Guinea-Bissau: Second Review Under the Extended Credit Facility Arrangement and Requests for a Waiver of Nonobservance of Performance Criteria, Rephasing of Access, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Exec

This paper presents Guinea-Bissau’s Second Review under the Extended Credit Facility (ECF) Arrangement and Requests for a Waiver of Nonobservance of Performance Criteria, Rephasing of Access, and Financing Assurances Review. The economy has grown by 4.2 percent in 2022 and should recover moderately to 4.5 percent in 2023 while inflation is expected to remain high. The authorities are taking measures to address the exogenous shocks and remain committed to strong policies and reforms. Program performance has been satisfactory. Five out of eight quantitative performance criteria for March 2023 were met. The government took corrective actions to address the missed targets, including strengthening expenditure controls, selling 5G licenses, and rationalizing tax expenditures to meet the end-2023 targets. Progress was made across the reform agenda and the authorities proposed four new structural benchmarks to accelerate the professionalization of the tax function, reintroduce expenditure controls, and improve the governance of state property. The authorities’ commitment to fiscal consolidation to meet the regional convergence criteria is commendable. Such efforts, which would support fiscal and debt sustainability, include strengthening the governance and management of public resources, mitigating fiscal risks, and relying on highly concessional financing.