Guinea – Unresolved Disputes Cloud Outlook

Political risk seems certain to escalate this year, as the government moves ahead with plans to hold a presidential election, despite the obstacles posed by the Ebola crisis and the failure of a dialogue between the government and opposition groups to produce an agreement on the ground rules for the vote. The country’s investment potential is not in doubt, and the likely re-election of President Alpha Condé bodes well for a generally business-friendly stance by the government. Nevertheless, the failure to strengthen the political environment is a major concern with the elections looming.

Guinea lacks the administrative capacity to ensure a credible voting process, the country has no Constitutional Court, and the independence of the National Electoral Commission is a subject of debate. Moreover, party affiliation is closely correlated to ethnic identity, with the Malinké in the east tending to back Condé’s RPG, and the Fulani (or Peul) of the central highlands, the country’s largest ethnic group, supporting Cellou Dalein Diallo’s UFDG.

These political/tribal tensions, which extend to some two dozen tribes, including the Soussou in the west, could easily flare into violence, both as the elections approach and in the immediate aftermath, especially given the animosity shown towards authority by those either grieving or justifiably frightened by the Ebola threat. A negotiated postponement of the voting would seem to offer the best hope for avoiding dangerous instability until the various outstanding issues can be resolved, but with neither side displaying much interest in reviving the dialogue, that may not be a viable option.

The extractive sector, meanwhile, remains mired in controversy over murky dealings that have pitted two of the world’s largest mining companies against each other in a legal dispute. At the same time, a government panel reviewing the state of affairs in the sector is expected to report its findings in April, and Nava Touré, who is leading the investigation, has intimated that there is sufficient evidence to justify the rescinding of other licenses, raising the prospect of protracted and costly court battles that could significant delay development of the mining sector.