{ "title": "IMF Executive Board Completes the Third Review of the Extended Credit Facility Arrangement for Guinea-Bissau and Approves US$8.2 Million Disbursement", "publication": "IMF News, November 30, 2023", "sourceUrl": "https://www.imf.org/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf", "canonical": "https://www.imf.org/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf", "overlayPath": "/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf/index.md", "summary": "Guinea Bissau, Third Review, Extended Credit Facility", "publishDate": "2023-11-30", "sections": [ { "heading": "Executive Board decision and financing actions", "content": "- The Executive Board decision allows for an immediate disbursement of about US$8.23 million (SDR6.16 million) to help meet the country’s financing needs.\n- The Executive Board approved an augmentation of access under the Extended Credit Facility arrangement from about US$37.96 (SDR28.4 million) to US$53.14 million (SDR39.76 million or 140 percent of quota).\n- With the third review disbursement, the total amount disbursed under the arrangement is SDR13.27 million (about US$ 17.7 million).\n- The three-year arrangement was approved on January 30, 2023." }, { "heading": "Performance under the ECF-supported program and waivers", "content": "- Performance under the ECF supported program was weaker than expected for the third review, against a challenging external and domestic context.\n- The Executive Board granted a waiver for nonobservance of performance criteria on:\n - the floor on domestic tax revenue,\n - the ceiling on wages,\n - the floor on the domestic primary fiscal balance,\n - and the nonobservance of the continuous performance criterion on ceiling on new external arrears.\n- The Executive Board approved the request to modify the end-December 2023 performance criterion on the domestic primary balance.\n- The financing assurances review was completed." }, { "heading": "Economic context and projections (2023)", "content": "- Growth:\n - The economy continues to recover in 2023 and growth is projected at 4.2 percent, the same level as in 2022.\n- Inflation:\n - Inflation is expected to reach 8 percent in 2023, because of soaring food prices.\n- Fiscal balance:\n - The overall fiscal deficit is projected at 5.6 percent of GDP in 2023, partly reflecting the spending overruns during the legislative elections period.\n- Public debt:\n - Public debt is projected to decline and reach 76.5 percent of GDP in 2023 because of a lower fiscal deficit, an appreciation of the domestic currency and higher nominal GDP.\n- Drivers of financing need:\n - Significant deterioration of Guinea-Bissau terms of trade and a tightening of regional financing conditions.\n- Country actions:\n - The authorities remain committed to strong policies and are taking measures to ensure that end-December 2023 targets are met." }, { "heading": "Policy priorities, reforms, and corrective measures", "content": "- Fiscal consolidation and revenue:\n - Improving domestic revenue mobilization and containing wage and non-wage current expenditures will be key to support fiscal consolidation and put public debt on a firm downward trajectory.\n - The authorities have adopted corrective actions and a draft 2024 budget in line with program parameters.\n - They are strictly rationalizing non-priority expenditure, mobilizing additional revenue, and tightly controlling the wage bill.\n- Structural reforms and risk mitigation:\n - The new government is leading structural reforms to mitigate fiscal risks in the energy and financial sectors, as well as in governance and the rule of law.\n - Implementation of policies to foster agricultural and economic diversification is important.\n- Governance, transparency, and oversight:\n - Progress continues in strengthening external audits, public procurement, and AML/CFT effectiveness.\n - The Audit Court has published the audit report of the High Commissioner for COVID-19.\n - The authorities continue to publish the beneficial ownership information of all public contracts.\n - A series of legislative reforms are underway to modernize the asset declaration regime and improve the anti-corruption and AML/CFT framework.\n- External support:\n - The augmentation of access under the ECF, together with increased support from development partners, will help cover the balance of payments needs." }, { "heading": "Statement by Mr. Li, Deputy Managing Director and Acting Chair", "content": "- Mr. Li noted:\n - “Guinea-Bissau’s successful completion of the last legislative election and the timely formation of the new government is commendable.”\n - The country is facing acute economic shocks from disappointing cashew exports, soaring food inflation, and a tightening of regional financing conditions.\n - “Sustained implementation of the reform agenda under the ECF arrangement will be crucial, and the authorities’ firm commitment to the program objectives is welcome.”\n - He emphasized that continued efforts in rationalizing non-priority expenditure, mobilizing additional revenue, tightly controlling the wage bill, and sustained fiscal consolidation are needed to ensure debt sustainability.\n - He highlighted the importance of reforms in energy and financial sectors, governance and the rule of law, and policies to foster agricultural and economic diversification.\n\nPress Release No. 23/412, November 29, 2023\n\n---\n\n\n References\n\n- Guinea and the IMF\n- Guinea-Bissau and the IMF\n- Press Releases\n- PRESS CENTER\n- Extended Credit Facility\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf" } ], "bullets": [ "[Markdown version](/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf/index.md)", "[Structured JSON version](/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf/index.json)", "[Bundle manifest](/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf/bundle-manifest.json)", "Published: November 30, 2023", "The Executive Board decision allows for an immediate disbursement of about US$8.23 million (SDR6.16 million) to help meet the country’s financing needs.", "The Executive Board approved an augmentation of access under the Extended Credit Facility arrangement from about US$37.96 (SDR28.4 million) to US$53.14 million (SDR39.76 million or 140 percent of quota).", "With the third review disbursement, the total amount disbursed under the arrangement is SDR13.27 million (about US$ 17.7 million).", "The three-year arrangement was approved on January 30, 2023.", "Performance under the ECF supported program was weaker than expected for the third review, against a challenging external and domestic context.", "The Executive Board granted a waiver for nonobservance of performance criteria on:", "The Executive Board approved the request to modify the end-December 2023 performance criterion on the domestic primary balance.", "The financing assurances review was completed.", "Growth:", "Inflation:", "Fiscal balance:", "Public debt:", "Drivers of financing need:", "Country actions:", "Fiscal consolidation and revenue:", "Structural reforms and risk mitigation:", "Governance, transparency, and oversight:", "External support:", "Mr. Li noted:", "[Guinea and the IMF](http://www.imf.org/external/country/GIN/index.htm)", "[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)" ], "alternates": { "markdown": "/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf/index.md", "json": "/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf/index.json", "bundleManifest": "/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T02:32:47.269Z" }