Communiqué: Under the chairmanship of His Excellency the President of the Republic, the Council of Ministers held its ordinary session this Thursday, 05 November 2020, from 10am to 12pm, with the following agenda:

III. OTHER BUSINESS

Under the first agenda item,

The President of the Republic recalled his instructions concerning the respect by the members of the Government of the administrative rules prohibiting them from the informal use of collaborators not appointed by Decree to the detriment of those occupying official functions, in the various departments of their respective departments.

The Head of State reiterated his attachment to the principle of national preference enshrined in the Law on Local Content in the Award of Public Contracts, in particular in the Public Works sector, with the aim of helping the emergence of Guinean companies with real competence and solid experience

The President of the Republic gave clear directives around the imperative need to match the orientations of the 2020 Amending Finance Law as well as those of the 2021 Initial Finance Law with the commitments made in the context of the implementation of a new governance in favor of the Quatriè Me Republic initiated by the Constitutional Referendum and by the Programme of the RPG Candidate in the presidential election of 18 October last

The Head of State insisted on the need to complete at the end of 2020, the economic and financial program underway with the IMF, so as to allow the implementation in 2021, of a new program opening more prospects to our country by increasing, for example, its debt capacity and significantly raising the eligibility ceiling for non-concessional loans. The Government is called upon to pay close attention to compliance with the quantitative criteria and structural benchmarks agreed with the IMF.

The President of the Republic instructed the Government to initiate a reflection and a study on a greater involvement of the State in the process of importing and storing hydrocarbons given the eminently strategic nature of petroleum products.

The Head of State recalled the urgency attached to the examination by the Government of the draft Military Programming Law and its transmission as soon as possible to the National Assembly with a view to its adoption and implementation.

The President of the Republic invited the members of the Council to rationalize their travel abroad and to be represented whenever necessary by our diplomatic staff in the country concerned by official missions. The resulting savings could thus be allocated to social sectors and promising projects in the fight against poverty.

The Head of State invited the Ministers to hold regular Cabinet Councils at the level of their respective departments in order to ensure a better flow of information and a more effective coordination of the various services.

The President of the Republic strongly encouraged the executives of the Administration and members of the Government to invest in the fields of agriculture and livestock in order to contribute to the growth of these sectors while serving as models inspiring farmers to appropriate more modern practices.

Under the second item of the agenda, the Prime Minister reported on the ordinary and extraordinary sessions of the Interministerial Council of August 25, September 22, November 03 and 04, 2020.

In this context, the Council heard successively

The Minister of the Budget who presented a communication on the project to set up the tele-declaration and telepayment of taxes and duties on the Internet (eTax Guinea).

He argued that as part of the modernization, security and improvement of the collection of taxes, the Ministry of budget has set up a new tax information and management system in the Republic of Guinea. This new solution has two components:

– A secure internet portal allowing taxpayers to carry out all their tax obligations online (by teledeclaration and telepayment);

– An internal management software to automate the daily tasks of the agents of the Directorate of Taxes and to improve the control of taxpayers.

The Minister indicated that with eTax, the following measurable objectives could be achieved as early as January 2021:

– A significant improvement in the rate of tax burden in Guinea (reach the 15% set by the Government;

– A broadening of the tax base and taxable persons so that all taxpayers are identified and monitored;

– A development of tax citizenship with automated taxation and automatic rules applying to all taxpayers;

– A security and simplification of the procedures that make it simple and ordinary to pay taxes in the Republic of Guinea;

– An improvement in Guinea's ranking in the Doing Business report thanks to a better score in the "Payment of Taxes" category.

He informed that the project teams are in the process of finalizing work on:

– The training of DNI agents;

– The training of banks and the implementation of production flows;

– Training of pilot taxpayers.

The Minister also announced that the implementation of Lot 2, by December 2020, will continue until the 1st quarter of 2021 in order to put in place all the modules necessary for the reform of the National Directorate of Taxes.

At the end of the discussions, the Council warmly appreciated the Minister's initiative for this important reform and expressed its full support for the continuation of the process.

The Governor of the Central Bank of the Republic of Guinea who submits to the Council a Preliminary Draft Law on the fight against Money Laundering and the Financing of Terrorism

The Governor recalled that money laundering and the financing of terrorism are scourges that undermine the economic development of our States.

It is estimated that money laundering resources account for just over 5% of global GDP.

Since money laundering and the financing of terrorism are national and transnational in nature, they have become a matter of concern to international organizations such as the United Nations, the IMF, the FATF, and GIABA at the West African level.

That is why, in order to coordinate national efforts to combat these scourges, these international organizations have issued international norms and standards to which all States must comply. They also provided for peer review mechanisms to ensure that States actually comply with them, as well as sanctions, where appropriate.

These norms and standards include international conventions and the Recommendations of the Financial Action Task Force (FATF).

Each State is therefore requested to translate these FATF Conventions and Recommendations into its legislative and regulatory framework.

The draft Law submitted to the Council in this context includes 150 articles divided into 14 chapters.

inter alia

The first chapter deals with the general provisions and provides the purpose and scope of the Act and the definitions of the terms used in the enactment.

Chapter II deals with criminal provisions and defines the offences of money-laundering and the financing of terrorism.

Chapter III deals with national AML/CFT coordination and policies. In this chapter, a National AML/CFT Coordination Committee is created whose missions and composition will be defined by Decree of the PRG.

Chapter IV deals with the implementation of United Nations Security Council resolutions.

Chapters V, VI and VII deal with the due diligence measures to be adopted by Financial Institutions, Designated Non-Financial Enterprises and Professions and Obliged Public Authorities, and Virtual Asset Service Providers, respectively.

Chapter VIII deals with Non-Profit Organizations, which must be registered and controlled by the Ministry in charge of the administration of the territory, in relation to the tax administration and CENTIF.

Chapter X deals with the detection of money laundering.

A National Unit for the Processing of Financial Information (CENTIF) is thus created, which is an independent administrative authority under the supervision of the Central Bank of the Republic of Guinea. Under the old law, CENTIF was placed under the supervision of the Ministry of Economy and Finance.

Chapter XI deals with the Regulation and Supervision of obliged entities.

Chapter XII deals with coercive measures.

Chapter XIII deals with international cooperation. All forms of international cooperation in police and judicial matters and international legal aid are provided for in this draft law, in accordance with the provisions of the Code of Criminal Procedure.

At the end of the discussions, given the importance of this draft law for the integrity and stability of guinea's economic and financial system and for national security, the Council decided to adopt the draft law.

The Minister of the Budget who presented the main orientations of the government's policy in the draft Amending Finance Law 2020 and Initial Finance Law 2021.

Ø Regarding the Amending Finance Law financial year 2020

The Minister first stressed that the preparation of the Draft Amending Finance Law 2020 is part of a context marked by the global health crisis related to COVID-19 and the organization of the presidential election of 18 October 2020 whose adjustment costs force the Government to revise the trajectory of its fiscal policy initially adopted in the 2020 Finance Law.

He announced the main assumptions of the PLFR 2020 which relate to an economic growth rate of 5.2% of GDP, an average inflation rate of 10.2% and a tax pressure of 12.02% against respectively 6%, 8.6% and 13.7% in the Initial Finance Law resulting in a basic budget balance of -2.34% of GDP against 0.63% initially planned.

The Minister indicated that the fiscal strategy for 2020 aims to preserve macroeconomic stability, with particular attention to basic social sectors including education, while ensuring that the Guinean economy recovers from the effects of the Covid-19 crisis.

He also highlighted, among other things, the public investment program, including the organization of the African Cup of Nations, the continuation of efforts in favor of presidential initiatives and EDG reforms and the intensification of efforts to mobilize internal revenues.

Ø Concerning the Finance Law Initial financial year 2021

The Minister gave the budget projections for 2021 which bet on an economic growth rate of 5.5% of GDP, an average inflation rate of 8% of GDP, a tax burden rate of 12.41% as well as the maintenance of the BCRG's reserves at more than three months of import coverage and a stabilization of the exchange rate at 9,996.8 GNF for 1 Dollar.

The main masses of the PLFI 2021 are as follows: Total revenue: 23,058.4 billion, Revenue excluding Grants: 21,360.4 billion, Expenses: 27,099.6 billion, Balance: -4,041.2 billion, Financing resources: 7,288.8 billion, Financing expenses: -3,247.6 billion.

He explained that compared to the LFR 2020, total revenues including donations grow by 8% while expenses remain almost at their level of the LFR 2020. Tax revenues increased by 21% mainly due to taxes on foreign trade (+41%). The increase in overall revenues is mitigated by a significant drop of about 43% in donations expected in 2021.

The Minister of budget informed that investment spending is expected to grow by 11% in 2021 while remaining within the planned limit of 5% of GDP. The share of public investment financed from domestic resources would represent 31% of total investment expenditure compared to 69% for external financing. The projected allocation for the National Agency for Economic and Social Inclusion (ANIES) amounts to 40 billion and the Mission d'Appui à la Mobilisation des Ressources Intérieurs (MAMRI) benefits from 50.50 billion, including 30.50 billion from external financing. Regarding the special allocation budgets, he informed that the allocations amount to 955.3 billion, an increase of 29% compared to 2020. Financing expenses amounted to 3,247.61 billion, an increase of 44.6% compared to 2020.

At the end of the discussions, the Council supported the Minister and proceeded, subject to the taking into account of the relevant comments, to the approval of the two draft texts.

The Minister of Mines and Geology made a communication on the railway and port agreements for the evacuation of iron ore from Blocks I and II of Simandou by Winning consortium Simandou.

He recalled that the Basic Agreement for the project to exploit the Simandou block 1 and 2 deposit was promulgated by Decree No. D/2020/143/PRG/SGG of 3 July 2020, after the adoption by the National Assembly (by Law L/2020/004/AN of 26 June 2020). This basic agreement included the general principles on the construction of railway and port infrastructure. These two agreements submitted to this Council concern the special conditions for the construction of the infrastructures concerned. The finalization of these agreements therefore completes the investment framework of the Simandou Blocks 1 and 2 project.

The Minister informed the Council that the Consortium is thus committed to building a railway with a length of 650 to 679 km linking the mine to a deep-water port with a capacity of 80 million Tons per year (MTPA) located in Matakang in the prefecture of Forécariah on the Guinean coast.

He recalled that the overall cost of the project is estimated at US$15 billion for the mine, infrastructure and associated costs, plus US$1 billion for the construction of a steel plant with a capacity of 500,000 tons. The total amount of investments envisaged is estimated at nearly USD 16 billion, broken down as follows:

The Minister informed that at the end of 2019, the Investor has committed to start work on four axes:

– Reprofiling, rehabilitation and expansion of 140 kilometers of road linking Kérouané and Kankan;

– Start of the construction of the Base Camp, the access roads and the Kérouané Airport;

– Exploratory phase of the target platform and launch of pre-feasibility studies; and

– Start of studies and design work of the railway.

These draft Agreements negotiated between the representatives of the Guinean State and those of the Investor in the presence of their respective Councils include a number of provisions, including the following points:

– Applicable law and fiscal and customs stabilization;

– Tax and customs regime;

– Stipulations concerning the regime of access for third parties;

– The transfer of rail and port infrastructure to the State.

The Minister stressed that the Company, its Affiliates and exclusive Subcontractors are subject to taxes, duties, taxes and royalties in accordance with the provisions of the General Tax Code, the Customs Code and the Mining Code in force on the date of signature of the Agreement. However, due to the integrated and industrial nature of the project and the investments it requires, certain exemptions have been granted.

In addition, the Parties accepted the principle of pooling in the use of infrastructure for both the transport of people and goods.

Finally, the Minister informed that the Port Infrastructures will be transferred free of charge to the State in good condition of maintenance and operation at the end of the Duration of the two agreements which is 35 years.

During the discussions, key comments focused on the need to:

– Ensure that tax concessions are effectively justified in view of the need to increase state revenues, including through the identification and recovery of transfer pricing losses;

– Ensure the effective application of the provisions of the conventions and a rigorous review of the feasibility study;

– Carry out a wide information and prior awareness of the populations along the corridor of the project in collaboration with the local authorities;

– Create a synergy with the telecom sector to seize possible opportunities to maximize the benefits of existing optical fibers or to be achieved within the framework of the project;

– Finalize the railway law in order to have an appropriate legal framework in this area.

; At the end of the debates, the Council adopted the two railway and port agreements and authorised their signature by the Ministers in charge of Mines, Budget and Transport.

Under the third agenda item

The Council welcomed the smooth running of the voting operations on 18 October, on the occasion of the presidential election. He was particularly pleased with the calm and serenity that prevailed, a climate to be attributed to the maturity of the People of Guinea and the quality of the organization of this election.

However, the Council deplored the acts of incivism and violence that followed the self-proclamation of victory of one of the candidates and encouraged the judiciary to complete the judicial proceedings initiated in order to identify and prosecute before the courts all the culprits and sponsors of the crimes and offences that have caused many victims and considerable material damage.

The Council reminds electoral competitors that only the judicial remedies provided for in our legislation are democratic and that any other form of electoral demand generates conflict and violence.

The Council calls on the spirit of good citizenship and tolerance of all to preserve peace and social cohesion in order to continue to make Guinea an island of stability in a subregion too long agitated by unrest of all kinds.

Before adjourning the meeting, the President of the Republic gave the Council extensive information on the African and international national situation.

Conakry, 05 November 2020

THE COUNCIL OF MINISTERS

Transmitted by the Government Communication Unit