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Guinea-Bissau: First and Second Reviews Under the Extended Credit Facility Arrangement, Request for Re-Phasing of Disbursements, Modification of Performance Criteria and Financing Assurances Review—Informational Annex

Author(s):
International Monetary Fund. African Dept.
Published Date:
December 2016
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Fund Relations

(As of September 30, 2016)

Membership Status

Joined: March 24, 1977; Article VIII

General Resources Account:

SDR MillionPercent Quota
Quota28.40100.00
Fund Holdings of currency (Exchange Rate)24.4886.2
Reserve Tranche Position3.5913.9

SDR Department:

SDR MillionPercent Allocation
Net cumulative allocation13.60100.00
Holdings8.5963.14

Outstanding purchases and Loans:

SDR MillionPercent Quota
RCF Loans3.5525.00
ECF Arrangements7.2451.00

Latest Financial Arrangements:

TypeDate of

Arrangement
Expiration

Date
Amount Approved

(SDR Million)
Amount Drawn

(SDR Million)
ECFJul 10, 2015Jul 09, 201817.042.84
ECFMay 07, 2010May 06, 201322.3715.12
ECF 1/Dec 15, 2000Dec 14, 200314.205.08
ECF 1/Jan 18, 1995Jul 24, 199810.5010.50

Formerly PRGF.

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

Projected Payments to Fund 2/
(SDR Million; based on existing use of resources and present holdings of SDRs):
Forthcoming
20162017201820192020
Principal0.481.451.451.452.16
Charges/Interest0.000.000.000.020.01
Total0.481.451.451.472.17

Formerly PRGF.

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

Formerly PRGF.

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

Implementation of HIPC Initiative:

Enhanced
Commitment of HIPC assistanceFramework
Decision point dateDec 2000
Assistance committed by all creditors (US$ Million) 3/421.70
Of which: IMF assistance (US$ million)11.91
(SDR equivalent in millions)9.20
Completion point dateDec 2010
Disbursement of IMF assistance (SDR Million)
Assistance disbursed to the member9.20
Interim assistance1.56
Completion point balance7.64
Additional disbursement of interest income 4/0.23
Total disbursements9.43
Implementation of Multilateral Debt Relief Initiative (MDRI):
MDRI-eligible debt (SDR Million) 5/0.51
Financed by: MDRI Trust0.00
Remaining HIPC resources0.51
Debt Relief by Facility (SDR Million)
Eligible Debt
Delivery DateGRAPRGTTotal
December 2010N/A0.510.51

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.

Implementation of Post-Catastrophe Debt Relief (PCDR):

Not Applicable

Safeguards Assessments:

The Central Bank of West African States (BCEAO) is a common central bank of the countries of the West African Economic and Monetary Union (WAMU). The latest assessment of the BCEAO was completed on December 13, 2013. The assessment found that the bank continued to have a strong control environment and has, with the implementation of the 2010 Institutional Reform of the WAMU, enhanced its governance framework. Specifically, an audit committee was established to oversee the audit and financial reporting processes, transparency has increased with more timely publication of the audited financial statements, and the BCEAO was committed to IFRS implementation by end-2014. The assessment also identified some limitations in the external audit process and recommended that steps be taken to ensure the adequacy of the mechanism through selection of a second experienced audit firm to conduct joint audits. All recommendations from the assessment have been implemented.

Exchange System and Exchange Rate Arrangement

Guinea Bissau accepted the obligations of Article VIII, Sections 2, 3, and 4 with effect from January 1, 1997. It joined the WAEMU in 1997, and has no separate legal tender. The exchange system is free from multiple currency practices and exchange restrictions on the making of payments and transfers for current international transactions. Since January 1, 1999, the CFA franc has been pegged to the Euro at a fixed rate of € l = CFAF 655.957. On October 8, 2016, the rate of the CFA franc in terms of the SDR was CFAF 1009.95 = SDR 1. Effective January 1, 2007, the exchange arrangement of the WAEMU countries has been reclassified to the category of conventional pegged arrangement from the category of exchange arrangement with no separate legal tender. The new classification is based on the behavior of the common currency, whereas the previous classification was based on the lack of a separate legal tender. The new classification thus reflects only a definitional change, and is not based on a judgment that there has been a substantive change in the exchange regime or other policies of the currency union or its members.

Article IV Consultation

Guinea-Bissau is on the 24-month consultation cycle. The last Article IV consultation discussions with Guinea-Bissau were held in Bissau, April 23–May 5, 2015. The staff report was discussed by the Executive Board and the consultation was concluded on July 10, 2015.

Technical Assistance (2008–16)
DepartmentType of AssistanceTime of DeliveryPurpose
West AFRITACShort-term expertJune 2008Customs administration
West AFRITACShort-term expertJune 2008Public expenditure management
STAExpertJune 2008Balance of payment statistics
West AFRITACShort-term expertJuly 2008Government finance statistics
West AFRITACShort-term expertAugust 2008Multisector statistics
West AFRITACShort-term expertSeptember 2008Real sector statistics
West AFRITACShort-term expertMay 2009National accounts
West AFRITACLong-term expertJune 2009National accounts
West AFRITACShort-term expertJune 2009Public expenditure management
West AFRITACShort-term expertJune 2009Public debt management
West AFRITACShort-term expertJune 2009Bank supervision
West AFRITACShort-term expertSeptember 2009Customs administration
West AFRITACShort-term expertNovember 2009Public debt management
West AFRITACShort-term expertNovember 2009Real sector statistics
West AFRITACShort-term expertFebruary 2010Public debt management
West AFRITACShort-term expertFebruary 2010Government finance statistics
West AFRITACShort-term expertMay 2010Revenue administration
West AFRITACShort-term expertJuly 2010National accounts
FADStaffSeptember 2010Tax revenue and customs administration
West AFRITACShort-term expertSeptember 2010Expenditure management
West AFRITACShort-term expertSeptember 2010National accounts
West AFRITACShort-term expertFebruary 2011Tax administration
West AFRITACShort-term expertFebruary 2011Government finance statistics
West AFRITACShort-term expertMarch 2011Government finance statistics
West AFRITACShort-term expertApril 2011Public debt management
West AFRITACShort-term expertApril 2011Public financial management,
West AFRITACShort-term expertApril 2011Public financial management
West AFRITACShort-term expertApril 2011Real sector statistics
West AFRITACShort-term expertJune 2011Government finance statistics
FADStaffSeptember 2011Tax reform strategy, modernization of the DGCI and revenue mobilization
FADStaffSeptember 2011Customs administration
FADShort-term expertOctober 2011Tax administration
West AFRITACShort-term expertOctober 2011Modernization of the DGCI
West AFRITACShort-term expertOctober 2011Real sector statistics, National accounts
West AFRITACShort-term expertJanuary 2012Public financial management, Accounting
West AFRITACShort-term expertJanuary 2012Public financial management
FADShort-term expertFebruary 2012Tax administration
West AFRITACShort-term expertFebruary 2012Public financial management
West AFRITACShort-term expertFebruary 2012Real sector statistics
FADShort-term expertMarch 2012Tax administration
West AFRITACShort-term expertMarch 2012Customs administration
West AFRITACShort-term expertFebruary 2013Public financial management
FADStaffApril 2013Revenue administration
West AFRITACShort-term expertApril 2013National accounts
West AFRITACShort-term expertApril 2013Public financial management
West AFRITACShort-term expertSeptember 2013Customs administration
West AFRITACShort-term expertSeptember 2013Real sector statistics
West AFRITACShort-term expertOctober 2013Government finance statistics
West AFRITACShort-term expertMarch 2014Real sector statistics
West AFRITACShort-term expertAugust 2014Tax administration
FADStaffSeptember 2014Public financial management
FADStaffSeptember 2014Tax administration
West AFRITACShort-term expertSeptember 2014Customs modernization
West AFRITACShort-term expertSeptember 2014Government finance statistics
West AFRITACShort-term expertSeptember 2014Real sector statistics
West AFRITACShort-term expertFebruary 2015Macroeconomic analyzing and prevision
West AFRITACShort-term expertFebruary 2015Tax administration
MCMStaffMarch 2015Banking sector: NPLs
West AFRITACShort-term expertMarch 2015Public financial management
West AFRITACShort-term expertMarch 2015National accounts
FADStaffApril 2015Revenue administration
West AFRITACShort-term expertApril 2015Real sector statistics
FADShort-term expertJune 2015Tax administration
FADShort-term expertJuly 2015Tax administration
West AFRITACShort-term expertJuly 2015National Accounts
FADShort-term expertSeptember 2015Revenue administration
FADShort-term expertSeptember 2015Tax administration
FADShort-term expertOctober 2015Tax administration
West AFRITACShort-term expertOctober 2015Government finance statistics
FADStaffDecember 2015Tax administration
West AFRITACShort-term expertDecember 2015National Accounts
FADShort-term expertJanuary 2016Tax administration
FADShort-term expertMarch 2016Tax administration
West AFRITACShort-term expertMarch 2016Customs administration
West AFRITACShort-term expertMarch 2016National Accounts
FADShort-term expertApril 2016Customs administration
FADShort-term expertApril 2016Tax administration
FADShort-term expertJune 2016Tax administration
West AFRITACShort-term expertJuly 2016Tax administration
West AFRITACShort-term expertJuly 2016National Accounts
FADStaffSeptember 2016Tax administration

Resident Representative

The Resident Representative in Senegal also covered Guinea-Bissau from September 1997 through July 2007. The Resident Representative Office in Guinea-Bissau was reopened in June 2011 and Mr. Torrez was the Resident Representative until end-May 2015. Mr. Melhado assumed the Resident Representative position in August 2015.

Table 1.Guinea-Bissau: Arrangements with the IMF, 1984–2016
ArrangementDate ApprovedAmount ApprovedRemarks
First credit tranche purchaseAugust 27, 1984SDR 1.875 million
Structural Adjustment FacilityOctober 14, 1987SDR 5.25 million2nd annual arrangement delayed; no 3rd annual arrangement.
Enhanced Structural Adjustment FacilityJanuary 18, 1995SDR 10.5 millionArrangement increased by SDR 1.05 million (10 percent of quota) with 3rd annual arrangement.
Emergency post-conflict assistanceSeptember 14, 1999SDR 2.13 million
Emergency post-conflict assistanceJanuary 7, 2000SDR 1.42 million
Poverty Reduction and Growth FacilityDecember 15, 2000SDR 14.2 millionPRGF elapsed without completion of a review.
Emergency post-conflict assistanceJanuary 10, 2008SDR 1.77 million
Emergency post-conflict assistanceMay 20, 2009SDR 1.77 million
Extended Credit FacilityMay 7, 2010SDR 22.365 millionThe arrangement elapsed on May 6, 2013.
Rapid Credit FacilityNovember 3, 2014SDR 3.55 million
Extended Credit FacilityJuly 10, 2015SDR 17.04 million

World Bank Group Relations

1. Guinea-Bissau joined the World Bank in 1977, three years after independence. The first operation was approved in 1979 for a road construction and restoration project. Since then, the International Development Association (IDA) has approved 43 projects for Guinea-Bissau amounting to about US$511 million.

2. World Bank engagement in Guinea-Bissau for fiscal years 2015+16 was based on a Country Engagement Note (CEN) approved in March 2015. The CEN is designed to provide immediate short-term support to the country, in order to consolidate the transition and restore basic services while assisting the government to design a more sustainable strategy for long term poverty reduction and greater shared prosperity. The CEN focused on two key areas:

  • Building institutions and strengthening public sector capacity, to enable the government to provide a sound macro-fiscal environment and the infrastructure and legal and regulatory framework necessary to promote shared growth and attract investment.

  • Strengthening the provision of basic services to the poor in health, education, electricity and water with a view toward providing people with the services, resources, and skills they need to create and take advantage of economic opportunities.

Budget Support Operations

3. By June 2017, the Bank will put forth a Country Partnership Framework (CPF) FY17–20 for Board approval replacing the 2015–16 CEN. The CPF will be informed by a Systematic Country Diagnostic, which was finalized in June 2016, which is an analysis of the key constraints to achieving the World Bank Group’s twin goals of eradicating extreme poverty and boosting shared prosperity.

Lending Program

4. The current active portfolio for Guinea-Bissau consist of four national IDA operations (US$65.6 million), and two regional IDA operations (US$84 million) for a total commitment amount of US$149.6 million. The largest share of the portfolio is in energy (55 percent), followed by water (16 percent), social protection (14 percent), trade & competitiveness (6 percent), environment and fisheries (6 percent), and governance (3 percent). The World Bank has also supported non-lending technical assistance activities in Guinea-Bissau such as a Public Expenditure Management and Financial Accountability Review (PEMFAR) and the 2016 Systematic Country Diagnostic.

African Development Bank Group Relations

5. From the approval of the first project to the country in 1976, to May 2015, the AfDB had approved 50 operations for Guinea-Bissau, for a net commitment of UA 237.6 million (about CFAF 195.6 billion). 33.3 percent of these operations have been in the infrastructure sector, 26.4 percent for social, 22.9 percent in the multi-sector, 15.4 percent in agriculture and 2.0 in finance. As of September 2016, the active portfolio comprises nine ongoing national projects representing a total net amount of UA 40.37 million, and a disbursement rate of 23 percent.

Lending Program

6. During the period January 2008–April 2014, AfDB approved an interim HIPC debt release (US$17.48 million), a fragile State Facility grant (UA 2 million), a fish sector support grant (UA 2 million), a health sector grant (UA 6 million), an emergency support grant to cholera (US$500,000), an emergency support grant to cholera (US$ 999,750), a capacity building grant to public administration (UA 7.80 million), a technical assistance and capacity building grant to public administration (UA 0.66 million) and an emergency budget support to budgetary reforms (UA 5.7 million).

7. In May 2015, the AfDB approved a new budget support operation to the tune of UA 5 million (CFAF 4.1 million). The program is built around two components: (i) the strengthening of transparency, internal and external control of budget execution and the fight against corruption, and (ii) the strengthening of budget management. It has been complemented by the approval of an institutional support project of UA 5 million (CFAF 4.1 billion) targeting capacity building in public financial management as well as the strengthening of the justice sector.

8. In the non-governance sector, additional approvals in 2015 are an energy project to rehabilitate the electricity network of Bissau for UA 13.3 million (CFAF 10.9 billion), a contribution to the OMVG transmission line for UA 4.5 million (CFAF 3.7 billion). In September 2016, an emergency assistance to support Guinea-Bissau preparedness and response plan to fight the Zika virus outbreak for US$1 million has been approved and a UA 3.8 million (CFAF 3.2 billion) investment project in agriculture sector (rice value chains) is under preparation.

Non-lending Program

9. In January 2015, the AfDB approved its 2015–19 country strategy and Country Portfolio Performance Assessment. The approved strategy is based on two pillars, namely (i) strengthening of governance and the foundations of the State; and (ii) development of infrastructure that will foster inclusive growth. A Regional Integration Strategy Paper for West Africa for 2011–15 was released in March 2011. Recent economic and sector studies include a review of the transport sector, the agriculture sector and a country gender profile released in 2015, as well as the preparation of policy papers on Public-Private-Partnerships and on the management of natural resources.

Statistical Issues

Assessment of Data Adequacy for Surveillance
General: Data have serious shortcomings that significantly hamper surveillance. Shortcomings are most serious in the national accounts and balance of payments. Data compilation was impaired during the 1998–99 civil conflict. Starting with weak capacity and outdated practices, the authorities have improved their data compilation in the recent years, with technical assistance from international and regional institutions.
National Accounts: In the second quarter of 2010, the National Institute of Statistics (INE) published revised national accounts data for 2003–08, based on the System of National Accounts 1993. Since then, the INE has continued to release annual GDP in both current and constant (2005) prices, and GDP deflators. Several missions from AFRITAC West, during 2013 to 2016, have helped improving the compilation of national accounts, although source data remain an issue. The missions are also assisting with the preparation of a new base year (2015) for the annual national accounts using the System of National Accounts 2008 (2008 SNA) as the standard.
Price Statistics: Since July 2002, a harmonized consumer price index (CPI) has been compiled, based on the same methodology as in other West African Economic and Monetary Union (WAEMU) countries. The CPI was updated in 2010 (new base year 2008, improvement in compilation techniques, extended coverage of products and increase in outlets). Price data are collected only for the capital city, Bissau. Work is now underway to update the base year to 2014 and to extend the coverage to the whole country.
Government Finance Statistics (GFS): Since 2007, the monthly worksheet table for the State Financial Operations is compiled on a regular basis and used as a basic tool for monitoring the program by the IMF. In March 2010, a GFS mission from West AFRITAC provided technical assistance in compiling and disseminating GFS and implementing action plans designed to improve the GFS data dissemination to users. Under the West AFRITAC work program, GFS technical assistance missions visited Guinea-Bissau in October 2013 and September 2014. These missions stressed the need for the Ministry of Economy and Finance to start implementing the recommendations of previous GFS missions.
Monetary and Financial Statistics (MFS): MFS, compiled and disseminated by the regional Central Bank of West African States (BCEAO), are broadly adequate. In August 2016, the BCEAO completed the migration of Guinea-Bissau’s MFS to the standardized report forms (SRFs) for the central bank and other depository corporations. These SRF-based data are being processed by the IMF Statistics Department for publication in the November 2016 issue of IFS.
Financial Sector Surveillance: Guinea-Bissau does not report financial soundness indicators (FSIs) to the IMF. A technical assistance mission on FSIs is scheduled to visit the BCEAO headquarters in Dakar, Senegal in 2017. This mission will assist the authorities in their efforts to develop a set of core and encouraged FSIs for deposit taking institutions for WAEMU member countries, including Guinea-Bissau.
Balance of Payments Statistics: Guinea-Bissau moved to BPM6 methodology for both balance of payments and international investment position (IIP) statistics in September 2013, reviewing back series from 2007. Balance of payments data are weak, mostly due to substantial unregistered trade and inconsistencies between financial account transactions and the position data in the IIP. The large number of small-scale operators, a large informal sector, and institutional weaknesses hamper the data collection. While no external debt data are published by the Ministry of Economy and Finance, stock and flow data are regularly produced and transmitted to the BCEAO. Guinea-Bissau also participates in the Coordinated Direct Investment Survey (CDIS) Under the recently launched Japan funded three-year project in 17 francophone countries in West and Central Africa, Guinea-Bissau will receive technical assistance missions for improving its external sector statistics.
Data Standards and Quality
Guinea-Bissau has participated in the General Data Dissemination System (GDDS)/Enhanced GDDS) since November 2001. Metadata for all data categories and plans for improvement need to be updated.No data ROSC is available.
Reporting to STA
Currently no monthly, quarterly or annual government finance data are submitted for reporting in the International Financial Statistics (IFS) or the Government Finance Statistics Yearbook. Monthly data on monetary statistics for Guinea Bissau are reported on a regular basis for publication in the IFS with some delays. Guinea-Bissau reports balance of payments, and IIP statistics to STA on an annual basis, but with delays. CDIS data for inward direct investment position have been reported for end-December 2011.
Guinea-Bissau: Table of Common Indicators Required for Surveillance
Date of latest observationDate receivedFrequency of data7Frequency of reporting7Frequency of publication7
Exchange ratesCurrentCurrentDDD
International reserve assets and reserve liabilities of the monetary authorities1Aug. 2016Sept. 2016MMM
Reserve/base moneyAug. 2016Sept. 2016MMM
Broad moneyAug. 2016Sept. 2016MMM
Central bank balance sheetAug. 2016Sept. 2016MMM
Consolidated balance sheet of the banking systemAug. 2016Sept. 2016MMM
Interest rates2Sept. 2016Oct. 2016MMM
Consumer price indexJune 2016July 2016MMM
Revenue, expenditure, balance and composition of financing3 – generalgovernment4Sept. 2016Sept. 2016MQQ
Revenue, expenditure, balance and composition of financing3– central governmentSept. 2016Sept. 2016MQQ
Stocks of central government and central government-guaranteed debt5Dec. 2011Apr. 2013AII
External current account balanceDec. 2015June 2016AII
Exports and imports of goods and servicesDec. 2015June 2016AII
GDP2015Apr. 2016AII
Gross external debt2015June 2016AII
International Investment Position62014June 2016AII

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA)

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA)

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