IMF Staff Completes Review Visit to Guinea-Bissau
IMF News, May 19, 2017
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- Published: May 19, 2017
Mission summary and status of ECF review
- IMF team led by Tobias Rasmussen visited Guinea-Bissau from May 10 to 19, 2017, to conduct discussions on the third review of Guinea-Bissau’s IMF-supported program under the Extended Credit Facility (ECF).
- The IMF team reached a staff-level agreement with the authorities on the economic policies needed to complete the third review of the ECF.
- The staff-level agreement is subject to approval by the IMF Executive Board, which is slated to consider the third ECF review in mid-July 2017.
- Upon approval, drawings of SDR 3.030 million (about US$4.1 million) would become available to Guinea-Bissau.
- Background on the ECF arrangement for Guinea-Bissau:
- Amount equivalent to SDR 17.04 million (about US$23.5 million, or 60 percent of quota) was approved on July 10, 2015.
Economic developments and drivers of growth
- The rebound in economic activity that started in 2015 has continued and become more entrenched.
- Growth has been supported by:
- high cashew prices,
- increased construction activity,
- continued improvements in the supply of electricity and water.
Public financial management and revenue mobilization
- The authorities have made significant progress in improving public financial management.
- Institutional reforms and outcomes:
- Institutionalization of an operational treasury committee has enabled better expenditure control.
- Elimination since the start of this year of non-regularized spending.
- Improvements in tax and customs administration are helping boost revenue collection.
Policy priorities and recommended measures
- To maintain the positive economic trajectory, continued efforts will be needed to maintain and strengthen fiscal discipline and advance structural reforms.
- Key measures identified by the mission:
- Ensuring a firmly established budget approval process.
- Enhancing debt management.
- Addressing financial pressures stemming from the power sector.
- Allowing fluctuations of domestic fuel prices in line with international prices.
- Ensuring a healthy competitive environment in the cashew sector by clearing out uncertainty about the regulatory regime for trading.
Stakeholder engagement
- The mission met with:
- President José Mário Vaz,
- Prime Minister Umaro Sissoco Embaló,
- Attorney General António Sedja Mam,
- Minister of Finance João Fadia,
- Central Bank of West African States (BCEAO) National Director Helena Nosolini Embaló,
- other high level officials,
- representatives of civil society, the private sector, and the donor community.
IMF Press Release No. 17/184 — May 19, 2017