On July 26, 2019, the Executive Board of the International Monetary Fund
(IMF) completed the third review of Guinea’s economic performance under the
program supported by an Extended Credit Facility (ECF). Completion of this
review enables the immediate disbursement of SDR 17.213 million (about
US$23.9 million), bringing total disbursements under the arrangement to SDR
68.849 million (about US$95.7 million). The Board also approved the
authorities’ request for modification of a performance criterion.
Guinea’s three-year ECF arrangement was approved by the Executive Board of
the IMF on December 11, 2017 (see Press Release No. 17/484) for SDR 120.488
million (about US$170.1 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, and promoting
private sector development.
Following the Executive Board’s discussion on Guinea, Mr. Mitsuhiro
Furusawa, Acting Chair and Deputy Managing Director, issued the following
statement:
“Guinea’s growth momentum continues and the medium-term outlook is
favorable with some downside risks. The authorities are moving ahead in the
implementation of macroeconomic policies and reforms to foster high and
broad-based growth and reduce poverty while preserving stability.
Performance under the ECF-supported program against end-December 2018
targets was satisfactory, and program-supported reforms have advanced.
Program performance continued to be satisfactory through the first
quarter of 2019. The authorities have started implementing additional
adjustment measures to achieve the end-2019 fiscal target, given higher
than-anticipated electricity subsidies and lower tax revenues.
“Achieving a basic fiscal surplus will preserve stability while
growth-supporting public investment will be scaled-up. Advancing programmed
tax revenue measures and applying the petroleum price adjustment mechanism
will support revenue mobilization. Gradually bringing electricity tariffs
to cost recovery levels will reduce untargeted electricity subsidies and
create fiscal space for priority spending. In parallel, social safety nets
will be strengthened to protect the most vulnerable and reduce poverty.
Improving public investment management will foster investment returns and
efficiency. Maintaining non-concessional loans to programmed amounts and
continuing to strengthen debt management will preserve debt sustainability.
“Continuing to build external buffers against shocks will strengthen
Guinea’s resilience. Greater exchange rate flexibility will support
building reserves. To this end, competition in the foreign exchange market
is being strengthened and a rule-based intervention strategy will be
finalized.
“Monetary policy will need to be prudent to moderate inflation. Limiting
the central bank’s lending to the government will be key to contain
inflationary pressures. An active liquidity management effort will support
achieving monetary targets. Strengthening banking supervision and
regulation will support stability.
“The authorities are advancing growth-supporting structural reforms.
Strengthening the anti-corruption framework, the AML/CFT regime, and the
business climate will enhance governance and support private sector
development.”
