## 1. Guinea’s COVID-19 Response Plan: Addressing the Health Crisis, Protecting the Most Vulnerable and Supporting the Private Sector

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---

### Context and background
- First COVID-19 case reported in mid-March 2020; about 4,300 cases have been confirmed.
- Limited hospital capacity fully utilized: 530 bed units in the country.
- National Emergency Preparedness and Response Plan prepared with WHO and development partners; measures include: strengthening surveillance, equipping three laboratories for diagnosis, setting up a quarantine center in Conakry, closing land and aerial borders, restricting movements, suspending public events, and establishing a night curfew in Conakry.
- Social context: poverty incidence about 60 percent of the population; large-scale protests and social unrest around March 22, 2020 elections; presidential elections expected by end-2020.
- Fourth review under the 2017-20 ECF arrangement completed April 1, 2020; all but one end-December 2019 quantitative performance criteria for the fifth ECF review were met. Preliminary data indicate most end-March indicative targets missed due to fiscal deterioration from the pandemic.

### Impact of the pandemic — key economic and financial findings
- Mining production contracted by about 5 percent (y-o-y) in Q1 2020.
- Bauxite exports contracted by 6.6 percent (y-o-y) at end-March; industrial gold exports contracted by 20 percent (y-o-y) at end-March.
- Headline inflation increased to 9.5 percent (y-o-y) at end-March 2020.
- Core inflation increased to 5 percent (y-o-y), driven by rising health care costs.
- Gross international reserves declined to US$1.2 billion (3.9 months of imports coverage) at end-March.
- Real effective exchange rate appreciated by 5.7 percent (y-o-y) at end-March 2020.
- Basic fiscal balance recorded a surplus of 0.1 percent of GDP at end-March; mining tax revenues declined by 26 percent (y-o-y).
- Net borrowing from the central bank picked up to 0.7 percent of GDP.
- Net domestic arrears were reduced by 0.5 percent of GDP at end-March.
- Banking sector indicators:
  - Private sector credit growth sustained at 23 percent (average, y-o-y) at end-March 2020.
  - Banks’ net lending to the government increased by 19 percent (average, y-o-y).
  - Excess reserves increased slightly at end-March after declining at end-2019.
  - Non-performing loans declined to 10.4 percent at end-2019 (from 12.5 percent at end-June 2019).

### Short-term outlook and external position
- Real growth revised down to 1.4 percent in 2020, against 5.8 percent previously anticipated.
- Mining activity expected to contract in 2020; local containment measures to negatively impact tourism, transport, and retail trade.
- Inflation expected at 9.1 percent in 2020.
- Real growth projected to rebound to 6.6 percent in 2021, against 6.2 percent previously expected.
- Real output expected to remain significantly below pre-pandemic trend through 2025.
- External position deterioration in 2020:
  - Mining exports projected to decline and imports to increase due to scaling-up public health spending.
  - International oil prices expected to be about 36 percent lower in 2020 than in the program scenario at the fourth ECF review.
  - Foreign direct investment in the mining sector and project loan financing expected to be delayed.
  - Staff estimates a balance of payments financing need of US$349 million (2.4 percent of GDP) has emerged.

- Text Table 1 (selected comparative figures and percent changes as presented):
  - Current account balance: -1,890 (2019), -3,268 (4th ECF Rev.), -2,976 (RCF Req.), Change -8.9 (Percent)
  - Exports of goods: 4,019 (2019), 4,709 (4th ECF Rev.), 3,876 (RCF Req.), Change -17.7 (Percent)
  - Mining products: 3,556 (2019), 4,130 (4th ECF Rev.), 3,431 (RCF Req.), Change -16.9 (Percent)
  - Imports of goods: -4,631 (2019), -6,176 (4th ECF Rev.), -5,215 (RCF Req.), Change -15.5 (Percent)
  - Capital and financial accounts: 2,194 (2019), 3,206 (4th ECF Rev.), 2,529 (RCF Req.), Change -21.1 (Percent)
  - FDI: 1,786 (2019), 1,514 (4th ECF Rev.), 1,184 (RCF Req.), Change -21.7 (Percent)
  - Financing gap: 0 (2019), 0 (4th ECF Rev.), -349 (RCF Req.)

### Policy response — fiscal measures and COVID-19 response plan
- Authorities adopted a comprehensive COVID-19 response plan focused on:
  - Scaling-up health spending to address the health emergency.
  - Protecting the most vulnerable.
  - Supporting the private sector, notably SMEs.
- IMF staff supports the authorities’ plan as well-tailored to pressing needs.
- Additional budgetary cost of the COVID-19 response plan estimated at 1.5 percent of GDP in 2020:
  - Health spending scaled-up by 0.8 percent of GDP.
  - Targeted measures for vulnerable groups estimated at 0.42 percent of GDP.
  - Support to private sector measures estimated at 0.27 percent of GDP.
  - Total: 1.50 percent of GDP (2020).

- COVID-19 Response plan breakdown (percent of GDP):
  - COVID-19 Health spending: 0.81
    - Health Infrastructure: 0.26
    - Operational Costs: 0.22
    - Medical Equipment: 0.14
    - Medical Treatment & Diagnostics: 0.09
    - Surveillance: 0.08
  - Protecting the Most Vulnerable: 0.42
    - Cash Transfers and High-intensity Works: 0.21
    - Payment of Electricity Bills for Social Tariff Consumers: 0.09
    - Food Stock Reserve: 0.08
  - Supporting the Private Sector: 0.27
    - Tax Relief to firms in tourism and hotels and SMEs: 0.19
  - Total: 1.50

- COVID-19 Response plan operational amounts (GNF Billions):
  - Health Infrastructure: 365
  - Operational Costs: 313
  - Medical Equipment: 197
  - Medical Treatment & Diagnostics: 125
  - Surveillance: 116
  - Communication, Coordination & TA: 10

- Social and private sector measures (GNF Billions and features):
  - Public guarantee fund for SMEs’ loans: GNF 50 billion.
  - Fund to support firms in the informal sector (through loans): GNF 20 billion.
  - Targeted cash transfer program for poor households (supported by the World Bank); expansion of the social register by the National Agency for Economic and Social Inclusion.
  - For April-June: payment for electricity and water bills waived for social tariff consumers and postponed for other non-commercial consumers; public transport provided for free.
  - State planning to build up an emergency stock of rice; tax relief measures for suppliers to stabilize basic food prices (rice, oil, sugar).
  - BCRG measure: allow firms in tourism and hotel sectors to request banks to reschedule loan repayments.
  - Acceleration of repayment of domestic arrears.

### Fiscal stance, financing gap, and external support
- Staff supports a temporary widening of the fiscal deficit to address the health crisis and mitigate economic impact.
- COVID-19 shock and policy response expected to lead to a basic fiscal deficit of 2 percent of GDP in 2020, against a programmed surplus of 0.6 percent of GDP.
- Tax revenues projected to be 1.9 percent of GDP lower-than-anticipated in 2020, driven by severe hits to mining revenues and slowdown in domestic activity.
- Anticipated emergency budget support in 2020:
  - World Bank: US$80 million (against US$40 million expected at the fourth ECF review).
  - African Development Bank: US$20 million.
  - European Union: EUR 18 million (included in the RCF baseline and previously in the program scenario of the fourth review under the ECF arrangement).
- G-20 / Paris Club DSSI operation expected to postpone about US$25 million due in amortization in 2020, rescheduled in NPV-neutral terms over 2022-24; included in the baseline scenario.
- RCF financing would contribute to closing the fiscal financing gap by 1 percent of GDP.
- Debt relief under the IMF CCRT Initiative will reduce the fiscal financing gap by an additional 0.1 percent of GDP.
- Authorities expect to mobilize additional financing to fill the residual financing gap of 0.7 percent of GDP.
- Fiscal financing gap of 2.4 percent of GDP is expected in 2020.

### COVID-19 spending, targeting, and governance arrangements
- Planned COVID-19 related spending categories (numbers as presented, presumably GNF billions):
  - SME's 253
  - Hotel & Tourism Industry 37
  - Other 72
  - Informal Sector 20
  - Cash Transfer Program 292
  - Utility Fee Waivers 150
  - Food Stock Reserve 117
  - Other 18
- Authorities preparing a Supplementary Budget Law to be submitted to the National Assembly in July.
- Oversight and transparency measures:
  - Creation of a budgetary fund to account for all earmarked external and domestic resources to address the pandemic.
  - Establishment of a dedicated account as part of the Treasury Single Account at the central bank to receive and disburse COVID-19 funds.
  - Monthly reports to be published on execution of COVID-19 related spending.
  - Timely ex-post control of high-risk expenditures by the inspectorate-general for finance, with involvement of civil society.
  - Publication online of all awarded procurement contracts for COVID-19 related projects, including names of entities and their beneficial owners.
  - A full audit of COVID-19 spending (including ex-post validation of goods and services procured) to be conducted by the Court of Accounts and published online by June 2021.
  - A third-party audit of the use of COVID-19 spending to be conducted and published online by June 2021.

### Fiscal and debt sustainability measures and commitments
- Authorities committed to medium-term fiscal and debt sustainability:
  - Orient fiscal policy to preserve debt sustainability and target a lower-than-previously-programmed primary fiscal deficit path as crisis impact subsides.
  - Rephase non-priority externally-financed public investments in 2020 to create fiscal space for COVID-19 priority spending.
  - Decision not to promulgate a EUR 230 million (1.8 percent of GDP) loan agreement with a private partnership (signed October 2019 and approved by the National Assembly in early June 2020).
  - Scale-up public investment at a more moderate pace and undertake only a limited share of planned, but unsigned external project financing in 2021-22.
- Under the baseline scenario:
  - Guinea’s debt is sustainable, with a moderate risk of external and public debt distress and limited space to absorb shocks.
  - Debt sustainability analysis reflects debt service relief under the IMF CCRT and the Debt Service Suspension Initiative.
- Authorities committed to adhere to DSSI requirements, including maintaining non-concessional borrowing within the envelope allowed under the ECF program.
- Guinea has fully utilized the US$650 million envelope of non-concessional borrowing allowed under the ECF program to finance priority infrastructure projects.

### Monetary policy and financial sector measures
- Staff supports using part of external buffers while maintaining international reserves at 3.8 months of import coverage (staff adequacy estimate).
- Authorities will continue to limit interventions in the foreign exchange market and will allow greater exchange rate flexibility.
- Commitment to implement the recently-adopted rule-based intervention strategy to reduce discretion by end-October 2020.
- Central bank policy adjustments:
  - BCRG lowered the policy rate from 12.5 to 11 percent.
  - Reserve requirement rate lowered from 16 to 15 percent.
- Staff supports monetary easing to support banks’ liquidity and provision of credit while limiting central bank lending to the government within existing statutory limits (statutory limit: no more than 5 percent of the average fiscal revenues of the last three years per the Central Bank Law and 2018 Memorandum of Understanding).
- BCRG to manage liquidity more actively using available instruments and calibrating operations on the basis of the recently-developed liquidity forecasting framework.

- Financial sector measures and safeguards:
  - Support for implementation of updated accounting framework and reporting system for banks to monitor asset quality.
  - Support for establishment of a public guarantee fund for SMEs, with caution on fiscal risks from contingent liabilities.
  - Support for loan repayment rescheduling for firms in most affected sectors, emphasizing prudent renegotiation of loan terms.
  - Banks should be allowed to restructure loans while maintaining appropriate loan classification and provision.
  - Authorities committed to an update of the safeguards assessment before Board approval of any subsequent arrangement to which the safeguards policy applies; a safeguards assessment update was completed in 2018.
  - Authorities authorized Fund staff to hold discussions with the central bank’s external auditors and to have access to the central bank’s external audit reports.

### RCF request, financing mix, and capacity to repay
- Authorities request a disbursement under the RCF equivalent to 50 percent of quota (SDR 107.1 million or about US$146 million) to be made available as budget support.
- RCF disbursement rationale and impacts:
  - Will provide timely support to address urgent balance of payments and fiscal financing needs from the pandemic.
  - Will fill 42 percent of the balance of payments need; debt relief under the CCRT will contribute to fill further 7 percent.
  - Proposed access calibrated to projected balance of payments need and prospective donor support; maintains buffers for additional IMF support if downside risks materialize.
  - If downside risks materialize, further support could be provided under an additional RCF or an augmentation of access under the ECF arrangement.
- Capacity to repay:
  - Total outstanding credit from the Fund, once RCF disbursement completed, will be SDR 375.9 million (175.5 percent of quota and 3.6 percent of GDP).
  - Staff considers Guinea has an adequate capacity to repay the Fund given favorable medium-term growth outlook, authorities’ commitment to sound macroeconomic policies, sustainable debt, and good track record in meeting Fund obligations.
  - CCRT relief specifics: US$22.4 million approved to cover repayments due between April 14 and October 13, 2020; additional US$73.5 million expected to become available to cover repayments due through April 13, 2022.
  - Authorities committed to signing a Memorandum of Understanding between the Ministry of Economy and Finance and the BCRG on roles and responsibilities for servicing financial obligations to the Fund.

### Staff appraisal, recommendations, and priorities
- Staff welcomes authorities’ plan to scale-up health spending, protect the most vulnerable, and support the private sector.
- Staff supports a temporary widening of the fiscal deficit to address the health crisis and mitigate its severe economic impact.
- Staff recommends greater exchange rate flexibility to absorb the shock and preserve adequate reserves.
- Reducing reserve requirements recommended to preserve banking sector liquidity; limiting central bank budget financing is key to containing inflation.
- Staff supports the RCF disbursement of SDR 107.1 million (50 percent of quota) as budget support to address urgent balance of payments need and catalyze donors’ financial support.

### Gross financing requirements and available financing (selected numeric highlights as presented)
- Gross financing headline series (selected): 889; 2,636; 2,292; 3,400; 3,110; 2,744; 2,541; 2,257; 2,329; 2,397
- External current account deficit (selected): 744; 2,332; 1,914; 3,332; 3,070; 2,437; 2,229; 2,000; 1,999; 2,137
- Debt amortization (selected): 46; 67; 70; 84; 91; 122; 134; 130; 133; 142
- Gross reserves accumulation (selected): 102; 259; 327; -31; -65; 162; 152; 106; 172; 108
- IMF Repayments (selected): 0; 0; 4; 39; 39; 47; 52; 47; 52; 38

- Available financing headline series (selected): 849; 2,510; 2,177; 3,247; 2,608; 2,696; 2,519; 2,257; 2,329; 2,397
- Foreign direct investment, net (selected): 1,386; 1,670; 1,895; 1,603; 1,214; 1,608; 1,793; 1,555; 1,592; 1,591
- Identified disbursements (selected): 307; 399; 186; 1,644; 1,393; 1,088; 734; 710; 746; 806
- Grants (selected): 175; 150; 65; 119; 147; 159; 148; 157; 161; 183
- Loans (selected): 132; 250; 122; 1,525; 1,246; 929; 586; 554; 584; 624

- Exceptional financing – fourth ECF review (selected):
  - ECF disbursement (selected): 24 49 24 71 71 00000
  - World Bank budget support (selected): ... 60 91 40 40
  - EU budget support (selected): 16 18 0 42 42

- Financing gap and exceptional support (selected):
  - Financing gap (selected): -349; -48; -23; ... ... ...
  - CCRT grants (selected): 25; 48; 23; ... ...
  - G-20 Debt Service Suspension Initiative: 25
  - RCF: 146
  - World Bank: 40
  - African Development Bank: 20
  - Residual financing gap (selected): -93 00000

### Debt sustainability assessment and scenarios (selected)
- Composite Indicator score: 2.51; debt-carrying capacity classified as weak.
- Risk of external debt distress: Moderate.
- Overall risk of public debt distress: Moderate, with judgement on a brief and marginal breach for PV-of-total-public-debt-to-GDP over 2020–21.
- Mechanical risk rating under the external DSA: Moderate.
- Mechanical risk rating under the public DSA: High.
- Baseline macro projections (selected):
  - Real GDP growth: 2018: 6.2; 2019: 5.6; 2020 (projected): 1.4; 2021 (projected): 6.6; 2022: 7.0; Medium term: 5.0 (2025–2030 generally 5.0).
  - Nominal GDP (US$ million, selected): 2018: 12,181; 2019: 13,797; 2020: 14,951; 2025: 22,994; 2030: 34,285.
  - Exports of goods and services (US$ million, memorandum): 3,953 4,754 5,143 5,684 6,161 6,536 6,997 7,569 8,128.
  - Gross International Reserves (US$ million, memorandum): 1,206 1,369 1,520 1,627 1,799 1,907 2,033 2,151 2,276.
- Stress tests and tailored scenarios: debt vulnerabilities rise under adverse shocks; under most extreme stress tests solvency and liquidity indicators breach thresholds for prolonged periods.
- Public DSA notes a brief and marginal breach in PV of total-public-debt-to-GDP over 2020–21 driven by higher external borrowing in 2020 and the 2018 central bank recapitalization.

### Key quantitative policy and program commitments (selected exact figures)
- Fiscal financing gap (2020): 2.4 percent of GDP.
- RCF contribution to closing fiscal gap: 1.0 percent of GDP.
- CCRT Debt Relief contribution: 0.1 percent of GDP.
- Residual financing gap to be mobilized by donors: 0.7 percent of GDP.
- RCF requested access: SDR 107.1 million (50 percent of quota ≈ US$146 million).
- Total outstanding IMF credit after RCF disbursement: SDR 375.9 million (175.5 percent of quota and 3.6 percent of GDP).
- International reserves adequacy target used by staff: 3.8 months of import coverage.
- BCRG policy rate change: from 12.5 to 11 percent.
- Reserve requirement rate change: from 16 to 15 percent.
- Decision not to promulgate a EUR 230 million (1.8 percent of GDP) loan agreement with a private partnership.
- Guinea fully utilized US$650 million envelope of non-concessional borrowing under the ECF program.
- CCRT relief specifics: US$22.4 million approved to cover repayments due between April 14 and October 13, 2020; additional US$73.5 million expected to become available through April 13, 2022.

*Source: IMF staff report excerpt — “Guinea’s COVID-19 Response Plan: Addressing the Health Crisis, Protecting the Most Vulnerable and Supporting the Private Sector.”*

### 1. Guinea’s COVID-19 Response Plan: Addressing the Health Crisis, Protecting the Most

### Guinea’s COVID-19 Response Plan: Addressing the Health Crisis, Protecting the Most Vulnerable and Supporting the Private Sector

### Context and background
- First COVID-19 case reported in mid-March 2020; about 4,300 cases have been confirmed.
- Limited hospital capacity fully utilized: 530 bed units in the country.
- Authorities prepared a National Emergency Preparedness and Response Plan with WHO and development partners; measures taken include: strengthening surveillance, equipping three laboratories for diagnosis, setting up a quarantine center in Conakry, closing land and aerial borders, restricting movements, suspending public events, and establishing a night curfew in Conakry.
- Social context: poverty incidence about 60 percent of the population; large-scale protests and social unrest around March 22, 2020 elections; presidential elections expected by end-2020.
- Fourth review under the 2017-20 ECF arrangement completed April 1, 2020; all but one end-December 2019 quantitative performance criteria for the fifth ECF review were met. Preliminary data indicate most end-March indicative targets missed due to fiscal deterioration from the pandemic.

### Impact of the pandemic — key economic and financial findings
- Mining production contracted by about 5 percent (y-o-y) in Q1 2020.
- Bauxite exports contracted by 6.6 percent (y-o-y) at end-March; industrial gold exports contracted by 20 percent (y-o-y) at end-March.
- Headline inflation increased to 9.5 percent (y-o-y) at end-March 2020.
- Core inflation increased to 5 percent (y-o-y), driven by rising health care costs.
- Gross international reserves declined to US$1.2 billion (3.9 months of imports coverage) at end-March.
- Real effective exchange rate appreciated by 5.7 percent (y-o-y) at end-March 2020.
- Basic fiscal balance recorded a surplus of 0.1 percent of GDP at end-March; mining tax revenues declined by 26 percent (y-o-y).
- Net borrowing from the central bank picked up to 0.7 percent of GDP.
- Net domestic arrears were reduced by 0.5 percent of GDP at end-March.
- Banking sector indicators:
  - Private sector credit growth sustained at 23 percent (average, y-o-y) at end-March 2020.
  - Banks’ net lending to the government increased by 19 percent (average, y-o-y).
  - Excess reserves increased slightly at end-March after declining at end-2019.
  - Non-performing loans declined to 10.4 percent at end-2019 (from 12.5 percent at end-June 2019).

### Short-term outlook and external position
- Real growth revised down to 1.4 percent in 2020, against 5.8 percent previously anticipated.
- Mining activity expected to contract in 2020; local containment measures to negatively impact tourism, transport, and retail trade.
- Inflation expected at 9.1 percent in 2020.
- Real growth projected to rebound to 6.6 percent in 2021, against 6.2 percent previously expected.
- Real output expected to remain significantly below pre-pandemic trend through 2025.
- External position deterioration in 2020:
  - Mining exports projected to decline and imports to increase due to scaling-up public health spending.
  - International oil prices expected to be about 36 percent lower in 2020 than in the program scenario at the fourth ECF review.
  - Foreign direct investment in the mining sector and project loan financing expected to be delayed.
  - Staff estimates a balance of payments financing need of US$349 million (2.4 percent of GDP) has emerged.

- Text Table 1 (summary figures presented in source):
  - Current account balance: -1,890 (2019), -3,268 (4th ECF Rev.), -2,976 (RCF Req.), Change -8.9 (Percent)
  - Exports of goods: 4,019 (2019), 4,709 (4th ECF Rev.), 3,876 (RCF Req.), Change -17.7 (Percent)
  - Mining products: 3,556 (2019), 4,130 (4th ECF Rev.), 3,431 (RCF Req.), Change -16.9 (Percent)
  - Imports of goods: -4,631 (2019), -6,176 (4th ECF Rev.), -5,215 (RCF Req.), Change -15.5 (Percent)
  - Capital and financial accounts: 2,194 (2019), 3,206 (4th ECF Rev.), 2,529 (RCF Req.), Change -21.1 (Percent)
  - FDI: 1,786 (2019), 1,514 (4th ECF Rev.), 1,184 (RCF Req.), Change -21.7 (Percent)
  - Financing gap: 0 (2019), 0 (4th ECF Rev.), -349 (RCF Req.)

### Policy issues and discussions — fiscal response
- Authorities adopted a comprehensive COVID-19 response plan focused on:
  - Scaling-up health spending to address the health emergency.
  - Protecting the most vulnerable.
  - Supporting the private sector, notably SMEs.
- IMF staff supports the authorities’ plan as well-tailored to pressing needs.
- Additional budgetary cost of the COVID-19 response plan estimated at 1.5 percent of GDP in 2020.
  - Health spending scaled-up by 0.8 percent of GDP.
  - Targeted measures for vulnerable groups estimated at 0.42 percent of GDP.
  - Support to private sector measures estimated at 0.27 percent of GDP.
  - Total: 1.50 percent of GDP (2020).

- COVID-19 Response plan breakdown (percent of GDP):
  - COVID-19 Health spending: 0.81
    - Health Infrastructure: 0.26
    - Operational Costs: 0.22
    - Medical Equipment: 0.14
    - Medical Treatment & Diagnostics: 0.09
    - Surveillance: 0.08
  - Protecting the Most Vulnerable: 0.42
    - Cash Transfers and High-intensity Works: 0.21
    - Payment of Electricity Bills for Social Tariff Consumers: 0.09
    - Food Stock Reserve: 0.08
  - Supporting the Private Sector: 0.27
    - Tax Relief to firms in tourism and hotels and SMEs: 0.19
  - Total: 1.50

- COVID-19 Response plan operational amounts (GNF Billions) reported in the Box:
  - Health Infrastructure: 365
  - Operational Costs: 313
  - Medical Equipment: 197
  - Medical Treatment & Diagnostics: 125
  - Surveillance: 116
  - Communication, Coordination & TA: 10
  - (COVID-19 related spending shown across Act./Act./Act./Budget Law/Proj. years in source charts)

- Social and private sector measures (GNF Billions) described in Box 1:
  - Public guarantee fund for SMEs’ loans: GNF 50 billion.
  - Fund to support firms in the informal sector (through loans): GNF 20 billion.
  - Targeted cash transfer program for poor households (supported by the World Bank) to be implemented in rural and urban areas; expansion of the social register by the National Agency for Economic and Social Inclusion.
  - For April-June: payment for electricity and water bills waived for social tariff consumers and postponed for other non-commercial consumers; public transport provided for free.
  - State planning to build up an emergency stock of rice; tax relief measures for suppliers to stabilize basic food prices (rice, oil, sugar).
  - BCRG measure: allow firms in tourism and hotel sectors to request banks to reschedule loan repayments.
  - Acceleration of repayment of domestic arrears.

- Fiscal stance and projections:
  - Staff supports a temporary widening of the fiscal deficit to address the health crisis and mitigate economic impact.
  - COVID-19 shock and policy response expected to lead to a basic fiscal deficit of 2 percent of GDP in 2020, against a programmed surplus of 0.6 percent of GDP.
  - Tax revenues projected to be 1.9 percent of GDP lower-than-anticipated in 2020, driven by severe hits to mining revenues and slowdown in domestic activity.
  - Authorities plan to contain non-priority spending to create space for health and mitigation measures — a reduction of about 0.1 (text truncated in source).

*Source: IMF staff report excerpt — “Guinea’s COVID-19 Response Plan: Addressing the Health Crisis, Protecting the Most Vulnerable and Supporting the Private Sector.”*

### 0.7 percent of GDP in spending in goods and services and domestically-financed public investment.

### 1ginea2020003 - 0.7 percent of GDP in spending in goods and services and domestically-financed public investment

### Fiscal financing gap and external support
- A fiscal financing gap of 2.4 percent of GDP is expected in 2020.
- Anticipated emergency budget support in 2020:
  - World Bank: US$80 million (against US$40 million expected at the fourth ECF review).
  - African Development Bank: US$20 million.
  - European Union: EUR 18 million (included in the RCF baseline and previously in the program scenario of the fourth review under the ECF arrangement).
- G-20 / Paris Club DSSI operation expected to postpone about US$25 million due in amortization in 2020, rescheduled in NPV-neutral terms over 2022-24; included in the baseline scenario.
- RCF financing would contribute to closing the fiscal financing gap by 1 percent of GDP.
- Debt relief under the IMF CCRT Initiative will reduce the fiscal financing gap by an additional 0.1 percent of GDP.
- Authorities expect to mobilize additional financing to fill the residual financing gap of 0.7 percent of GDP.

### COVID-19 spending, targeting, and governance
- Planned COVID-19 related spending categories and (numbers as presented):
  - SME's 253
  - Hotel & Tourism Industry 37
  - Other 72
  - Informal Sector 20
  - Cash Transfer Program 292
  - Utility Fee Waivers 150
  - Food Stock Reserve 117
  - Other 18
- Authorities preparing a Supplementary Budget Law to be submitted to the National Assembly in July.
- To ensure traceability and monitoring of COVID-19 resources:
  - Creation of a budgetary fund to account for all earmarked external and domestic resources to address the pandemic.
  - Establishment of a dedicated account as part of the Treasury Single Account at the central bank to receive and disburse COVID-19 funds.
  - Monthly reports to be published on execution of COVID-19 related spending.
  - Timely ex-post control of high-risk expenditures by the inspectorate-general for finance, with involvement of civil society.
  - Publication online, on the websites of the Ministry of Economy and Finance and the Ministry of Budget, of all awarded procurement contracts for COVID-19 related projects, including the names of the entities and their beneficial owners.
  - A full audit of COVID-19 spending (including ex-post validation of goods and services procured) to be conducted by the Court of Accounts and published online by June 2021.
  - A third-party audit of the use of COVID-19 spending will be conducted and published online by June 2021.

### Fiscal and debt sustainability measures
- Authorities committed to medium-term fiscal and debt sustainability:
  - Orient fiscal policy to preserve debt sustainability and target a lower-than-previously-programmed primary fiscal deficit path as crisis impact subsides.
  - Rephase non-priority externally-financed public investments in 2020 to create fiscal space for COVID-19 priority spending.
  - Decision not to promulgate a EUR 230 million (1.8 percent of GDP) loan agreement with a private partnership for infrastructure development (signed October 2019 and approved by the National Assembly in early June 2020).
  - Scale-up public investment at a more moderate pace and undertake only a limited share of planned, but unsigned external project financing in 2021-22.
- Under the baseline scenario:
  - Guinea’s debt is sustainable, with a moderate risk of external and public debt distress and limited space to absorb shocks.
  - Assumes a gradual rebound in 2021 and lower-than-budgeted externally financed public investment in 2020 due to containment measures and rephasing.
  - Debt sustainability analysis reflects debt service relief under the IMF CCRT and the Debt Service Suspension Initiative.
- Authorities committed to adhere to DSSI requirements, including maintaining non-concessional borrowing within the envelope allowed under the ECF program.
- Guinea has fully utilized the US$650 million envelope of non-concessional borrowing allowed under the ECF program to finance priority infrastructure projects.

### Monetary and exchange rate policies
- Staff supports using part of external buffers to respond to the balance of payments shock while maintaining an adequate level of international reserves (3.8 months of import coverage, in line with the ARA-CC reserve adequacy estimate).
- Authorities will continue to limit interventions in the foreign exchange market and will allow greater exchange rate flexibility.
- Commitment to implement the recently-adopted rule-based intervention strategy to reduce discretion by end-October 2020.
- Central bank policy adjustments:
  - BCRG lowered the policy rate from 12.5 to 11 percent.
  - Reserve requirement rate lowered from 16 to 15 percent.
- Staff supports monetary easing to support banks’ liquidity and provision of credit while limiting central bank lending to the government within existing statutory limits to contain inflation (statutory limit: no more than 5 percent of the average fiscal revenues of the last three years per the Central Bank Law and 2018 Memorandum of Understanding).
- BCRG to manage liquidity more actively using available instruments and calibrating operations on the basis of the recently-developed liquidity forecasting framework.

### Financial sector measures and safeguards
- Financial sector risks and responses:
  - Banks’ lending to the private sector is mostly short-term and concentrated in sectors expected to be severely hit by containment measures, notably retail trade and transport.
  - Concerns that banks’ earnings and asset quality could be undermined by borrowers’ capacity to service loans.
  - Staff supports implementation of updated accounting framework and reporting system for banks to monitor asset quality.
  - Support for establishment of a public guarantee fund for SMEs, with caution on fiscal risks from contingent liabilities.
  - Support for loan repayment rescheduling for firms in most affected sectors, emphasizing prudent renegotiation of loan terms.
  - Banks should be allowed to restructure loans while maintaining appropriate loan classification and provision.
- Safeguards and central bank transparency:
  - Authorities committed to undertaking an update of the safeguards assessment before Board approval of any subsequent arrangement to which the safeguards policy applies.
  - A safeguards assessment update was completed in 2018.
  - Authorities authorized Fund staff to hold discussions with the central bank’s external auditors and to have access to the central bank’s external audit reports.

### RCF access, financing mix, and capacity to repay
- Authorities request a disbursement under the RCF equivalent to 50 percent of quota (SDR 107.1 million or about US$146 million) to be made available as budget support.
- RCF disbursement rationale and impacts:
  - Will provide timely support to address urgent balance of payments and fiscal financing needs from the pandemic.
  - Will fill 42 percent of the balance of payments need; debt relief under the CCRT will contribute to fill further 7 percent.
  - Proposed access calibrated to projected balance of payments need and prospective donor support; maintains buffers for additional IMF support if downside risks materialize.
  - If downside risks materialize, further support could be provided under an additional RCF or an augmentation of access under the ECF arrangement.
- Capacity to repay:
  - Total outstanding credit from the Fund, once RCF disbursement completed, will be SDR 375.9 million (175.5 percent of quota and 3.6 percent of GDP).
  - Staff considers Guinea has an adequate capacity to repay the Fund given favorable medium-term growth outlook, authorities’ commitment to sound macroeconomic policies, sustainable debt, and good track record in meeting Fund obligations.
  - Debt relief under the CCRT will reduce Guinea’s repayment obligations to the Fund (note: Guinea has been granted relief on its IMF debt service obligations under the CCRT, with US$22.4 million approved to cover repayments due between April 14 and October 13, 2020; additional US$73.5 million expected to become available to cover repayments due through April 13, 2022).
  - Authorities committed to signing a Memorandum of Understanding between the Ministry of Economy and Finance and the BCRG on roles and responsibilities for servicing financial obligations to the Fund.

### Staff appraisal and policy recommendations
- Staff welcomes authorities’ plan to scale-up health spending, protect the most vulnerable, and support the private sector.
- Staff supports a temporary widening of the fiscal deficit to address the health crisis and mitigate its severe economic impact.
- Staff recommends greater exchange rate flexibility to absorb the shock and preserve adequate reserves.
- Reducing reserve requirements recommended to preserve banking sector liquidity; limiting central bank budget financing is key to containing inflation.
- Staff supports the RCF disbursement of SDR 107.1 million (50 percent of quota) as budget support to address urgent balance of payments need and catalyze donors’ financial support.

### Key statistics and fiscal table excerpts (exact figures as presented)
- Fiscal financing gap (2020): 2.4 percent of GDP.
- RCF contribution to closing fiscal gap: 1.0 percent of GDP.
- CCRT Debt Relief contribution: 0.1 percent of GDP.
- Residual financing gap to be mobilized by donors: 0.7 percent of GDP.
- RCF requested access: SDR 107.1 million (50 percent of quota ≈ US$146 million).
- Total outstanding IMF credit after RCF disbursement: SDR 375.9 million (175.5 percent of quota and 3.6 percent of GDP).
- International reserves adequacy target used by staff: 3.8 months of import coverage.
- BCRG policy rate change: from 12.5 to 11 percent.
- Reserve requirement rate change: from 16 to 15 percent.
- Decision not to promulgate a EUR 230 million (1.8 percent of GDP) loan agreement with a private partnership.
- Guinea fully utilized US$650 million envelope of non-concessional borrowing under the ECF program.
- CCRT relief specifics: US$22.4 million approved to cover repayments due between April 14 and October 13, 2020; additional US$73.5 million expected to become available through April 13, 2022.

*Source: IMF country report content provided in the supplied document.*

### 1. Gross financing requirements

### 1ginea2020003 - 1. Gross financing requirements

### Gross financing requirements (selected line items and series)
- Headline series under "1. Gross financing requirements":
  - Row with values: 889; 2,636; 2,292; 3,400; 3,110; 2,744; 2,541; 2,257; 2,329; 2,397
- External current account deficit:
  - 744; 2,332; 1,914; 3,332; 3,070; 2,437; 2,229; 2,000; 1,999; 2,137
- Capital account balance 1:
  - -3; -23; -23; -24; -24; -25; -25; -26; -27; -28
- Debt amortization:
  - 46; 67; 70; 84; 91; 122; 134; 130; 133; 142
- Change in arrears, net:
  - 2; 0; 0; 1; 0    0
- Gross reserves accumulation:
  - 102; 259; 327; -31; -65; 162; 152; 106; 172; 108
- IMF Repayments 3:
  - 0; 0; 4; 39; 39; 47; 52; 47; 52; 38

### Available financing (selected line items and series)
- Headline series under "2. Available financing":
  - 849; 2,510; 2,177; 3,247; 2,608; 2,696; 2,519; 2,257; 2,329; 2,397
- Foreign direct investment, net 4:
  - 1,386; 1,670; 1,895; 1,603; 1,214; 1,608; 1,793; 1,555; 1,592; 1,591
- Identified disbursements:
  - 307; 399; 186; 1,644; 1,393; 1,088; 734; 710; 746; 806
- Grants:
  - 175; 150; 65; 119; 147; 159; 148; 157; 161; 183
  - Project grants: 143; 118; 41; 97; 96; 88; 81; 71; 76; 81
  - Program grants: 33; 32; 24; 22    51 71678686102
- Loans:
  - 132; 250; 122; 1,525; 1,246; 929; 586; 554; 584; 624
  - Project loans: 132; 250; 61; 1,525; 1,246; 889; 546; 534; 571; 610
  - Program loans: 0; 0; 61; 0; 0 4040201313
- Other flows:
  - -851 440   96 0    0 00000
- Debt relief 1,2:
  - 6; 0; 0; 0; 0; 0-8-8-8 0

### Exceptional financing – fourth ECF review (selected)
- Aggregate line shown: -40-127-115  -153-503    -48-23000
- ECF disbursement:
  - 24   49   24 71  71 00000
- World Bank budget support:
  - ... 60 91 40  40
- EU budget support:
  - 16   18 0 42  42

### Financing gap and exceptional support (selected)
- Financing gap:
  - -349; -48; -23; ... ... ...
- CCRT grants 5:
  - 25; 48; 23; ... ...
- G-20 Debt Service Suspension Initiative:
  - 25
- RCF:
  - 146
- World Bank:
  - 40
- African Development Bank:
  - 20
- Residual financing gap:
  - -93 00000

- Sources line as printed: Guinean authorities; and IMF staff estimates and projections.1
  - Footnotes (as printed):
    - 1 Excludes public transfers and  capital grant from IMF CCR Trust for debt cancellation.
    - 2 Projected clearance of outstanding debt arrears to non-Paris Club official creditors and commercial creditors through debt rel
    - 3 Excludes debt relief provided under the IMF's CCR Trust.
    - 4 Includes private short-term capital flows.
    - 5 The grant for debt service falling due in the 18 months from October 14, 2020 is subject to the availability of resources unde r the CCRT.
- Years shown at table bottom: 2017 2018 2019 2020

### Key quantitative items explicitly shown elsewhere in the unit
- Urgent balance of payments financing need: US$349 million (2.4 percent of GDP).
- Request for RCF support: SDR 107.1 million (50 percent of our quota).

### Indicators of Capacity to Repay the IMF, 2020–28 (Table 7, selected rows)
- Fund obligations based on existing credit (Principal, in millions of SDRs):
  - 1.8 34.6 38.3 34.4 37.6 27.4 22.7 17.2 13.8
- Fund obligations based on existing and prospective credit (Principal, in millions of SDRs):
  - 1.8 34.6 38.3 34.4 37.6 39.8 51.0 45.5 42.1
- Outstanding credit based on existing and prospective drawings (In millions of SDRs):
  - 375.9 341.3 303.1 268.8 231.2 191.4 140.4 94.9 52.8
- Outstanding credit based on existing and prospective drawings (In percent of exports of goods and services):
  - 13.0 9.8 8.1 6.5 5.2 4.0 2.8 1.7 0.9
- Outstanding credit based on existing and prospective drawings (In percent of debt service 3/):
  - 336.5 196.4 142.6 122.2 97.9 76.9 40.5 24.7 10.0
- Outstanding credit based on existing and prospective drawings (In percent of GDP):
  - 3.6 3.1 2.5 2.1 1.7 1.3 0.9 0.6 0.3
- Outstanding credit based on existing and prospective drawings (In percent of Gross International Reserves):
  - 42.6 34.1 27.3 22.7 17.7 13.8 9.5 6.1 3.2
- Outstanding credit based on existing and prospective drawings (In percent of quota):
  - 175.5 159.4 141.5 125.5 107.9 89.4 65.5 44.3 24.6
- Outstanding credit based on existing drawings (In millions of SDRs):
  - 236.2 234.4 199.8 161.6 127.2 89.7 62.3 39.6 22.4
- Net use of Fund credit (millions of SDRs):
  - 139.7 -34.6 -38.3 -34.4 -37.6 -39.8 -51.0 -45.5 -42.1
- Disbursements:
  - 141.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
- Repayments:
  - 1.8 34.6 38.3 34.4 37.6 39.8 51.0 45.5 42.1

Memorandum items (selected):
- Exports of goods and services (millions of US$): 3,953 4,754 5,143 5,684 6,161 6,536 6,997 7,569 8,128
- External Debt service (millions of US$): 153 238 291 302 325 342 477 528 723
- Nominal GDP (millions of US$): 14,244 15,296 16,637 17,804 19,030 20,343 21,765 23,299 24,941
- Gross International Reserves (millions of US$): 1,206 1,369 1,520 1,627 1,799 1,907 2,033 2,151 2,276
- Quota (millions of SDR): 214.2 repeated across years

Note on interest setting (footnote 2 as printed):
- On May 24, 2019 the IMF Executive Board approved an interest rate setting mechanism which effectively sets interest rates to zero on ECF and SCF through June 30, 2021 and possibly longer. The Board also decided to set a zero interest rate on ESF until end-June 2021 while the interest rate on RCF was set to zero in July 2015.

### Financial Soundness Indicators (Table 8, selected series, 2016Q1–2019Q4)
- Regulatory Capital to Risk-Weighted Assets (selected values): 17.3; 22.0; 18.2; 17.9; 18.6; 17.9; 18.4; 16.8; 16.1; 17.0; 17.2; 15.2; 18.3; 16.1; 14.7; 14.4
- Regulatory Tier 1 Capital to Risk-Weighted Assets (selected values): 16.6; 22.0; 18.3; 18.0; 19.1; 18.2; 18.8; 17.4; 16.4; 17.7; 17.9; 15.6; 18.5; 16.8; 15.2; 15.0
- Non-performing Loans Net of Provisions to Capital (selected values): 8.6; 17.7; 14.1; 14.7; 12.9; 14.4; 13.1; 11.3; 12.3; 13.5; 13.5; 24.6; 18.8; 19.6; 21.2; 25.3
- Non-performing Loans to Total Gross Loans (selected values): 6.7; 10.1; 9.4; 9.4; 10.0; 11.4; 11.1; 10.7; 11.1; 8.7; 11.9; 11.8; 12.6; 12.5; 12.5; 10.4
- Return on Assets (selected values across periods): 2.6 2.2 2.2 2.1 2.4 2.2 2.1 2.0 2.1 2.0 2.0 2.0 1.7 2.0 2.2 2.3
- Return on Equity (selected values): 23.6; 18.5; 18.3; 18.8; 19.4; 17.1; 16.1; 16.7; 18.5; 17.3; 16.3; 19.3; 16.5; 16.8; 19.6; 26.8
- Interest Margin to Gross Income (selected values): 33.4; 37.4; 37.8; 38.9; 40.7; 40.8; 41.3; 41.8; 37.8; 38.4; 39.4; 38.6; 43.8; 42.2; 42.1; 41.9
- Non-interest Expenses to Gross Income (selected values): 80.9; 80.0; 79.3; 79.2; 76.5; 76.4; 78.5; 78.1; 78.2; 79.0; 79.2; 78.0; 78.2; 74.6; 73.5; 72.6
- Liquid Assets to Total Assets (Liquid Asset Ratio, selected): 24.3; 26.6; 28.2; 28.9; 26.2; 30.4; 28.9; 26.8; 29.6; 30.6; 30.9; 26.2; 28.4; 26.3; 24.9; 23.2
- Liquid Assets to Short Term Liabilities (selected): 40.4; 43.4; 45.6; 45.8; 42.7; 48.6; 46.2; 43.1; 48.5; 50.1; 51.1; 42.6; 45.4; 42.6; 40.4; 36.3
- Net Open Position in Foreign Exchange to Capital (selected): -47.2; -26.1; 26.0; 25.1; 56.9; 68.3; 51.1; 79.2; 109.5; 115.3; 116.1; 105.7; 78.6; 108.2; 112.1; 204.3

### Letter of Intent — Key findings, projections, and policy commitments (Conakry, June 12, 2020)
- COVID-19 impact and containment:
  - "more than 4,300 cases have been confirmed."
  - Containment measures implemented: closing borders; restricting movements of people within the country; suspending large gatherings and public events.
  - Impacts: significant strain on health system; negative effects on tourism, transport, and retail trade; mining exports weakened due to slowdown in China.
- Macroeconomic outlook and financing needs:
  - Real GDP growth forecast: "sharply decelerate to 1.4 percent in 2020, against 5.8 percent previously anticipated."
  - External position deterioration and "urgent balance of payments financing need of US$349 million (2.4 percent of GDP)."
  - Fiscal outlook: "basic fiscal deficit of 2.0 percent of GDP (against an earlier programmed surplus), and a fiscal financing gap of 2.4 percent of GDP."
- IMF request and expected catalytic role:
  - Request for emergency financial support under RCF: "SDR 107.1 million (50 percent of our quota), in the form of budget support."
  - Expectation that IMF assistance will help catalyze donor support, including from the World Bank and African Development Bank.
- Policy responses and commitments:
  - Scale-up health spending and targeted measures to protect the most vulnerable and support the private sector.
  - Contain non-priority spending in goods and services and rephase domestically-financed public investment to create fiscal space.
  - Use external buffers while allowing greater exchange rate flexibility; Central Bank of Guinea (BCRG) will limit FX market interventions and implement a rule-based intervention strategy by end-October 2020.
  - BCRG lowered policy rate and reserve requirements to support liquidity; committed to limit central bank budget financing within statutory limits to contain inflation.
- Transparency, monitoring, and safeguards:
  - Create a budgetary fund to account for all earmarked external and domestic COVID-19 resources; establish a dedicated account within the Treasury Single Account at the central bank to receive and disburse COVID-19 funds.
  - Publish monthly reports on COVID-19 spending execution; inspectorate-general for finance to conduct timely ex-post control of high-risk expenditures with civil society involvement.
  - Publish online all awarded procurement contracts for COVID-19 related projects, including names of entities and beneficial owners.
  - Court of Accounts to conduct a full audit of COVID-19 spending, to be published online by June 2021.
- Debt treatment and borrowing stance:
  - Requested debt suspension under the DSSI and committed to adhere to its requirements; freed DSSI resources to be used for COVID-19 health spending and mitigating measures.
  - Committed to broaden public debt coverage with donors' technical assistance and not to contract new non-concessional loans beyond the envelope allowed under the current ECF program.
- Fiscal medium-term commitments:
  - Preserve medium-term fiscal and debt sustainability; target a lower-than-previously planned primary fiscal deficit path as crisis subsides.
  - Undertake significant external borrowing in 2020 for exceptional budgetary needs; rephase non-priority externally financed public investments in 2020.
  - Decision not to promulgate a EUR 230 million loan agreement with a private partnership recently approved by the National Assembly.
  - Scale-up public investments at a more moderate pace during 2021-22 and undertake only a limited share of programmed, but unsigned, external project financing.
- Program engagement and safeguards:
  - Continue the ECF arrangement and resume program discussions; IMF Board completed the fourth review on April 1, 2020.
  - Expectation to have met all but one of the end-December 2019 quantitative performance criteria for the fifth ECF review.
  - Undertake an update of the safeguards assessment before approval of any new IMF arrangement; authorize IMF staff to hold discussions with the central bank’s external auditors and access external audit reports.
  - Will sign a Memorandum of Understanding between the Ministry of Economy and Finance and the BCRG on responsibilities for servicing financial obligations under the RCF.

*Italicized source attribution as printed: Sources: Guinean authorities; and IMF staff estimates and projections.*

### 10.      In line with our commitment to transparency and accountability, we authorize the IMF

### Guinea: Request for Disbursement under the Rapid Credit Facility—Debt Sustainability Analysis Update

### Debt sustainability assessment and risk ratings
- Guinea’s Composite Indicator score is 2.51 and its debt-carrying capacity is classified as weak.
- Risk of external debt distress: Moderate.
- Overall risk of public debt distress: Moderate, with application of judgement regarding a brief and marginal breach for the PV-of-total-public-debt-to-GDP ratio over 2020–21.
- Staff assessment: limited space to absorb shocks.
- Mechanical risk rating under the external DSA: Moderate.
- Mechanical risk rating under the public DSA: High.
- The update reflects debt service relief provided by the IMF under the CCRT, and by the Debt Service Suspension Initiative (DSSI) supported by the G-20 and Paris Club, and incorporates IMF RCF assistance and additional World Bank support for the COVID-19 response.

### Key macroeconomic projections and outlook
- Real GDP growth:
  - 2018: 6.2
  - 2019: 5.6
  - 2020 (projected): 1.4
  - 2021 (projected rebound): 6.6
  - 2022: 7.0
  - Medium term: 5.0 (2025–2030 generally 5.0)
- Nominal GDP ($ Million) examples:
  - 2018: 12,181
  - 2019: 13,797
  - 2020: 14,951
  - 2025: 22,994
  - 2030: 34,285
- Inflation (GDP deflator) expected: 9.1 percent in 2020 (text), GDP deflator series shows 8.5–8.2 percent in projection tables.
- Exports and imports:
  - Exports of goods and services (percent of GDP) around low 30s across projections (e.g., 2020: 32.2).
  - Imports of goods and services (percent of GDP) around high 30s to mid-40s (e.g., 2020: 48.5 in table header; other rows show variations).
- External position:
  - Gross foreign reserves will cover 3.9 months of imports in 2020 against 4.8 months in 2019 (text).

### Fiscal impacts, financing needs, and IMF request
- COVID-19 impact on fiscal accounts:
  - Basic fiscal position is expected to widen to a basic fiscal deficit of 2.0 percent of GDP in 2020 (text) versus a surplus of 0.6 percent of GDP initially envisaged.
  - The pandemic and policy response are expected to generate a fiscal financing gap amounting to 2.4 percent of GDP (text).
- Financing and borrowing:
  - Guinea will rely mostly on concessional financing, with non-concessional loans to increase over time (DSA summary).
  - New external borrowing (percent of GDP) shown in table: 2018: 13.4; 2019: 4.9; 2020: 10.9; 2025: 3.1; 2030: 2.8.
  - Grant elements of new external borrowing (in percent) examples: 2018: 31.2; 2019: 31.7; 2020: 31.7; 2025: 39.5; 2030: 37.8.
- IMF assistance request:
  - Authorities requested a disbursement under the Rapid Credit Facility (RCF) of SDR 107.1 million, equivalent to 50 percent of quota, to be made available as budget support (Statement).
  - Authorities requested debt service relief under the CCRT and debt service relief under the DSSI and indicated intention to adhere to DSSI commitments.

### Stress tests, vulnerabilities, and scenarios
- Baseline DSA: all external debt burden indicators lie below respective thresholds.
- Stress tests: debt vulnerabilities increase under adverse shocks; under the most extreme stress tests, solvency and liquidity indicators breach thresholds for prolonged periods.
- Public DSA: brief and marginal breach in PV of total-public-debt-to-GDP over 2020–21 driven by higher-than-earlier anticipated external borrowing in 2020 and one-off impact of the 2018 central bank recapitalization.
- Tailored/country-specific scenarios examined include: Weak policy, Higher non-concessional borrowing, Commodity price shocks, Natural disasters, Combined contingent liabilities; many tests show elevated ratios though baseline remains under thresholds.

### Policy response and measures undertaken
- Health and social measures:
  - National Emergency Preparedness and Response Plan (NEPRP) launched.
  - Focus on increasing health spending; protecting the poor and vulnerable via strengthened social safety nets, cash transfers, temporary waiving of electricity and water charges; building up food security stocks.
- Private sector and fiscal relief:
  - Temporary relief on tax payments, social security contributions and utilities bills for firms and SMEs in the most affected sectors.
- Monetary and financial measures:
  - Central bank reduced its policy rate and reserve requirements to ensure adequate liquidity.
  - Greater exchange rate flexibility allowed; central bank interventions to be limited to preserve foreign reserves.
  - Measures include rescheduling loan repayments for tourism and hotels sectors, acceleration of domestic arrears repayments, creation (with World Bank support) of a public guarantee fund for SME loans and a fund to support firms in the informal sector.
- Debt and fiscal policy commitments:
  - Rephasing of non-priority externally financed public investments in 2020 to create fiscal space for health infrastructure.
  - Authorities will refrain from contracting any new loan that does not meet ECF program criteria.
  - Commitment to request and adhere to DSSI requirements and to seek CCRT relief from the Fund.
  - Continued reliance on the ECF-supported program to reinforce macroeconomic stability and support PNDES objectives.

### Transparency, PFM, and safeguards
- Use and monitoring of COVID-19 resources:
  - Authorities commit to strengthen public financial management and the anti-corruption framework.
  - Timely ex-post control will be conducted with involvement of civil society.
  - All awarded procurement contracts will be posted on the websites of the Ministry of Economy and Finance and the Ministry of Budget.
  - A full audit of COVID-19 expenditures will be conducted by The Court of Accounts and the report will be published online by June 2021.

### Selected epidemiological and social data (as reported)
- COVID-19 cases as of June 15, 2020: 4,639 cases recorded; 3,327 recovered (Statement).
- Economic sectors affected: mining, agriculture, transport, trade and tourism (Statement).

### Implementation status and concluding commitments
- Authorities report having met all but one quantitative performance criterion set at end-December 2019 for the fifth review of the ECF-supported program.
- Authorities reaffirm commitment to sound policies and reforms to strengthen macroeconomic stability and achieve higher, sustained, and inclusive growth once the crisis wanes.
- Request for Executive Board approval of the RCF disbursement to meet urgent financing needs.

*Prepared by IMF and World Bank staff; Guinea: Joint Bank-Fund Debt Sustainability Analysis Update (June 15, 2020) and Statement by Guinea (June 19, 2020).*

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_Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1ginea2020003.pdf_