Document of The World Bank

FOR OFFICIAL USE ONLY

Report No. 59671-GN

INTERNATIONAL DEVELOPMENT ASSOCIATION

INTERNATIONAL FINANCE CORPORATION

AND

MULTILATERAL INVESTMENT GUARANTEE AGENCY

INTERIM STRATEGY NOTE

FOR

THE REPUBLIC OF GUINEA

FOR THE PERIOD FY11-FY12

March 24, 2011

Western Africa Country Cluster Africa Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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REPUBLIC OF GUINEA- FISCAL YEAR

January 1 - December 31

CURRENCY EQUIVALENTS (as of March 1, 2011)

Currency Unit: Guinea Franc (GNF)

1US$ = GNF 7,250

WEIGHTS AND MEASURES

Metric System

ACRONYMS AND ABBREVIATIONS AAA Analytic and Advisory Activities ACE Africa-Europe Submarine Fiberoptics Cable

ADF African Development Fund AFD Agence Française de Développement (French Development Agency) AfDB African Development Bank AU African Union CAS Country Assistance Strategy CDD Community Driven Development

CG Consultative Group

CPIA Country Performance Institutional Assessment CRD Communautés rurales de développement

CSO Civil Society Organization

ECOWAS Economic Community of Western African States

EITI Extractive Industries Transparency Initiative

DB Doing Business Survey

DPs Development Partners

DPO Development Policy Operation DSA Debt Sustainability Analysis

EAPSP Emergency Agricultural Productivity Support Project

ECF Extended Credit Facility EFA FTI CF Education For All Fast Track Initiative Catalytic Fund

EMSP Economic Management Support Project

EU European Union

ESW Economic and Sector Work

EUR Euro GDP Gross Domestic Product GEF Global Environment Facility

GET Global Experts Team

GFDRR Global Facility for Disaster Reduction and Recovery GFRP Global Food Crisis Response Program

HIPC Heavily Indebted Poor Countries

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HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome

HDI Human Development Index ICT Information and Communication Technologies

IDA International Development Association

IDF Institutional Development Fund

IFC International Finance Corporation

IFAD International Fund for Agricultural Development

IMF International Monetary Fund

INT Institutional Integrity Department ISN Interim Strategy Note

JSAN Joint Staff Advisory Note IsDB Islamic Development Bank

KM Kilometers

LICUS Low Income Countries Under Stress

LIPW Labor Intensive Public Works

MDG Millennium Development Goal

MDRI Multilateral Debt Relief Initiative

M&E Monitoring and Evaluation MIGA Multilateral Investment Guaranty Agency

NPV Net Present Value

OECD DAC Development Assistance Committee of the Organization for Economic

Cooperation and Development OMVS Organisation pour la Mise en Valeur du Fleuve Sénégal

PAP Priority Action Plan

PDO Project Development Objectives

PER Public Expenditure Review PIU Project Implementation Unit

PFM Public Financial Management

PPP Public Private Partnership

PRGF Poverty Reduction and Growth Facility

PRSP Poverty Reduction Strategy Paper

PRGSP Poverty Reduction and Growth Strategy Paper RCF Rapid Credit Facility (IMF)

SDR Special Drawing Rights SME Small and Medium Enterprise

SPF State and Peace Building Fund

SSP Services Support Project

TA Technical Assistance

TFSCB Trust Fund for Statistical Capacity Building

TVET Technical and Vocational Education and Training

UDP Urban Development project

UN United Nations

UNDP United Nations Development Program

VCSP Village Community Support Program

WARCIP West Africa Regional Connectivity Project

WBI World Bank Institute WDR World Development Report

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World Bank Vice President: Obiageli K. Ezekwesili

Country Director: Ishac Diwan

Country Manager: Siaka Bakayoko

Country Program Coordinator/TTL: Sergiy Kulyk

MULTILATERAL INVESTMENT GUARANTEE AGENCY

Vice President and Corporate

Secretary:

Jorge Familiar Calderón

Executive Vice President: Izumi Kobayashi

Chief Operations Officer: James Bond

Finance and Risk Management: Thomas Hum, Conor Healy

INTERNATIONAL FINANCE CORPORATION

Vice President: Thierry Tanoh

Country Director: Yolande Duhem

Resident Representative : Mary-Jean Lindile Moyo

Strategy Unit: Frank Douamba

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INTERIM STRATEGY NOTE FOR THE REPUBLIC OF GUINEA FOR FY11-FY12

Table of Contents EXECUTIVE SUMMARY JOINT INTERIM STRATEGY NOTE FOR THE REPUBLIC OF GUINEA FY11-12 ..........7

I. INTRODUCTION ........................................................................................................... 7

II. COUNTRY CONTEXT ................................................................................................... 8

A. POLITICAL DEVELOPMENTS ..................................................................................... 8

B. RECENT ECONOMIC DEVELOPMENTS ..................................................................... 9

C. GOVERNANCE............................................................................................................ 11

D. DELIVERING SERVICES ............................................................................................ 13

E. SOURCES OF GROWTH ............................................................................................. 14

III. IMPLEMENTATION OF THE WORLD BANK COUNTRY REENGAGEMENT .... 16

A. GOVERNMENT STRATEGY ...................................................................................... 16

B. MACROECONOMIC OUTLOOK AND DEBT SUSTAINABILITY ............................ 19

IV. WORLD BANK INTERIM STRATEGY ................................................................... 20

A. HISTORY OF BANK ENGAGEMENT......................................................................... 20

B. LESSONS LEARNED................................................................................................... 21

C. PROPOSED INTERIM STRATEGY ............................................................................. 22

a. Good Economic Governance and Macro Stabilization ........................................................ 26

b. A Big Push on Social Services ........................................................................................... 27

c. Creating Jobs ..................................................................................................................... 29

D. PARTNERSHIP ............................................................................................................ 32

E. RESULT MONITORING .............................................................................................. 34

F. Risks and Mitigation ...................................................................................................... 35

Annex I. Portfolio Restructuring ............................................................................................ 37

Annex II. Results Matrix (1 January 2011 to 30 June 2012) .................................................... 39

Annex III – Guinea-at-a-glance .............................................................................................. 40

Annex IV: Guinea Map IBRD 33414 .................................................................................... 43

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Tables

Table 1: Selected Macroeconomic Indicators, 2008-13 ............................................................... 18

Table 2: Government Priority Action Plan ................................................................................. 19

Table 3: Existing & Proposed Operations and ESW ................................................................... 25

Table 4. Republic of Guinea – Donor Mapping by Sector (2011-2012) ....................................... 34

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JOINT INTERIM STRATEGY NOTE FOR THE REPUBLIC OF GUINEA FY11-12

I. INTRODUCTION

1. Guinea is one of the most well endowed countries in Africa with arable agriculture land,

rivers, and large deposits of bauxite and iron ore – it has been called the water tower of West

Africa, and also a geological “scandal”. Despite this large potential wealth, Guinea ranks among

the least developed countries in sub-Saharan Africa, for e.g. 156/169 countries on the UN Human

Development Index. The last two years, 2009-10 were especially tumultuous with a decline on the

security and economic front brought about by a Coup-d’état in 2009.

2. With strong support from the international community, a first democratic presidential election took place in September 2010, ushering a period of great hope for the

country. The goal of the new Government is to dramatically improve governance in order to bring

the country within a few years onto a rapid development path. The first phase of this program

focuses on addressing institutional and sectoral dysfunctions to prepare the stage for a subsequent

phase of reform and fast growth, and it is articulated around efforts to improve governance,

stabilize the economy, and initiate a recovery plan to deliver early wins in terms of better services

and more jobs.

3. This Interim Strategy Note (ISN) outlines a Bank re-engagement strategy in Guinea for the period FY11-12 that will support the Government‟s plan. The Bank will support

macroeconomic stabilization and help Government to reach the HIPC completion point rapidly by

providing budget support and technical assistance, with a special focus on the areas of public

financial management, public administration, the security sector, and mining. The Bank will

support a major push to boost the delivery of social services and the creation of jobs to help deliver

tangible quick wins to the citizens. We will do this by using the existing portfolio, creating a few

select new projects, and leveraging new sources of finance. The Bank will place emphasis on

strengthening civil society and social accountability mechanisms and on accelerating regional

integration. Significant progress under the ISN is expected to lead to a full Country Assistance

Strategy, at the end of the ISN period.

4. The implementation of the strategy is associated with a number of risks, and while

some can be mitigated, others cannot be affected by actions by the Bank. But these risks are well

worth taking, given the existence of a unique critical moment in Guinea‟s history, brought about

by the confluence of a first ever Government with both national and international legitimacy, and

the coming together of civil society energies in support for democracy and development. It seems

imperative to take advantage of the window of opportunity to organize strong and quick

international support and try to make the current transition irreversible, so as to set the stage for

Guinea to enter a virtuous growth cycle in the future. Inaction or slow response on the other hand

carries the risk of a back-slide into a chaotic trap of poverty and insecurity, which would also

seriously destabilize the sub-region.

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5. The Bank’s strategy for Guinea is inspired by the important innovations developed by the recent World Development Report 20111 and the new Africa Strategy2

. Following the

WDR recommendations, the ISN takes the risk of inaction as a starting point and focuses on

building up state society relations, reforming the security sector, and anti-corruption initiatives by

providing immediate assistance to secure quick wins while initiating in parallel institutional

reforms to build confidence in the medium term. The Africa Strategy has shaped the ISN in two

important dimensions. First, by suggesting a focus not just on finance, but importantly, on the

provision of knowledge and partnerships, especially involving civil society and regional actors;

and second, in the selective selection of job creation and service delivery as central to rebuilding

citizens confidence.

II. COUNTRY CONTEXT

A. POLITICAL DEVELOPMENTS

6. After years of military dictatorship and instability, and a disastrous transition under military rule during 2009-10, Guinea’s first democratically elected president assumed power in December 2010. Since it attained independence from France in 1958, Guinea has lived under a

succession of autocratic regimes. Under Sékou Touré, in power from 1958 until his death in 1984,

Guinea turned to central planning of the economy, resulting in disastrous development outcomes.

Political freedoms were also severely curtailed. Upon Sékou Touré‟s death, control was seized by

the military in a coup led by Lansana Conté, who remained in power until his death in December

2008. Although the economy was liberalized during the earlier part of Conté‟s regime, political

freedoms remained limited and the country‟s development was constrained by decaying

governance and occasional military unrest. During the past decade, Guinea became an important

transit point for the drug trade, leading to increased corruption in government and within the

security forces. Social unrest threatened the stability of the regime when the country was hit in

2007 by a wave of general strikes generated by an increasingly mobilized civil society, led by the

trade unions, demanding an end to mismanagement and impunity.

7. The elections come on the heels of several failed attempts to reform the state. A

reform Government led by Prime Minister Kouyaté was appointed in February 2007 in response to

social unrest. He initiated a period of reforms, but this was short lived and he was dismissed in

May 2008. In December 2008, President Conté died following a long illness, and a military junta,

led by Captain Moussa Dadis Camara, seized power. Early in his rule, President Camara initiated

a robust anti-corruption drive, but when it became clear that he would be seeking the Presidency,

civil society groups got mobilized again. The protest movements grew, culminating in a mass

opposition rally in Conakry on September 28, 2009, which was violently attacked by security

forces, leading to dozens of deaths and injuries. Shortly after, Captain Camara was shot by one of

his associates, evacuated from Guinea, and replaced as the head of the junta by General Sékouba

Konaté. General Konaté presided over the transition to civilian rule and, with heavy support from

ECOWAS, the AU, and the international community, organized presidential elections, which were

1 WORLD DEVELOPMENT REPORT 2011, Conflict, Security, and Development The World Bank, Washington D.C.,

January 2011. 2 Africa Regional Strategy, The World Bank, Washington D.C., March 2011

9

held in June and November 2010. These elections were recognized as generally free and fair by

the international community, and are expected to be followed by legislative elections during 2011.

Prof. Alpha Condé, a lifetime opponent of the previous régime, was elected and assumed power in

December 2010. Cellou Dalein Diallo, his opponent, accepted defeat, and by so doing, ensured a

peaceful transfer of power after a divisive election.

8. Citizen power is at the heart of the ongoing historical transformation happening in Guinea. The country has been led by autocratic rule for over five decades in the context of a

complex pattern of social and ethnic allegiance. Under Sékou Touré and Lansana Conté, the

Guinean State did not function in the public interest, but instead became a source of patronage and

private gain. The key stakeholders who benefited from this state of affairs were the President‟s

clan, as well as the top echelons of the armed forces. They resisted reforms throughout the past

decade, until popular pressure, led by the trade unions and civil society organizations managed to

force the appointment of a „reform Government‟ under Prime Minister Kouyaté in 2007, and again

in 2010, to force the holding of the first ever competitive election for the Presidency. The existing

window is thus largely a result of the resilience and cohesion of Guinean society which has

allowed the country to avoid the social breakdown and civil wars seen elsewhere in the region, in

spite of enormous tensions, and which has generated a powerful and ultimately successful

mobilization for change. The success of the movement was facilitated by divisions within the

military and the weakening of the traditional elites. In the future, the movement for change is

counting on its ability to push for both a political stabilization and a better management of the

country‟s natural resources, to get the country on a fast track to growth and development.

9. The main challenge for the new Government will be to use the window of opportunity created by the presidential elections in order to transform the nature of the State, from a

purveyor of private benefits to be shared between social and ethnic groups, to an organization

working for the benefit of the nation as a whole. To achieve this transition, the new Government

has to capitalize on its recent successes and find ways to initiate the governance reform agenda

rapidly. Both the Africa Strategy and the WDR2011 emphasize the importance of early wins to

demonstrate the potential for success and restore confidence in the potential of collective action.

The Government‟s hand is strengthened by the discredit of the notion that the military can govern

the state effectively, following the events of 2009 and the intervention of the International

Criminal Court, as well as the financial mismanagement during their rule. The recent political

gains need to be consolidated with rapid progress on the reform of the security forces to reduce

insecurity as well as the connected fiscal drain. The new Government benefits so far from the

support of a relatively wide social coalition, but this support is conditional on the holding of

Parliamentary elections in the near future, and the initiation of a national reconciliation process,

which are necessary conditions to reduce the tensions brought about by a very competitive

Presidential election. To prevent nepotism and guard against accusations of favoritism, deliberate

efforts at greater transparency and communication will be necessary, including on the causes of

past failures.

B. RECENT ECONOMIC DEVELOPMENTS

10. On the economic front too, the new authorities have a difficult inheritance to contend with, in the form of a massively mismanaged and unbalanced economy, rampant poverty and

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social tensions, large accumulated debts and arrears, low growth, and an ineffective public service.

At the same time, the population expects a democracy dividend after years of impoverishment and

stagnation. Finding solutions will require a tight balancing act.

11. Since 2008, economic growth strongly decelerated, to become negative in per capita terms. Cumulatively, GDP per capita declined by 4.6 percent between 2008 and 2010. While

agriculture continued to grow modestly, the mining sector - historically a major driver of growth

contracted in real terms by 6 percent between 2008 and 2010 in spite of rising world commodity

prices. The regulatory business environment worsened with the cancellations of contracts in the

mining sector, changes of license terms and conditions in the telecommunications sector, on the

one hand and political uncertainty in the context of deteriorated security situation on the other. In

contrast, the construction sector benefited from the large fiscal expansion recorded in 2009-10.

12. The Strategy for Africa identifies macroeconomic shocks as the main vulnerability and threat to sustained resilience of the African countries. During the ISN period macroeconomic stabilization will remain a central challenge for the new government. The

overall fiscal deficit deteriorated sharply both in 2009 and in 2010. From 1.3 percent of GDP in

2008, the fiscal deficit grew to 7.2 percent of GDP in 2009 and 14.2 percent in 2010. The fiscal

deterioration stemmed mostly from increased military spending as well as a surge in the civil

service wage bill (increased hiring and substantial pay rises). The resulting fiscal deficit was

mostly financed by advances from the Central Bank and by running up external arrears, vis-à-vis

IDA notably. As a result, broad money doubled during this period, and by 2010, inflation had shot

up to 20.8 percent, the Guinean Franc had depreciated by 12 percent against the Euro, and foreign

currency reserves had fallen to 0.5 months of imports.

13. Poverty has increased, from a high base, as a result of macro instability and low growth. The last household survey

3 undertaken in 2007 suggested that 53 percent of the

population was living below the poverty line, up from 49 percent in 2002. The proportion of the

rural population living below the poverty line was 63 percent, against 31 percent for the urban

population. Using the household 2007 survey and an estimated cumulative decline in average per

capita private consumption of 6.4 percent the poverty rate would have reached 58 percent in 2010.

Moreover, the poor are highly vulnerable to shocks. The consumption of essential food items

(rice, maize, oil, fish, meat and vegetables) in total consumption is high (at about 45 percent)

across all income levels. As such, increases in the relative price of essential food commodities –

the result of global food prices increases, would significantly affect poor and near poor, as

observed in 2008. In contrast, the consumption of petroleum products (for lightning and transport)

is strongly differentiated between poor (2.5 percent of their total consumption) and non poor (5.7

percent of their total consumption). Guinea social safety net system is however very limited in

scope, coverage and effectiveness. The country has largely relied on informal solidarity, which

tends to work less well in periods of generalized shocks. Formal social safety net interventions are

small and driven by donors, and they include works program and school feeding programs.

14. Guinea’s fiscal distress will continue until the country reaches the Completion Point under the Enhanced HIPC Initiative and benefits from the Multilateral Debt Reduction Initiative (MDRI). The stock of debt including arrears is equivalent to 71 percent of GDP at end-

3 Institut National de la Statistique, Enquête Légère pour l‘ Evaluation de la Pauvreté, 2007-08

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2010, and 300 percent of exports. Of the debt service due in 2010, about US$145 million or 21

percent of Government revenue, about US$24 million were paid, the remainder giving rise to

arrears. Guinea reached the decision point under the Enhanced HIPC Initiative in December 2000,

but did not manage yet to reach the completion point. In the meanwhile, interim debt relief has

been provided by all main creditors including the IMF and IDA, and Guinea obtained several debt

rescheduling from its Paris Club creditors. HIPC‟s interim debt relief was suspended in 2007,

when Guinea reached the 50 percent ceiling of committed HIPC assistance. Since 2008, it has

accumulated arrears to the World Bank, which stood at US$75million, as of April 15, 2011.

Arrears to Paris Club partners at about US$37 million. Guinea did not run arrears with the IMF or

AfDB. By clearing its arrears to the World Bank and settling of all the project accounts, Guinea

would remove all the barriers for the full reengagement with the Bank.

C. GOVERNANCE

15. The foundation of the new Africa Strategy is the work on poor governance and weak institutional capacity of the client countries. These will be at the heart of the development challenge in Guinea as well. Years of institutional neglect, authoritarian rule, predatory behavior

on the part of senior government officials and civil servants alike, ethnic tensions and armed

conflicts have clearly affected the governance situation in Guinea. The Ibrahim Index on African

Governance4 ranks Guinea 45

th out of 53 African countries, reflecting a judicial system that has

been weakened by political interference and corruption, and lacks independence from the

executive. Transparency International reports that Guinea, over the past several years, ranked at

the bottom of the scale in terms of perceptions of corruption -- in 2010, it was ranked 164 out of

178 countries5. These are related dimensions of a challenged authoritarian state with an oversized

military, the pernicious effects of the drug trade and the loss of financial controls , opaqueness of

the mining deals, especially during the junta in 2009-10, when governance effectiveness, which

had deteriorated over time, took a large dip.

16. A central component of this state of affairs is the weakness of the state. The decaying

public administration has lost many of its core skills. After years of under-investment and

institutional neglect, the public administration requires significant attention in order to become an

effective agent for the country‟s rebirth. Much of the best talent, especially at the higher echelons

has left the civil service as the economic situation eroded the financial benefits associated with

public service. In the past few years, the exodus accelerated and the government was purged of its

best talent as political cronyism overtook meritocratic considerations in terms of appointments and

promotion. The civil service establishment has also been neglected. Serious inconsistencies

between the payroll and personnel data plague the public service pointing to the existence of large

abuse and irregularities in the payroll. Some of the problems leading to this situation include the

existence of multiple management centers; uncoordinated reform efforts amongst the various

actors involved in the management of human resources; a planning function which exists

structurally but is not used or implemented; management procedures (recruitment, training,

integration) which are not followed; and information applications which are obsolete and

dysfunctional.

4 The Ibrahim Index, The Mo Ibrahim Foundation, 2010

5 Corruption Perceptions Index, Transparency International, 2010

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17. Guinea’s public financial management was poorly performing prior to December 2008, but aggregate fiscal discipline was broadly maintained. A PEFA assessment finalized in

July 2007 showed that, overall, the performance of Guinea‟s public financial management system

placed it in the bottom league of African countries6. Despite obvious and pervasive weaknesses in

the Guinean public financial management system, aggregate fiscal discipline was broadly

maintained: expenditure outturns remained in line with the approved budget up to 2007, and the

treasury kept a reasonable degree of oversight over cash flows. Since December 2008 however,

aggregate budget discipline has collapsed. Despite flat domestic revenues and a drop in external

funding, total government expenditures nearly doubled between 2008 and 2010. The predominant

cause of the collapse of budget discipline was that, following the military coup, the executive set

aside regular controls over budget commitments in order to enter into hundreds of mostly single -

source multi-year contracts. An audit undertaken with Bank support indicates that the contracts

signed in 2008 and 2009 were worth about US$2.2 billion. About 45 per cent of these benefited the

defense sector, for example for the construction of military barracks in cities and the purchase of

military equipment and vehicles. The remainder pertained to sectors such as road construction and

vehicle purchases.

18. The security sector is central to the current crisis in Guinea and its transformation will be critical in supporting legitimate and democratic rule. For decades, the military have

used their power and influence to control a disproportionate amount of the country‟s financial,

material and natural resources. From 2000 to 2010, the number of military personnel grew from

10,000 to over 45,000 and security expenditures represented 40 percent of the national budget in

2010. Although the army had entrenched its position since 2008, its leaders agreed to leave

political power with the understanding that security sector reform (SSR) as required by the

Ouagadougou Accord (January 15, 2010) will result in an improvement of its conditions. An

international team of experts conducted an evaluation of the state of the security forces and

submitted a wide range of recommendations on SSR in May 2010. The challenge ahead is to

bridge the gap between the Government‟s desire to adapt the size and role of the security forces to

the actual needs of the country, and the military which sees SSR as an opportunity to improve their

employment conditions. As a first step, the Government, with the support of ECOWAS and the

UN, will hold a seminar to establish a common approach to SSR in early April 2011.

19. The bright spot in this picture, as alluded to earlier, is the awakening of civil society ,

which has played a central role in contesting the authoritarian model, in leading to the decision by

the military to withdraw from the electoral competition, and in ensuring that despite a high level of

ethnic tensions, the elections were conducted in an atmosphere of relative calm . The role of civil

society will be crucial in ensuring that Guinea is able to move forward in many of the important

agendas of the future, including national reconciliation, security sector reforms, the shaping of

national debates on reforms and development, and their participation in social accountability

mechanisms at all levels and in all sectors to eradicate corruption and establish good governance.

20. Increased regional integration can greatly facilitate improvements in governance as well as the reaping of gains from scope. Guinea had played a positive role in the past in the

6 Matt Andrews, How Far Have Public Financial Management Reforms Come in Africa? Harvard Kennedy School

Faculty Research Working paper 10-018, May 2010, p. 23.

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ending of the civil wars in Liberia and Sierra Leone. ECOWAS and the neighboring countries of

Burkina Faso, Senegal, and Mali have played an important role in the process of democratization.

The Mano River Union has been less influential so far, with the exception of its civil society youth

arm which has been very vocal in the opposition to authoritarian rule in Guinea. Liberia, Sierra

Leone and Guinea are immediately affected when the security of one of them is threatened due to

long and porous borders, and also to the existence of ethnic groups divided by borders. A recent

example of cooperation involved Government and civil society groups in the three countries

developing a common approach to mining in order to present a more unified front in the face of

powerful mining corporations7. Economies of scope exist in the area of infrastructure (energy grid,

transport, ICT). Moreover, the small size of local markets taxes the competitiveness of local firms

and unduly favor imports8.

D. DELIVERING SERVICES

21. As a result of the budget crunch, under-paid civil servants, and faltering decentralization, the delivery of basic services has suffered.

22. Heath services are in a serious state of decay. Government spending on health

(excluding external assistance) is dismally low, having decreased from less than 1 percent of GDP

in 1993 to 0.2 percent in 2010. Chronic malnutrition in 2007 was 36 percent up from the previous

survey in 2002. Less than 16 percent of the population consulted health care workers even though

56 percent had access to services according to the same survey. Malaria remains the leading cause

of morbidity and mortality among children. The infant mortality rate is 101 per 1,000 (2004) and

the maternal mortality rate is one the highest in Africa at 740 per 100,000. Among those accessing

services, only slightly over half expressed satisfaction. The HIV prevalence rate is low relative for

the region, estimated at 1.6 percent. The government is pursuing a policy of free access to anti-

retroviral drugs but so far, public resources were not in place to finance this policy.

23. The recent crisis also had negative effects on education. The gross enrolment rate has

stagnated at around 79 percent since 2007 (86 percent was expected in 2010), and for girls, at

around 70 percent. In the rural areas, the rate has remained at around 60 percent over the same

period. Dropout rate however shot up from 5.9 percent in 2007 to 11.6 percent in 2010, and as a

result, the primary completion rate fell to 57 percent in 2010. Enrolment in secondary schools has

also remained flat at about 44 and 25 percent GER respectively for secondary 1 and 2 since 2007.

The TVET including post-primary cycle is very weak: in 2008, the overall enrolment in this sub-

sector was less than 6,000 students. Sector inefficiencies seem to have risen, especially in

expenditure management and planning with more than 90 percent of primary and secondary

education recurrent expenditures now spent on salaries. It is widely suspected that public

employment, especially in education, is rife with ghost workers and double dippers.

7 See West Africa Mineral Sector Strategic Assessment (WAMSSA), World Bank, 2010.

8 See Gains From Cooperation in the Mano River Union, World Bank, 2010.

14

24. Local initiatives have been trying to restore the gap left behind by the failure of central government but they have been limited by resource and capacity constraints. In

response to pressures from civil society and regions, past governments had undertaken important

reforms by passing on important functions, especially in the areas of social services, to local

governments. Political decentralization had progressed after the adoption of a new Electoral Code

in August 2005, and the holding of local government elections in December 2005. As a result, a

cadre of elected representatives became empowered to manage local affairs, and is poised to act as

champion for improved service delivery over the coming years. While this process so far has

promoted the development of local accountability and an increased presence of civil society at the

local level, it has however, been thwarted by the lack of devolution of financial and human

resources to the lower levels of government. The advent of democratic rule and the appearance of

regional specificities that need to be recognized point to the need to further this process.

25. While some progress can be seen, Guinea is unlikely reach the MDG targets on gender. The ratio of girls to boys in primary schools have improved from 0.76 in 2005 to about

0.92 in 2010 while the ratio in secondary schools has improved from 0.45 to about 0.59. The ratio

at the university level is about 0.30. The proportion of women in salaried formal sector positions

outside of agriculture remains low at 0.30 with the situation in the civil service being even worse at

0.26. Even in the education sector which is usually a major point of entry for women into the

formal sector, the ratio of women teachers in primary schools is only 0.35 while in secondary this

falls to a dismal 0.06. About 42 percent of women headed households are food insecure whereas

that percentage is 30 percent for male headed households. This is partly related to problems with

access to land. Special gender sensitive food security measures are needed especially in the current

situation of rising food prices. The general situation is reflected in the political and administrative

institutions with less than 20 percent of the members of the last parliament being women. Overall

only 17 percent of decision making positions in the administration are held by women with this

level falling to 4 percent for Secretary-Generals.

E. SOURCES OF GROWTH

26. Guinea’s political and macroeconomic instability have long hobbled the development of a vibrant private sector. The new Government is contending with one of the toughest climates

for business in the world: huge deficits exist in both the quantity and quality of economic and

administrative infrastructure; the legal enabling environment for business is one of the weakest

anywhere (Guinea ranks 179th in the 2011 Doing Business Report); access to finance is severely

constrained; and a history of poor governance, erratic policy, and inconsistent regulatory

enforcement have seriously undermined investor confidence in Guinea‟s institutions. Whether it is

in agriculture, mining, or services, Guinea is operating way below its potential and important

investments in both institutions and infrastructure will be needed to catch up.

27. Agriculture is widely recognized to have considerable growth potential given Guinea’s very favorable agro-ecological endowments. With about 70 percent of Guinea‟s population

living in rural areas, including 88 percent of the poor and 90 percent of the extreme poor,

increasing agricultural productivity is critical for providing jobs and higher incomes. To some

extent this is evidenced by the sector‟s growth performance over the period 1991-2004 which was

respectable in the regional context, reaching an average annual growth rate of 4.3 percent. Indeed,

15

Guinea ranked among the top 5 performing countries for the primary sector within a group of 15

best performing African countries9, although it should be noted that most of this growth occurred

in the 1990‟s. However, while agricultural potential is high, productivity remains low. Most land

use is for subsistence farming on small family farms (1-3 ha), which lack the technology and

capital to pursue intensive crop production. Increased production is primarily driven by area

expansion and often been at the expense of the environment, with erosion of mountain slopes due

to clearing for rain-fed rice. The dominance of subsistence production and the lack of market

linkages have so far limited the value-adding potential of the sector.

28. In the past two years Guinea has participated in the ECOWAS –led Comprehensive Africa Agriculture Development Program (CAADP) process. Building on the Government‟s

National Agricultural Development Policy – Vision 2015 document, and with analytical support

from the International Food Policy Research Institute, a series of briefs and strategy papers were

prepared, leading to a draft National Agricultural Investment Plan (NAIP) in September 2010. The

NAIP identifies five priority investment programs: (i) sustainable development of the rice sub-

sector; (ii) diversification for food security; (iii) promotion of agricultural exports and agro -

business; (iv) integrated natural resource management; and (v) institutional capacity building. It is

currently being revised to better define the priorities, sequencing of actions and costing for each of

the investment programs. The revision process is an opportunity for the government to engage

with its development partners (DPs) over the issues and arrive at a medium and long program that

will allow Guinea to achieve a 6 percent growth rate in the sector and attain the MDGs. In terms

of immediate actions, the government has developed a priority action program with a focus on

food security issues. It has proposed a round table to discuss this program with DPs in early April.

29. Guinea is also richly endowed in mineral resources. It has the world‟s largest reserves

of bauxite, as well as significant deposits of iron, gold, and diamonds, and good potential for oil

reserves in the Gulf of Guinea. In the past, poor governance and instability prevented the country

from leveraging these assets to stimulate growth. Still, the sector accounts for more than 90 percent

of exports, but only 20 percent of GDP and 25 percent of government revenues. Mining is capital

intensive and as a result, does not create a lot of jobs – it is estimated that the sector only employs

about 10,000 people. Planned multibillion dollar iron ore and alumina projects by some of the

world top corporations did not materialize over the past several years, despite favorable

commodity prices. In 2008, the Extractive Industries (EI) value chain work (EITI++) initiated by

the Bank identified the main constraints, which are governance related and include the lack of due

process and legal compliance, and low capacity to manage the sector. Reforms of the mining code

were started. During the military rule several large contracts were signed, some with obscure

corporations, but the secrecy surrounding these transactions has made it difficult to advise the

Government on how to make them developmentally sound. Going forward, the new Government

intends to finalize a reformed mining code, review and possibly revise existing mining contracts,

and develop a mining policy that would make the sector an engine for development.

30. Both agriculture and mining are constrained by a lack of infrastructure. Road

infrastructure is poor and unevenly distributed, contributing to slow growth in most areas. Due to

the poor network of rural/feeder roads, large parts of rural areas are not adequately linked to

9 The 15 countries are Benin, Botswana, Burkina Faso, Cape Verde, Equatorial Guinea, Ghana, Lesotho, Mali, Mauritania,

Mauritius, Mozambique, Seychelles, Sudan, Tanzania, and Uganda.

16

markets, which hinder producers from fully exploiting the opportunities offered by urban demand

and export possibilities. Rural communities are confronted with great hardships in accessing basic

social services, mainly due to their physical isolation during rainy seasons when roads become not

passable for days. Despite Government‟s efforts and donors commitments, effective road

management has been stymied by the lack of an overall network development and management

plan, and inadequate and irregular maintenance funding. A Road Maintenance Fund has been

established to collect user-fees for maintenance, but its annual budget is insufficient. This situation

has caused a considerable maintenance backlog and a continuous devaluation of the roads asset

value. Mobility in Conakry is a key challenge due to a combination of urban population growth,

lack of maintenance, poor traffic management, and an aging transport fleet.

31. Overall electrification is estimated at only at 17 percent, with rural electrification at mere 3 percent. The urban electricity sector is in a dire situation. Supply only covers about 40

percent of total demand, which leads to large scale load shedding. Generation, transmission and

distribution infrastructure is dilapidated due to lack of investment and maintenance. Technical

losses and fraud are high with total energy losses estimated at 47 percent, and the recovery of

billed energy is below 70 percent for private consumers. As a result, the utility only gets only paid

for about 1/3 of generated energy. Given that in addition, tariffs have been below average cost, the

state utility has been operating with a financial loss for many years, restricting its ability to raise

funds for rehabilitation.

32. Despite significant growth in mobile penetration, the telecom sector faces numerous challenges. Guinea is one of a handful of countries in the ECOWAS region which is not

connected to global broadband fiber optics infrastructure and relies on expensive satellite for

international connectivity. Broadband services are still very limited and expensive, with cost of

bandwidth between US$4,000-5,000 for 1 Mbit (compared with about, US$200 in the US, and

approximately US$400 in East Africa) resulting in high connectivity costs in general, and high

prices for international calls. A new regulatory authority (ARPT) was created in 2008 to regulate

the sector. The Authority is still in the establishment phase with significant needs for capacity

strengthening to play its role of ensuring fair completion in the market.

III. IMPLEMENTATION OF THE WORLD BANK COUNTRY REENGAGEMENT

A. GOVERNMENT STRATEGY

33. Medium and long term prospects for Guinea’s growth and poverty reduction are bright. President Condé was elected on a platform of radical break with the practices of the

former military regime. The vision of the new Government is to transform Guinea‟s political and

economic governance in order to start reaping and sharing the benefits of its very rich agricultural

and geological endowment. The intent is to part with old habits in the area of economic and social

governance and create opportunities to rise above the dismal record of the past.

34. The general aim of the immediate period is to reestablish a competent, transparent government in order to be able to make progress in the future. Given the very difficult social

and economic situation that was inherited from the past, the goal of the new administration, in its

first two years, is to consolidate the new democratic order, stabilize the economic and security

17

situation, and lift up the economy onto a positive growth path. The main goals of this first phase

are: (i) Good governance: Parliamentary and local level elections; zero tolerance for corruption;

national reconciliation; and a big push to modernize the army; (ii) macro-economic stabilization,

including reducing fiscal deficits to sustainable levels, in ways that protect the poor, while

increasing revenues by increasing the tax base and renegotiating mining contracts; and a rapid

attainment of the HIPC completion point; and (iii) the implementation of an emergency recovery

plan with emphasis on agriculture, the rehabilitation of infrastructure, and the social services.

35. The Government’s plan is outlined in the 2011-2012 Poverty Reduction Strategy Paper, an extension to the 2007-10 PRS, whose preparation has involved consultations with

stakeholders and members of the Development Community in Guinea. The strategy articulates

government‟s actions necessary for recovery from crisis to laying the foundations sustained growth

and development. The PRS is complemented by a recently released detailed Priority Action Plan

(PAP), which defines in detail the reforms actions to be initiated in the next two years (see Table 2

for an outline). The PRS and PAP are organized around five priority areas (good governance,

poverty reduction, infrastructure, economic growth, and security). The PAP will also launch the

process of the preparation of the Guinea Vision 2035 and the next PRS.

36. The good governance pillar puts emphasis on the consolidation of peace and democracy, including initiating a process of national reconciliation, a reform and strengthening of

the electoral commission, a tightening of the rules for budget execution, procurement, and

financial management and the rehabilitation of public administration. It also proposes steps to

strengthen the decentralization system and to start the process of reforming justice.

37. The government’s plans to fight poverty and improve living condition are articulated in

the PRS, and the PAP identifies priority actions to make a big push on job creation, especially in

agriculture and labor intensive rehabilitation of infrastructure, and support the most vulnerable

groups. The PAP also outlines short-term measures to substantially improve access to education

and health services and improve their quality. Other emergency actions seek to stabilize food

prices.

38. The third pillar focuses on the rehabilitation of infrastructure and of basic service delivery including water and electricity. There is an emphasis on delivering power on an urgent

basis in the main towns. The creation of the anti-corruption brigade and an inter-ministerial

committee for management and monitoring highlights the concern for good governance. Some of

the projects to be undertaken include the purchase and installation of new power grids in 22 rural

communities. Suspended road projects connecting agricultural centers will be reactivated and road

networks in Conakry will be improved. Unauthorized check points will be eliminated.

39. To revitalize economic activity and growth, the government is stressing the improvement

of the investment climate, a big push on agriculture, and a reform of the mining sector. Policies are

outlined to attract investment (local and foreign) in mining and agriculture, with a particular focus

on micro and small-to-medium enterprises. The PAP proposes initiatives to improve the

investment climate, strengthen financial and non-financial support to the private sector, promote

entrepreneurship, and facilitate the integration and access of the Guinean private sector to regional

markets. Early priorities will be to revise the policy and legal framework for private sector

18

Table 1: Selected Macroeconomic Indicators, 2008-13

2008 2009 2010 2011 2012 2013

Annual changes (%)

Real GDP growth 4.9 -0.3 1.9 4.0 4.5 5.0

Real GDP per capita growth 1.7 -3.4 -1.2 0.6 1.2 1.7

Inflation, end of period 13.5 7.9 20.8 17.1 12.0 10.0

Broad Money (M2) 39.0 25.9 74.4 13.5 13.0 12.0

% of GDP

Revenue 15.6 16.2 15.6 16.6 16.8 17.0

Grants 0.5 0.4 0.4 5.2 4.3 4.0

Wage and salaries 4.1 5.0 5.8 6.2 6.2 6.2

Goods and services 4.8 6.2 9.5 4.4 4.2 4.0

Transfers 1.9 3.3 3.5 3.4 3.4 3.4

Due interest on domestic debt 1.3 1.5 1.3 0.9 1.0 1.0

Due interest on foreign debt 1.3 0.6 0.7 0.9 0.4 0.3

Domestically financed capital expenditure 1.9 5.8 8.2 3.5 3.0 3.5

Foreign financed expenditure 2.1 1.3 1.0 3.4 6.0 5.6

Basic fiscal balance 1.6 -5.6 -12.8 -2.0 -1.0 -0.9

Overall fiscal balance (commitment) -1.3 -7.1 -14.2 -1.1 -3.1 -2.8

Drawings 1.6 0.9 0.7 1.7 3.0 2.8

Due amortization on external debt -3.1 -2.0 -2.3 -3.6 -1.2 -0.2

Net external arrears accumulation 0.8 0.9 1.3 0.0 -6.1 0.0

Debt relief and rescheduling 1.2 0.0 0.6 0.4 6.1 0.0

Errors and omissions -0.3 -0.3 -0.3 0.0 0.0 0.0

Domestic financing (net) 1.1 7.6 14.2 2.6 1.4 0.2

Millions of US$

Gross Domestic Product 4,520 4,562 4,267 4,658 4,965 5,317

BOP Current account deficit 339 493 566 415 359 375

Gross Foreign Currency Reserves 68 73 87 203 317 463 Source: World Bank Staff Calculations based on Authorities and IMF.

40. development (e.g. an overhauled investment code), as well as to modernize the institutional

framework for the private sector (e.g. Chamber of Commerce and Industry; private sector

associations; investment promotion agency; one-stop shop for enterprise formalities etc.) and

financial sector support mechanisms. Other actions outlined in the PAP include a reform of the

mining code, improved public-private dialogue, and measures to attract large investments in

agriculture and linking them with smallholders using out-growers schemes.

19

41. The plans aim to start implementing the recommendations of a UN mission to reform the security sector. An Inter-ministerial committee would be created to design the overall

security sector reform strategy and identify implementation structures. The national defense

strategy will be updated to reflect current security challenges, including preventing military

involvement in civilian affairs, rightsizing the security forces, and upgrading their capacity to

support construction and agriculture in inaccessible areas. Barracks will also be upgraded to house

military personnel. Overall, the PAP follows as measured approach to the thorny question of

reform of the army and stresses the need for consultations and dialogue on the reform of the army.

Table 2: Government Priority Action Plan Pillar 1: GOOD GOVERNANCE Objective 1: Improve Political Governance

1.1: Restored state authority and revived local

development process

1.2 Reinforced socio-political dialogue in preparation of

elections

1.3 Revamped public administration

1.4 Diplomatic Relations oriented towards development

Objective 2: Improve Economic Governance

2.1 Revived planning processes and improved

government transparency

2.2 Stabilized exchange rate

2.3 Reinforced control of public management and

significantly reduced corruption

Objective 3: Improve Judicial Governance

3.1 Established Judicial Sector Reform

Pillar 2: FIGHT AGAINST POVERTY Objective 4: Reinforcing Food Security

4.1 Accessibility of Foodstuffs and primary products

4.2 Reinforced support for gender activities

Objective 5: Improve accessing basic social services by

the poor

5.1 Improved reproductive health and access to health

care

5.2 Improved quality of education

Object 6: Improving Sanitation

6.1 Secured and Stabilized Working Environment

Objective 7: Promoting Youth Employment

7.1 Created Youth Employment Framework

7.2 Strengthened Youth Sport

Pillar 3: INFRASTRUCTURE DEVELOPMENT Objective 8: Improving Access to Water & Electricity

8.1 Institutional Reform and fraud is reduced

8.2 Strengthened capacity in the electricity distribution

sectors

8.3 Strengthened potable water production and supply

Objective 9: Improving Transport and

Telecommunications Infrastructure

9.1 Improved transport infrastructure

9.2 Improved public transport

Pillar 4: ECONOMIC GROWTH & DEVELOPMENT Objective 10: Promoting Mining Sector Development

10.1 Improved agriculture production

10.2 Improved Institutional and Legal Framework of the

Mining Sector

Objective 11: Upgrading the Market Mechanism

11.1 Launched private sector reform

Pillar 5: SECURITY AND DEFENSE Objective 12: Reform of the Security Sector Initiated

12.1 Established Legal and Institutional Reform

Framework

12.2 Improved Civilian-Military Relations

Objective 13: Guaranteeing the Security of People and

Property

13.1 Reinforced living and working conditions of the

security forces

B. MACROECONOMIC OUTLOOK AND DEBT SUSTAINABILITY

42. Due to the difficult inheritance from the past, the first year of the new Government will be challenging. The authorities intend to move rapidly to restore macroeconomic stability in

2011 through fiscal consolidation in order to lower inflation and reach the HPIC completion point

rapidly. Measures retained by the authorities include in particular the re-instatement of the

Treasury Committee (chaired by the Prime Minister) for effective cash management, measures to

20

improve fiscal revenue, aggressive controls against fraud and corruption, a net hiring freeze in the

public sector, and the audit, cancellation, and/or postponement of most investment contracts signed

under the military junta regime in 2009-10. Under this budget, the overall deficit is expected to

reach 3 percent of GDP in 2011.

43. The economic recovery is expected to initially remain modest. With compressed public

demand, a mining sector at full capacity, a poor and uncertain business environment, and a

looming deterioration in the terms of trade, economic growth is projected at 4 percent in 2011 (or 1

percent in per capita terms). The Government, with the assistance of Development partners,

intends to promote interventions and broad reforms aimed at improving the supply response from

the private sector.

44. Inflation will continue in 2011 to exert strong pressure on households’ purchasing power. Despite fiscal stabilization, inflation is expected to remain high in 2011 (peaking at 25

percent by mid-year before starting to decline), given the high level of liquidity, the lack of

sufficient foreign currency reserves to intervene on the foreign exchange market, looming terms of

trade pressures and the need to remove inefficient and costly subsidies for the budget. High

inflation will hurt the poor. Against these pressures, the Government intends with the assistance of

Development Partners to scale up safety nets, especially in cities where inflation pressures will be

mostly felt.

45. Substantial external financing in 2011 will be critical to a successful macroeconomic stabilization and pave the way for meeting the HPIC completion point. Given identified

financing needs to cover current debt service and arrears clearance to multilaterals, substantial

financial support will be critical to limit resort to central bank financing and rebuild foreign

currency reserves, providing sufficient buffer against potential external shocks and the resumption

of arrears. Under favorable circumstances, the HPIC completion point could be achieved

sometime in 2012. Along with meeting structural HPIC triggers, most of which have already been

met, a satisfactory track record on macroeconomic management, especially containing the fiscal

deficit, would facilitate the early attainment of the completion point. This would in turn reduce the

debt service and allow reducing fiscal pressures in the future.

IV. WORLD BANK INTERIM STRATEGY

A. HISTORY OF BANK ENGAGEMENT

46. The World Bank ceased its engagement in Guinea after the military coup of December 2008. Subsequently, a formal suspension of disbursements was declared in November

2009, when the country fell into arrears. The Bank has been operating under the auspices of

OP/BP 7.30, Dealings with De Facto Governments until January 2011. Prior to disengaging, the

Bank had maintained an active portfolio comprising eleven projects including three regional

operations. IDA commitments are currently US$360 million with an amount of about US$160

million available for disbursement.

47. The 2003-2006 CAS was anchored on the three PRSP pillars of fostering growth, improving access to basic services, and strengthening capacity. The Bank‟s objective was to

21

foster growth, improve access to social services and strengthen capacity. The program aimed at

assisting Guinea to reform its institutional and policy framework, by building its capacity for

service delivery and improving the management of public finances. Bank interventions focused on

community development, rural infrastructure, education, transport, electricity, health, HIV/AIDs,

Water Basin management and rural electrification. Most of these projects are still in the Bank‟s

portfolio and remain highly relevant areas for Bank support.

48. During 2007-08, the Bank was also active developing a safety net and advising on how to reform the mining sector and improve regional integration. The Bank financed elements of

a safety net in response to the food and fuel price shock of 2008, including works programs,

fertilizers subsidies, and budget support to cover the loss of revenue related to the elimination of

custom duties on food imports during the height of the crisis. It undertook studies on how to make

mining more pro-development (EITI++ approach), which was presented and discussed with the

Kouyaté Cabinet. The Bank also developed its relations with civil society, and maintained them

after the 2008 coup. It initiated ESW to strengthen regional cooperation, exploring the many

dimensions in which a Mano Union could benefit its members and hosting a regional mining

conference in Conakry focused on the regional harmonization of mining laws. During the recent

election period, the Bank prepared a series of sector notes, outlining diagnostics and options for

progress, and these were discussed with civil society and made available to the new leadership.

B. LESSONS LEARNED

49. Prior to interruption of operations in 2008, the Bank had a mixed record of program implementation in Guinea. Some of the lessons of the pre-military rule engagement will be

relevant during the ISN period:

50. Strengthening accountability mechanisms has been a key element of ensuring some level of impact to donor financed activities in an environment where traditional institutional

counterparts revealed themselves to be unresponsive. Those initiatives whose reach went beyond

the traditional institutional partners fared better than those who did not.

51. Community participation has been central to reaching tangible results. Programs such

as the Community Support Program and the Urban Program that involved strong participation of

beneficiaries have been particularly successful in improving the quality of services and poor

people's access to these services. Such programs have also promoted gender equity, since many of

the community-identified priorities have involved measures improving the quality of women's

lives, such as maternal health services, better access to drinking water and agricultural services. These efforts also allowed the Bank to have a decisive impact on governance at the local level . Early investments in CDD activities were followed by political reforms in the late 80s, which

introduced district and municipal level elections. The Bank‟s close relationship with civil society

was also helpful in creating the momentum for change which ultimately led to the first free and

peaceful elections.

52. The involvement of the private sector, including beneficiary and producer organizations, in service delivery has increased the quality of services. For example, in a

recent survey, beneficiaries of the Community Support Program have expressed increased

22

satisfaction with services. Garbage collection in Conakry has improved under the Urban Program

through subcontracting of the services to private organizations. Working with the private sector

will be particularly important in the future given the very low level of capacity in the public sector.

53. Donor coordination has been important in scaling up successful programs to national coverage. Programs involving strong donor coordination, such as education and the Community

Support Program have made more progress in scaling up to national coverage than those in which

donor coordination was weak. The establishment of clear national strategies facilitates donor

support to a common program.

54. The Bank’s investment in analytical work has supported national debates and the emergence of evidence based policy and should continue. Recent ESW and technical assistance

have focused on the mining sector, decentralization, the political economy of change, the

effectiveness of safety nets, the benefit of regional integration, and more recently, the audits of

large contracts have all been influential in developing our contacts with regional organizations and

in supporting processes of evidence based reform. The effort has also proved useful in helping the

Bank to navigate the difficult environment of the past two years.

C. PROPOSED INTERIM STRATEGY

55. The Bank’s strategy for Guinea is being inspired by the recent innovations proposed by both the World development Report 2011 on Conflict, Security, and Development, and the new Africa Strategy. Following the WDR recommendations, the ISN is taking the risk of

inaction as a starting point and is focusing on building bottom up state society relations, the

institutional transformation of security agencies, job creation, economic empowerment at all

levels, and anti-corruption initiatives along three tracks: (i) providing immediate assistance on jobs

and services to secure quick wins; (ii) start to reform internal agencies to build confidence for

medium term re-emergence; and (iii) acting regionally and globally to maximize impact. The

Africa Strategy suggests both the mode of interaction and the areas where the Bank is development

comparative advantages. This has shaped the ISN in two important dimensions. First, the approach

used will focus not just on finance, but importantly, on the provision of knowledge for

development – both to shape analysis in ways useful for policy, and to bring about social dialogue

necessary to build the basis for broad coalitions for change. It will also work in partnership with

the key actors in society, including not just the Government, but also society groups, local

government, the private sector, universities and the intellectual elite, and regional players. The

areas of selective focus of the ISN are areas that are both of strategic interest in Guinea and where

the Bank has developed comparative advantages.

56. The main goal of the interim strategy is to deliver timely and adequate support to the newly elected government in its effort to bring about a tangible improvement of the living conditions of the population, including the restoration of the macro-economic stability, a sharp improvement of governance, and the recovery of the economy and of social services. It

is in the vital interest of the international community and the neighboring West African countries

that the new government succeeds in delivering early wins to first consolidate the transition to

democratic rule and then embark on a path a fast growth and development. The Bank‟s support for

23

this first phase will be organized along three main axes: improved economic governance and

macro stability; big push on public services (including supporting social resilience to shocks); big

push on jobs. It also includes two cross cutting themes: social accountability and regional

integration.

57. The ISN covers the period FY11 and FY12. In FY11, the last year of IDA15, the Bank

will still be able to utilize the unused IDA15 allocation (about US$84 million). In FY12, the first

year of IDA16 period, Guinea is estimated to receive about US$32 million in IDA allocation.10

In

addition, in FY12, Guinea would be eligible for frontloading up to 30 percent of its FY12

allocation (or US$10 million) from future years of IDA16, which would further increase the

resources available in FY12 to support its development needs. The total new commitments of IDA

resources available for the ISN period would thus be about US$125 million. The undisbursed part

of the existing portfolio stands at about US$160 million (IDA and TFs) and efforts will be devoted

to maximizing the disbursement rate during the ISN period. Support from additional regional IDA

would be available if Guinea participates in regional projects. These finances would be

complemented by the various trust funds, deploying support from the WBI, and leveraging the IFC

and MIGA resources.

58. A key focus of Bank’s support will be devoted to stabilization and economic governance. In order to fill the budget gap in 2011 without running into arrears and without

unduly hurting the poor, external support of the order of US$100-150 million will be needed. In

addition, a precondition to resuming our activities as well as that of the IMF and other donors for

Guinea is to clear its arrears to the Bank, now at US$74million. These requirements suggest that

the World Bank and other Development Partners will have to deliver important levels of budget

support in 2011 and until HIPC completion point is reached. The Bank will deliver in April 2011 a

DPO for US$78 million, followed in FY12 by a second DPO. The IMF is planning in parallel to

start with an RCF program, to be followed with an ECF program when the Government

performance improves, probably during the Fall of 2011. HIPC CP could occur about six months

later, in early to mid 2012. Failure of the Government to stabilize its budget would delay this

process. Preliminary discussions with DPs suggest that the AfDB, EU, and possibly France will

also provide budget support. It is also expected that the bilateral debt service will be subject to

complete restructuring by the Paris Club.

59. In parallel to budget support, the Bank will develop an Economic Management Support Project (EMSP) to finance technical assistance and capacity building in the areas that

are crucial for good economic governance, such as PFM, PSR, and support for the mining and

security sectors. Other new projects include the creation of a safety net to shield the poor from the

negative impact of stabilization, support measures to speed up the growth recovery by improving

the investment climate, a project in agriculture, and 2 new regional projects in areas of high

priority (ICT and Mining). We will also be very involved in delivering several pieces of AAA and

TA to support evidence based policy change and social debates, and in developing partnerships

(with civil society, DPs, the private sector) to leverage gains from coordination.

10

The allocation figure is indicative only and actual allocation for IDA16 may vary, depending on (i) total IDA

resources available at the time of allocation; (ii) Guinea’s performance rating; (iv) the terms of IDA's assistance

(grants or credits) depending on the debt sustainability position; (v) the performance and assistance terms of other

IDA borrowers; and (vi) the number of IDA-eligible countries.

24

60. The Bank will finance much of its support for the PAP, especially to boost services and create more jobs, from its existing portfolio of projects. The resumption of our activities

will be sequenced in time, with the more urgent areas receiving more support in the early period.

This includes 9 projects that support improved service delivery in maternal health and basic

education, and stimulating agriculture and rural development. These are areas of traditional

support from the Bank with projects in place that were performing relatively well before the

breakdown in relations in 2008. Re-activating the portfolio will involve overall 11 retroactive

extensions of closing dates and six level 1 or 2 restructurings. The restructurings have been

devised in ways to improve disbursement rates, tighten fiduciary controls, make the projects more

participatory, and more generally, more adapted to the current circumstances. Following a

comprehensive fiduciary review of the portfolio, existing operations have been assessed as being

ready for a resumption of activities. All projects have also submitted the required audit reports and

identified ineligible expenditures are being reimbursed. The goal is to use the fact that the existing

projects have in-built capacity for delivery to disburse at least US$100 million during 2011-12.

Importantly, and during the ISN period, the portfolio will be simplified and organized around the

three key clusters of economic governance, jobs, and decentralized services. Working closely with

other DPs, the various vertical projects in this last theme will be combined over time into a single

program that would focus on the horizontal constraints to service delivery in health and education,

such as inter-governmental transfers, staff incentives, and social accountability.

61. The two cross-cutting themes of citizen activism and regional integration were selected

based on consultations with the Government and civil society, and in line with perceived priorities

as well as Bank new directions under the Africa Strategy and the WDR2011. The relation between

the citizen and the state needs to be repaired, starting with opening up a constructive dialogue.

Citizen involvement will enrich social debates on priorities, national strategies, and the necessary

trade-offs. The Bank will support the development of the capacity of youth, women, and trade-

union groups and will involve them also in project design, implementation, and monitoring.

Analytical work will involve local research groups and universities. This will also help reach

some of the higher order goals of the new regime: to improve social cohesion, reduce corruption at

all levels, and achieve national reconciliation. Regional integration can support Guinea re-

integration with its neighbors, after several years of isolation, which would strengthen the young

democracies of the Mano River Group, as well as start reaping organizational and efficiency gains

from cooperation with counties with whom Guinea shares borders, rivers, and mining deposits

including the Gambia, Mali, Senegal, Burkina, Sierra Leone, and Liberia.

25

Table 3: Existing & Proposed Operations and ESW

Sectors Priority projects and ESW in

current Portfolio $m New Commitments and

ESW $m 1. Good Governance

Economic Governance

and public sector

management

ESW: EITI++

TA: SME IFC Linkages

EMSP*

Mining Regional Project

ESW: Economic

Management Policy Notes

ESW: Political Economy

10.0

15.0

DPO FY11

DPO FY12

78.0

30.0

2. Basic services

Local development

and basic

infrastructure

Village Communities Support

Program -Phase II APL (VCSP-2)

13.9

Urban development &

basic infrastructure

Third Urban Development Project

(UDP-3) & AF

11.8

ESW: Basic services strategy

Education Education for All FTI (TF) 45.2

Health Health Sector Support Pr. (HSSP) 15.9

3. Creating Jobs Agric. & Food

Security

Emergency Agricultural

Productivity Support Project

(EAPSP) TF

3.0

EAPSP AF (GFRP)

Reg. WA Ag. Productivity

(WAAPP) (JSDF)

ESW: Agriculture

20.0

9.0

Water Management

and Environment

Regional Senegal River Basin

Regional Niger River Basin

15.3

8.3

Rural roads Natl Rural Infrastructure Program 23.2

PSD TA: PSD (wt IFC)

Safety net ESW: Safety Net Safety net (GFRP)* 20.0

Energy

Electricity Sec Efficiency Project

5.6

ICT

Regional APL1-B WARCIP 30.0

TOTAL 142.2 232.0

* = available if TF approves request.

New financing is composed of: (i) IDA15: $84m ; (ii) IDA16 year 1, front-loaded: $40m; (iii) IDA regional:

$33m; (iv) GFRP: $20m in FY11 and $20m in 2012; (v) Trust funds: PBF $4m; JSDF $9 m; PHRD: $1m. See

also footnote 10, page 22.

26

a. Good Economic Governance and Macro Stabilization

62. Assisting the Government in restoring civilian rule, consolidating macroeconomic stability, improving the effectiveness and accountability of the civil service and state institutions, and improving the governance of the mining sector are core priorities of the ISN. 63. An important instrument for Bank’s support of good economic governance is the Guinea Re-engagement and Reform Support Grant DPO series (FY11 and FY12). Prior

actions of the DPO1 include important measures in the areas of PFM, Public Administration

Reform, revenues, and mining. The medium term agenda in these areas will be supported in the

second DPO in FY12 which will initiate improvements in the rules. In the area of PFM, the DPO2

would focus on priorities such as the new PFM legal framework, the revised procurement code, the

consolidation of the single treasury account, the production of financial statements and

strengthening external and internal oversight. In the area of state accountability and public

administration, it would support the reconstruction of a viable personnel database of public

employees which includes biometric information, the revitalization of control institutions for

public sector employment, a redefinition of the mandates and staffing structure of public entities. It

would support governance in the mining sector through the adoption of a new mining sector policy

and mining code.

64. In parallel, an Economic Management Support project (EMSP, US$10 million) is being developed to provide technical assistance and capacity building inputs to support the policies delivered by the DPOs. The project will support technical reforms in these areas,

including for audits and the renegotiation of state contracts, the creation of a school of Public

Administration (Ecole Nationale d’ Administration), measures to rehabilitate the public

administration, a senior executive program to attract talent from the Diaspora, and possibly,

support for the security sector reform. In the area of mining, the EMSP as well as an established

Mining TF) will finance the audits of the large mining contracts and their renegotiation, along a

process that would e transparent and would follow due process. It will also support the building of

a shared vision for the management of the sector, including the development of a new policy, legal,

and regulatory frameworks; strengthening institutional capacity and accountability of the

ministries of mines, finance and environment to foster compliance. The World Bank possible

engagement in the security sector will be mindful of the limits of our mandate and comparative

advantage. Subject to other partners taking the lead around a coherent approach, two entry points

can be considered in the short term, public expenditures analysis of key security institutions, and

Public Financial Management support to increase accountability and transparency. In the longer

term, support for demilitarization may be considered. The EMSP will also strengthen transparency

and accountability systems by building capacity of CSOs, community organizations, media, and

other stakeholders to be active in debates and social accountability mechanisms on all these

important national issues.

65. Guinea will also benefit from the planned West Africa Mineral Governance project

(US$15 million, Board in FY12). This regional project involves Liberia, Sierra Leone, and Guinea

and focuses on improving the state of knowledge by these countries of their mining resources. The

27

project will provide a critical mass of geo-scientific information to allow the countries to properly

value their assets as they enter into contract with private companies. It will also set up a regional

mining observatory for the provision of valuable public goods (skills in audits and negotiations,

grievance mechanisms; design and monitoring of performance indicators; and the development of

cadastres for geo, economic, and financial data).

66. Economic and sector work will be very important to develop in these areas in order to

provide a basis for good policies. A series of policy notes on economic management will focus on

providing the evidence base to implement the urgent reforms. For example, a key issue is how to

reduce inflation given the monetary overhang and rising international prices. Analysis will also be

needed in areas connected to PFM, PSR, increasing revenues, and reforming the mining sector.

Political analysis will also be necessary to help understand developments and manage risks.

67. WBI will be focusing its support on supporting civil society in the area of Governance through development dialogues, social accountability mechanisms, and the media, including using

cultural platforms that can appeal to the youth. It will provide support to the PRS secretariat to

enhance participation of key stakeholders in the validation/dissemination & monitoring of the

country PRS (through strengthening the capacity of media professionals and collaborating

strategically with national, rural, community and private radio stations; and including capacity

building for M&E). It will also engage citizens and civil society organizations to participate more

directly in the development and implementation the PRS process and movement on key HIPC

triggers by making innovative uses of ICTs as tools to enhance good governance and social

accountability in key strategic sectors, i.e. health and education. ICT facilitated engagement of

multi-stakeholders will integrate with e-government initiatives. It will also organize south-south

knowledge exchanges in Public Service Reform, and other areas.

b. A Big Push on Social Services

68. The restoration of health and education services, and the re-invigoration of the capacity of the decentralized agencies in charge of delivering these services figure prominently in the PAP, with measures to extent service and improve quality in the short term,

enhance decentralization, as well as parallel efforts to plan sectorally for the next phase. These are

sectors where the Bank has played traditionally an important role, and four projects in the portfolio

with sizable balances allow us to show results on the ground rapidly.

69. Health. The revised PDO of the Health Sector Support Project is to improve health service

delivery to mother and child in the 18 poorest districts of Guinea and 22 health centers in the

commune of Conakry. The restructured project will finance medicines and support the national

vaccination campaign. The project has US$16.6 million of undisbursed funds of which US$11

million can be disbursed in the next 12 months, and the balance by end 2012. The project will help

increase the share of assisted deliveries in the 18 targeted districts from 21 percent in 2011 to 25

percent by end 2013, and the proportion of children immunized from 39 percent to 41 percent by

end 2013.

28

70. Education. The objectives of the education pooled fund (US$78 million with AFD, KfW,

and EFA FTI CF managed by the WB) is to enhance equitable access to and quality of education

in basic education while also strengthening decentralized management of the education system.

The project will finance 2000 primary classrooms and 389 secondary classrooms in addition to

procurement of textbooks and school materials to all primary school children; block grants to

schools and prefectures in support of their annual plans; and targeted support to increase education

demand in the nine poorest prefectures with the lowest education indicators (school kits, little

materials..). The pooled fund is expected to disburse US$18.3 million in the six months after

recommencement, followed by US$37.4 million during the following six months and US$25.4

million in the subsequent twelve months. This is expected to increase gross enrolment in the nine

targeted prefectures from 47 percent to 55 percent and improve the 4th

grade math passing grade

from 51 percent to 58 percent. Another older IDA project is in its last year of operation with

US$5.2 million of funds that are expected to be disbursed within the next 12 months and focusing

on improving personnel/HR management.

71. An important part of normalization and reconciliation is to empower decentralized structures to play their role. The Bank had supported decentralization in the past decade through

CDD activities, urban and rural, with more focus on rules and capacity since the 1999 reform and

the subsequent direct election of local officials. Reactivating these projects will allow not only to

empower local authorities to play their legal roles, but will also inject liquidity at the local level,

generating quick impact in terms of new jobs as well as additional public services. The third

Urban Development Project (UDP3) targets cities as centers of opportunities to improve the

provision of infrastructure and services as well as the financial and organizational management of

municipalities in support of the decentralization process. The project will be re-activated and

restructured to increase its disbursement rate -- the remaining balance of US$11.8 million will be

fully disbursed by end 2012. The Village Communities Support Program – Phase 2 (VCSP-2)

focuses on rural areas, strengthening local governance and improving access to basi c

infrastructure. CRDs are enabled to fulfill their legal mandate by planning and implementing

inclusive local development activities, and improving revenue performance to sustain their

recurrent costs. Undisbursed amount is US$15 million IDA and US$9 million IFAD grants, which

can be fully disbursed by end 2012.

72. Here too, the role of civil society groups will be important to improve policy-making and results. The participation of CSOs in the national debates that will lead to the finalization of

health, education, and decentralization strategies will be important and needs to be supported. In

addition, and with the support of WBI, the Bank will pilot social accountability mechanisms at

various levels in these sectors in order to channel citizens energy in holding the state accountable

and improving the quality of social services all the way to the facility level.

73. The Bank, working with other donors, aims to develop a more coherent approach to supporting service delivery in a decentralized framework. As a follow up to the VCSP, UDP,

and health and education projects, we will work with the Government, DPs, and civil society on a

comprehensive program that would focus horizontally on the main constraints to service delivery,

such as the timing and extent of inter-governmental transfers, the incentives and skills of teachers

and nurses, and the positive feedback and pressures from civil society. Economic and sector work

29

will be initiated in this area to clarify which are the main constraints to service delivery.

Depending on the availability of IDA resources, the project would be delivered in FY13.

c. Creating Jobs

74. While stabilization efforts will push growth down in the short term, it is imperative to exert efforts early on to encourage private sector activity to ensure a quick rebound of the economy. Macro stability is necessary to a good business climate. But as the Africa Strategy

makes clear - it is not sufficient. The Bank, working closely with IFC, will support efforts to

quickly improve the investment climate and get Guinea back in business. This is particularly the

case for SMEs and for agriculture, for which the investment climate is so important, and where

growth would have a strong impact on job creation. The Bank will also support the Government‟s

efforts to entice the mining sector to contribute more to the development of the regions of the

country, including assisting in rehabilitation the power sector. To have a quick impact, work

programs in poor areas will be funded early on in the context of a scaling up of a national safety

net. Timely ESW, especially on the constraints to private activity and agriculture will help provide

the knowledge needed for good policies.

75. The business community complains that it faces many constraints that reduce its competitiveness and ability to create jobs. Guinea has one of the lowest DB rankings in the

world, and the Government and the private sector are keen to work on improving it. Constraints to

business seem to include rules that are overly complex, low access to credit, poor infrastructure,

and especially electricity, and scarce skills. In order to identify the key constraints, the Bank and

IFC will support the creation of a Public Private Dialogue to build confidence and foster dialogue

on reforms. This effort will also map the key private sector actors, and offer institutional support

to develop representative associations to promote PPD. The Dialogue would be supported to

develop an Investment Climate Assessment and Reform . The first step would be the development

of an action plan to help identify priority measures with quick and visible impacts. The effort

would also focus on the constraints to finance, especially to SMEs and through micro-credit, and

actions that would start unlocking the financing constraint. Finally, Guinea has large investment

needs in infrastructure, mining, agriculture, and services. Public Private Partnerships (PPPs)

represent an opportunity to leverage private sector capacity, finance, and innovation, provided that

a sound enabling environment is put in place. Initial efforts in this area would be geared at

supporting, with assistance of the IFC Advisory crevice, a diagnostic on the legal and regulatory

regime for PPPs.

76. The Bank’s strategy for the agriculture sector supports the government priorities of making farmers a key engine of job creation and growth. In terms of sequencing, we will

initially focus on smallholder rice and food crop productivity FY11 and FY12 and build in support

for market access, commercialization and non-food export crops in FY13 as part of a sector-wide

program supporting Guinea‟s National Agricultural Investment Program. The following is

proposed for the interim strategy period:

30

Emergency Agricultural Productivity Support Project (EAPSP) aims at increasing smallholder

productivity of rain-fed rice through increased access to improved inputs (seeds, fertilizers, and

pesticides) and technical advisory services. Funded by the GFRP, the US$3 million left is

already being used to support access to input for this cropping season and will be largely

disbursed within 6 months. To be followed by Additional Financing from GFRP for the

EAPSP to extend project support to the productivity of food crops other than rice and broaden

project activities to include (a) rehabilitation of smallholder water management infrastructure

and (b) post-harvest loss issues (storage / transformation) , in addition to increased access to

improved inputs. Funded by the GFRP, the US$ 20 million additional financing package is

currently under preparation, in consultation with other donors active in the sector, and is

scheduled for approval by June 15, 2011. It will be disbursed over a 3 year (2 cropping

seasons) period. West Africa Agricultural Productivity Program (WAAPP) is a regional program that

encourages the regional sharing of improved technologies in ways that take advantage of

regional synergies to reduce costs and foster joint learning. Initial funding for Guinea‟s

participation in this program is provided by US$9 million PHRD grant for rice technology and

adoption. The grant is approved and financing agreement will be signed once arrears are

cleared.

In terms of AAA, an agricultural public expenditure review would lay the foundation for new

investment lending in FY13 as part of a sector-wide program supporting the National

Agricultural Investment Plan.

77. Boosting agriculture will also require better transport. A strategy to bring more

efficiency in the provision of transport services in Guinea is badly needed, and will take some time

to be developed. But in the short term, the priorities of the Government are a few priority national

roads and a big push on rural roads to boost agriculture. The Bank‟s main support will be through

the Second National Rural Infrastructure Project which is being restructured so that the remaining

balance of US$22 million can be disbursed within 24 months and deliver the rehabilitation of 400

km of feeder roads and generating many jobs during the (labor intensive) construction period.

78. Given the high poverty rates, more jobs will be needed in the short term. In the

Guinean context- high prevalence of poverty and high vulnerability to shocks- and the need for

urgent reforms to stabilize the economy, a two stage-approach make sense, with short term

measures to scale up existing instruments, and in parallel, efforts to lay the foundations for a more

effective safety net system. Such a system should be able to expand and shrink depending on the

need with clear exiting strategies to avoid long term dependence. A recent Bank study argued that

the safety net system should include works, school feeding, and fertilizers and public transport

subsidies in the short term, while moving towards a conditional transfer to household system in the

medium term. In both urban as rural areas there is now huge potential for labor intensive public

works to help meeting the expectations of the new government to show rapid and tangible results

on ground while contributing to create revenues for the poorest.11

In the short term, there is support

11

WFP, UNIDO, and several NGOs have well established but modest programs in place. The Bank supported an emergency

program to mitigate the impact of the 2008 food and fuel crisis (US$2.5 million). Between 30 percent and 60 percent of the cost

were transferred as salary for works that included sanitation and rehabilitation of rural roads. The program has created the

equivalent of 40,000 man/month of work, a small amount to make a visible impact, but the institutional set up is now up and

running and activities can be scaled up.

31

for a safety net in the Guinean budget, and by the EU (€6 mil). The Bank will use existing

instruments in the short term (UDP3 and VCSP for works programs with US$1.25 remaining,12

and fertilizers subsidies under the VCSP with US$3 million remaining), while preparing a new

operation scale up the nascent safety net while drawing on lessons from implementation

experience (US$20 million, GFRP).

79. The operations of mining companies can benefit national development more both in terms of jobs and better infrastructure. Enhancement of benefits can occur through the

development of integrated economic development plans for the bauxite and iron ore districts and

corridors; the development of mining induced growth clusters, using initiatives such as IFC‟s

Linkages program to encourage SMEs to deliver the type of goods and services demanded by the

mining companies, including during the process of construction of their infrastructure. Moreover,

mining infrastructure can be also used for other purposes if planned right, instead of the old

enclave model, can also generate gains. The Bank will explore working with mining companies

around these ideas.

80. The energy sector is now in total disarray, with the physical infrastructure in a state of decay, and the institutional Bank structure in need of serious reform and capacity building. Energy access is also a key to the mining sector development and SMEs growth. The

Bank will re-engage in the energy sector by restructuring existing operations first for urban and

then rural electricity (respectively US$5.7 million and US$1.7 million remaining), and leading

analysis and TA on utility recovery, reform, and investment planning. The Bank will work closely

with the AfDB, the IsDB, and other partners to get sector plans in place and to initiate the reforms

and the rehabilitation efforts. However, we do not plan at this stage to remain involved in the

sector directly in the future. In this context, the Bank team is coordinating a meeting between the

government, the donor community and other sector stakeholders, whose aim is to come up with a

common strategy for emergency sector recovery and longer term reform and development. In the

long term, it would be important to connect Guinea to the West African Power Pool grid,

especially given the country huge hydro-power potential.

81. An immediate intervention in the area of ICT is needed to get Guinea connected to the ACE submarine cable which is being constructed now to link the West Coast of Africa to Europe. Failure to connect now will mean that Guinea will not be connected to a cable for many

years to come. Lack of reliable and affordable high speed internet access will also be jeopardizing

SMEs development. The Bank has supported the Government to put in place a PPP framework the

for governance, ownership and financing of the landing station as well as regulatory framework for

open and non discriminatory access to the cable capacity. Given the timing constraint, the

operation is being processed under the rapid response provisions of OP/BP8.00. The project will

also support the reforms of the ICT sector and capacity strengthening in key regulatory areas to

improve sector performance and lower prices for mobile and internet services. Access to improved

and affordable ICT services will also contribute to the efforts of creating demand side governance

initiatives in the health and education sectors.

12 The Coordination Unit for the UDP3 has developed skills in this area and the National Directorate for Rural Infrastructure has

also extensive experience in maintaining rural roads following similar approaches.

32

82. There are 14 international rivers that have their source in Guinea, and regional efforts are needed to harness their potential for agriculture and hydropower in a coordinated manner. The Bank had initiated two ambitious programs in this respect (on the Niger and Senegal

rivers), which will be restarted. The Niger Basin project aims at enhancing regional coordination

to develop the potential of this river in a sustainable manner. Five countries are participating --

Benin, Guinea, Mali, Niger, and Nigeria. The project is rehabilitating degraded ecosystems in the

basin and doing feasibility studies for the development of regional water infrastructure, including

the Fomi dam in Guinea. The Senegal River basin project involves Mali, Mauritania, Senegal, and

Guinea and it finances feasibility studies for the Koukotamba and Boureya dams in Guinea and

from which Guinea will directly benefit in terms of electricity, plus small investments such as

watershed protection, river bank rehabilitation and protection, and capacity building of OMVS

national entity in Guinea.

83. IFC will play a catalytic role in accelerating private sector support in Guinea by

introducing innovative ways to mitigate risk, helping improve the investment climate, building

private sector capacity and mobilizing local and foreign investors. To do so, IFC plans to

proactively assist the Government of Guinea to overcome constraints to private sector dynamism

and to help create a broad public-private constituency for implementing the kind of improvements

in the business environment. IFC‟s strategy in Guinea is evolving, and will include advisory and

investment operations focused on: improving the investment climate; deepening and broadening

activities in the financial sector; proactive project development in infrastructure (power and

Telecommunication) and growth sectors (mining and agriculture); supporting capacity building

programs in both private and public sector; and increase investments and advisory services to

SMEs.

84. Rich resources endowment and potentially fast growth of FDIs will create opportunities for MIGA continued engagement. Currently, MIGA‟s gross exposure in Guinea

amounts to US$56.6 million focused in the telecoms, agribusiness and tourism sectors, with a net

exposure of US$51.2 million (1.1 percent of MIGA‟s total net portfolio). MIGA‟s product is fully

consistent with the Bank‟s goal of leveraging non-Bank funds and having a catalytic impact.

Support for Guinea is also fully consistent with MIGA‟s own strategic priorities. Moreover, the

political risk insurance product offered by MIGA may alleviate concerns for private investors who

are keen to invest in the country, but remain apprehensive because of outstanding political risks.

MIGA is currently considering several specific projects in the country, including a potential

expansion of its support for the telecoms sector.

D. PARTNERSHIP

85. Donor coordination is an area of particular importance for the success of the ISN implementation. The scope of needs the Government is facing can only be matched by a

constellation of donors and a multiplicity of efforts. Although there is a solid display of goodwill

by all DPs present in Guinea, the country has been an aid orphan in the past. The best way to

mobilize potentially committed resources is by having solid implementation which achieves results

on the ground; establish a firm linkage with the available, prioritized national budget framework.

In the immediate future, all donors are interested in having a good coordination structure at the

Government level to complement the donor structures and several DPs will be funding an

33

expanded coordination unit at Ministry of Finance. Sector roundtables are being organized to

agree on plans and on SWAPs, with workshops for energy, rural development, and the security

sector planned for the near term. Other areas which could benefit from sector roundtables include

health and safety nets. A Champions of Guinea meeting will be organized in Washington DC

during the Springs Meetings of 2011 to exchange views and mobilize efforts, and a CG is planned

for the summer of 2011. A challenge will be the integration of new donors, such as Brazil, India,

and China, plus large mining companies around the agreed priorities. The donor community is

looking to the Bank for leadership in the harmonization process.

86. Donors have already given indications as to which sectors in the PAP they are interested in supporting (see Table 4). The Government will need to lobby existing donors, seek

new donors or commit their own resources to address financing gaps in orphan areas. Initial

estimates indicate that DPs have either committed, or are about to commit a total of about US$1.5

billion of support for the period from 2011 to 2014, of which about US$850 million can be

disbursed during 2011-2012. Excluding funds for budget support the total availability of project

funds during 2011-12 has been estimated at US$650 million. This includes a large proportion of

ongoing projects which could only be redirected within a limited range of activities in line with

their approved objectives. The donors currently proposing budget support are the World Bank,

AfDB, EU, and the IMF with a possibility that France could join.

87. There are some clear indications as to which areas donors are interested in supporting

and which sectors could experience financing gaps requiring the government to either try to

persuade donors to reallocate funds to where they are more needed, seek new donors, or commit

own resources. There is a significant amount of donor interest in supporting the broad area of Governance with

donors interesting in providing 15 percent of the total non-budget support pool to this area

reflecting the government‟s wishes to move quickly to rehabilitate government institutions.

The Bank, as lead donor of the PFM thematic group, will continue to play its role and ensure

adequate monitoring of the matrix developed in 2010 and will participate actively and

constructively in the activities of other working groups.

The largest overall of donor interest appears to be transport (28 percent of funds). This

underscores the need to develop Guinea‟s infrastructure in order to unlock its agriculture

potential and to develop the minerals sector by supporting the transport infrastructure such a s

ports to allow export of minerals.

The energy sector could receive good support at 11 percent of the total. The Bank will try to

limit its role in the short term to technical support and a moderate amount of financing.

The amount for energy could increase as many donors appear willing to intervene further if

there is a credible plan of institutional reform in the sector.

Basic and technical education could get 15 percent, but donor interest in the health sector

appears is very low. The Bank will be working with other DPs to develop a better financed

more comprehensive approach to the expansion of basic services that is more suited to

Guinea‟s decentralized structure.

34

E. RESULT MONITORING

88. The ISN proposes to assess progress towards the PDO against a set of 8 indicators and 23 milestones (see Annex II for details). Whereas the indicators measure output and outcomes,

the milestones are aligned with the concept of PAP and the need to account for deliverables that

support outputs and outcomes. This framework is closely aligned with the Africa Strategy

Monitoring Framework, directly contributing to its Tier 3 “Activities and Inputs in support of

Regional Results”. Selection of the indicators and their target values is based on short horizon of

the ISN (18 months), the current and low capacity in Guinea in terms of M&E and the need to

show immediate and viable results of the DPO and efforts in re-engagement and support to key

reform areas. Indicators and milestones have been developed to ensure focus on specific results

and tailored to assist the Government in implementation of their immediate plans and are hence in

line with the prior action for the DPO. They are articulated around the pillars of the PRSP.

Progress against these indicators will be assessed regularly through consultations with the

Government, donors and other key stakeholders, and will at the end be assessed and be part of the

ISN completion report.

Table 4. Republic of Guinea – Donor Mapping by Sector (2011-2012)

Sectors EU

Germa

ny GIZ

Spain

AECID

Franc

e AFD

USAI

D Japan China WB AfDB

Is

DB IMF

UNI

CEF UNDP

Budget Support X X X

Governance X X X X X

Civil Service Modernization Justice

decentralization X X X X X

Security Sector X X X

Health and Nutrition X X X X X X Basic education &

vocational training linked to mining sector X X X X X

X

Urban Development X X X X

Energy X X X X X

Transport X X X X X

Environment x

Water and Sanitation x x x

Agriculture X X x x x

Rural Infrastructure X x

Youth Employment x

Social Safety Nets X X x

35

F. Risks and Mitigation

89. The proposed strategy comprises high level of interrelated risks, some of which cannot be fully mitigated. At the same time the team was guided by the WDR2011

recommendation suggesting that there is a need to be pragmatic to address immediate challenges

within political realities of the country, with approaches that can improve over time. Sometimes

these approaches will have second-best aspects associated with them.

90. Security risks stemming from (i) insufficient progress in security sector reform, (ii)

spillover effects from the ongoing crisis in Cote d‟Ivoire (including the flow of refugees), and (iii)

arms and drug trafficking. The mitigation of this risk requires a continued commitment of the UN

and the international community to support the Government of Guinea in maintaining security. In

collaboration with other Development Partners (United Nations and ECOWAS in particular, given

their foreseen leadership in his area), the Bank EMSP (in preparation) will contribute to integrate

the reform of security services in the broader medium term fiscal framework, while improving

public financial management practices in the military for greater reform effectiveness and

efficiency. The ESW on political economy will allow the Bank to understand the challenges more

deeply, and the Bank‟s efforts to empower civil society groups to actively participate in these

national debates will support rapid change in these priority areas.

91. Political economy risks stemming from delayed supply response or insufficient results

(against high expectations), or perceptions of corruption, which would the political feasibility of

reforms. There are also risks related to the upcoming Parliamentary elections, including risks of

ending up with a divided authority. Support to a strong and meaningful Poverty Reduction

Strategy participatory and consultative process, involving civil society groups, and the

strengthening of safety nets would mitigate these risks. By February 2011, this process had

already started, through regional and national consultations, involving CSOs and the National

Transition Council. Proactive communication through media (radio in particular), which proved

very effective to contain tension during elections, will be pursued to manage population

expectations.

92. The prospects of a deterioration of Guinea’s macroeconomic performance, stemming

from a deterioration in the external environment (increased fuel, food, and petroleum prices,

against a stagnation of mining prices) or /and the materialization of important fiscal contingent

liabilities, represent an important risk, particularly if this causes a delay in the HIPC process. This

macroeconomic risk would be mitigated by close monitoring of the macroeconomic framework

elaborated by the Government jointly with the IMF and the World Bank, and an acceleration of the

HIPC timetable, provided that overall performance is fully satisfactory on the part of the

Government. There is also a risk of falling back into arrears with all creditors, given the scale of

the outstanding debt. This risk is mitigated by the provision of IDA budget support, which,

combined with the IMF RCF, will serve as a catalyst for external support from other Development

Partners. Future IDA assistance expected in FY12 to support Government‟s reform program will

ensure that overall IDA flows will remain positive. Importantly, the provision, in real time, of

analytical support for evidence based policy, and the involvement of civil society and the private

sector in discussions on the requirement for macroeconomic stability (how to reduce inflation, how

to manage public sector arrears) will play an important role in mitigating macro risks.

36

93. Implementation risks stemming from poor capacity and coordination within the

Government, which could stall progress in delivering particular projects, developing sector

strategies, or implementing particular reforms which underpin some projects. The focus and

limited ambition of the proposed projects on a limited set of key reforms/institutions will mitigate

this risk, and will be complemented with direct technical assistance as needed (public financial

management, public sector reform, mining sector, health and education sector strategies,

electricity, and food security programs). The degree of coordination between Guinean institutions

will also be improved by the demonstrated strong ownership of the reform agenda by the

President. Revived coordination between Development Partners will also facilitate the overall

implementation of the reform agenda, and especially the Priority Action Plan.

94. Fiduciary Risks. The key challenge will be to accelerate the pace of disbursements on the

existing investment lending portfolio while managing fiduciary risks. Prior to the recent coup,

Guinea was characterized by relatively weak public financial management controls. The overall

residual country financial management risk was substantial. Fiduciary arrangements reflected this

weak environment, with a traditionally strong reliance on project implementation units. During the

suspension, the implementation of financial management action plans contributed to maintain an

acceptable control environment at the PIUs‟ level. All major fiduciary requirements were met

(audit reports, interim financial reports). Nonetheless, specific FM challenges are foreseen over

the ISN implementation. They include improving external audit arrangements and addressing the

weakening of local capacity. To overcome these challenges and mitigate the underlying risks, the

Bank will, first following a risk assessment, shift eligible projects from transactions based

disbursement to report based disbursement. Second, a portfolio team comprising FM Specialists,

Procurement Specialist, Disbursement Officer and Operation Officer has been set up to identify

and address any bottlenecks in projects implementation and scrutinize significant procurement

contracts with the aim to provide timely no objections. The team will prepare a CPPR during the

summer of 2011 focusing on capacity building activities in PIUs. Third, while waiting for the new

CAS to perform an assessment leading to a Report on the Observance of Standards and Codes on

Auditing and Accounting (which aims at identifying and addressing the systemic weaknesses in

the external audit arrangements), the FM team will make use of the audit firms assessment

completed during the suspension.

37

Annex I. Portfolio Restructuring

Project ID Project name

Current Credit/Grant/T

F Undisbursed

Proposed Action Closing date Commitment Balance

P093826 Senegal River Basin * Sept. 08, 2011 18,040,000.00 15,370,672.70 Resumption of

disbursements.

P077317 Guinea Electricity Sector

Efficiency ** Dec. 31, 2009 7,200,000.00 5,698,179.81

Retroactive

extension of the

closing date and

restructuring.

Unfunded financing

gap of $15 m. to

reach original

objectives.

P065129 Village Communities Support

Program -Phase 2 (VCSP-2) ** June 30, 2012 17,000,000.00 13,900,000.00

Extension of closing

date and resume

disbursements.

Unfunded financing

gap of $15m. to

reach original

objectives

P091297 Third Urban Development

Project – Phase 2 (UDP-3)** Dec. 31, 2011 15,000,000.00 11,800,000.00

Extension of

closing date and

resumption of

disbursements

Unfunded financing

gap of $ 14m.to

reach original

objectives

P093806 Niger River Basin Water

Resources** Jan. 31, 2013 9,000,000.00 8,347,341.00

Extension of closing

date for 23 months

for Kanji Power

Plant Rehabilitation.

P083751 West & Central Africa Air

Transport * Dec. 31, 2009 7,100,000.00 4,873,827.00

Retroactive

extension of closing

date and resumption

of activities.

P065126 Health Sector Support Project * Sept. 30, 2011 25,000,000.00 15,900,000.00

Extension of closing

date &

restructuring.

P065127 National Rural Infrastructure** Dec. 31, 2009 30,300,000.00 23,293,000.00

Retroactive

extension until June

30, 2013.

Restructuring to

adjust scope of

activities and merge

categories of

expenditures.

P074288 Decentralized Rural

Electrification ** Dec. 31, 2009 5,000,000.00 1,920,868.60

Retroactive

extension of closing

date.

P050046 Education for All Project ** Dec. 31, 2009 10,000,000.00 4,730,439.47

Retroactive

extension of closing

date and 2nd order

restructuring.

P050046 Education for All Project ** Dec. 31, 2009 70,000,000.00 213,093.61

Retroactive

extension of closing

date to use

outstanding balance.

38

*Projects will be closed in FY11/FY12

**Projects will be restructured/closed in FY13/FY14

T R U S T F U N D S

P113608 UDP-3 Additional Financing for

Labor Intensive Public Works *

December 31,

2009 2,500,000.00 1,250,000.00

Retroactive

extension of closing

date completed.

(GFRP TF)

P113268 Emergency Agricultural

Productivity Support Project * June 30, 2012 5,000,000.00 3,000,000.00

Retroactive

extension of closing

date completed

(GFRP TF)

P111470 Education for All Fast Track

Initiative. ** June 30, 2010 117,800,000.00 40,000,000.00

Retroactive

extension of closing

date.

P081297 Community-Based Land

Management Project **

June 30,

2011 7,000,000.00 6,183,393.90

Extension of closing

date and resume

disbursements

P070878 Coastal Marine and Biodiversity

Project *

Dec. 31,

2011 5,000,000.00 4,383,801.77

Extension of closing

date and resume

disbursements.

P042055 Decentralized Rural Electrification

Project **

Dec. 31,

2009 2,000,000.00 1,664,944.91

Retroactive

extension of closing

date and resume

disbursements

P070256 Reversing Land Degradation * Feb. 28, 2011 5,320,000.00 680,000.00 Close

P073378 Multisectoral Aids Project * Sept. 25,

2009 510,800.00 328,557.61

Retroactive

extension of closing

date.

P098844 EITI Mining *

Sept. 29, 2009 569,000

335,000.00

Retroactive

extension of closing

date and

restructuring.

P100958 Support to Accountancy * Sept. 5, 2010 309,000 247,234

Close and cancel

balance.

P098525 Improving Monitoring &

Evaluation *

Nov. 16,

2009 498,000 169,045 Close

39

Annex II. Results Matrix (1 January 2011 to 30 June 2012) Strategic Theme Indicators Milestones

Good

Economic

Governance

1. Proportion of all signed contracts

that are single source decreases

from 91% (2010) to 45 (%)

2. Net hiring into civil service

decreases from 5,211 (2010) to

less than 2,000 (in 2011)

- Audit report on the legality, transparency and

budgetary effect of 2009 and 2010 single

source contracts sent to President

- Report on census of all public sector bank

accounts in commercial banks published

- The Recipient has adopted a joint arrêté

between Ministry of Finance and the Ministry

of Civil Service Reform to temporarily freeze

public sector hiring, with the exception of the

education and health sectors.

Improving

services

3. 12-23 months old children fully

immunized from 38.2 % (2007) to

40 % (2011)

4. Gross Enrolment Rate (GER) in

nine targeted prefectures

increases to 55 %

5. 240,000 person-days of

employment created in rural road

maintenance and construction

- Increase in immunization by DPT3/Penta of

under-1 to 70 %

- Annual report of the Ministry of Health

produced for 2008, 2009 and 2010

- Construction of 500 primary education

classrooms and 100 secondary education

- First joint audit by the Civil Service and

Education Ministry to assess the presence of

teachers in classrooms carried out

- First joint audit by the Civil Service and

Education Ministry to assess the presence of

teachers in classrooms carried out

- 7.0 Billions GNF distributed to workers

under the LIPW program

Creating

Jobs

6. Doing Business Rank from 179

to 170

7. Proportion of mining revenue in

proportion to mining share in

GDP increases to 4 %

8. Rice yield of targeted

smallholders increase by 50 %

over 2009 baseline

- 470 km of prefectural roads using

conventional contracting methods maintained

- 450 km of prefectural rural roads using

labor-intensive methods maintained

- 3 rural bridges rehabilitated

- Tombo thermal generation unit rehabilitated

- 15,000 new household connections

- Access to the ACE submarine cable in 2012

- Public-Private Sector Forum convened

- Action plan on investment climate reform

developed

- Diagnostic study on the legal and regulatory

regime public-private partnerships carried

out

- EITI reports 2007 and 2009 published

- Mining cadastre updating started

- Mineral revenue collection capacity building

program started

- 90,000 smallholders received improved input

packets

- 2,300 t of improved seed produced,

purchased, certified and stocked

40

Annex III – Guinea-at-a-glance

Guinea at a glance 2/25/10

Sub-

Key D evelo pment Indicato rs Saharan Low

Guinea Africa income

(2008)

Population, mid-year (millions) 9.8 818 973

Surface area (thousand sq. km) 246 24,242 19,310

Population growth (%) 2.3 2.5 2.1

Urban population (% of to tal population) 34 36 29

GNI (Atlas method, US$ billions) 3.5 885 510

GNI per capita (Atlas method, US$) 350 1,082 524

GNI per capita (PPP, international $) 1,190 1,991 1,407

GDP growth (%) 4.7 5.0 6.4

GDP per capita growth (%) 2.4 2.5 4.2

(mo st recent est imate, 2003–2008)

Poverty headcount ratio at $1.25 a day (PPP, %) 70 51 ..

Poverty headcount ratio at $2.00 a day (PPP, %) 87 73 ..

Life expectancy at birth (years) 58 52 59

Infant mortality (per 1,000 live births) 93 89 78

Child malnutrition (% of children under 5) 23 27 28

Adult literacy, male (% of ages 15 and o lder) 43 71 72

Adult literacy, female (% of ages 15 and o lder) 18 54 55

Gross primary enro llment, male (% of age group) 98 103 102

Gross primary enro llment, female (% of age group) 84 93 95

Access to an improved water source (% of population) 70 58 67

Access to improved sanitation facilities (% of population) 19 31 38

N et A id F lo ws 1980 1990 2000 2008 a

(US$ millions)

Net ODA and official aid 89 292 153 224

Top 3 donors (in 2007):

France 9 87 20 55

European Commission 21 33 16 31

United States 8 0 26 25

Aid (% of GNI) .. 11.6 5.0 5.8

Aid per capita (US$) 19 47 18 23

Lo ng-T erm Eco no mic T rends

Consumer prices (annual % change) .. 23.3 6.8 19.2

GDP implicit deflator (annual % change) 8.6 17.3 11.1 14.9

Exchange rate (annual average, local per US$) 19.0 660.2 1,746.9 5,500.0

Terms of trade index (2000 = 100) .. 145 100 106

1980–90 1990–2000 2000–08

Population, mid-year (millions) 4.6 6.1 8.4 9.8 2.8 3.1 2.0

GDP (US$ millions) 6,684 2,667 3,112 3,799 3.2 4.4 3.2

Agriculture .. 23.8 20.3 24.8 .. 4.3 9.9

Industry .. 33.3 32.5 46.4 .. 4.9 4.0

M anufacturing .. 4.6 4.0 4.5 .. 4.0 3.1

Services .. 42.9 47.2 28.8 .. 3.6 -4.2

Household final consumption expenditure 73.9 66.9 77.7 80.6 .. 5.2 3.9

General gov't final consumption expenditure 12.0 11.0 6.8 9.2 .. -0.5 -0.3

Gross capital formation .. 24.5 19.7 15.5 .. 0.1 -3.7

Exports o f goods and services 31.2 31.1 23.6 33.2 .. 0.3 1.9

Imports of goods and services 28.1 33.4 27.9 38.4 .. -1.1 -0.8

Gross savings .. 14.6 13.3 1.7

Note: Figures in italics are for years other than those specified. 2008 data are preliminary. .. indicates data are not available.

a. A id data are for 2007.

Development Economics, Development Data Group (DECDG).

(average annual growth %)

(% of GDP)

10 5 0 5 10

0-4

15-19

30-34

45-49

60-64

75-79

percent of total population

Age distribution, 2008

Male Female

0

50

100

150

200

250

1990 1995 2000 2007

Guinea Sub-Saharan Africa

Under-5 mortality rate (per 1,000)

-2

0

2

4

6

95 05

GDP GDP per capita

Growth of GDP and GDP per capita (%)

41

Guinea

B alance o f P ayments and T rade 2000 2008

(US$ millions)

Total merchandise exports (fob) 250 807

Total merchandise imports (cif) 583 703

Net trade in goods and services -133 -240

Current account balance -200 -395

as a % of GDP -6.4 -10.4

Workers' remittances and

compensation of employees (receipts) 1 151

Reserves, including gold 207 315

C entral Go vernment F inance

(% of GDP)

Current revenue (including grants) 10.9 18.9

Tax revenue 10.0 16.7

Current expenditure 5.8 13.7

T echno lo gy and Infrastructure 2000 2008

Overall surplus/deficit -2.0 -0.8

Paved roads (% of to tal) 16.5 9.8

Highest marginal tax rate (%) Fixed line and mobile phone

Individual .. .. subscribers (per 100 people) 1 21

Corporate .. .. High technology exports

(% of manufactured exports) 0.1 ..

External D ebt and R eso urce F lo ws

Enviro nment

(US$ millions)

Total debt outstanding and disbursed 3,066 3,092 Agricultural land (% of land area) 50 51

Total debt service 157 146 Forest area (% of land area) 28.1 27.4

Debt relief (HIPC, M DRI) 761 .. Nationally protected areas (% of land area) .. 6.1

Total debt (% of GDP) 98.5 81.4 Freshwater resources per capita (cu. meters) 25,959 23,505

Total debt service (% of exports) 21.3 9.7 Freshwater withdrawal (billion cubic meters) 1.5 ..

Foreign direct investment (net inflows) 10 382 CO2 emissions per capita (mt) 0.15 0.15

Portfo lio equity (net inflows) 0 0

GDP per unit o f energy use

(2005 PPP $ per kg of o il equivalent) .. ..

Energy use per capita (kg of o il equivalent) .. ..

Wo rld B ank Gro up po rtfo lio 2000 2008

(US$ millions)

IBRD

Total debt outstanding and disbursed 0 0

Disbursements 0 0

Principal repayments 0 0

Interest payments 0 0

IDA

Total debt outstanding and disbursed 982 1,288

Disbursements 29 22

P rivate Secto r D evelo pment 2000 2008 Total debt service 18 41

Time required to start a business (days) – 41 IFC (fiscal year)

Cost to start a business (% of GNI per capita) – 135.7 Total disbursed and outstanding portfo lio 5 10

Time required to register property (days) – 104 o f which IFC own account 5 10

Disbursements for IFC own account 0 7

Ranked as a major constraint to business 2000 2008 Portfo lio sales, prepayments and

(% of managers surveyed who agreed) repayments for IFC own account 1 1

Electricity .. 61.0

Transport .. 9.5 M IGA

Gross exposure 43 66

Stock market capitalization (% of GDP) .. .. New guarantees 40 59

Bank capital to asset ratio (%) .. ..

Note: Figures in italics are for years other than those specified. 2008 data are preliminary. 2/25/10

.. indicates data are not available. – indicates observation is not applicable.

Development Economics, Development Data Group (DECDG).

0 25 50 75 100

Control of corruption

Rule of law

Regulatory quality

Political stability

Voice and accountability

Country's percentile rank (0-100)higher values imply better ratings

2008

2000

Governance indicators, 2000 and 2008

Source: Kaufmann-Kraay-Mastruzzi, World Bank

IBRD, 0

IDA, 1,288

IMF, 71Other multi-lateral, 560

Bilateral, 951

Private, 30

Short-term, 192

Composition of total external debt, 2008

US$ millions

42

Millennium Development Goals Guinea

With selected targets to achieve between 1990 and 2015(estimate closest to date shown, +/- 2 years)

Go al 1: halve the rates fo r extreme po verty and malnutrit io n 1990 1995 2000 2008

Poverty headcount ratio at $1.25 a day (PPP, % of population) 92.6 36.8 .. 70.1

Poverty headcount ratio at national poverty line (% of population) .. 40.0 .. ..

Share of income or consumption to the poorest qunitile (%) 3.1 6.4 .. 5.8

Prevalence of malnutrition (% of children under 5) .. .. 21.2 22.5

Go al 2: ensure that children are able to co mplete primary scho o ling

Primary school enro llment (net, %) 27 .. 48 74

Primary completion rate (% of relevant age group) 19 20 33 64

Secondary school enro llment (gross, %) 9 12 16 38

Youth literacy rate (% of people ages 15-24) .. .. .. 47

Go al 3: e liminate gender disparity in educat io n and empo wer wo men

Ratio of girls to boys in primary and secondary education (%) 45 .. 61 76

Women employed in the nonagricultural sector (% of nonagricultural employment) .. 34 .. ..

Proportion of seats held by women in national parliament (%) .. 7 9 19

Go al 4: reduce under-5 mo rtality by two -thirds

Under-5 mortality rate (per 1,000) 231 210 185 150

Infant mortality rate (per 1,000 live births) 137 124 111 93

M easles immunization (proportion of one-year o lds immunized, %) 35 61 42 71

Go al 5: reduce maternal mo rtality by three-fo urths

M aternal mortality ratio (modeled estimate, per 100,000 live births) .. .. .. 910

B irths attended by skilled health staff (% of to tal) 31 .. 35 38

Contraceptive prevalence (% of women ages 15-49) .. 2 6 9

Go al 6: halt and begin to reverse the spread o f H IV/ A ID S and o ther majo r diseases

Prevalence of HIV (% of population ages 15-49) 0.2 0.6 1.1 1.6

Incidence of tuberculosis (per 100,000 people) 119 154 200 287

Tuberculosis cases detected under DOTS (%) .. 45 55 53

Go al 7: halve the pro po rt io n o f peo ple witho ut sustainable access to basic needs

Access to an improved water source (% of population) 45 53 61 70

Access to improved sanitation facilities (% of population) 13 14 16 19

Forest area (% of to tal land area) 30.1 29.1 28.1 27.4

Nationally protected areas (% of to tal land area) .. .. .. 6.1

CO2 emissions (metric tons per capita) 0.2 0.2 0.2 0.1

GDP per unit o f energy use (constant 2005 PPP $ per kg of o il equivalent) .. .. .. ..

Go al 8: develo p a glo bal partnership fo r develo pment

Telephone mainlines (per 100 people) 0.2 0.1 0.3 0.5

M obile phone subscribers (per 100 people) 0.0 0.0 0.5 26.4

Internet users (per 100 people) 0.0 0.0 0.1 0.9

Personal computers (per 100 people) .. 0.1 0.3 0.5

Note: Figures in italics are for years other than those specified. .. indicates data are not available. 2/25/10

Development Economics, Development Data Group (DECDG).

Guinea

0

25

50

75

100

2000 2002 2004 2006 2008

Primary net enrollment ratio

Ratio of girls to boys in primary & secondary education

Education indicators (%)

0

10

20

30

2000 2002 2004 2006 2008

Fixed + mobile subscribers

Internet users

ICT indicators (per 100 people)

0

25

50

75

100

1990 1995 2000 2007

Guinea Sub-Saharan Africa

Measles immunization (% of 1-year olds)

Mt. NimbaMt. Nimba(1752 m)(1752 m)

NNiimm

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G U I N E EG U I N E EM A R I T I M EM A R I T I M E

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F O R E S T I E R EF O R E S T I E R E

M O Y E N N EM O Y E N N E

G U I N E EG U I N E E

H A U T EH A U T EG U I N E EG U I N E E

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TTiinnkkiissssooKKoogg

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SansalSansalééSangarSangaréédidi

CoyahCoyah

BissikrimaBissikrima

NyagassolaNyagassola

MoribayaMoribaya

FoulamFoulamôôriri BalakiBalaki

KintinianKintinian

TTiroiro

SibiribaroSibiribaro

BoolaBoola

DiDiéékkéé

SokouralaSokourala

NiandankoroNiandankoro

DokoDoko

FriaFria

BokBokéé

PitaPita

MaliMali

YYomouomou

BeylaBeyla

BofBoffafa

MamouMamou

LLééloumalouma

DalabaDalabaDabolaDabola

TTongueongue

GaoualGaoual

MacentaMacenta

FaranahFaranah

SiguiriSiguiri

KKéérouanerouane

TTéélimlimééllééee

KoundaraKoundara

LolaLola

GuGuééckckéédoudou

KouroussaKouroussa

ForForéécariahcariah

DinguirayeDinguiraye

KissidougouKissidougou

MandianaMandiana

LabLabéé

KindiaKindia

KankanKankan

NzNzéérréé-kor-koréé

GUINEA-BISSAU

S E N E G A L

M A L I

C Ô T ED ' I V O I R E

S I E R R A L E O N E

L I B E R I A

TTo o BafatBafatáá

TTo o TTambacoundaambacounda

TTo o TTambacoundaambacounda

TTo o TTambacoundaambacounda

TTo o KayesKayes

TTo o KayesKayes

TTo Bamakoo Bamako

TTo Bougounio Bougouni

TTooKorhogoKorhogo

TTooSSééguguéélala

TTooManMan

TTooMagburakaMagburaka

TTooMagburakaMagburaka

TTooFreetownFreetown

G U I N E EM A R I T I M E

G U I N E E

F O R E S T I E R E

M O Y E N N E

G U I N E E

H A U T EG U I N E E

Kamsar

SansaléSangarédi

CoyahDubréka

Bissikrima

Nyagassola

Moribaya

Foulamôri Balaki

Kintinian

Tiro

Sibiribaro

Boola

Diéké

Sokourala

Niandankoro

Doko

Fria

Boké

Pita

Mali

Yomou

Beyla

Boffa

Mamou

Lélouma

DalabaDabola

Tongue

Gaoual

Macenta

Faranah

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Kérouane

Télimélée

Koundara

Lola

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Kouroussa

Forécariah

Dinguiraye

Kissidougou

Mandiana

Labé

Kindia

Kankan

Nzéré-koré

CONAKRY

GUINEA-BISSAU

S E N E G A L

M A L I

C Ô T ED ' I V O I R E

S I E R R A L E O N E

L I B E R I A

Niger

Kole

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Bafin

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Gambia

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Tinkisso

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Milo

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A T L A N T I C

O C E A N

To Bafatá

To Tambacounda

To Tambacounda

To Tambacounda

To Kayes

To Kayes

To Bamako

To Bougouni

ToKorhogo

ToSéguéla

ToMan

ToMagburaka

ToMagburaka

ToFreetown

Nim

ba Mts. Mt. Nimba(1752 m)

12°N

10°N

12°N

10°N

8°N

14°W

14°W

12°W 10°W 8°W

12°W 10°W 8°W

GUINEA

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 20 40 60 80

0 20 40 60 80 Miles

100 Kilometers IBRD 33414

NO

VEM

BER 2004

GUINEASELECTED CITIES AND TOWNS

PREFECTURE CAPITALS

REGION CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

PREFECTURE BOUNDARIES

REGION BOUNDARIES

INTERNATIONAL BOUNDARIES