By Nicholas Nhede, Strategic Communications Officer at Energy Capital & Power (www.EnergyCapitalPower.com)
Despite its vast energy resources, Guinea-Bissau has one of the least developed economies in the world. Due to the slow progress of the west African country in terms of exploitation of its energy resources, due to limited investment in infrastructure development and political instability, little progress has been made in the expansion of other sectors such as manufacturing and mining.
However, the recent increase in capital expenditures is set to revitalize the economy during 2022. Moreover, in the short term, tackling corruption and increasing infrastructure rollout will allow Guinea-Bissau to grow its economy by 3.9% by 2022 and ensure that inflation remains stable. there is. steady at 1.9%, according to the development finance agency, the African Development Bank (AfDB).
Energy Development Stimulates Economic Growth
The energy sector can provide Guinea-Bissau with an income stream for sustainable economic growth. For better capital, the government needs to establish a regime that attracts capital and introduce new exploration and production permits for the oil and gas industry. This will increase investor confidence and increase participation of global energy companies which will serve to monetize the energy resources of the west African country while creating local jobs.
Currently, in the area of renewable energy, Guinea-Bissau has various projects in progress that contribute to a positive financial outlook for 2022. These projects are in line with the increased electrification target, which has grown from 6% in 2010 to 31% by 2019. With energy being the backbone of economic growth, projects such as the 20 MW, Bissau Solar PV Park 1 valued at $32.75 million and the Solar Energy Access and Upgrade Project at $50 million, will enable Guinea-Bissau to meet its growth targets.
In addition, the ECOWAS Regional Electricity Access Project, with funding of $338.7 million from the World Bank and its partners, is planned to further enhance Guinea-Bissau’s economic growth prospects.
Meanwhile, AfDB’s $30 million financial package, for the purpose of agriculture, energy, water and public works projects in Guinea-Bissau, starting in 2022, could also help revitalize the economy through infrastructure improvements.
Utilizing the Mining Potential of the State
Guinea-Bissau is rich in bauxite, gold, diamonds and rock phosphate but the lack of transparency in these sectors has crippled the industry’s ability to thrive. Addressing corruption in the mining sector could enable the government to increase foreign investment and ring-fence funds to advance the sector, accelerate economic growth through mining-related job creation, infrastructure development and export earnings.
By building transparency and accountability within the sector, opportunities arise in securing grants such as those provided by AfDB to six other African countries. This as part of the AfDB initiative, ‘Regulating Natural Resource Flows for Increased Economic Resilience in Fragile and Transitional Countries’ and access to similar grants could enable Guinea-Bissau to significantly expand the country’s mining sector and promote sustainable economic growth in 2022 and beyond. .
Manufacturing and Regional Trade Cooperation
Meanwhile, President Umaro Sissoco’s recent visit to the Special Economic Zone of Rwanda in March 2022 was a major step towards enhancing regional trade cooperation. Together with the Rwandan delegation, the President met with companies such as the Rwandan food producer, Africa Improved Foods, and the vehicle manufacturer, Volkswagen, to discuss investment and manufacturing opportunities for Guinea-Bissau. By leveraging regional cooperation with some of Africa’s fastest growing economies, Guinea-Bissau can accelerate development in various sectors including manufacturing, which is a key driver of economic growth.
At the same time, the 2022 feasibility study to build a new deep-sea port in Guinea-Bissau is testimony to the country’s efforts to boost regional trade and attract foreign investment. Port development will be critical in driving economic growth while positioning the country as a strategic west African trading center.
Distributed by the APO Group on behalf of Energy Capital & Power.
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Encouraging Sustainable Economic Growth in Guinea-Bissau (By Nicholas Nhede)
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