Abstact

This paper examines the short and long-term determinants of economic growth in Guinea-Bissau, using an ARDL approach (Autoregressive Distributed Lag, Pesaran et al, 2001). The results reveal that the accumulation of physical capital, the labor force and education are the main determinants of economic growth in Guinea-Bissau while trade opening has a mixed effect on economic activity as well as short than long term. These determinants have a higher impact on economic activity in a context of controlled inflation and budget deficit. In view of the specificities of the country and the significant comparative advantages in certain key sectors, major reforms should be undertaken, focusing in particular on four areas, namely, socio-political stability, fiscal consolidation, financial inclusion, and strengthening the production environment.