Guinea Bissau is reviewing contracts signed by previous governments as the West African country seeks to ensure miners have sufficient means to kick-start its $2 billion economy, its prime minister told Reuters.
Domingos Simoes Pereira, elected at polls a year ago that sealed a transition back to democracy after a 2012 coup, said the review was also aimed at diversifying investment in services such as maritime transport and telecoms, dominated by former colonial power Portugal.
Fishing and timber contracts would also be analysed to ensure sustainability for resources, he said.
Most of Guinea-Bissau’s roughly $250 million in exports come from fish and cashew nuts, though the government aims to develop its bauxite and phosphate sectors. The government wants to encourage investment as the country of 1.7 million people seeks to shed its image as a cocaine transit point between South America and Europe.
“Today, we want to bring clarity to all contracts that risk posing problems,” the prime minister said in an interview.
“For some, there will be audits, for others an inspection by the finance ministry will be enough,” he added.
The prime minister wants to ensure that contracts ensure a fair return for the country and that the companies awarded them have the means to invest properly.
Russian miner Poto has suspended its extraction of heavy mineral sands from Varela on the north coast of Bissau amid a dispute over tax payments and environmental damage.
Canada’s GB Minerals operates the fledgling Farim phosphate mine in the north, while miner Bauxite Angola has a bauxite project in the southeast at Boe.
Guinea-Bissau’s main port is operated by Portugal’s Tertir Group and its main telecoms company is controlled by Portugal Telecom. The main port in the capital Bissau is small and some cargoes can only be delivered at high tide.
“I had a meeting with Portugal’s prime minister and I explained simply that we need to open these sectors to competition,” Pereira said.
Economic growth this year is expected to nearly double from 2014 to 4.7 percent, according to the International Monetary Fund. Donors pledged more than 1 billion euros at a conference in Brussels in March to support a 10-year development programme aimed at giving Guinea Bissau a fresh start.
Pereira said the government will prioritise improving infrastructure in the south, reviving a deep sea port project at Buba and a railway linking it to a bauxite mine in Boe.