Economy

Guinea possesses major mineral, hydropower and agricultural resources, yet remains an underdeveloped nation. The country possesses over 30% of the world's bauxite reserves and is the second-largest bauxite producer. The mining sector accounted for about 75% of exports in 1999.

Long-run improvements in government fiscal arrangements, literacy and the legal framework are needed if the country is to move out of poverty. Fighting along the Sierra Leonean and Liberian borders, as well as refugee movements, have caused major economic disruptions, aggravating a loss in investor confidence. Panic buying has created food shortages and inflation and caused riots in local markets.

Guinea is not receiving multilateral aid, with the IMF and World Bank cutting off most assistance in 2003. Growth rose slightly in 2004, primarily due to increases in global demand and commodity prices on world markets.

In September 2006, the government signed a production sharing contract (PSC) with an American micro-cap exploration company to explore for offshore petroleum resources. Further exploration is in its very early planning stages.