Guinea-Bissau

Politics:

• Analysis

  Guinea-Bissau politics: Quick View - PRS elects a new leader

  Event

  Alberto Nambeia was elected as the new leader of Guinea-Bissau's second-largest party-the Partido da Renovacao Social (PRS)-after obtaining 562 votes out of a total of 801 delegates at the party's fourth congress in mid-December.

  Analysis

  The outcome of the election was widely considered a surprise owing to the last-minute withdrawal of the incumbent-the party's founder, most prominent figure and, according to most analysts, the de facto leader, Kumba Yala. The PRS's only period in government took place in 2000-03 and coincided with Mr Yala's presidency. The poor economic performance and the so-called "Balantisation" of the administration during his time in power, however, has limited the party's popularity outside the Balanta ethnic group ever since and jeopardised its chances of returning to power through the popular vote. Still, the close links between the PRS, the Balanta ethnic group and the armed forces (in which the Balanta are a majority and in control) led to the PRS once again rising to prominence and effectively controlling the transitional government after the military, in April this year, overthrew the government led by the Partido Africano da Independencia da Guine e Cabo Verde (PAIGC). As a result, Mr Yala is widely seen as one of the country's most influential figures despite the fact that he does not hold any formal political office.

  Against this background, it was expected that Mr Yala would be easily re-confirmed as party president. However, he announced halfway through the congress that he would not be standing in the internal election. Instead, the delegates were left to choose from among four relatively lesser-known candidates, with Mr. Nambeia, a PRS member of parliament and one of the founders of the party, coming out as the clear winner. The rationale behind Mr Yala's decision to withdraw from the race is uncertain, but few doubt his ability to continue to exert major influence from behind the scenes both inside the party and on national politics. Growing tensions inside the party suggests that it could be a strategic move aimed at avoiding exposing rising contestation within his own party, in order to boost Mr Yala's chances in the election for the country's president, expected to be held before May 2013.

  December 20, 2012

• Background

  Guinea-Bissau: Constitution and institutions

  A democratic constitution

  Guinea-Bissau is a unitary state with a centralised elected authority. The country's first post-independence constitution proclaimed a one-party state. Constitutional reforms in the early 1990s paved the way for multiparty elections, abolishing the single-party state and reintroducing the position of prime minister. In 1997 a parliamentary committee was mandated to revise the constitution and reinforce the independence of the judiciary. The 1998 Abuja peace accord provided further impetus, and the 1998-99 transitional government began to work on a project of constitutional revision that would also reduce excessive presidential power. In July 1999 parliament passed the new constitution by a two-thirds majority, limiting the tenure of the president to two five-year terms, abolishing the death penalty and preventing anyone whose parents had not been born in Guinea-Bissau from holding high office. In 2002 a major constitutional reform aimed at reducing presidential powers was debated in the National Assembly, but the then president, Mr Yala, blocked the initiative by dismissing parliament. Further amendments to the constitution are likely in the future, although it is unclear if these will have any effect given the many constitutional restrictions that have been broken in recent years.

  The president is the main authority

  The political system is officially semi-presidential, and the executive is able to appoint the prime minister and government. The judiciary is constitutionally independent, and the highest judicial authority is the Supreme Court. Parliament has a four-year mandate. According to the current constitution, the president is the head of state, but not the head of government. However, in practice, both Mr Yala and Mr Vieira have acted as if the system of government were presidential, and their continuing involvement in Guinea-Bissau's politics is in violation of the existing constitution.

  January 10, 2008

• Structure

  Guinea-Bissau: Political structure

  Official name

  República da Guiné-Bissau

  Form of state

  Unitary republic

  Legal system

  Based on the 1984 constitution, which was revised in 1993 and 1999; a new constitution was passed by parliament in April 2001 but has yet to be enacted by the head of state

  National legislature

  Assembléia Nacional Popular, with 100 members, elected for a four-year term

  National elections

  November 2008 (legislative); July 2009 (presidential); the first round of the presidential election took place on March 18th following the death of the previous president, Malam Bacai Sanhá; the second round was interrupted by a military coup on April 12th; legislative and presidential elections are now expected in April 2013

  Head of state

  Serifo Nhamadjo, interim president following the miliatary coup on April 12th

  National government

  The president appoints the prime minister, who presides over a Council of Ministers; a transitional government was appointed in May 2012 following the military coup in April; the government's 28 members hail from the military, Partido da Renovação Social (PRS), and other former opposition parties; a new government is expected following the next national elections

  Main political parties

  Partido Africano da Independência da Guiné e Cabo Verde (PAIGC; 67 seats; boycotted the May paliamentary session); Partido da Renovação Social (PRS; 28 seats); Partido Republicano para a Independência e o Desenvolvimento (PRID; three seats); Partido para a Nova Democracia (PND; one seat); Aliança Democrática (AD; one seat)

  President (interim): Serifo Nhamadjo

  Prime minister (interim): Rui Duarte de Barros

  Key ministers (transitional government)

  Agriculture & fisheries: Malam Mané

  Budget (minister of state): Tomásia Lopes Moreira Manjuba

  Civil service, labour & state reform: Carlos Joaquim Vamain

  Defence & veterans' affairs: Celestino de Carvalho

  Economy & regional integration: José Biai

  Education, culture, youth & sports: Vincent Pungura

  Energy & natural resources: Daniel Gomes

  Environment & tourism (minister of state): Agostinho da Costa

  Finance: Abubacar Demba Dahaba

  Foreign affairs & international cooperation: Faustino Fudut Imbali

  Health: Agostinho Cá

  Infrastructure: Fernando Gomes

  Interior: António Suka Ntchama

  Justice: Mamadú Saido Baldé

  Media (minister of state): Òscar Suca Baldé

  Presidency of the council of ministers, social communication & parliamentary affairs: Fernando Vaz

  State security & public order (minister of state): Basílio Mancuro Sanca

  Territorial administration & local governments: Baptista Té

  Trade, industry & crafts: Abubacar Baldé

  Transport & communications (minister of state): Carlos Nhaté

  Governor of regional central bank (BCEAO)

  Koné Tiémoko Meyliet

  October 09, 2012

Economy:

• Background

  Guinea-Bissau: Economic background

  Main economic indicators, 2007(a)
  Real GDP growth (%)	3.7
  GDP (CFAfr m)	177.9
  Consumer price inflation (av; %)	3.0
  Current-account balance (US$ m)	-36.8
  Foreign debt (US$ m)	993.4(b)
  Average exchange rate (CFAfr:US$)	480.1
  (a) Economist Intelligence Unit estimates. (b) 2006.
  Source: Economist Intelligence Unit.

  Download text file (csv format)

  January 10, 2008

• Structure

  Guinea-Bissau: Economic structure

  Economic structure: Annual indicators

  	2008a	2009a	2010a	2011b	2012b
  GDP at market prices (CFAfr bn)	377.5	387.6	410.4	432.1	457.0
  GDP at market prices (US$ m)	842.9	820.8	828.5	915.7	887.5
  Real GDP growth (%)	3.2	3.0	3.5	5.3a	-0.5
  Consumer price inflation (av; %)	10.5	-1.7	2.5	5.0a	6.4
  Population (m)	1.5	1.5	1.5	1.6	1.6
  Exports of goods fob (US$ m)	128.1	121.6	126.0b	244.6	125.0
  Imports of goods fob (US$ m)	-198.8	-202.3	-206.2b	-327.6	-254.1
  Current-account balance (US$ m)	-92.9	-113.6	-89.8b	-95.9	-151.4
  Foreign-exchange reserves excl gold (US$ m)	124.4	149.8	137.2	200.7a	125.5
  Exchange rate (av) CFAfr:US$	447.81	472.19	495.28	471.87a	514.90
  a Actual. b Economist Intelligence Unit estimates.

  Download the numbers in Excel

  Origins of gross domestic product 2011	% of total	Components of gross domestic product 2011	% of total
  Agriculture, forestry & fishing	56.4	Private consumption	86.5
  Industry	13.0	Government consumption	12.4
  Services	30.5	Fixed investment	13.4
  		Stockbuilding	0.2
  		Exports of goods & services	20.7
  		Imports of goods & services	-33.3
  Principal exports 2010	US$ m	Principal imports 2010	US$ m
  Cashew nuts	103.2	Food products	57.2
  Fish & shrimps	6.6	Capital goods	55.5
  		Petroleum products	44.7
  Main destinations of exports 2011a	% of total	Main origins of imports 2011a	% of total
  India	41.5	Portugal	28.3
  Nigeria	33.9	Senegal	15.6
  Brazil	8.7	China	4.7
  Togo	7.9	Cuba	3.8
  Spain	2.7	US	3.8
  a Derived from partners' trade returns, subject to a wide margin of error.

  Download the numbers in Excel

  Download text file (csv format)

  October 09, 2012

• Outlook

  Guinea-Bissau: Country outlook

  Guinea-Bissau: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  OVERVIEW: Despite the appointment of an interim civilian administration, the military will retain significant influence over political affairs in Guinea-Bissau, thus undermining political stability and preventing a swift return to constitutional order. Restoring a measure of political stability, including support from development partners, will depend upon the holding of free and fair elections and reinforcing civilian control over the military. The military coup in April has undermined recent improvements in the public finances and much donor support has been withdrawn. The fiscal deficit will rise to 4.6% of GDP in 2013 and fall to 4.4% of GDP in 2013. Assuming normal weather conditions and improvements in political stability, economic growth is expected to rebound to 2.1% in 2013 and 2.9% in 2014 as agricultural growth and public investment pick up. Although exports will recover slightly in 2013, the country's dependence on imported food and fuel means the current-account deficit will remain wide at an average of 16.3% of GDP in the 2013-14 forecast period.

  DOMESTIC POLITICS: The military coup in April has thrown Guinea-Bissau into a political crisis, and instability is set to persist. Although the military has returned to its barracks, it appears intent on seeking to prevent any development that could constitute a threat to its core interests, including army reforms and the return of the ousted prime minister, Carlos Gomes Júnior, who had sought to reform the army with the backing of Angola. The army has threatened to intervene again should Mr Gomes Júnior, who is currently in exile in Portugal, return. The interim authorities' capacity to rein in the army's influence and prevent it from intervening will be restricted by its lack of popular legitimacy and the fact that it owes its position largely to its support from the military. Hence, until credible elections are held, a legitimate civilian administration is installed and civilian control over the military is reinforced, the military's excessive influence over the political scene is likely to hinder effective government. Moreover, efforts to crack down on the illegal narcotics trade and to fight the culture of impunity among the elite, both of which are essential for strengthening political stability, are likely to be undermined by the lack of constitutional order as well as the weak capacity of both the judiciary and the law-enforcement agencies. The transitional arrangement, brokered by the Economic Community of West African States (ECOWAS), reflects the part of the country's political spectrum that opposed the democratically elected pre-coup administration led by the Partido Africano da Independência da Guiné e Cabo Verde (PAIGC) and its leader, Mr Gomes Júnior. Efforts by the PAIGC to push for the formation of a more inclusive transition government have so far failed. In retaliation, the National Assembly, in which the PAIGC still holds a two-thirds majority, has been deadlocked, preventing new legislation and major policies from being enacted. In contrast to ECOWAS, most of the country's international partners-including the Comunidade dos Países de Língua Portuguesa (an organisation of lusophone countries), Portugal, Angola, the EU, the UN, and the African Union-have refused to recognise the transition authorities and have called for the re-establishment of constitutional order. The perceived lack of legitimacy and the weak international backing of the transitional administration, coupled with the parliamentary impasse, will remain major sources of political instability until constitutional order is restored. In addition, worsening food security and rising living costs, compounded by weak government capacity to address such issues, could trigger popular resentment and protests against the regime. Similarly, continued infringements of human rights and political freedoms, including the intimidation of political and civil society activists critical of the transition, will do little to promote national cohesion and political stability. Furthermore, divisions within the military leadership could trigger destabilising power struggles. In the short term, restoring a measure of political stability as well as support from the country's development partners will depend on the holding of credible presidential and legislative elections, which the interim government says will be held in April 2013. However, concerns have been raised over the transitional authorities' commitment to hold the elections within this timeframe, and without the support of donors, financing and organising the elections could prove difficult. Several PAIGC members have indicated their intention to challenge the leadership of the party and should they succeed in sidelining Mr Gomes Júnior during the upcoming party congress (expected in January) and uniting the PAIGC, this could strengthen prospects for timely elections.

  INTERNATIONAL RELATIONS: Relations with traditional development partners have come under serious strain following the military coup and the continued influence of the army leadership over civilian matters. European donors had already suspended aid before the coup, and support from the World Bank and the IMF, which remained actively engaged in the country until the coup, has now been suspended. A return to constitutional rule and the withdrawal of the military from civilian affairs will be crucial for the resumption of aid flows to the government. Moreover, Angola, an increasingly important source of funding, has withdrawn most of its support following the ousting of its ally, Mr Gomes Júnior. Part of the gap in funding is likely to be covered by financing from other sources-in particular, ECOWAS and Nigeria. The influence of ECOWAS, which has long played a leading role in aiding the country, will be boosted by the withdrawal of Angola, and it will be the country's ultimate guarantor of security for the foreseeable. China, which prior to the coup offered generous budget support and credit lines as part of its efforts to expand its influence across the region, might also maintain at least part of its support. The interest of the US-which has been less firm than the EU in its rejection of the interim solution-will remain focused on Guinea-Bissau's position as a hub for international drug-trafficking networks. Senegal is an important regional partner and favours co-operation between the two countries' military forces in order to crush rebel movements in Senegal's Casamance region, which borders northern Guinea-Bissau.

  POLICY TRENDS: The political and economic disruptions following the coup in April have undermined macroeconomic stability and policy implementation, derailing progress on fiscal reforms, and ongoing efforts to restrain inflation and contain the current-account deficit. In the short term the interim government is likely to focus on re-establishing essential economic functions, including the payment of civil servants' salaries and the distribution of seeds, fertilisers and basic foods in order to prevent a food crisis and ensure a decent harvest. However, implementation of longer-term policies as well as larger public investment projects will be hindered by political uncertainty as well as by the current impasse in the Assembly that in effect prevents any new legislation from being adopted. Similarly, efforts to industrialise the agricultural sector, boost pro-poor spending, improve the business climate and attract foreign investments will prove difficult under the current circumstances. Once constitutional order has been re-established, the Fund and other donors will urge the government to resume structural reforms, which are needed to create a more competitive and diversified economy. At the moment, Guinea-Bissau is heavily dependent on just one key export: cashew nut sales generated over 80% of total export receipts in 2011.

  ECONOMIC GROWTH: Guinea-Bissau's economic prospects are heavily dependent on political developments. Disruptions following the coup, including to the distribution of seeds and fertilisers, and delays to the expected boost in infrastructural spending and planned foreign investment in mining will act as a drag on economic growth. Continued low external demand for Guinea-Bissau's main export crop, cashew nuts, risks depressing incomes in the rural sector and could hurt agricultural growth in 2013. Nevertheless, assuming normal weather conditions and an uninterrupted cashew trading season, the economy is expected to rebound from an estimated contraction of 0.5% in 2012 to growth of 2.1% in 2013. As political stability improves and the public investment programme picks up again, growth is expected to quicken to 2.9% in 2014. However, there are downside risks to this forecast, relating to a possible continuation of military interference in civilian affairs and a prolonged mandate for the interim administration as well as widespread instability surrounding next year's elections, which would have a big impact on growth. The sound monetary policies of the regional central bank, Banque Centrale des États de l'Afrique de l'Ouest, and expected moderation in global food and oil prices will be positive factors in helping to control inflation over 2013-14. The rise in inflation in 2012-to an estimated average of 6.4%-largely reflects the impact of elevated world commodity prices coupled with fuel and food shortages following the economic disruptions caused by the military coup. The interim government is likely to relent on the previous administration's promises to increase the pass-through of global prices into domestic prices and this will help contain inflation. The Economist Intelligence Unit expects the average rate of inflation to decline to 4.1% in 2013 and further to 3.2% in 2014 as commodity prices continue to fall and agricultural output rises. This forecast is subject to upside risks: lower than average rainfall could disrupt rice and cereal production and prolonged political instability could disrupt trade, thus triggering higher food prices.

  EXTERNAL ACCOUNT: The CFA franc, which is pegged to the euro at CFAfr655.96:EUR1, will fluctuate against the US dollar in line with the euro:dollar exchange rate (on the assumption that the CFA franc/euro peg is maintained). We expect the dollar to strengthen against the euro over the next two years. As a result, the average exchange rate of the CFA franc will depreciate from an estimated CFAfr515:US$1 in 2012 to CFAfr520:US$1 in 2013 and CFAfr525:US$1 in 2014. On the external front, exports will be dependent on the performance of the cashew sector, which typically generates more than 80% of export revenue. After a sharp drop in output and prices in 2012, official cashew exports are expected to pick up, albeit slowly as external demand remains weak. Although the upturn in exports will outpace growth in imports, the trade and current-account positions in 2013-14 will be weighed down by continued high imports, which, despite falling prices, will remain buoyant as volumes rise and the currency depreciates. Overall, we expect the current-account deficit to narrow from an estimated 17.1% of GDP in 2012 to 16.4% of GDP in 2013 and 16.2% of GDP in 2014. The deficits are expected to be financed by the country's foreign-exchange reserves, credits from the international partners, including ECOWAS, China and Nigeria, as well as by the accumulation of arrears. Although the country's debt levels were significantly reduced after the major donors granted it debt relief in 2010, the high current-account deficits risk leading to a renewed increase in external debt levels and thus undermine longer-term debt sustainability.

  October 10, 2012

View detailed map

Country Briefing

Land area

36,125 sq km

Population

1.58m (2010 IMF estimate)

Main town

Bissau (capital), population 384,960 (2009 census)

Weather in Bissau

Tropical: hottest month, April, 23-33°C; coldest month, January, 19-23°C

Languages

Portuguese, Crioulo, French, Balanta, Fula, Manjaco, Mandinga, Pepel

Measures

Metric system

Currency

CFA franc (CFAfr), the common currency of the Union économique et monétaire ouest-africaine (UEMOA); tied to the euro at a fixed exchange rate of CFAfr655.957:EUR1; the CFA franc replaced the peso in May 1997 at an exchange rate of P65:CFAfr1

Time

GMT

Public holidays

January 1st; January 20th (Heroes' Day); March 8th (Women's Day); May 1st; August 3rd (start of anti-colonial struggle); August 19th; September 24th (Independence Day); October 26th; November 14th; December 25th

July 01, 2012