Guinea - The economy

RESTRICTED FILE COPY Report No. AF-41c This report was prepared for use within the Bank and..its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION THE ECONOMY OF GUINEA March 3, 1966 Africa Department CURRENCY EQUIVALENTS $ U.S. 1 = G. F. 246.85 G. F. 1 $ U.S. 0.04 G. F. 1 billion = $ U. S. 4 million TABLE OF CONTENTS BASIC DATA SUMMARY AND CONCLUSIONS I. Background........................................... 1 The Country and the People........................ 1 Political Background.............................. 1 II. The Structure and Performance of the Economy......... 4 III. Investment and Development Planning.................. 5 IV. Public Finance....................................... V. Money and Credit. ................. ........... . 10 VI. The Main Sectors of the Economy...................... 11 A. Agriculture, Livestock and Fishing............... 11 B. Mining and Industry.............................. 14 C. Transportation................................... 18 D. Power and Water........... .............. ..... 20 E. Education......................... .......... 21 VII. External Trade and Payments............... ......... 22 A. Foreign Trade..................................... 22 Exports...................................... 23 Imports... ................. ............... 24 Organization of Foreign Trade and Prospects..... 25 B. Balance of Payments............................... 25 VIII. External Assistance and Foreign Debt..... .......... 27 IX. Economic Prospects and Conclusions................... 29 MAPS STATISTICAL APPENDIX GUINEA BASIC DATA Area: 95,000 sq. miles; 246,000 sq. km. Population: 3.4 million (1964) Rate of growth: about 2.7% Population density: 35 per sq. mile; 14 per sq. km. Political status: Independent since October 1958 Gross domestic product: US$240 million (1964) (rough estimate) Rate of growth: n.a. (probably less than population growth) Per capita: US$70 (1964) (rough estimate) Gross domestic product at factor cost: of which, Agriculture: about 50% Mining: about 10% Percent of GDP at market prices 1964 Gross investment 25% Gross savings 14,51 Balance of payments current account deficit 11-12% (rough estimate) Interest payments 1% Central and Regional Governments' current revenues 25% Money, credit and prices Relationship to large monetary or customs area: None Increase over June 1965 June 1964 Total money supply GF 37.28 billion 30.26% Time and savings deposits GF 3.29 " 2.01% Commercial bank credit to private and cooperative sector GF 2.51 " 3.31% Rate of change in prices n.a. but probably sizable -2- GUINEA Public sector operations (at current prices) Increase over 1963/64 1960-62 av. Central government current receipts (actual) GF 12,175 million + 44% Central government current expenditures (actual) GF 10,531 " + 40% Surplus + GF 1,644 Government capital expenditures ) Public investment expenditures ) GF 15 billion avge, n.a. Total external assistance to public sector GF 8 billion n.a. External public debt (in million US $) June 1965 Total debt 204 Debt service 14.6 Debt service ratio 28% Balance of payments (in US $) 1964 1960-64 Total 52'million - 1% Total imports* 66 " -11% Net invisibles -10.6 " n.a. Net current account balance -27.7 " n.a. 1964 1961-63 Commodity concentration of exports (alumina) 60% 56% Gross foreign exchange reserves 9.8 million n.a. (or 2 months' imports) *Including an estimate of imports under the Plan not included in customs data SUMMARY AND CONCLUSIONS i. To arrive at a balanced judgment on the Guinean economy.is singularly difficult. In the first place, the economist has to contend with the fact that some of the key data are more than ordinarily sketchy, even for an African country. That in itself is one aspect of the second difficulty, which calls for a particular effort of understanding. Independence came to Guinea abruptly. There was no handover from the former French administration and a new administration, perforce wholly African, had to be constructed from scratch. The administration was, moreover, overtaxed. First, a large part of the remaining foreign com- munity, particularly those engaged in banking, commerce and plantations, withdrew in the year or so following Independence when Guinea, seeking control over what had become a serious capital flight, created the Guinean franc and severed relations with the convertible CFA franc then circulating in the rest of the former French West African territories. Guinea was thus faced with a further vacuum to fill in the private sector. The area of government activity was in any case deliberately extended because of a basic policy decision to set up a centrally planned economy, itself the most demanding of all administrative tasks. ii. A planned economy has not meant the systematic exclusion of private investment. But domestic Guineanprivate investment was always negligible and, even before Independence, foreign, essentially French, private investment in small and medium sized industry was drawn to Senegal and later the Ivory Coast rather than to a country that was traditionally regarded as offering by comparison very limited opportunities. iii. Guinea was, and remains, attractive only to very large private investors. No matter how successful the Government may be in stimulat- ing agricultural production and exports, it will be the successful execution of large scale ventures based on Guinea's mineral resources that will have the largest impact on her exports. The Government has recognized that partnership with major international producers and investors is the key to the successful development of those resources. It is perhaps ironical that serious interest in developing Guinea's min- eral resources for international markets on a large scale expressed itself in the years immediately preceding Independence, and projects were ready for execution when general conditions appeared least favorable iv. On the eve of Independence, projects sponsored by foreign in- vestors involving a total investment of well over $600 million were under active consideration. With Independence further work was suspended on the plans for the Konkoure hydroelectric project to supply power for an aluminum smelter, but the first stage of the associated alumina plant, owned and operated by the Fria company, was pushed forward to a success- ful conclusion in 1960. Work also continued on the Boke bauxite project until 1961 when the GDvernment of Guinea terminated the concession of Bauxites du Midi, alleging failure by that company to meet its obligations under that concession, and seized its properties in Guinea. The Government subsequently concluded an agreement with a subsidiary of Harvey Aluminum Company-for the exploitation of the Boke deposits, under which it established a jointly owned mining company, Bauxites de Guinee, in which the Government holds 49% of the capital -ii- stock. The Bank has been requested to assist in financing the railway and port facilities required to support the mining operation. v.. Guinea has mounted a very large development effort and the polit- ical drive behind economic development is strong. The Government has held strongly to the view that traditional social forms are inconsistent with economic development. Guinea has largely been able to replace tribal by national structures and has created an unusual sense of national cohesion and purpose. Efforts in education have been massive; those to improve the situation of women noteworthy. In short, Guinea has already gone far in laying down the structure of a modern society. vi. For a country of about 3.4 million, Guinea is relatively well endowed with unusually varied natural resources - minerals, in particular bauxite and iron ore, and agricultural products both for export and inter- nal consumption. It has also a large hydroelectric potential. The scope for development is thus considerable. vii. On balance, however, the results of development so far achieved have been less than commensurate with the effort and the scale of invest- ment undertaken. The Fria alumina project has added very substantially to Guinea's gross foreign exchange earnings, but agricultural production and exports, which are fundamental to Guinea's development, have lagged. In part, it must be admitted that Guinea in some ways suffered as much as it benefited from the large aid programs mounted by Eastern countries in the early years after Independence, often tied to projects not well matched to Guinea's requirements in scale, availability of raw materials and markets. Guinea has also taken on projects sponsored by suppliers without adequate demonstration of feasibility. Guinea itself has over- emphasized investments that are slow yielding and has given far too little attention to maintenance. In part, organization, administration and extension service in agriculture have been weak. Project preparation has generally been poor and management inadequate. Latterly Guinea has re- quired that project financing, including projects financed by suppliers, be accompanied by management contracts and certain foreign aid sources have also increasingly related financial to technical assistance. viii. For a country which came to Independence with a large budget deficit financed by subsidies from France and the former Federation of French West Africa, Guinea's budgetary performance has been remarkably good. The number of civil servants has increased sharply as the public sector expanded, but public sector salaries as a whole have been held in tight check and taxation has been increased to the point at which it now takes a very high proportion of the national product. Although there may have been some drawing on reserve funds in the last two years, the current budget is generally balanced, and has sometimes shown a surplus which, together with profits from state enterprises, has gone to finance investment. ix. Credit management through the State banking system has been less satisfactory, with large amounts of credit being used to finance initial and working capital contributions to state enterprises and the local currency contribution to foreign aid. Ill-administered -iii- agricultural credit has led to a high proportion of unpaid loans and the Government has suspended operations of the agricultural credit bank pend- ing review and reorganization. Since 1964, the Government has shown increasing awareness of the danger of continued credit expansion and has progressively restrained it. x. The basically weak point in Guinea's performance since Independence has been the failure to recognize the impact on economic development of general monetary policies and specific pricing policies, no matter how well intentioned. The weakness of the inconvertible Guinea franc, the rigidities introduced by extensive bilateral trading arrange- ments (even where these have provided new markets) and substantial infla- tion have hampered the movement of foodstuffs from countryside to towns within Guinea, have encouraged illegal trading with neighboring countries and thereby reduced official foreign exchange receipts. Despite large amounts of foreign aid, Guinea has had to cut consumer goods imports very severely, with a resultant damaging lack of incentives to farmers who have little on which they spend their earnings. It is encouraging that there are now signs of a reappraisal of policies in the course of which it is Co be hoped that the --'pact of monetary policies on economic development will receive the necessary attention. xi. Nowhere is the burden of past difficulties more evident than in the size and structure of the country's external debt, which has been allowed to build up piecemeal without due regard to the total burden in- volved. In spite of some recent rescheduling, about one-fourth of Guinea's receipts in foreign exchange or exportable merchandise will have been used to service debt in 1965. This proportion, on the basis of present debt schedules, would increase until 1969, without taking account of any new debt on hard terms that may be incurred. Few of the projects financed can be expected to contribute soon and substantially enough to foreign exchange earnings, or savings, to improve this picture without further extensive rescheduling. THE ECONOMY OF GUINEA I. BACKGROUND The Country and the People 1. Guinea occupies 246,000 square kilometers on the southwestern side of the great bulge of West Africa, about ten degrees north of the Equator. A dominant feature of the country's terrain is an eroded mountain range extending southeastward from Senegal and Mali in the north to Sierra Leone, Liberia and the Ivory Coast in the south. The northern portion of this range with heigbts of 1,500 meters is known as the Fouta Djalon, where many of the major rivers of West Africa are born. Four major geographical regions are generally distinguished: Lower Guinea, or the narrow and humid coastal zone; Middle Guinea, or the Fouta Djalon area accounting for one-third of the total area of the country; Upper Guinea, or the savannah representing another third of the country; and the fairly mountainous forest area in the southeast. These regions differ considerably from one another in climate, topography and soils which gives rise to an unusually wide variety in crops produced. 2. The population is estimated at 3.4 million people. The growth rate is believed to lie between 2.5% and 3%, and 2.7% has been assumed in this report. There are three main ethnic groups: the Foulahs, the Malinkes and the Soussous, most of them Moslems. One of the major suc- cesses of the Government has been the substantial elimination of tribal rivalries and the creation of an unusual degree of national conscious- ness. 3. The population is unevenly spread over the land. Density is at its lowest - 6.8 per square kilometer - in Upper Guinea. The popula- tion is largely rural. There are probably not more than eight towns with a population of over 10,000 people: Conakry (170,000), Kankan (31,000), Kindia, Fria (18,000), Labe, N'Zerekore, Macenta and Mamou. Political Background 4. In September 1958 Guinea voted overwhelmingly, unlike all other then French Territories, against the Constitution proposed by General de Gaulle, which would have given Guinea internal self-govern- ment as a member of the French Community, but less than full independence. On October 2, the Territorial Assembly proclaimed Guinea independent. M.r. Sekou Toure, leader of the Democratic Party of Guinea (PDG), and until then Vice President of the Assembly, became President. 5. Ties with France were broken in two stages. Immediately after Independence, French budget support and development aid ceased; French civil servants were quickly withdrawn. Guinea simultaneously lost the services and financial aid provided through the former Federation of French West Africa. Guinea no longer enjoyed protection in the French market for its agricultural exports. Private French citizens, for ex- ample, plantation owners, bank staff, small businessmen and artisans, generally stayed on until the decision to set up an independent -2- currency in March 1960 and to introduce exchange controls which ended unrestricted transfers to France and to the rest of the franc area as well as access to the French banking system. At this stage, the depar- ture of the remaining French population was accelerated. However, the Compagnie Miniere de Conakry continued operations, construction of the Fria alumina plant was completed, and development work and some construc- tion on the Boke bauxite project was carried forward, until mid-1961, by Bauxites du Midi. 6. In the absence of official help from the United States and Western Europe to replace French aid, Guinea sought and received aid and advice from Eastern bloc countries and independent African allies. In the short run the funds and goods provided relief. However, neither party had any experience of the other and much trial and error was involved. 7. In the absence of continued protection in the French market, Eastern bloc agreements also provided outlets for Guinea's agricultural exports in return for consumer goods, although of variable quality and suitability, the provision of a series of turn-key industrial and other projezts generally constructed with insufficient regard for local capa- bilities, the availability of raw materials or markets and, at least initially, with little opportunity for Guinea to exercise any control over their timetable or cost. 8. In the face of the complete and rapid withdrawal of the former French administration, Guinea had no practical alternative but to Africanize virtually overnight. At the same time, the Government was determined to take control of the economy. Eastern bloc advice encour- aged Guinea to experiment with new institutional arrangements in the production, distribution and financial fields, which over-extended the task of the new and relatively inexperienced administration. Meanwhile, Guinea incurred very substantial external debts for projects all too often of low economic priority, which do not contribute sufficiently to the now heavy repayments. By 1962, Guinea decided not to restrict it- self to Eastern aid and turned towards Western countries and inter- national institutions. 9. On the positive side, Guinea has remarkable achievements to its credit. It has not merely survived the uniquely difficult condi- tions in which it came to independence but has gone further than any other country in West and Equatorial Africa (except perhaps Ghana, which followed a more ordered path to independence) in subordinating tribal distinctions and building a nation. Guinea has had sustained and dynamic leadership from President Sekou Toure, laying equal stress on the preservation of independence, the urgency of economic development and the necessity for social progress. His organizational ability and earlier experience as trade union leader, with close collaboration from a number of able colleagues, has built the single political party, the PDG, into an instrument of crucial importance. Most of the adult popu- lation belongs to the PDG, which reaches out to every village in the country and whose competence applies to almost every aspect of Guinean life. It parallels the administrative structure, conveying orders, -3- mobilizing and informing the people, and feeding back results to the fifteen-man Political Bureau heading the Party hierarchy and collective- ly determining policies. It is remarkable that the principal political figures of 1956 and 1958 are virtually without exception the same in 1966. The President and the Bureau have in the past shown great will- ingness to change their minds, often radically; the temptation to seek solutions to problems by radical changes rather than unspectacular daily improvements had frequently proved strong. A major achievement of the Party, begun even before Independence, was the elimination of the former system of appointed local leaders (chefferie). The Government and Party have been unambiguous in their conviction that an essentially tribal society is incompatible with national economic development. 10. The Government's actions since Independence have been a blend of deliberate policy decisions opting for a controlled economy modified by improvization in the face of particular problems. The alter- natives at any given time have been very limited. For example, there had never been a Guinean private sector in anything but a very limited sense. It remains true that, in opting for a centrally controlled econ- omy, Guinea opted for the most complicated of all administrative tasks despite a weak administrative framework and capability. There have inevitably been substantial shortcomings. As the following chapters will show, important sectors of the Guinean economy have barely limped along. If the contribution of Fria is left out of account, the economy as a whole appears to have slipped backward, despite great efforts and an unusually large share of national product devoted to investment. 11. While Guinea has demonstrated remarkable ability to stand on its own feet politically, economic recovery from the shocks of Independ- ence has been much less assured. The cessation of French aid proved only a temporary problem; in volume Guinea has been receiving aid from a variety of sources on a very substantial scale, but also on terms which have created a major debt problem. She has found new markets for agricultural products which had relied on a protected position in France, but not all the bilateral arrangements through which these new markets have been provided have offered commensurate benefits in terms of making available the imports most urgently needed. The intractable problem is that,since the decision to divorce herself from the CFA franc, and hence from the franc area, Guinea has been unable to build up adequate reserves and thus has an inconvertible currency virtually without back- ing. The whole exchange rate question and related issues of monetary management have tended to be treated on a different plane from economic and fiscal issues. However, there are now indications that the Government has come to recognize that its economic problems are in fact inseparable from its monetary problems and that both are being sub- jected to serious scrutiny. m 4M II. THE STRUCTURE AND PERFORMANCE OF THE ECONOMY 1;* There is a more than usual shortage of adequate and reliable data on many sectors, due to the administrative vacuum left after Inde- pendence, and an assessment of the economy has to be made with great approximation. There is no doubt, however, that the general level of income in Guinea is low, GDP being probably little over GF 60 billion in 1964. The majority of the population (over 80%) has a standard only a little above subsistence requirements and, allowing for income trans- ferred by foreign owned companies, per capita income is somewhat less than $70 a year. 13. During the period 1958-60 it appears that the economy made little progress. Since 1960, when the national currency was established, growth outside the mining sector appears to have fallen below the assumed rate of population increase of 2.7%. The economy has in this period, however, benefited by the entry into production of Fria which virtually doubled gross export earnings within three years and now contributes close to 10% of GDP. This compensating effect may for the years 1961-63 have brought the overall growth rate to a level slightly over the growth rate of the population. Since then, however, the rate has fallen back. 14. Guinea has attempted to fill the vacuum left by the departure of French administrators and technicians, farmers and businessmen by bringing an increasing area of the economy into the public sector. Partly for reasons of policy and partly out of necessity, the Government has stepped in where the private sector stepped out. But since the number of competent and experienced people was very limited, efficiency has often been low. State enterprises have been introduced in, or have taken over, production, commerce, banking, insurance, util- ities,and in general there has been an attempt to establish a centrally planned economy for which the Government did not have the administrative capacity. 15. The public sector now accounts for over half of gross domes- tic expenditures. Not including the activities of state enterprises, current budgetary expenditure amounts to aliaost 30% of GDP; pub- lic capital expenditure stands at about 25%. 16. Guinea is largely oriented towards foreign trade. Exports in 1964 were estimated at over GF 14 billion, representing about 23% of the GDP; over 85% of this is recorded trade, for a large part (GF 7.5 billion) alumina exports. Imports, not including those under the Plan, i.e. those financed by external aid, increased rapidly until 1963, but were in that year drastically curtailed for lack of foreign exchange, leading to serious shortages of spare parts and consumption goods. In- cluding imports under the Plan, total imports, probably half of which are equipment, now stand at over GF 16 billion, which is almost 25% of the GDP. 17. Agriculture, including livestock, forestry and fishing, accounts for about half of GDP, but provides less than 30% of total recorded ex- ports. 13 Price controls are rather strict in the urban centers and of- ficial prices have been increased only occasionally with the introduc- tion of new taxes when liquidity appeared too abundant or when price discrepancies with neighboring countries led to large leakages across borders. Official prices, for which there is no index, do not adequately reflect the price increases which have taken place as evidenced by an active black-market. There had been little increase in public sector wage rates since Independence until July 1965 when wages of lower civil servants were increased by 12 to 50%, but the number of wage earners has greatly increased with a corresponding increase in monetary demand. Price policy has little influence in the interior where most of the pop- ulation lives at subsistence level. The number of unemployed, particu- larly in Conakry, has been substantial but was recently reduced by requiring them to return to rural regions. However, as everywhere in Africa, there is much underemployment in the agricultural sector. 1(. Slow growth was not the result of low investment, which has amounted to as much as 25% of GDP, but a continuation of poorly directed investments too often yielding poor returns (for which the donors and suppliers were also to blame), the dislocations in external trade and payments following Independence, the attempts to run a planned and centralized economy without the basic information required for effective planning, without an adequate appreciation of the impact of policies that might seem justified in themselves and without an effective administra- tion. These various aspects are considered in the following sections of the report. However, important changes have taken place in social struc- ture, there is a readiness to admit and review mistakes and the ground- work laid, particularly through the spread of education, for improved performance in the future. III. INVESTMENT AND DEVELOPMENT PLANNING 20. Total investment just prior to Independence amounted to about 12% of GDP. Up to Independence, virtually all public investment had been financed by French aid, which contributed between 1947 and 1958 about CFAF 12.5 billion (say, an average of about $5 million a year), most of it for infrastructure and the social sector. Foreign private capital contributed an additional CFAF 6 to 7 billion, most of it for two mining operations and for the initial phases of major projects started shortly before Independence. The balance consisted of rela- tively minor investments in plantations and small manufacturing plants. Domestically financed private and public investment was negligible. 21. After Independence in 1958 the Guinean Government no longer had access to French public resources and several Eastern countries stepped in with assistance. From this early period little detailed information is known, except that foreign aid at least initially seems to have been mostly used to furnish fuel and consumption goods to keep the economy going and to provide budget support. Foreign private in- vestment, however, continued at a high level for about two years after Independence. Although preparatory work on the Konkoure hydroelectric project and related aluminum smelter came to a halt, the Fria alumina plant and railway to Conakry were pushed on to successful completion in 1960 at a total cost of some $150 million. (See paragraph 66 below.) Investment also continued for about two years in the Boke bauxite proj- ect but the concession of Bauxites du Midi was subsequently terminated by tae Government (see paragraph 68 below). 22. The Government's first major effort to take control of the economy was incorporated in a Three-Year Development Plan, 1960-63, devised principally by two foreign advisers. The Plan laid down guide- lines aiming at a complete restructuring of the economy which would have resulted inter alia in a reduction of the role of the agricultural sec- tor. Given the lack of basic knowledge about the economy, its early stage of development and the Government's limited administrative capacity, the objectives were unrealistic, but the effort undertaken in trying to implement the Plan was none the less impressive. 23. Actual public investment expenditures under the Plan, as of May 1964, the end of the extended Plan period, amounted to GF 40 bil- lion. Shortfalls were important in agriculture, smaller in industry and health; other sectors, notably transport, achieved or surpassed their financial targets. Foreign loans and a small amount of foreign grants financed about GF 23 billion of expenditures. Domestic savings, mainly generated by state enterprises, probably amounted to about GF 6 billion over the period. Financing of the Plan by the Central Bank amounted to over GF 10 billion, mostly for projects for which other financing was not available in time. 24. A special effort, foreseen in the Plan, had to be made when state enterprises were introduced in the industrial, financial and, in particular, commercial sectors which required sizeable initial outlays for fixed and working capital. Sums amounting to GF 30 billion were obtained from the Central Bank and have been the main cause of infla- tionary financing. 25. In terms of meeting its financial target, the Three-Year Plan has been reasonably successful, as 83% of the expected level of invest- ments was reached and the economy had absorbed investments annually at the very high rate of close to 25% of GDP, or double that realized be- fore Independence. However, in physical terms the resuks have not always been striking. Sector allocations indicate that infrastructure, including administrative buildings, received 57% of total investment; industry 18%, education and health 13%; and agriculture only 11%. Some major efforts in infrastructure and education have had profound effects. An important part of investment went to needed increases in electric power output and some to the processing of local primary products, but the objectives of the Plan in the industrial sector in general were far from being reached and agricultural investment showed few positive results. 2r. Project preparation on the whole has been largely insuffic- ient, since adequate technical assistance and training have not been -7- available. Besides, the investments made have been mainly of a low yielding nature. With exceptions in the case of education and power, implementation of the Three-Year Plan has done rather little to prepare the ground for the growth of the economy which is expected to materialize from the Seven-Year Development Plan (1964-70), in execution since mid- 1964. 27. In essence, the broad objectives of this new Plan are the same as those of the preceding one, and the Seven-Year Plan incorporates incompleted Three-Year Plan projects. The Government's approach remains essentially oriented towards the public sector, although the balance has shifted somewhat more in favor of the productive sectors. The Seven- Year Plan envisages new investment of GF 108 billion plus GF 5 billion to complete Three-Year Plan projects. This would imply a still higher rate of investment, an average of GF 16 billion a year (almost $65 mil- lion equivalent), increasing per capita investment from $15 per year in the recent past to close to $18, without taking account of public and private investments which are planned to be started before 1970, notably the Boke project. Investments in administrative equipment are not included either, nor investments to be made by the regions, which may run up to GF 10 billion in the seven-year period. Moreover, the cost of several projects is probably underestimated. 2. Over GF 33 billion, representing almost 30% of total planned expenditures, is expected to be contributed by domestic savings, which seems high but possible considering profits made by state enterprises. In principle, financing is in sight for GF 74 billion, although it is believed that firm arrangements still have to be made. For the remain- der, about GF 40 billion ($160 million equivalent), Guinea would have to look to additional foreign aid. Having drawn the lesson from earlier years, the Government intends to limit its Development Plan according to non-inflationary finance available; the Plan targets are thus essentially flexible. 29. It seems unlikely that the Government will be able to secure foreign financing of such magnitude on terms which would not add sub- stantially to the already very heavy debt service burden. Besides, administering such an ambitious program will place great strain on the government machinery for supervising the Plan, even though it has undoubtedly acquired valuable experience in the recent past. It is also debatable whether the Guinean economy will be able to absorb such a high level of investment, considering its state of development and the shortages of skills. $0. An immediate source of concern, whatever the rate of comple- tion of the new Plan may be, is that recurrent expenditures resulting from these investments, in particular from those in the infrastructure sector, will increase rapidly if adequate maintenance is to be provided. It does not seem possible that the growth of the economy, which from now on will have to be the main source of additional current government income, will be sufficient, the more so as present allocations for main- tenance are already very inadequate. IV. PUBLIC FINANCE 3.1. Before Independence, French subsidies had covered 40% of the current budget. In addition the West African rederation and France financed certain services directly. Aid from both sources ceased imme- diately on Independence and Guinea had to make extraordinary efforts to bring order into the public finances. In the circumstances, performance in this area has been remarkably good. The Government has generally managed to keep current expenditures within its own current revenue. Expenditure estimates have to be made on the basis of authorized rather than actual payments, but it seems that on several occasions surpluses have been achieved, although recently there have been some drawings on reserve funds ( Fonds de Perequation) in order to maintain budget equil- ibrium. Budgeted current revenues and expenditures increased from GF 7.5 billion each in 1959 to GF 15.6 billion each in 1965/66 (i.e., by 12.5% per annum). Regional budgets introduced in 1960 generally cover current and part of capital expenditures with their own resources amounting to about GF 2 to GF 3 billion a year. Total current government income thus represents the very high proportion of almost 30% of estimated GDP. 32. Central Government income depends for over 50% on indirect taxation; imports alone provide almost 40% of total current income, although imports for the Plan and for certain enterprises are duty free. Export duties provide an almost negligible contribution after recent reductions to make the FOB prices of commodities such as bananas and coffee more competitive. 33. Direct taxation contributes to over 20% of current government income, most of it from a tax on business profits paid by both public and private enterprises, except those exempted under special agreements. Tax rates have been considerably increased over the years and there has been a substantial improvement in collection procedures. Growth of government income cannot be expected to continue at the past rate (about 7% per annum) since it will depend largely on the growth of the economy, although further improvements in collection are possible. The heavy reliance on import duties while imports have to be severely restricted is not a factor favorable to revenue increase. Regional income is derived from a variety of taxes and enterprises. 3ei. Current expenditures of the Central Government have been ris- ing since 1962 at an accelerated rate with annual increases between 13% and 18%. Allocation of available funds is highest for education at 24%, defense at 20% and for health and social services at 10%, whereas the productive sectors obtain only 4% of the total expenditures. Expendi- tures for maintenance of infrastructure, transportation and public works dropped both proportionately, from 9% of total expendituresin 1962 to slightly under 3% in 1965-66, and also in absolute terms and stand now at GF 450 million, of which GF 300 million are for maintenance of the national roads, that is about $150 per km. 35. Most of the investments in the Seven-Year Plan would increase the need for services and for maintenance expenditures. As revenues cannot be expected to continue to increase at the present rate, there is urgent need for restraining the growth of other expenditures, and in particular to restructuring the budget to allow larger current -9- expenditures for maintenance and services in the key productive sectors. 36. Wages and salaries represent the largest part of the current budget, taking slightly over 60% of expenditures, a rate comparable to that in other countries in the same stage of development. With salar- ies frozen, the substantial increases in the cost of personnel over the years have been due essentially to an increase in the number of govern- ment employees who now total close to 25,000 (versus 10,000 in 1958). The GF 2 billion to GF 3 billion per year spent by the regions is mostly for administrative purposes; their expenditures for ?roductive-services are probably under 10% whereas maintenance of infrastructure dropped to 3% in 1964/65. 37. The current budget includes some capital items such as restor- ation and construction of administrative buildings. In recent years these have not amounted to over 5% of total current expenditure. Capi- tal expenditure of the regions is small and is either financed out of current income or from loans which can be obtained on a project basis from the banking system. All other public capital expenditures are grouped in the Plan. 38. The management of the current budget is basically sound. It relies for current expenditure exclusively on domestic resources and the rate of mobilization of these resources has been high. This position is, however, complicated by the recent use of the Fonds de Perequation, the heavy burden of external debt, and the existence of deficits incurred by several of the state enterprises. 39. During the 1964/65 and 1965/66 fiscal years the Government has obtained special contributions from the Fonds de Perequation. This Fund, established in 1961, levies a surtax of between 5% and 40% on most im- ported products for the benefit of agricultural exports. The Fund's annual income is generally between GF 1 billion and GF 1.5 billion; reserves reached GF 4.7 billion in June 1965. Expenditures were a GF 1.4 billion subsidy to the current budget in 1964/65 and another of GF 0.4 billion in 1965/66. It is also not entirely clear to what extent other payments (which were made in 1965 to Guinexport - the state monop- oly for exports, I'Office de la Banane and the Railway Authority) total- ing GF 2.9 billion are in agreement with the initial objectives of this Fund; namely to provide incentive for production of export crops. 40. It seems that state enterprises produce on balance profits of about GF 3 billion a year which are expected to increase in the near future to GF 5-3 billion. The main contributors are the banking sector with GF 1.1 billion in 1963/64 and Alimag, the state importing agency for foodstuff, with GF 1.6 billion. Total profits of state enter- prises in 1963/64 amounted to GF 4.3 billion, partially offset by losses of GF 1.2 billion, principally by Air Guinea and the Urban Transport Company (TUC). Guinexport and the Railway Authority also operate at a loss which is covered by the Fonds de Perequation. Part of the net pro- fits, totaling GF 1.8 billion, but which represent public savings, is chan- neled toward the Plan as a contribution to public capital investment and part -10- of it has been used to pay up the capital stock of these state enter- prises. As the Government did not have sufficient funds to subscribe its capital stock in the new enterprises in full, nor to provide an adequate working capital, they borrowed heavily from the Central Bank. V. MONEY AND CREDIT 41* Guinea remained a member of the West African Monetary Union, in which framework it had no control over its own monetary policy or any defense against rapidly mounting capital flight. In March 1960, Guinea established its own Central Bank and created its own currency at par with the CFA franc which was then withdrawn from circulation and used as reserves by the Central Bank. This institution became responsible for note issue and for credit and exchange control. 42. In the following period, the Government suspended the opera- tions of all foreign banks and the Central Bank assumed the functions of a commercial and a development bank. In June 1961, the Government created a commercial bank, a foreign trade bank and an agricultural development bank, all three closely linked with the Central Bank, whose Governor is also the Minister of Banking and Foreign Trade. The estab- lishment of such an intricate public banking system without well trained staff in sufficient numbers and without adequate experience in monetary affairs led to difficulties and errors in the handling of operations. The system has, however, worked and is being improved in spite of a ser- ious lack of competent personnel. Guinea has requested help from the United liations Special Fund in training bank staff. 43. The Central Bank is authorized to extend credit to the -Govern- met,c up to one-tenth of its previous year's revenues to be repaid in 240 days; there is no statutory limit on the credit volume which it can extend to the other banks and, until July 1965, there was none on that to finance the Plan. 44. Money supply in Guinea has increased from GF 14 billion at the end of 1960 to GF 37 billion in June 1965, with a very large increase during the preceding 12 months. Deposits, including small amounts of time deposits, increased at a slightly lower rate during the same per- iod, rising from GF 5.1 billion to GF 23 billion. In spite of this, commercial banks became increasingly liquid; in mid-1965, cash reserves represented almost 75% of the deposits of the private sector and state enterprises. Deposits, four-fifths of which are private deposits, now account for over 60% of money supply. Part of these, however, consists of funds accumulated because of transfer restrictions, which are de facto blocked and can be regarded as outside the money supply. Liquid- ity in Guinea seems, nevertheless, excessive. 45. Substantial expansion in domestic credit has been responsible for the growth of money supply. Credit increased from GF 10 billion in December 1960 to GF 46 billions in June 1965, taking credit to Government on a net basis. -11- 46. The main sources of inflationary financing since 1960 have been credit creation of almost GF 28 billion for the purpose of paying the Government's capital subscription to new state enterprises and for providing them with working capital, together with financing of GF 11 billion of capital expenditure under the Three-Year Plan. These credits were granted automatically. Long-term foreign loans made for the financ- ing of investment in state enterprises and amounting to another GF 28 billion are not included in these amounts. 47. By 1964, the Government had come to recognize the dangers of excessive credit creation and there was virtually no expansion in credit to the economy in that year when credit to the private sector, anyway- small, was halted. However a strong increase in unclassified items since the third quarter of 1964 casts some doubt on the effectiveness of the more restrictive credit policy. In July 1965 the decision was taken not to allow the banks to make advances for the financing of the Seven- Year Plan. The Government and state enterprises can, however, still receive bank credits to finance unfinished Three-Year Plan operations and these credits increased in the first half of 1965 by almost GF 0.4 bil- lion, that is 8%, mostly to the Government. Also during the same period government deposits have been run down by about GE 2 billion, which is equivalent in its inflationary effects to the creation of money. Although some seasonal financing of commercial state enterprises is included and although total deposits of state enterprises increased, pressures on the banking system seem to be high. Local funds resulting from U.S. AID operations, over GF 5 billion of which are deposited in a special account,represent an important liability of the banking system. The re- lease of these funds for the financing of local expenditures of develop- ment projects would add to inflationary pressures in the country. VI. THE MAIN SECTORS OF THE ECONOMY A. Agriculture, Livestock and Fishing 48. At least 80% of the Guinean population derive their living prin- cipally from agriculture, representing over half of GDP. Many urban dwellers are also involved in part-time agricultural activities. The four distinct ecological zones allow a diversified agricultural produc- tion. Rice, oil palm, bananas and pineapples are grown in Lower Guinea; coffee, oil palm and tobacco in the forest areas, whereas grain production is predominant in Upper Guinea and stock raising in the Fouta Djalon. Agricultural productivity is low; little use is made of modern techniques and equipment except in parts of the export sector. 49. Agricultural production figures are unreliable; but it seems that production on the whole continued growing until 1960 when the Guinean franc was created and the majority of foreign plantation management and staff withdrew. Since then production of export crops has declined and there are indications of little progress in the subsistence sector. 50. The Government's efforts to increase production have concen- trated on extensive rehabilitation campaigns and extension schemes. These have generally suffered from inadequate preparation and lack of staff. The country's 270 extension workers, too few in themselves, work under the direction of the 29 Regional Governors, which hampers coordination and concentration of efforts. -12- 51. The objectives of the Seven-Year Plan are to attain self- sufficiency in food crops, provide raw materials for new industries and promote export crops. Guinea still lacks adequate supporting services to attain these objectives although these will be strengthened by the graduates becoming available each year. The operations envisaged under the Plan do not always seem to be based on sufficient technical studies or economic justifications. 52. Although much could undoubtedly be done to improve farming methods and restore the efficiency of plantations, a major problem is the lack of incentives. Except where the opportunity arises for unofficial border trade, consumer goods for producers are in short supply. In any case domestic food prices are controlled and standardized, without regard to transport costs, in the interest of social equity. Prices to farmers for export products suffer from the progressive depreciation of the Guinea franc. This situation is compounded by ineffective marketing arrangements and generally high transport costs. 53. Total grain output in Guinea may lie between 1 and 1.4 million tons per year, only a small fraction of which is marketed. Guinea is importing large and increasing quantities of rice, sugar, fats, dairy produce and wheat flour. This increase in imports stems largely from population increase and a changing pattern of food consumption. In 1960 the Government fixed a low price for imported rice in order to raise consumption standards, but it raised the price in 1965 in the face of increasing shortages. Production of rice is roughly evenly divided between swamp rice, yielding close to 2,000 kilos per hectare in Lower Guinea, and mountain rice over most of the rest of the country, yielding about 800 kilos per hectare, grown after burning the vegetation on the land. Output has probably stagnated at about the 1957/58 level with pro- duction of 350,000 tons. Imports of rice increased from 7,000 tons in 1957 to over 40,000 tons in 1964, mostly supplied by the U.S. under its PL-480 program. Land reclamation projects to expand rice cultivation are presently under consideration, and the UNDP is undertaking a survey of 40,000 hectares of mangrove swamp. One 2,000 hectare project, which was abandoned by the French when about three-quarters finished, will be completed at a small cost financed by AID, but investment costs on other projects are likely to exceed $1,200 per hectare, giving rise to serious doubts regarding their economic justification. A flood control and irri- gation project in the Niger basin, being studied by Russian experts, may be more promising. 54. Other food crops are fonio (second to rice in area planted), high-yielding cassava, corn, groundnuts, potatoes and vegetables. These crops, along with imports, make up for the shortfall in rice produc- tion. An extension of their output, which seems relatively easy, could substantially increase domestic food supply. 55. One-fourth of Guinea's recorded exports, and 80% of its agri- cultural exports, were made up in 1964 of coffee, bananas, palm kernels and pineapple. -13- 56. High quality robusta coffee, produced on small plots, became Guinea's most valuable agricultural export in 1964. In 1960, produc- tion and exports of coffee reached a record of 16,000 tons, but by 1964 official exports had dropped to 6,400 tons. In addition, there were unrecorded exports estimated between 4,000 and 6,000 tons. But total production has clearly declined since 1960, due largely to trachemycosis against which no curative treatment yet exists and which may have in- fected about 40% of the country's coffee trees. At present the spread of the disease may have stopped. Guinea is embarking upon an ambitious expansion program, the objective of which is to raise coffee production to 40,000 tons by 1970. Guinea is not a member of the International Coffee Agreement, and some increase in coffee production could probably be absorbed by the countries with which Guinea has bilateral trading arrangements. 57. Bananas are grown along the coast and the railway line all the way to Mamou. Production and exports were over 90,000 tons in the peak year - 1956 - and 55,000 tons in 1960. Exports were less than 30,000 tons in 1964, 20,000 of which was probably produced on foreign-managed plantations. The main reasons for this decline are the occurrence of cercospora, emigration of the European plantation managers and lack of investment by the few remaining owners. Government efforts, notably free spraying and free supply of fertilizer, aim at bringing production up to the level of the mid-50's by 1970. The potential for reaching this target seems to exist, but the task to rehabilitate abandoned plantations is a heavy one. 58. Wild oil palm trees grow in Lower Guinea and in the forest zone. There are 1,300 hectares of government plantations. More could be created along the coast, but, owing to the long dry period, yields are unlikely to exceed 1.5 tons per hectare, which compares tinfavorably with yields in other African regions. In the forest region, where the climate is better, the topography is adverse and communications poor. Exports of palm kernels which totaled 22,000 tons in 1956 have remained at that level since. 59. Pineapple is grown in Lower Guinea. Exports of fresh pine- apple rose from 1,700 tons in 1956 to 5,500 tons in 1960, and then declined to 3,200 tons in 1964. However, in recent years some of the production has been exported in canned or juice form. There seems to be scope for further expansion of pineapple production. Other agri- cultural exports are of lesser importance. Recorded groundnut exports have declined, though part of the production is probably exported through Senegal. Citrus exports amount to 1-2,000 tons per year; pro- duction and exports of the valuable Guinean orange essence have declined from 136 tons in 1960 to 54 tons in 1964, but could quickly regain their former level. Other minor items (honey, wax, rubber, etc.) have practically disappeared from the export market. 60. Guinea is embarking upon an import substitution program in- volving sugar cane near the Sierra Leone border, cotton and tomatoes in Upper Guinea, tea and tobacco in the forest area. Most of these -14- programs are still in the pilot stage. However, as several among these crops are alien to the country, much care and supervisory work will be needed to enlarge the programs successfully. The establishment of separ- ate specialized and largely independent extension units is now under consideration for the cotton program, which should increase the chances of success. The crops are grown to supply processing plants already built (a textile plant, a cigarette factory and a cannery) or to be built (sugar refinery). On the whole, production costs are likely to be high (especially for cotton and sugar cane). In general, the present or prospective supply of raw materials does not always match the capacity of the plants existing or envisaged and the needs of the country. 61. Most of the country's 1.5 million head of N'dama cattle and 300,000 sheep are concentrated in the Fouta Djalon and the savannah to the east. Cattle is kept mostly as a status symbol in spite of some compul- sory deliveries to the towns. Official slaughterings amount to 3-4% of total herd; total extraction may reach 7%. Russian experts are helping to improve the livestock situation. Forest resources are substantial, though the country has until now been a net importer of wood. This situ- ation should be reversed soon since recent completion with Russian help of a modern saw mill at N'Zerekore. About 3,000 tons of sea fish are caught yearly, 800 of which by relatively modern methods. The establish- ment of a joint Senegalese-Polish company in Dakar after the failure of a similar venture in Conakry has been a blow to Guinea's expectations in this sector. 62. There is almost no possibility for farmers to obtain agricul- tural credit. The Banque Nationale de Developpement Agricole (BNDA) has, since 1962, restricted its activities to financing the purchase of export crops by Guinexport, and public or cooperative ventures. These have not been very successful; BNDA had to write off GF 700 million as bad debts and the Government stopped further activity pending thorough reorganiza- tion. The total portfolio of the institution amounted to GF 6.5 billion on June 30, 1964, of which GF 5.5 billion were short-term credits. BNDA operates outside of Conakry through branches of the Credit National. B. Mining and Industry 63. Guinea is particularly well endowed with mineral resources, especially bauxite and iron ore. It also possesses diamonds, a little gold and a few other minerals. Bauxite 64. Guinea has some of the largest reserves of bauxite in the world. The first deposit to be mined, and now nearly exhausted, is on Kassa Island near Conakry. A second, near Fria 150 km. north of Conakry, with an estimated reserve of approximately 200 million tons and a content of 40-45% of alumina is the basis for alumina production. A project is presently being prepared for the mining of a third and much richer depos- it near Boke in northwest Guinea. *15- 65. Kassa is one of the two Los Islands near Conakry where baux- ite with about 60% oxide content was mined from 1952 to 1961 by Compagnie des Bauxites du Midi, a subsidiary of the Canadian firm Aluminium, Limited, both to gain experience in bauxite mining in Guinean conditions and to provide an interim source of supply until the much larger Boke project (see below) came in. Production varied from a high of 660,000 tons in 1953 to a low of 299,000 tons in 1958 and 541,000 tons in 1960. In 1961, when the properties were taken over by the'Government as forming part of the assets of Bauxites du Midi, production and exports dropped to 44,000 tons but recovered to 167,000 tons in 1964. Production at Kassa is unlikely to rice further because reserves are nearly exhausted. 66. In 1956 a consortium of aluminum producers led by Olin Mathieson (U.S.), Pechiney and Ugine (France), together with British Aluminium, Ltd. and Alusuisse, later joined by V.A.W. (Germany), cre- ated the Fria company to mine the bauxite near Fria, transform it into alumina and export it, in the first instance for reduction in their own smelters. These installations, including a 143 km. railway, were com- pleted in 1960, at a cost of $150 million. Fria, now a Guinean firm, is operating under a 75-year convention confirmed by the Government of independent Guinea. It produces 480,000 tons of alumina annually, most of which is sold to its stockholders at $63.50 a ton, somewhat above competing sources. Fria, which employs 1,450 people in Guinea, has had considerable success in Africanizing its personnel. Its exports produce about $30 million a year (i.e. about 60% of the country's export earn- ings) of which it is allowed to retain two-thirds to pay for imports of fuel, soda, equipment replacements as well as debt service and salary transfers. At the present level of sales and financial charges, Fria's full foreign exchange requirements exceed two-thirds of its foreign exchange receipts and various means have been worked out from year to year, in agreement with the Government, to make possible the purchase of imports, notably fuel, against payment in Guinean francs. 67. Fria has been operating under the basic handicap of being the first stage of what was originally conceived both as a larger alumina plant (eventually up to 1.2 million tons a year) and as part of an aluminum complex, to be served by the same railway, port facilities and townships. Although work on the complex as a whole was suspended in 1958 before it was far advanced, the overheads now carried by Fria alone include charges which, it was expected, would have been spread over a larger volume of production and shared with other facilities. Fria has thus been operating under a cost disadvantage compared with competing plants which can be overcome only by increasing production. It is possible that increased sales would be practicable at an f.o.b. price of the order of $56.00 a ton, which would be attainable at a pro- duction level of 600,000 tons and would be consistent with substantial investment in new capacity in Guinea rather than elsewhere. The Govern- ment has, however, been reluctant to see the Fria alumina price fall below $63.50 a ton. Present plans provide for an increase in plant capacity in 1966 to 525,000 tons at an investment cost of $4 million. -16- 68. A second concession for the exploitation of larger (1 billion tons) and richer (52-57% alumina content) bauxite deposits near Boke was granted to Compagnie des Bauxites du Midi with the obligation to start production of bauxite and alumina by July 1964. Some preparatory work, including civil engineering for a railway and port, had already been done by the company. At the beginning of 1961 the Government terminated the concession of Bauxites du Midi alleging failure by that company to meet its obligations under that concession. 69. In 1963 the Government entered into an agreement with the Halco Mining Co., a subsidiary of Harvey Aluminum Company of the U.S. for exploitation of a part of the Boke deposits. The agreement establishes a semi-public company, Bauxites de Guinee, of which Harvey owns 51%. The needed infrastructure (principally a railroad) is to be the property and the responsibility of the Government. The latter has requested the World Bank to cover the foreign exchange costs of the infrastructure (presently estimated around $40 million) while AID has agreed in principle to provide the needed Guinean francs from PL480 local currency proceeds. A prelimin- ary appraisal indicates that if the project as a whole is to have economic and financial returns that would justify the investment and make a posi- tive contribution to the Guinean economy, the minimum level of output and sales of bauxite (assuming an f.o.b. price of $7 per ton) should be of the order of 2.5 million tons. Iron Ore 70. There are three main deposits known in the country. The first, with reserves estimated at approximately 900 million tons, is just out- side Conakry and is being mined by the Compagnie Miniere de Conakry. The other two lie in the forest region at Mount Nimba and in the Simandou range. 71. The Compagnie Miniere de Conakry started operating in 1953. Production has varied with world demand from a high of over 1 million tons in 1957 to a low of 358,000 tons in 1959. It reached 728,000 tons in 1964, representing GF 933 million, i.e. 7% of the value of Guinea's recorded exports that year. The market for the ore is limited by its average grade and high chrome content. The bulk is now sold to Eastern European countries within the framework of bilateral payments agreements. If markets were available, output could be increased sub- stantially with comparatively small investment in additional capacity. The present problem is rather one of maintaining existing capacity in face of the urgent need for spare parts and replacements, for which foreign exchange has not been available. A partial solution could be provided by about $600,000 of spare parts and replacement equipment likely to be made available by the U.S. in 1966. 72. In the forest area some very large deposits of high grade ore have been identified in the Simandou Range. The Mount Nimba -17- deposit already being mined by the Lamco corporation on the Liberian side also extends into Guinea. Although interest has been shown at various times by major steel producers, the scale of the deposits and transport costs even if, as is contemplated, ore were to be shipped through the Liberian port of Buchanan (300 km. away) rather than that of Conakry (1,000 km. away), would require a very large operation, raising serious marketing questions until the output from other major projects is ab- sorbed. Diamonds and Gold 73. Commercial exploitation of diamonds in the forest area started in 1955. The two foreign diamond mining companies operating in Guinea were nationalized in 1961 and private diamond mining by individuals pro- hibited. In 1963 the latter decision was rescinded and private miners were permitted to operate again. In 1964 the decision was again reversed. Less than one-third of the diamonds exploited are high quality gem stones, the balance being industrial stones. The construction of a large washing plant and assistance from the Soviet Union in prospecting should improve diamond mining considerably. Recorded exports have fluctuated from GF 2.1 billion in 1960 to GF 0.3 billion in 1963, depending upon the quality of the stones and the extent to which the organization of marketing affects the incidence of smuggling. 74. Gold has been mined in Guinea since early in the century along the Niger River and its tributaries and the Siguiri area. Recorded pro- duction and exports have dwindled to a few kilograms but smuggling is probably widespread. Manufacturing 75. Until Independence manufacturing in Guinea was restricted to a few plants which were relatively small and simple. Fria was completed in 1960 and since then a number of industrial lavestments, generally publicly owned and financed by foreign loans, have been made. The Three- Year Plan allocated GF 9.6 billion to industry. Most of the 35 projects included in the Three-Year Plan are completed or about to be completed. A number of these investments resulted from proposals by lenders or suppliers without adequate demonstration of possibilities and proved to be either premature or too large. For others, raw materials were not available in sufficient quantities and markets were lacking on the scale assumed. Some of the largest plants are a GF 2.5 billion textile mill financed by a U.K. export credit, a cigarette and match factory built at a cost of GF 1.2 billion with the help of the People's Republic of China, a cannery at Mamou and a saw mill at N'Zerekore built with Russian aid for GF 1.9 billion, a printing works financed by the German Democratic Republic and brick and furniture plants with aid from Yugoslavia. The Seven-Year Plan, with an allocation to industry of GF 16.5 billion, has taken over some uncompleted projects from the Three-Year Plan and envisages a petroleum refinery, a sugar refinery, another cannery and another hotel, most of them state enterprises. In general, the feasibility of these projects has yet to be demonstrated by detailed -18- studies and their execution would in any case be dependent on the avail- ability of foreign financing. 76. The Government's attitude and policies towards mining and indus- try and private investments have fluctuated since Independence. At first, relations with the private sector were obscured by the dispute with the Compagnie des Bauxites du Midi and various nationalizations. Since then, however, the two other foreign-owned private mining enterprises have continued operations and relations with the Government have been described as excellent by both parties. The Government tends to remain sceptical of private commercial activities. On the other hand, it has promulgated an investment code intended to attract private foreign capital and has been relatively open-minded about associating with private foreign capital in major projects. C. Transportation 77. Guinea's main transportation system looks generally adequate on the map. Its quality, however, leaves much to be desired because of often faulty alignment of main roads and of the railway, compounded by lack of maintenance in a country subject to very heavy rains. A trans- port survey, completed in 1963 by the Battelle Institute of Frankfurt, recommended rehabilitation of the railroad and roads mainly as feeders to the railroad. Improved maintenance for the road system was also emphasized. The Seven-Year Plan, however, envisages sizable investments both in the road and the railroad sectors. 78. Guinea has a relatively dense road network with about 8,000 km. of national roads, of which only 200 km. are asphalted. The total num- ber of vehicles in the country is probably close to 25,000, of which heavy trucks, which are generally operated by private entrepreneurs, number over 7,000, compared with 5,400 in 1959. Light trucks have in- creased from under 900 in 1959 to around 5,000. Major difficulties arise from the great variety of vehicles and maintenance equipment which have been imported from different aid-giving sources and suppliers, creating an intractable spare part and workshop problem. Traffic on the 300 km. section Conakry/Mamou may reach or slightly exceed 100 vehicles a day. On the main roads further inland traffic, hampered by extremely poor surfaces, probably ranges from 10 to 50 vehicles per day. 79. Maintenance has been very badly neglected since 1958 because of lack of funds and lack of qualified personnel. Allocations for road maintenance would have to be at least three times the present GF 300 million, not all of which is spent. The most urgent initial task, how- ever, would be to strengthen the existing highway authority and to train personnel. -0. Vehicle operating costs are high. Transport rates have been fixed officially at GF 25 per ton-kilometer throughout the country and regardless of actual costs. Consequently movement of agricultural products is not always assured for many parts of the country. Operating -19- costs, which on present laterite roads range between GF 20 and GF 30 per ton/kilometer, could be reduced to about GF 13 per ton/kilometer on a well designed and well maintained laterite road. New investments in the highway system during the Three-Year Plan have been mainly for the paving of the streets in and around Conakry. About 40 motor ferries have been installed. 81. The Seven-Year Plan envisages the asphalting of 2,300 km. of main roads, the construction of five major bridges and the pavement of streets in urban areas. Two foreign contractors have obtained contracts for paving the 650 kilometers from Conakry to Kissidougou. On the basis of traffic density and future maintenance costs, it would appear that asphalting would be justified only for the first 300 kilometers to Mamou. In most cases transport cost would be reduced little more by asphalting than on a good laterite road. As a practical matter, it is unlikely that the objective of asphalting an average of 330 km. per year will be reached. Construction units of the Guinean Army, assisted by the Federal Republic of Germany, the U.S.S.R. and the U.S.A., are paving the Conakry and Kankan streets and part of the coastal highway. 82. The country's main railway line, which is publicly owned, was built early in the century and runs the 662 km. between Conakry and Kankan almost parallel to the road. The meter gauge track is badly aligned and never made a profit. The French administration had decided to phase it out. After Independence this decision was reversed and under the Three- Year Plan sizable investments were made in rolling stock from Eastern and Western sources and on the permanent way, partly financed by DM15 million from the Federal Republic of Germany. 83. Traffic is small and imbalanced. About 50,000 tons each year move inland on the railway while 20,000 to 30,000 tons are brought to Conakry. Seven hundred and sixty thousand passengers were carried in 1964. Tariffs, which are not low, have been kept almost unchanged since 1958 and are well below cost, resulting in annual operating deficits for the railway agency of about GF 150 million which would be doubled if pro- vision for depreciation were made. Traffic would have to be trebled at present tariffs for this railway to break even, and management would, in any case, have to be improved substantially. The Government of the Federal Republic of Germany, after having thought of assisting on roads, is presently considering provision of DM 30 million and technical assistance to the railway on the basis of the transport survey mentioned above. 84. The railway, and the road parallel to it, was originally con- ceived as a link to the Niger River. East of Dabola it does not fol- low the principal economic axis of the country, which lies south and southeast through the forest area to the Liberian border. The existing road on that axis, which should drain the region in the direction of both Conakry and Monrovia, is, for the most part, in very poor shape and a major obstacle to the development of potentially the richest area of Guinea. -20- 85. Two other operating railway lines in the country, owned respec- tively by the Fria Company (143 km.) and the Compagnie Minibre de Conakry (14 km.), are used exclusively for the needs of the companies. 86. Conakry is the main port. Other ports at Boffa, Benty and Victoria are presently of little importance. Along the nine berths of the Conakry harbor, 600,000 tons of imports are handled each year, of which 200,000 tons are fuel, half for Fria. Exports amount to about 1.5 million tons a year, most of it iron ore, alumina and bauxite, and 150,000 tons of general merchandise. The Port Authority seems to have made some profit in the past. In a normal year current expenditure would be about balanced by revenues. One hundred fifty million Guinean francs are spent each year for dredging. The present port capacity is sufficient and could be readily extended by improving handling and storage, which is the responsibility of the state enterprise called "ENTRAT." However, even if the Plan's objectives are not reached, expansion of the port will be needed at some time and should be planned now, completing former studies made by BCEOM (a French engineering firm). There is some river traffic on the Niger between Kankan and Bamako from July to January. 87. The extension of the Conakry airport to allow it to receive jet aircraft was one of the major projects financed under the Three- Year Plan by Russian aid. Air Guinea, created in 1960, started opera- tions with equipment bought on a GF 2.5 billion loan from the U.S.S.R. and Czechoslovakia. The latter also provided technical personnel and assistance. Guinea's fleet is heterogeneous and costly to run. It con- sists of 3 Ilyushin 18 for international flights, 5 Avia 14, two C-54's for internal liaison and two DC-4's which proved unusable. Occupancy rates on external routes, for which pooling arrangements would be in- dicated, are as low as 10% to 15% except for charters (notably to Mecca). The occupancy rate on internal flights is good (80%). The Avias are expensive to operate but the recently arrived C-54 should improve the situation. Air Guinea seems to run at an operating loss of about GF 100 to GF 200 million per year (plus about GF 400 million for depre- ciation). More economic equipment and technical and financial assist- ance worth $2.8 million recently obtained from the U.S. may be expected to improve the Company's performance within a few years. D. Power and Water 88. Guinea has great hydroelectric potential. Studies by Electricitd de France in 1947/48 and by Bulgarian experts in 1961 esti- mate a theoretical gross potential of 63 billion kilowatt hours for the eight river basins. Of this total it is estimated that projects with a possible total annual generation of 13.6 billion KwH could be developed. The most important river, the Konkoure, would account for 6 billion KwH of this potential energy. Preparatory work on a 480,000 Kw plant on the Konkoure at Souapiti to supply an aluminum smelter to be located along- side the Fria alumina plant was suspended in 1958. Construction of the project remains a major Government objective. -21- 89. Present installed capacity is about 72 MW, including a 41 MW thermal plant owned and operated by Fria. The other large installation is the 20 MW Grandes Chutes hydro plant on the Samou River (a tributary of the Konkoure), about 80 km. northeast of Conakry, initially built with French aid before Independence and subsequently expanded with Yugoslav assistance. It is connected to the capital by a single 60 KV transmission line. As a result only 10 1Q1 can presently be supplied to Conakry. In Conakry, thermal plants totaling 9.2 KW are used mainly for peaking and as standby, 80% of which was installed in 1965 with financing from US AID. 90. Total generation in 1964 amounted to 164 million KwH, of which some 80% was accounted for by Fria. Remaining consumption is largely domestic and lighting, except for some small industrial demand in the Conakry-Kindia area. 91. At present an additional hydro plant upstream of Grandes Chutes with a capacity of 3.2 MW is under construction, financed with aid from the People's Republic of China. Diesel generating equipment is being in- stalled in 4 towns in the interior with U.S. assistance. A program of transmission line construction is also being considered. The most impor- tant link is the planned 150 KV transmission line to Conakry to permit full utilization of the 20,000 Kw of Grandes Chutes. 92. Generation and distribution of power (excluding the Fria oper- ation) is the responsibility of Soci4td Nationale d'Electricitd, a government-owned company which took over the installations of the earlier French company in 1961. Tariffs have remained unchanged since 1957. Industrial users pay a demand charge of GF 6,450 per KVA and an energy charge of GF 9.40 per KwH, increased to GF 14.10 per KwH during the peak period and reduced to GF 5.60 per KwH during the night. Domestic supply tariffs vary from GF 30.10 per KwH to GF 17.20 per KwH depending on consumption. The Company apparently operates on a profit; GF 50 million was recorded for 1963/64, but the balance sheet shows a substantial though decreasing amount of receivables (GF 600 million), of which about half is owned by the Government. 93. The water situation in Conakry has recently been improved with help from the Federal Republic of Germany. Forty thouoand cubic meters are now available daily, which is sufficient for several years. Sewerage capacity, on the other hand, is still very inadequate. E. Education 94. Major efforts have been made in the field of education, par- ticularly at the primary and technical levels. There were about 45,000 students in school in 1957/58; there are presently 180,000, i.e. about 6% of the total population and one-third of the estimated school-age population. The rapid expansion in number has necessarily created a major problem of providing teachers of adequate quality and experience. 95. In the primary schools the number of classes, which was only 450 in 1957/58, wae increased to 3,782 in 1964/65, representing an increase in primary school children during the same period from 42,500 -22- to 178,000,for whom there are 3,862 teachers (versus 505 in 1957/58), most of them Guineans. The proportion of girls in primary school rose from 22% to 31% over the same period. 36. Some amphasis aas also been placed on the expansion of secondary and advanced education, where the Government rightly sinsed .rea- weaknesses. The number of secondary and technical classes increased from 65 in 1957/58 to 545 in 1964/65, of which 17 are techni- cal, and the number of students increased from 2,547 to 20,681, of whom 6,548 are in technical schools. The number of teachers at the secondary level rose from 62 in 1957/58 to 835 in 1964/65, of whom 313 are foreigners, mostly French. 97.. There are three new institutions of higher learning in Guinea. The most important one, which emphasizes applied sciences, is the Polytechnic Institute, completed in 1963 with help from the U.S.S.R. There are 351 students presently in school at the higher level, but the number is expected to increase rapidly, especially in the Polytechnic Institute. There are 65 professors, of whom 55 are foreigners. In addi- tion, about 1,100 Guineans are presently in school abroad, mostly at the university level. Many of them are expected to complete their studies within two years. 98. Guineans presently in school can be expected to do much to relieve the scarcity of skills prevalent in the country. However, further increases in the numbers in school may be hampered by the great shortage of teachers, combined with the understandable desire of Guinea to reduce its dependence on foreign teachers. VII. EXTERNAL TRADE AND PAYMENTS A. Foreign Trade 99. Guinea's trade figures are not very reliable. Exports and im- ports are both underestimated due to unrecorded border trade. Imports "under the Plan" were, until recently, not usually recorded, being tax exempt. Payments data and customs data cannot readily be recon- ciled. 100. Over the past nine years Guinea's recorded trade balance has sometimes been in equilibrium, notably in 1963 and 1964. However, if Plan imports, fianced by external aid (excluded from the official im- port figures) are taken into account, there has of course been a deficit in each year, which reached GF 8.7 billion in 1962 but has decreased since. -23- EXTERNAL TRADE (Million francs (CFA until 1960, then Guinean)) 1956 1957 1958 1959 1960 1961 1962 1963 1964 Recorded exports 5,094 5,224 4,874 7,108 12,745 15,175 11,086 12,315 12,851 Recorded imports 6,638 9,250 12,999 15,279 12,328 17,993 16,195 11,389 12,085 Deficit (-) -1,544 -4,026 -8,125 -8,171 +417 -2,818 -5,109 +926 +766 or Surplus (+) Est. Plan imports - - - - 3,600 3,600 3,600 4,800 5,000 Est. total deficit -1,544 -4,026 -8,125 -8,171 -3,183 -6,418 -8,709 -3,874 -4,234 101. The main characteristics of Guinea's foreign trade are, on the export side, the predominance of alumina and the decrease in agricultural exports; on the import side, the importance of imports of consumption goods, notably of rice. The direction of Guinea's trade has shifted away from France, which occupied a preponderant position, towards Eastern coun- tries within the framework of bilateral payments agreements, which in 1964 accounted for about 22% of recorded exports and 45% of recorded imports. Exports 102. Until 1960, 70%-80% of Guinea's exports, sold essentially on the French market, were represented by a variety of agricultural products (coffee, bananas, palm kernels, pineapples, etc.), which are still im- portant today though they have declined in quantity and value since 1960. The rest was represented by minerals (iron ore, bauxite and diamonds), sold largely outside of France. Since 1960 this proportion has been prac- tically reversed, due to the completion of the Fria alumina plant, the sales of which represent about 60% of Guinea's gross export earnings. Minerals and mineral products now represent three-fourths of Guinea's recorded exports. The increase in mineral exports hides the decline in agricultural exports. About one-fourth of total recorded exports are sold within the framework of bilateral payments agreements. 103. Most of Fria's production of about 480,000 tons a year is sold to its stockholders for reduction in their smelters: in Western Europe, North America and Cameroon. About 60,000 tons are sold to Eastern European countries within the framework of bilateral agreements. Pro- duction and exports will probably be increased to 525,000 tons in 1966, and possibly more later. 104. Earnings from exports of iron ore have fluctuated widely in the past, due essentially to the situation on the world market. Exports of 358,000 tons in 1959 more than doubled in 1960 but fell thereafter. They -24- will probably amount to 800,000 tons in 1965, sold generally at $4.25 per ton, largely to traditional customers of Eastern Europe and the United Kingdom. Production and exports are presently limited by lack of foreign exchange to renew the very obsolete equipment. 105. Sales of bauxite, which reached 540,000 tons in 1960, dropped to 44,000 tons in 1962. Production and exports, generally to Eastern countries, have since somewhat recovered (167,000 tons in 1964) but are limited by the fact that reserves of the Kassa Island are nearing exhaustion. 106. Recorded exports of diamonds for industrial and jewelry pur- poses have fluctuated very widely according to the way production and trade were organized. Recorded exports rose sharply after Independence as a result of stricter controls, reaching GF 2.1 billion in 1960, which represented 17% of total export earnings that year. After nationaliza- tion of production and trade, recorded exports dropped to GF 0.5 billion in 1962. Production and trade were turned back to private hands in 1963 and official exports in 1964 reached GF 950 million, although in November 1964 the decision was again reversed. Unrecorded diamond exports are probably substantial. Recorded exports of gold, never large, are now negligible. 107. Exports of agricultural products, the value of which has declined by 507. since 1960, have been affected by production difficul- ties, smuggling and a decline in world prices for some commodities. At present, most of the agricultural exports are sold to Eastern bloc coun- tries under bilateral payments agreements, thus providing Guinea with an outlet for products which might not otherwise be readily sold on the world market. Imports 108. Guinea's imports went up from GF 9.2 billion in 1957 to over GF 20 billion in 1961 (including an estimate of Plan imports). Since then, however, due to lack of foreign exchange, imports have been cur- tailed to about GF 17 billion in 1964, largely by reducing non-Plan imports. Food imports, which represented 23% of recorded imports in 1964, went up from GF 1.2 billion in 1956 to GF 2.8 billion in 1964, after a peak of GF 3 billion in 1962. These imports are made up for an increasing proportion (42% in 1964) of rice, largely supplied by the U.S. under its PL480 program. Sugar accounted for 22% of food imports in 1964. Textiles, especially cotton-made, represented 12% of the import bill that year; this can be expected to decrease in time if the cotton-growing experiments are successful. 109. About 25% of recorded imports represent expenditures for equip- ment not under the Plan, of which the largest part is transport equipment (GF 1.2 billion in 1964). Imports of fertilizer of about 10,000 tons amounted to GF 125 million in 1964; those of petroleum products to GF 216 million. -25- 110. Imports under the Plan represent largely imports of equipment for projects financed by the various lenders. Some of the loans have, however, been for imports of consumption goods. Ill. Imports from France formerly represented three-fourths of Guinea's imports. Though France in 1964 was still Guinea's first supplier, it accounted for only 23% of recorded imports in that year. The gap left by France has been filled in part by the U.S., but mostly by countries with which Guinea trades on the basis of bilateral payments agreements. There are about 20 such agreements, generally with African neighbors or Eastern bloc countries. Imports under these agreements have tended to fluctuate sharply from one year to the other and goods so supplied are not always adapted to Guinea's most urgent needs or to the demand. Organization of Foreign Trade and Prospects 112. Foreign trade, except in alumina, is controlled and often handled by the state; exports by Guinexport and imports by a variety of public enterprises (Alimag, Agrima, Sonatex, etc.). Private enterprises which wish to import have to channel their requests through the relevant public ones. Guinea has a comprehensive system of import controls which had become quite strict in 1963-64. Import duties on cereals are quite low, those on durable consumption goods (e.g. cotton cloth) range from 30% to 50%. In addition, an equalization tax of between 5% and 40% is levied to promote exports. Export duties on agricultural products are non-existant, while they range from 2 to 5% on mineral products (exports from the Boke project would be exempted from these duties) and seldom rise above that level. 113. Prospects for improving Guinea's foreign trade position before 1970 exist, though they should not be overestimated. An increase in exports of alumina is possible but probably at a somewhat reduced unit price; one in sales of iron ore is possible. Progress on the agricultur- al front for export crops as well as for import substitution might regain previous levels if adequate action would be undertaken but are unlikely to surpass them at an early date. A reduction in smuggling is more likely to be effected by incentives than by controls which, if successful, may dis- courage production. It is doubtful that imports of consumption goods can be reduced below the already low present level. After 1970 the export situation would depend mainly upon the quality of the projects financed until then. B. Balance of Payments 114. Foreign exchange shortages have become the focal point of Guinea's problems and present it with a most urgent and difficult task. From Independence in October 1958 to February 1960 Guinea remained in the franc area but this proved increasingly difficult, given the partic- ular situation of Guinea vis-&-vis France during that time and the large outflows of capital. In March 1960, Guinea created its own currency. There were then CFA francs 12.5 billion in the country which were exchanged for Guinean francs and used as reserves. By 1964 the reserve position (not strictly comparable to the above figure) had deteriorated -26- to a net liability of GF 7.6 billion, by June 1965 to a net liability of GF 9.05 billion, in spite of a conversion into long-term debt of about GF 5.6 billion owed under bilateral payments agreements to five Eastern bloc countries. 115. There are no balance of payments data for Guinea from 1960 to 1962 except for trade figures. Thereafter more information is available, though of variable reliability. The IMF has attempted to calculate the balance of payments for Guinea in 1963 and 1964. This chapter is based mainly on these estimates. 116. In spite of substantial foreign aid, there has been a net deterioration in the foreign exchange position of Guinea, which is essen- tially due to deficits on current account, around GF 7 billion a year since 1963 and much more in 1962,and also to high foreign debt repayments, now over GF 2 billion. Recorded exports have stagnated from 1960 to 1964. They declined by 15%, if 1961 is taken as a base. Total exports are larger than recorded exports by possibly GF 2 billion, representing the smuggling of one-third to one-half the coffee crop, substantial numbers of cattle, diamonds, etc. These unrecorded exports are either used to buy goods abroad, which are then sold in Guinea, or to send capital over- seas. 117. Imports of equipment as well as of consumption goods rose largely during the period of the Three-Year Plan (1960-63) and were fin- anced by using reserves and assuming large amounts of external debt. Unfortunately, few of the projects thus financed can be expected to con- tribute substantially to foreign exchange earnings or savings in the near future. Since 1963 imports, save those under the Plan, have been sharply reduced by the increase of restrictions; nevertheless, deficits on the trade balance amount to around GF 4 billion. 118. Guinea's deficit on services and transfers amounts to about GF 2 billion a year. Protracted delays in actual transfers are exper- ienced by both individuals and companies. Transfers out of the country represent remittances abroad of expatriate personnel employed in the private and public sectors (who are permitted to transfer from 15% to 30% of their salaries) and debt service of companies, notably of Fria. This company has, however, its own foreign exchange accounts in which it is allowed to keep two-thirds of its export earnings, that is, about GF 5.2 billion, for debt service, transfers and imports. On the other hand, Guinea has been receiving about GF 1.5 billion a year from France as pension payments to its former soldiers and civil servants. These amounts were held by the French from 1960 to 1963 until settlement of most of the outstanding issues between the two countries, and in particular the can- celing out of amounts owed by France with those in CFA francs used by Guinea in 1960. Guinea also received grants in kind from the U.S. for technical assistance and imports of various commodities (rice, petroleum products, etc.) worth abiout GF 2.5 billion in 1963 and 1964. 119. Guinea's surplus on its capital account was GF 7.7 billion in 1963. In that year debts with France were settled, resulting in a net payment to Guinea of GF 1.3 billion. Consequently gross foreign assets -27- increased by about GF 1 billion. In 1964 the surplus on capital account was GF 7.6 billion and gross foreign reserves declined by GF 250 million; they then remained stable through the first half of 1965. 120. Over the last four years Guinea has financed imports in excess of its export earnings by using its reserves, credits under bilateral payments agreements and increasing its long-term foreign indebtedness. Now that the reserves are practically depleted, additional borrowing or grants will be the only way external deficits can be financed. Export earnings plus pension payments in 1964 amounted to almost $58 million equivalent, of which $21 million was required by Fria for imported sup- plies and transfers. This left about $37 million available for other imports, transfers and debt repayments which amount at present probably to about $59 million, not including imports for the development plan which requires another $20 million. Guinea's short-term liabilities amount to $23 million. Also, its debit position in its payments agree- ments as of June 1965 amounted to about $16 million. 121. Rough estimates of what the foreign exchange position of Guinea may be by 1970 have been made under optimistic assumptions. Mineral pro- duction may expand as envisaged by the companies. But sales of alumina would probably have to be at a somewhat reduced price. Agricultural pro- duction targets may be reached. Pension payments from France have been assumed to increase somewhat. Under these conditions, Guinea might almost double its foreign earnings by 1970. It may be possible to keep the in- crease in foreign exchange outlays for total imports, debt service and transfers at about 60% over the same period. This would still leave a substantial balance of payments gap which would have to be covered by external aid. VIII. EXTERNAL ASSISTANCE AND FOREIGN DEBT 122. Before Independence most of the investment costs and parts of current costs of the country were borne by the Fede tion of French West Africa and by France. From 1947 to 1958 Fides- invested about $50 million in Guinea. 123. At Independence, which Guinea acquired before any other French speaking country south of the Sahara, Guinea found itself cut off from French aid and accepted the assistance which only the Eastern bloc coun- tries seemed to be willing to provide. Although the aid from this source was abundant in quantity, its adaptation to Guinean conditions was not at first very good. Actions were hasty, equipment unknown and not always fit for the tropics. Language difficulties did not help and adequate technical assistance was lacking. Seeking to restore a neutral position, Guinea again sought Western and international assistance. 124. Total aid received since Independence is over $250 million, a sizable part of which has been used to finance imports of consumption goods. The annual average of total foreign aid received was probably I/ Fonds d'Investissement pour le Ddveloppement Economique et Social. -28- around $50 million, one of the highest among the less developed coun- tries on a per capita basis (about $15). Four-fifths of the aid supplied has been in the form of loans. 125. Technical assistance during project preparation, construction and operation has generally been insufficient in amount and quality. To a certain extent this deficiency has been recognized and several coun- tries have adopted a stricter attitude regarding the supply of adequate technical assistance in connection with their financial aid. OECD reports that there are at present around 2,000 technical advisers in the country. 126. By far the largest lender has been the U.S.S.R. with over $81 million, of which over $70 million has been disbursed, much of it for projects in the sector of civil aviation and airports and for development of numerous industrial and social projects. Eastern European countries including Yugoslavia have committed about $33 million, of which $25 million has been disbursed. These figures of Eastern bloc countries include a recent conversion of $20 million of short-term debt into long-term. The term of these loans varies from 9 to 15 years and the interest rate is 2.5%. Very substantial repayments on long-term loans start in 1969. Many of the loans are repayable in merchandise. Technical assistance plays a role in aid from the Eastern bloc; at times it has been large although in the early periods probably deficient in quality. It is pro- vided mostly on a project basis. 127. U.S. aid, now at about $20 million annually, centers around an import program of foodstuffs and other scarce commodities such as cheraicals and spare parts as well as technical assistance. This to a large extent not only keeps the economy running, but also provides substantial relief to the balance of payments. These operations have generated funds or obligations in Guinea francs of 10 billion, of which over GF 7 billion have been deposited and are available for use by Guinea in agreement with the U.S. Local currency costs for development projects can be met out of these funds. U.S. aid has been predominantly in the form of grants; loans, for civil aviation and power, amount to $5.5 million, most of it on very soft terms. 128. Over $35 million has come from Western Europe, with the Federal Republic of Germany accounting for over $14 million. Public loans are generally not on hard terms, but an important part of the Western Euro- pean lending represents suppliers' credits (about $25 million) ranging in term from 4 to 6 years and bearing 5% to 6% interest, which burden debt service heavily. 129. African countries, notably Ghana, have lent over $16 million to Guinea, apparently for balance of payments support. The Peoplds Republic of China has lent about the same amount for 15 years, bearing no interest. 130. Total external public debt outstanding in June 1965, includ- ing amounts undisbursed, is estimated at a little over $200 million, of which $60 million is due to be repaid before 1970. Outstanding debt includes over $40 million of undisbursed loans and over $25 million of -29- suppliers' credits, all from Western European countries, but excludes about $16 million of accumulated credits under bilateral payments agree- ments. 131. The average terms of the aid provided are, apart from suppliers' credits, not excessively hard in themselves, but annual debt service is reaching proportions which require extensive rescheduling. The annual service on the total external public debt, including undisbursed, will amount to about $14.6 million in 1965, representing one-fourth of Guinea's foreign exchange earnings from exports and pension payments by France in 1964. The annual service on disbursed debt alone amounts to about one- fifth of these earnings. If the $21 million earmarked for Fria is deducted, there remained in 1964 $37 million available for other needs, of which debt service represented almost 40% including undisbursed por- tions and almosL 30% for the disbursed debt alone. By 1969, the peak year, service under present repayment schedules would rise to $17 million, representing about 35% of optimistically projected foreign exchange then available to the Government, excluding what is earmarked for Fria. IX. ECONOMIC PROSPECTS AND CONCLUSIONS 132. Guinea has considerable potential. Although conditions for agriculture are not particularly favorable, since the most accessible areas are the least favored climatically, while the best areas suffer from difficult location and topography, the distinct ecological zones offer an unusual variety of products. Guinea thus does not have to con- tend with a one crop economy. Attention has been focussed on major mineral projects, which still lie ahead and even these may tap only a small part of her mineral resources. The population is small in relation to this potential, is intelligent and quick learning. Great efforts have been made in education since Independence, the benefits of which are starting to appear. Many valuable young people trained abroad are now entering public service, thereby contributing to the solution of one of the country's main problems. 133. Under optimistic assumptions, Guinea might be able to double its gross export earnings by 1970. The production of agricultural products for domestic consumption could in a few years reach the point where Guinea would be able to feed itself, provided that adequate inputs, including cre- dit and extension services, are available to the farmers and that sound marketing arrangements are made. The output of agricultural exports, part of which is now smuggled out, could with adequate incentives at least restore export earnings to the record level of 1960. To increase agricultural exports over that level would require special efforts from the agricultural extension service and much expert advice would be needed. Marketing these commodities abroad should not, at least for a while, present a major problem as bilateral trading agreements direct many agri- cultural exports to the creditors of the country. New crops may within a few years provide local factories with sufficient raw materials to take up present excess capacity in manufacturing. Most of the new production would be for the local market, replacing imports. Continued technical -30- assistance within the framework of the contracts establishing new enter- prises will determine future performance in this sector. Exports by Fria are expected to increase by some 10% in the course of 1966. Technically there would be no obstacle to substantial further increases in output which would enable Fria to ship at competitive prices by reducing unit costs. At an expected initial output of, say, 2.5 million tons, at the presently assumed average f.o.b. price of $7.00 a ton, the Boke project would add a further $17.5 million to Guinea's export receipts starting about 1968. The Compagnie Miniere de Conakry may be able to increase its iron ore exports by 50% to 1.2 million tons, for which contracts from Eastern countries appear possible, if the necessary investments in re- placements and some additional equipment are made. Attempts are being made both to find economical ways of reducing the high chrome content and of handling it in steel making. New diamond mining equipment along with improvements in the organization of the trade, which would substan- tially reduce smuggling, could also lead rapidly to a sizable increase in recorded exports. 134. The growth in production and exports, with the associated rise in import need and capacity indicated above, would react favorably on government revenues, which, very tentatively, may be assumed to increase by possibly 7% per annum. At the same time it seems that overall profits by state enterprises may increase. Assuming a continued restraint in government expenditure overall, additional revenue will be available for maintenance and for services in the productive sectors. 135. While the expansion or creation of major projects operating in the mineral sector depend on decisions in which Guinea is certainly a partner, but which cannot be made by Guinea alone, the creation of con- ditions in which agricultural production and recorded exports can expand rests in large part in the hands of the Government, insofar as what is required involves both improved organization and the creation of confi- dence in the Guinean franc. The various measures that would be involved in consolidating the monetary situation and creating confidence in the Guinean franc would require substantial balance of payments support. 136. While there is room for improvement in the pattern of govern- ment expenditure and, as has been noted above, a substantial increase is required in maintenance and services for the productive sectors, there is little scope for further increase in tax revenues until major proj- ects produce new sources of revenue. The limiting factor at present is the level of imports, which have been severely restricted, at the expense of government revenues, incentives, price stability and the effective operation of equipment and industrial plants. 137. The weakest point in the balance of payments position is the very heavy external debt, of which some 30% is due to mature over the next four years on present repayment schedules. Guinea has been con- sulting with some of its creditors on extension of payments and has already managed to consolidate on a long term basis short and medium term debts due to Eastern countries. 138. Itis essential that future aid for Guinea be made available on as soft a basis as possible, and that, to the extent that loans are *31* involved, grace periods be so far as possible extended beyond the present peak years of debt service. It is at the same time essential that the Government, as it has shown signs of doing, scrutinize much more carefully than in the past the terms on which aid is being made available, as well as the purposes to which it is applied. 139. It is difficult to make a balanced appraisal of the results in the economic field: the picture is made up of conflicting elements. When recognition is given to the conditions in which Guinea acquired its early Independence, totally unprepared to solve the resulting intricate economic and administrative problems, full credit must be paid to the unusual degree of political stability and national cohesion which has held the country together in face of innumerable difficulties and in spite of mistakes. Great effort has gone into development and the extent to which Guinea's resources have been mobilized has been impressive. But weaknesses in planning and project appraisal, compounded by faulty execution, have meant that results have fallen far short of expectations. In part, this has been due to the absence of competent advice. In part, too, Guinea has received bad advice and has been the victim of ill con- ceived foreign aid and suppliers whose interest in economic develdpment was at best marginal. It also appears that economic policies, no matter how well intentioned, have not always been sufficiently thought through and measures have been taken without regard to the problems involved and administrative capacity required. Economic policies have resulted from a blend of policy and pragmatism. The Government has not been afraid to reverse decisions found to be impracticable; there has indeed been a tendency in some areas, notably distribution, to change policies rapidly, before conclusive evidence of success or failure was available. There has been considerable distrust, again sometimes as a matter of doctrine, sometimes as a matter of experience, of the domestic private sector, always somewhat limited. On the other hand, the Government has shown itself willing to make or confirm special arrangements with large inter- national enterprises to carry out major projects. 140. It is not believed that the Government itself is either satis- fied with its performance or unaware of the difficulties. The exper- ience of foreign aid over the past five years has been much debated and there is a greater readiness than in the past both to accept and to seek technical assistance, to insist that aid to finance projects include aid to manage them. There are now signs that key areas of policy, notaly in the monetary field, are coming under close scrutiny. iN•rS E N E G A L O R T u 5 1 E 5 E' G N E A rsAl, 0 ŸE R' Ki FD M- C.-bre 9 - / *- E F, 4 t E E . REPUBLIC OF GUINEA G... POPULATION & ADMINISTRATIVE CENTERS ½. .- ... - t Euqå »~-- **- ,. /W. . . 0 - uke -- ..,ie .. T E .1 --:k u Ø. , , .. R kR E NOVE MBER 19 65 IBRDI665R I.D IV-d,n \X 0 -J~1 1j .. . .. MKAYL Gallual Touguý DSIERRrye sgLi Pita vi.- Boké Dabola DoIabo REUL F, GUINEAw Boffa Kmo dio M CONAKRÝ: VA.., d.4, L.. neeco. O ForécoriohN S lIE R R A L EO0N E . hy Kissidougou Kanrouan AFRICA GUINEA GuékédouBel REPUBLIC OF GUINEA oacent T RANSPOR T -- -Roads being paved other main roads G" Railway , a • ' Navigable rver G S0 ANZ orZ Airport cAo.; Regularly serviced airfields SR A osR NOVEMBER 1965 IBRD 1590 R GAOUALO LABE SAl OLAE ';f- l ong,,Gye 0 IUR A .* BOKE 0 DAL ABA DABOLA KOUROUSSA- ANKAN BOFFA KINDIA CNKDUBIR KAO CONAKRY F RECARIAH. KISSIDOUGOU 0) BEYLA 'ý REPUBLIC OF GUINEA MACENTA LOCATION OF PRINCIPAL EXPORT RESOURCES BAUKI PALM KERNELS - IRON PINEAPPLES u GOLD BANANAS 0 50 100 350i, DIAMONDS COFFEE KILOMETERSIOO_ _ 50 TLE ba~ DECEMBER 1965 IBRD-1330R, Guinea - Statistical Appendix Note The figures in this appendix have been drawn from a variety of sources; in the face of sometimes conflicting data, staff judgment was exercised. Discrepancies may also reflect differences in concepts, timing and the inadequacy of many series. Most figures, except in the modern sectors, should be regarded as orders of magnitude. STATISTICAL APPENDIX 1. Estimated External Public Debt as of June, 1965 2. Estimated Service on External Public Debt 3. Population by Region 4. Estimates of Mid-Year Population 5. Sectoral Expenditures under the Three Year Plan 6. Resources and Allocations of the Seven Year Plan 7. Central Government Current Budget 8. Revenue of the Current Budget 9. Expenditure of the Current Budget 10. Regional Governments' Budgets - 1961-1965/66 11. Regional Governments' Budget - Revenue and Expenditure 12. Monetary Survey 13. Assets and Liabilities of the Central Bank 14. Consolidated Balance Sheet of Deposit Money Banks 15. Official Retail Prices of Some Imported Products 16. Production and Exports of Principal Crops 17. Estimate of Livestock Population 18. Recorded Utilization of Livestock 19. Ocean Fishing 20. Agricultural Credit Bank, Loans Outstanding 21. Mineral Production and Exports 22. Number of Motor Vehicles 23. Consumption of Fuels - 2 - STATISTICAL APPENDIX 24. National Railway Transport 25. Commercial Traffic at Port of Conakry 26. Air Traffic Movements 27. Installed Capacity of Electricity 23. Production and Consumption of Electricity 29. Education in Selected Years 30. Recorded Imports by Commodities 31* Recorded Exports by Commodities 32. Imports by Area of Origin 33* Recorded Exports by Area of Destination 34* Principal Areas of Destination of Main Exports 35. Commodity Balance by Area 36. Balance of Payments 1963 and 1964 37* U.S. Aid to Guinea 38. Sources of Foreign Skills Table 1 ESTIATED EXTERNAL MEDIUM- AND LONG-TERM 1/ PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF JUNE 30,1965 Debt Repayable in Foreign Currency 2/ (In thousands of U.S. dollar equivalents) Debt outstanding June 30, 1965 Item Net of Including ______________________undisbursed undisbursed TOTAL EXTERNAL PUBLIC DEBT 181,61 20h,133 Loans from: Belgium 5,916 5,916 China - People's Republic 15,711 15,711 Eastern European countries 18,823 25,128 France 13,635 13,635 Germany - Federal Republic /13,988 Ghana 13,988 Italy 2,062 2,062 Morocco 1,946 1,946 Switzerland 6,123 6,123 United Arab Republic 435 435 United Kingdom 9,242 9,212 U.S.S.R. 70,490 81,632 United States - AID 2,427 5,503 Yugoslavia 6,319 8,312 ~/Loans with an original or extended maturity of one year or more. 2/ Defined to include debt repayable in merchandise. 3/ Does not include a DM 5,192,6141.60 loan for which terms of repay- ment are not yet determined. Statistics Division IBRD -Economics Department November 8, 1965 Table 2 ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL MEDIUM- AND LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF JUNE 30, 1965 1/ Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) TOTAL EXTERNAL PUBLIC DEBT Debt Outst (begin.of period) Payments during period including Amorti- Year undisbursed zation Interest Total 1965 2/ 204,133 9,575 5,039 14,614 1966 195,841 8,933 5,167 1U,100 1967 186,908 12,152 b,988 17,1L0 1968 174,756 13,228 4,554 17,782 1969 161,528 18,918 4,091 23,009 1970 142,610 16,980 3,478 20,458 1971 125,630 16,202 2,978 19,180 1972 109,428 16,,425 2,530 18,955 1973 93,003 14,776 2,092 16,868 1974 78,227 14,170 1,738 15,908 1975 64,057 14,077 1,t4 15,521 1976 49,980 13,336 1,133 14,469 1977 36,6L4 8,518 817 9,335 1978 28,126 7,737 633 8,370 1979 20,394 7,b45 bl 7,860 1J Includes service payments on all debtslisted in Table 1 prepared November 8, 1965, and should be read in conjunction with footnotes on Table 1. 2/ Debt outstanding as of June 30, 1965; payments for the entire year 1965. Statistics Division IBRD-Economics Department November 8, 1965 Table 3 POPULATION BY REGION Estimate as of August 1964 Arga Population Densit (km ) (000) (per km ) Lower Guinea 36,133 771 21.3 Boffa 90 Boke 105 Conakry 173 Dubreka 86 Forecariah 98 Fria 27 Kindia 192 Fouta-Djalon 80,683 1,338 16.6 Dabola Dalaba 105 Dinguiraye 67 Gaoual 81 Labe 283 Mali 152 Mamou 163 Pita 155 Telimele 1L7 Tougue 75 Youkounkoun 55 Upper Guinea 79,667 542 6.8 Faranah 97 Kankan 176 Kouroussa 93 Siguiri 179 Forest Region 49,374 808 16.4 Beyla-Kerouane 1-9 Gueckedou 130 Kissidougou 133 Macenta 123 N'Zerekore 253 Total 245,857 3,59 14.1 Source: Direction Generale de la Statistique et de la m6canograhpie. Table 4 ESTIMATES OF MiIID-YYR POPULATION (in thousands) Years Total 1957 2,696 1958 2,896 1959 2,983 1960 3,034 1961 3,086 1962 3,139 1963 3,360 196h 3,0 1965 3,506 Sources: - U.N. Demographic Yearbook 1963 for the period of 1957 through 1959 - Direction de la Statistique, Government of Guinea, for the period of 1962 through 1964. - Mission's estimates for the years 1960, 1961 and 1965. Table 5 Investment Expenditures under the Three-Year Plan, 1960-631 (In billions of Guinean francs) Initial estimates Revised estimates Results Amount Per cent Amount Per cent Amount Per cent Production 18.4 47.3 19.0 42.9 11.8 29.4 Agriculture and animal husbandryV 10.1 26.0 9.4 21.3 4.5 11.2 Industryy 8.3 21.3 9.6 21.6 7.3 18.2 Infrastructure 13.6 35.0 18.6 42.0 22.1 54.9 Administrative facilities 6.7 17.3 8.6 19.4 9.1 22.6 Transport equipment 4.2 10.8 4.8 10.8 6.6 16.4 Ports and airports 1.3 3.4 1.7 3.8 2.5 6.3 Roads 1.2 2.9 3.1 7.0 3.7 9.2 Telecommunications 0.2 0.6 0.4 1.0 0.2 0.4 Social services 6.8 17.3 6.6 11.8 6.3 15.5 Education 3.7 9.5 3.2 7.1 3.4 8.3 Health 1.8 4.5 1.8 4.0 1.2 2.9 Housing and youth activities 0.8 2.0 1.1 2.6 1.0 2.5 Athletic facilities 0.5 1.3 0.5 1.1 0.7 1.8 Unallocated 0.1 0.4 0.1 0.3 0.1 0.2 Total 38.9 100.0 4.3 100.0 40.3 100.0 Source: Data provided by the Guinean authorities. 1/ Owing to the lags in the implementation of the Plan, these expenditures were actually effected during the period from July 1, 1960 to April 30, 1964. 2/ Including forestry. 7/ Including mining, power, and handicrafts. Table 6 RESOURCES AND ALLOCATIONS OF THE SEVEN-YEAR DEVELOPMENT PLAN (1964-1970) (In Millions of OF) Remainder 7-Year of Plan 3-Year Plan Total In Percent Estimated Revenue Domestic Resources: 30,898 2,051 32,949 44.8 Contribution of State Enterprises 27,888 2,051 29,939 40.7 Contribution of Regional Budget 3,010 - 3,010 4.1 Foreign Resources: 37,762 2 853 40 615 55.2 Foreign Credits 16372 1 ,90 18,277 24.5 Counterpart Funds from imported goods 2,893 587 3,480 4.7 Contribution of Inter- national Organizations 258 250 508 0.7 Bilateral Aid 18,239 111 18,350 25.0 Total Revenue 68,,660 4904 73,564 100.0 Expenditure Industry and Mines 16,493 1,014 17,507 15.5 Agriculture 16,044 803 16,847 14.9 Power 11,502 - 11,502 10.1 Transport (except high- ways and bridges) 32,277 - 32,277 28.5 Highways and Bridges 26,295 380 26,675 23.6 Telecommunications 2,255 2,708 4,963 4.4 Handicrafts 576 - 576 0.5 Social Services 2,785 - 2,785 2.5 Reserve - - - - Total Expenditure 108,227 4,905 113,132 100.0 Remaining to be financed 39,567 Source: Ministere dfEtat Charge des Finances et du Plan Table 7 CENTRAL GOVERNIMNT CURRENT BUDGET (in millions of GF) Year Budget Estimates Actual Revenue and Expenditure Revenue Expenditure Surplus or Deficit 1958 6,328 5,693 1959 7,461 8,272 8,164 +108 1960 8,227 7,550 7,993 -W43 1961 8,745 8,713 7,56L +1,149 1962 9,738 9,098 7,222 +1,876 1963 1J11,243 10,397 2/ 11,131 2/ -73b 2/ 1963/4 11,712 12,175 10,531 +1,644 1964/5 13,355 10,768 31 5,425 2/ +5,343 1/ 1965/6 17,985 Change in fiscal year from calendar year to October/September period. Including the first quarter of the fiscal year 1963/4. First 9 months only. Yearly surplus estimated at 1.0 billion. Source: Direction du Budtet, Minist6re d'Etat Charge des Finances et du Plan Table 8 REVEXUE OF THE CUREiLT BUDGET (Estimates in millions francs) 1958 1959 in % 1960 1961 1962 19631 1963/0/ 1964/5 in % 1965/6 in % Direct Taxes: 1927 2,162 29.0 0 80 1,147 1,695 2,365 2,645 19.8 3,155 20.4 Tax on industrial and business profits .. 160 250 265 447 1,000 1,500 1,800 - 13.5 2,000 - 12.8 General income tax .. 50 30 20 20 15 15 15 35 Tax on income from stocks .. 20 82 100 120 120 120 80 140 Lump sum payment an salaries and wages .. 70 70 130 130 130 130 150 180 Witholding tax on salaries and wages .. 150 250 305 L30 430 6oo 600 800 Others .. 1,712 1,718 4O - - - - Indirect Taxes: 1,159 4 743 63.6 5,165 7 198 8 013 7 299 7 379 6 717 50.3 7 980 51.2 Import duties .. 1,70 1,912 5,1 ,9 ,425 , 2 ,0 76 o00 -3.5 Export duties .. 200 250 700 359 650 300 203 1.5 170 - 1.1 Turnover tax .. 230 350 250 375 h00 500 600 600 Tax on petroleum products .. 280 350 590 1,240 64o 755 656 550 Miscellaneous taxes .. 30 45 73 72 73 73 207 385 Others .. 2,133 2,258 1,275 273 311 326 251 275 Fees and Dues 160 152 2.0 255 262 307 I0 830 742 5.6 1,048 6.7 Revenue from Services 493 247 3.3 265 303 45 68 69 440 3.3 7691 4.9 Social Revenue - 30 0.4 30 35 70 965 912 1 204 9.0 1 096 7.0 Social security (C.N.S.S.) - - - - - 710 172 0 Apprenticeship tax .. 30 30 35 70 50 40 70 80 Others - - - - - 185 - 320 216 Repayment of Loans and Advances 50 35 0.5 100 80 30 30 30 30 0.2 15 0.1 Special Receipts - - - - 75 75 75 1,475 11.0 1,409 9.0 Contribution from Caisse de Perequation - - - - - - - 1,400 400 Contribution from amortization of state enterprises - - - - - - - - (2,409)- Investment Fund - - - - 75 75 75 75 - Surplus revenue -frm previous-- year - - - - - - - - 1,000 Miscellaneous 2,559 92 1.2 32 27 51 51 52 102 0.8 113 0.7 Total 6,328 7,461 100.0 8,227 8,75 9738 11 2 13 100.0 157 100.0 Actual Revenue .. 8,272 110.9 7,550 8,713 9,098 10,397 12,175 10,768- 1/ The 12 months from January to December 1963 2/ The fiscal year of 12 months from October to September 3/ Including revenue from economic activities of the army amounting to 225 millions of G h/ Not accounted for in total 5/ 9 months only Source: Direction du Budget, Ministere d'Etat charge des Financeret du Plan. Table 9 EXPENDITURE OF TE CURRENT BUDGET (Estimatesin millions francs) 1958 1959 in % 1960 1961 1962 19 196 1964 5 _Inl 1965/6 in % Public Debt: 251 107 1.4 114 92 80 764 1,005 890 6.7 897 5.8 Repayment of public debt .. 87 .. 22 .. .. 326 50 (2,409)4/ Pensions-allocations-social security .. 20 .. 70 80 764 679 840 897 Defense and security 287 1,473 19.8 1,777 2,076 2,170 2,2L3 2,072 2,593 19.- 3,188 20.5 General administration 1,195 1,221 16.4 1,221 1,713 1,767 2,407 3,213 2,230 16.7 2,571 16.5 Education 831 966 13,0 1,518 2,019 2,307 2,570 2,213 3,285 24.6 3,744 24.0 Health and social services 682 875 11.7 1,134 1,356 1,365 1,280 1,263 1,416 10.6 1,659 10.7 Production 367 428 5.7 427 196 283 53h 394 530 4.0 629 b.0 Public works and transport 263 265 3.6 261 333 399 259 299 71 0.5 95 0.6 Post and telecommunication - 7 0.1 .. .. 8 72 77 510 3.8 561 3.6 Maintenance: 182 420 5.6 424 450 500 466 450 335 2.5 350 2.2 Roads and ferry boats 16y 100 .. 425 .. L39 388 300 300 Airfields 15 20 25 .. 27 62 35 50 Common and miscellaneous expenditure 571 526 7.0 464 359 355 1o8 5h5 1,370 10.3 1,621 10.4 Loans, advances, contribution, subsidies & - - - - - - - - - - - - Emergency Fund / 1,06h 1,173 15.7 883 151 524 182 181 125 0.9 261 1.7 Total 5,693 7,h661 100.0 8,223 8,745 9,738 11185 11,712 13,355 100.0 15,576 100.0 Of which: a. Personnel .. 3,806 51.0 .. 5,o89 4,70b 5,027 L,909 8,190 61.3 9,484 60.9 b. Materials and supplies .. 1,6h9 22.1 .. 2,525 2,350 2,408 1,757 2,842 21.3 3,788 24.3 Estimated actual brpenditure .. 8,16L 7,993 7,564 7,222 11,131 10,531 5,4252/ y The 12 months from January to December 1963. The fiscal year from October to September. 3/ 9 months only. Not accounted for in Total Expenditure. Not including various subsidies included above. Sourcet Direction du Budget, Minist&re d'Etat Charg6 des Financeset du Plan. Table 10 Regional Government Budgets (in millions of GF) Year Budget Estimates Actual Surplus Revenue and Expenditure Revenue Expenditure or Deficit 1961 1,190 1,062 1,110 - 48 1962 3,035 2,927 2,995 - 68 1963 3,151 2,832 2,882 - 50 1963/64 3,185 1,656 1,605 + 51 1964/65 3,078 2,002 1,553 +449 1965/66 3,00 ./ 18 regions only. 2/ First 9 months only. Source: Direction du Budget, Ainist6re d'Etat charg6 des Finances et du Plan. Table 11 Regional Governments' Budget Estimates for the Fiscal Years 1963/L and 1964/5. (in millions of GF) 1963/64-1/ 1964/65t, Revenue Current Budget: 2607 2059 Direct taxes 1070 1322 Indirect taxes 578 271 Revenue from regional Government services 220 181 Revenue from regional enterprises 186 136 Miscellaneous 583 149 Capital Budget: 355 725 Capitation tax 37 70- Contribution, subsidies and revenue from commercial activities 7 122 Total Revenue 2962 2784 Expenditure Current Budget: 2607 2059 3/ Repayments of loans and other debts 139- 1T Administration 979 ) Production 424 ) 1178 Education and health 154 ) Regional enterprises 121 102 Public works (maintenance): 236 82 Roads and bridges 228 70 Airfields 1 5 Navigation 5 7 Common and miscellaneous expenditure 556 553 Capital Budget: 355 725 Construction 16 ) Development 47 ) Equipment 93 ) 606 Completion 36 ) Roads and bridges 11 ) Production . 44 Contribution to the Plan - 75 Total Expenditure 2962 2784 1/ 26 regions out of 29. 7/ 25 regions out of 29. 7/ Including GF 5 million for Pensions. Source: Direction du Budget, Minist6re d'Etat charge des Financeset du Plan. Table 12 I,bnetary Survey 1960-65 (in billions of GF) 196 L2 61 19262 196 196 1965 Dec. Dec. Dec Dec. June Set. Dec. March June Foreign Assets (Net) 5.bo -0.27 -K.9 -8.25 -7.11 -7.37 -7.64 -7.77 -9.05 Toroign assets kgross) 12.44 8.84 1.64 2.66 3.50 2.91 2.41 2.26 2.42 Forein liabilities 7.0b 9.11 10.52 10.91 10.61 10.28 10.05 10.03 11.47 of which: Bilateral payments (3.84) (5.84) (6.58) (8.16) (8.38) (7.87) (7.79) (7.88) (3.92) agreements Domestic Credit 10.20 15.03 38.97 40.15 38.14 44.08 39.97 39.72 45.72 Claims on Government (net) 3.81 4.44 10.66 5.46 4.97 5.64 4.51 5.98 9.46 Claims on Government (gross) 5.14 11.19 18.83 12.46 13.51 14.14 14.74 16.11 17.67 of which: advances to Plan (L.57) (8.01) (10.71) (10.71) (11.43) (11.69) (12.46) (13.83) (15.47) Government deposits 1.33 6.75 8.17 7.00 8.54 8.50 10.23 10.13 8.21 Claims on the Economy 6.39 10.59 28.31 34.69 33.17 38.44 35.46 33.74 36.26 of which: on state enterprises (5.97) (9.85) (26.35) (32.31) 29.86 35.72 32.72 31.09 33.75 on private sector (0.42) (0.74) 1.96 2.38 3.31 2.72 2.74 2.65 2.51 Money 14.07 16.89 23.53 27.83 30.26 33.42 32.62 32.68 37.28 of which: Currency outside banks 8.96 9.54 10.71 10.81 12.29 12.81 13.72 14.37 14.29 deposits 5.11 7.35 12.82 17.02 17.97 20.61 18.90 18.31 22.99 state enterprises (2.36) (1.58) (3.52) (5.37) (3.64) (4.99) (2.88) (2.47) (5.51) private sector (2.75) (5.77) (9.30) (11.65) (14.33) (15.62) (16.02) (15.84) (17.48) Time Deposits --- 0.03 0.03 0.58 1.21 1.24 Inyort Drepayments -- --- 2.77 0.14 0.14 0.06 0.22 0.38 0.49 Counterpart Funds - -- --- 3.50 3.11 3.91 3.70 4.77 5.29 CiDital Accounts 0.50 1.12 1.59 2.77 1.99 2.28 2.31 2.66 2.66 Other Items (net) -1.03 -3.25 .2.20 -2.35 -4.80 -2.97 -7.10 -9.75 -10.29 Related Data Claims on state enterprises 3,31 5.11 15.94 20.69 23.79 24.60 25.75 26.72 27.65 (financed through long-term foreign loans) -Source: IF If Counterpart of foreign loans contracted on bohalf of state enterprises, ana channeled through the Central Bank. Table 13 Assets and Liabilities of the Central Bank (in billions of Guinean francs) 1960 1961 1962 1963 1964 1965 June Sept. Dec. Mar. June Assets Foreign assets 12.44 8.83 0.91 2.02 3.18 2.88 2.29 2.18 2.32 Claims on Government 5.14 3119 18.83-V 12.04 13.01 13.66 111.13 15.56 16.92 of which: Advances to plan (4.57) (8.01) (10.71) (10.71) (11.43) (11.69) (12.46) (13.83) (15.47) Claims on state enterprises 6.39 -- 0.24 0.16 0.15 0.16 0.16 2.65 0.03 Claims on banks 0.81 10.26 20.52 24.26 24.31 25.98 27.64 24.40 29.20 Unclassified assets 2.37 0.32 0.53 1.62 1.73 1.92 1.54 2.40 2.48 Assets - Liabilities 27.15 30.60 41.03 40.10 42.38 14.60 45.76 47.19 50.95 Liabilities Reserve money 114.07 17.04 19.61 20.02 23.64 25.35 26.13 28.45 30.80 Currency outside banks 8.96 9.54 10.71 10.81 12.29 12.81 13.72 11.37 114.29 Currency in banks -- 2.75 2.68 3.41 4.73 3.91 3.54 3.76 3.64 Bankers' deposits -- 4.75 5.05 2.52 4.4h 5.96 6.56 7.71 9.96 State enterprises deposits 2.36 -- 0.95 2.22 1.29 1.24 1.02 1.07 1.31 Private sector deposits 2.75 -- 0.22 1.06 0.89 1.43 1.29 1.54 1.80 Government deposits 1.33 3.11 7.05 5.60 6.53 6.80 7.54 7.00 7.08 Foreign liabilities 2/ 10.35 9.0 10.42 10.01 10.46 10.00 9.89 9.88 21.16 of which: Bilateral payments agreements -- (5.84) (6.58) (8.16) (8.38) (7.87) (7.79) (7.88) (3.92) Capital accounts 0.50 0.56 0.91 1.17 0.92 1.07 1.10 1.14 1.14 Unclassified liabilities 0.89 0.86 3.02 3.30 0.83 1.38 1.10 0.72 0.77 y Claims on Government for 1962 include a Treasury special loan of OF 6.0 billion to pay the pensions of Guinean war veterans owed then by France and blocked with the Bank of France. This loan was repaid in 1963 following the deblocking by France of the war veterans' account. Data exclude the counterpart of foreign loans channeled through the Central Bank for the account of state enterprises. These foreign loans are reported as "Related data" to the Monetary Survey (Table 12) In June 1965 a part of the debit balances under payments agreements was converted into long-term liabilities. Source: IMF Table 14 Gonsolidated Bdlance Sheat of DeposIt Money Banks (in billions of Guinean francs) 1961 1962 1963 1964 1965 June Sept. Dec. Mar. June Assets canh 5.97 8.46 6.75 9.70 10.04 10.58 12.34 14.93 of which: deposits with Central Bank (B~CE) (3.22) (5.78) (2.52) (4.44) (6.13) (6,56) (8.57) (9.96) for-ign assets (CXE) 0.01 0.73 o.64 0.32 0.03 0.12 0.08 0.10 Claims on Oovernment (Deposits with cP) .. .. 0.42 0.50 0.48 0.61 0.55 0.75 Claims on state enterprine 9.85 26-1U 32.15 29.71 35.56 32.56 28-4U 33.72 C0ls on prIvate Dector 0.71 1.96 2.38 3.31 2.72 2.74 2.65 2.51 Liabillties Deposits 7.35 U.65 13.74 15.79 17.94 16.59 15.70 20.08 Privatw oector (5.77) (9.08) (10.59) (13.44) (21.19) (31.73) (14.30) (15.68) State snterprises 1-5 (2-57) (3.15) (2.35) (3.75) (1.66) (1.40) (4.40) TIn deposita -- -- - 0.03 0.03 0.58 1.21 1.24 Import prepayro nts (BGCE) -- 2.77 0.14 0.14 0.06 0.22 0.38 0.49 Oovernment depoalts 3.64 1.12 1.40 2.01 1.70 2.69 3.13 1.13 Foreign liabilites (~305) 0.07 0.10 0.90 0.15 0.28 0.16 0.15 0.31 Counterpart funds (GCE) -- -- 3.50 3-L2 3.91 3.70 4.77 5.29 CapitaI aocounts 0.56 0.68 1.60 1.07 1.21 1.21 1.52 1.52 Credit from Central Bank 9.88 21.27 20.76 22.19 23.84 24.64 20.77 24.91 ether itams (not) -.93 -0.33 0.30 -1.25 -0.14 -3.18 -3.57 -2.96 Source: m Table 15 OFFICIAL RETAIL PRICE OF SOME IMPORTED PRODUCTS (Francs per unit) Unit 1957 1958 1959 1960 1961 1962 1963 1964 1965 Beer 1 litre 45 50 50 60 75 75 75 75 75 o1 1 litre 15 150 150 150 130 130 120 135 190 Salt 1 kg 70 65 70 60 20 20 20 25 25 Sugar 1 kg 55 58 62 L5 65 65 80 110 110 Rice 1 kg 55 55 60 60 45 45 45 55 75 Source: Direction des Prix et Direction Statistique, Ministère du Commerce Intérieur. Table 16 PRODUCTION AND EXPORTS OF PRINCIPAL CROPS P - Production in thousand metric tons E - Export in thousand metric tons Average 1954 - L6 1960/1961 1961/1962 1962/1963 1963/1964 1964/1965 P E P E P E P E P E P E Export Crops: Bananas 89 90 75 55 52 59 86 44 81 65 87 28 Pineapples 11 6 11 4 12 2 11 2 13 3 Groundnuts 31/ 8 3 19 8 14 6 11 2 15 2 Palm kernels 221/ 22 26 23 15 19 23 20 20 24 25 20 Coffee 1021 10 l4 16 15 15 13 7 13 7 14 6 Sesame 1 1 1 1 2/ - 1 1 1 1 Other Cro s: Rice paddy) 260 323 219 319 250 330 Fonio (finger millet) .3 58 63 47 128 Corn 60 361 323 180 260 450 Sweet potatoes 115 55 83 87 81 84 Cassava 250 433 650 430 420 650 Sorghum 15 7 6 8 6 8 1/ Estimated figures of the crop years 1956/1957 2/ Estimated figures from totals for ex French West Africa 3/ Less than a half ton Sources: Tableau economique et social des Etats et territoires d'outre-mer 1958, for the average 1954-1956. Ministere de 1'Economie rurale et de l'Artisanat, Government of Guinea for the crop years 1960/1961 through 1964/1965. Table 17 Estimate of Livestock Population (in '000) Cattle Sheep Goats Horses Donkeys Pigs 1950 668 128 319 1.1 1.7 3.7 1951 716 144 166 .9 .6 3.1 1952 723 170 184 .9 1.1 3.3 1953 787 205 220 .9 1.2 3.2 1954 828 192 227 1.0 1.3 4.1 1955 864 225 245 .9 1.4 5.5 1956 949 235 255 .8 n.a 5.8 1957 999 250 273 .7 1.5 n.a 1958 1007 249 277 .6 1.5 7.3 1959 1202 296 270 .5 1.4 7.8 1960 1197 261 285 . 1.4 7.8 1961 1 1300 343 491 -. 2.0 9.0 1962 1500 343 491 .6 1.5 9.7 1963 1 1500 343 491 2/ 2.0 10.0 1964 1 1500 343 491 i 2.0 10.0 1/ Rapports annuels Inspection Generale de ItElevage, Ministere de 1'Economie Rurale et de 1Artisanat. 2/ Included under Donkeys. SOURCES: Bulletin de Statisique and Minist;re de 1'Economie Ruraleet de 1'Artisanat. Table 18 Recorded Utilization of Livestock Exports (in tons) Controlled slaughtering (in heads) Live animals Skins and Cattle Sheep Goats Pigs Hides 1958 154 368 29,970 .. n.a n.a 1959 13 394 43,599 n.a n.a 1960 20 682 45,882 n.a n.a 1961 12 46 38,595 n.a. n.a 1962 7 500 35,437 1963 3 575 55,232 6,704 5,342 522 1964 101 434 55,975 3,348a/ 4,217 / 1942 1965 10 .. 10,5682' 1/ Ministere du Commerce Exterieur et des Banques 2/ First 9 months I/ 8 months in Conakry only. SOURCES: Bulletin de Statistique for Exports and Rapports annuels Inspection Generale de 1'Elevage for Controlled Slaughtering. Table 19 Ocean Fishing (in tons) 1957 1958 1959 1960 1961 1962 196 l_ Catch 2,312 2,251 3,148 2,481 3,516 3,125 3,257 3,310 2,3151 Exports - - - - 1 n.a. n.a 0.3 0.5 1/ First Six Months. SOURCE: Ministere de 1'Economie rurale et de ltArtisanat. Table 2 AGRICULTURAL CREDIT BANK LOANS OUTSTANDING (in millions GF) Short Tem Medium Term Long Term Total Sept.30, 63 June 30, 6h Sept.30, 63 June 30, 64 Sept.30, 63 June 20, 64 Sept.30, 63 June 30, 64 Public Sector 4,293 5,455 725 502 281 166 5,299 6,123 Cooperative Sector - 6 117 115 - - 117 121 Private Sector 24 93 88 168 - 1 112 275 Total 4,317 5,554 930 785 281 180 5,528 6,519 Source: Banque Nationale de Developpement Agricole. Table 21 Mineral Production and Exoorts (in 000 metric tons) 1958 1959 190 961 1962 1963 1964 1965 (forecast) Bauxite Production 309673 300973 521669 384961 54794 172468 . . . .1 Exports 299157 300973 540569 378412 44389 184766 166649 104067 Alumina Production 185289 400457 457875 480035 484000 480000 Exports 171376 390336 458654 487733 477000 Iron Ore Production 408090 342321 773368 525527 701669 557654 766744 Exports 372796 358374 766274 534936 719495 559710 701000 810000 'Diamond (in carats) Production 2/ 113338 81608 37423 49083 41854 520692" 418601/ 509922 Exports 113338 81608 37423 49083 41854 52069 41860 ./ Actual 9 months only Production figures are estimated by Direction Generale de l'Industrie et des Hines The figures of E.G.E.D. (Entreprise Guineenne d'Exploitation de Diamant) Source: Direction Generale de l'Industrie et des ilines Table 22 Number of Motor Vehicles Registered at December 31 Tves of Mator Vehicles 1955 1956 1959 1960 1961 1962 (June 30) Passenger cars 1889 2626 4268 5453 6548 6884 7869 Light trucks, Delivery-vans 388 380 871 3922 4331 4465 4629 Trucks (4-50 tons) 3571 4691 5407 4140 4707 6707 7128 Buses 28 66 111 189 253 274 311 Special vehicles 34 61 n.a. 154 154 154 154 Tractors 72 92 315 178 214 216 229 Scooters and others 376 n.a. 1082 1624 2329 2381 2718 Total 6358 7916 12054 15660 18536 21081 23038 Source: Service du Controle Automobile Service des Mines for 1955 Documentation francaise for 1956 Table 23 Consumption of Fuels (in mJ) 1958 1959 1960 1961 1962 1963 Aviation spirit 939 763 1127 1511 1792 674 Gasoline 35016 32647 31351 34596 h0596 22570 Kerosene 11754 12115 12154 13570 1h6 8712 Gas oil 20911 18348 15318 18185 21849 1454 Diesel oil ----- ----- ----- 2050 900 800 Light fuel oil ----- ----- ----- 4825 1280 1000 Heavy fuel oil ----- 864 92706 149501 159995 79639 Total 68620 64737 152656 224238 240858 127939 First 6 months. Source: Bulletin Special de Statistique Table 2 L National Railway Transport 1957 1958 1959 1960 1961 1962 1963 19641! 1965./ Passengers (in '000) 658 560 433 812 749 818 773 763 236 Long distance MT 7 77 TT M7y, Suburban 215 224 100 441 431 456 450 396 162 Passenger/km. (in '000) 38312 43011 34772 32866 28562 32415 40052 44137 15801 Long distance 35976 LTOMT 3976 76U-9 7 15111665 14509 Suburban 1716 1963 797 3527 3444 3649 3603 2972 1292 Freight (in '000 tons) 94 86 86 79 83 80 95 84 36 of which: Bananas 21 7T5 TU Ia T9 g1 11 Coffee 4 4 5 5 2 1 1 4 1 Fuel 9 11 14 10 14 11 10 12 6 Others 60 48 49 46 46 50 66 57 18 Financial results (in millions of Guinean francs) A. Revenue . .. .. 473 655 654 613 660 425 Passengers 126 211 240 141 193 120 Freight 317 420 394 415 438 280 Other 30 24 20 57 29 25 B. Expenditure/ .. .. .. 673 646 817 718 802 624 C. Surplus (4) or deficit (-) 3/ -200 +9 -163 -105 -142 -199 1/ From October 1, 1964 to June 30, 1965. 2/ From January to June. 1/ Excluding expenditure for amortization and interest. Source: Office National des Chemins de Fer de Guinee, Ministere des Transports. Table 2 ! Commercial Traffic at Port of Conakry 1958 1959 1960 1961 1962 1963 1964 19651/ Ships entered 932 953 804 844 725 692 628 304 Tonnage (in '000 tons) 2262.3 2328.8 2478.9 2333.6 2075.9 n.a. n.a. n.a. Movement of passengers: Embarkation 3377 1969 3890 2890 2820 2974 640 94 Disembarkation 6375 2243 2788 3470 5188 5258 5307 855 Imports (in '000 tons) 379 330 429 533 614 542 600 Fuels 61T 727 M' M 72 Cement - 69 - 69 96 57 49 Others 315 197 277 277 282 274 319 Exports (in 1000 tons) 837 785 1489 1376 1314 1327 1811 Iron ore 720 Bauxite 313 301 433 329 42 184 204 Alumina - - 171 390 459 488 5U4 Coffee - 14 - 13 7 6 6 Fruits 72 74 63 68 57 56 150 Others 79 38 56 41 29 33 294 Budget of Port of Conakry: (in millions of francs) Revenue 115.6 256.4 256.4 381.1 336.2 334.4 - 1859.3 Current Expenditure 236.6 264.5 266.0 328.7 331.7 450.5 378.1 402.8 Capital Expenditure 39.1 69.0 79.0 100.0 100.0 100.0 145.0 728.3 1/ 6 months only. Sources: Bulletin Special de Statistique and Direction Generale de 1'Office Maritime, Minist6re des Transports. Table 26 Air Traffic Movements in 1963 Boke Labe Kankan Kissidougou N'Zerekore Conakry Aircraft Movements: Arrivals 272 92 615 424 114 3,384 Departures 283 92 613 427 112 Passengers: Arrivals 1518 2121 5225 2542 1080 29,136 Departures 1618 1876 5881 2140 1060 26,666 Freight: (in kilograms) Arrivals 1468 6050 10575 8755 4370 341,000 Departures 1208 1033 7394 7413 4235 322,000 Mail: (in kilograms) Arrivals 460 567 1728 1257 1362 Departures 387 1496 1026 1260 1078 807,000 1/ In 1962. Source: Direction de 1'Aeronautique and for Conakry Air Transport in Africa 1964, ICAO Table 27 Installed Capacity of Electricity in Major Centers (in Kw.) Additional Capacity Major Communities January 1, 1965 in 1965 Thermal Hydraulic Thermal Fria 41,214 - Grandes Chutes - 20,000 - Conakry 1,700 - 7,500 Kankan 410 - Hamou 1,000 - - Labe 148 180 100 Iacenta 160 160 - Bok4 150 - - Total: 44,782 20,340 7,600 1/ Distribution to Conakry and Kindia Source: Societe Nationale d'Electricite Table 28 Prod(u- ion an'd Consuol,; on o:T -lecticity (in 1000 Kwh) Number of Production of which Fria Consul:,ion Subscribers Industrial Domestic 1952 2,820 1,686 1953 6,060 2,363 1954 8,500 3,3d2 1955 10,040 4,328 1956 13,627 6,115 1957 17,589 b,976 1958 20,839 7,700 1959 30,866 9,135 13,553 15,335 8,751 1960 101,515 77,372 79,726 19,888 9,290 1961 134,482 109,261 110,070 10,847 10,702 1962 147,183 115,115 113,157 21,982 11,032 1963 155,993 119,253 12,000 1964 16 U ,00, 124,890 13,000 1935 (3 mo.) 43,395 31,487 Source: Soci6t' Nationale d'Electricite, Ministere du Developpement Economique. Table 29 Education in selected years 1957/58 1960/61 1964/65 Primary Number of schools 287 642 1665 Number of classes 450 1575 3782 Number of boys (000) 33 71 123 Number of girls (000) 9.5 25.3 55.0 Total 42.5 96.3 178.0 Teachers 505 1474 3862 Secondary and technical Number of schools 22 23 48 of which technical n.a. n.a. 17 Classes 65 217 545 of which technical n.a. n.a. 190 Number of students 2547 6810 20681 of which technical n.a. n.a. 6548 Number of professors 62 250 835 of which foreigners n.a. n.a. 313 Higher education Number of students - 350 Number of schools - 3 Number of professors - 65 of which foreigners - 55 Studying abroad n.a. n.a. 1135 Total in school (000) 45 103 180 Estimated school age population (000) 540 Source: Ministry of Education Table 31 RECORDED IMPORTS BY CDMODITIDS OfR GROUFS OF COMMODITIES Q - Quantity in '000 metric tons V - Value in million francs (CFA until 1960, then Guinean) CIF Conakry. 1956 1957 198 1959 1960 1961 1962 1963 196 Foodstuffs, beverages and tobacco V 1,228 1,483 1,702 2,396 1,860 1,796 3,0141 2,328 2,844 of Wh. * Rice Q 9.5 11.0 7 24 19 21 25 25 42 V 219 282 203 623 415 523 546 885 1,197 Sugar Q 4 5.7 7 17 13 10 15 11 9 V 190 268 352 442 393 365 485 415 624 Flour and wheat Q 5.2 3.5 3 19 7 1 11 19 25 V 157 118 121 427 139 56 268 465 353 Beverages Q 9.4 9.8 10 9 6 4 3 1 n.a. V 216 276 353 309 255 201 119 75 n.a. Textiles and clothing V 1,261 1,608 1,677 1,459 1,917 L,171 2,853 1,551 1,910 Petroleum products Q 46 49 57 64 151 204 200 217 216 V 370 456 562 638 976 1,142 1,201 1,352 1,341 Transport and equipment V 921. 1,917 1,964 1,062 1,590 3,635 1,70 _ 1,184 1,2-16 Care and buses ('000) 0.6 0.8 0.7 0.6 1.6 2.0 1.0 0. 0.6 V 169 271 332 198 342 603 279 18 221 Trucks ('000) 1.4 2.3 2.6 1.0 1.3 5.5 1.3 0.8 2.1 V 296 550 704 283 337 1,h01 38h 248 539 Spare parts V 147 183 325 209 143 404 427 353 211 Other V 309 658 603 372 768 1,227 61 1435 245 Construction materials Q 33 48 76 61 72 6L 131 35 n.a. V 135 207 342 257 321 236 479 109 304 Machinery and appliances V 508 1,073 2,258 4,586 1,232 11741 1,799 1,000 966 Metals Q 9 114 50 12 8 19 20 6 1-4 V 310 451 1,126 590 308 711 887 186 475 Metal Products V 532 684 1,609 1,958 755 1,313 70 306 Chemical producs V 329 426 508 574 608 863 1090 711 ' Fertiliser g 6 5 4 7 5 13 11 V 93 96 79 72 87 95 127 131 125 Other 7 ;945 . 1,251 1,759 2,761 2,385 2,437 2,662 2,90 Total recorded V 6 638 9,250 12,999 15,279 12,328 17,993 16,195 11,389 12,085 Estimated imports under the Plan V 3,6001 3.600.;/ 3,6001/ ,800 5,000 Total estimated imports 15,928 21,593 19,795 16,189 17,085 Sources: Bulletin Special de Statistique, Direction du Commerce Exterieur, Statistiques Douanieres, etc. and staff estimates. / Estimates for 3-Year Plan spread evenly over 3 years. 2/ Included under "Other". Table 11 Recorded Exports by Commodities Quantities in 000 metric tons unless otherwise specified. V = Value in million Francs (CFA until 1960, then Guinean) FOB Conakry 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965(estimate) Alumina* Q - - - - 171 463 "41 488 477 480 V - - - - 2623 7147 6631 7740 7658 Iron ore Q 820 1050 373 358 766 535 719 560 701 810 V 733 773 406 411 884 593 681 540 933 Bauxite Q 457 375 299 301 541 378 44 185 167 150 V 475 408 337 500 852 625 68 305 220 Diamonds - 000 cts 77 80 31 185 V 138 252 158 1279 2183 1913 498 279 950 Total main minerals V 1346 1433 961 2190 6542 10278 7878 8864 9761 Coffee Q 11.1 9.6 10.3 14.4 16.0 15.2 7.8 7.01 6.4 V 1501 14 1748 2244 2117 1577 712 860 806 Bananas Q 91 73 65 67 55 59 44 45 28 V 1305 1058 1067 1090 1146 1607 1120 1022 668 Palm kernels Q 27 21 19 23 23 19 20 24 20 V 4h9 500 502 713 919 649 735 794 733 Pineapple (fresh) Q 1.7 2.2 3.0 3.8 5.5 4.1 2.1 2.4 3.2 V 49 77 128 191 187 368 167 262 328 Groundnuts**(shelled) Q 0.1 - - 2.1 2.8 7.9 6.1 2.3 1.5 V 2 1 - 90 119 413 315 122 48 Sesame Q - - 1 0.4 1 1 - 0.5 0.5 V - - 40 16 40 48 6 23 22 Tons Orange essence Q 97 180 77 84 136 108 87 77 54 V 75 121 88 81 148 45 102 109 87 Leather, hides Q 332 405 310 394 682 445 5oo 575 h34 V 29 45 42 47 100 52 43 43 30 Fruit juice Q 252 712 395 837 927 5 39 79 64 V 14 41 27 48 4h - 4 7 5 Other agriculture (errors and omissions) 324 504 271 398 1383 138 4 209 363, Total agriculture 3748 3791 3913 918 6203 4897 3209 3451 3090 Total Recorded Exports 5094 5224 487h 7108 12745 15175 11086 12315 12851 * Production began in 1960. *+ Until 1959 groundnuts were exported through Senegal. Sources: Bulletin Special de Statistiquef Statistiques Douani&res, individual companies, staff estimates, etc. Table 32 Importsil by area of Origin (Millions of Francs (CFA until 1963 then Guinea) C.I.F. Conakry) 1957 1958 1959 1960 1961 1962 1963 196b Franc Area 6,901 9,996 11,328 4,56 3,259 3,03b 2,156 3,063 France 6,06 79""w6 10,22 3,729 2,205 271bl 1,195 2771 Other 833 632 1,086 835 1,05L 653 961 292 EEC (less France) n.a. 938 759 651 3,886 2,66b 509 bl5 Sterling Area L58 619 207 b93 868 083 100 366 Other Convertible Currency Countries 2/ 73 801 1,19) 1,1b2 1,h26 2,267 2,796 2,8:0 .7-S35 77 T W1M 917 1,dl 2,11i5 SW Switzerland n.a. 29 66 110 503 L37 575 105 Other n.a. 8 188 91 6 16 1Ab 11D Clearing Account Countries / - 328 12976 5,719 9,10% 7,6b3 5,38b 5,397 U.S.S.R. - -15 1,177 7 3,269 2,029 1,520 Eastern Europe - 12 1,103 3,388 h,309 2,866 1,691 1,123 China, Peioles' Republic - 1 1L2 366 1,1b6 133 1,012 2,075 African Countries - 299 596 593 1,067 1,125 379 361 Other 16 - 185 L9 250 273 318 Unspecified,Errors and omissions 1,18 317 -183 769 -550 10 Uh6 UL Total Recorded 9,250 12,999 15,279 13,328 17,993 16,195 11,389 12,385 Estimated Plan Imports - - - 3,600 3/ 3,600 3/ 3,600 / ),800 5,joo Total Estimated Imports 9,250 12,999 15,279 16,928 21,593 19,795 16,189 17,085 1/ Including an estimate of imports under the Plan but not of illegal imports. 2/ As of 1964. 3/ Estimated for 3-year Plan spread evenly over 3 years. Table 33 Recorded Exports y Area of stinatn (Millions of prances (FA until 1960 then Guinea) F.0.B. Cona_kry) 19,57 1953 1959 1960 1961 1962 1963 _6_ Franc Area 3A75 3,697 3,672 4,720 11,586 3,717 4,053 2A8 rance - 3, 3,29 2768 2136 1,929 1,3231/ thr29 3312 444 1,291/ 1.,897 1,6n1 2,12b ,563 ESC (less France) 399 23 1,267 1,890 1,950 1,01 1,736 5 ste,ling Area 55o 372 323 572 26 108 _2J5 36( Other Convertible Currency Cotuntr±es 31 32 _21 624 2,259 3,851 1 3,919 23P - -25 9- U.-A.~ 168 138 93 909 126 898 992 Canada 303 246 392 1,285 97b 234 942 Norway - - - 565 1,190 1,273 2,016 1,O4i Other 8 7 94 316 778 218 61 17 .lean.ng Account 3 162 38 1,143 3,021 3,855 2 886 3,19 2,576 -i. -- 3,1-' Rastern Europe 162- 7).7-1 U Other 37 955 2,059 2,008 2,030 2,588 2,335 Other50 231 3t0 208 Unspecified, Enrors and n327 9 79 283 687 1,573 -1,157 2,WO0 Total 5,224 4,87b 7,108 12,74 15,175 11,086 12,315 12,51 1/ Essentially alumina to Cameroon since 1960. 2/ FrAsch of cure. Scurce1: Bulletin SpeCial de Statis,®D Statiot.±ques Douan±eres, etc. Table A4 PRINCIPAL AREAS OF DESTINATION OF MAIN EXPORTS - 1963 (in millions GF, FOB Conakry) EEC UK and Eastern P.R. of France Cameroon Morocco (minus France) Canada USA Yugoslavia USSR Europe China Other Total Mineral Products: Bauxite - - - - 305 - -/ 305 Alumina 1,515 1,556 - 738 9827 741 - - 877 - 1,519' 7,738 Iron ore - - - - 144 - - - 394 - 2 540 Diamond - - - 217 38 22 - - - - 22.1 98 Main Agricultural Products: Bananas - 4 56 - - - 127 290 $56 - 4 1,022 Coffee 14 - 18 11 12 356 58 33 94 - 98 860 Pineapple 5 - - - - - 22 148 63 - 24 262 Palm kernels 7 - 13 124 - - 30 90 290 187 53 794 Groundnute (shelled) - - 2 2 - 12 13 - 87 10 - 126 Miscellaneous, errors and amissions 388 249 4 64 201 -233 50 30 -78 - -1,065 +170 Total 1,929 1,805 248 1,736 1,q07 898 300 $91 2,588 197 836 12,315 1/ Canada only 2/ U.K. only 3/ Norway Sources: For Bauxite,Alumina and iron ore, individual companies for the rest. Statistiques douanieres: Exportations par pays des principaux produits de 11annee 1963. Table 35 COMMODITY BALANCE BY CURRMNCY AREA (EXCLUDING IMPORTS UNDER THE PLAN) (in millions CFA francs until 1960, Guinean francs thereafter) 1957 1958 1959 1960 1961 1962 1963 196L Balance: Franc area -3,26 -6 299 -7,656 +156 +1 327 +683 +1 897 -179 France -2 2 -5999 -7,016 -300 +78L T -1,60 Other -584 -300 -642 +456 +843 +1,028 +1,263 +1,271 E.E.C. (less France) n.a. -651 +508 +1,239 -1,936 -1 613 +1 227 +1,8h0 Sterling area +92 -777 17 +79 622 +T17 0 Other convertible currency countries -37 -3750 -7 +1 117 +2,4 -216 +1,125 -570 U.S.A. -73 7_97 -7-9U -bi -a -1,_M1,1 -1, 797 Other +311 +216 +232 +1,965 +2,433 +1,172 +2,342 +1,022 Clearing account countries +162 -290 -833 -2,688 -5,7249 -h 757 -1 865 -2,521 U.S.S.R. - - + 5 -214 -791 - -1,8 -1,102 Eastern Europe +162 +25 -1148 -1,329 -2,301 -836 +897 +1,212 Other - -315 -738 -1,15 -2,157 -1,277 -1,324 -2,631 Other, Errors, Omissions -422 -258 +260 -486 +1,237 +1,469 -1,603 +2,196 Total -4,026, -8,125 -8 -583 -2,818 -_5109 +926 +766 Source: Export-Import Tables. Table 36 Balance of Payments, 1963 and 1964 (in millions of Guinean francs) 1963 1964 I. Goods, Services, and Transfer Payments -_7,198 -6,856 Exports 12,315 12,851 Imports -16,189 -17,085 Fria -2,600 -2,600 Plan -4,800 -5,000 Other -8,789 -9,485 Trade Balance -3,874 -4,234 Service and Transfer Payments -3,324 -2,622 Private -5,124 -4,842 Travel 30 140 Frial/ -2,560 -2,532 Compagnie Miniere 1/ -299 -400 Other 2/ -2,295 -2,05Q Government 1,800 2,220 Interest -600 -650 U.S. Government Grants 2,100 1,875 Other 3/ 300 945 II. Capital 7,657 7,565 Private 972 1,180 Fria --- 480 Other 972 700 Government 6,685 6,385 Debt Settlement with France (net) 1,300 --- U.S. PL 480 1,475 1,825 Other Loans 4,750 5,210 Suppliers' Credit 1,000 1,200 Foreign Debt Repayment -1,800 -1,850 Subscriptions to International Organizations -40 --- III. Net Errors and Omissions 171 -99 IV. Monetary Movements -630 -610 Net IF Position -690 --- Payments Agreements 1,580 -370 Liabilities of Banks -1,190 -490 Reserves of Banks -330 250 Source: IF 1/ Includes certain capital transfers. Y/ Profits, interest, remittances of salaries of foreign employees, etc. 3/ Includes French paymonts of pensions to Guinean war veterans and former civil omployees. Table 37 U.S. AID TO GUINEA (Commitments) (in $M) Until June 30, 1961 1961/62 1962/63 1963/64 1964/65 Total Agricultural imports 2.7 10.7 2.2 14.2 6,0 35.8 Other imports - 3.1 5.5 7.0 4.7 20.3 Technical assistance 1.3 2.5 3.1 2.7 4.7 16.3 Sub-total grants 4.0 16.3 10.8 23.9 15.h 70.4 Loans - - 0.7 - 4.8 5.5 Total L.0 16.3 11.5 23.9 20.2 75.9 Source: U.S. AID, Conakry Table 3 Sources of Foreign Skills in 1965 No. of people Bilateral Technical Assistance of 0.E.C.D. countries 320 Technical Assistance & Capital Projects of Yugoslavia 40 t if I " P.R. of China 250 " i It " U.S.S.R. 250 S"i " "i " " other communist countries 100 U.N. Technical Assistance 15 Private Foreign Investment 500 Private Voluntary Agencies 150 Purchases of Skills by Guinea apart from those financed by aid programs 400 2,025 Source: OECD, Development Centre. The Economic Situation of Guinea and the Impact of Foreign Aid, March 16, 1965