IMF Executive Board Completes Second Review of the Extended Credit Facility with Guinea
IMF News, December 21, 2018
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Bibliographic details
- Published: December 21, 2018
Review outcome and disbursement
- Executive Board completed the second review of Guinea’s economic performance under the Extended Credit Facility (ECF) on December 21, 2018.
- Completion of the review enables the immediate disbursement of SDR 17.213 million (about US$23.9 million).
- Total disbursements under the arrangement after this review: SDR 51.636 million (about US$71.6 million).
- The Board approved the authorities’ request for modification and a waiver of non-observance of a performance criterion.
Program background and objectives
- Guinea’s three-year ECF arrangement was approved by the Executive Board on December 11, 2017 (Press Release No. 17/484) for SDR 120.488 million (about US$167.2 million at the time of the arrangement’s approval, or 56.25 percent of Guinea’s quota).
- The ECF arrangement aims at:
- strengthening resilience,
- scaling-up public investment in infrastructure while preserving stability,
- strengthening social safety nets,
- promoting private sector development.
IMF assessment and macroeconomic outlook (statement by Mr. Tao Zhang, Acting Chair and Deputy Managing Director)
- Overall assessment:
- “Guinea is implementing a program of macroeconomic policies and reforms to achieve high and broad-based growth and reduce poverty while preserving macroeconomic stability.”
- “Performance under the ECF-supported program against end-June targets was satisfactory and program-supported reforms advanced well.”
- “The strong growth momentum continues, and the medium-term outlook is favorable.”
- Fiscal policy and public investment:
- In view of revenue shortfalls, the authorities have undertaken additional measures to achieve the end-2018 fiscal target.
- “Achieving a basic fiscal surplus will support preserving macroeconomic stability.”
- “Mobilizing additional tax revenues will allow scaling-up growth-supporting infrastructure investment.”
- The authorities aim to reduce untargeted electricity subsidies and have an automatic adjustment mechanism for petroleum prices.
- “Attention to the social impact of these planned reforms will be important, including by strengthening social safety nets.”
- Debt management:
- “Prudent debt management will be crucial to maintaining debt sustainability.”
- “Limiting non-concessional borrowing and enhancing public finance and investment management will help preserve debt sustainability and support efficiency and transparency.”
- External sector and reserves:
- “A more active strategy to accumulate reserves will help build external buffers and strengthen Guinea’s resilience to shocks.”
- “Increasing competition in the foreign exchange market and moving to a rule-based intervention strategy will also support greater exchange rate flexibility.”
- Monetary policy and financial sector:
- “Monetary policy will remain prudent to preserve moderate inflation.”
- “The authorities will continue to limit government budgetary borrowing from the central bank and move toward a more active liquidity management.”
- “Strengthening banking supervision and the regulatory framework will support financial sector stability.”
- Structural reforms and governance:
- “The authorities are committed to advancing growth-supporting structural reforms.”
- “Strengthening the anti-corruption framework and the business climate will enhance governance and support private sector development.”
Key statistics
- Immediate disbursement approved: SDR 17.213 million (about US$23.9 million).
- Total disbursements under the arrangement after review: SDR 51.636 million (about US$71.6 million).
- Original ECF approval: SDR 120.488 million (about US$167.2 million at approval), or 56.25 percent of Guinea’s quota.
- ECF arrangement approval date: December 11, 2017.
- Review completion date: December 21, 2018.
- Press Release number for this review: Press Release No. 18/497.
Press Release No. 18/497 (December 21, 2018), IMF Communications Department.