An IMF mission led by Abdoul Aziz Wane visited Conakry during August 24 to September 7, 2016, to conduct discussions on the eighth and final review of the
authorities’ program supported by an arrangement under the Extended Credit Facility (ECF).
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At the conclusion of the mission Mr. Wane issued the following statement:
“The Guinean authorities and IMF staff have reached preliminary understandings on a set of policies that, subject to approval by IMF management and the
Executive Board, could be supported by the eighth and final disbursement under the ECF arrangement. Subject to measures to be adopted in the coming weeks,
the Executive Board meeting is expected in late October 2016.
“Available data suggest economic activity is recovering, albeit at an uneven pace. The recovery is driven by positive supply shocks in the mining,
agriculture, and energy sectors, which were less affected by the Ebola epidemic. Activity in the manufacturing and services sectors, prone to generating
good jobs, is recovering at a much slower pace. In this context, the 2016 growth forecast has been revised upward to 5.2 percent from 3.8 percent
previously. Reflecting higher prices for imported goods, inflation has increased somewhat to 8.4 percent at end-July 2016.
“Program performance has improved significantly. All end-June performance criteria were met, as well as all indicative targets for end-March and end-June,
at the exception of the indicative target on priority spending. A key element of this performance has been prudent execution of the budget. The authorities
delivered a basic fiscal balance surplus of 0.7 percent of GDP compared to deficit target of 1.2 percent of GDP. The authorities have met the structural
benchmark on the adoption of the civil service reform plan and amended the central bank (BCRG) law to forbid BCRG’s guarantees. Work is also underway on
the other structural reforms of the ECF program
.
“Macroeconomic policies for 2017 will continue to be geared toward improving the population’s living conditions, while maintaining economic stability.
Monetary policy will continue to be guided by the primary objectives to reduce inflation to 8 percent and rebuild international reserves of the central
bank to anchor confidence in the Guinean franc. The mission welcomed the authorities’ plan to align the 2017 with available financing. Fiscal space for
priority sectors should be created by implementing bold and sustainable revenue measures, including measures to broaden the tax base, and most importantly,
by improving the quality of spending.
“The mission encourages the authorities to step up efforts to finalize the ECF program’s structural reforms, in particular in the electricity sector, and
enforce strictly the procurement code. The mission took note of the conclusions of the audit report on public procurement contracts signed in 2014-15 and
encouraged the authorities to publish the report in line with their transparency policy.
“The IMF team thanks the authorities for their hospitality and for the constructive discussions.”
The mission was received by His Excellency President Alpha Condé. The mission met with President of the National Assembly Honorable Claude Kory Kondiano
and the economic and finance commissions of the National Assembly. The mission also met with Minister of Economy and Finance Malado Kaba, central bank
governor Lounceny Nabé, Minister of Planning and International Cooperation, Kanny Diallo, Minister of Budget Mohamed Doumbouya, and other senior government
officials, the banking association, international partners, as well as private sector and civil society organizations.
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The ECF is the IMF’s main tool for medium-term financial support to low-income countries. Financing under the ECF currently carries a zero percent
interest rate, with a grace period of 5½ years, and a maturity of 10 years.
