Deepika Uppala, AFRICOM; Chandi Haripriya Guduru, Emma Palmberg, Illicit Finance and Economic Threats (IFET) Team
Week of Monday, December 20, 2021
Map of Guinea[1]
On September 5, 2021, Lieutenant Colonel Mamady Doumbouya, head of the Guinean Special Forces Group, overthrew the Guinean government in a military coup and captured the former authoritarian President of Guinea, Alpha Condé.[2] Doumbouya’s self-declaration as the interim President likely suggests a lack of democratic transition in the near future. Despite the socio-political instabilities, the mining sector continues to be seemingly unaffected by the military coup.[3] Bauxite, aluminum, iron, and gold mining led to a massive increase in the country’s export revenues over the last decade, creating discrepancies between mining and other sectors in the country.[4] Wealth inequalities and an authoritarian regime during former President Condé’s Administration almost certainly induced violent protests, likely bringing underlying ethnic conflicts to attention. Doumbouya's move to retire almost one thousand military personnel following the coup will likely create future dissent towards the military junta in the future.[5] Sanctions placed by the Economic Community of West African States (ECOWAS) and African Union (AU) are unlikely to compel a democratic transition in Guinea. Instead, they will likely create a loss of humanitarian aid and economic growth, opening up illicit financing channels in the country.
Colonel Doumbouya became interim President of Guinea on October 01, 2021, promising to amend the Constitution, reduce corruption, and reform the economy.[6] After the coup, Doumouya also promised that the military would ensure democracy and that his duty as a soldier was “to save the country.”[7] The coup’s objective was likely the eradication of ongoing political corruption and to provide better living conditions for the country's citizens as opposed to power. The lack of casualties or targeting of a specific ethnic group during and after the coup suggests there is a roughly even chance that Doumbouya will create an environment of impartiality. However, Doumbouya making himself the interim President likely indicates the unlikelihood of a quick democratic transition and likely suggests that a decrease in corruption is unlikely.
Although former President Condé promised democracy and a solution for ethnic tensions in the 2010 elections, the government’s unlawful voting methods before elections triggered ethnic conflicts between Malinkés and Fulanis, leading to protests, looting, and increased sectarian violence.[8] Despite a consecutive increase in Guinea’s gross domestic product (GDP) over the last five years, 70% of civilians were earning less than $3.20 USD a day, and the country ranked 178 among 189 in the Human Development Index 2019.[9] Economic mismanagement consisting of political corruption and a lack of effective development policies almost certainly instilled a sense of displeasure among citizens. Doumbouya’s knowledge of the Condé government’s internal affairs and policies in addition to the widespread public opposition very likely set the stage for the military coup. The public is almost certainly expecting to see more left-leaning political and economic reforms to improve their livelihoods.
Members from the Malinké ethnic group have remained in political authority since the independence of Guinea in 1959, while Fulanis, who are the majority population in the country, have continued to face social and economic marginalization.[10] The current interim President of the military junta, Colonel Doumbouya, is also a Malinké.[11] Although Guinea is not known for severe sectarian conflict, the presence of Malinkés in political authority since independence has likely caused ethnic conflict between the Fulanis and Malinkés in vulnerable regions of the country. As the former President belonged to the Malinké group, it is very likely that wealth was siphoned off to Malinkés over other ethnic groups. Widespread corruption has almost certainly induced irregular distribution of wealth amongst communities. Having Doumbouya, another Malinké, as their interim President, will likely result in distrust arising from other ethnic groups, likely increasing the intensity of the inter-ethnic conflict in the future. Devising transparent economic laws that aim to reduce corruption will likely prevent any future amplification of this conflict.
In 2018, the mining sector contributed $544 million USD to the Guinean government treasury, which was more than 30% of the State budget.[12] Corruption within the mining sector in Guinea became prominent under former President Condé.[13] The macroeconomic policies of the Condé Administration primarily focused on expanding the country’s mining sector in order to earn higher revenues.[14] It is likely that such policies led to poor handling of the economic situation, where the economy and government revenues became reliant on mining operations. It is very likely that such economic mismanagement, lack of government investments in employment opportunities and infrastructure, coupled with corruption, contributed to the vast discontentment among Condé’s political rivals and Guinean citizens. Widespread corruption also likely allowed revenues to go to the political elite and private investors through illicit channels to evade the country’s weak taxation laws. Such consecutive economic mismanagement by the Condé Administration very likely played a significant role in the success of Doumbouya’s coup. It is very likely that the current economic situation in Guinea is both a cause and effect of its current political transformations.
The economy very likely became an export-led economy due to the heavy reliance on mineral mining as Guinea’s mining sector grew by 18.4% in 2020.[15] Agriculture, forestry, and fishing contributed about 23% of the country’s GDP in 2020.[16] Such an economic structure paired with the national economic policies of the Guinean government likely contributed to the lack of implementation of welfare development programs despite a growth in the economy over the last few years. It is likely that such economic policies did not facilitate a uniform structural growth in Guinea’s economy. While the mining sector grows with support from the government and increased foreign direct investments (FDIs), it is unlikely that other sectors will receive as much capital and government incentives.
In 2013, Guinea’s National Transition Council (CTN) amended its mining code to improve investments by bringing profit taxes down to 30% and cutting the tax on bauxite to a fraction of the international market price.[17] Such mining-oriented macroeconomic policies likely created wide disparities between the mining sector and other sectors within the economy in terms of government interventions and capital investments. However, the non-mining sectors, including the agricultural sector, will very likely continue to play a significant role in the economy in terms of revenue generation and employment. It is likely that Doumbouya’s Administration will continue to encourage mineral-oriented economic growth, especially through export revenues from bauxite, aluminum, iron, and gold. This is likely because the structure of the economy is heavily reliant on export revenues from the mining sector and any discrepancies within the mining sector will likely lead to heavy losses for mining companies and subsequently to government treasuries.
The bauxite mining sector is the largest contributor to Guinea’s export revenues with a contribution of over 90%.[18] The military coup in Guinea led to a spike in the bauxite and aluminum prices.[19] While it is often likely that political instability and turmoil will negatively affect a country’s mining sector, as it is often reliant on foreign capital, it seems to have had a paradoxical effect on the industry in Guinea. This likely indicates that the new administration is ensuring the smooth functioning of the country’s highest-earning sector to continue the flow of revenues to the government. It is likely that members involved in the coup and stakeholders in bauxite mining are cooperating to ensure that profiteering from bauxite mining will not be affected by the major political changes taking place in Guinea. Cooperation between the instigators of the coup and stakeholders in bauxite mining will very likely lead to an increase in corruption within the government, as well as an increase in the private stakeholders' political leverage. If corruption continues, democracy in Guinea will likely continue to remain under threat.
Bauxite and aluminum prices in Guinea rose in 2020 due to an increase in Chinese demand after disruptions caused by the COVID-19 pandemic.[20] The Chinese presence in Guinea is prominent, not only due to their role as major investors in the mining sector, but also as significant stakeholders in domestic politics due to their economic interests in Guinea.[21] Guinea has been an important part of the Chinese Belt and Road Initiative since a 2017 agreement.[22] It is likely that Doumbouya will not intervene in the mining sector operations given the presence of foreign stakeholders, such as the Chinese, as Doumbouya's intervention in the macroeconomic policies set up by Condé would likely disrupt the existing agreements with Chinese foreign investors. Said disruption would likely decrease the flow of foreign capital into Guinea's mining sector, likely having major consequences on Guinea's GDP. Doumbouyo's new regime will likely not risk financial losses from the country's highest-earning sector, especially as investments in other sectors would likely decrease as a result of the constant political turmoil.
It is likely that a transition to the military regime could blur the lines of responsibility, accountability, and transparency of operations by the government regulatory bodies and open new channels of corruption. It is very likely that most of the proceeds from mining operations in Guinea go to the political elite as bribes, often involving foreign actors through transnational illicit financial flows including money laundering. In 2017, Mahmoud Thiam, former Minister of Mines of Guinea, was sentenced for receiving and laundering $8.5 million USD in bribes from China Sonangol International Ltd. and China International Fund (CIF).[23] The change in the political structure in Guinea could likely lead to the opening of new financial channels including illicit financial flows. Capital and profits from the mining sector will likely flow through illicit financial channels such as through money laundering or cryptocurrency platforms to evade the country’s taxation system, or as bribes to corrupted actors involved in the mining operations. It is also likely that Chinese State-owned companies play a significant role, not only as major stakeholders of the global value chains for minerals but also as politico-economic actors involved in Guinean government bribes. This will very likely mean that certain Chinese firms will gain further leverage in the mining sector as well as in the political sphere to protect their economic interests.
In November 2021, Doumbouya placed a thousand military personnel in retirement, including 44 generals that had served the former President.[24] It is almost certain that the soldiers were forced into early retirement due to their perceived loyalty to the former President Condé, as the presence of dissenting soldiers in the future would likely threaten the authority of Doumbouya. It is very likely that Doumbouya's decision to remove potential dissenters was taken to create loyalty amongst his troops to prevent future mutiny. There is a roughly even chance that this retirement may cause the loss of livelihoods of these soldiers, likely inducing ill-will towards the junta. Although no evidence is currently present about any dissent within the military, there is a roughly even chance that these retired soldiers, who have been trained in warfare, will later form into groups against the military regime in the country. They will likely be influenced by former President Condé’s supporters or even the opposition who may see the current political instability as the perfect time to induce another coup in return for administrative or high-ranking designations. If this occurs, they will likely conduct guerrilla-style attacks on the junta and incite conflict between the Malinkés and the Fulanis in the region.
Under Doumbouya, the government is allowing the trial of the 2009 Conakry stadium massacre, which left at least 157 people dead and 109 women raped by junta soldiers under then Junta Chief Moussa Dadis Camara, to continue.[25] Doumbouya’s allowance of the trial suggests that he likely wants to establish trust with the public and create better judicial precedents to gain public support. For the same reason, and despite the undemocratic nature of the coup, there is a roughly even chance that Doumbouya will amend the constitution to allow free speech, or reform certain economic policies to make them more transparent and prevent corruption. The lack of public chaos following the coup suggests that the majority of the public will likely continue to support the junta as long as human rights are not violated and Doumbouya appears to create positive changes for Guineas citizens. If public support increases, there is a roughly even chance of Doumbouya creating his own political party in the future or a political alliance of the military with another party. This likely poses the risk of the concentration of power within the military, which will likely eliminate any process of future democratic transition in the country.
Political entities and individuals that rule autocratically under the guise of democracy incite instability in the form of protests or coups, as has been observed in Guinea and other countries in the region. Countries like Algeria and Chad are constitutionally democratic but maintain authoritarian regimes with leaders and political parties that have been in power for decades.[26] The present Guinean military coup will likely encourage military personnel or militias in unstable neighboring countries, such as Guinea-Bissau, Mali, and Chad, to act against their own governments. This will likely also create increased religious or ethnic conflict within the region, resulting in discord and even civil-war-like situations that could likely spill into neighboring countries. Such conflicts will likely create a cycle of decreasing economic and social development and disputes between different communities for basic necessities and resources such as food and housing. Local and transnational rebel groups such as the Fulanis or the Islamic State (IS), will very likely take advantage of such situations for profit and create further conflict in such countries.
Following the coup, the ECOWAS placed sanctions and travel bans on Guinea’s coup leaders and their relatives in order to ensure a democratic transition within six months.[27] The AU also suspended Guinea from their bloc after the coup.[28] Placing sanctions on individuals of the junta is unlikely to deter the current path of military governance or ensure a better administration, as it only freezes their personal financial assets. As Guinea continues to be the key bauxite supplier to the world, it is very unlikely that economic sanctions on certain individuals will have an impact on faster democratic transition when Guinea’s economy continues to profit and improve. However, expanding sanctions and withdrawing relations with these organizations will likely negatively affect peacebuilding activities in the region, likely allowing conflict to form on the Mali-Guinea borders. Economic sanctions could also likely encourage newer illicit economic threats in Guinea, as is seen in Iran where sanctions are evaded by money laundering and use of cryptocurrencies.[29] Prolonged sanctions and poverty are likely to create conflicts over resources such as food and shelter, which have a roughly even chance of escalating into inter-ethnic issues or exploitation by militant groups in neighboring countries. Complete isolation of the Guinean government is unlikely to help in improving the economic prosperity of Guinea or in bringing the country closer to a democratic transformation after the coup.
The Counterterrorism Group (CTG) recommends for Guinea to maintain diplomatic and economic relations with neighboring countries through regional groups and international organizations such as ECOWAS, AU, and United Nations (UN), which would very likely help the Guinean junta to decrease any future political turmoil, improve economic development, and introduce better welfare programs. In return for their aid, these international organizations are advised to leverage a democratic transition in the country. To pressure the junta further, members of the military should not be allowed to represent Guinea in international discussions and meetings. To uphold the democratic values, ECOWAS and AU can seek to necessitate mandatory small-scale democratic processes and the endorsement of fundamental rights in exchange for trade and exports between member countries. In the long run, this could ensure a proper democracy that was not present during the rule of former President Alpha Condé. In order to prevent illicit financing, it is advised that the Guinean government remain a party to the Financial Action Task Force (FATF) and adhere to the recommendations and guidelines set forth by the global watchdog.
The Counterterrorism Group (CTG) will continue to monitor the situation in Guinea and produce subsequent reports to assess the potential threats and impacts of the military coup on the politics and economic state of the country. The IFET and AFRICOM Teams will continue to collaborate to understand the nexus connecting the development of illicit financing and the changing political structures in West Africa, including Guinea. Through 24/7 monitoring, CTG Worldwide Analysis of Threats, Crime, and Hazards (W.A.T.C.H.) Officers will track and monitor the potential rise in illicit activities and conflict escalations in the region and shall provide necessary analysis and recommendations that help essential actors and governments to take essential measures.
The Counterterrorism Group (CTG) is a subdivision of the global consulting firm Paladin 7. CTG has a developed business acumen that proactively identifies and counteracts the threat of terrorism through intelligence and investigative products. Business development resources can now be accessed via the Counter Threat Center (CTC), emerging Fall 2021. The CTG produces W.A.T.C.H resources using daily threat intelligence, also designed to complement CTG specialty reports which utilize analytical and scenario-based planning. Innovation must accommodate political, financial, and cyber threats to maintain a level of business continuity, regardless of unplanned incidents that may take critical systems offline. To find out more about our products and services visit us at https://www.counterterrorismgroup.com/.
[1] “Map of Guinea” by TUBS licensed under Wikimedia Commons
[2] Guinea coup: Who is Col Mamady Doumbouya?, BBC News, October 2021, https://www.bbc.com/news/world-africa-58461971
[3] Guinea bauxite prices rise after coup, mines report no immediate impact, Reuters, September 2021, https://www.reuters.com/business/guinea-bauxite-prices-rise-political-turmoil-2021-09-06/
[4] Guinea Economic Outlook, African Development Bank Group, 2020, https://www.afdb.org/en/countries/west-africa/guinea/guinea-economic-outlook
[5] Guinea strongman Doumbouya retires 1,000 soldiers, Africa News, November 2021, https://www.africanews.com/2021/11/02/guinea-strongman-doumbouya-retires-1-000-soldiers//
[6] Guinea Economic Outlook, African Development Bank Group, 2020, https://www.afdb.org/en/countries/west-africa/guinea/guinea-economic-outlook
[7] Guinea: The Causes and Consequences of West Africa’s Latest Coup, Centre for Strategic and International Studies, September 2021, https://www.csis.org/analysis/guinea-causes-and-consequences-west-africas-latest-coup
[8] Guinea violence mars political progress, The New Humanitarian, May 2013, https://www.thenewhumanitarian.org/analysis/2013/03/08/guinea-violence-mars-political-progress
[9] The fall of Alpha Condé’s regime in Guinea: A critical appraisal, Observer Research Foundation, September 2021, https://www.orfonline.org/expert-speak/the-fall-of-alpha-condes-regime-in-guinea-a-critical-appraisal/
[10] Guinea’s Ethnic Conflict, Confluence, October 2019, https://confluence.gallatin.nyu.edu/sections/research/guineas-ethnic-conflict#:~:text=Guinea's%20Demographics&text=Fula%20people%20are%20the%20largest,23%20percent%20of%20the%20 population
[11] Guinea coup: Who is Col Mamady Doumbouya?, BBC News, October 2021, https://www.bbc.com/news/world-africa-58461971
[12] What is the Future of Guinea's Mining Sector After the Coup?, Human Rights Watch, September 2021, https://www.hrw.org/news/2021/10/11/what-future-guineas-mining-sector-after-coup
[13] Former Guinean Minister of Mines Sentenced to Seven Years in Prison for Receiving and Laundering $8.5 Million in Bribes From China International Fund and China Sonangol, US Department of Justice, August 2017, justice.gov/opa/pr/former-guinean-minister-mines-sentenced-seven-years-prison-receiving-and-laundering-85
[14] Guinea, Intergovernmental Forum, https://www.igfmining.org/beps/capacity-building/guinea/
[15] Guinea Economic Outlook, African Development Bank Group, 2020, https://www.afdb.org/en/countries/west-africa/guinea/guinea-economic-outlook
[16] Agriculture, forestry, and fishing, value added (% of GDP) - Guinea, The World Bank and OECD Data Files, 2020, https://data.worldbank.org/indicator/NV.AGR.TOTL.ZS?locations=GN
[17] “Guinea Country mining guide”, KPMG Strategy Series, 2014, https://assets.kpmg/content/dam/kpmg/pdf/2014/07/guinea-mining-guide.pdf
[18] Guinea-Bissau Plays a Crucial Role in Global Bauxite Supply Chain, Energy, Capital and Power, September 2021, https://energycapitalpower.com/guinea-bissau-plays-a-crucial-role-in-global-bauxite-supply-chain/
[19] Guinea bauxite prices rise after coup, mines report no immediate impact, Reuters, September 2021, https://www.reuters.com/business/guinea-bauxite-prices-rise-political-turmoil-2021-09-06/
[20] Guinea Economic Outlook, African Development Bank Group, 2020, https://www.afdb.org/en/countries/west-africa/guinea/guinea-economic-outlook
[21] China Is OK With Interfering in Guinea’s Internal Affairs, Foreign Policy, September 2021, https://foreignpolicy.com/2021/09/08/china-guinea-interference-relations-alpha-conde-xi-jinping/
[22] Belt and Road opens new path for Guinea, China Daily, August 2021, https://www.chinadaily.com.cn/a/201808/21/WS5b7b6117a310add14f386d13.html
[23] Former Guinean Minister of Mines Sentenced to Seven Years in Prison for Receiving and Laundering $8.5 Million in Bribes From China International Fund and China Sonangol, US Department of Justice, August 2017, justice.gov/opa/pr/former-guinean-minister-mines-sentenced-seven-years-prison-receiving-and-laundering-85
[24] Guinea strongman Doumbouya retires 1,000 soldiers, Africa News, November 2021, https://www.africanews.com/2021/11/02/guinea-strongman-doumbouya-retires-1-000-soldiers//
[25] Conakry stadium massacre: Guinea "prepares" for trial, Africa News, November 2021, https://www.africanews.com/2021/11/29/conakry-stadium-massacre-guinea-prepares-for-trial//
[26] What’s Happening to Democracy in Africa?, Council for Foreign Relations, May 2021, https://www.cfr.org/article/whats-happening-democracy-africa
[27] ECOWAS sanctions Guinea coup leaders, African Business, September 2021, https://african.business/2021/09/trade-investment/ecowas-sanctions-on-guinea-unlikely/
[28] African Union suspends Guinea after military coup, DW, September 2021, https://www.dw.com/en/african-union-suspends-guinea-after-military-coup/a-59144311
[29] US charges Turkey's Halkbank with violating Iran sanctions, DW, October 2021, https://www.dw.com/en/us-charges-turkeys-halkbank-with-violating-iran-sanctions/a-50848437