Guinea’s Gold Sheds Light on the Difficulties of Reforming North-South Exploitation

By Roland Benedikter - 31 March 2022
Guinea’s Gold Sheds Light on the Difficulties of Reforming North-South Exploitation

Guinea is an exemplary case of North-South exploitation, as well as of the ambiguities involved on both sides. This is what is shown by the case of its foreign-stored gold reserves and the unclear attempts of Guinea’s current military junta to take back control. As poor transparency in European-African financial relations is still too often the case, the solution lies in reforms on both sides. It must involve both the European Union and the African Union, and from there it should be expanded to a more general reexamination of North-South financial relations in toto, writes Roland Benedikter.

It all started with a bang. In September 2021, the West African nation of Guinea was shaken by a coup. President Alpha Condé (2010-21) was overthrown by his own security forces who then implemented a military transition government under the leadership of Colonel Mamady Doumbouya (42). The junta promised to plan democratic elections and to rely heavily on former UN personnel to master the transition phase to a liberal democracy. A new Guinean democracy would, as the hopes went, also reexamine of how the nation’s financial assets, including the banking system, could be better used for the people, and not just for the elite’s and foreign investors enrichment.

Given its crucial role in a fragile economic and social situation, the junta was prudent not to touch the nation’s Central Bank (Banque Centrale de la République de Guinée, BCRG) and its leaders, and instead to do everything for a smart “inclusion” of the existing system in the transition process. This went well for a couple of months. Yet in February 2022, after initial close cooperation, the junta surprisingly intervened against the governor of Guinea’s central bank, Louncény Nabé, held him in custody and opened up an investigation about potential crimes. The situation has revolved around the foreign-stored gold reserves of the nation – potentially one of the richest in terms of resources but de facto one of the poorest in Africa – which the junta wants to take home. The implicit question is whether the junta want the gold for the people or for itself, and what their actions convey to the people of Guinea and to the outside world about North-South exploitation, as well as about the chances of a smooth transition to democracy.

What prompted the 2021 coup against President Alpha Condé in the first place?

Condé (President 2010-21) initially appeared to be a progressive intellectual of European inclination who wanted to lead the country to more participatory structures, strongly sustained by France. He was determined to stabilize, modernize and emancipate the nation, including reordering its financial system. In that, and as the first democratically elected President, he inspired great hope, even beyond Guinea, for West Africa and even for the African Union. The appointment of Nabé one month after Condés election victory in December 2010 was initially perceived as an act of financial reform and systemic modernization. After initial progress, though, Condé’s government regressed into more oppressive manners, concentrated the economic power in his hands, cemented his political reign and even modified the constitution in order to obtain a third term as President. Some contend that he falsified the October 2020 elections, which he officially won. The increasing oppression and ethnic selectivity of his government eventually prompted his own special military forces to revolt against him one year later, on 5 September 2021. Since then, the domestic everyday situation has widely normalized, and a variety of political parties have sprung up which are in the process of organizing themselves in view of an upcoming general elections. One major challenge is the party financing by the state authorities which remains slow, bureaucratical and complicated to achieve.

Fearing intervention by the African Union and pressure from international bodies, Guinea’s military junta over the past half year has been careful not to stir up problems and to “fly under the radar” of critical global perception wherever possible. So what prompted the military government in charge to publicly remove governor Nabé and his deputies from the Central bank? Did the Doumbouya-led junta want to set an example of how it wants to eradicate any trace of the former administration? Did it want to seriously reform the financial system and to address North-South-exploitation? Or did it, more pragmatically, simply want to access the central bank’s reserves to finance itself?

In essence, the junta has only made it clear that it wants to get access to around three tons of Guinea’s gold reserves which are stored abroad with the Belgian rare metals firm Affinor. Affinor signed a contract with the Nabé administration in March 2021, still under Condé’s reign, to refine and store part of Guinea’s gold reserves for the Central Bank (BCRG) in order to in turn supply the nation with foreign currency in case of need. Since then there have been problems verifying the origin of the gold, some of which apparently came from Dubai and not from Guinea’s Central Bank. As a consequence, Affinor got into legal trouble and are refusing to give the gold back to the junta. Instead, the company has offered to return its cash value, which the junta has not accepted partly because of the volatile global market price of precious metals.

So why exactly did the military arrest and charge Nabé?

The military initially became involved to investigate Guinea’s foreign dependencies and deposed Nabé probably to put pressure on Affinor in the first place. If Nabé were to be prosecuted for alleged crimes in managing the national foreign gold reserve in cooperation with European firms, part of the suspicion and prosecution would fall on Affinor since the firm collaborated closely with the Central Bank, as stipulated in the contract. The junta also knows that indicting a former elite representative of the Condé government makes it more popular at home, since many Guineans think that many bureaucrats under Condé were working to exploit their country in favor of themselves with the help of external actors, i.e. that many were corrupt in some way and thus should be held responsible.

Some press reports have suggested that the military arrested Nabé because Affinor would not surrender Guinea’s gold reserves to the military government. Two questions arise in this regard:

  • Is it normal for a European commercial company to refuse to deal with a de facto government?
  • Since the junta’s actions would not change the legal environment in Belgium or wherever the gold is held, why would Nabé's arrest have any influence on Affinor's response?

These questions are of a complex legal nature and are the object of debate among specialists. It is contested whether a military junta as a de facto government can or should be seen as the legal successor of an overthrown government that was officially elected, is being held in the country and has never formally resigned by its own will. Affinor is under pressure since it knows that it is not improbable that there could have been some corruption issues involved in its Guinea deals, and obviously it does not want to ruin its name by being further involved in any international investigation.

So is it likely that there will be calls for Nabé's release? After all, as a central bank governor he is likely to have connections in international financial circles.

This is difficult to predict from the outside. Experience teaches that once serious legal problems of an international nature arise, the solidarity among high-ranking finance representatives proves to be limited. Especially when it comes to a – in its details on the ground – rather opaque and poorly-known situation like that of Guinea, and on the North-South axis which has always been a difficult ground of investigation in itself.

What is known about Karamo Kaba, the junta’s new governor?

According to various sources, Kaba is a political economist and strategist who has publicly been quite present in the European and Western “attention economy”. He writes for the “Courrier Financier” and other specialized outlets aiming, in their own self-description, at “seeing the whole”. From another lens, Kaba has directly grown on the North-South axis, too, like (and even more so then) his predecessor. He has a French academic education and has been a director of studies in France at Ecofi Investments, a management company specialising in responsible investments and a subsidiary of Crédit Coopératif, which invests into circle economies. His appointment by the junta is obviously meant as a signal of renewal and modernization towards a more “ethical” banking system and new forms of “green” and sustainable local and regional investment, following European approaches and strengthening ties with the EU and the Joe Biden administration’s attempts to create a “greener” USA. Kaba stands for a new generation of progressive economists with strong ties to innovative socio-economic models “tied to the ground”. He should also bring a good understanding of the EU’s 1.8 trillion Euro development and investment program “New Green Deal”, which African nations could become part of. His political inclinations nevertheless are unknown.

What kind of governor was Nabé? Was he competent? Did he defend the central bank’s autonomy with regard to outside influence?

Independent of the outcome of the further procedures, Nabè was, for most of his charge, highly regarded among his peers and, having served more than a decade as the National Bank’s governor, has been often seen as the “father” of contemporary financial practices in Guinea. Some, though, consider this an ambiguous honor given some of the disputed practices ascribed to the government under which he served.

Summing up and looking forward, the solution lies in reforms on both sides of the North-South axis. On the one hand, the European Union should not leave investigations of dubious financial and banking cases or single indictments just to the courtrooms in its single nations. It should create a specialized overall mechanism to carefully reassess the overall structure of its financial and banking relations to African and other Global South nations. Every single case, such as the Guinean one, should be included in an overall framework of EU-AU and EU-single countries assessment and reform, including basic guidelines, comparative mechanisms and joint standards also for private firms with regard to criminal charges in specific cases where appropriate. In so doing, the EU could built on its sophisticated, but often too complex, disconnected and shattered institutional efforts to fight corruption and financial misuse, including its cooperation experience with GRECO, the Council of Europe Group of States Against Corruption.

On the other hand, the African Union should do something similar with its member states: force them to investigate the often corrupt relations of their financial institutions with external banks and financiers, and implement a stronger joint mechanism for the respective procedures which member states have to follow. The overall mechanism should also include the exchange of best practices. In so doing, the AU could follow and strengthen the recommendations already at hand, as its Specialized Technical Committee (STC) on Finance, Monetary Affairs, Economic Planning and Integration in 2018 in Addis Ababa, Ethiopia, „called upon the [AU] Commission to lead in the tax transparency and information exchange agenda for Africa, set up an experience-sharing platform and foster stronger collaboration among countries and regions in order to tackle the root causes of illegal financial flows (IFFs) in Africa”. As the African Union Commission rightly wrote already in its 2019 report “Domestic Resource Mobilization: Fighting Against Corruption and Illicit Financial Flows”, this fight will be instrumental – and a prerequisite – to achieve the AU’s Agenda 2063 and the U.N. Agenda 2030 for the continent:

“Africa has experienced strong economic growth with an average of around 5% since 2000. However, this growth has not substantially reduced poverty and inequality nor led to job creation. In view of the current limited budgetary resources, the scarcity and volatility of development aid, African countries should explore more options for mobilizing domestic resources to finance productive activities, generate inclusive growth and mitigate the increasing social demands. A High Level Panel on Illicit Financial Flows (IFFs) was established to improve knowledge of the nature, scale and impacts of illicit financial flows and curb them. The recommendations of the Panel, which were adopted by the AU Heads of State, provide a basis to fight IFFs and helped build strong political momentum across the continent.“

In the ideal case, these steps should be implemented in close cooperation with the European Union, which – by mutual interest – should help to further develop appropriate instruments, tools and mechanisms carefully differentiated and adapted to the very different and often poorly comparable or contradicting contexts Africa today presents in order to get the work done.

Yet even if these steps are implemented, with regard to the specifics of the Guinean case three cardinal questions remain: Is Guinea’s military junta in the process of renewing the nation’s international and global financial intertwinement for the better of the people? Is it a force of reforming structural North-South exploitation, or rather interested to take advantage of it for its own survival? And are its actions destined to endure, i.e. to generate some sustainable long-term effects perhaps beyond its own, restrained lifetime which according to its own promises is limited until the next elections?

The military junta has promised, from its very start, that a fast and smooth transition to democracy would take place by relying heavily on former personnel of universally recognized global bodies and by emancipating politically progressive and reconciliatory pro-democracy forces. The appointments for the transitional parliament, the National Council of Transition (Conseil National de Transition, CNT), indeed seem to at least partially point in this direction. There are nevertheless also voices from the pro-democracy factions on the ground indicating that some are unhappy with the pace of development towards general elections and with the state financing of new political parties. The African Union is also pressing the junta to speed up the transition process. Currently it remains unclear when exactly the promised elections may take place, and how the question of “Guinea’s Gold” will evolve until then, and beyond.



Roland Benedikter, DDDr., is Co-Head of the Center for Advanced Studies of Eurac Research Bolzano-Bozen, Italy, Research Professor of Multidisciplinary Political Analysis in residence at the Willy Brandt Centre of Wroclaw University, Poland, Member of the “Future Circle” of the German Federal Ministry of Education and Research (BMBF) Berlin for the German Federal Government and Full Member of the European Academy of Sciences and Arts. Contact: Homepage:

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