SIM Report: Guinea's political risks are mounting amid uncertain transitional period, rising resource nationalism
GUINEA: POLITICAL RISKS MOUNT AMID UNCERTAIN TRANSITIONAL PERIOD AND RISING RESOURCE NATIONALISM
Seven months have passed since a faction of the armed forces deposed the former president. No clear transitional timeline has yet been outlined, while the interim government seeks to increase revenue from the country’s strategic mining sector. Amid elevated geopolitical volatility, businesses face mounting policy uncertainty and political risks, including a realistic possibility of contract renegotiations, operational disruption, and/or assets seizures, as well as international sanctions over the one-year outlook.
UNCERTAIN POLICY ENVIRONMENT AND GEOPOLITICAL VOLATILITY
In September 2021, Colonel Mamady Doumbouya seized power through a military coup that deposed then-president Alpha Condé. Since then, the junta-led government has presented no clear guideline on a transition back to democratic rule despite calls by the Economic Community of West African States (ECOWAS). But the regional’ bloc’s demands have gone largely unheeded, signalling a rupture in Conakry’s relations with the regional trade bloc. Further underscoring this schism, the government has refused to enforce sanctions by ECOWAS and the West African Economic and Monetary Union (WAEMU) on Guinea’s northern neighbour, Mali.
In parallel, the government has taken an increasingly hostile stance against mining companies, in line with our warnings last year. In March, it ordered a halt to operations at the Simandou iron ore mine. Output from the mine remained disrupted for about a month, when authorities on 25 March signed a new agreement with the main concessionaires – Rio Tinto and Simandou Winning Consortium – and took a greater share in the project, which will include the construction of a railway from Simandou to the port of Conakry and Matakong. Two weeks later the government took aim at bauxite miners, demanding they submit plans by the end of May to build refineries. Most of Guinea’s large bauxite output, which amounted to about 80 tonnes in 2020, continues to be exported and refined abroad.