The prize for the winner of Guinea’s landmark presidential election, early results of which could be announced today, is an economy shattered by decades of graft, mismanagement and political unrest.
Sitting on deposits of iron ore, bauxite and gold worth billions of dollars, Guinea is a lure for mining giants such as Rio Tinto, RUSAL and Vale, and could be one West Africa’s richest countries.
Yet the freefall of its local currency in recent months has added to the woes of a population struggling to meet their basic needs on annual income of $350 per head, barely a third of the World Bank figure for sub-Saharan Africa overall.
“The cost of living has been high for a long time, but recent events have added to that situation, aggravated it,” mother-of-five Mamasta Camara said of events since the army took power after the death in 2008 of authoritarian ruler Lansana Conte. “The government that is to come in has to find a solution so the cost of living is reduced,” Camara said as she peeled vegetables at the side of a dirt track in the Conakry district of Dixinn, its roads muddy after a night of heavy rain.
No fewer than 24 candidates lined up for Sunday’s first round, billed as the first free vote since independence from France in 1958. A run-off will likely be needed later this month to separate the two frontrunners from the first round.
In Guinea, which imports hundreds of thousands of tonnes of rice, plus other everyday basics such as sugar and oil, changes in the value of its currency are keenly felt at the food market and around the dining table.
Having traded at 1500-2000 to the dollar in the late 1990s, the Guinean franc’s exchange rate spiked to 4,500 at the time of a general strike in 2007, and, according to black market currency traders on ‘Wall Street’, as Conakry’s money-changing area is known, hovered around 6200 in early July this year.
Camara said a 50 kg bag of rice now cost 200 000 Guinean francs, up from around 125 000 francs over recent years, while onions were also 200 000 francs, up from 80 000. “If there’s real (political) change, money would be stable, but when the government is not well managed, that creates problems,” said currency dealer Mohamed Lamine Diallo. “When there’s national stability, the currency is stable.”
Yet even if stability returns, there are likely to be no quick fixes from an administration that could struggle to implement policy on the ground because of institutions weakened by authoritarian rule under independence leader Sekou Toure, then Conte, and finally a year under Moussa Dadis Camara’s junta.
“Lots of issues in public finances have to be addressed,” said Sekou Oumar Pendassa, an official at Guinea’s central bank, working on development of payment systems. “We need substantial reform in the accountability of public finances … public receipts and spending should be subject to rules,” he added.
The International Monetary Fund, which along with the World Bank suspended its Guinea programmes after the coup, said economic gains in 2007-08 had unravelled during army rule. “The transition government in place since mid-February 2010 is taking corrective measures but the macroeconomic outlook remains very difficult,” an IMF spokesman said of the caretaker rule in place since Camara went into exile following his wounding in a gun attack by an ex-aide.
“Fund staff is monitoring developments closely and stands ready to resume cooperation with Guinea … as soon as a majority of the Fund’s membership has recognised, or has started to deal with, the new government in Guinea,” he noted. Guineans, desperate for basic services such as water and electricity, would accept support from any quarter.
“We have been ruined by poverty. As for those in the West who can help us, any aid is useful,” said Yarie Sylla, a widowed mother of five children who said she was struggling to buy enough food for her family. “We hold out our hands to them. Anyone who can help Guinea is welcome.”