## IMF Executive Board Completes the Second Review under the Extended Credit Facility Arrangement for Guinea-Bissau and Approves US$3.15 Million Disbursement _IMF News, August 30, 2023_ ## Source details **Canonical URL:** [IMF Executive Board Completes the Second Review under the Extended Credit Facility Arrangement for Guinea-Bissau and Approves US$3.15 Million Disbursement](https://www.imf.org/en/news/articles/2023/08/30/pr23299-imf-executive-board-completes-review-under-ecf-for-guinea-bissau) ## Other formats - [Markdown version](/en/news/articles/2023/08/30/pr23299-imf-executive-board-completes-review-under-ecf-for-guinea-bissau/index.md) - [Structured JSON version](/en/news/articles/2023/08/30/pr23299-imf-executive-board-completes-review-under-ecf-for-guinea-bissau/index.json) - [Bundle manifest](/en/news/articles/2023/08/30/pr23299-imf-executive-board-completes-review-under-ecf-for-guinea-bissau/bundle-manifest.json) ## Bibliographic details - Published: August 30, 2023 --- ### Overview - The Executive Board completed the second review under Guinea-Bissau’s Extended Credit Facility (ECF) arrangement. - The completion enables an immediate disbursement of SDR2.37 million (about US$3.15 million) to help meet balance-of-payments and fiscal financing needs amid external shocks. - Total disbursements under the ECF arrangement to date: SDR7.11 million (about US$9.46 million). - The Board approved a waiver for nonobservance of performance criteria on: - the floor on tax revenue, - the ceiling on wages, - the floor on the domestic primary fiscal balance. - Financing assurances review completed; rephasing of access agreed to make two disbursements of SDR2.37 million on January 17 and April 17, 2024, instead of a single disbursement on April 17, 2024. - The new government resulting from the winning coalition of the June 4, 2023, legislative election expressed commitment to implementing the program reform agenda. ### Economic performance and outlook - Real GDP growth: - 2022: 4.2 percent. - 2023 projection: 4.5 percent (recovery described as moderate). - 2024 projection: 5.0 percent. - Real GDP per capita projections (annual percent change): - 2022: 1.9 - 2023: 2.3 - 2024: 2.8 - 2025: 2.9 - 2026: 2.4 - Inflation: - Consumer price index (annual average): 2022: 7.0 percent; 2023 projection: 3.0 percent; 2024 projection: 2.0 percent. - GDP deflator: 2022: 7.3; 2023 projection: 6.9; 2024 projection: 3.1. - External sector: - Exports, f.o.b. (CFA francs): 2022: -14.3 (annual percent change); 2023 projection: 10.4; 2024 projection: 29.6. - Imports, f.o.b. (CFA francs): 2022: 25.3 (annual percent change); 2023 projection: 4.9; 2024 projection: 7.8. - Terms of trade (deterioration = -): 2022: -10.1; 2023 projection: 1.0; 2024 projection: 9.0. - Exchange rate (CFAF per US$; average): 2020: 574.8; 2021: 554.2; 2022: 622.4. - Drivers and risks: - Growth has been negatively affected by low cashew exports and adverse external shocks. - Surge in food and oil prices is adding pressure on annual inflation. - Downside risks cited: long-standing fragility constraints, uncertainty in the global economy with potential adverse spillovers on cashew exports and food and energy prices, and climate shocks. ### Fiscal and debt developments - Fiscal performance: - Overall fiscal deficit: remained at 5.9 percent of GDP in 2022. - Government undertook corrective actions after missed targets, including strengthening expenditure controls, selling 5G licenses, and rationalizing tax expenditures to meet end-2023 targets. - Public debt: - Based on provisional data, stock of public and publicly guaranteed debt: 2022: 80.3 percent of GDP. - Drivers of the increase: higher-than-projected overall fiscal deficit, new government guarantees mainly to the public utility company, and recognition of cross-arrears owed to suppliers with non-performing loans at the undercapitalized bank. - Stock of public and publicly guaranteed debt projections: - 2023: 75.5 percent of GDP - 2024: 73.1 percent of GDP - 2025: 70.9 percent of GDP - 2026: 68.8 percent of GDP - 2027: 67.0 percent of GDP - 2028: 65.7 percent of GDP - Of which: external debt: 2022: 39.2 percent of GDP; 2023 projection: 35.8; 2024: 32.3; 2025: 30.2; 2026: 28.4; 2027: 27.0. - Fiscal policy priorities: - Revenue mobilization and expenditure containment remain pivotal to prevent risks to debt sustainability and access to external financing. - Commitment to fiscal consolidation to meet regional convergence criteria, including strengthening governance and management of public resources, mitigating fiscal risks, and relying on highly concessional financing. ### Policy reforms, governance, and program implementation - Program progress: - Program performance described as satisfactory: five out of eight quantitative performance criteria (QPCs) for March 2023 were met. - Authorities proposed four new structural benchmarks to: - accelerate the professionalization of the tax function, - reintroduce expenditure controls, - improve the governance of state property. - A quarterly review will be added this year to ensure close monitoring under high uncertainty. - Governance and anti-corruption: - Authorities implemented transparency commitments related to COVID-19 emergency spending, including publication of the third-party audit and beneficial ownership information of public contracts. - Progress in priority audits by the Audit Court. - Progress in mitigating fiscal risks from the public utility company. - Authorities remain committed to modernize the asset declaration regime and improve the AML/CFT framework. - Structural priorities: - Strengthen institutional capacity through structural and governance reforms. - Enhance economic diversification. - Ensure banking vulnerabilities are managed effectively. - IMF view (statement by Mr. Okamura, Deputy Managing Director and Acting Chair): - Emphasized commitment to program implementation, ambitious fiscal consolidation to support inclusive growth while preserving debt sustainability, and the critical role of reform implementation to catalyze additional donor support. ### Selected economic and financial indicators, 2020–28 (selected exact figures) - Real GDP at market prices (annual percent change): - 2020: 1.5 - 2021: 6.4 - 2022: 4.2 - 2023 (Proj.): 4.5 - 2024 (Proj.): 5.0 - Consumer price index (annual average): - 2020: 3.3 - 2021: 7.9 - 2022: 7.0 - 2023 (Proj.): 3.0 - 2024 (Proj.): 2.0 - Revenue excluding grants (percent of GDP): - 2020: -5.5 - 2021: 22.7 - 2022: 3.4 - 2023 (Proj.): 19.3 - 2024 (Proj.): 9.3 - 2025 (Proj.): 9.8 - 2026 (Proj.): 10.2 - 2027 (Proj.): 10.0 - 2028 (Proj.): 8.7 - Expenditure (annual percent change): - 2020: 33.8 - 2021: 8.9 - 2022: -5.2 - 2023 (Proj.): 6.0 - 2024 (Proj.): 6.1 - Domestic primary balance (percent of GDP): - 2020: -4.6 - 2021: -1.9 - 2022: -3.2 - 2023 (Proj.): -0.2 - 2024 (Proj.): 0.4 - 2025 (Proj.): 0.6 - 2026 (Proj.): 0.7 - Overall balance (commitment basis), including grants (percent of GDP): - 2021: -9.6 - 2022: -5.9 - 2023 (Proj.): -3.5 - 2024 (Proj.): -3.0 - External current account (percent of GDP): - 2020: -2.6 - 2021: -0.8 - 2022: -7.1 - 2023 (Proj.): -4.3 - 2024 (Proj.): -4.1 - Nominal GDP at market prices (CFAF billions): - 2020: 875.2 - 2021: 956.3 - 2022: 1069.2 - 2023 (Proj.): 1194.4 - 2024 (Proj.): 1293.0 - 2025 (Proj.): 1395.7 - 2026 (Proj.): 1506.5 - 2027 (Proj.): 1626.1 - 2028 (Proj.): 1746.9 - WAEMU gross official reserves (billions of US$): - 2020: 21.8 - 2021: 24.5 - 2022: 25.2 *Source: IMF Executive Board press release, Press Release No. 23/299 (August 30, 2023).* --- ## References - [Guinea-Bissau and the IMF](http://www.imf.org/external/country/GNB/index.htm) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [Extended Credit Facility](https://www.imf.org/en/About/Factsheets/Sheets/2023/Extended-Credit-Facility-ECF) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2023/08/30/pr23299-imf-executive-board-completes-review-under-ecf-for-guinea-bissau_