## 1. Priority Recommendations

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---

### Mission overview
- A technical assistance (TA) mission on external sector statistics (ESS) visited Guinea-Bissau during February 3 to 7, 2020.
- Mission conducted in Bissau at the request of the National Directorate for Guinea-Bissau of the Central Bank of West African States (BCEAO-DNGB).
- Fourth and final mission under the JSA-AFR project for improving ESS in 17 francophone countries of Central and West Africa, financed by the government of Japan and administered by the IMF.

### Major outcomes and data improvements
- Assisted BCEAO–DNGB in developing data sources and estimation techniques for compiling the balance of payments and the international investment position (IIP) according to BPM6.
- New information and recording obtained for three types of transactions:
  - Timber exports.
  - The floating power plant (powership).
  - The consortium for hydroelectric facilities and power transmission lines (OMVG).
- Timber extraction and exportation were recorded for 2018, together with the counterpart (debit) in direct investment income.
- Obtained 2019 data from the Guinea-Bissau Electricity and Water Company (EAGB) on fuel imports of the powership, which is to be treated as a resident unit.
- Revisited apportionment of OMVG financial resources: multilateral organizations disbursed directly to partner countries and recognized only the countries as debtors, not OMVG.
- Obtained estimates for students in Brazil (number and average expenditure); OECD and MEC of Brazil provided average expenditure estimates.
- Five of six QEDS tables for all quarters of 2019 were submitted to the World Bank’s QEDS database on the last day of the mission; mandatory table and four of five encouraged QEDS tables were disseminated shortly after submission.
- BCEAO headquarters’ new system for compiling and disseminating ESS entered testing phase; BPT being tested by all WAEMU countries and 16 banks (four with operations in Guinea-Bissau).
- Authority for validating the balance of payments transferred from CBP-GB to the National Economic Policy Committee to speed validation and dissemination.

### Priority recommendations (summary)
- Target Date: September 2020
  - Compile and disseminate external debt statistics for March 2020, according to the QEDS standard. — Responsible: BCEAO-DNGB, DNDP of the MEF
- Target Date: June 2021
  - Publish quarterly balance of payments statistics. — Responsible: BCEAO headquarters and BCEAO-DNGB

### Detailed action plan (selected high-priority actions and dates)
- Treat the powership as a direct investment enterprise resident in Guinea-Bissau; record import and increase in direct investment liability in the 2019 balance of payments and IIP; estimate and record direct investment income and imports of inputs. — Target Completion Date: September/2020 — Priority: H
- Compile and disseminate external debt statistics for March 2020, using the Quarterly External Debt Statistics (QEDS) framework. — Target Completion Date: September/2020 — Priority: H
- Complete and submit QEDS Table 2, with the payment schedule for the December 2019 external debt position, including accrued interest and principal payments falling due on securities issued by the National Treasury (TN) of Guinea-Bissau, held by nonresidents. — Target Completion Date: September/2020 — Priority: M
- Check for publicly guaranteed private sector external debt and, if necessary, update and submit the QEDS tables. — Target Completion Date: September/2020 — Priority: H
- Assess preparing QEDS tables for external debt positions prior to 2019 (except Table 2); consider data availability and priority. — Target Completion Date: December/2020 — Priority: L
- Publish quarterly balance of payments. If available, use the balance of payments in terms of regulation (BPR) system. — Target Completion Date: September/2021 — Priority: H
- Update balance of payments time series on the BCEAO headquarters website. — Target Completion Date: September/2020 — Priority: H
- Record disbursements, principal repayments, and interest on loans extended by investors into the hydroelectric project to the National Treasury (NT) of Guinea-Bissau; record the debt balance of the NT of the Republic of Guinea-Bissau in external debt and in the IIP. — Target Completion Date: September/2020 — Priority: H
- Apportion transactions and positions among the four member countries only in the case of direct transactions with OMVG, a multinational company. — Target Completion Date: September/2020 — Priority: L
- Record grants relating to the hydroelectric project coordinated by OMVG in the capital account of the balance of payments. — Target Completion Date: September/2020 — Priority: M
- Increase the number of ESS compilers to at least two. — Target Completion Date: December/2020 — Priority: H

### Exports and imports — key findings and amounts
- Timber exports recorded in 2018 goods account: CFAF 44.894 billion.
  - Same amount recorded as counterpart in Primary income – Investment income – Direct investment – Income on equity – Dividends and Withdrawals from income of quasi-corporations (debit).
  - Primary income balance in 2018: CFAF 42 billion (contrast: had ranged from minus CFAF 2 billion to minus CFAF 6 billion between 2014 and 2017).
- Cashew nut price adjustment:
  - 2018 price adjustment: CFAF 39.9 billion.
  - 2017 price adjustment: CFAF 74.8 billion.
  - SBRPC-reported market prices: US$1,648 per ton in 2018; US$1,950 per ton in 2017.
- DGA records anomaly: some 7 billion cashew nut bags (packaging) exported in July 2019; DGA indicated these reflected records being brought up to date and the bags had actually left the country over several earlier months. Recommendation: redistribute these export entries over the previous months.
- Fish exports not registered with DGA were incorporated using data from CIPA.
- Other product categories with limited DGA-registered exports (palm oil, fruits, vegetables, cereals) likely have negligible registered values and potential unregistered cross-border trade may be immaterial.

### Powership treatment and implications
- Powership context:
  - Vessel owned by Karpowership anchored in the port of Bissau since fourth quarter of 2018; producing city’s electrical energy under a five-year contract set to end in 2024.
- Mission recommendations and recording implications:
  - Treat the powership as a separate institutional unit (resident quasi-corporation) while based in the territory for one year or more (BPM6 paragraphs 4.16 and 4.27).
  - Electricity produced by the ship is part of Guinea-Bissau domestic production and should be counted in GDP; sale of energy from powership to EAGB is a transaction between two residents and should not be recorded in the balance of payments.
  - Fuel consumed in producing the electricity is imported and should be recorded as a merchandise import (up to January 2020 it had not been registered by the DGA).
  - Payment flows: EAGB will draw down international reserves and make deposits in an account held by Karpowership abroad. Counterpart to reserve reduction splits into:
    - Payment for imported fuel and inputs (as if resident vessel received inputs and sent them abroad).
    - Repatriation of direct investment income (difference between cost of imported inputs and revenue earned by resident vessel) to the nonresident direct investor.
- Data obtained from EAGB:
  - Monthly series for February to December 2019 of volume, price, and value of imports supplied to the vessel.
  - Monthly amounts paid to Karpowership for electricity produced.
  - EAGB committed to submit all monthly series regularly with a delay of up to one month.
- Required recording actions:
  - Treat powership as resident quasi-corporation.
  - Record corresponding imports of fuel and other inputs.
  - Calculate and record direct investment income associated with the powership.

### External debt compilation and QEDS
- QEDS submission:
  - Five of six tables on the gross external debt position for all quarters of 2019 were submitted to the World Bank’s QEDS database on the last day of the mission.
  - SBPRC and DNDP can produce the external debt service payment schedule and should send it shortly to the World Bank.
  - SBPRC considering back casting series prior to 2019 as requested by the World Bank.
- Specific QEDS actions and dates:
  - Compile and disseminate external debt statistics for March 2020, using QEDS. — Target Completion Date: September/2020 — Priority: H
  - Complete and submit QEDS Table 2 (payment schedule for December 2019 external debt position). — Target Completion Date: September/2020 — Priority: M
  - Check for publicly guaranteed private sector external debt and update QEDS if necessary. — Target Completion Date: September/2020 — Priority: H

### Governance, systems, and capacity
- BCEAO headquarters’ BPT system being tested to support quarterly compilation; banks will input information directly into system similar to an International Transaction Reporting System (ITRS); validation of bank-reported transactions will be a challenge.
- Validation authority change: from Balance of Payments Committee of Guinea-Bissau (CBP-GB) to the National Economic Policy Committee to accelerate validation and dissemination.
- Recommended staffing: increase ESS compilers to at least two by December/2020 (Priority: H).
- Recommendation to update balance of payments time series on BCEAO headquarters website by September/2020 (Priority: H).

### Power ship (quasi-corporation vessel) — transactions, valuation, and recording
- Findings:
  - Payments by the EAGB (revenue of the quasi-corporation vessel) were reported each month from February to December 2019 and used to calculate profit to be recorded in Direct investment income.
  - The vessel’s value estimates: CFAF 29 billion; insurance proposal and crew information estimated value at US$50 million.
  - The vessel has over 200 crew members and had produced electricity in other countries (asset subject to depreciation).
  - Vessel arrived in late-2018; power production began in February 2019. Mission considers the transaction recordable in the 2019 balance of payments.
  - When the vessel leaves, it will resume nonresident status; a disinvestment (return of direct investment — equity share, reduction of liability) and a merchandise export should be recorded, with depreciation estimated for the period.
- Recommendations:
  - Consider the power ship as a resident entity in Guinea-Bissau while anchored in the port of Bissau.
  - In 2019, record an increase in direct investment (liability) and a merchandise import, according to the estimated value of the power ship.
  - While anchored in the port of Bissau, record inputs purchased by the resident vessel from nonresident entities as merchandise imports. Record the difference between the value of the imported inputs and the revenue obtained from electricity sales as direct investment income.
  - When the power ship leaves at the end of the contract, calculate depreciation of the equipment, and record a return of direct investment (disinvestment) with a goods export as counterpart.

### Primary income, secondary income, capital account — fishery agreement, election funding, students, and reserves
- Fishery compensation (EU agreement):
  - Finding: Agreement renewed and came back into force in 2019; nonresidents availed the fishing right in 2019 though financial disbursement for the permit is scheduled for 2020.
  - Recording: Right to exploit natural resources for a finite period should be recorded under Primary Income - Other primary income (BPM6 paragraphs 11.85 and 11.86) in the 2019 balance of payments (accrual basis).
  - Until payment, the asset should be recorded in Financial Account - Other investments - Other accounts payable and receivable; when paid, the asset is likely reclassified to Reserve assets.
- Election-related grants:
  - Finding: International organizations granted funds to Guinea-Bissau government for the 2019 presidential elections.
  - Recording: Should be recorded under Secondary income - General government - Current international cooperation.
- Students in Brazil (scholarships and services):
  - Findings:
    - Embassy data: about 600 Guinean students at Unilab in 2019; embassy suggested at least 100 Guinean students in other Brazilian universities.
    - Average annual cost per student estimates: OECD US$12,400 (2015); Brazil’s MEC US$11,500 (2016). An average annual cost of US$12,000 is considered a reasonable estimate.
  - Recording: Admission of a nonresident at a public university should be recorded as a transfer and consumption of travel services: Services – Travel – Personal (debit) and Secondary Income – General government (credit). Net effect on the current account is zero but composition shifts between services and secondary income.
  - Recommendation: Consult embassies of Portugal, China, Russia, and Morocco to revise estimates of students abroad; use embassy data and cost estimates to update Services – Travel (debit) and Secondary income – Other transfers (credit).
- Reserve assets and income apportionment:
  - Findings:
    - Stock of reserves in 2018: CFAF 270.9 billion, representing 54.2 percent of the assets of Guinea-Bissau’s International Investment Position (IIP).
    - No transactions relating to income on reserve assets recorded in the balance of payments.
    - Reserves are shared across the monetary area and managed centrally by the BCEAO head office.
  - Recommendation: Define criteria for apportioning income generated on reserve assets to each economy’s balance of payments to expand coverage of current account transactions and reconcile stocks and flows.

### Balance of payments frequency, BPR system, and governance
- Findings:
  - SBRPC sends quarterly balance of payments statistics to BCEAO headquarters. Some quarterly accounts reuse annual sources; others are estimated from previous period data.
  - New ESS compilation system (BPR — balance of payments in regulation terms) is in testing by ESS compilers of WAEMU countries; testing involves 16 banks, four with branches in Guinea-Bissau.
  - BPR resembles an ITRS but allows compilers to impute survey information; banks report transactions directly in the BPR.
  - Direct reporting of bank transactions will pose validation challenges; primary data quality is fundamental.
  - BPR is designed for quarterly statistics and should make quarterly compilation and publication easier; banking transactions will be available quarterly reducing reliance on annual surveys.
  - Governance change: approval of the balance of payments moved from Guinea-Bissau’s Balance of Payments Committee (CBP-GB) to the National Economic Policy Committee; SBPRC expects faster validation for quarterly BOP.
- Recommendations:
  - Improve processes for validating quarterly balance of payments estimates.
  - As soon as available, use the BPR system and publish quarterly balance of payments.

### Hydroelectric project (OMVG) — financing and recording
- Findings:
  - OMVG coordinates a sub-regional hydroelectric project among Guinea-Bissau, Senegal, the Gambia, and Guinea-Conakry; project funded by the World Bank, AfDB, and other international organizations.
  - Up to January 2020, project financing and disbursements were bilateral to individual countries rather than to OMVG; OMVG had no direct positions or transactions to apportion.
  - Credits under the project are recorded in external debt, IIP, and balance of payments statistics.
  - Grants should appear in MEF data and be included in the capital account, as funds are destined for works affecting the capital stock.
- Recommendations:
  - Record disbursements, amortizations, and interest on loans granted by hydroelectric project financiers to the NT of Guinea-Bissau. Record the NT’s debtor balance in the external debt and IIP.
  - Apportion transactions and positions among the four member countries only if operations are undertaken directly with the plurinational OMVG.
  - Record grants under the OMVG-coordinated project in the capital account of the balance of payments.

### Assessment of the 2018 Balance of Payments and IIP publication
- Document reviewed: Balance des paiements et position extérieure globale au titre de l’année 2018 (Balance of Payments and International Investment Position for the Year 2018), prepared by the BCEAO-DNGB and published by BCEAO headquarters.
- Improvements introduced in the 2018 edition:
  - Text boxes on specific topics: financial compensation and fishing permit; the trend of budgetary support in the form of transfers from abroad; sources of direct investment statistics.
  - Analysis of exported and imported goods by group.
  - Some charts and tables streamlined, with redundant information suppressed and other data added.
- Prior mission suggestions (reiterated and partially addressed):
  - Reorganization of tables focusing on key issues for the external sector of the Guinea-Bissau economy.
  - Standardization of charts.
  - Formalization of language and nomenclature.
  - Clarification of the concept used by BCEAO-DNGB for the analytical presentation of the balance of payments.
  - Standardization of the format in which tables are made available.
- Mission suggestions to SBPRC:
  - Standardize the format of tables and charts.
  - Further rationalize and clarify information to contribute to continued improvements.

### Data dissemination and harmonization
- BCEAO head office maintains a time series system on its website covering WAEMU countries, including Guinea-Bissau external sector statistics.
- Issue identified:
  - Guinea-Bissau balance of payments statistics in the BCEAO time series system differed from the figures published in the 2018 Balance des paiements et position extérieure globale au titre de l’année 2018 (which contains the series since 2013).
  - The statistics displayed in the time series system probably represented the first version and had not been updated.
- Recommendation:
  - Harmonize the statistical series and their revisions across the various data dissemination channels.

### Human resources for ESS compilation
- Organizational arrangement:
  - The SBPRC combines ESS compilation tasks with regulation and supervision of the Guinea-Bissau foreign exchange market.
- Staffing situation:
  - Except for temporary staff hired to distribute surveys, activities are carried out by just one employee.
- Mission stance:
  - Increasing the number of compilers remains essential for implementing the action plan and improving the frequency, timeliness, and coverage of the ESS.

### Authorities and officials met
- Helena Nosolini Embalo — National Director – BCEAO-DNGB
- Lassana Sambu — Main Branch Director – BCEAO-DNGB
- Danso Antonio Yala — Head of Studies and Statistical Services – BCEAO-DNGB
- Ilitch Vitali Gomes da Silva — Chief of Balance of Payments Section – Studies and Statistical Services, BCEAO-DNGB
- Magda Sanca — Technical Officer – National Public Debt Directorate, Ministry of Finance
- Alexandre Tavares — Technical Officer – Guinea-Bissau Electricity and Water Company (EAGB)
- Simone Maciel Cuiabana — Senior Economist – African Development Bank (AfDB)
- Fábio Guimarães Franco — Ambassador of Brazil to Guinea-Bissau

### Key external debt statistics (quarterly figures as presented)
- Table 1 — Gross External Debt Position (USD in million)
  - Public Sector External Debt: 2019Q1 670.8; 2019Q2 674.0; 2019Q3 693.8; 2019Q4 709.6
  - Short-term (public): 0.0; 0.0; 0.0; 0.0
  - Long-term (public): 670.8; 674.0; 693.8; 709.6
  - Private Sector External Debt Not Publicly Guaranteed: 2019Q1 45.1; 2019Q2 45.7; 2019Q3 43.8; 2019Q4 45.1
  - Short-term (private): 26.8; 27.1; 26.0; 26.8
  - Long-term (private): 18.4; 18.6; 17.8; 18.4
  - Gross External Debt Position: 716.0; 719.7; 737.6; 754.7
  - Short-term (total): 26.8; 27.1; 26.0; 26.8
  - Long-term (total): 689.2; 692.6; 711.6; 727.9
  - Memorandum item — Arrears: 0.8; 0.8; 1.9; 1.9
  - Memorandum item — Public Sector External Debt (arrears): 0.84; 0.84; 1.85; 1.85

- Table 3 — Public and Publicly-Guaranteed Private Sector External Debt: By Creditor Sector (USD in million)
  - Public Sector External Debt: 2019Q1 670.8; 2019Q2 674.0; 2019Q3 693.8; 2019Q4 709.6
  - Multilateral creditors: 450.0; 452.9; 471.6; 468.8
  - Official bilateral creditors: 115.2; 115.0; 114.9; 114.6
  - Debt securities’ holders: 105.6; 106.2; 107.4; 126.2
  - Publicly-Guaranteed Private Sector External Debt: 0.0; 0.0; 0.0; 0.0
  - Total: 670.8; 674.0; 693.8; 709.6
  - Memorandum item — Paris Club member creditors: 2.8; 2.8; 2.8; 2.8

- Table 4 — Public Sector Debt and Publicly-Guaranteed Private Sector Debt: By Instrument Breakdown (USD in million)
  - Public Sector External Debt: 2019Q1 670.8; 2019Q2 674.0; 2019Q3 693.8; 2019Q4 709.6
  - Short-term (public): 0.0; 0.0; 0.0; 0.0
  - Long-term (public): 670.8; 674.0; 693.8; 709.6
  - Special drawing rights (allocations): 18.9; 18.9; 18.0; 18.6
  - Debt securities: 105.6; 106.2; 107.4; 126.2
  - Loans: 546.4; 548.9; 568.4; 564.8
  - Publicly Guaranteed Private Sector External Debt: 0.0; 0.0; 0.0; 0.0
  - Memorandum items — Arrears: 0.8; 0.8; 1.9; 1.9
  - Memorandum items — Principal: 0.63; 0.63; 1.43; 1.43
  - Memorandum items — Interest: 0.21; 0.21; 0.42; 0.42

- Table 5 — Public and Publicly-Guaranteed Private Sector External Debt: Foreign Currency and Domestic Currency Denominated Debt (USD in million)
  - Foreign currency: 376.6; 379.7; 388.3; 387.3
  - Long-term (foreign currency): 376.6; 379.7; 388.3; 387.3
  - Domestic currency: 294.3; 294.3; 305.5; 322.3
  - Long-term (domestic currency): 294.3; 294.3; 305.5; 322.3
  - Public and Publicly-Guaranteed Private Sector External Debt Position: 670.8; 674.0; 693.8; 709.6

- Table 6 (SDDS prescribed component) — Gross External Debt Position: By Sector (USD in million)
  - General government: 651.9; 655.1; 675.8; 691.0
  - Central Bank: 18.9; 18.9; 18.0; 18.6
  - Deposit-Taking Corporations, except the Central Bank: 26.8; 27.1; 26.0; 26.8
  - Other Sectors: 18.4; 18.6; 17.8; 18.4
  - Direct Investment: Intercompany Lending: 0.0; 0.0; 0.0; 0.0
  - Gross External Debt Position (total): 716.0; 719.7; 737.6; 754.7
  - Memorandum items — Arrears: By Sector: 0.8; 0.8; 1.9; 1.9
  - Debt Securities: By Sector (memorandum): 105.6; 106.2; 107.4; 126.2
  - Debt securities — General government: 105.6; 106.2; 107.4; 126.2

*International Monetary Fund — Summary of mission outcomes and priority recommendations (February 3–7, 2020) contained in “1. Priority Recommendations”*

### 1. Priority Recommendations _____________________________________________________________________ 5

### 1. Priority Recommendations

### Mission overview
- A technical assistance (TA) mission on external sector statistics (ESS) visited Guinea-Bissau during February 3 to 7, 2020.
- The mission was conducted in Bissau at the request of the National Directorate for Guinea-Bissau of the Central Bank of West African States (BCEAO-DNGB).
- This was the fourth and final mission under the JSA-AFR project for improving ESS in 17 francophone countries of Central and West Africa, financed by the government of Japan and administered by the IMF.

### Major outcomes and data improvements
- Assisted BCEAO–DNGB in developing data sources and estimation techniques for compiling the balance of payments and the international investment position (IIP) according to BPM6.
- New information and recording obtained for three types of transactions:
  - Timber exports.
  - The floating power plant (powership).
  - The consortium for hydroelectric facilities and power transmission lines (OMVG).
- Timber extraction and exportation were recorded for 2018, together with the counterpart (debit) in direct investment income.
- Obtained 2019 data from the Guinea-Bissau Electricity and Water Company (EAGB) on fuel imports of the powership, which is to be treated as a resident unit.
- Revisited apportionment of OMVG financial resources: multilateral organizations disbursed directly to partner countries and recognized only the countries as debtors, not OMVG.
- Obtained estimates for students in Brazil (number and average expenditure) to improve compilation of secondary income and travel services; OECD and MEC of Brazil provided average expenditure estimates.
- Five of six QEDS tables for all quarters of 2019 were submitted to the World Bank’s QEDS database on the last day of the mission; mandatory table and four of five encouraged QEDS tables were disseminated shortly after submission.
- BCEAO headquarters’ new system for compiling and disseminating ESS entered testing phase; BPT (balance of payments based on transactions) being tested by all WAEMU countries and 16 banks (four with operations in Guinea-Bissau).
- Authority for validating the balance of payments transferred from CBP-GB to the National Economic Policy Committee to speed validation and dissemination.

### Priority recommendations (summary from Table 1)
- Target Date: September 2020
  - Compile and disseminate external debt statistics for March 2020, according to the QEDS standard. — Responsible: BCEAO-DNGB, DNDP of the MEF
- Target Date: June 2021
  - Publish quarterly balance of payments statistics. — Responsible: BCEAO headquarters and BCEAO-DNGB

### Detailed action plan (selected high-priority actions and dates)
- Treat the powership as a direct investment enterprise resident in Guinea-Bissau; record import and increase in direct investment liability in the 2019 balance of payments and IIP; estimate and record direct investment income and imports of inputs. — Target Completion Date: September/2020 — Priority: H
- Compile and disseminate external debt statistics for March 2020, using the Quarterly External Debt Statistics (QEDS) framework. — Target Completion Date: September/2020 — Priority: H
- Complete and submit QEDS Table 2, with the payment schedule for the December 2019 external debt position, including accrued interest and principal payments falling due on securities issued by the National Treasury (TN) of Guinea-Bissau, held by nonresidents. — Target Completion Date: September/2020 — Priority: M
- Check for publicly guaranteed private sector external debt and, if necessary, update and submit the QEDS tables. — Target Completion Date: September/2020 — Priority: H
- Assess preparing QEDS tables for external debt positions prior to 2019 (except Table 2); consider data availability and priority. — Target Completion Date: December/2020 — Priority: L
- Publish quarterly balance of payments. If available, use the balance of payments in terms of regulation (BPR) system. — Target Completion Date: September/2021 — Priority: H
- Update balance of payments time series on the BCEAO headquarters website. — Target Completion Date: September/2020 — Priority: H
- Record disbursements, principal repayments, and interest on loans extended by investors into the hydroelectric project to the National Treasury (NT) of Guinea-Bissau; record the debt balance of the NT of the Republic of Guinea-Bissau in external debt and in the IIP. — Target Completion Date: September/2020 — Priority: H
- Apportion transactions and positions among the four member countries only in the case of direct transactions with OMVG, a multinational company. — Target Completion Date: September/2020 — Priority: L
- Record grants relating to the hydroelectric project coordinated by OMVG in the capital account of the balance of payments. — Target Completion Date: September/2020 — Priority: M
- Increase the number of ESS compilers to at least two. — Target Completion Date: December/2020 — Priority: H

### Exports and imports — key findings and amounts
- Timber exports recorded in 2018 goods account: CFAF 44.894 billion.
  - Same amount recorded as counterpart in Primary income – Investment income – Direct investment – Income on equity – Dividends and Withdrawals from income of quasi-corporations (debit).
  - Primary income balance in 2018: CFAF 42 billion (contrast: had ranged from minus CFAF 2 billion to minus CFAF 6 billion between 2014 and 2017).
- Cashew nut price adjustment:
  - 2018 price adjustment: CFAF 39.9 billion.
  - 2017 price adjustment: CFAF 74.8 billion.
  - SBRPC-reported market prices: US$1,648 per ton in 2018; US$1,950 per ton in 2017.
- DGA records anomaly: some 7 billion cashew nut bags (packaging) exported in July 2019; DGA indicated these reflected records being brought up to date and the bags had actually left the country over several earlier months. Recommendation: redistribute these export entries over the previous months.
- Fish exports not registered with DGA were incorporated using data from CIPA.
- Other product categories with limited DGA-registered exports (palm oil, fruits, vegetables, cereals) likely have negligible registered values and potential unregistered cross-border trade may be immaterial.

### Powership treatment and implications
- Since the fourth quarter of 2018, a vessel owned by Karpowership has been anchored in the port of Bissau and is producing the city’s electrical energy under a five-year contract set to end in 2024.
- Mission recommendation and findings:
  - Treat the powership as a separate institutional unit (resident quasi-corporation) as it undertakes production on a significant scale and is based in the territory for one year or more (BPM6 paragraphs 4.16 and 4.27).
  - Electricity produced by the ship is part of Guinea-Bissau domestic production and should be counted in GDP; sale of energy from powership to EAGB is a transaction between two residents and should not be recorded in the balance of payments.
  - Fuel consumed in producing the electricity is imported and should be recorded as a merchandise import (up to January 2020 it had not been registered by the DGA).
  - Payment flows: EAGB will draw down international reserves and make deposits in an account held by Karpowership abroad. Counterpart to reserve reduction splits into:
    - Payment for imported fuel and inputs (as if resident vessel received inputs and sent them abroad).
    - Repatriation of direct investment income (difference between cost of imported inputs and revenue earned by resident vessel) to the nonresident direct investor.
- Data obtained from EAGB:
  - Monthly series for February to December 2019 of volume, price, and value of imports supplied to the vessel.
  - Monthly amounts paid to Karpowership for electricity produced.
  - EAGB committed to submit all monthly series regularly with a delay of up to one month.
- Required recording actions:
  - Treat powership as resident quasi-corporation.
  - Record corresponding imports of fuel and other inputs.
  - Calculate and record direct investment income associated with the powership.

### External debt compilation and QEDS
- Five of six tables on the gross external debt position for all quarters of 2019 were submitted to the World Bank’s QEDS database on the last day of the mission.
- The SBPRC and DNDP are able to produce the external debt service payment schedule and should send it shortly to the World Bank.
- SBPRC considering back casting series prior to 2019 as requested by the World Bank.
- Specific QEDS actions and dates (from Detailed Technical Assessment):
  - Compile and disseminate external debt statistics for March 2020, using QEDS. — Target Completion Date: September/2020 — Priority: H
  - Complete and submit QEDS Table 2 (payment schedule for December 2019 external debt position). — Target Completion Date: September/2020 — Priority: M
  - Check for publicly guaranteed private sector external debt and update QEDS if necessary. — Target Completion Date: September/2020 — Priority: H

### Governance, systems, and capacity
- BCEAO headquarters’ BPT system being tested to support quarterly compilation; banks will input information directly into system similar to an International Transaction Reporting System (ITRS); validation of bank-reported transactions will be a challenge.
- Validation authority change: from Balance of Payments Committee of Guinea-Bissau (CBP-GB) to the National Economic Policy Committee to accelerate validation and dissemination.
- Recommended staffing: increase ESS compilers to at least two by December/2020 (Priority: H).
- Recommendation to update balance of payments time series on BCEAO headquarters website by September/2020 (Priority: H).

_International Monetary Fund — Summary of mission outcomes and priority recommendations (February 3–7, 2020) contained in “1. Priority Recommendations”_

### 20.      The EAGB also reported the amount paid for the electricity produced. Although this

### 1gnbea2020002 - 20.      The EAGB also reported the amount paid for the electricity produced. Although this

### Power ship (quasi-corporation vessel) — transactions, valuation, and recording
- Findings:
  - Payments by the EAGB (revenue of the quasi-corporation vessel) were reported each month from February to December 2019 and used to calculate profit to be recorded in Direct investment income.
  - The vessel’s value estimates: CFAF 29 billion; insurance proposal and crew information estimated value at US$50 million.
  - The vessel has over 200 crew members and had produced electricity in other countries (asset subject to depreciation).
  - Vessel arrived in late-2018; power production began in February 2019. Mission considers the transaction recordable in the 2019 balance of payments.
  - When the vessel leaves, it will resume nonresident status; a disinvestment (return of direct investment — equity share, reduction of liability) and a merchandise export should be recorded, with depreciation estimated for the period.
- Recommendations:
  - Consider the power ship as a resident entity in Guinea-Bissau while anchored in the port of Bissau.
  - In 2019, record an increase in direct investment (liability) and a merchandise import, according to the estimated value of the power ship.
  - While anchored in the port of Bissau, record inputs purchased by the resident vessel from nonresident entities as merchandise imports. Record the difference between the value of the imported inputs and the revenue obtained from electricity sales as direct investment income.
  - When the power ship leaves at the end of the contract, calculate depreciation of the equipment, and record a return of direct investment (disinvestment) with a goods export as counterpart.

### Primary income, secondary income, capital account — fishery agreement, election funding, students, and reserves
- Fishery compensation (EU agreement):
  - Finding: Agreement renewed and came back into force in 2019; nonresidents availed the fishing right in 2019 though financial disbursement for the permit is scheduled for 2020.
  - Recording: Right to exploit natural resources for a finite period should be recorded under Primary Income - Other primary income (BPM6 paragraphs 11.85 and 11.86) in the 2019 balance of payments (accrual basis).
  - Until payment, the asset should be recorded in Financial Account - Other investments - Other accounts payable and receivable; when paid, the asset is likely reclassified to Reserve assets.
- Election-related grants:
  - Finding: International organizations granted funds to Guinea-Bissau government for the 2019 presidential elections.
  - Recording: Should be recorded under Secondary income - General government - Current international cooperation.
- Students in Brazil (scholarships and services):
  - Findings:
    - Embassy data: about 600 Guinean students at Unilab in 2019; embassy suggested at least 100 Guinean students in other Brazilian universities.
    - Average annual cost per student estimates: OECD US$12,400 (2015); Brazil’s MEC US$11,500 (2016). An average annual cost of US$12,000 is considered a reasonable estimate.
  - Recording: Admission of a nonresident at a public university should be recorded as a transfer and consumption of travel services: Services – Travel – Personal (debit) and Secondary Income – General government (credit). Net effect on the current account is zero but composition shifts between services and secondary income.
  - Recommendation: Consult embassies of Portugal, China, Russia, and Morocco to revise estimates of students abroad; use embassy data and cost estimates to update Services – Travel (debit) and Secondary income – Other transfers (credit).
- Reserve assets and income apportionment:
  - Findings:
    - Stock of reserves in 2018: CFAF 270.9 billion, representing 54.2 percent of the assets of Guinea-Bissau’s International Investment Position (IIP).
    - No transactions relating to income on reserve assets recorded in the balance of payments.
    - Reserves are shared across the monetary area and managed centrally by the BCEAO head office.
  - Recommendation: Define criteria for apportioning income generated on reserve assets to each economy’s balance of payments to expand coverage of current account transactions and reconcile stocks and flows.

### External debt, QEDS submission, and related statistics
- Findings:
  - Previous translation and sharing of six QEDS tables for e-GDDS subscribers; chapter 5 of EDS Guide 2013 is methodological reference.
  - Coordination led to submission of five of six recommended QEDS tables on February 7, 2020, reporting positions as of March 2019, June 2019, September 2019, and December 2019.
  - On February 12, 2020, these tables had been published on the World Bank’s website.
  - Five tables cover creditor sector, currency, debtor institutional sector, maturity, and instrument. Table containing interest and principal payment schedules (QEDS Table 2) was pending.
  - DNDP to calculate payment schedule excluding assumptions on future disbursements; DNDP lacked data on publicly guaranteed private sector debt.
  - Concept clarification: External debt consists of liabilities requiring payment of principal and/or interest to a nonresident; debt need not be foreign-currency denominated or internationally traded.
  - December 2019 position: 45.4 percent of the RGB’s public sector external debt was denominated in domestic currency.
    - DNDP reported domestic currency amount of loans from multilateral creditors equivalent to US$196 million.
    - SBPRC identified CFAF-denominated securities issued by the NT held by nonresidents equivalent to US$126 million.
  - Private sector external debt in December 2019 represented 6.0 percent of the total external debt stock.
  - SDR allocations should be recorded as external debt liabilities of the central bank (also classified as reserve assets).
  - Schedule agreed between DNDP and SBPRC recommended for quarterly QEDS submission with up to two quarters lag.
- Recommendations:
  - Complete and submit QEDS Table 2, containing the payment schedule for the December 2019 debt position.
  - Check existence of publicly guaranteed private sector external debt and, if necessary, update the six QEDS tables and submit them.
  - Send the March 2020 QEDS external debt tables to the World Bank by September 2020.
  - Agree on a schedule for information exchange and completion of the QEDS tables between the SBPRC and DNDP.
  - Evaluate preparing QEDS tables (except Table 2 Payment schedule) for external debt positions prior to 2019, considering data availability and task priority.

### Balance of payments frequency, BPR system, and governance
- Findings:
  - SBRPC sends quarterly balance of payments statistics to BCEAO headquarters. Some quarterly accounts reuse annual sources; others are estimated from previous period data.
  - New ESS compilation system (BPR — balance of payments in regulation terms) is in testing by ESS compilers of WAEMU countries; testing involves 16 banks, four with branches in Guinea-Bissau.
  - BPR resembles an ITRS but allows compilers to impute survey information; banks report transactions directly in the BPR.
  - Direct reporting of bank transactions will pose validation challenges; primary data quality is fundamental.
  - BPR is designed for quarterly statistics and should make quarterly compilation and publication easier; banking transactions will be available quarterly reducing reliance on annual surveys.
  - Governance change: approval of the balance of payments moved from Guinea-Bissau’s Balance of Payments Committee (CBP-GB) to the National Economic Policy Committee; SBPRC expects faster validation for quarterly BOP.
- Recommendations:
  - Improve processes for validating quarterly balance of payments estimates.
  - As soon as available, use the BPR system and publish quarterly balance of payments.

### Hydroelectric project (OMVG) — financing and recording
- Findings:
  - OMVG (Gambia River Basin Development Organization) coordinates a sub-regional hydroelectric project among Guinea-Bissau, Senegal, the Gambia, and Guinea-Conakry; project funded by the World Bank, AfDB, and other international organizations.
  - Up to January 2020, project financing and disbursements were bilateral to individual countries rather than to OMVG; OMVG had no direct positions or transactions to apportion.
  - Credits under the project are recorded in external debt, IIP, and balance of payments statistics.
  - Grants should appear in MEF data and be included in the capital account, as funds are destined for works affecting the capital stock.
- Recommendations:
  - Record disbursements, amortizations, and interest on loans granted by hydroelectric project financiers to the NT of Guinea-Bissau. Record the NT’s debtor balance in the external debt and IIP.
  - Apportion transactions and positions among the four member countries only if operations are undertaken directly with the plurinational OMVG.
  - Record grants under the OMVG-coordinated project in the capital account of the balance of payments.

*Source: 1gnbea2020002 - 20.*

### 47.      The mission assessed the document titled Balance des paiements et position

### 1gnbea2020002 - 47.      The mission assessed the document titled Balance des paiements et position

### Assessment of the 2018 Balance of Payments and IIP publication
- Document reviewed: Balance des paiements et position extérieure globale au titre de l’année 2018 (Balance of Payments and International Investment Position for the Year 2018), prepared by the BCEAO-DNGB and published by BCEAO headquarters.
- Improvements introduced in the 2018 edition:
  - Text boxes on specific topics: financial compensation and fishing permit; the trend of budgetary support in the form of transfers from abroad; sources of direct investment statistics.
  - Analysis of exported and imported goods by group.
  - Some charts and tables streamlined, with redundant information suppressed and other data added.
- Prior mission suggestions (reiterated and partially addressed):
  - Reorganization of tables focusing on key issues for the external sector of the Guinea-Bissau economy.
  - Standardization of charts.
  - Formalization of language and nomenclature.
  - Clarification of the concept used by BCEAO-DNGB for the analytical presentation of the balance of payments.
  - Standardization of the format in which tables are made available.
- Mission suggestions to SBPRC:
  - Standardize the format of tables and charts.
  - Further rationalize and clarify information to contribute to continued improvements.

### Data dissemination and harmonization
- BCEAO head office maintains a time series system on its website covering WAEMU countries, including Guinea-Bissau external sector statistics.
- Issue identified:
  - Guinea-Bissau balance of payments statistics in the BCEAO time series system differed from the figures published in the 2018 Balance des paiements et position extérieure globale au titre de l’année 2018 (which contains the series since 2013).
  - The statistics displayed in the time series system probably represented the first version and had not been updated.
- Recommendation:
  - Harmonize the statistical series and their revisions across the various data dissemination channels.

### Human resources for ESS compilation
- Organizational arrangement:
  - The SBPRC combines ESS compilation tasks with regulation and supervision of the Guinea-Bissau foreign exchange market.
- Staffing situation:
  - Except for temporary staff hired to distribute surveys, activities are carried out by just one employee.
- Mission stance:
  - Notwithstanding budget constraints, increasing the number of compilers remains essential for implementing the action plan and improving the frequency, timeliness, and coverage of the ESS.

### Authorities and officials met
- Names and institutions listed:
  - Helena Nosolini Embalo — National Director – BCEAO-DNGB
  - Lassana Sambu — Main Branch Director – BCEAO-DNGB
  - Danso Antonio Yala — Head of Studies and Statistical Services – BCEAO-DNGB
  - Ilitch Vitali Gomes da Silva — Chief of Balance of Payments Section – Studies and Statistical Services, BCEAO-DNGB
  - Magda Sanca — Technical Officer – National Public Debt Directorate, Ministry of Finance
  - Alexandre Tavares — Technical Officer – Guinea-Bissau Electricity and Water Company (EAGB)
  - Simone Maciel Cuiabana — Senior Economist – African Development Bank (AfDB)
  - Fábio Guimarães Franco — Ambassador of Brazil to Guinea-Bissau

### Key external debt statistics (quarterly figures as presented)
- Table 1 — Gross External Debt Position (USD in million)
  - Public Sector External Debt: 2019Q1 670.8; 2019Q2 674.0; 2019Q3 693.8; 2019Q4 709.6
  - Short-term (public): 0.0; 0.0; 0.0; 0.0
  - Long-term (public): 670.8; 674.0; 693.8; 709.6
  - Private Sector External Debt Not Publicly Guaranteed: 2019Q1 45.1; 2019Q2 45.7; 2019Q3 43.8; 2019Q4 45.1
  - Short-term (private): 26.8; 27.1; 26.0; 26.8
  - Long-term (private): 18.4; 18.6; 17.8; 18.4
  - Gross External Debt Position: 716.0; 719.7; 737.6; 754.7
  - Short-term (total): 26.8; 27.1; 26.0; 26.8
  - Long-term (total): 689.2; 692.6; 711.6; 727.9
  - Memorandum item — Arrears: 0.8; 0.8; 1.9; 1.9
  - Memorandum item — Public Sector External Debt (arrears): 0.84; 0.84; 1.85; 1.85

- Table 3 — Public and Publicly-Guaranteed Private Sector External Debt: By Creditor Sector (USD in million)
  - Public Sector External Debt: 2019Q1 670.8; 2019Q2 674.0; 2019Q3 693.8; 2019Q4 709.6
  - Multilateral creditors: 450.0; 452.9; 471.6; 468.8
  - Official bilateral creditors: 115.2; 115.0; 114.9; 114.6
  - Debt securities’ holders: 105.6; 106.2; 107.4; 126.2
  - Publicly-Guaranteed Private Sector External Debt: 0.0; 0.0; 0.0; 0.0
  - Total: 670.8; 674.0; 693.8; 709.6
  - Memorandum item — Paris Club member creditors: 2.8; 2.8; 2.8; 2.8

- Table 4 — Public Sector Debt and Publicly-Guaranteed Private Sector Debt: By Instrument Breakdown (USD in million)
  - Public Sector External Debt: 2019Q1 670.8; 2019Q2 674.0; 2019Q3 693.8; 2019Q4 709.6
  - Short-term (public): 0.0; 0.0; 0.0; 0.0
  - Long-term (public): 670.8; 674.0; 693.8; 709.6
  - Special drawing rights (allocations): 18.9; 18.9; 18.0; 18.6
  - Debt securities: 105.6; 106.2; 107.4; 126.2
  - Loans: 546.4; 548.9; 568.4; 564.8
  - Publicly Guaranteed Private Sector External Debt: 0.0; 0.0; 0.0; 0.0
  - Memorandum items — Arrears: 0.8; 0.8; 1.9; 1.9
  - Memorandum items — Principal: 0.63; 0.63; 1.43; 1.43
  - Memorandum items — Interest: 0.21; 0.21; 0.42; 0.42

- Table 5 — Public and Publicly-Guaranteed Private Sector External Debt: Foreign Currency and Domestic Currency Denominated Debt (USD in million)
  - Foreign currency: 376.6; 379.7; 388.3; 387.3
  - Long-term (foreign currency): 376.6; 379.7; 388.3; 387.3
  - Domestic currency: 294.3; 294.3; 305.5; 322.3
  - Long-term (domestic currency): 294.3; 294.3; 305.5; 322.3
  - Public and Publicly-Guaranteed Private Sector External Debt Position: 670.8; 674.0; 693.8; 709.6

- Table 6 (SDDS prescribed component) — Gross External Debt Position: By Sector (USD in million)
  - General government: 651.9; 655.1; 675.8; 691.0
  - Central Bank: 18.9; 18.9; 18.0; 18.6
  - Deposit-Taking Corporations, except the Central Bank: 26.8; 27.1; 26.0; 26.8
  - Other Sectors: 18.4; 18.6; 17.8; 18.4
  - Direct Investment: Intercompany Lending: 0.0; 0.0; 0.0; 0.0
  - Gross External Debt Position (total): 716.0; 719.7; 737.6; 754.7
  - Memorandum items — Arrears: By Sector: 0.8; 0.8; 1.9; 1.9
  - Debt Securities: By Sector (memorandum): 105.6; 106.2; 107.4; 126.2
  - Debt securities — General government: 105.6; 106.2; 107.4; 126.2

*Source: Mission assessment of Balance des paiements et position extérieure globale au titre de l’année 2018 (BCEAO-DNGB) and accompanying quarterly external debt tables.*

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_Source: https://www.imf.org/-/media/files/publications/cr/2020/english/1gnbea2020002.pdf_