{
  "title": "IMF Executive Board Approves US$71 Million in Emergency Financing Support and Concludes 2024 Article IV Consultation with Guinea",
  "publication": "IMF News, May 7, 2024",
  "sourceUrl": "https://www.imf.org/en/news/articles/2024/05/07/pr24140-imf-approves-us-71m-in-emergency-financing-support-and-concludes-2024-article-iv-with-guinea",
  "canonical": "https://www.imf.org/en/news/articles/2024/05/07/pr24140-imf-approves-us-71m-in-emergency-financing-support-and-concludes-2024-article-iv-with-guinea",
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  "summary": "The Executive Board approved a disbursement of SDR 53.55 million (about US$71 million) to Guinea under the Exogenous Shocks Window of the Rapid Credit Facility to help Guinea address immediate needs associated with the explosion of the main fuel depot in late 2023.",
  "publishDate": "2024-05-07",
  "sections": [
    {
      "heading": "Emergency financing and purpose",
      "content": "- The Executive Board approved a disbursement of SDR 53.55 million (about US$71 million) to Guinea under the Exogenous Shocks Window of the Rapid Credit Facility to help address immediate balance-of-payments needs associated with the explosion of the main fuel depot in late 2023.\n- Emergency spending measures to be reflected in the revised budget law for 2024 include:\n  - transfers to affected households;\n  - decontamination of the explosion site;\n  - construction of housing, school, and health infrastructure;\n  - rehabilitation of damaged public buildings;\n  - start of construction work on a modern and safe fuel depot."
    },
    {
      "heading": "Economic outlook and projections",
      "content": "- Growth projections:\n  - Real GDP Growth (annual percentage change): 2024 projection 4.1 percent; 2025 projection 5.6 percent.\n  - Mining (annual percentage change): 2024 projection 7.6; 2025 projection 10.7.\n  - Industrial mining (annual percentage change): 2024 projection 9.8; 2025 projection 11.5.\n  - Non-mining (annual percentage change): 2024 projection 3.1; 2025 projection 4.2.\n- Inflation:\n  - Inflation Average (annual percentage change): 2024 projection 11.0; 2025 projection 10.2.\n- External sector and reserves:\n  - Current account balance (including official transfers): 2024 projection -10.6; 2025 projection -10.0 (percent of GDP).\n  - Overall balance of payments: 2023 Est. -0.6; 2024 Projection -0.4 (percent of GDP).\n  - Gross available reserves (months of imports)1: 2021 Act. 2.8; 2022 Prel. 2.5; 2023 Est. 2.2.\n  - Current account balance (excluding official transfers): 2023 Est. -10.7 (percent of GDP).\n- Public finances:\n  - Total revenue and grants: 2024 projection 13.4; 2025 projection 13.2 (percent of GDP).\n  - Expenditures and net lending: 2024 projection 16.4; 2025 projection 15.8 (percent of GDP).\n  - Current Expenditures: 2024 projection 11.1.\n  - Capital Expenditures: 2024 projection 4.5; 2025 projection 5.2 (percent of GDP).\n  - Overall balance including grants: 2024 projection -3.0; 2025 projection -2.6 (percent of GDP).\n  - Basic fiscal balance: 2024 projection 0.1 (percent of GDP).\n  - Gross public debt: 2023 Est. 40.3; 2024 Projection 39.3; 2025 Projection 37.9 (percent of GDP).\n  - Nominal GDP (GNF billions): 2021 Act. 159,336; 2022 Prel. 170,313; 2023 Est. 195,789; 2024 Projection 226,143; 2025 Projection 262,951."
    },
    {
      "heading": "IMF assessment and policy recommendations",
      "content": "- Short-term policy stance:\n  - A temporary relaxation of the fiscal stance is warranted to respond to the explosion.\n  - Emergency financial assistance under the Rapid Credit Facility will address urgent needs including decontamination, assistance to households, and reconstruction.\n- Medium-term fiscal and structural priorities:\n  - Mobilize domestic revenues, especially from the mining sector.\n  - Modernize tax administration.\n  - Improve public finance management and investment efficiency.\n  - Increase spending on education, health, and social protection, while anchoring spending on available resources.\n  - Reform the electricity sector to address shortages.\n  - Ensure that the Simandou iron ore project delivers expected benefits.\n  - Adapt to and mitigate climate change and address gender disparities.\n  - Strengthen governance and transparency, fight corruption, and improve the anti-money laundering and counter-terrorism financing regime (AML/CFT).\n  - Implement the 2023 safeguards assessment recommendations.\n- Debt and financial stability guidance:\n  - Guinea remains at moderate risk of debt distress, with some space to absorb shocks; domestic debt vulnerabilities have increased due to government T-bonds issuance to finance high public investment spending.\n  - Preserve debt sustainability by maximizing concessionality of new debt, avoiding repeated accumulation of domestic arrears, strengthening debt management capacity, and enhancing public investment management.\n  - Monetary authorities should be ready to tighten monetary policy if needed and ensure central bank lending to the government remains within the statutory limit to help contain inflationary pressures.\n  - Implement the government securities market action plan to create alternative financing avenues and limit the increased sovereign-bank exposure.\n  - Strengthen financial sector regulation and supervision; discontinue the use of Treasury bond holdings as reserve requirements; respect statutory limits on central bank advances to the government."
    },
    {
      "heading": "Executive Board views and expectations",
      "content": "- Directors agreed that emergency assistance is critical and emphasized transparent use of the RCF disbursement.\n- Directors supported temporary fiscal relaxation for emergency response, while stressing the need for domestic revenue mobilization to preserve medium-term debt sustainability.\n- Directors welcomed authorities’ commitments to address transfer mispricing, reduce tax exemptions in the mining sector, and implement transparency and governance measures for RCF resources.\n- Directors recommended reforms to fuel and electricity subsidies, stronger SOE management, and further efforts to strengthen AML/CFT and address climate vulnerabilities and gender gaps.\n- It is expected that the next Article IV consultation with Guinea will be held on the standard 12-month cycle.\n\nInternational Monetary Fund — Press Release No. 24/140, May 6, 2024\n\n---\n\n\n References\n\n- Gita Gopinath\n- Guinea and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/05/07/pr24140-imf-approves-us-71m-in-emergency-financing-support-and-concludes-2024-article-iv-with-guinea"
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    "Published: May 7, 2024",
    "The Executive Board approved a disbursement of SDR 53.55 million (about US$71 million) to Guinea under the Exogenous Shocks Window of the Rapid Credit Facility to help address immediate balance-of-payments needs associated with the explosion of the main fuel depot in late 2023.",
    "Emergency spending measures to be reflected in the revised budget law for 2024 include:",
    "Growth projections:",
    "Inflation:",
    "External sector and reserves:",
    "Public finances:",
    "Short-term policy stance:",
    "Medium-term fiscal and structural priorities:",
    "Debt and financial stability guidance:",
    "Directors agreed that emergency assistance is critical and emphasized transparent use of the RCF disbursement.",
    "Directors supported temporary fiscal relaxation for emergency response, while stressing the need for domestic revenue mobilization to preserve medium-term debt sustainability.",
    "Directors welcomed authorities’ commitments to address transfer mispricing, reduce tax exemptions in the mining sector, and implement transparency and governance measures for RCF resources.",
    "Directors recommended reforms to fuel and electricity subsidies, stronger SOE management, and further efforts to strengthen AML/CFT and address climate vulnerabilities and gender gaps.",
    "It is expected that the next Article IV consultation with Guinea will be held on the standard 12-month cycle.",
    "[Gita Gopinath](https://www.imf.org/en/about/senior-officials/bios/shirin-hamid)",
    "[Guinea and the IMF](http://www.imf.org/external/country/GIN/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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