Guinea-Bissau Grew 5.8% on Cashews. Its Banks Hold 22% Bad Loans

Guinea-Bissau's economy expanded 5.8% in 2025, driven by a strong cashew campaign, according to the World Bank's 2026 Economic Update. The farmgate price of raw cashew nuts increased from 300 CFA francs per kilogram in 2024 to 410 in 2025, while export volume rose. The African Development Bank reported a slightly lower growth rate of 5.0%.

Inflation was 2.2% compared to the World Bank's estimate of 0.9%, and the fiscal deficit was 3.6% of GDP versus 6.5%. However, the share of exports composed of cashews is debated, with the IMF estimating 65% after accounting for unrecorded fish exports, while the World Bank reports over 90%. Non-performing loans at banks reached 22.2% of total loan volume by June 2025, up from 13.9% in 2023.

Only about 10% of firms have access to bank loans, and credit to the economy grew by 5% in 2025. Tax revenue accounts for 8.5% of GDP, leaving little room for fiscal actions such as recapitalizing. Guinea-Bissau lacks national foreign exchange reserves and import cover, and relies on pooled reserves at the regional central bank.

The World Bank identifies taxation, access to finance, institutional unpredictability, and gender gaps in firm ownership and credit access as binding constraints. Extreme poverty is projected to reach 37.8% by 2028. A military coup occurred on 26 November 2025, leading to Guinea-Bissau's suspension from the African Union and a one-year transitional roadmap.

The IMF provided technical support and guidance on the implementation of the roadmap, and the currency peg to the euro remains a stable advantage for investors.