Guinea: How does the December explosion affect the country’s economy?

Guinea: How does the December explosion affect the country’s economy?
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Image caption, Petit Simbaya district, in the suburbs of the Guinean capital, Conackry.

10 minutes ago

The December explosion at a fuel storage plant was among the worst accidents Guinea has seen. An explosion which caused a lot of material damage and whose repercussions are still felt in the daily lives of Guineans whose way of life and activities have deteriorated significantly.

Conakry, the Guinean capital, has regularly experienced fuel and water shortages since the explosion (on the night of December 17 to 18, 2023) in the main hydrocarbon depot of the Guinean public oil company.

In addition, malfunctions within energy supply installations and equipment (a group at the Kaloum 5 power plant recently caught and a high voltage cable was broken in Sanoyah, not far from Conakry), affect dozens of neighborhoods. of the capital who are regularly in the dark.

Load shedding which impacts the activities and trade of many Guineans who see their income threatened.

“I sell frozen chickens, yogurt, fresh milk, and all varieties of butter. My business was flourishing and I had managed to retain many customers. But, since the advent of load shedding, I have been living a nightmare.” deplores Mamadou Bah, economic operator, resident in the Petit Simbaya district, in the suburbs of Conakry.

“My turnover has dropped considerably. I threw in the trash kilos of dairy products and derivatives which were in an advanced state of rot in my fridges,” he says, disappointed. “I have to tell you that some of the products I had ordered and stored and which are all rotten, I took them on credit I wonder how to repay Every day, I expect my creditors to show up and I stress about it. permanence” adds the merchant.

Image caption, Mamadou Bah, wholesaler and retailer.

The seller estimates having lost several million since the start of recurring power cuts in the capital. Enough to give him headaches.

”Before I could sell up to 3 to 5 million Guinean francs per day (approx. 214,000 to 356,000 CFA francs). Today, I can barely earn 600,000 francs. You see the economic disaster that I am suffering. I am faced with a dilemma. I close my supermarket or I retrain and try to sell something other than frozen products.

Load shedding lasting several hours a day has considerable consequences on economic activity in the country to the point where SMEs/SMIs have now gone out of business, according to the Union for the Defense of Consumers of Guinea.

”Many SMEs and even large companies are having difficulties mainly due to the lack of electricity. The impact of untimely power cuts is felt even in households where keeping food cool poses a problem. As a result, fathers can no longer control their consumption budget due to the daily purchase of groceries. In short, the power cuts have exacerbated the cost of living,” explains Mbani Sidibé, the president of the Union.

Image caption, Mamadou Bah checks the condition of his frozen products stored in the freezer.

Load shedding which impacts the cost of living

Faced with this situation, the Guinean authorities had also decided to reduce the cost of living by lowering the prices of certain foodstuffs.

”When you go today to the markets of Conakry and the big cities, you will see that the price ceilings have not been respected at all due to lack of monitoring. Here, at home, the price is often left to the discretion of those involved in the sector. Each prefecture, and sub-prefecture, has its own price. And at the time, we clearly told the government that before moving towards that, it was necessary to rework on the price structure and apply the law relating to general regulation of competition and price freedom. The operator is free to set its price, but it has the obligation to inform the consumer of the unit price including tax. The law in our country punishes the failure to advertise prices and also the fact that certain importers, certain retailers, are unable to respect these prices,” told us the president of the Union for the Defense of Consumers of Guinea.

An electricity problem that has always existed in the country

The Guinean authorities justify the recurring power cuts by the drop in the water level of the hydroelectric dams (Garafiri launched in 1999, Kaléta and Souapitia in 2015) which manage as best they can to supply the country with electricity and malfunctions in certain power plants electrical.

Prime Minister Amadou Oury Bah, during his first press briefing since his appointment, discusses the repercussions of the explosion at the Kaloum oil depot but also the problem of availability of public funds.

Karpowership, the Turkish thermal power station, which supplies certain African countries with electricity (Guinea Bissau, Ghana, Sierra Leone among others…) was expected in Guinea but the Head of Government stressed that the use of a Turkish boat would not be not the most viable solution due to its high cost, given current budgetary constraints. He said the government was exploring various options to improve electricity supply, while avoiding costly solutions.

”We are facing a crisis that continues. You know, the volume of water in dams decreases with the seasons and power production naturally drops when there is not enough water.”

When the Transitional authorities arrived, a Turkish floating boat provided additional electricity.

Mbani Sidibé, president of the Consumers’ Union of Guinea, calls for an audit of the sector: “Today, we are facing a crisis and I think we need a global audit of the energy sector, especially electricity. The national electricity company cannot even tell you today the exact number of consumers it has in its database.”

The energy mix approach is also mentioned as a solution to the crisis.

”We must also develop other sources of energy, whether wind turbines, thermal or solar sources, to allow all of Guinea to have electricity,” suggests Mr. Sidibé.

The national electricity company EDG (Electriqué De Guinée), run by an interim since the dismissal of the last director, has always experienced management problems according to some Guineans.

”When you go inside the country, there are many prefectures, and sub-prefectures that don’t even know the current,” the president of Guinean consumers tells us.

Recurrent power cuts have often been the cause of riots in the capital, Conakry, as was the case in several neighborhoods in March after a general outage of one of the country’s power stations.

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