IMF Staff Completes Mission for a Staff-Monitored Program to Guinea Bissau

IMF News, May 12, 2021

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Canonical URL: IMF Staff Completes Mission for a Staff-Monitored Program to Guinea Bissau

Press release date: May 12, 2021.
IMF mission led by Mr. Jose Gijon held virtual meetings with the authorities from April 28-May 12, 2021.
Authorities requested a 9-month Staff-Monitored Program (SMP) to support efforts to:
- restore macroeconomic stability;
- cope with the impact of COVID-19;
- lay the foundation for stronger and more inclusive growth;
- mobilize external concessional financing.
SMP aims at building a track record toward a possible Extended Credit Facility (ECF) arrangement.
Mission will not result in a Board discussion; statement reflects IMF staff views.

The Bissau Guinean economy contracted by an estimated 1½ percent in 2020.
The economy is projected to grow by about 3½ percent in 2021.
The COVID-19 pandemic has given rise to balance of payments (BOP) needs.
Fiscal deficit widened in 2020 reflecting weaker tax revenue and pandemic-related spending.
Public debt has increased.

Staff-level agreement reached on policies and reforms to underpin an SMP, subject to approval by IMF management.
The team reached understandings on a reform agenda for 2021 and fiscal measures needed to:
- ensure consistency of 2021 budget implementation with the SMP;
- avoid arrears accumulation;
- avoid expensive non-concessional borrowing.
Program includes revenue mobilization and expenditure containment measures to generate fiscal space for priority spending while ensuring debt sustainability.
Wage bill projected to be about 65 percent of tax revenue in 2021.

SMP will assist authorities to improve the fiscal framework through development of a realistic public financial management strategy to enhance:
- fiscal governance;
- transparency and accountability.
Measures supported include strengthening expenditure control, tax and customs frameworks.
Program will support the fight against corruption and mitigation of state-owned enterprises’ risks.
IMF technical assistance will support these efforts.

Strengthening debt sustainability will require prudent fiscal policy avoiding non-concessional financing and putting public debt on a downward path.
IMF staff supports authorities’ efforts to reach out to donors to mobilize concessional financing and grants to support reforms.
The team supports the authorities’ ongoing efforts to lower debt burden and welcomes their decision to join the Debt Service Suspension Initiative (DSSI).
Authorities are encouraged to enhance control over external debt contracting.
IMF staff will aim to continue playing a catalytic role and support outreach to other international partners to mobilize adequate concessional financing for the reform program.

IMF team met with H.E. President Sissoko Embaló, Prime Minister Nabiam, Vice-Prime Minister Sambú, Finance Minister Fadia, BCEAO National Director Embalo, Minister of Economy Mandinga, Minister of Public Administration Balde, High Commissioner for COVID-19 Robalo, and Mr. Djaló, President of the Commission for Economic Affairs of the National Assembly.
Team also met officials from the Ministries of Finance, Economy, Public Administration, the National Direction of the BCEAO, the National Institute of Statistics, the FIU, other officials, and representatives from development partners.

IMF Communications Department — End-of-Mission press release (staff views), May 12, 2021.