Guinea-Bissau: Investing

FDI in Figures

In recent years, Guinea-Bissau had been able to attract relatively large amounts of foreign investment, unfortunately FDI inflows to Guinea-Bissau declined considerably in 2020 due to the crisis induced by the COVID-19 pandemic. According to UNCTAD's 2021 World Investment Report, FDI inflows declined from USD 72 million in 2019 to USD 20 million in 2020. In the same year, the stock of FDI rose to USD 317 million. In 2021, global FDI flows rebounded strongly, but FDI flows to African countries (excluding South Africa) rose only moderately (UNCTAD’ Investment Trends Monitor). Offshore oil exploration attracts most foreign investors. The tourism sector is also developing and receiving increasing investment (particularly in the Bijagos Islands). The main investing countries are China, the United States, Portugal and India.

In the latest available Doing Business report released by the World Bank, Guinea Bissau ranked 174th worldwide, gaining one position from the previous year. Monetary mass growth and low interest rates helped attract investments. Also, the government’s efforts to diversify the economy and the country’s natural resources are other positive factors. The priority of the government is to increase foreign investment in the agriculture and energy sectors, which are two key drivers of the economy. Chinese investment in Guinea-Bissau has been increasing in the last decade. As such, a canning factory as well as a fish distribution network were developed with the support of the China International Fisheries Corporation (CONAPEMAC). Additionally, the Kaleba hydroelectric dam, funded by the China International Water & Electric Corp. for USD 536 million, entered into service in 2015. Chinese companies are also investing in real estate as well as in bauxite. Despite a return to political stability, the main weakness of the country consists of the large number of Latin American drug traffickers who have set up their base to ship drugs into the European market. The poor condition of infrastructure, a weak legal system, political instability and the high cost of energy are also hindrances to investment. Formally, the law treats foreign and domestic investment equally. Nevertheless, the judicial system remains vulnerable to political interference, and corruption is widespread. The overall regulatory framework is not conducive to starting businesses and discourages broad-based employment growth.

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Latest Update: February 2023