Politique, société, économie
La première décennie du régime PDG
Victor Du Bois
Guinea: The Decline of the Guinean Revolution.
Part II: Economic Development and Political Expediency
The Developing World. American Universities Field Staff, Inc.
Conakry. November 1965. Vol. I. 1965 Columbia University Press. pp. 122-29
- The Triennial Plan in Retrospect
- The Decline of the Guinean Franc
- The Liberalization of the Economy
- The Return to Severe Controls
- Performance of the Guinean Economy in 1965
- The Outlook for 1966
It has become a truism that in Guinea nothing takes precedence over politics. No decision affecting any aspect of life in the country is ever made without first considering what its political repercussions are likely to be. Originally, this intense preoccupation with the political implications of policy was necessary to hold together Guinea’s multiple ethnic groups during the struggle for independence.
When independence was finally achieved, this overriding concern for the political impact of policy decisions remained characteristic of the way Guinea was governed. Nowhere was this dominance of political considerations more evident than in the realm of economic affairs. The principle which seemed to guide the nation’s leaders in the formulation of policy was not « Is it economically feasible ?» but rather « Is it politically expedient? » Worse, the choice of a political expedient was all too often determined by little more than the President Sékou Touré’s whim, or the mood that he sensed in the crowd he happened to be addressing at the moment. Major policy commitments, therefore, tended to result not so much from a careful study of national problems as from the President’s impulsiveness or from his lofty dreams
Sékou Touré was a prisoner of his own rhetoric and of his own propaganda, and this fact was to weigh heavily on Guinea. Like Fidel Castro, whom he greatly admired, he was a powerful orator, enamored of his own voice; and, again like Castro, he could speak for hours without seeming to tire either himself or his audience. His hostility toward colonialism, imperialism, and what he conceived to be counterrevolution and neocolonialism impelled him to strike out angrily and unmercifully at anything or any person who displeased him. And always, no matter how blindly or unjustifiably he struck out, there was an audience there to applaud him and, by its applause, convince him that he was right.
No one ever told Sékou Touré that he was not right or even that he was capable of being wrong. No one dared. His ministers would not. Such impertinence would bring instant dismissal and perhaps a harsher fate. Ordinary citizens could not. In Guinea it is unhealthy to disagree with the President, and the few who have tried have either ended up in prison or disappeared, never to be heard from again. Foreign diplomats have felt that it would be impolitic to interfere in the internal affairs of another state.
Toure’s intemperate remarks on matters of crucial importance for the well-being of his country restricted Guinea’s capacity for diplomatic maneuver. His obstinacy and unwavering belief in his own self righteousness made compromise or settlement with adversaries extremely difficult, if not impossible. Such was clearly the case with his fateful decision to withdraw Guinea from the franc zone, a decision whose grave implications he scarcely seems to have pondered at the time it was made.
Touré’s insistence that the abandonment of his independent but inconvertible national money would constitute an intolerable abridgement of his country’s sovereignty has kept him for years from arriving at a modus vivendi with France and the other states of the franc zone, whose friendship he seeks and whose help he sorely needs. With characteristic obduracy, he has made of this heedless and ill-fated decision a question of national honor. So far has he committed his own prestige on the matter that even if he now wanted to rescind the action it is unlikely that he could do so without shaking his people’s confidence in him.
Within his own peculiar frame of reasoning, Touré saw nothing immoral or inconsistent in proclaiming in one breath the revolutionary nature of his state and his implacable hostility to capitalism and Westernism, and in the next, his eagerness for capitalist investment in his country and for the West to help in bailing him out when he was in trouble.
This inconsistency between a commitment to revolutionary principle and a need to rely on foreign capitalist investment was bound to cause confusion in the formulation and implementation of policy. And nowhere was this confusion more evident than in the results obtained from Guinea’s first major development scheme, the Triennial Plan.
The Triennial Plan in Retrospect
Guinea’s Triennial Plan (1960-63) was intended to raise the living standards of the people by replacing the colonial economic structure with a socialist structure which would eliminate the exploitation of the masses by middlemen, whose only interest was in making excessive profits. It also set out to put the country on the road to prosperity by a rational development of the nation’s natural resources. The Plan failed to achieve either of these goals.
Part of the trouble lay in the fact that the men who drew up the Triennial Plan knew little about planning, and even less about the complex problems involved in putting a rational development scheme into execution.
The confusion which resulted from the way the colonial economic structure was dismantled, and the disruption which ensued from the government’s tampering with the commercial circuits that had been established under it, wreaked havoc in the nation’s economy. The closing down or nationalization of the old European import and export houses gave the government a monopoly over the purchase and distribution of goods, and placed entirely in government hands the responsibility of seeing that the economic machinery of the state ran smoothly. This responsibility it was ill-prepared to assume.
Few qualified persons were available to manage the complex of state agencies and enterprises which were erected by the government to function in place of the private interests which it had abolished. Although the Triennial Plan provided for a state apparatus which would handle the purchase, transport, and distribution of imports, its authors were careless to the point of negligence in failing to provide the necessary underpinning, indispensable if the apparatus was to function effectively. Thus commodities and spare parts were frequently contracted for, purchased, and delivered without adequate provision having been made in advance to use them, or even to store them. Trucks were obtained to transport them but little was done to improve the road system over which the trucks had to travel. Goods destined for Kankan, Guinea’s second city, and other points in the interior were stockpiled in preparation for shipment by train; but little attention was given ahead of time to repairing the railroad’s track bed or replacing its deteriorated equipment. All of these preparatory steps, on which the success of many of the Triennial Plan’s goals depended, were not begun until the Plan was well into its second year of operation.
From its inception, it was evident that the Triennial Plan was an oversimplification of the measures required to resolve the nation’s economic problems and fulfill the ambitions of its leaders. It was predicated and dependent for its success upon a set of ideal social conditions which did not in fact exist. It was based on an unrealistic appraisal of the people’s motivation and capacity to work, and on an exaggerated notion of the willingness of foreigners to invest in a country whose leaders vociferously proclaimed it to be a revolutionary and socialist state.
So unrealistic was the Plan that not one of its major operations lived up to the high expectations of its authors. Voluntary labor, called investissement humain under the auspices of the program, was originally intended to play a major part in the realization of the Plan by supplying a steady source of cheap labor throughout the three years it was in operation. Investissement humain was slated to contribute fully 20% ,of the Plan’s total budget allocation.
While this voluntary labor program did result in the building of schools, mosques, and roads in places which otherwise might not have had them, its overall contribution to the Triennial Plan was far less significant than had been foreseen. By early 1962, investissement humain had already ceased to figure as a major factor in the Plan; and by the time the Sixth Party Congress of the Parti Démocratique de Guinée (P.D.G.) rolled around at the end of that year, it had been downgraded to such an extent that it was not even mentioned in the party’s public pronouncements.
Similarly, the government failed to get the response it had hoped for from foreign investors. Realizing that the original investment code promulgated in May 1960 was far too restrictive, the government belatedly sought to make the country more attractive to outside capital by passing a new investment code in April 1962. Among other things, the new code
- protected foreign investments from nationalization
- accorded them generous tax advantages
- assured them of protection from foreign competition, and
- guaranteed them the right to repatriate a certain percentage of their profits in hard currency.
But this was at best a palliative measure and failed to improve Guinea’s attraction for outside capital appreciably. With one significant exception — an agreement reached with the American mining firm of Harvey Aluminum to take over operations of a defunct French firm at Boke — no new major investments by private foreign interests were made during the entire duration of the Plan.
In the crucial area of agriculture, the Plan was a virtual failure. Between poor planning, lack of agricultural specialists, and an acute and chronic shortage of fertilizer, agricultural productivity not only failed to rise according to the goals called for in the Plan, but actually declined precipitously. Bananas, once one of Guinea’s most lucrative exports, were supposed to rise in production from 60,000 to 130,000 metric tons ; in fact, production fell to 44,000 metric tons. A similar decline was registered in coffee: although the Plan foresaw an increase from 16,000 to 20,000 metric tons, so much of the coffee crop was smuggled out of the country that only 8,000 metric tons, or 50%, of the pre-Plan amount, was available for legal export.
When the Triennial Plan officially drew to a close on June 30, 1963, it was with a discretion and sobriety that contrasted sharply with the fanfare with which it had been launched three years earlier. Although the Plan had provided some infrastructure which was useful to the country, its most touted accomplishments—the construction of
- the 28th of September Stadium
- the Polytechnic Institute
- the Patrice Lumumba Printing Plant
- a new radio transmitter, and
- two new hotels:
- Hotel Camayenne
- Hotel Gbessia
added little to the nation’s productive capacity.
The Decline of the Guinean Franc
One of the major factors in the Triennial Plan’s lack of success was the continuing repercussion of Guinea’s withdrawal from the franc zone back in March 1960. From that time on, Guinea’s independent franc went steadily down in value. Although the official rate of exchange of Guinean francs for C.F.A. francs remained one to one, the black-market rate, which more accurately reflected its actual purchasing power and therefore its real value, pegged it at two to one, and sometimes as high as five to one.
The inconvertibility of Guinea’s currency on the international market obliged the Government to conduct its foreign trade either on the basis of barter agreements or by using up the precious foreign exchange earned for it by FRIA (The giant alumina-producing complex north of Conakry) and the Compagnie Minière, another large mining firm. What little solvency Guinea continued to enjoy in the face of an unabated decline in the agricultural and commercial sectors was due largely to these two foreign-owned companies, which the government had prudently exempted from the succession of nationalization measures. Between them they produced fully 71% of Guinea’s exports and most of its foreign exchange earnings. Since Guinea’s meager foreign reserves were quickly dissipated in the first years of the Triennial Plan, it was only through the foreign exchange earned by these two firms that the government was able to maintain some façade of solvency.
Essential as this foreign exchange was, however, by itself it was not sufficient to provide the Guinean franc with the support it needed to become a stable currency. The stability of Guinea’s franc, like the financial prosperity of the country, was ineluctably tied to the agricultural sector from which 85% of Guinea’s people still drew their living. To a lesser extent, it was also tied to the commercial sector, upon whose smooth functioning the country’s urban labor force depended for its wages. And in Guinea both of these sectors were in a state of progressive disarray.
The shortage of foreign exchange obliged the government to impose severe limits on imports, especially by the private commercial interests. This in turn made it extremely difficult, and in some cases impossible, for them to continue operating. The result was that commercial activity in the private sector gradually began to grind to a halt; unemployment increased; and government revenues from personal and corporate taxes and customs receipts dwindled.
The value of the Guinean franc was depressed still further by the inflation which started to grip the country. As consumer imports became scarcer, the few that were still available in Conakry and the towns of the interior began to command higher and higher prices. Realizing that available stocks of clothing, appliances, liquor, spare parts, and other commodities would be replenished only haphazardly, if at all, Guineans flocked to buy what they could—only to find that wily merchants and unscrupulous profiteers had doubled, tripled, and sometimes even quadrupled their prices.
As the purchasing power of the Guinean franc continued to drop, a lively black market in money sprang up on Guinea’s frontiers with neighboring Sierra Leone, Liberia, the Ivory Coast, and Senegal. Despite vigorous government efforts to stamp out this traffic, it continued to flourish because of the demand for consumer goods from Guinea’s hard-pressed people, and their willingness to pay exorbitant prices to obtain them. Although the penalties for being caught participating in such traffic were unusually severe, the profits to be had were so great that at times even foreigners were encouraged to try their hand at it.
By early 1963 the government was sufficiently alarmed by the decline in the value of its money to initiate a series of fiscal reforms which it thought could effectively check this dangerous trend. Its first move came in January 1963, when, in an effort to improve its control over the banking system, the government attached the Central Bank directly to the Presidency. The bank’s newly named governor was now to be a member of the Presidential Secretariat rather than hold an individual ministerial rank as under the old system.
A more important reform was undertaken on March 10, 1963, when President Sékou Touré, speaking at P.D G. headquarters in Conakry, announced to his startled countrymen that on that very day he had decreed a change in Guinea’s currency. Guineans were given only two days (March 10 and 11) to declare to the government the number of old Guinean francs they had in their possession; they were then given three additional days (that is, until March 14) to turn in all their old bills in exchange for the new issue. The President emphasized that during the currency change Guinea’s frontiers with neighboring states would remain completely closed. This monetary reform was clearly aimed at curbing the illicit traffic in Guinean francs which had grown to alarming proportions in the border areas. By his abrupt move, the President hoped to surprise all those persons abroad who had acquired and were holding large blocs of Guinean notes for speculative purposes.
Toure was convinced that by this action he had won a victory over those who were compromising the Guinean currency. Secure in this thought, and anxious to bolster his flagging prestige among his people, he made another bold move on March 17, 1963. With little apparent forethought about probable repercussions, Touré arbitrarily decreed a 10% reduction in all retail prices. The decree applied to all merchandise sold throughout the country, although its principal aim was to lower food prices, for in Conakry alone these had more than tripled during the previous three months. The President made it clear that those who did not fully comply with his decree would be considered « the No. 1 enemies of the Guinean Revolution » and punished accordingly. Severe penalties were provided both for those who did not lower their prices and for those who consented to pay more than the newly established legal index. Toure was certain that this latest measure, like the new currency issue, would help to strengthen the Guinean franc.
He was wrong on both counts. While the currency change caught a few black-marketeers by surprise and caused them to sustain some losses, its over-all effect as a check on speculation of the Guinean franc was negligible. Once the currency change had been achieved, the old practices were resumed, only this time with the new money.
Similarly, Touré’s impulsive attempt to roll back prices by simple presidential edict came to nothing. Most merchants, rather than comply with the President’s decree, simply chose to withhold their goods from sale, thereby aggravating the already acute existing shortages and driving local prices up still higher. Worse, the few producers of food in the Fouta Djallon and other areas of the interior who were still sending their produce to Conakry, Kankan, Labé, and other cities now suddenly stopped doing so, reasoning like their confrères in the cities that the profit margin was so low that it was not worthwhile.
In a sense the situation had become a test of strength between the government and the merchants. For a time the government seemed determined to enforce the unpopular decree, and soldiers and policemen were sent to the marketplaces and shops to make spot checks to verify that the decree was being obeyed. But the merchants held their ground. They either pleaded to the visiting inspectors that they were out of stock or else assured them that they had duly complied with the government’s order, even when it was obvious that they had not. Realizing that his decree threatened to do more harm than good, Toure sensibly refrained from pressing the issue. Although he never publicly admitted his error in promulgating the decree in the first place, he stopped trying to enforce it, and it was discreetly revoked several months later.
The Liberalization of the Economy
Later in 1963, the government took a number of steps designed to strengthen the economy:
- On May 14, 1963, it opened discussions with the French to settle all outstanding financial problems between the two nations. 10 Its hope was that, once these problems were settled, the way would become clear for a resumption of French aid to the country.
- On September 28, 1963, Guinea joined the International Monetary Fund. Swiss banking experts were also called in to help put the Central Bank in order and advise the government on drawing up balance of payments estimates.
- On October 1, 1963, without revealing any details, the government announced the beginning of its new Seven Year Development Plan
- On October 9, 1963, President Touré made an important speech before representatives of the private sector, the indigenous merchant community, and members of the diplomatic corps. Among other things,
- he agreed to let the private sector participate in the commercialization of goods over which the state firms had previously held an exclusive monopoly.
- He also agreed to allow free competition between the private sector and the state enterprises. The President explained that up until that time such a step had been impeded because of Guinea’s trade agreements with Eastern Bloc countries, whose governments dealt not with individuals but only with states. He said, however, that recent trade agreements with the United States, Great Britain, West Germany, and Italy, and the 1963 accords with France, now made such a step possible.
- The President also committed himself to abolishing state companies once it had been established to the government’s satisfaction that the private sector could meet the needs of the nation’s consumers better than they could. He conceded that the state’s role should be limited to the import of merchandise and the export of the country’s produce, while the wholesale purchase and retail distribution of imports should be left to the private sector.
- Finally, he agreed to support the establishment of small industries and provide government aid to co-operatives, if the latter were shown to represent the interest of large groups of people and not merely those of a few profit-seeker.
- On October 14, 1963, in keeping with the assurances he had given the business community a few days earlier, the President ordered the closing of state stores and the relaxation of foreign exchange controls in the private sector. He also decreed the denationalization of the diamond industry.
- On October 19, 1963, N’Famara Keita, the Minister of Commerce, in an address before the National Assembly, revealed further government measures to favor the private sector. The number of cooperatives of petty merchants was reduced and their function limited to the distribution of goods imported by either the large commercial firms or state agencies. At the same time, however, the government liberalized the requirements for those wishing to qualify as merchants
In an effort to pump new blood into the moribund commercial sector, Keita also announced that in the future import licenses would be granted to state-controlled and privately owned firms on an impartial basis, depending solely on which served the public interest more favorably.
Throughout the latter part of 1963 and the early part of 1964, the government maintained this liberal policy toward the private sector, anxiously watching the effect it had on the economy. The results were deeply disappointing. The government’s liberalization encouraged a few African entrepreneurs to establish small businesses in the regions of Conakry and Kindia —notably
- several small laundries
- a nail foundry
- a bakery, and
- a soapworks
but it had anticipated far more ambitious activity.
More disquieting was the fact that the sudden loosening of controls over the private commercial sector led to a swift rise in prices, especially in foodstuffs, for the Guinean consumer. Such staples as rice and flour, imported from abroad under various aid programs and sold at low cost by the government to private wholesalers, quickly rose in price as they passed through the hands of various middlemen. Hard-to-get goods formerly obtainable only through the black market reappeared in the open, but at astronomical prices which few were in a position to pay.
Thus the net result of Guinea’s brief venture into a freer economy almost proved a disaster for the country. While a few people, notably the functionaries who directed the state enterprises and the merchants who acted as middlemen and vendors to the consuming public, reaped sizable profits from the experiment, the masses found themselves worse off than before. Virtually everything increased in price, while wages—for the few who were lucky enough to be employed—remained static. By the year’s end, the situation had reportedly become so critical that riots broke out in Labe, Beyla, and other towns of the interior, in protest over the high cost of living.
The Return to Severe Controls
By the fall of 1964, the economic situation in Guinea had deteriorated to such a point that it was apparent that drastic measures would have to be taken if public reaction against the government was not to reach a crisis level. Guinea’s leaders, convinced that it was their momentary deviation from their previous revolutionary path which had led them into such straits, hastened to retrace their steps. Before long a new set of laws and presidential decrees appeared, which in effect abolished the liberalization measures enacted the year before and restored the government’s stranglehold on the economy.
The first hint of the severity of these measures came in a major policy address delivered by Sékou Touré on November 8, 1964, before the National Council of the Revolution, a body composed of government and party leaders, military commanders, and other notables. In this speech, Touré reiterated Guinea’s fundamental choice of a « noncapitalistic road to economic development. » He outlined 12 points which henceforth were to form the loi-cadre or legal framework on which the P.D.G. would base its reforms of the economic and political life of the country. A number of these points concerned the imposition of stricter controls over the private sector.
The implications of the loi-cadre insofar as the economy was concerned were revealed in a series of laws promulgated on November 19, 1964, implementing the President’s declarations of November 8. 11
- The first of these laws set the basis for limiting the number of merchants allowed to operate in each of the country’s 29 administrative regions. Commercial licenses formerly in force were declared invalid and merchants were required to apply for new ones from a national commission set up expressly for this purpose. Stiff new requirements were laid down for those wishing to qualify: i.e.,
- a place of business occupying at least 100 square meters and
- a minimum liquid capital of ten millions Guinean francs ($40,000).
Private companies or persons engaging in commerce, even if only in retail selling, were obliged to have
- a store for displaying their wares and
- two storage hangars at their disposal.
- They were also required to have a minimum liquid capital of 50 million Guinean francs ($200,000). Part of such liquid assets was to be left on permanent deposit with the National Credit Agency for Commerce, Industry, and Housing.
Even after meeting all of these stringent requirements, a person wishing to operate a commercial enterprise still had to obtain the authorization of the governor of the region.
- The second law emphasized the President’s earlier threat that henceforward the sale or purchase of merchandise in a nonauthorized place would be considered a « crime against the economy of the country. » Persons caught violating this statute were liable to imprisonment at hard labor for terms ranging from 15 to 20 years. Similarly, allure to label wholesale and retail prices on merchandise was made punishable by fines ranging from 100,000 to five million Guinean francs ($400 to $20,000) and six-months to two-years imprisonment.
- The third law promulgated to implement President Toure’s declarations of November 8 stipulated that smuggling, « tending to deprive the Guinean people of the just fruits of their labor, » would incur the death penalty. To dissuade his people from engaging in such illegal activity, the President announced that the number of customs inspectors and gendarmes at the nation’s borders would be doubled.
On November 22, 1964, President Touré declared over Radio Conakry’s « Voix de la Revolution » that the Guinean people had accepted with « unanimous enthusiasm and profound joy » the 12 points of the loi-cadre of November 8. 12
One week later (on November 29) the President reaffirmed publicly the government’s intention of dealing severely with recalcitrants. Addressing his remarks to the nation in general, and to the merchants in particular, he said:
Those who have no fear in sabotaging our economy, and who are preparing actions to discourage the laboring masses of the nation, will learn in the hours and in the weeks ahead that the Guinean Revolution is a powerful and invincible force which will not hesitate to crush all of the people’s enemies, all reactionary opportunists, and all racist [i.e. tribal] elements…. 13
On December 30 and 31, 1964, and again on January 2 and 5, 1965, the National Political Bureau (B.P.N.) met. At the end of the second series of meetings, the B.P.N. issued a communique claiming:
- a decrease in frontier smuggling thanks to increased vigilance on the part of customs agents, the gendarmerie, the army and the national youth group (the J.R D.A.)
- a general lowering of prices throughout the country
- the reappearance of merchandise formerly unobtainable, and
- the neutralizing of speculators and persons engaged in illicit traffic.
The National Political Bureau reaffirmed its determination to apply the sanctions of November 19, 1964, and hasten the end of detrimental speculative activities by imposing stricter controls on itinerant merchants, by keeping a much closer watch on the operations of co-operatives and also limiting their membership to the laboring masses (i.e., the workers and peasants), and by opening general stores in each administrative area, which would be directly accountable to the Ministry of Commerce.
Performance of the Guinean Economy in 1965
Throughout 1965, Guinea’s economy continued to suffer from the same ailments that had afflicted it in previous years.
Chief among these was the continued inconvertibility of the Guinean franc. Despite the signing of new Franco-Guinean accords on May 20, 1963, which ostensibly settled outstanding financial problems between the two countries, Guinea has shown no sign of wishing to rejoin the franc zone. As recently as January 26, 1965, President Sékou Touré reaffirmed his intention to keep Guinea free from such ties:
The Republic of Guinea has never had the intention of reintegrating itself into the franc zone. This would signify for it a renunciation of an essential attribute of its sovereignty. The Guinean monetary zone eventually could disappear only if there were established a larger independent monetary zone created by certain African states or all of them which would safeguard their complete freedom of economic and financial action. 14
Another major problem was the acute and chronic shortage of foreign exchange. It is reliably reported by diplomatic sources in Conakry that Guinea has exhausted its foreign exchange reserves. Throughout 1965 it survived month by month largely on a hand-to-mouth basis from barter agreements, foreign aid, short-term credit arrangements, and especially from the foreign exchange earned by its mineral exports. 15
The inconvertibility of the national money and the shortage of foreign exchange have led, in turn, to severe shortages of consumer goods. Conakry’s two main stores, Nafaya and Printania, are skeletons of their former selves; huge areas of the stores display nothing because there is nothing to display; their shelves stand empty and their battered counters offer little except the shoddiest of goods to lure their customers. What little there is sells at extraordinarily high prices.
- A man’s suit of poor quality costs 12,500 francs ($50)
- A women’s skirt, of equally dubious quality, is 8,000 francs ($32)
- A pair of plastic sandals, of the type that are available almost anywhere else in West Africa for about $1.50, sells in Guinea for $4.00.
These prices are indications of the inflation that has overtaken Guinea. Between August 1964 and September 1965, food prices in Conakry almost doubled. Up-country, food prices are sometimes 50% to 75% lower, but important items such as clothing, wristwatches, light bulbs, transistor batteries, and automobile parts are conversely more expensive.
Inflationary pressures have also increased because of the large amount of exportable goods which has left the country illegally. It is estimated that between $10 and $15 million worth of coffee, diamonds, cattle, and various other items is smuggled out of Guinea each year, despite the severe penalties laid down by the government for engaging in such traffic. 16
The evasion of so large an amount of the country’s exports from official control has cut deeply into customs receipts, normally one of the government’s largest sources of revenue. Deprived of this revenue, the government has resorted to the printing press in order to obtain the money it needs to finance the country’s internal development. How much money is actually in circulation is one of the best kept secrets in Guinea; but it is known that when Guinea withdrew from the franc zone on March 1, 1960, it issued approximately 6.5 billion Guinean francs ($26.3 million) for the C.F.A. francs it had collected from its people on a one to one basis. As of June 30, 1963, three months after the second currency reform, it is estimated that there were approximately 11 billion Guinean francs ($44 million) in circulation, or an increase of nearly 70%. 17 The alarming aspect of this extraordinary increase in the monetary circulation is that it has not been backed up by a comparable increase in domestic productivity.
Finally, the Guinean economy in 1965, as in previous years, suffered from inordinate waste and inefficiency in the operation of its state-controlled agencies and enterprises. Although the notoriously inefficient comptoirs du commerce, set up by the government in 1960 to control imports and exports, were decentralized and replaced in the following year by Guinexport (for agricultural produce), Prodex (for other exports), and by 14 other state enterprises specializing in the import of specific classes of items (pharmaceuticals, books and stationery supplies, textiles, food and tobacco, etc), this decentralization increased rather than diminished the problem. Some of the state enterprises were entrusted to men who had little knowledge of how to run them; others fell into the hands of unscrupulous administrators or managers who used them to pilfer sizable sums for their own benefit.
Few of the state enterprises ever functioned well, and most produced far below the goals that had optimistically been set for them by party leaders.
- The Soviet-built cannery in Mamou, for example, which went into production in 1963, is estimated to have produced about 10% of its planned output.
- The Soviet-built sawmill at N’Zerekore also worked well below capacity.
- The famous Patrice Lumumba Printing Plant, Guinea’s pride when it was opened in 1961, has been plagued throughout its four-year existence by worker inefficiency, absenteeism, the theft of tools, neglect of machinery, and inability to meet production goals . 18
Experts who have studied the question estimate that state management—or mismanagement—of the economy costs the government between $18 million and $20 million a year in potential export earnings. 19 Were this situation rectified, this saving alone would be nearly enough to wipe out Guinea’s trade deficit (estimated at $21 million in 1964).
The Outlook for 1966
Guinea enters 1966 with both great advantages and severe handicaps. The little prospecting that so far has been done on its territory has already led to the discovery of significant amounts of silver, diamonds, iron ore, granite, and other minerals. With the facilities already established at FRIA and those on the Harvey Company’s drawing board at Boke, Guinea’s future definitely seems to lie more in mining than in agriculture. There is little doubt that in time Guinea could become one of the world’s foremost suppliers of these essential raw materials as well as one of its leading producers or finished aluminum; but before Guinea’s vast mineral wealth can be exploited, it will be necessary to build a vast infrastructure of roads, dams, power installations, and communication lines. Guinea’s current Seven Year Plan recognizes this need and is dedicated for the most part to building this infrastructure in order to lay the basis for an export-oriented mining economy.
Still, given Guinea’s present lack of financial resources and the chaotic state of its economy, it is in a poor position to accomplish an enterprise on this scale. Both internally and externally its financial position is one of growing precariousness. Although the government maintains that its expenditures are covered by ordinary revenues (i.e., by tax receipts and customs duties), it has consistently refused to publish its statistics supporting such a claim; and the claim is seriously questioned by most impartial observers.
On the basis of the few statistics the government has published, and on the estimates of business and diplomatic sources in Guinea, national revenues, far from being adequate to cover government expenditures, are estimated to have taken a sharp drop. During the years 1963-64, the last period for which reasonably reliable statistics are available, government revenues from direct and indirect taxes are said to have fallen by as much as 40%. 20 And in view of the widespread smuggling that goes on along the country’s frontiers, it is scarcely likely that government revenues from customs duties, other than those derived from mineral exports, will have shown an increase.
Guinea’s cumulative internal deficit is at present estimated to exceed $60 million. In a developed country—or even in a developing one—such deficit financing would not cause undue concern, provided that such funds were put into enterprises which promised to raise national productivity. In Guinea, however, they have been used to sustain poorly managed and inefficient enterprises which are estimated to contribute no more than 2% to national revenues. 21
Guinea’s external finances are not in much better shape. Since independence it has received more than $270 million in foreign aid, on an average of $40 million per year (or roughly $16 per capita), one of the highest in Africa. Most of this aid has been either in the form of foreign exchange credits for the purchase of goods from the giver nation, or in the form of short-term loans granted at interest rates varying from 3% to 8%. The former has characterized the aid given by nations of the Eastern bloc, and the latter, those of the Western.
Of the $270 million received to date, about $120 million has come from countries of the Eastern bloc. Guinea is estimated to have already used up between 80% and 90% of these Eastern bloc credits, mostly for the construction of the spectacular but not very productive projects started under the Triennial Plan—such as the 28th of September Stadium, the Polytechnic Institute, a new hotel, and the lengthening of the runway at Conakry’s airport.
When Guinea’s new Seven Year Plan officially got under way on May 1, 1964, there were no new substantial credits forthcoming from the Soviet Union or any of its European allies for its financing. On his return from a trip to the Soviet Union in July 1965, however, Sékou Touré announced that the U.S.S.R. had consented to finance the construction of Guinea’s Konkoure Dam, a project that will rival Ghana’s Volta River Dam in size and add vastly to Guinea’s industrial potential. Significantly, neither Soviet authorities in Moscow nor Soviet diplomats in Conakry ever confirmed this declaration.
In the years that lie ahead, Guinea faces a difficult repayment schedule. Between 1966 and 1972 it will have to pay out about $80 million a year to nations of the Sino-Soviet bloc. It will also be expected to start paying off loans of some $80 million that it has received from Western nations. With interest, these payments should come to another $7 to $8 million. Even taking into consideration the sizable foreign exchange earned by FRIA and that which will be earned by the Harvey mines at Boke once they get under way, Guinea will still be hard put to find the funds necessary to make these payments and to negotiate new loans in the years ahead.
If Guinea’s economy is at present in serious trouble, it is because years of mismanagement have taken their toll. Since independence, the country has been ruled by a clique of men who through a mixture of idealism and naivete have administered their country in complete ignorance of, or disdain for, the simplest principles regarding the economic functioning of a nation. They are men who subscribe to the dubious principle that « Whatever is good politics is also good economics. « And it is this practice of always putting political expediency ahead of rational planning that more than anything else has retarded Guinea’s economic development. Guinea’s leaders have attempted to regulate by executive fiat forces which are susceptible to regulation only by the free working of the market.
No one is more responsible for the present chaos than the President of the Republic. For all his admitted qualities as a shrewd and loquacious politician and a militant African nationalist, Sékou Touré has been, and is, a monumentally inept Chief of State. He has ruled Guinea by whim and impulse, using his country as a laboratory to try out experiments of social and economic development whose grave implications he only vaguely understands, and whose negative results he is insensible to, even when they inflict severe hardship on his people.
Had Guinea been in the hands of a more prudent leader, or even a less vainglorious one, over these last seven years, it is probable that today it would be one of the most prosperous countries in Africa, ahead even of the much-admired Ivory Coast and Nigeria. That it is instead on the brink of bankruptcy is mainly due to the poor and demagogic quality of leadership Sékou Touré has provided the nation.
If Guinea is not completely bankrupt today, it is only because Toure and his ministers have refrained from interfering in the management of Fria — the goose that lays the golden egg — and because foreign governments have been willing to come to their aid on the mistaken notion that by bailing them out they would win them over to their side.
It is relevant and essential to ask whether there is any hope for change in Guinea so long as Sékou Touré remains in power. Guineans themselves are not free to pose such a question, at least not in public, for to do so would be regarded as an act of treason and punished accordingly. But the question is nevertheless being asked in Guinea — and by an increasing number of people — in the privacy of their homes or among small groups of trusted friends. The hope one used to hear expressed by nearly everyone in Guinea. « &C¸a va s’arranger » has started to give way to the more determined « Il faut que ga change! » If Sékou does not recognize the significance of this change in attitude, and heed the warning that it implies, then the day may not be far off when his people will take to the streets. And at that moment he may suddenly realize that the revolution about which he has been speaking for seven years has actually begun.
. For a fuller discussion of the working of the Triennial Plan during its first year, see Victor D. Du Bois, Reorganization of the Guinean Economy (VDB -1963), American Universities Field Staff Reports. West Africa Series, Volume VI, No. 1, February 1963.
. A breakdown of the projects actually achieved by investissement humain is presented in the article cited above.
. This was the estimate given by Louis Lansana Beavogui, Minister of the National Economy at the time the Plan was launched in 1959. Cited from « Rapport du Ministre de l’Economie Nationale » in Sékou Touré. L’Action politique du Parti Démocratique de Guinée, Tome V, « La Planification économique » (Conakry: 1960). p. 142
. Guinea; a mimeographed market report prepared by S. J. Rundt & Associates (New York: 1964). p. 16; hereafter referred to as Rundt.
. The currency used in the French-speaking countries of West Africa.
. The 71% figure cited is for 1963, the last year for which reliable statistics are available. By 1965 the percentage of total exports earned by mining was probably closer to 75%. Production of alumina at Fria has been steadily expanding
- 400,000 tons in 1961
- 457,000 tons in 1962
- 480.000 tons in 1963
- 484,000 tons in 1964
Fria is now working at near capacity. See Le Moniteur Africain (Dakar). No. 141. June 13, 1964; also « Guinea’s Mineral Production and Exports » in International Financial News Survey (Washington, D.C.). Vol. XVII. No. 24, June 18, 1965. p. 221, and Marchés Tropicaux et Méditerranéens (Paris). January 23 and April 17, 1965.
. The foreigners included, among others, Frenchmen, Lebanese, and Americans.
The Americans involved were personnel of the U.S.S Hope, a hospital ship sent by the United States government for a visit of several months to Guinea. Some of the people aboard the Hope, mainly seamen, took advantage of their stay to trade eagerly sought dollars for Guinean francs at three, occasionally four, times the official rate of exchange (246 Guinean francs to the dollar).
. Afrique Nouvelle (Dakar). April 4. 1964.
10. These mainly involved the compensation due French citizens and business interests whose assets were nationalized during 1960-62. They also involved the settlement of funds owed by Guinea to the French development agency, Caisse Centrale de Cooperation Economique. The French, on the other hand, owed the Guinean government about two million dollars for pensions it had paid Guinean soldiers who had formerly served in the French Army.
11. A resume of these laws is provided in a special book published by the Guinean government on the reforms of November 8. See Sékou Touré. 8 Novembre 1964 (Conakry. n.d. [ 1964?]).
12. Ibid., p. 41.
13. Ibid., p. 48.
14. Le Moniteur Africain (Dakar), No. 175, February 6, 1965, p. 12.
15. Guinea’s two main producers of minerals are Fria (alumina and the Compagnie Miniere (iron ore). Between them they have provided the bulk of Guinea’s foreign exchange earnings:
- In 1960, 20%
- In 1962, 65%
- In 1963, 71%
Figures for 1964 and 1965 have not yet been made available by the Guinean government, but indications are that the trend is upward. See International Financial News Survey, op. cit.
16. Rundt, p. 9.
17. Ibid., p. 11.
18. Just how badly off the Patrice Lumumba Printing Plant has been was revealed in a remarkably candid speech delivered by its director, N’Famara Camara, on February 11, 1965, before a gathering of the plant’s employees and technicians:
The enthusiasm which marked the inauguration of the Patrice Lumumba Printing Plant was rapidly tempered once we confronted the problems of management and production.
In 1963, 23.5% of the revenue of the enterprise went to pay salaries. By 1964 this figure had climbed to 48% which meant a reduction in profits of almost 25%. During the same period the rate of absenteeism rose by 14%.
It is generally acknowledged that for an enterprise to be a paying proposition it is necessary that its profit level reach at least 25% of its capital investment; that of our enterprise has not reached 13%. These few figures reveal to us that our enterprise is in a potential state of bankruptcy.
There is not a workroom where one, sometimes two machines, have not broken down. These breakdowns are due to negligence, to a lack of concern.
- How can we explain that in one workroom alone three lighted tables have been broken?
- How can we explain that in three years practically the entire stock of small tools has disappeared?
- How can we explain the disappearance of glass panels in showers and washroom?
- How can we explain the unkemptness in the workrooms and laboratories, the complete lack of upkeep of the machines, and the general waste which one sees at every turn?
[All of this] should not come as a surprise to us when we consider that… personal work has always come ahead of the work for our clients… our attitude has not been to take care of our equipment … but to avoid the simplest of responsibilities.
There has been a negligence on the part of the administrators [of the plant] that is all the more serious because it set for the workers not an exalting example but an example of the most pernicious sort.
If this degradation—one can even say rotting—of the enterprise has taken place at the base, it is because of lack of firmness….
Quoted from Afrique Express (Brussels), No. 91, March 25. 1965. pp. 20, 33. (Author’s translation )
19. Rundt, p. 10.
20. Ibid., p. 12.