Guinea Bissau’s macroeconomic situation was affected by a coup d’état on 12 April 2012,and the economy is estimated to have contracted by 1.5% of gross domestic product (GDP) that year after having grown by 5.3% in 2011. The slowdown was mainly due to lower production and world prices of cashew nuts, which account for some 30% of the added value in the primary sector. The average price of cashew nuts fell from USD 1 350 (US dollars) a tonne in 2011 to USD 1 081 in 2012. Real GDP growth is expected to recover to 4.2% in 2013 and 3.5% in 2014. Inflation, which was 5.0% in 2011 due to higher import prices, should ease, thanks to expected macroeconomic evolutions, to 2.1% in 2012 (with 3.3% in 2013 and 2.5% in 2014) as the economy slowly recovers and domestic markets are adequately supplied.
The budget showed a deficit of 2.3% of GDP in 2012 after a 0.7% surplus in 2011. Thanks to budgetary discipline and better revenue collection, it is expected to shrink to a deficit of 0.8% in 2013 and of 1.0% in 2014. The current-account deficit worsened to 6.3% of GDP in 2012 but should improve to a deficit of 4.7% of GDP in 2013 and of 4.3% in 2014. Food imports should decline with an expected 5% increase in production and export of cashew nuts in 2013 and a satisfactory 2012/13 crop season.
The social situation is still precarious. Guinea-Bissau has a very low score (0.364) on the worldwide Human Development Index (HDI) and ranks 176th out of 185 countries surveyed in the 2013 report. Per capita GDP was USD 614 in 2010, and more than two-thirds of the population was living on less than USD 2 a day and 33% on less than one dollar a day. The country showed an HDI average annual growth between 2000 and 2010 of 0.9%, compared with 2.1% for sub-Saharan Africa and 1.68% for very low-ranking countries.
This bad score was due to widespread poverty, very low incomes because of lack of jobs and a life expectancy of only 48.6 years aggravated by difficult access to good healthcare.
Mineral and oil resources have not been developed, except for some quarrying an small alluvial gold mining operations. Concessions have however been granted in recent years to mine bauxite (2007) and phosphates (1997). Several offshore oil discoveries have been made but their commercial viability is uncertain.
( Courtesy African Economic Outlook……Source… New Africa Business News )