The executive board of the International Monetary Fund has approved a $38.4 million extended credit facility for Guinea-Bissau to support the West African nation’s economic recovery and policies to improve governance, the fund said on Monday.
The IMF Executive Board decision enables an immediate disbursement of SDR 2.37 million (about US$3.2 million). Disbursements of the remaining amount will be phased over the duration of the program, subject to two initial quarterly reviews–to ensure close monitoring of reforms, followed by five biannual reviews.
The ECF-supported program aims to anchor macroeconomic stability, putting the budget back on track and ensuring medium-term debt sustainability while continuing progress on structural reforms initiated under the 2021-22 Staff Monitored Program (SMP).
The program will also help catalyze much-needed donor financing, particularly in the form of grants and concessional loans, and support the reduction of debt vulnerabilities.
Following the Executive Board discussion of the IMF on Guinea-Bissau, Mr Li, Deputy Managing Director and Acting Chair said;
“Guinea-Bissau demonstrated a strong commitment to reform implementation in a challenging environment through its satisfactory completion of a nine-month Staff Monitored Program. Looking ahead, while the economy is expected to rebound, the outlook is subject to significant downside risks related to domestic weaknesses, long-standing fragility, volatility in cashew exports, and spillovers from Russia’s war in Ukraine that could further impact food and energy prices. The new Extended Credit Facility (ECF) arrangement supports economic recovery and policies to create fiscal space for social and priority spending, reduce debt vulnerabilities, and improve governance and transparency.