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GUINEA–BISSAU
L
WORLD RANK:
119
imited attempts at structural reform have generated uneven
progress in Guinea–Bissau’s economic development, and any
emergence of private-sector dynamism remains constrained by
institutionalized weaknesses. The judicial system remains inefficient and vulnerable to political interference, and corruption is
perceived as widespread.
REGIONAL RANK:
20
The overall regulatory framework is not conducive to starting
businesses and discourages broad-based employment growth.
Potentially significant economic gains from trade continue to be
undercut by the absence of progress in reforming the financial
and investment sectors that are critical to sustaining efficient
open markets.
ECONOMIC FREEDOM STATUS:
MOSTLY UNFREE
ECONOMIC FREEDOM SCORE
56.1

( ▲ UP 4.3 POINTS )
0
50
60
70
80
55.0
60.9
REGIONAL AVERAGE
WORLD AVERAGE
(SUB-SAHARAN AFRICA REGION)
NOTABLE SUCCESSES:
Monetary Stability
100
CONCERNS:
Rule of Law, Investment Freedom,
and Financial Freedom
OVERALL SCORE CHANGE
SINCE 2013:
+5.0
QUICK FACTS
FREEDOM TREND
70
60
50
40
POPULATION:
1.8 million
UNEMPLOYMENT:
7.6%
GDP (PPP):
$2.7 billion
4.8% growth in 2015
5-year compound
annual growth 3.1%
$1,508 per capita
INFLATION (CPI):
1.5%
FDI INFLOW:
$18.3 million
PUBLIC DEBT:
57.7% of GDP
30
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2015 data unless otherwise noted. Data compiled as of September 2016
BACKGROUND: Guinea–Bissau has been wracked by conflict since independence in 1974, including a civil
war in the late 1990s and multiple military coups, most recently in April 2012. In May 2014, José Mário
Vaz was elected president of the former Portuguese colony. In August 2015, Vaz dismissed Prime Minister
Domingos Simões Pereira, head of the ruling African Party for the Independence of Guinea and Cape
Verde (PAIGC), sparking a political crisis. Vaz quickly dismissed several successor governments and by
November 2016, had named Umaro Sissoco Embaló to serve as the country’s fifth prime minister within a
two-year period. Guinea–Bissau is highly dependent on subsistence agriculture, the export of cashew nuts,
and foreign assistance, which normally comprises about 80 percent of the country’s budget.
392
2017 Index of Economic Freedom
KEY:
WORLD AVERAGE
12 ECONOMIC FREEDOMS | GUINEA–BISSAU
RULE OF LAW
157th
GOVERNMENT SIZE
75th
152nd
100
100
80
80
70
70
60
60
50
50
0
33.8
48.7
28.7
Property
Rights
Judicial
Effectiveness
Government
Integrity
Although the government has made transferring
property easier by lowering the property registration
tax, protection of property rights is generally weak.
The judiciary has little independence and is barely
operational. Judges are poorly trained, inadequately
and irregularly paid, and subject to corruption. Guinea–
Bissau’s status as a transit hub for cocaine trafficking
from South America to Europe exacerbates its
endemic corruption.
170th
87th
100
80
80
70
70
60
60
50
50
60.9
77.7
Business
Freedom
Labor
Freedom
Monetary
Freedom
87.5
75.3
Tax
Burden
Government
Spending
Fiscal
Health
0
151st
154th
133rd
65.2
30.0
30.0
Trade
Freedom
Investment
Freedom
Financial
Freedom
Rank
Trade is moderately important to Guinea–Bissau’s
economy; the value of exports and imports taken
together equals 37 percent of GDP. The average
applied tariff rate is 9.9 percent. The law treats foreign
and domestic investment equally. High credit costs
and scarce access to financing impede entrepreneurial
activity, although bank credits to the private sector
have increased. In late 2015, the government bailed out
two commercial banks.
The Heritage Foundation | heritage.org/Index
GUINEA–BISSAU
The opaque regulatory environment discourages
entrepreneurial activity, virtually precluding any significant private-sector development. Much of the labor
force is employed in the public sector or the informal
economy. Although the government has removed all
fuel subsidies, in 2015, the IMF urged it to review its
fuel pricing mechanism to ensure that international
prices are fully passed through and criticized “indiscriminate” electricity subsidies.
89.0
Rank
OPEN MARKETS
96th
46.7
98th
The top personal income tax rate is 20 percent,
and the top corporate tax rate is 25 percent. The sales
tax is down to 10 percent on certain commodities. The
overall tax burden equals 8.7 percent of total domestic
income. Government spending has amounted to 20.4
percent of total output (GDP) over the past three
years, and budget deficits have averaged 3.4 percent
of GDP. Public debt is equivalent to 57.7 percent
of GDP.
100
0
26th

REGULATORY EFFICIENCY
0
31st
393