IMF Executive Board Concludes the First Review of the Extended Credit Facility Arrangement for Guinea-Bissau and Approves US$3.2 Million Disbursement
May 10, 2023
- The IMF Executive Board decision allows for an immediate disbursement of SDR2.37 million (about US$3.2 million) to Guinea-Bissau to help meet the country’s financing needs.
- Growth is estimated at 3.5 percent in 2022 and is expected to improve to 4.5 percent in 2023.
- Performance has been strong during the initial phase of the program. The authorities remain committed to strong policy measures and structural reforms, including on fiscal management and governance.
Washington, DC: Today, the Executive Board of the International Monetary Fund (IMF) completed the first review of Guinea Bissau’s performance under a program supported by a 36-month Extended Credit Facility (ECF) arrangement. The ECF, with a total access of SDR28.4 million (about US$38.4 million at the time of approval, or 100 percent of quota), was approved by the IMF Executive Board on January 30, 2023 . Completion of the first review enables an immediate disbursement of SDR2.37 million, about US$3.2 million, to help meet the country’s balance-of-payments and fiscal financing needs and support the ongoing recovery. This brings total disbursements under the arrangement to SDR4.74 million, (about US$6.4 million). The Executive Board’s decision was taken on a lapse-of-time basis. [1]
Growth in 2022 is estimated at 3.5 percent, while average inflation increased to 7.9 percent in 2022. Growth was negatively affected by lower cashew exports and adverse external shocks, but supported by higher agricultural production, infrastructure projects, and relative political stability. The surge in commodity prices added inflationary pressures.
Program performance was satisfactory with all but one end-January 2023 quantitative performance criteria met for end-January 2023 and all structural measures at end-March 2023 for the second review completed. This reflects the authorities’ ability to maintain macroeconomic stability in a very difficult external environment made of spillovers from the war in Ukraine and tighter global financial conditions, including in the WAEMU regional capital market. Program performance should improve private sector and donor confidence and further catalyze much-needed concessional financing.
Going forward, ensuring continuation of strong policies is paramount to maintain good program performance. This entails a credible fiscal consolidation that ensures medium-term debt sustainability. The structural agenda is designed to strengthen governance and AML/CFT frameworks, improve the management of fiscal resources and public investment, increase transparency, accountability, and counter corruption. Priorities are the strengthening of revenue administration and collection, including through the implementation of the new VAT law, and a more efficient management of the wage bill supported by a new census of public sector employees and the implementation of an IMF-supported blockchain solution.
It is critical to persevere in the ambitious structural reform agenda, especially in the context of upcoming parliamentary elections, to fully reap the catalyzing effect of the ECF arrangement.
[1] The Executive Board takes decisions under its lapse-of-time procedure when it is agreed by the Board that a proposal can be considered without convening formal discussions.
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Guinea-Bissau: Selected Economic and Financial Indicators, 2020–28 |
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|
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
2026 |
2027 |
2028 |
|
|
Est. |
Proj. |
||||||||
|
(Annual percent change, unless otherwise indicated) |
|||||||||
|
National accounts and prices |
|||||||||
|
Real GDP at market prices |
1.5 |
6.4 |
3.5 |
4.5 |
5.0 |
5.0 |
5.0 |
5.0 |
4.5 |
|
Real GDP per capita |
-0.7 |
4.1 |
1.2 |
2.3 |
2.8 |
2.9 |
2.9 |
2.9 |
2.4 |
|
GDP deflator |
-1.0 |
2.7 |
7.3 |
5.6 |
3.1 |
2.8 |
2.8 |
2.8 |
2.8 |
|
Consumer price index (annual average) |
1.5 |
3.3 |
7.9 |
5.5 |
3.0 |
2.0 |
2.0 |
2.0 |
2.0 |
|
External sector |
|||||||||
|
Exports, f.o.b. (CFA francs) |
|||||||||
|
Imports, f.o.b. (CFA francs) |
-15.6 |
35.1 |
-14.3 |
26.8 |
11.7 |
4.5 |
4.6 |
4.7 |
5.4 |
|
Export volume |
-9.9 |
9.7 |
22.2 |
8.5 |
2.3 |
5.7 |
4.7 |
5.4 |
6.1 |
|
Import volume |
-3.9 |
-6.5 |
-10.1 |
-2.6 |
8.8 |
2.7 |
2.1 |
1.9 |
1.6 |
|
Terms of trade (deterioration = -) |
2.0 |
1.5 |
-1.0 |
… |
… |
… |
… |
… |
… |
|
Real effective exchange rate (depreciation = -) |
574.8 |
554.2 |
622.4 |
… |
… |
… |
… |
… |
… |
|
Exchange rate (CFAF per US$; average) |
|||||||||
|
Government finances |
|||||||||
|
Revenue excluding grants |
-5.5 |
22.7 |
3.4 |
15.4 |
13.0 |
9.8 |
10.2 |
10.0 |
8.5 |
|
Domestic revenue (excluding grants and one-offs) |
33.8 |
8.9 |
-6.0 |
5.0 |
7.3 |
7.9 |
7.7 |
9.8 |
8.2 |
|
Expenditure |
14.5 |
3.5 |
7.9 |
-5.8 |
4.7 |
6.8 |
8.0 |
8.2 |
6.6 |
|
Current expenditure |
96.7 |
19.3 |
-28.8 |
31.9 |
11.9 |
9.7 |
7.1 |
12.6 |
10.6 |
|
Capital expenditure |
|||||||||
|
Money and credit |
|||||||||
|
Domestic credit |
-1.7 |
18.5 |
24.2 |
8.2 |
10.8 |
9.5 |
6.3 |
5.9 |
5.9 |
|
Credit to the government (net) |
-19.7 |
53.4 |
25.5 |
4.8 |
4.1 |
2.4 |
-6.2 |
-7.0 |
-6.2 |
|
Credit to the economy |
5.9 |
7.3 |
23.7 |
9.8 |
13.8 |
12.4 |
11.0 |
10.0 |
9.0 |
|
Net domestic assets |
-13.8 |
21.0 |
47.2 |
10.4 |
13.4 |
11.5 |
7.5 |
6.9 |
6.8 |
|
Broad money (M2) |
9.1 |
21.2 |
2.9 |
5.8 |
7.1 |
6.4 |
5.7 |
6.1 |
6.1 |
|
(Percent of GDP, unless otherwise indicated) |
|||||||||
|
Investments and savings |
|||||||||
|
Gross investment |
17.5 |
18.3 |
18.0 |
17.5 |
19.6 |
20.4 |
21.1 |
22.1 |
23.2 |
|
Of which: government investment |
5.8 |
6.4 |
4.1 |
4.9 |
5.1 |
5.1 |
5.1 |
5.3 |
5.5 |
|
Gross domestic savings |
3.3 |
7.6 |
1.1 |
3.3 |
7.5 |
8.5 |
9.6 |
10.8 |
12.0 |
|
Of which: government savings |
-7.6 |
-5.5 |
-4.5 |
-2.4 |
-1.5 |
-1.2 |
-1.2 |
-1.1 |
-1.0 |
|
Gross national savings |
15.0 |
17.5 |
9.1 |
11.2 |
15.2 |
16.2 |
17.0 |
18.1 |
19.2 |
|
Government finances |
|||||||||
|
Revenue excluding grants |
11.4 |
12.8 |
11.9 |
12.5 |
13.0 |
13.2 |
13.5 |
13.8 |
13.9 |
|
Domestic primary expenditure |
16.0 |
14.7 |
15.1 |
12.7 |
12.5 |
12.6 |
12.9 |
13.1 |
13.3 |
|
Domestic primary balance |
-4.6 |
-1.9 |
-3.2 |
-0.2 |
0.5 |
0.6 |
0.7 |
0.7 |
0.7 |
|
Overall balance (commitment basis) |
|||||||||
|
Including grants |
-9.6 |
-5.9 |
-5.8 |
-3.8 |
-3.2 |
-3.0 |
-3.0 |
-3.0 |
-3.0 |
|
Excluding grants |
-13.6 |
-12.2 |
-9.2 |
-7.6 |
-6.9 |
-6.7 |
-6.4 |
-6.4 |
-6.4 |
|
External current account |
-2.6 |
-0.8 |
-8.9 |
-6.3 |
-4.4 |
-4.2 |
-4.1 |
-4.0 |
-4.0 |
|
Excluding official current transfers |
-5.7 |
-3.4 |
-10.8 |
-8.7 |
-6.8 |
-6.6 |
-6.2 |
-6.1 |
-6.0 |
|
Stock of public and publicly guaranteed debt 1 |
77.7 |
78.8 |
80.5 |
76.4 |
73.9 |
71.6 |
69.4 |
67.5 |
66.2 |
|
Of which: external debt |
41.1 |
40.3 |
39.0 |
35.6 |
33.7 |
32.2 |
30.1 |
28.3 |
26.9 |
|
Memorandum items: |
|||||||||
|
Nominal GDP at market prices (CFAF billions) |
875.2 |
956.3 |
1062.0 |
1172.0 |
1268.7 |
1369.5 |
1478.2 |
1595.6 |
1714.1 |
|
WAEMU gross official reserves (billions of US$) |
21.8 |
24.5 |
25.2 |
… |
… |
… |
… |
… |
… |
|
(percent of broad money) |
33.2 |
30.2 |
30.6 |
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|
Sources: Guinea-Bissau authorities; and IMF staff estimates and projections. |
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1 Coverage expanded to include legacy arrears. |
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IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: Pavis Devahasadin
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