## IMF Staff Concludes Visit to Guinea-Bissau

_IMF News, January 18, 2019_

## Source details

**Canonical URL:** [IMF Staff Concludes Visit to Guinea-Bissau](https://www.imf.org/en/news/articles/2019/01/18/pr1908-imf-staff-concludes-visit-to-guinea-bissau)

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## Bibliographic details
- Published: January 18, 2019

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### Mission summary and context
- Mission led by Tobias Rasmussen visited Guinea-Bissau during January 14-18, 2019 to evaluate the draft 2019 budget and discuss developments in the financial sector.
- The mission issued a statement presenting preliminary findings; the views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
- This mission will not result in a Board discussion; the mission did not conclude discussions on the pending sixth review of the ECF program and expects to return after the legislative elections.

### Key economic findings (2018)
- Cashew exports declined by about 25 percent.
- Real GDP growth is estimated to have fallen to 3.8 percent in 2018 against roughly 6 percent a year during 2015–17.
- Lower growth and weak revenue collection led to missed fiscal targets.
- The fiscal deficit on commitment basis is estimated to have widened to about 5 percent of GDP against a target of 2.5 percent of GDP.
- Economic performance in 2018 suffered from lower cashew income and weak domestic revenue mobilization.

### 2019 budget assessment and fiscal outlook
- The draft budget for 2019 aims to consolidate public finances.
- The draft budget targets increased government revenue and modest expenditure growth to bring the deficit below 3 percent of GDP, in line with the WAEMU criterion.
- Higher revenue in the draft budget is supported by:
  - recent passage of two new tax laws;
  - reform of the customs brigade;
  - collection of stamp duty on air transport; and
  - adjustment of some tax rates.
- Achieving the envisioned targets will require tight expenditure control and additional effort in some areas.

### Fiscal risks and public financial management priorities
- The public water and electricity utility, EAGB, has been a longstanding drain on government funds and is likely to require further transfers to cover accumulated liabilities.
  - Identifying offsetting savings and finalizing the planned reform of EAGB should be a top priority.
- The government capital budget is a pressure point, reflecting the need for better alignment with underlying investment projects.
- Avoiding arrears and unregularized expenditures will be essential for sound public financial management.

### Financial sector and growth support
- Maintaining a conducive environment for private sector activity would support a pickup in economic growth in 2019.
- Ensuring a transparent and competitive cashew marketing season will be critical, starting with the announcement of a reference price consistent with international price developments.
- Addressing weaknesses in banks and ensuring compliance with prudential norms will be essential to maintain a healthy financial sector.

### Institutional and program engagement
- The IMF remains committed to supporting good economic governance in Guinea-Bissau.
- The mission expects to return to Bissau as soon as possible after the legislative elections for discussions with the incoming government.
- The team met with President José Mário Vaz; Prime Minister and Minister of Finance Aristides Gomes; Public Prosecutor General Bacari Biai; BCEAO National Director Helena Nosolini Embaló; other high-level officials; and representatives of the private sector and the donor community.

*IMF staff statement, January 18, 2019.*

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## References

- [Guinea-Bissau and the IMF](http://www.imf.org/external/country/GNB/index.htm)
- [Benin and the IMF](http://www.imf.org/external/country/BEN/index.htm)
- [Burkina Faso and the IMF](http://www.imf.org/external/country/BFA/index.htm)
- [Côte d'Ivoire and the IMF](http://www.imf.org/external/country/CIV/index.htm)
- [Mali and the IMF](http://www.imf.org/external/country/MLI/index.htm)
- [Niger and the IMF](http://www.imf.org/external/country/NER/index.htm)
- [Senegal and the IMF](http://www.imf.org/external/country/SEN/index.htm)
- [Togo and the IMF](http://www.imf.org/external/country/TGO/index.htm)
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_Source: https://www.imf.org/en/news/articles/2019/01/18/pr1908-imf-staff-concludes-visit-to-guinea-bissau_