PHOTO | Courtesy

Guinea-Bissau will receive an immediate disbursement of $3.2 million from the International Monetary Fund (IMF) to ensure macroeconomic stability.

Under the thirty-six-month Extended Credit Facility arrangement approved Monday by the IMF, the West African country will access a total of $ 38.4 million equivalent to SDR 28.4 million or 100pc of quota.

According to IMF, the credit facility will also help Guinea-Bissau put the budget back on track and ensure medium-term debt sustainability, and continue progress on structural reforms initiated under the 2021-22 Staff Monitored Program (SMP).

“Guinea-Bissau demonstrated 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,” said IMF.

Additionally, the financing is expected to help the government in implementing effective policies to enhance education and health systems, inclusive growth, and poverty reduction.

On the other hand, fiscal policy will aim to reduce the deficit and debt in line with the West Africa Economic and Monetary Union convergence criteria over the medium term through revenue mobilization, expenditure rationalization, mitigation of fiscal risks and prudent borrowing.

“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,” added IMF.

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