Guinea-Bissau’s Cashew-Driven Growth Faces Structural Debt Wall

The World Bank’s latest economic assessment highlights a precarious paradox: while rural incomes benefited from favorable farmgate prices last year, the broader national economy struggles under the weight of public debt. At 75.6 per cent of GDP, debt levels have breached the ceiling established by the West African Economic and Monetary Union. This fiscal strain is compounded by a troubled banking sector, where non-performing loans surged past 22 per cent by mid-2025, effectively choking off credit for small businesses and women-led enterprises.

Structural inefficiencies further undermine these gains. Although the share of firms investing in fixed assets rose to 61.2 per cent, labor productivity has cratered to minus 6.8 per cent, indicating a trend of hiring without commensurate output growth. With economic expansion projected to decelerate to 4.8 per cent in 2026, the path forward hinges on fundamental reforms. Analysts point to the necessity of broadening the tax base, digitizing customs, and expanding fiber-optic infrastructure to move beyond a narrow reliance on raw agricultural exports.