Although water quality and water delivery systems still need improvement, as a low-lying country with a pronounced rainy season, Guinea-Bissau has plenty of water for subsistence, commercial agriculture and human consumption.
Large deposits of bauxite in the east along the Guinean border and phosphates in the centre and northwest, offshore petroleum, and gold are additional assets that could be developed more fully with improved infrastructure.
JAKARTA - INDONESIA
A major restructure of Guinea-Bissau’s banking system that began in 1989 replaced the National Bank of Guinea-Bissau with separate institutions including a central bank, a commercial bank, and a national credit bank. Guinea-Bissau joined the West African Economic and Monetary Union and the Franc Zone in 1997, and the Guinean peso was eventually replaced by the CFA (Communauté Financière Africaine) franc after the two currencies coexisted for several months. The role of the central bank was taken over by the Central Bank of West African States, which is based in Dakar. Participation in the banking system among Guineans is very low, and only a fraction retains bank accounts.
During the colonial period, Portugal was by far Guinea-Bissau’s most important trading partner. Although Portugal retained a significant role after independence, Guinea-Bissau maintains important trade relationships with Senegal and Italy. Guinea-Bissau receives the majority of its imports from Senegal and Italy, as well as with India and Nigeria, which are also recipients of most of its exports.
The economy is largely agricultural, with good prospects for forestry and fishery development. Foods produced for local consumption include rice, vegetables, beans, cassava (manioc), potatoes, palm oil, and peanuts (groundnuts). Livestock includes pigs, goats, sheep, cattle, and poultry. Fish and shrimp are raised for both domestic consumption and export.
Guinea-Bissau is heavily forested, with forest cover on about three-fifths of its land. Most wood harvests are used for domestic fuel, but the country exports small amounts of sawn wood. The export of commercial items such as cashews, palm products, rice, peanuts, timber, and cotton has long played an important role in the country’s economy.
REPUBLIC OF GUINEA-BISSAU
The economy of Guinea-Bissau includes a mixture of state-owned and private companies. Plans for industrial development have been reduced, and those supporting agriculture have been increased. The number of state-owned businesses declined significantly after the government adopted a liberal free-market economy in 1987, as endorsed by the World Bank and IMF (International Monetary Fund).
Guinea-Bissau is easily self-sufficient in food production, and the majority of labor is devoted to agriculture at the subsistence level. Whilst some crops are raised for export, various small-scale industries and services also generate a part of the gross national product. Due to a variety of damaging factors, including an exploitative colonial inheritance, war damage, inflation, debt service, subsidization, civil disorder and mismanagement, the economy has fallen far short of its promise, resulting in a protracted negative balance of trade and Guinea-Bissau’s status as one of the world’s poorest countries. Various foreign aid and loan programs have been sought to address this deficit.