## IMF Executive Board Approves US$71 Million in Emergency Financing Support and Concludes 2024 Article IV Consultation with Guinea _IMF News, May 7, 2024_ ## Source details **Canonical URL:** [IMF Executive Board Approves US$71 Million in Emergency Financing Support and Concludes 2024 Article IV Consultation with Guinea](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) ## Other formats - [Markdown version](/en/news/articles/2024/05/07/pr24140-imf-approves-us-71m-in-emergency-financing-support-and-concludes-2024-article-iv-with-guinea/index.md) - [Structured JSON version](/en/news/articles/2024/05/07/pr24140-imf-approves-us-71m-in-emergency-financing-support-and-concludes-2024-article-iv-with-guinea/index.json) - [Bundle manifest](/en/news/articles/2024/05/07/pr24140-imf-approves-us-71m-in-emergency-financing-support-and-concludes-2024-article-iv-with-guinea/bundle-manifest.json) ## Bibliographic details - Published: May 7, 2024 --- ### Emergency financing and purpose - 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: - transfers to affected households; - decontamination of the explosion site; - construction of housing, school, and health infrastructure; - rehabilitation of damaged public buildings; - start of construction work on a modern and safe fuel depot. ### Economic outlook and projections - Growth projections: - Real GDP Growth (annual percentage change): 2024 projection 4.1 percent; 2025 projection 5.6 percent. - Mining (annual percentage change): 2024 projection 7.6; 2025 projection 10.7. - Industrial mining (annual percentage change): 2024 projection 9.8; 2025 projection 11.5. - Non-mining (annual percentage change): 2024 projection 3.1; 2025 projection 4.2. - Inflation: - Inflation Average (annual percentage change): 2024 projection 11.0; 2025 projection 10.2. - External sector and reserves: - Current account balance (including official transfers): 2024 projection -10.6; 2025 projection -10.0 (percent of GDP). - Overall balance of payments: 2023 Est. -0.6; 2024 Projection -0.4 (percent of GDP). - Gross available reserves (months of imports)1: 2021 Act. 2.8; 2022 Prel. 2.5; 2023 Est. 2.2. - Current account balance (excluding official transfers): 2023 Est. -10.7 (percent of GDP). - Public finances: - Total revenue and grants: 2024 projection 13.4; 2025 projection 13.2 (percent of GDP). - Expenditures and net lending: 2024 projection 16.4; 2025 projection 15.8 (percent of GDP). - Current Expenditures: 2024 projection 11.1. - Capital Expenditures: 2024 projection 4.5; 2025 projection 5.2 (percent of GDP). - Overall balance including grants: 2024 projection -3.0; 2025 projection -2.6 (percent of GDP). - Basic fiscal balance: 2024 projection 0.1 (percent of GDP). - Gross public debt: 2023 Est. 40.3; 2024 Projection 39.3; 2025 Projection 37.9 (percent of GDP). - Nominal GDP (GNF billions): 2021 Act. 159,336; 2022 Prel. 170,313; 2023 Est. 195,789; 2024 Projection 226,143; 2025 Projection 262,951. ### IMF assessment and policy recommendations - Short-term policy stance: - A temporary relaxation of the fiscal stance is warranted to respond to the explosion. - Emergency financial assistance under the Rapid Credit Facility will address urgent needs including decontamination, assistance to households, and reconstruction. - Medium-term fiscal and structural priorities: - Mobilize domestic revenues, especially from the mining sector. - Modernize tax administration. - Improve public finance management and investment efficiency. - Increase spending on education, health, and social protection, while anchoring spending on available resources. - Reform the electricity sector to address shortages. - Ensure that the Simandou iron ore project delivers expected benefits. - Adapt to and mitigate climate change and address gender disparities. - Strengthen governance and transparency, fight corruption, and improve the anti-money laundering and counter-terrorism financing regime (AML/CFT). - Implement the 2023 safeguards assessment recommendations. - Debt and financial stability guidance: - 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. - Preserve debt sustainability by maximizing concessionality of new debt, avoiding repeated accumulation of domestic arrears, strengthening debt management capacity, and enhancing public investment management. - 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. - Implement the government securities market action plan to create alternative financing avenues and limit the increased sovereign-bank exposure. - 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. ### Executive Board views and expectations - 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. *International Monetary Fund — Press Release No. 24/140, May 6, 2024* --- ## References - [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) _Source: 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_