Sierra Leone Telegraph: 02 April 2020:
Yesterday, the Executive Board of the International Monetary Fund (IMF) completed its fourth review of Guinea’s economic performance under the program supported by an Extended Credit Facility (ECF).
It said that completion of this review has enabled it to immediately disburse about US$23.5 million, bringing total disbursements so far – under the arrangement, to about US$117.6 million.
“While performance under the Fund-supported program remains broadly satisfactory, Guinea faces significant downside risks related to COVID-19 pandemic. The Fund will remain closely engaged with the Guinean country authorities as the situation evolves, and as the authorities further develop their policy responses and financing needs change,” the IMF said yesterday.
According to the IMF, the US$23.5 million disbursement, supports strengthening Guinea’s resilience, scaling-up growth-supporting investment and social-safety nets and promoting private sector development.
Following the Executive Board’s discussion on Guinea, Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director, issued the following statement:
“Guinea’s performance under the ECF-supported program against end-June 2019 targets was satisfactory and the authorities implemented corrective actions to achieve the end-2019 program targets. Guinea faces significant downside risks related to COVID-19 pandemic.
“The IMF will remain closely engaged as the situation evolves, the authorities further develop their policy responses, and financing needs change.
“ The authorities have finalized a National Emergency Preparedness and Response Plan for a COVID-19 outbreak, with the technical support of international developments partners. Key measures focus on prevention and mitigation of an eventual outbreak. The IMF fully supports the adoption and the implementation of the authorities’ COVID-19 Emergency Plan.
“Beyond immediate needs created by the COVID-19 crisis, creating fiscal space for priority spending will be pivotal to foster broad-based growth in the years to come. Achieving a basic fiscal surplus in 2020 will contribute to containing inflation and preserving debt sustainability.
“Mobilizing additional tax revenues and reducing untargeted electricity subsidies will generate resources to scale-up public investments and strengthen social safety nets.
“To this end, implementing programmed tax revenue measures, adopting an automatic petroleum prices adjustment mechanism, and advancing the multi-year tariff electricity tariff is key. Prudent external borrowing strategy will support scaling-up public investments, notably in infrastructure. Strengthening public investment management will support the fiscal strategy and enhance governance.
“Allowing greater exchange rate flexibility is important to preserve buffers against external shocks. Continuing to limit central bank interventions in the foreign exchange market will be important. Reforms to strengthen market forces in the foreign exchange market have progressed well. Moving ahead with the implementation of a rule-based central bank’s intervention strategy will reduce discretion.
“Continuing to limit central bank’s lending to the government in line with program objectives is needed to reduce inflation. A more active liquidity management will also support achieving monetary targets. Strengthening banking supervision and regulation will support financial stability.
“The authorities are advancing growth-supporting structural reforms. Strengthening the anti-corruption framework and the business climate will enhance governance and support private sector development. Implementing the new asset declaration regime and further strengthening the AML/CFT regime will be important.’’