The International Monetary Fund (IMF) has endorsed $148 million in emergency credit to Guinea to boost its economy as the COVID-19 (coronavirus) pandemic continues to ravage the global economy. The fund would help to revive the economy after a hard blow from the pandemic that is crippling its mining sector.
According to the IMF, “worsening global conditions and a rapidly spreading local outbreak have deteriorated Guinea’s short-term growth prospects and hindered mining exports and tax revenues.” However, local transmission of the virus has brought about a reduction of mining activities, causing a stunt in economic growth. This latest IMF fund will help scale up productions and boost revenue generation for the West African country.
In a report, the IMF approved the use of $650 million to Guinea in 2017. The fund was raised for non-concessional borrowing to finance improvements to infrastructure, higher education and water in Guinea. In effect, the 2017 fund was to help bring development in the country and also cushion the negative impacts that mining imposes on host communities.
Studies show that bauxite mining would have significant impacts on the hydrology of the surrounding landscape unless it is well managed. Many residents have told the Human Rights Watch that this could have been responsible for reduced water levels and quality in the local rivers, streams and wells.
Water supply is under threat in Guinea’s mining communities as thousands of people do not enjoy sufficient clean water. Many residents in host communities depend on the daily delivery of water tankers by mining consortiums. It has equally caused a gradual loss of livelihood for some of its people.
Situated in West Africa, the Republic of Guinea has the largest bauxite reserves in the world and is the sixth global producer of the mineral. The country is home to over a third of the global reserves of bauxite, estimated at 40 billion tons. The West African country also has untapped deposits of high-grade iron ore, graphite and nickel-cobalt, plus significant reserves of gold, diamonds and gemstones.
Before the pandemic, Guinea’s Ministry of Mines and Geology had forecasted that the country’s bauxite production could reach up to 60 million tons by 2020. But the pandemic has caused a decline in economies, globally and Guinea is not spared. Civil unrest hindered mining explorations in the country for the whole of the first decade of the 21st century. However, it began its first project in 2015, La Société Minière de Boké (SMB), a joint venture that includes a Chinese company that is the largest aluminium producer in the world. The SMB consortium has rapidly expanded since it began operating in 2015 and is already Guinea’s biggest exporter.