Country Summary

Macroeconomic performance

Real GDP growth stabilized at an estimated 5.3% in 2018, slightly below the 5.9% in 2017, supported by robust agriculture (with 6.3% growth) and fisheries (with 8.3% growth). The country relies heavily on agriculture, especially rice and cashew nut production. Agriculture accounts for 45.3% of GDP, almost 85% of total employment, and more than 90% of exports. On the demand side, growth was driven by exports and private consumption.

The government has maintained a restrictive fiscal policy and improved revenues, so the budget deficit remained moderate at an estimated 2.5% of GDP in 2018. Total public debt declined to 49.2% of GDP in 2017 from 55.1% in 2014 through debt restructuring. Guinea-Bissau is at a moderate risk of debt distress.

Inflation was an estimated 2.0% in 2018, up from 1.4% in 2017, driven by high domestic demand and rising prices for rice and other essential food items.

The current account deficit deteriorated to 3.2% of GDP in 2018 from 0.6% in 2017, despite sharp increases in cashew nut export volume and international prices. About 90% of Guinea-Bissau’s exports are from cashew nut, while imports are dominated by machinery and construction materials (19%), fuel and refined products (18%), services (16%), and food and agricultural products (12%). Official reserves stood at $3.3 billion (or 4.6 months of imports) in 2018.

Tailwinds and headwinds

Real GDP is projected to grow by 5.1% in 2019 and 5.0% in 2020, supported by favorable cashew nut prices amid weaker harvests and by high public investment in energy, construction, and water supply. Overall,

inflation is projected to be 2.2% in 2019 and 2.3% in 2020, below the 3% convergence criterion for the West African Economic and Monetary Union.

The current account deficit was an estimated 3.2% of GDP in 2018 and is projected to reach 2.3% in 2019 because of increased investment and a rising import bill of higher oil prices.

The economic outlook is highly uncertain due to political instability and volatile cashew prices, the main income source for more than two-thirds of households. Other headwinds include risks from banking instability, higher-than-expected oil prices, and heavy reliance on rain-fed agriculture that can be threatened by adverse weather.

The large concentration of domestic currency debt (39.7% of GDP) could threaten the banking sector. Improved public financial management is thus key to avoiding crowding out private investment. The government is rationalizing public expenditure through a zero-program target (zero nonregularized expenditures, zero new arrears, and zero credit to the central government from commercial banks).

Sustaining strong and inclusive growth requires addressing infrastructure gaps. Only 10% of the national road network is tarred, and the national energy access rate is about 14.7%. Health and education services remain dire, held back by political instability and weak governance. The country ranked 178 of 188 on the Human Development Index in 2016. Poverty affects more than 70% of the population. Income inequality, measured by the Gini index, was last estimated at 50.7, as women remain marginalized with constrained access to credit and professional training. Managing fragility and resolving political and institutional instability will lay a solid foundation for development.

Source: African Economic Outlook 2019

Fixed Income

Issuance strategy 

The West African Economic and Monetary Union (WAEMU) comprises eight countries: Benin, Burkina Faso, Cote d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo.. Bond issuance strategies vary from one state to another but most use the MTDS tool to develop their issuance strategy. Generally, most programs are focused on short-term tenor and characterized by securities with repayments by amortization and deferred coupon. Recently, with the advent of the AUT, the zone has progressed towards lengthening and standardizing securities. 

Benchmark issues 

For the moment, there is no benchmark maturity in the WAEMU. The region is in the assessment phase of developing a yield curve. WAEMU countries understand that issuance policies need to evolve towards considering the need for a yield curve. 

Yield curve 

Yield curve calculation models 

There is no benchmark yields curve in the WAEMU Zone. 

Interpolation methods 

As there is no yield curve in the WAEMU, no method for interpolation is in use. 

Yield curve managed by

Agence UMOA-Titres is responsible for the yield curve. 

Display platform 

There is no yield curve in the WAEMU. 

Challenges in building an efficient yield curve 

  • Market fragmentation: fragmented securities market and non-standardized securities. 
  • Price discovery issue
  • Narrow investor base: comprising homogeneous investors such as banks. 
  • Limited and illiquid secondary market: nonexistent secondary market where the securities are acquired for "buy and hold”. 
  • Coexistence of two agencies for issuing bonds and bills: The “Conseil Régional de l’Epargne Publique et des Marchés Financiers” (CREMPF) is in charge of monitoring the syndication. The Agence UMOA-Titres is responsible for auctions.

Guide to Buying Bonds

Procedures for market participation

The frequency of auctions is determined by the states, together with the Central Bank. Each state cannot hold T-Bills and Government bonds auction more than once a week.

For Treasury Bills, a calendar program specifying the instruments and their amounts and maturities, is published quarterly by the Minister of Finance in consultation with the Central Bank, and in consideration mainly the foreseeable revenue and government spending. Whereas Treasury bonds, an indicative issuance calendar specifying the instruments and their amounts and maturities, is set annually by the Minister of Finance in consultation with the Central Bank.

Each issuance should be advertised at least 7 days before the auction by describing the issuance characteristics. Bidders submit to the Central Bank, sealed in a ballot box reserved for this purpose, a submission form specifying the amounts and the interest rates or the price offered. Submissions may also be made electronically in the conditions defined by the Central Bank.

Later than one hour after the deadline for bids submission, the National Directions of the BCEAO transmit electronically, by fax or any other means of rapid communication accepted by the Central Bank, the main submissions to the principal agency of the BCEAO, which is organizing the auction.

Treasury bills are eligible for refinancing by the Central Bank. Investors and the Central Bank may buy or sell Treasury bonds on the secondary market, awarded by private treaty. In this context, they are required to post the purchase price and sale which they are willing to transact.

Treasury bonds can be traded on the secondary market. As such, they can be exchanged at the Regional Stock Exchange (BRVM) or outside the BRVM.

Settlement cycle

The settlement date is T+1 for domestic operations and T+3 for operations between Members of the Union. This period can be modified by BCEAO. However, the contracting parties are free to agree on a minimum term above to unwind their operations. If the instructions given by the two parties are identical, the operation is definitely offset the value date agreed. In case of discrepancy between the evidences, the Central Bank suspends the transaction and notifies this decision to both parties for correction. Central Bank ensures the existence of adequate provisions before executing the compensation requested. Transmission to the Central Bank of notifications occurs in the selection of speakers, fax, telex, ordinary mail or any other means of rapid communication accepted by the BCEAO.


Treasury bills and Treasury bonds incomes are tax-free throughout the territory of the Member States of the WAEMU.But for non-members, the tax rates are different from one country to another. In Guinea-Bissau, the tax rate one securities income is equal to maximum 6%.


Rating Agency Current rating Outlook
Moody’s No rating No outlook
Fitch No rating No outlook
Standard and Poor’s No rating No outlook

Primary Dealers

There is no appropriate Primary Dealers System in the WAEMU zone.

Subscription of Treasury bills is reserved to banks, financial institutions as well as regional financial institutions with an ordinary current account in the books of the Central Bank. Other investors, physical or legal persons, whatever their country of origin can also purchase Treasury bills in the primary market through banks located in the territory of the Union.

The primary subscription of Treasury bonds is restricted to banks, financial institutions, regional organizations and financial management company and intermediation (IMS). Other investors, physical or legal persons, whatever their country of origin may also purchase Treasury bonds on the primary market through banks and brokerage firms (SGI) located on the territory of the Union.

Market restrictions

Openness to international investors

The members of the zone are actively encouraging foreign investment. Foreign companies are free to invest and list on the regional stock exchange (BRVM), which is based in Abidjan and is dominated by Ivorian and Senegalese firms. 

Capital controls

There are no significant limits on foreign investment nor are there generally differences in treatment of foreign and national investors, either in terms of the level of foreign ownership or sector of investment.

Restriction on FX and profit repatriation

WAEMU has unified foreign exchange regulations. Under these regulations, there are no restrictions for transfers within the community, and designated commercial banks are able to approve routine foreign exchange transactions inside the community. The transfer abroad of the proceeds of liquidation of foreign direct investments no longer requires prior governments approval.

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