GTAP Resources: Resource Display
| GTAP Resource #7556 |
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"Mining boom and economic growth: A case study of the Simandou project in Guinea using a new CGE model" by Fofana, Ismael and Bernabe Sanchez Abstract Guinea has been experiencing an economic boom driven by its mining sector since 2016. Bauxite and gold export growth have made it the fourth fastest growing economy globally over the period and the third largest mineral exporter in Africa. This growth has not translated human development at the rate that could have been expected and there is evidence it has crowded out activity in other sectors of the economy. As the $20 billion plus Simandou high grade iron ore megaproject comes close to commissioning, the project presents new challenges as well as opportunities to the country’s economy. This paper provides the first attempt to measure and publicly share the fiscal and economic impacts of Simandou, using the IMF’s Financial Analysis of Resources Industries (FARI) model and developing a new CGE model for Guinea’s economy. The FARI model shows a direct fiscal impact of the project for Guinea of between $0.8 billion and $2.7 billion annually at full production before 2035. Corporate tax rates increase from 2035, resulting in higher government revenues of between $1.9 billion and $3.5 billion thereafter, at $70/t and $100/t iron ore prices. This CGE modelling exercise finds that Simandou will have a significant impact on the size of the economy: by 2030 the economy will be between 26% ($7.8 billion) and 42% ($12.5 billion) larger than it would have been without the project at $70/t and $100/t iron ore prices respectively. The results also show a detrimental impact on other exports as the real exchange rate appreciates. Finally, they show that without structural changes, once the project has ramped up to full iron ore production of 120 million tonnes, economic growth reverts to a path lower than it would have been without Simandou. The paper concludes by highlighting policy priorities that can help translate this growth into human development and structural transformation, and which are more broadly applicable to African countries experiencing mining booms. |
| Resource Details () | GTAP Keywords | ||||||||||||||||
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- Resources and circular economy - Other data bases and data issues - Domestic policy analysis - Economic development - Economic growth - Model extension/development - Partial and general equilibrium models - Africa (West) |
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Public Access  GTAP Resource 7556 - Paper (743.5 KB) Replicated: 0 time(s) GTAP Resource 7556 - Presentation (2.3 MB) Replicated: 0 time(s)Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 3/16/2026 10:39:15 AM
