The World Bank has released the latest Guinea-Bissau Economic Update, examining economic trends and development issues in the country. The report reviews economic developments from 2024 and provides an outlook for 2025-2028, focusing on tax revenue composition and performance while offering recommendations to enhance revenue mobilization.
In 2024, despite challenges in the cashew campaign, Guinea-Bissau's economy showed resilience with a real GDP growth of 4.8%, slightly above the previous year's rate of 4.4%. Inflation decreased to an average of 3.8% from 7.2% in 2023. The fiscal deficit improved to 7.3% of GDP due to expenditure controls and higher donor grants, despite lower-than-expected revenue collection.
Public debt increased to 82.3% of GDP due to elevated financing needs and tightening financial conditions in the regional market.
The report highlights that tax pressure in Guinea-Bissau remains low compared to the West African Economic and Monetary Union convergence criterion of 20 percent of GDP. An immediate priority is rationalizing multiple tax expenditures by broadening the VAT base, strengthening personal and corporate income taxes, adjusting excise rates on fuels and alcohol, and improving transparency and oversight mechanisms.
“By pursuing these reforms, Guinea-Bissau can create fiscal space to address the rising need for quality public services, especially in the priority areas of health, education, and infrastructure,” stated Maria Elkhdari, World Bank Group Country Economist and lead author of the report.
For 2025-2028, growth is projected to average 5.1%, assuming favorable cashew production, strong activity in services sectors, and continued investment in key infrastructure projects. The fiscal position is expected to improve through revenue-based fiscal consolidation with a large consolidation effort needed in 2025 requiring strong political commitment.
“Strengthening revenue mobilization is crucial for Guinea-Bissau to achieve sustainable economic growth,” said Rosa Brito, World Bank Group Resident Representative in Guinea-Bissau. "The Economic Update Report offers timely insights for policymakers with concrete policy recommendations for building a more equitable, efficient, and resilient tax system that can support Guinea-Bissau’s development goals."