By Nicholas Nhede, Strategic Communications Officer at Energy Capital & Power (www.EnergyCapitalPower.com)
Despite having vast energy resources, Guinea-Bissau has one of the least developed economies in the world. Due to the west African country’s slow progress regarding the exploitation of its energy resources, due to limited investments in infrastructure development and political instability, little progress has also been made in expanding other sectors such as manufacturing and mining.
However, recent increases in capital expenditure are set to revitalize the economy during 2022. In addition, for the near-term, addressing corruption and boosting infrastructure rollout will enable Guinea-Bissau to grow its economy by 3.9% in 2022 and ensure that inflation remains stable at 1.9%, according to development finance institution, the African Development Bank (AfDB).
Energy Developments Spur Economic Growth
The energy sector could provide Guinea-Bissau with a revenue stream for sustained economic growth. To better capitalize, the government needs to establish a capital-attractive regime and introduce new exploration and production licenses for the oil and gas industry. This would improve investor confidence and increase the participation of global energy companies who would serve to monetize the west African country’s energy resources while creating local jobs.
Currently, on the renewable energy front, Guinea-Bissau has various projects in the pipeline that contribute to a positive financial outlook for 2022. The projects are in line with improved electrification targets, having already progressed from 6% in 2010 to 31% in 2019. With energy being the backbone of economic growth, projects such as the 20 MW, $32.75 million Bissau Solar PV Park 1 and the $50 million Solar Energy Scale-Up and Access Project, will enable Guinea-Bissau to achieve growth targets.
In addition, the ECOWAS Regional Electricity Access Project, with funding to the tune of $338.7 million from the World Bank and partners, is set to further improve Guinea-Bissau’s economic growth outlook.
Meanwhile, the AfDB’s $30 million financial package, for the purpose of agriculture, energy, water and public works projects in Guinea-Bissau, as from 2022, could also help revitalize the economy through the refurbishment of infrastructure.
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