## IMF Staff Completes Virtual Mission for the First Review of a Staff-Monitored Program to Guinea Bissau

_IMF News, October 11, 2021_

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**Canonical URL:** [IMF Staff Completes Virtual Mission for the First Review of a Staff-Monitored Program to Guinea Bissau](https://www.imf.org/en/news/articles/2021/10/11/pr21296-guinea-bissau-imf-staff-completes-virtual-mission-first-review-staff-monitored-program)

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## Bibliographic details
- Published: October 11, 2021

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### Mission summary and purpose
- IMF staff team, led by Mr. Jose Gijon, held virtual meetings with the authorities from September 28 to October 11, 2021, to conduct the first review of the 9-monthStaff-Monitored Program(SMP).
- The review assesses efforts to build a policy track record towards a possible Extended Credit Facility(ECF) arrangement in 2022.
- A staff-level agreement was reached on the completion of this first review, subject to IMF management approval.
- Statement emphasizes that views are those of IMF staff and do not necessarily represent the IMF’s Executive Board; the mission will not result in a Board discussion.

### Progress on reforms and program implementation
- Progress on the Staff-Monitored Program (SMP) reform agenda has been satisfactory despite difficult socio-economic conditions compounded by the COVID-19 pandemic.
- Structural benchmarks and most quantitative targets have been met.
- Authorities achieved relatively high levels of vaccination compared to other Sub-Saharan African countries, despite very constrained resources.

### Economic outlook and program targets
- Economic recovery continued in 2021 and the medium-term outlook remains strong.
- Inflation should remain subdued and below the 3 percent regional threshold of the Western Africa Economic and Monetary Union (WAEMU).
- Fiscal budget deficit is expected to be contained to 5.2 percent of GDP in 2021, in line with the program objectives.
- The IMF team and authorities agreed on policy measures for the 2022 budget intended to bring the projected fiscal deficit down to about 4 ½ percent of GDP in 2022.
- Fiscal deficit is projected to gradually converge to the WAEMU regional deficit norm of 3 percent of GDP by 2025.

### Fiscal policy, revenue mobilization, and debt sustainability
- Recommendation to avoid arrears accumulation and the use of expensive non-concessional borrowing in 2021 budget execution and 2022 budget design, given public debt already above the WAEMU convergence pact limit.
- Emphasis on focusing on revenue mobilization and expenditure containment measures, including more efficient management to contain any increase of the wage bill and lower debt interest payment.
- Debt interest payment represented 20.5 percent of tax revenue in 2020; wage bill represented 80 percent of tax revenue in 2020.
- Attracting external grants will be key to cover government current expenses.
- Authorities decided to use most of the recent SDR 27.2 million allocation to Guinea Bissau (about US$ 38.4 million) to buttress debt sustainability by repaying non concessional debt, notably to BOAD, and allocate the remaining amount to supporting COVID-related spending, including vaccination and improvement in health services.

### Governance, transparency, and accountability measures
- Success of the IMF program hinges on meeting strong governance commitments to enhance public finance transparency, accountability and efficiency.
- Measures aim to guarantee that expenditure decisions impacting the budget are exclusively authorized by the Ministry of Finance in accordance with existing legislation.
- Specific governance and transparency measures related to COVID-19 spending include:
  - Completion of an independent audit of crisis-mitigation spending.
  - Publication of the related report along with regular expenditure reports.
  - Publication of procurement contracts mentioning awarded companies and beneficial owners.
  - Publication of ex-post reports on validation of delivery of goods and services.
- IMF will support implementation through provision of adequate capacity development.
- IMF staff will continue supporting authorities’ efforts to reach out to other international partners to mobilize concessional financing for the reform program.

### Meetings and stakeholder engagement
- The IMF team met with:
  - H.E. President Sissoco Embaló
  - Vice-Prime Minister Sambú
  - Finance Minister Fadiá
  - BCEAO National Director Embaló
  - President of the Court of Auditors Baldé
  - High Commissioner for COVID-19 Robalo
  - Officials from the Ministries of Finance, Economy, Public Administration, the National Directorate of the BCEAO, the National Institute of Statistics, the FIU and other officials
  - Representatives from development partners
- The team thanked the authorities for openness and constructive discussions and looks forward to continuing close cooperation.

*IMF Communications Department — End-of-Mission press release, October 11, 2021.*

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## References

- [IMF COVID-19 Hub](https://www.imf.org/en/Topics/imf-and-covid19)
- [Policy Tracker](https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19)
- [Financial Assistance](https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker)
- [Questions & Answers](https://www.imf.org/en/About/FAQ/imf-response-to-covid-19)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Staff-Monitored Program](https://www.imf.org/en/About/Factsheets/Sheets/2021/03/22/imf-staff-monitored-program-smp)
- [Extended Credit Facility](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/04/Extended-Credit-Facility)
- [Rapid Credit Facility](https://www.imf.org/en/Publications/CR/Issues/2021/02/01/Guinea-Bissau-Request-for-Disbursement-Under-the-Rapid-Credit-Facility-Press-Release-Staff-50055)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2021/10/11/pr21296-guinea-bissau-imf-staff-completes-virtual-mission-first-review-staff-monitored-program_