IMF Reaches Staff-level Agreement with Guinea
IMF News, October 17, 2017
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- Published: October 17, 2017
Overview
- IMF staff and Guinean authorities reached a staff-level agreement on a program of economic policies and reforms that could be supported by an Extended Credit Facility (ECF) arrangement.
- The program is intended to support Guinea’s 2016–20 National Social and Economic Development Plan.
- Subject to IMF management approval, the staff-level agreement is expected to be submitted to the IMF Executive Board for its consideration in November 2017.
- Discussions took place in Conakry from July 31-August 15, 2017 and during the 2017 Annual Meetings in Washington in October 2017.
Program objectives and scope
- Support Guinea’s 2016–20 National Social and Economic Development Plan to:
- foster higher and more broad-based growth,
- diversify the economy,
- reduce poverty,
- preserve macroeconomic stability and debt sustainability.
- The envisaged ECF arrangement would be for three-year duration.
Macroeconomic resilience and external buffers
- Further accumulating foreign exchange reserves to reinforce Guinea’s external buffers against shocks.
- Maintain a prudent monetary policy to:
- preserve moderate inflation,
- ensure liquidity in the banking sector to support healthy private sector credit growth.
Fiscal policy and public investment
- Achieve a basic fiscal surplus to:
- limit budgetary financing needs,
- contribute to keeping inflation at a moderate level,
- increase banks’ provision of credit to the private sector,
- preserve medium-term debt sustainability.
- Mobilize additional tax revenues and gradually reduce untargeted electricity subsidies to create fiscal space for:
- increasing public investments in infrastructure,
- strengthening social safety nets to reduce poverty and foster inclusion.
- Strengthen public finance and investment management to support the scaling-up of public investments and increase the efficiency and returns of public investments.
Debt management and borrowing strategy
- A prudent borrowing strategy that aims at maximizing the concessionality of external loans will be key to preserve medium-term debt sustainability.
- Strengthening debt capacity management will be important to implement this strategy.
Structural reforms and private sector development
- Bolster social safety nets to reduce poverty.
- Foster the development of the private sector by:
- improving the business climate,
- strengthening governance,
- advancing financial inclusion.
- These measures are intended to generate more inclusive and broad-based growth for Guinea.
Timetable and procedural notes
- Staff-level agreement reached following IMF staff mission discussions in Conakry (July 31-August 15, 2017) and meetings in October 2017.
- Expected submission of the staff report to the IMF Executive Board in November 2017, subject to IMF management approval.
Source: IMF Press Release No. 17/404, October 17, 2017.