## IMF Executive Board Completes the Third Review of the Extended Credit Facility Arrangement for Guinea-Bissau and Approves US$8.2 Million Disbursement _IMF News, November 30, 2023_ ## Source details **Canonical URL:** [IMF Executive Board Completes the Third Review of the Extended Credit Facility Arrangement for Guinea-Bissau and Approves US$8.2 Million Disbursement](https://www.imf.org/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf) ## Other formats - [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) ## Bibliographic details - Published: November 30, 2023 --- ### Executive Board decision and financing actions - 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 and waivers - 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 floor on domestic tax revenue, - the ceiling on wages, - the floor on the domestic primary fiscal balance, - and the nonobservance of the continuous performance criterion on ceiling on new external arrears. - 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. ### Economic context and projections (2023) - Growth: - The economy continues to recover in 2023 and growth is projected at 4.2 percent, the same level as in 2022. - Inflation: - Inflation is expected to reach 8 percent in 2023, because of soaring food prices. - Fiscal balance: - The overall fiscal deficit is projected at 5.6 percent of GDP in 2023, partly reflecting the spending overruns during the legislative elections period. - Public debt: - 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. - Drivers of financing need: - Significant deterioration of Guinea-Bissau terms of trade and a tightening of regional financing conditions. - Country actions: - The authorities remain committed to strong policies and are taking measures to ensure that end-December 2023 targets are met. ### Policy priorities, reforms, and corrective measures - Fiscal consolidation and revenue: - 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. - The authorities have adopted corrective actions and a draft 2024 budget in line with program parameters. - They are strictly rationalizing non-priority expenditure, mobilizing additional revenue, and tightly controlling the wage bill. - Structural reforms and risk mitigation: - 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. - Implementation of policies to foster agricultural and economic diversification is important. - Governance, transparency, and oversight: - Progress continues in strengthening external audits, public procurement, and AML/CFT effectiveness. - The Audit Court has published the audit report of the High Commissioner for COVID-19. - The authorities continue to publish the beneficial ownership information of all public contracts. - A series of legislative reforms are underway to modernize the asset declaration regime and improve the anti-corruption and AML/CFT framework. - External support: - The augmentation of access under the ECF, together with increased support from development partners, will help cover the balance of payments needs. ### Statement by Mr. Li, Deputy Managing Director and Acting Chair - Mr. Li noted: - “Guinea-Bissau’s successful completion of the last legislative election and the timely formation of the new government is commendable.” - The country is facing acute economic shocks from disappointing cashew exports, soaring food inflation, and a tightening of regional financing conditions. - “Sustained implementation of the reform agenda under the ECF arrangement will be crucial, and the authorities’ firm commitment to the program objectives is welcome.” - 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. - 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. *Press Release No. 23/412, November 29, 2023* --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2023/11/30/pr23412guineabissauthirdreviewecf_