Guinea's national economic policy calls for the disengagement of the state from certain productive enterprises. The number of public enterprise liquidations and privatizations has also been impressive. Out of 180 public enterprises in existence in 1986, the majority have been liquidated and more than 30 privatized. Over 300 state farms have been closed.
The pace of privatization slowed considerably beginning in 1989. In 1992, the economic reform program moved ahead again and some progress in privatization was made in the bauxite and petroleum sub-sectors. The government issued a liquidation decree of its wholly-owned Office des Bauxites de Kindia (OBK) which was turned into a limited liability company. The government is now seeking partners for the new venture, Société des Bauxites de Kindia. The importation and distribution of petroleum was privatized in 1992 and four companies now compete in the market.
The restructuring of the remaining public entexprises to be privatized remains behind schedule. Privatization of the state-owned electricity company — formerly "ENELGUI" now SOGEL — was delayed by a year until June 1, 1994, when a private management contract was signed between the Government and a foreign partner. SOGETRAG (buses) , and Air Guinee are still undergoing restructuring involving privatization. Progress in privatizing medium-sized enterprises, such as SOGUITRO (construction), and the Novotel Hotel in Conakry have been delayed as well, principally by difficulties in financial rationalization and negotiations with creditors.
In 1992, the government adopted a new private land tenure law. The establishment of a land registry for Conakry was to be completed by July 1996, followed by the gradual extension of land registry for the country as a whole. A new business code, revising the rights and obligations of private businesses was adopted in December 1992. That same year, Guinea's private sector promotion offices were restructured and funds established to stimulate private sector activity. To strengthen legal institutions and ensure a uniform application of the law, a Supreme Court and a High Council of Magistrates were set up in late 1992.
In 1993, the pace of structural reform slowed due to the ongoing political process which dominated public life in the country. Some progress was made in financial sector policy: interest rates were liberalized, reserve ratios for commercial banks were strengthened, treasury bills were introduced. A new banking law codifying these changes was issued in early 1994. In addition, two troubled private banks underwent restructuring. The Banque Islamique de Guinee (BIG) has been recapitalized by its major owner, Groupe Bancaire DMI-Trust.
An interbank market for foreign exchange was introduced in October l994. Since January 1995 the Central Bank of Guinea has been selling foreign exchange on a regular basis to the commercial banking system. Since the shift to an interbank market, the official Guinean' franc has maintained its value visa-vis the U.S. dollar.
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