The International Monetary Fund (IMF) approved this Monday the fourth and fifth versions of the financial adjustment program in Guinea-Bissau, distributing 8.1 million US dollars, despite “lower performance than expected”.
“The program’s results were weaker than expected, reflecting the challenging economic and socio-political environment,” said a press release issued this evening in Washington, which reported that despite this, phases four and five of the Expanded Energy Agreement program financing (ECF), which made it possible to immediately disburse approximately 7.5 million euros.
The government, the IMF says, is “firmly committed to implementing the reforms at the heart of the programme,” approved in January 2023, which aims to reduce poverty, ensure debt sustainability, improve governance and reduce corruption, while creating fiscal space. for inclusive growth.”
Despite this, the IMF says Guinea-Bissau needs to improve in several areas, including debt management and the fight against corruption.
“Implementing a successful fiscal consolidation strategy is fundamental to reducing vulnerabilities and reducing high levels of public debt,” added Deputy Director of the Fund Bo Li, warning: “It is necessary to strengthen the implementation of structural reforms, including strengthening the anti-corruption system, increasing transparency, improving rule of law and addressing weaknesses in the financial sector.”
The approval of the fourth and fifth editions of this adjustment program, for which a total of 25.7 million dollars, about 23.8 million euros, have already been allocated, out of a total of 35 million euros for the program, comes after several changes in goals and objectives. to overcome the difficulties of implementing the program, the IMF says.
“Continuing to implement structural reforms and fiscal consolidation will be critical to ensuring debt sustainability, strengthening financial stability and creating fiscal space for development policies,” said the fund’s deputy director Bo Li, adding that “the program’s performance in the fourth and fifth Review was weaker.” “than expected, mainly due to policy miscalculations late last year and delays in implementing reforms by the previous government.”
The new government, however, “demonstrated a strong commitment to the program by taking concrete steps to address previous anomalies,” especially in the areas of “additional revenue mobilization, reduction of unsustainable subsidies, and increased control over non-priority expenditures and government functions.”
Last year, Guinea-Bissau grew by 4.3%, recording inflation of 7.2%, which would have reached double digits without cuts in taxes on fuel and food, and a budget deficit of 8.2% in a country where the ratio debt to GDP 80.2%.
Author: Lusa
Source: CM Jornal
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