Moussa Magassouba, Minister of Mines and Geology of Guinea, asked mining companies operating in Guinea to repatriate 50% of export earnings. It is a requirement of the mining code in these articles 184 and 185 that mining companies repatriate their revenues in order to boost the country’s economy. This measure came into effect on September 1, 2023.
In RFI’s «news calls» broadcast on Wednesday, September 6, 2023, Karamo Kaba, governor of the BCRG (Central Bank of the Republic of Guinea) expressed the reason for this decision. He recalled that the government has requested that at least 50% of revenues be repatriated while the law provides 100%. And that this is nothing new, it is only law enforcement.
“The land leaves Guinea and will never return. When it has to come back, it comes back in the form of aluminum, steel, in short as a finished product. Today, there is no fixed price for bauxite. The average price is $25 a tonne. That’s already a lot. You have to understand that it corresponds to 25 cans of Coca Cola. So if we continue like this, we will perpetuate the curse of natural resources. Hence Colonel Mamadi Doumbouya’s desire to ask exporting companies to repatriate only a portion of their export earnings in order to diversify our economy,” said the Governor of the BCRG.
Kaba said the Guinean economy is not just mining, “even though Guinea is referred to as a mining giant. It is true that Guinea has bauxite, gold and iron, but it must be borne in mind that Guinea has enormous agricultural potential.”
He recalled that in 1957, Guinea was considered as the breadbasket of West Africa. How will the repatriation of revenue? Karmo Kaba replies that any mining company by extension, “any exporting company will be obliged to make export declarations at the level of the competent services the DDE (Descriptive Export Declaration), DDI (Descriptive Import Declaration and the Single Window of Foreign Trade”.
Then these companies will have a period of 90 days to repatriate the value of at least 50% of the currency of the products exported via their bank accounts. «The primary banks that are the supervision of the Central Bank of the Republic of Guinea must ensure the effectiveness of these repatriations in foreign currency and especially inform the BCRG via a reporting system».
Creation of a recovery commission
He adds: “At the BCRG level, we have set up a recovery commission to repatriate. We’re going to take a penalty from anyone who hasn’t done their job and is free to pass it on to the customer if they want to.”
The governor of the BCRG explained that the importance of this repatriation of currencies is that it will allow macroeconomic stability. To the extent that the repatriated currencies will help to stabilize the balance of payments and by extension the national currency thus helping to maintain macroeconomic stability and to ward off the financial crisis.
“The goal is to reduce poverty because we have a high poverty rate while we have mines and full potential. By allowing a better diversification of the economy, these import revenues will stimulate job creation in the tourism sector, in agriculture,” added Mr Kaba.
This should improve the standard of living of the population and finally having a lot of currencies in the central bank will help the appreciation of the Guinean franc. «This will be a kind of anti-inflation shield for the Guinean population, which will be good for purchasing power», concluded the governor of the central bank. Recall that mining production represents 90% of Guinea’s export.
