{
  "title": "IMF Executive Board Completes the Sixth Review under the Extended Credit Facility Arrangement for Guinea-Bissau and Approves US$7.3 Million Disbursement",
  "publication": "IMF News, August 28, 2024",
  "sourceUrl": "https://www.imf.org/en/news/articles/2024/08/28/pr25312-guinea-bissau-imf-exec-board-completes-6th-rev-ecf-arr-approves-us7m-disbursement",
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  "summary": "The IMF Executive Board today completed the sixth review under the Extended Credit Facility (ECF) for Guinea-Bissau. This decision allows for an immediate disbursement of SDR5.44 million (about US$7.3 million) to help meet the country’s financing needs.",
  "publishDate": "2024-08-28",
  "sections": [
    {
      "heading": "Decision and disbursement",
      "content": "- The Executive Board completed the sixth review under Guinea-Bissau’s Extended Credit Facility (ECF) arrangement (three-year arrangement, approved on January 30, 2023).\n- Immediate disbursement: SDR5.44 million (about US$7.3 million) to help meet the country’s financing needs.\n- Total disbursement under the arrangement to date: SDR 24.88 million (about US$ 33.44 million).\n- The Executive Board granted an augmentation of access (140 percent of quota or SDR 39.76 million) on November 29, 2023.\n- The Board granted a waiver of nonobservance of:\n  - the end-April 2024 quantitative performance criterion on the floor on social and priority spending; and\n  - the continuous quantitative performance criterion on the ceiling on the accumulation of new external payment arrears.\n- The Executive Board completed the financing assurances review."
    },
    {
      "heading": "Program performance and targets",
      "content": "- Program performance in the sixth review: Seven out of nine Quantitative Performance Criteria (QPC) and both Indicative Targets were met for April 2024.\n- Missed targets:\n  - QPC on external payment arrears missed due to technical arrears in external debt service.\n  - Continuous structural benchmark (SB) on debt service missed due to technical arrears.\n  - QPC on social priority spending missed due to delayed external project grants (expected to materialize in coming months).\n- Recommendation to avoid recurrence of external arrears: strictly adhere to the revised continuous SB which incorporates a corrective action."
    },
    {
      "heading": "Macroeconomic outlook and risks",
      "content": "- Economic growth projection for 2024: 5 percent.\n- Inflation projection for 2024: 4.2 percent (compared to 7.2 percent in 2023).\n- Current account deficit expected to narrow to 6.1 percent of GDP.\n- Authorities’ target: achieve the domestic primary deficit target of 1.2 percent of GDP in 2024 to put public debt on a firm downward trajectory.\n- Near-term risks highlighted: challenging socio-political climate, terms-of-trade shocks, high inflation persistence, and tightening of regional financial conditions raising borrowing costs."
    },
    {
      "heading": "Structural reforms, fiscal policy, and governance recommendations",
      "content": "- Continue ambitious structural reform agenda to:\n  - improve domestic revenue mobilization;\n  - strengthen expenditure controls; and\n  - enhance governance, including transparency in public procurement and beneficial ownership information.\n- Fiscal consolidation measures emphasized:\n  - strict rationalization of non-priority expenditure;\n  - strengthen expenditure controls through the Technical Committee of Arbitration of Budgetary Expenditure (COTADO);\n  - containment of wage bill spending;\n  - focus revenue mobilization on reducing tax expenditures and strengthening revenue administration;\n  - continue engaging donors for additional budget support and grants to finance social priority spending.\n- Financial sector and public enterprise recommendations:\n  - take urgent actions to mitigate fiscal risks from the public utility company;\n  - continue advancing the disengagement of the undercapitalized bank, including through contingency planning;\n  - strengthen debt management procedures to avoid incurrence of technical arrears.\n- Anti-corruption and AML/CFT recommendations:\n  - improve governance, especially transparency in public procurement and beneficial ownership information, as essential steps to improve anti-corruption and AML/CFT effectiveness."
    },
    {
      "heading": "Key statistics and dates (verbatim)",
      "content": "- SDR5.44 million\n- about US$7.3 million\n- SDR 24.88 million\n- about US$ 33.44 million\n- 140 percent of quota\n- SDR 39.76 million\n- January 30, 2023\n- November 29, 2023\n- April 2024\n- 5 percent (growth in 2024)\n- 4.2 percent (inflation in 2024)\n- 7.2 percent (inflation in 2023)\n- 6.1 percent of GDP (current account deficit expected)\n- 1.2 percent of GDP (domestic primary deficit target in 2024)\n- Sixth review\n- Press Release No. 24/312\n- August 28, 2024\n\nSource: IMF press release (Press Release No. 24/312).\n\n---\n\n\n References\n\n- Guinea-Bissau and the IMF\n- Special Drawing Rights (SDRs) -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- Extended Credit Facility\n- The three-year arrangement\n- The Executive Board granted an augmentation of access\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/08/28/pr25312-guinea-bissau-imf-exec-board-completes-6th-rev-ecf-arr-approves-us7m-disbursement"
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    "Published: August 28, 2024",
    "The Executive Board completed the sixth review under Guinea-Bissau’s Extended Credit Facility (ECF) arrangement (three-year arrangement, approved on January 30, 2023).",
    "Immediate disbursement: SDR5.44 million (about US$7.3 million) to help meet the country’s financing needs.",
    "Total disbursement under the arrangement to date: SDR 24.88 million (about US$ 33.44 million).",
    "The Executive Board granted an augmentation of access (140 percent of quota or SDR 39.76 million) on November 29, 2023.",
    "The Board granted a waiver of nonobservance of:",
    "The Executive Board completed the financing assurances review.",
    "Program performance in the sixth review: Seven out of nine Quantitative Performance Criteria (QPC) and both Indicative Targets were met for April 2024.",
    "Missed targets:",
    "Recommendation to avoid recurrence of external arrears: strictly adhere to the revised continuous SB which incorporates a corrective action.",
    "Economic growth projection for 2024: 5 percent.",
    "Inflation projection for 2024: 4.2 percent (compared to 7.2 percent in 2023).",
    "Current account deficit expected to narrow to 6.1 percent of GDP.",
    "Authorities’ target: achieve the domestic primary deficit target of 1.2 percent of GDP in 2024 to put public debt on a firm downward trajectory.",
    "Near-term risks highlighted: challenging socio-political climate, terms-of-trade shocks, high inflation persistence, and tightening of regional financial conditions raising borrowing costs.",
    "Continue ambitious structural reform agenda to:",
    "Fiscal consolidation measures emphasized:",
    "Financial sector and public enterprise recommendations:",
    "Anti-corruption and AML/CFT recommendations:",
    "SDR5.44 million",
    "about US$7.3 million",
    "SDR 24.88 million",
    "about US$ 33.44 million",
    "140 percent of quota",
    "SDR 39.76 million",
    "January 30, 2023",
    "November 29, 2023",
    "April 2024",
    "5 percent (growth in 2024)",
    "4.2 percent (inflation in 2024)",
    "7.2 percent (inflation in 2023)",
    "6.1 percent of GDP (current account deficit expected)",
    "1.2 percent of GDP (domestic primary deficit target in 2024)",
    "Sixth review",
    "Press Release No. 24/312",
    "August 28, 2024",
    "[Guinea-Bissau and the IMF](http://www.imf.org/external/country/GNB/index.htm)",
    "[Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)",
    "[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)",
    "[The three-year arrangement](https://www.imf.org/en/News/Articles/2023/02/07/pr2326-guinea-bissau-imf-executive-board-approves-ecf-arrangement-for-guinea-bissau)",
    "[The Executive Board granted an augmentation of access](https://www.imf.org/en/News/Articles/2023/11/30/Pr23412GuineaBissauthirdreviewECF)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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