A team from the International Monetary Fund (IMF), led by Mission Chief Niko Hobdari, conducted meetings in Bissau from October 29 to November 6, 2024. The discussions focused on macroeconomic policies as part of the Seventh Review of the Extended Credit Facility (ECF) arrangement with Guinea Bissau. This staff-level agreement awaits approval from IMF Management and consideration by the Executive Board.
The initial ECF arrangement was approved by the IMF Executive Board for a total amount of SDR 28.4 million (approximately US$ 37.3 million) on January 30, 2023. An augmentation of access was granted on November 29, 2023, increasing it to SDR 39.76 million.
Niko Hobdari stated: “I am pleased to announce that the Guinea Bissau authorities and the IMF staff have reached a staff-level agreement on economic and financial policies that could support the approval of the Seventh Review of the ECF program.” He noted that if approved by mid-December 2024, this would enable a disbursement of SDR 5.43 million (about US$ 7.2 million), bringing total disbursements under the arrangement to SDR 30.31 million (about US$ 40.4 million).
Hobdari provided an economic outlook: “Growth is expected to reach 5 percent in 2024 despite lower-than-expected cashew exports while inflation is projected to average 4.2 percent this year.” He added that “the current account deficit will be larger-than-expected at 7.4 percent of GDP due to underperformance in cashew exports,” and mentioned a fiscal deficit projection of “5 percent of GDP in 2024” with a commitment to reduce it to “3 percent of GDP in 2025.”
He highlighted progress in implementing economic programs: “In this context, the authorities’ economic and financial program is on track and its implementation has been strong.” Most performance criteria were met for June and September deadlines.
Since August, Bissau has been supplied with electricity solely by OMGV hydropower plant at reduced tariffs compared to previous providers. Authorities plan rapid expansion of domestic electricity production through solar plants as part of energy sector reforms.
Hobdari emphasized future goals: “Looking ahead, advancing key structural reforms will support inclusive growth and economic diversification.” These include energy sector reform focusing on renewable sources, encouraging domestic cashew processing, fostering tourism, empowering women and youth, improving revenue mobilization, strengthening expenditure controls, seeking concessional loans and grants, mitigating fiscal risks from state-owned enterprises, and improving cash and debt management.
The IMF team engaged with several high-ranking officials including President Sissoco Embaló and Prime Minister Barros among others during their visit.