Guinea receives B+/B sovereign ratings from S&P Global

Investing.com -- The Republic of Guinea has been assigned ’B+/B’ long- and short-term foreign and local currency sovereign credit ratings by S&P Global Ratings, with a stable outlook.

The rating agency cited Guinea’s strong growth prospects, favorable debt profile, and rising foreign currency earnings as positive factors, while noting constraints from the country’s low level of development, institutional vulnerabilities, and heavy reliance on mining.

S&P expects Guinea’s real GDP growth to average 9.5% over 2026-2028, significantly outpacing peers, driven primarily by the mining sector and the start of production at the Simandou iron ore project later this year. The Simandou deposit, estimated at 2.8 billion tons of high-quality iron ore, represents a major turning point for the country’s economy.

Despite these positive growth indicators, Guinea’s GDP per capita remains below $2,000 in 2025, which S&P describes as "low by global standards." The country’s economy is heavily dependent on mining exports, which account for approximately 90% of total foreign currency receipts, making it vulnerable to terms-of-trade shocks.

The rating agency noted that a recent GDP rebasing exercise suggests Guinea’s economy could be 40%-50% larger than previously estimated, though these figures were not incorporated into the current rating as complete data is not yet available.

Guinea’s institutional arrangements remain vulnerable according to S&P, with the political transition nearing completion but tensions with the opposition remaining high. However, the implementation of reforms and infrastructure projects has accelerated in the past two years, leading to increased donor support.

The country’s general government debt is relatively modest at about 44% of GDP as of end-2024, with a favorable profile. S&P expects this debt to decline slightly to 40% of GDP by 2028, supported by high nominal GDP growth.

Current account deficits are expected to decrease as exports rapidly increase, supported by the Simandou project, higher bauxite and gold production, and increased refining capacity. The budget deficit is forecast to gradually decline and average slightly below 3% of GDP over 2025-2028.

S&P assigned a transfer and convertibility assessment of ’BB-’ to Guinea. The stable outlook balances the country’s growth prospects against its development challenges and mining dependency.

The rating agency indicated it could lower the rating if growth and exports falter or if foreign currency reserves decline, potentially due to a large and lasting decrease in global demand for Guinea’s minerals. Conversely, a rating upgrade could occur if external imbalances decline faster than forecast while fiscal consolidation and reform momentum continue.

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