Guinea Bissau President, Mario Vaz, has dismissed the government following disagreements with Prime Minister, Domingos Pereira, local media reported on Thursday.
The rift had widened since 2014 over questions, including the use of aid money and how to deal with rebels in the neighbouring Senegalese region of Casamance.
Vaz has reportedly accused Pereira of creating a self-serving clique within the ruling African Party for the Independence of Guinea and Cape Verde (PAIGC), which to which both of them belong.
The former Portuguese colony in West Africa has undergone nine coups or coup attempts since 1980.
None of its democratically elected governments have served a full term since a multi-party system was introduced in 1994.
Donors pledged more than 1.1 billion dollars in aid after Guinea Bissau returned to civilian rule in 2014 following a 2012 coup.
Portugal warned recently that the growing instability could endanger aid.
European Union warned that political instability in Guinea Bissau could undermine reconstruction efforts.
“The most recent political developments in Guinea Bissau may put at risk the positive dynamics of reconstruction and democratic consolidation of the country observed so far,” said foreign policy chief, Federica Mogherini in a statement.
Guinea Bissau is considered a failed state by international analysts and is one of the biggest global transit points for cocaine.
