The International Monetary Fund (IMF) Executive Board has completed the seventh review under Guinea-Bissau's Extended Credit Facility (ECF) arrangement, allowing for a disbursement of approximately US$7.1 million. This development follows the approval of a three-year ECF arrangement on January 30, 2023, aimed at securing debt sustainability and improving governance in Guinea-Bissau.
The IMF's Executive Board approved an augmentation of access to 140 percent of quota or SDR 39.76 million on November 29, 2023. The completion of this review brings total disbursements under the arrangement to about US$39.9 million.
According to the IMF, program performance was strong with all quantitative targets and structural benchmarks met by end-June 2024. The authorities have also adhered to continuous structural benchmarks related to expenditure committee operations and debt service payments.
Economic growth in Guinea-Bissau is projected at 5 percent for 2024 despite lower-than-expected cashew exports, while inflation is expected to average 4.2 percent. However, the current account deficit is anticipated to be larger than previously projected due to underperformance in cashew exports.
Mr. Li, Deputy Managing Director and Acting Chair of the IMF Executive Board, commented on the situation: “Guinea-Bissau continues to face a complex economic and political landscape... The authorities have fostered consensus on essential reforms while upholding political and macroeconomic stability.”
He added that achieving fiscal consolidation targets for 2024 and 2025 is crucial for reducing public debt vulnerabilities: “It will be important to maintain strict controls over the wage bill and tighten controls of other expenditures through the expenditure committee (COTADO) to prevent spending overruns.”
The IMF emphasized that efforts should focus on reducing tax exemptions and strengthening revenue administration while securing fiscal space for priority social spending. Structural reforms are being advanced by Guinea-Bissau's authorities as part of their commitment to implementing policies outlined in their Fund-supported program.