Posted on Monday, 23 November 2015 10:00

Guinea Country Profile 2015: Ebola casts a long shadow

By The Africa Report

altThe 2014 Ebola epidemic started in Guinea and is the single most important factor in the country's political and economic future.

The government declared a state of emergency in August and the World Health Organisation cautiously said that the spread of the disease had shown signs of stabilising in late September.

Hundreds of Guineans died from Ebola in 2014, and the healthcare system of this country with poor infrastructure was considerably weakened.

The holding of presidential elections planned for 2015 and investment decisions on mining projects will depend on how the government handles the crisis over the next few months. The international response has been slow, but France promised in October to build several new treatment centres.

If elections can be held while Ebola is still spreading, the power of incumbency is likely to carry President Alpha Condé through to re-election in 2015. He is set to benefit from the fact that the opposition coalition seems unable to decide on a candidate to represent the alliance.

Ethnic divisions

The country's politics are influenced by ethnicity, with opposition leader Cellou Dalein Diallo counting on support from his Peul ethnic group and Condé depending on the Malinké vote.

The army has tended to play an influential role in politics in recent times, too. Prior to Condé's arrival in power, the army was indisciplined and weakened by ethnic and generational conflicts.

He has ensured that the soldiers have returned to their barracks, but elements of the armed forces are unhappy with the privileges given to Malinké soldiers and officers. Condé has not succeeded in calming the political atmosphere since his arrival in power in 2010.

The opposition regularly accuses him of manipulating the electoral register and says he has not implemented the policies agreed in a previous round of talks with the government.

altLeading up to the presidential poll, the opposition has promised to restart its street protests if Condé does not cancel the Commission Electorale Nationale Indépendante's contract with the company Waymark.

Dalein Diallo has also hardened his negotiating position by calling for the government to appoint a new leadership team at the electoral commission. He says that its members are too close to the Condé regime. Those disputes look likely to continue as Condé often adopts a hardline approach.

The numbers may seem exaggerated, but Guinea's mines minister Kerfalla Yansané estimates that the country is expecting about $50bn in investment over the next decade in the mining sector.

Mining is the principal earner of foreign exchange for the country, which also expects sizeable investments in manufacturing and hotels. However, the Ebola epidemic is casting doubts on those predictions. The government is now expecting negative growth rates for 2014.

Investment delays

In May 2014, the government signed an investment framework agreement with Anglo-Australian mining company Rio Tinto for the development of the two southern deposits of the Simandou iron ore deposit. It includes plans for the construction of a mine in Beyla and the building of a 650km rail line and a deepwater port at Forécariah on the Atlantic coast.

Simandou is by far President Condé's largest economic project, with an estimated cost of $20bn, according to official figures. Rio Tinto and its principal partner Chinalco have agreed to deliver feasibility studies by April 2015. For now, the only other two parties involved in the project are the World Bank's International Finance Corporation and the Guinean state.

Other interested investors are waiting to see how the Ebola crisis plays out and for the presidential election, if it is held. Most other investments in the mining and power sectors also face delays, but the World Bank delivered a financing package of $50m to improve electricity services in July 2014.

The two northern blocks of Simandou were held by the Israeli company BSG Resources and its partner Vale until early 2014, when the government withdrew the licences following an anti-corruption investigation.

BSG Resources says that it has done nothing illegal and the revocation was a political move. The two parties have brought their conflict to the International Centre for Settlement of Investment Disputes in Washington DC.

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