Press Release No. 17/404

IMF Reaches Staff-level Agreement with Guinea

October 17, 2017

• IMF staff and Guinean authorities have reached a staff-level agreement on a program of economic policies and reforms that could be supported by an Extended Credit Facility (ECF) arrangement.
• The program will support Guinea’s 2016–20 National Social and Economic Development Plan to foster higher and more broad-based growth, and reduce poverty while maintaining macroeconomic stability and debt sustainability.
• A prudent borrowing strategy that aims at maximizing the concessionality of external loans will be key to preserve medium-term debt sustainability.

Following discussions between the Guinean authorities and IMF staff in Conakry from July 31-August 15, 2017 [1] and during the 2017 Annual Meetings in Washington in October 2017, a staff-level agreement was reached on a program of economic policies and reforms that could be supported by an Extended Credit Facility (ECF) arrangement. Subject to IMF management approval, the staff-level agreement is expected to be submitted to the IMF Executive Board for its consideration in November 2017.

At the conclusion of the discussions, Giorgia Albertin, IMF Mission Chief for Guinea, made the following statement:

“The Guinean authorities and the IMF staff have reached a staff-level agreement on a program of economic policies and reforms that could be supported by a three-year ECF arrangement and support Guinea’s 2016–20 National Social and Economic Development Plan to foster higher and broad-based growth, diversify the economy, and reduce poverty.

“The ECF-supported program aims at strengthening the resilience of the Guinean economy, increasing public investments in infrastructure to foster growth while preserving medium-term debt sustainability, bolstering social safety nets to reduce poverty, and fostering the development of the private sector.

“Further accumulating foreign exchange reserves will reinforce Guinea’s external buffers against shocks. Maintaining a prudent monetary policy will preserve moderate inflation while ensuring liquidity in the banking sector to support a healthy private sector credit growth.

“Achieving a basic fiscal surplus will limit budgetary financing needs, which will contribute to keeping inflation at a moderate level, increase banks’ provision of credit to the private sector, and preserve medium-term debt sustainability.

“Mobilizing additional tax revenues and gradually reducing untargeted electricity subsidies will create fiscal space to increasing public investments in infrastructure and strengthening social safety nets to reduce poverty and foster inclusion.

“A prudent borrowing strategy that aims at maximizing the concessionality of external loans will be key to preserve medium-term debt sustainability. To this end, strengthening debt capacity management will be important.

“Improving the business climate, strengthening governance and financial inclusion will foster the development of the private sector, which is needed to generate more inclusive and broad-based growth for Guinea.

“Strengthening public finance and investment management will be key to support the scaling-up of public investments and increasing the efficiency and returns of public investments.”