Lancine Condé: "May young Guineans find their happiness, may the rule of law be restored!" »

(Agence Ecofin) - Idriss Linge, editor-in-chief of Ecofin, met with Dr Lanciné Condé, Guinea's Minister of Economy, Finance and Planning. Maintenance.

Agence Ecofin: Could we take stock of the situation of your ministry since the arrival of the transitional authorities. What did you find and what are the first actions that have been taken?

Dr Lancine Condé: I would like to say that I did not discover anything in particular. As part of the mission entrusted to me, the priority when I took office was elsewhere. So I didn't immediately get involved in an audit process, looking for something in particular. Before my appointment, there were two distinct ministerial departments which were put together, following their merger. Clarifying the architecture of the new structure was an urgent action. Another priority project was the preparation of a reference framework for the transition. We found the country without a programmatic frame of reference. The implementation of the PNDES was to be spread over the period 2016-2020, the date of its completion. The PNDES II, which should have succeeded the first, was being developed when the events of September 5, 2021 occurred. In the spirit of this new political deal, it was imperative to formalize a new development program.

Managing a department like the Ministry of the Economy, Finance and Planning, in this context, imposes an absolute priority, that of knowing in what framework of coherence the government action would be situated. Our priority was also to ensure that in such a context of installation, without handover, that the country was not further weakened, due to a lack of vigilance, particularly with regard to debt service payment operations and other major obligations. It was necessary to prevent the country from taking a damaging blow, during the implementation of the new orientations.

Finally, once these different reflections have been completed, it will be time to audit the inheritance. Knowing what have we inherited, what have we found in place. What is good, what needs to be redirected? So to come back to the question, the context and the timing were not such as to go after the hidden things and the audits. It's important, of course, but for that you have to know what you want and what you can gain from it.

Agence Ecofin: To come back to the state of play in Guinea, what is it?

Dr. Lancine Condé: If we look at things globally, we can note that the growth prospects have not been too weakened by events. The projected growth rate was 5%. We remain at the same level with room for improvement by an additional point of growth. Inflation is 12.2% with an outlook of 12.3%. She is not scary and stays in control. But double-digit inflation is higher than the threshold agreed under ECOWAS. However, you have heard the Head of State, the President of the transition, His Excellency Colonel Mamadi Doumbouya, say that our commitments must be kept. We will work to lower inflation to comply with the guidelines of the ECOWAS Macroeconomic Convergence Pact, which places macroeconomic convergence in relation to inflation at a single digit inflation rate, below 10%.

“We will work to lower inflation to be in line with the guidelines of the ECOWAS macroeconomic convergence pact, which places macroeconomic convergence with inflation at a single digit inflation rate, below 10%. »

However, it should be noted that sea freight costs have doubled. Similarly, agricultural raw materials, such as wheat or rice, are beginning to show pressure on their prices, as well as oil. All these tensions linked to favorable anticipations of the imminent advent of the post-covid 19 period are reflected in prices.

And it is also important to say that there are elements of inflation that are domestic in nature, and there are those that come from outside. Our measures will aim to ensure that we are not significantly affected by these developments. By considering the details of the operations, when we take office, we can identify elements such as cash management or the management of commitments with service providers. Several suppliers have not been paid since the end of the first quarter of 2021, for some well before. Arrears of several months have thus accumulated. If I take for example the pending payments that I found at the level of the public treasury, they were greater than 4700 billion Guinean Francs, due to the accumulation of unpaid commitments.

Agence Ecofin: Speaking of the State's treasury, as is the case for the entire Guinean economy, it is based on the exploitation of mining resources which represent 90% of exports and up to 22% of country's GDP. At the first industry fair held this month of December 2021, there was talk of economic diversification. What are the areas of diversification that you have started to plan?

Dr. Lancine Condé: This is a question that I will answer in two stages. On the one hand, it is not acceptable for an economy to be so concentrated. If you take the concentration statistics provided by the United Nations Conference on Trade and Development (UNCTAD), the situation is not very good, the country's concentration index at the end of 2020 was almost 60% . Everything suggests that if mining operators or the metals market quiver, the country could suffer. Guinea harbors great potential in several other sectors. A population estimated at around 13 million inhabitants, 60% of whom are under 25 years old, is a definite labor force and a potential source of innovation.

"A population estimated at around 13 million inhabitants, 60% of whom are under 25 years old, is a definite labor force and a potential source of innovation."

The country has the largest water reserves in West Africa, which offers many possibilities in terms of development and agribusiness ventures. You also have all the possibilities of subcontracting that could generate better synchronization between the rest of the economy and the mining sector, to irrigate the national economy from this sector. Thus, revenues from the mining sector could help create and develop another economic microcosm in the country, where people would organize themselves to produce and set up a supply system for the mining sector in various local products. There is this potential for diversification which exists and which deserves to be supported. In this, there are advantages. The country's electricity production and distribution capacities have been strengthened; there are opportunities in the agricultural sector and with the digitalization of the economy, which offer possibilities for the creation of start-ups. An example of Guinean success in this area is Tulip, a patented start-up that offers various connectivity solutions and care offers, whose founder is Guinean. The observation on the potential having been made, it must be remembered that this Government is a transitional government which would lay the foundations, but the necessary efforts require more time and should continue beyond the transition.

"The report on the potential being made, it must be remembered that this Government is a transitional government which would lay the foundations, but the necessary efforts require more time and should continue beyond the transition."

The question of diversification is therefore a subject of which we are aware and there is reason to act in this direction, but from a political point of view this objective is not the most urgent priority at the moment.

Agence Ecofin: We understand the constraints that a situation of political transition can impose. However, let us come back to the question of the public treasury. A subject that has often been raised concerning Guinea is that of the tax exemptions granted in particular to the extractive resources sector. You mentioned the constraints of insufficient minimum cash to honor payment commitments. Is there a short-term approach aimed at rationalizing these tax exemptions?

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Dr. Lancine Condé: The question does not come directly from my department, but from that of the minister in charge of the budget. But if I have to bring my perspective to it, I would say that we must already understand the role of taxes. A State has financial needs to implement its policy and create the conditions for the development of the population. Citizens participate in it through various contributions, tax or not. The State needs the income from these contributions to cover public expenditure and provide various services to the population, including roads, drinking water, education and health. Taxes and other contributions enable the State to improve the living conditions of populations. Now, there is a reality, which we must realize. The history of Guinea is written on several observations related to its endowments in natural resources, the magnitude of which leads to talk of a geological scandal. Despite this great potential, the population still suffers in terms of access to basic social services and people's daily lives are not at a satisfactory level. This leads us to make trade-offs. Do we keep our potential with pride, or do we analyze the context and make concessions to exploit them, while preserving our interests as best we can. As far as tax exemptions are concerned, choices have been made. The President of the Transition His Excellency Colonel Mamadi Doumbouya has decided that the commitments made previously, within the framework of regular processes, will be respected. The Prime Minister, Head of Government, HE Mohamed Béavogui sees to it and each member of the Government works on it. However, these commitments do not include the nearly 3000 billion Guinean Francs of ad-hoc tax exemptions. Also, some of these exemptions are not fair. For example, what is the point of exempting imported products such as water from taxes, in a country that is known as the water tower of West Africa?

“There is also that some of these exemptions are not fair. For example, what is the point of exempting imported products such as water from taxes, in a country that is known as the water tower of West Africa? »

So my understanding of this problem is as follows: there are commitments made, they will be kept, there is the reality of the mining sector which, at one time, needed to attract investors, including by making exceptional efforts , and there is the historical development of the country. Finally, there is a call for the responsibility of the actors. One expectation is that in a friendly way, everyone looks at whatever they ask for as an exemption and offers efforts to rationalize them and support the country. You can also decide to apply the rules that are already established. In principle, an exemption is not intended to be eternal or permanent. When the call for individual responsibility has not sufficed, the regulator will be obliged to intervene in strict compliance with the law. For the moment this project has not started, but it cannot be postponed forever.

Agence Ecofin: Many entrepreneurs met in Guinea indeed express concerns about the economic orientations of the transition council currently in power. What message do you have for them?

Dr Lanciné Condé: Already, I would say that the job of the Minister of Economy, Finance and Planning is to ensure that economic activity works in the country, that the markets function properly, that unemployment declines, that price levels remain under control, that the outlook improves and that the financial sector allocates resources normally. It is the first interest, when one assumes these charges. So anything that can be done to complete this mission will be. I actually received economic operators, who told me about the difficulties of their sectors and what can be done. From these exchanges, we learned that there are actions that can be envisaged immediately, but there are some that deserved to be taken a step back. The real challenge is that sometimes economic operators want an exclusive relationship with public authorities. The aspects of unfair competition are things we can try to provide quick solutions on, because cheating is not legal in any country.

“Aspects of unfair competition are things we can try to provide quick solutions on, because cheating is not legal in any country. »

When a business is having difficulty operating because it is awaiting government payments, something should be done immediately. We continue to rehearse and ensure that regular commitments will be maintained. On the other hand, there are queries that require a little hindsight. When economic operators wish to preserve monopolies, it may take longer to settle, the principle being the absence of monopoly. We continue to discuss with economic players and our partners to better understand their perspective. It is true that the development finance institutions took a break at one point, but the activities resumed quickly for some, and the AfDB has recently resumed its operations with Guinea. We also received an assessment mission from the World Bank, the conclusions of which are awaited. Its experts have had the opportunity to observe that what often happens in what they call de facto governments, that is to say not resulting from constitutional processes, does not happen with us. No one has misused project resources, current spending by officials is proportionate, and the administration as a whole is striving to be sober. We hope that the Bank has observed that it has found a government that knows where it wants to go and how. We hope that she also noted the security stability of the country and the clear political consensus regarding the timeliness of the events of the beginning of September. The Government's prepared priorities strongly integrate political objectives which have a relative pre-eminence over development priorities in our particular context. This is why we have chosen to focus on aspects of governance, to convey the message that at the end of this process there will certainly be new authorities. As the process unfolds, we will work, under the leadership of HE Mr. Mohamed Béavogui, to ensure that the economic environment remains viable for all categories of the population, including building roads, rehabilitating hospitals, building drinking water and the rest. Why do we do it? it is because we want to ensure that at the end of this period, the country will have better prospects. A coherent priority framework has now been adopted and we continue to exchange with all the stakeholders. Coming back to the concerns of economic operators, they must be reassured that the Government has a roadmap, that commitments will be kept, that the Government is counting on them to succeed in its work of overhaul, the ultimate goal of which is to clean up the business environment and strengthen the attractiveness of the country. They will be consulted at the appropriate time to hear their concerns and their proposed solutions.

Ecofin Agency: A process has been put in place with the overall objective of combating or sanctioning people caught up in corrupt practices. Without necessarily going into the ongoing legal proceedings, what is your Ministry's role in this initiative for political transition in Guinea?

Dr. Lanciné Condé: Corruption is not a political issue, it is a judicial issue and one of applying the law, other bodies have more authority and competence than me on this subject. You will have noted the firm commitment of the President of the Transition, Head of State, Supreme Commander of the Armed Forces, to fight without qualms against corruption, in all its forms. This desire was materialized by the publication of a first major act in the form of an ordinance which established a new Court for the repression of economic and financial offences, the CRIEF. When talking about the fight against corruption, the Ministry of Economy, Finance and Planning can intervene at several levels. We must mobilize and allocate adequate resources to support the fight against corruption, but also, insofar as it is a question of analyzing financial transactions, we can make use of our data as well as our capacities for verifying the regularity operations. The strong will of the President of the National Council of the Rally for Development (CNRD) to fight against corruption has been expressed since the first day. It wasn't just a statement. Ministers, including myself, were asked to make a declaration of conflicts of interest and to swear on their honor to correct potential conflicts of interest, which I did in full transparency.

“Ministers, including myself, were asked to make a declaration of conflicts of interest and to swear on their honor to correct potential conflicts of interest, which I did in full transparency.”

This demonstrates the importance attached to ensuring that there are no conflicts of interest or risks of corruption within our government. There is a national anti-corruption agency here in Guinea. A few months ago, there was nothing there at all. Problems related to the availability of the budget have long limited its means. Today, standardization efforts are underway to improve the Agency's working conditions. Alongside potential lawsuits and anti-corruption measures, we will strive to ensure that state revenues are secure in order to reduce opportunities for corruption.

Agence Ecofin: Finally, today you manage the Ministry of Economy, Finance, and Planning in this transitional government which aims to be a government of unity and development. What is the vision and prospects, from your point of view?

Dr Lanciné Condé: In terms of vision, I would say that I share that of the President of the Transition, His Excellency Colonel Mamadi Doumbouya, who wants Guinea to become a normal and respected country again, a country where the citizen can aspire to happiness, and where everyone, including those who know no one and cannot rely on anyone, are offered the same opportunities. It is on this vision that the action of the current authorities that we are rests.

“May Guinea once again become a normal and respected country, a country where the citizen can aspire to happiness, and where everyone, including those who know no one and cannot count on anyone, are offered the same opportunities.”

Thus, the perspective is to ensure that this vision translates into daily reality. This will manifest itself through the following markers: That young Guineans find their happiness and their vocation in their countries, as well as hope. May the rule of law be restored, may the mining sector, which is our strength today, become more of a lever that would allow all skills, even the smallest ones, to profit and be realized. May the country's prospects be even better. We will continue to reassure our compatriots, investors and lenders that our country is safer today than ever. This involves honoring commitments in terms of debt repayment, expanding opportunities for all, strengthening the quantity and quality of our infrastructure, and improving our public governance. To this end, it would be necessary that the progress margins available in terms of reforms be exploited, in particular the management of the treasury, public contracts, or the execution and programming of public investments. That innovative financing tools are deepened and that this is done in a healthy environment. That the exchange rate remains stable, as well as inflation, which is a tax on the poor. If we are able to achieve this and substitute local production for certain imports, including water, we will give young people more hope. I would say that the ultimate achievement would be for the country to be peaceful and put on the path to a better future.

Interview conducted by Idriss Linge