Guinea-Bissau

Guinea-Bissau closed 2025 with a surprisingly strong real economy: the IMF estimated growth at 5.5%, supported by a bumper cashew crop and favorable terms of trade, while inflation collapsed to a 0.9% average — comfortably inside the WAEMU 1-3% band. As a member of the euro-pegged CFA franc zone, the country benefits from a supportive regional monetary backdrop, with the BCEAO easing its policy rate to 3.00% in March 2026. Nominal GDP sits near US$1.6-1.8 billion for a population of about 2.2 million.

The thesis is a frontier WAEMU credit whose fundamentals have, so far, decoupled from its politics. A euro-pegged currency, an active IMF Extended Credit Facility — extended to December 29, 2026 with its ninth and tenth reviews completed in March 2026 — and a structurally improving terms-of-trade story anchor the case. The 2025 cashew harvest reached an estimated 260,000 tons (+18%), with the transitional government setting a 2026 farmgate price of 410 CFA/kg, among the highest in West Africa, and an EU Sustainable Fisheries Partnership delivering €85 million over 2024-2029 provides a rare, stable non-cashew source of public finance.

The defining risk is acute political instability stacked on extreme concentration. Following a contested November 23, 2025 election from which the PAIGC was barred — with both President Embaló and opposition candidate Fernando Dias claiming victory — the military seized power on November 26, 2025, arresting Embaló a day before results were due; critics call it a 'simulated coup.' Army chief General Horta N'Tam was installed as transitional president for a one-year transition, with fresh elections set for December 6, 2026. This sits atop a single-crop, single-buyer export base (cashew >90% of exports) and public debt near 75% of GDP.