-58.138.589.821.25.32.7
Changes in arrears18.00.1-2.318.168.916.070.7
Committed debt relief and rescheduling0.068.642.160.334.837.021.5
Memorandum items:
Current account-GDP ratio (percent)
Including official transfers-6.4-2.7-2.5-3.4-5.8-4.5-5.9
Excluding official transfers-7.1-4.6-3.7-3.9-6.0-4.9-6.5
Overall balance (percent of GDP)-2.0-0.8-2.3-4.7-2.5-0.9-2.7
Exports-GDP ratio (percent)24.026.624.522.321.028.334.9
Imports-GDP ratio (percent)-29.2-27.9-26.6-24.6-25.4-31.5-39.6
Debt-service ratio, before interim debt relief4.620.218.919.923.220.721.1
Gross reserves150.3208.4170.080.259.053.751.0
Months of imports of the following year22.03.32.50.90.50.50.6
Nominal GDP (million of U.S. dollar)3,1123,0393,2103,6193,9383,2613,140
Sources: Guinean authorities and IMF staff estimates and projections.

Debt service payments on public and publicly guaranteed debt.

Percent of exports of goods and nonfactor services, excluding imports for large mining projects and those financed by project loans from donors.

Sources: Guinean authorities and IMF staff estimates and projections.

Debt service payments on public and publicly guaranteed debt.

Percent of exports of goods and nonfactor services, excluding imports for large mining projects and those financed by project loans from donors.

Table 16.Guinea: Composition of Merchandise Exports, 2000-06(Millions of U.S. dollars, unless otherwise indicated)
2000200120022003200420052006
Total exports, f.o.b.666.6722.8708.5726.1748.3841.41011.1
Of which: Mining products1570.6636.5619.9627.3674.8760.6908.7
Agricultural and maritime products96.086.488.698.873.580.8102.5
Bauxite299.4319.6305.2255.3292.4356.7404.7
CBG2269.1290.0285.6235.6269.7329.6379.8
Volume (million tons)12.512.313.411.912.912.812.9
Price (U.S. dollars per ton)21.523.721.319.920.825.829.5
CBK320.820.419.719.622.727.124.9
Volume (million tons)1.41.61.81.92.12.32.8
Price (U.S. dollars per ton)14.612.811.010.411.011.88.9
Alumina (Friguia)102.8138.5128.4143.6163.0116.7141.8
Volume (thousand tons)570.9679.7674.6731.2785.8710.0510.0
Price (U.S. dollars per ton)180.0203.8190.3196.4207.4164.3278.0
Diamonds51.328.134.552.248.235.242.9
Arédor, Hymex, and Quatro18.64.56.45.83.00.00.0
Volume (thousand carats)41.425.522.228.540.10.00.0
Price (U.S. dollars per carat)450.2175.1286.7203.675.9166.3167.9
Others32.723.728.246.445.135.242.9
Gold117.1150.2151.8176.2171.3252.0319.3
SMD424.629.531.933.735.851.359.9
Volume (tons)2.73.33.42.92.94.43.6
Price (U.S. dollars per ounce)283.0280.0293.6364.0389.0360.8511.8
SAG578.677.083.891.882.4133.5188.8
Volume (tons)8.78.98.47.96.39.310.2
Price (U.S. dollars per ounce)281.0270.1311.0363.0410.0445.0578.0
Other13.943.736.150.853.167.270.6
Volume (tons)2.94.34.74.73.84.94.9
Price (U.S. dollars per ounce)220.4248.8240.6333.1333.1333.1452.5
Coffee21.415.217.620.715.823.331.8
Volume (thousand tons)19.621.221.820.622.323.023.8
Price (thousand U.S. dollars per ton)1.10.70.81.00.71.01.3
Fish23.525.228.330.133.230.142.1
Cotton29.140.318.220.922.0
Other exports51.146.113.67.76.36.46.5
Sources: Guinean authorities; and staff estimates.

Exports of bauxite, alumina, diamonds, and gold.

Compagnie Bauxite de Guinée.

Compagnie Bauxite de Kindia.

Société Minière de Dinguirayo.

Société Aurifère de Guinée.

Sources: Guinean authorities; and staff estimates.

Exports of bauxite, alumina, diamonds, and gold.

Compagnie Bauxite de Guinée.

Compagnie Bauxite de Kindia.

Société Minière de Dinguirayo.

Société Aurifère de Guinée.

Table 17.Guinea: Composition of Merchandise Imports, 2000–06(Millions of U.S. dollars, unless otherwise indicated)
2000200120022003200420052006
Total imports, f.o.b.583.3561.9547.2525.8721.0754.9942.0
Adjustment for freight, insurance, diplomatic and transit trade111.1107.0108.145.256.793.3116.4
Imports, c.i.f.694.4668.9655.3571.1777.7848.21058.4
Food products126.4124.6118.0110.5160.4147.0165.0
In constant 1996 prices192.8184.5156.5139.4177.1162.8166.3
Price index, 1990 = 10083.786.281.886.098.397.9107.6
Other consumption goods104.098.8112.595.8133.6119.2124.7
In constant 1996 prices132.8133.4144.0114.7135.1109.389.0
Price index, 1990 = 10091.486.476.882.197.3107.3137.8
Petroleum products97.0104.6106.086.0124.1181.8223.7
In constant 1996 prices70.187.886.660.667.069.470.9
Price index, 1990 = 10028.224.325.028.937.853.464.3
Intermediate goods122.6112.6130.4110.9142.3167.6227.7
In constant 1996 prices156.5152.1166.9132.8143.9153.6162.5
Price index, 1990 = 10091.486.476.882.197.3107.3137.8
Capital goods244.4228.3188.4167.9217.2232.7317.4
In constant 1996 prices312.0308.2241.1201.1219.6213.3226.5
Price index, 1990 = 10091.486.476.882.197.3107.3137.8
Memorandum items:
Imports, c.i.f., 1996 prices814.4833.7697.7570.9698.2693.6768.5
Percentage change-3.52.4-16.3-18.222.3-0.710.8
Import prices (1996=100)85.380.293.9100.0111.4122.3137.7
Percentage change8.1-5.917.16.511.49.812.6
Import-GDP ratio (in percent)27.927.926.624.625.431.539.6
Merchandise imports, f.o.b.18.718.517.014.518.323.230.0
Services imports9.19.59.610.17.18.39.6
Terms of trade (1996=100)106.3115.0107.7103.588.882.886.9
Percentage change-7.88.12.4-3.8-14.2-6.85.0
Sources: Guinean authorities and IMF staff estimates.
Sources: Guinean authorities and IMF staff estimates.
Table 18.Guinea: Direction of Trade–Exports, 2000–06
2000200120022003200420052006
(Percent of total)
Industrial countries78.5584.3557.5676.4765.9343.3242.12
Of which:
Spain7.6110.2910.131.130.8310.168.98
United States11.4817.669.289.511.066.137.69
France18.5521.197.1314.4717.725.747.70
Ireland17.2311.158.621.040.936.005.08
Belgium13.102.209.7011.5014.714.503.22
Germany5.256.895.020.230.105.045.38
Canada3.812.843.130.010.011.802.19
Netherlands0.051.320.590.241.010.470.35
United Kingdom1.388.070.4724.0114.700.570.21
Switzerland0.052.340.0113.3112.830.120.01
Developing countries21.4515.6542.4413.236.1043.2241.66
Africa7.5614.783.8110.851.521.902.14
Of which:
Cameroon5.5813.691.501.450.000.000.00
Côte d’Ivoire0.040.010.368.460.020.650.68
Liberia0.020.350.250.040.130.060.07
Nigeria0.010.030.620.010.010.000.01
Asia0.110.0621.290.210.2913.5312.07
Of which:
Korea0.040.0217.860.060.0611.298.81
People’s Republic of China0.010.001.270.000.020.210.81
Europe13.780.7917.331.604.2727.7727.36
Of which:
Russia0.000.006.800.000.0014.6311.55
Ukraine11.200.296.690.254.217.939.55
Romania0.280.002.530.010.002.791.77
Middle East0.010.010.000.000.010.020.05
Western Hemisphere0.000.000.010.580.000.000.03
Memorandum items:
European Union65.4661.5047.8254.9150.9538.1334.13
Oil-exporting countries0.010.050.700.070.020.020.03
Non-oil developing countries21.4415.6141.7413.166.0843.1941.63
(Millions of U.S. dollar, unless otherwise specified)
Exports according to DOTS617.4542.7828.1628.7559.61,327.91,363.1
Exports according to BOP666.6722.8708.5726.1748.3841.41,011.1
Exports according to dots
as share of according to BOP92.675.1116.986.674.8157.8134.8
Source: IMF, Direction of Trade Statistics (DOTS), various years.
Source: IMF, Direction of Trade Statistics (DOTS), various years.
Table 19.Guinea: Direction of Trade–Imports, 2000–06
2000200120022003200420052006
(Percent of total)
Industrial countries0.560.590.650.550.320.360.33
Of which:
France20.6219.3018.0614.958.747.208.04
Belgium8.148.707.306.745.944.124.38
Italy3.012.948.583.391.714.711.59
Netherlands
United Kingdom1.871.935.025.580.912.382.94
United States5.587.137.893.753.357.343.17
Germany3.212.523.283.721.701.231.29
Spain2.142.652.051.891.161.571.01
Japan5.175.262.534.042.220.802.33
Switzerland0.991.611.643.930.900.450.29
Developing countries43.4441.3234.9444.4365.0962.1464.76
Africa24.9622.0211.7813.4622.4411.919.40
Of which:
Côte d’Ivoire17.9217.295.077.0415.115.173.49
Senegal0.650.862.070.650.462.351.81
South Africa2.191.861.402.714.642.191.84
Developing countries in Asia13.1414.5217.6221.7113.1616.9516.07
Of which:
People’s Republic of China4.926.275.4411.515.908.488.58
Hong Kong0.991.122.301.080.490.820.64
India2.021.914.013.342.293.143.22
Indonesia1.021.312.392.210.580.971.01
Korea0.290.271.170.490.231.080.30
Europe3.151.932.242.753.232.932.14
Middle East1.402.131.282.221.721.361.42
Western Hemisphere0.790.722.034.2824.5328.9935.72
Memorandum items:
European Union44.5242.4452.3141.0224.7727.1526.54
Oil-exporting countries2.413.144.483.951.912.072.17
Non-oil developing countries41.0338.1830.4740.4763.1760.0762.59
(Millions of U.S. dollar, unless otherwise specified)
Imports according to DOTS, c.i.f.532.8498.8876.9694.01,140.51,871.92,251.0
Imports according to BOP, c.i.f.694.5668.9655.3571.1777.7848.21,058.4
Imports according to BOP, f.o.b.583.3561.9547.2525.8721.0754.9942.0
Sources: Guinean authorities; staff estimates; and IMF, Direction of Trade Statistics (DOTS), various years.
Sources: Guinean authorities; staff estimates; and IMF, Direction of Trade Statistics (DOTS), various years.
Table 20.Guinea: External Public Debt, 2000-061
2000200120022003200420052006
(Millions of U.S. dollars)
Total medium- and long-term debt outstanding3258.93204.63069.23172.23242.23198.83187.9
Medium- and long-term debt, excluding IMF3146.03081.32930.23035.93120.23111.53115.6
Multilateral institutions, excluding IMF1553.61657.31764.01852.11889.91958.51943.2
Organizations of Arab countries146.8126.6115.7112.9120.5138.0136.7
Bilateral creditors11435.61289.41042.51062.91071.9976.91000.8
Paris Club1167.61074.4827.5847.9857.3819.3887.9
Postcutoff297.3276.5279.0307.3326.6302.2335.2
Resched. in 1986 and not previously resched.74.163.754.441.529.929.129.2
Rescheduled in 198961.845.034.422.122.321.620.7
Rescheduled in 1992111.3101.4104.7117.5120.2114.6121.4
Rescheduled in 199598.292.296.0109.1110.6104.4111.1
Rescheduled in 199783.976.779.487.688.795.2118.1
Russian Federation441.0418.9179.6162.8159.0152.2152.2
Other bilateral creditors268.0215.0215.0215.0214.6157.5112.9
Commercial creditors10.08.08.08.037.938.134.9
Outstanding IMF credit112.9123.3139.0136.3121.987.372.2
Memorandum items:(Percent of GDP)
Total debt104.7105.495.687.682.398.1101.5
Medium- and long-term debt, excluding IMF101.1101.491.383.979.295.499.2
IMF credit3.64.14.33.83.12.72.3
Sources: Guinean authorities; and IMF staff estimates.

Guinean debt to some bilateral and multilateral creditors is not fully reconciled. A data reconciliation exercise will be conducted in the context of the Heavily Indebted Poor Countries (HIPC) Initiative completion point review.

Sources: Guinean authorities; and IMF staff estimates.

Guinean debt to some bilateral and multilateral creditors is not fully reconciled. A data reconciliation exercise will be conducted in the context of the Heavily Indebted Poor Countries (HIPC) Initiative completion point review.

Table 21.Guinea: Financial Soundness Indicators of the Banking Sector, 2001-06(Percent, unless otherwise indicated)
Prudential Limits200120022003200420052006
Net capital (billions of Guinean francs) 15 billion 24.89.28.710.814.723.0
Regulatory capital to risk-weighted assets 110% 311.618.415.812.211.113.8
Loans larger than 15 percent of capital to regulatory capital (ratio) 1Eight times capital4.31.41.81.72.73.2
Number of loans larger than 25 percent of capital 103.42.12.61.31.41.3
Loans to managers and insiders to regulatory capital 110%11.39.37.76.36.5
Number of loans to managers and insiders larger than 5 percent of capital 100.60.60.30.30.0
Liquid assets to short-term liabilities 1100% 4164.5363.6172.8214.8185.4136.0
Open foreign exchange position to regulatory capital 135%7.711.017.223.914.3
(Number of banks respecting the pirudential limits, out of a total of seven baniks for 2001-05 and eight banks for end–2006)
Net capital (billions of Guinean francs)5 billion2556678
Regulatory capital to risk-weighted assets10% 3477748
Loans larger than 15 percent of capital to regulatory capital (ratio)Eight times capital577778
Number of loans larger than 25 percent of capital0235234
Loans to managers and insiders to regulatory capital10%44520
Number of loans to managers and insiders larger than 5 percent of capital044630
Liquid assets to short-term liabilities100% 4777778
Open foreign exchange position to regulatory capital35%77641
Source: Central Bank of Guinea (BCRG).

Included in the prudential regulation of the BCRG. Presented as average of seven banks (eight from end–2006).

The limit was 2 billion Guinean francs before March 2002 and was raised to 10 billion from January 2007.

The ratio was 8 percent before June 2003.

The ratio was 70 percent before June 2003.

Source: Central Bank of Guinea (BCRG).

Included in the prudential regulation of the BCRG. Presented as average of seven banks (eight from end–2006).

The limit was 2 billion Guinean francs before March 2002 and was raised to 10 billion from January 2007.

The ratio was 8 percent before June 2003.

The ratio was 70 percent before June 2003.

Table 22.Guinea: Structure of Credit Portfolio of the Commercial Banks, 2001–06
200120022003200420052006
(Billions of Guinean francs)
1. Total credit outstanding302.7310.7368.7381.3572.3799.6
2. Performing credits213.3225.5259.7276.8473.9715.1
Of which: nonimputed values (NIVs)5.26.37.00.20.50.3
3. Frozen credits4.95.35.84.50.50.8
4. Doubtful and contentious loans net10.49.216.92.03.33.7
5. Provisions73.570.786.498.094.779.8
6. Nonperforming loans (NPLs) (4+5)83.979.9103.2100.097.983.6
7. Unpaid loans (NIVs+3+4+5)9491.5116.0104.798.984.7
(Percent)
Unpaid loans to total loans (1/7)31.129.431.527.517.310.6
NPLs to total loans (1/6)27.725.728.026.217.110.5
Coverage of NPLs (5/6)87.688.583.798.096.795.5
Source: Central Bank of Guinea.
Source: Central Bank of Guinea.
Table 23.Guinea: Debt-Service Liabilities on Medium-and Long-Term External Public Debt, 2000-06(Millions of U.S. dollars)
2000200120022003200420052006
Total debt service due (excluding IMF)152.3158.6149.5140.6166.9171.3197.7
Interest due on medium- and long-term public debt38.839.050.937.947.845.045.4
International organizations113.717.921.518.925.321.119.8
Organizations of Arab countries1.42.22.22.62.32.42.9
Paris Club, post-cutoff date5.85.24.84.34.65.74.6
Paris Club, 1986 and previously rescheduled debt (PRD)1.10.90.90.81.10.60.4
Paris Club, 19894.12.81.91.00.90.90.6
Paris Club, 19924.13.83.63.24.74.54.5
Paris Club, 19953.32.92.82.63.33.84.1
Paris Club, 19973.31.23.12.73.73.95.3
Russian Federation22.01.910.01.81.82.22.2
Non-Paris Club bilaterals0.00.10.10.00.00.01.1
Principal due on medium- and long-term public debt (excl. IMF)113.5119.698.6102.7119.1126.3152.3
Of which: International organizations143.137.644.645.053.260.173.1
Paris Club, post-cutoff-date13.616.615.716.923.522.624.6
Russian Federation222.122.13.610.14.24.88.0
Non-Paris Club bilaterals24.98.57.68.28.31.41.4
Memorandum items:
Change in debt-service payments arrears18.00.1-2.318.168.916.070.7
Sources: Guinean authorities; and IMF staff estimates.

Excluding organizations of Arab countries.

Debt to some bilateral creditors is not fully reconciled; the table follows the Guinean position.

Sources: Guinean authorities; and IMF staff estimates.

Excluding organizations of Arab countries.

Debt to some bilateral creditors is not fully reconciled; the table follows the Guinean position.

Table 24.Guinea: Nominal Exchange Rates and Effective Exchange Rate Indices, 2000:Q1-2006:Q4(Index, 2000=100, unless otherwise indicated)
Guinean Francs1 per U.S. DollarGuinean Francs per SDRNonadjusted Consumer PricesAdjusted Consumer PricesRelative Price IndexEffective Exchange Rate
NominalRealNominalReal
Period averageEnd of PeriodPeriod averageEnd of periodPeriod averageEnd of periodPeriod averageEnd of periodPeriod averageEnd of periodPeriod averageEnd of period
2000
Q11,7471,6802,3642,26297.7239.497.597.999.099.195.594.6100.699.6
Q21,6101,6262,1362,17497.8265.098.598.999.299.0107.2106.3105.3104.3
Q31,7381,8262,2752,370100.3281.2100.3103.399.8102.3101.4101.299.2101.5
Q41,8921,8822,4362,452104.2104.7103.6104.1102.1102.295.997.993.195.2
2001
Q11,9231,9752,4852,489104.3104.1104.4104.5101.8101.792.494.193.394.9
Q21,9451,9522,4512,431104.3104.7105.2105.7101.6101.695.096.596.197.7
Q31,9621,9522,4932,516106.5107.3106.3106.5102.1102.293.195.191.693.7
Q41,9721,9882,5052,499106.3105.9105.7105.5101.1100.792.993.993.293.8
2002
Q11,9771,9752,4692,455106.2106.5106.3107.1100.9101.494.295.194.395.7
Q21,9751,9762,5232,549106.9107.4108.0108.5101.8102.291.493.189.291.2
Q31,9761,9762,6142,631109.4109.9109.0108.8102.3102.087.990.088.290.0
Q41,9761,9762,6272,620111.5112.4110.7112.1103.1104.087.690.386.590.0
2003
Q11,9751,9772,7032,720115.1117.7115.5118.9106.2109.083.788.983.390.8
Q21,9801,9802,7652,805119.1120.4120.4121.6110.4111.480.488.879.088.0
Q31,9861,9952,7612,768122.4123.9121.6122.2111.0111.380.189.079.888.9
Q41,9992,0002,8782,964125.3125.9124.3125.7112.6113.676.586.275.085.2
2004
Q11,9922,0002,9682,969129.6129.8130.4131.8117.2118.274.086.774.888.4
Q22,0002,0002,9222,942131.0132.3132.7133.5118.2118.675.889.775.689.7
Q32,3582,5503,4572,932145.7157.6144.2155.0127.6136.960.777.258.179.6
Q42,5502,5503,8533,516159.7160.8158.2160.3138.8140.257.079.155.377.6
2005
Q12,7963,2284,2573,517164.5165.5166.1169.1144.5146.551.274.046.968.7
Q23,5433,8275,2845,600176.2186.0178.6187.3154.1161.341.563.939.864.2
Q33,9314,1335,7435,988197.1201.3194.5197.7166.5168.738.063.236.661.7
Q44,3074,5006,1796,443205.8208.5203.9207.6173.2176.035.160.834.059.9
2006
Q14,5704,7176,5836,795216.0219.9218.5225.4184.1189.732.559.932.461.4
Q24,9085,0897,2277,481239.4252.1242.7253.4203.0211.529.860.428.961.0
Q35,4845,5968,1278,283265.0270.1260.9265.4216.9220.526.457.225.957.1
Q45,7355,9778,5478,992281.2290.0278.9288.5230.9237.925.157.923.756.3
Sources: Guinean authorities; IMF, International Financial Statistics and Information Notice System; and IMF staff estimates.

Official exchange rate.

Sources: Guinean authorities; IMF, International Financial Statistics and Information Notice System; and IMF staff estimates.

Official exchange rate.

1Prepared by Mahvash Saeed Qureshi and Konstantin Fedorov.
2Bauxite is the most common aluminum ore. To produce aluminum, it is first refined into alumina (aluminum oxide trihydrate), which is further processed into metallic aluminum.
4Only Guyana, which currently does not produce any alumina, has a lower alumina-to-bauxite ratio than Guinea.
5Annual electricity production in Guinea is 320 mw, 40 percent of which is privately generated and consumed by mining companies. The state-owned electric company, Energie de Guinée, faces a range of financial and technical problems, among them payment arrears by large customers such as the state; a shortage of skilled staff; a poorly maintained distribution network; and electricity theft (EIU, 2006). Guinea, known as the “Water Tower of West Africa”, has a tremendous hydroelectric potential (estimated to be about 1000mw).
6Strikes and social unrest in the second half of 2006 temporarily interrupted production at the Compagnie des Bauxites de Guinée (CBG). Production stopped again in early 2007 due to country-wide labor strikes. CBG lost 631,000 tons of output during the strike; producing at only 25 percent of capacity, Compagnie des Bauxites de Kindia (CBK) lost 210,000 tons and Alumina Compagnie de Guinée (ACG) lost 36,000 tons, of output. Their rail network and locomotives were also damaged.
7The multinational mining group Rio Tinto recently bought Alcan Inc. for US$38.1 billion. The take over has created the world’s largest aluminum company, Rio Tinto Alcan, with its headquarters based in Montréal, Canada. It remains to be seen if the new arrangement will affect the ownership of CBG in some way.
8The estimates are based on the planned output of Global Alumina, 3PL, Dian-Dian, the first stage of the Alcoa/Alcan project, and the planned expansion of the ACG refinery. The ACG input-output ratio is used to derive the estimates and calculate the amount of bauxite that must be produced by each new plant for internal consumption.
10The world aluminum price is a natural benchmark to assess Guinea’s bauxite export prices. This is because the prices of bauxite and alumina are not determined in international markets but are contract determined. Hence, no reference price exists for bauxite. In principle, contracts should take into account the world aluminum price and any movement in world aluminum prices should be reflected in Guinea’s export prices of bauxite and alumina.
11The negotiated prices tend to be complex formulas that may take into account variations in the prices of aluminum and alumina and changes in production costs. Detailed information on individual pricing arrangements in Guinea is not publicly available.
12The half life of deviation is two years for CBG prices and 1 year for ACG prices.
13At CBG’s request, its prices were again renegotiated in 2000. The company had argued that the high production costs of its aluminum plants in North America necessitated a renegotiation.
14See Appendix III for a comparison of Guinea’s Mining Code with the mining taxation regime in other mineral-rich developing countries.
15Best international practices refer to standard and recognized good fiscal practices for receiving and managing natural resource revenues. Details of fiscal regimes may vary by country but in general they should satisfy certain criteria for transparency, administration, and management. See Appendix IV for IMF recommendations to resource-rich countries for improving their share of revenues from natural resources.
16An assessment by Otto (2005) of Guinea’s taxation regime shows the system to be complex and internationally uncompetitive compared to those of the other major mineral producers.
17This is because mineral wealth may contribute to corruption, political instability and conflict in the country, adversely affecting economic growth (Auty, 1997; Sachs and Warner, 2000).
18The authorities have created a 24-member Permanent EITI Implementation Committee with representatives from the government, mining companies, and civil society. It has three subcommittees—the Statistics Committee, the Audit and Communication Committee, and the Capacity Building Committee—which perform the main EITI tasks. A Supervision Committee (presided over by the Prime Minister) and an Executive Committee (presided over by the Ministry of Finance) have also been established to ensure that the initiative is implemented.
19Data was collected and reconciled for ACG, CBG, CBK, Société Anglo Gold Ashanti de Guinée (SAG), Société Miniere de Dinguiraye (SMD), and Société Semafo.
20The estimated effect of world aluminum prices should be interpreted with caution; it may be capturing the effect of other variables, such as alumina prices, on CBG’s bauxite export prices.
21The chi-square statistic reported in the last row of Table A.2 indicates that the hypothesis of weak exogeneity is accepted for Log(prALM) in each case. Hence, a single-equation ECM may be estimated to assess the short-and long-run dynamics of export prices.
22In the case of CBK, both short- and long-run effects of the world aluminum price are negligible. However, the past period’s price appears to have a significant effect on the current price. This suggests that the dynamics of CBK prices are different from those of CBG prices.

Other Resources Citing This Publication