Press Release No. 10/257

Press Release: IMF Concludes Staff Visit to Guinea-Bissau

June 25, 2010

An International Monetary Fund (IMF) mission led by Mr. Paulo Drummond visited Guinea-Bissau from June 17–25, 2010. The mission met with President Malam Bacaí Sanhá, Prime Minister Carlos Gomes Junior, Minister of Finance José Mario Vaz, and Minister of Economy Helena Embaló. The mission also held discussions with representatives of the private sector, civil society, and the donor community.

At the conclusion of the visit on June 25, 2010, the mission issued the following statement:

“In May, the IMF Executive Board approved a three-year Extended Credit Facility (ECF)¹ arrangement in an amount equivalent to SDR 22.365 million (US$33.3 million) to support Guinea-Bissau’s medium-term economic program, and also approved interim assistance under the Heavily Indebted Poor Countries (HIPC) Initiative of SDR 1.016 million (US$1.5 million).

“Economic performance through May has been satisfactory, and the authorities have made good progress on structural benchmarks established for mid-2010. We are encouraged by the authorities’ commitment to implementing their reform program that aims for stronger economic growth and poverty alleviation.

“Continued satisfactory performance under the program will help pave the way for Guinea-Bissau to reach the HIPC Initiative completion point in late 2010. Debt relief under the HIPC Initiative and Multilateral Debt Relief Initiative (MDRI), with additional debt relief from bilateral creditors, will alleviate significantly the debt burden and help Guinea-Bissau advance toward external and fiscal sustainability.

“As the authorities in Guinea-Bissau continue to implement their economic program, we plan to return to Bissau later in the year to evaluate performance under the ECF through the first half of the year.”

¹ The ECF is a concessional IMF facility for low-income countries. ECF-supported programs are based on country-owned poverty reduction strategies adopted in a participatory process involving civil society and development partners and articulated in the country's Poverty Reduction Strategy Paper. ECF loans carry a zero interest rate until end-2011 and an annual interest rate of no more than 0.5 percent thereafter. The loans are repayable over 10 years with a 5½ -year grace period on principal payments.