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Guinea-Bissau :, Staff Report for the 2015 Article IV Consultation and Request for a Three-Year Arrangement Under the Extended Credit Facility

Guinea-Bissau :, Staff Report for the 2015 Article IV Consultation and Request for a Three-Year Arrangement Under the Extended Credit Facility
EXECUTIVE SUMMARY Context: A series of coups d’état since independence have resulted in chronic political instability and deterred economic and social progress. Guinea-Bissau has re-initiated progress since the assumption of office of the current inclusive government in mid-2014. The economy is now recovering after a decline in 2012 and marginal growth in 2013. Inflation remains low, and socio-political stability seems achievable. The coup d’état of April 2012 stalled implementation of the three-year Extended Credit Facility (ECF)- supported program approved by the Board in May 2010, and the arrangement lapsed subsequently. The Fund’s support under the Rapid Credit Facility (RCF) disbursement of 2014 and the authorities’ commitment to reforms have re-ignited donor confidence. Article IV Discussions. Policy discussions focused on measures to overcome fragility; fiscal consolidation and public financial management reforms; restoring financial stability; borrowing policies and long-term debt sustainability; private sector development and structural reforms to enhance inclusive growth prospects. The Proposed Program. The authorities’ development program, anchored on the Strategic Plan for 2014–18, aims to consolidate the fiscal position through better expenditure management and enhanced revenue mobilization, deepen institutional reform, mitigate vulnerabilities, and develop the private sector to support growth and employment. The program focuses on improving the policy framework by addressing governance and security issues, strengthening budgetary transparency as well as public investment and debt management, and improving compilation of statistics. Structural benchmarks focus on these issues while QPCs include a floor on revenues collection and a ceiling on net credit to government (the anchor of the program). Request for an Extended Credit Facility Arrangement. To support their medium-term economic reform program, the authorities request a three-year arrangement under the ECF in an amount equivalent to SDR 17.04 million (120 percent of quota). Risks to the program include the still fragile political situation, which could delay implementation of reforms, adverse terms of trade developments, and weakening donor confidence, and the heightened risk of incursion of the Ebola virus from neighboring countries
international or intergovernmental publication
Literary Form
non fiction
Main title
Guinea-Bissau :
Nature of contents
Series statement
IMF Staff Country Reports
Sub title
Staff Report for the 2015 Article IV Consultation and Request for a Three-Year Arrangement Under the Extended Credit Facility
Table Of Contents
Cover; CONTENTS; ACRONYMS; BACKGROUND: TAKING STOCK; A. Addressing Political Stability and Related Challenges; BOXES; 1. Outcome of the Brussels Donor Roundtable of March 25, 2015; B. Assessment of the Last ECF-Supported Program; 2. Response to Fund Advice from the 2013 Article IV Consultation; RECENT ECONOMIC DEVELOPMENTS AND SHORT TERM OUTLOOK; MEDIUM-TERM FRAMEWORK; POLICY DISCUSSIONS AND THE PROPOSED PROGRAM; A. Overcoming Fragility; B. Stepping Up Fiscal Reforms; 3. Tax Potential versus Performance, 2001-14; C. Restoring Financial Stability; 4. New Fuel Pricing MechanismD. Maintaining Prudent Borrowing Policies5. Financial Deepening and Inclusion in Guinea-Bissau; E. Enhancing Competitiveness and External Stability; FIGURES; 1. Ease of Doing Business, 2015; F. Fostering Inclusive Growth; G. Other Surveillance Issues; 6. External Stability Assessment; PROGRAM MODALITIES AND ACCESS; STAFF APPRAISAL; 2. Economic Developments, 2010-15; 3. Additional Economic Developments, 2010-15; 4. Medium-Term Outlook, 2013-18; TABLES; 1. Selected Economic Indicators, 2012-20; 2a. Central Government Operations, 2012-18 (CFA Billions)2b. Central Government Operations, 2012-18 (Percent of GDP)3. Monetary Survey, 2011-18; 4. Balance of Payments, 2012-18 (CFAF Billions); 5. Indicators of Capacity to Repay the Fund, 2014-24; 6. Proposed Schedule of Disbursements under the ECF Arrangement, 2015-18; 7. Financial Soundness Indicators, 2010-14; 8. Quantitative Performance Criteria and Indicative Targets for 2015-16; 9. Proposed Structural Benchmarks under the ECF Program, 2015-16; APPENDIXES; I. Letter of Intent; Attachment I. Memorandum on Economic and Financial Policies; Attachment II. Technical Memorandum of UnderstandingII. Risk Assessment MatrixCONTENTS; AFRICAN DEVELOPMENT BANK GROUP RELATIONS; STATISTICAL ISSUES; FUND RELATIONS; WORLD BANK GROUP RELATIONS

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