Guinea-Bissau: Recent Economic Developments

International Monetary Fund

doi:10.5089/9781451815689.002.A001

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Guinea-Bissau

Recent Economic Developments

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International Monetary Fund

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Publication Date:: 19 Dec 1995

eISBN:: 9781451815689

Language:: English

Keywords:: ISCR; CR; central bank; rate of depreciation; government; debt service; exchange rate; broad money; government action; factor cost; current account

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This report describes recent economic and financial developments in Guinea–Bissau, focusing on 1994 and early 1995, and provides statistical coverage from 1990. In 1994, the rate of growth of aggregate economic output exceeded that of the population, the pace of consumer price inflation abated to historic low, and both the fiscal and external current account positions showed further improvement. At end-1994, the economic and financial situation of Guinea–Bissau remained characterized by large domestic and external imbalances, as well as by a heavy burden of external debt service obligations.

Abstract

GUINEA-BISSAU - Basic Data ^1/

Sources: Data provided by the Guinea-Bissau authorities; and staff estimates.

^{^1/}Numbers may not total because of rounding.

^{^2/}Current budget, excluding scheduled external interest payments.

I. Introduction

This report describes recent economic and financial developments in Guinea-Bissau, focusing on 1994 and early 1995, and provides statistical coverage from 1990.

As discussed below, in 1994 the rate of growth of aggregate economic output again exceeded that of the population, the pace of consumer price inflation abated to an historic low, and both the fiscal and external current account positions showed further improvement. On the other hand, the rate of monetary expansion accelerated toward the end of the year, leading to a spurt in inflation, as well as a more rapid rate of depreciation of the Guinea-Bissau peso in early 1995. The relaxation in the monetary and credit policy stance was attributable in part to the political transition in the aftermath of the country’s first multiparty elections, which were concluded in August.

At end-1994, the economic and financial situation of Guinea-Bissau remained characterized by large domestic and external imbalances, as well as by a very heavy burden of external debt service obligations.

II. Production, Expenditure, and Prices

1. Overview

In 1994, real GDP is estimated to have increased by almost 7 percent, thanks mainly to a strong improvement in net agricultural exports and buoyant commercial activity (Table 1). This strong performance permitted the continuation of the annual gains in real per capita income that have been achieved since 1990, despite a relatively high population growth rate of 2 ½ percent (Chart 1). Also, the overall improvement in net exports contributed to positive domestic savings, possibly for the first time. Following the sharp deceleration in the rate of monetary growth in 1993, the rate of domestic inflation—as measured by the consumer price index (CPI)—again declined in 1994, to 15 percent (on a period average basis), from 48 percent in 1993.

Table 1.

Guinea-Bissau: Real Gross Domestic Product by Sector of Origin, 1990–94

Sources: Data provided by the Guinea-Bissau authorities; and staff estimates.

Table 1.

Guinea-Bissau: Real Gross Domestic Product by Sector of Origin, 1990–94

			1990	1991	1992	1993	1994
							Est.
				(In billions of Guinea-Bissau pesos. 1986 prices)
	Agriculture, fishing, and
		forestry	28.9	29.8	30.9	32.5	34.5
	Industry		5.8	5.8	5.7	5.8	5.9
	Construction		1.9	1.9	2.4	2.5	2.6
	Commerce, restaurants, and hotels		12.5	13.2	13.3	12.6	14.5
	Transport and communications		1.7	1.8	1.8	1.8	1.9
	Banks, insurance, and other services		1.4	l.4	1.6	1.8	1.8
	Public administration		4.9	5.0	4.9	5.3	5.4
Gross domestic product at factor cost			57.2	58.9	60.6	62.2	66.5
				(In percent of GDP)
	Agriculture, fishing, and
		forestry	50.5	50.5	51.0	52.2	51.8
	Industry		10.2	9.8	9.4	9.3	8.8
	Construction		3.3	3.3	4.0	4.0	3.8
	Commerce, restaurants, and hotels		21.9	22.4	22.0	20.2	21.8
	Transport and communications		3.0	3.1	3.0	3.0	2.9
	Banks, insurance, and other services		2.5	2.4	2.6	2.9	2.6
	Public administration		8.5	8.4	8.0	8.5	8.2
Gross domestic product at factor cost			100.0	100.0	100.0	100.0	100.0
				(Annual changes in percent)
	Agriculture, fishing, and
		forestry	3.7	3.0	3.6	5.3	6.1
	Industry		−1.5	−1.0	−l.4	1.2	1.5
	Construction		6.5	3.0	24.6	1.6	3.8
	Commerce, restaurants, and hotels		6.7	5.4	0.9	−5.7	15.5
	Transport and communications		3.3	6.4	−0.5	1.2	3.3
	Banks, insurance, and other services		7.6	−1.1	11.4	14.3	−2.5
	Public administration		−4.6	1.8	−2.1	8.5	3.5
Gross domestic product at factor cost			3.2	3.0	2.8	2.7	6.9

Sources: Data provided by the Guinea-Bissau authorities; and staff estimates.

Table 1.

Guinea-Bissau: Real Gross Domestic Product by Sector of Origin, 1990–94

			1990	1991	1992	1993	1994
							Est.
				(In billions of Guinea-Bissau pesos. 1986 prices)
	Agriculture, fishing, and
		forestry	28.9	29.8	30.9	32.5	34.5
	Industry		5.8	5.8	5.7	5.8	5.9
	Construction		1.9	1.9	2.4	2.5	2.6
	Commerce, restaurants, and hotels		12.5	13.2	13.3	12.6	14.5
	Transport and communications		1.7	1.8	1.8	1.8	1.9
	Banks, insurance, and other services		1.4	l.4	1.6	1.8	1.8
	Public administration		4.9	5.0	4.9	5.3	5.4
Gross domestic product at factor cost			57.2	58.9	60.6	62.2	66.5
				(In percent of GDP)
	Agriculture, fishing, and
		forestry	50.5	50.5	51.0	52.2	51.8
	Industry		10.2	9.8	9.4	9.3	8.8
	Construction		3.3	3.3	4.0	4.0	3.8
	Commerce, restaurants, and hotels		21.9	22.4	22.0	20.2	21.8
	Transport and communications		3.0	3.1	3.0	3.0	2.9
	Banks, insurance, and other services		2.5	2.4	2.6	2.9	2.6
	Public administration		8.5	8.4	8.0	8.5	8.2
Gross domestic product at factor cost			100.0	100.0	100.0	100.0	100.0
				(Annual changes in percent)
	Agriculture, fishing, and
		forestry	3.7	3.0	3.6	5.3	6.1
	Industry		−1.5	−1.0	−l.4	1.2	1.5
	Construction		6.5	3.0	24.6	1.6	3.8
	Commerce, restaurants, and hotels		6.7	5.4	0.9	−5.7	15.5
	Transport and communications		3.3	6.4	−0.5	1.2	3.3
	Banks, insurance, and other services		7.6	−1.1	11.4	14.3	−2.5
	Public administration		−4.6	1.8	−2.1	8.5	3.5
Gross domestic product at factor cost			3.2	3.0	2.8	2.7	6.9

Sources: Data provided by the Guinea-Bissau authorities; and staff estimates.

2. National accounts

In 1994, Guinea-Bissau’s domestic imbalances were less pronounced than in previous years. Although gross domestic expenditure again exceeded GDP—by some 17 percent—consumption declined to about 97 percent of GDP, from 100 percent in 1993, thus allowing for positive domestic savings (Table 2). Investment also fell relative to GDP, to 20 percent from 25 ½ percent in 1993, reflecting largely the virtual depletion of cashew nut stocks. The external resource gap was thus narrowed to 17 ½ percent of GDP in 1994, from 25 ¾ percent in 1993. The change in the GDP deflator (at market prices) was 23 percent, down from 53 ¾ percent in 1993.

Table 2.

Guinea-Bissau: National Accounts, 1990–94

Sources: Data provided by the Guinea-Bissau authorities; and staff estimates.

Table 2.

Guinea-Bissau: National Accounts, 1990–94

		1990	1991	1992	1993	1994
						Est.
		(In billions of Guinea-Bissau pesos)
Consumption		550.8	917.6	1,819.4	2,442.3	3,119.9
	Private	488.6	803.0	1,641.7	2,236.4	2,843.0
	Government	62.2	114.6	177.7	205.9	276.9
Investment		126.8	233.5	467.4	622.6	640.2
	Private	12.0	15.5	22.0	35.0	35.6
	Government	114.8	218.0	445.4	587.6	604.6
Exports of goods and nonfactor services		57.0	122.6	125.0	259.2	585.0
Imports of goods and nonfactor services		−217.9	−405.2	−869.4	−888.4	−1.142.9
Gross domestic product at market prices		516.7	868.5	1,542.4	2,435.7	3,202.2
			(In percent of GDP)
Consumption		106.6	105.7	118.0	100.3	97.4
	Private	94.6	92.5	106.5	91.8	88.8
	Government	12.0	13.2	11.5	8.5	8.6
Investment		24.5	26.9	30.3	25.6	20.0
	Private	2.3	1.8	1.4	1.4	1.1
	Government	22.2	25.1	28.9	24.1	18.9
Exports of goods and nonfactor services		11.0	14.1	8.1	10.6	18.3
Imports of goods and nonfactor services		−42.1	−46.7	−56.4	−36.5	−35.6
Domestic savings		−6.6	−5.7	−18.0	−0.3	2.6
Resource gap		−31.1	−32.6	−48.3	−25.8	−17.4
Memorandum items:
	Real GDP growth (in percent)	3.2	3.0	2.8	2.7	6.9
	GDP (in millions of U.S. dollars)	236.4	237.4	222.4	241.6	248.4
	GDP per capita (in U.S. dollars)	241.2	237.4	218.1	232.3	233.9

Sources: Data provided by the Guinea-Bissau authorities; and staff estimates.

Table 2.

Guinea-Bissau: National Accounts, 1990–94

		1990	1991	1992	1993	1994
						Est.
		(In billions of Guinea-Bissau pesos)
Consumption		550.8	917.6	1,819.4	2,442.3	3,119.9
	Private	488.6	803.0	1,641.7	2,236.4	2,843.0
	Government	62.2	114.6	177.7	205.9	276.9
Investment		126.8	233.5	467.4	622.6	640.2
	Private	12.0	15.5	22.0	35.0	35.6
	Government	114.8	218.0	445.4	587.6	604.6
Exports of goods and nonfactor services		57.0	122.6	125.0	259.2	585.0
Imports of goods and nonfactor services		−217.9	−405.2	−869.4	−888.4	−1.142.9
Gross domestic product at market prices		516.7	868.5	1,542.4	2,435.7	3,202.2
			(In percent of GDP)
Consumption		106.6	105.7	118.0	100.3	97.4
	Private	94.6	92.5	106.5	91.8	88.8
	Government	12.0	13.2	11.5	8.5	8.6
Investment		24.5	26.9	30.3	25.6	20.0
	Private	2.3	1.8	1.4	1.4	1.1
	Government	22.2	25.1	28.9	24.1	18.9
Exports of goods and nonfactor services		11.0	14.1	8.1	10.6	18.3
Imports of goods and nonfactor services		−42.1	−46.7	−56.4	−36.5	−35.6
Domestic savings		−6.6	−5.7	−18.0	−0.3	2.6
Resource gap		−31.1	−32.6	−48.3	−25.8	−17.4
Memorandum items:
	Real GDP growth (in percent)	3.2	3.0	2.8	2.7	6.9
	GDP (in millions of U.S. dollars)	236.4	237.4	222.4	241.6	248.4
	GDP per capita (in U.S. dollars)	241.2	237.4	218.1	232.3	233.9

Sources: Data provided by the Guinea-Bissau authorities; and staff estimates.

3. Production

Guinea-Bissau’s economy is heavily dependent on a large primary sector, mainly subsistence agriculture, and a sizable services sector, including public administration, which accounted for 44 percent and 38 percent of GDP, respectively, in 1994 (Table 3). Industry and construction, together, accounted for only another 18 percent of output.

Table 3.

Guinea-Bissau: Nominal Gross Domestic Product by Sector of Origin, 1990–94

Sources: Data provided by the Guinea-Bissau authorities; and staff estimates.

Table 3.

Guinea-Bissau: Nominal Gross Domestic Product by Sector of Origin, 1990–94

		1990	1991	1992	1993	1994
						Est.
		(In billions of Guinea-Bissau pesos)
Agriculture, fishing, and
	forestry	227.5	382.4	676.0	1,092.0	1,407.7
Industry		41.9	72.6	129.5	194.6	261.2
Construction		50.9	71.9	165.0	267.5	314.7
Commerce, restaurants, and hotels		131.3	220.4	396.4	612.9	881.4
Transport and communications		18.9	33.4	45.9	73.4	92.6
Banks, insurance, and other services		16.6	27.9	59.0	97.3	122.9
Public administration		23.0	46.5	58.3	73.0	88.2
Gross domestic product at factor cost		510.1	855.0	1,530.0	2,410.6	3,168.7
Indirect taxes		6.6	13.5	12.4	25.1	33.5
Gross domestic product at market prices		516.7	868.5	1,542.4	2,435.7	3,202.2
		(In percent of GDP at factor cost)
Agriculture, fishing, and
	forestry	44.6	44.7	44.2	45.3	44.4
Industry		8.2	8.5	8.5	8.1	8.2
Construction		10.0	8.4	10.8	11.1	9.9
Commerce, restaurants, and hotels		25.7	25.8	25.9	25.4	27.8
Transport and communications		3.7	3.9	3.0	3.0	2.9
Banks, insurance, and other services		3.3	3.3	3.9	4.0	3.9
Public administration		4.5	5.4	3.8	3.0	2.8
Gross domestic product at factor cost		100.0	100.0	100.0	100.0	100.0
			(Annual changes in percent)
Agriculture, fishing, and
	forestry	42.2	68.1	76.8	61.5	28.9
Industry		47.3	73.0	78.5	50.2	34.3
Construction		47.0	41.1	129.6	62.1	17.6
Commerce, restaurants, and hotels		42.1	67.9	79.9	54.6	43.8
Transport and communications		47.2	76.8	37.5	60.0	26.1
Banks, insurance, and other services		42.1	67.9	111.2	65.0	26.3
Public administration		21.6	102.5	25.3	25.2	20.9
Gross domestic product at factor cost		42.1	67.6	79.0	57.6	31.4
Memorandum item:
	GDP deflator at factor cost	37.7	62.7	74.1	53.4	22.9

Sources: Data provided by the Guinea-Bissau authorities; and staff estimates.

Table 3.

Guinea-Bissau: Nominal Gross Domestic Product by Sector of Origin, 1990–94

		1990	1991	1992	1993	1994
						Est.
		(In billions of Guinea-Bissau pesos)
Agriculture, fishing, and
	forestry	227.5	382.4	676.0	1,092.0	1,407.7
Industry		41.9	72.6	129.5	194.6	261.2
Construction		50.9	71.9	165.0	267.5	314.7
Commerce, restaurants, and hotels		131.3	220.4	396.4	612.9	881.4
Transport and communications		18.9	33.4	45.9	73.4	92.6
Banks, insurance, and other services		16.6	27.9	59.0	97.3	122.9
Public administration		23.0	46.5	58.3	73.0	88.2
Gross domestic product at factor cost		510.1	855.0	1,530.0	2,410.6	3,168.7
Indirect taxes		6.6	13.5	12.4	25.1	33.5
Gross domestic product at market prices		516.7	868.5	1,542.4	2,435.7	3,202.2
		(In percent of GDP at factor cost)
Agriculture, fishing, and
	forestry	44.6	44.7	44.2	45.3	44.4
Industry		8.2	8.5	8.5	8.1	8.2
Construction		10.0	8.4	10.8	11.1	9.9
Commerce, restaurants, and hotels		25.7	25.8	25.9	25.4	27.8
Transport and communications		3.7	3.9	3.0	3.0	2.9
Banks, insurance, and other services		3.3	3.3	3.9	4.0	3.9
Public administration		4.5	5.4	3.8	3.0	2.8
Gross domestic product at factor cost		100.0	100.0	100.0	100.0	100.0
			(Annual changes in percent)
Agriculture, fishing, and
	forestry	42.2	68.1	76.8	61.5	28.9
Industry		47.3	73.0	78.5	50.2	34.3
Construction		47.0	41.1	129.6	62.1	17.6
Commerce, restaurants, and hotels		42.1	67.9	79.9	54.6	43.8
Transport and communications		47.2	76.8	37.5	60.0	26.1
Banks, insurance, and other services		42.1	67.9	111.2	65.0	26.3
Public administration		21.6	102.5	25.3	25.2	20.9
Gross domestic product at factor cost		42.1	67.6	79.0	57.6	31.4
Memorandum item:
	GDP deflator at factor cost	37.7	62.7	74.1	53.4	22.9

Sources: Data provided by the Guinea-Bissau authorities; and staff estimates.

In 1994, primary sector output expanded by slightly more than 6 percent, associated with an above-average crop year for staples and increased traders’ demand for cashew nuts, following the termination of minimum export shipping requirements (Table 4). Cashew nut exports increased to a record 46,460 metric tons, with almost half of this accounted for by a virtual depletion of stocks (Table 5). Fishing activity by domestic operators is estimated to have increased for all species, although exports remained negligible, reflecting the cessation of operations of the previous major exporter—Estrela do Mar—a joint venture between the governments of Guinea-Bissau and the former Soviet Union (Table 6). Manufacturing output increased by less than 2 percent in 1994, reflecting the precarious situation of domestic industry, which consists largely of state enterprises that are being closed or downsized. However, wood processing showed a strong rise, with sawn wood increasing by 28 percent (Table 7). Commercial activity grew by 16 percent in 1994, owing to the successful cashew nut campaign and increased retail trade. Electricity and water production is estimated to have grown slightly, reflecting the ongoing rehabilitation of Bissau’s public utility (Table 8).

Table 4.

Guinea-Bissau: Output of Main Crops, 1990–94

(In thousands of metric tons)

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 4.

Guinea-Bissau: Output of Main Crops, 1990–94

(In thousands of metric tons)

		1990	1991	1992	1993	1994
Rice (Paddy)		118.8	123.6	123.6	125.9	130.9
Other cereals		44.0	55.8	45.4	54.8	56.8
Manioc		17.5	11.9	14.7	14.3	14.7
Sweet potatoes		14.0	14.3	14.7	15.0	15.4
Coconut		6.6	6.3	6.0	5.1	4.3
Sugar cane		47.5	47.9	48.0	49.0	50.4
Vegetables		7.4	7.6	7.8	8.1	8.3
Fresh fruit		130.3	141.9	153.2	166.5	181.3
	Of which: cashew	(77.4)	(87.5)	(97.1)	(108.8)	(121.8)
Cashew nuts		15.5	17.5	19.4	21.7	24.4
Groundnuts		18.1	14.8	15.7	18.1	18.3
Cotton		2.2	2.4	1.2	1.8	1.8

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 4.

Guinea-Bissau: Output of Main Crops, 1990–94

(In thousands of metric tons)

		1990	1991	1992	1993	1994
Rice (Paddy)		118.8	123.6	123.6	125.9	130.9
Other cereals		44.0	55.8	45.4	54.8	56.8
Manioc		17.5	11.9	14.7	14.3	14.7
Sweet potatoes		14.0	14.3	14.7	15.0	15.4
Coconut		6.6	6.3	6.0	5.1	4.3
Sugar cane		47.5	47.9	48.0	49.0	50.4
Vegetables		7.4	7.6	7.8	8.1	8.3
Fresh fruit		130.3	141.9	153.2	166.5	181.3
	Of which: cashew	(77.4)	(87.5)	(97.1)	(108.8)	(121.8)
Cashew nuts		15.5	17.5	19.4	21.7	24.4
Groundnuts		18.1	14.8	15.7	18.1	18.3
Cotton		2.2	2.4	1.2	1.8	1.8

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 5.

Guinea-Bissau: Stocks, Production, and Uses of Cashew Nuts, 1990–94

(In metric tons)

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 5.

Guinea-Bissau: Stocks, Production, and Uses of Cashew Nuts, 1990–94

(In metric tons)

	1990	1991	1992	1993	1994
Stock at beginning of year	5,099	3,910	2,887	18,383	22,863
Production	15,481	17,493	19,418	21,748	24,358
Domestic consumption	−260	−266	−272	−278	−283
Exports	−16,410	−18,250	−3,650	−16,990	−46,460
Change in stocks	−1,189	−1,023	15,496	4,480	−22,385

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 5.

Guinea-Bissau: Stocks, Production, and Uses of Cashew Nuts, 1990–94

(In metric tons)

	1990	1991	1992	1993	1994
Stock at beginning of year	5,099	3,910	2,887	18,383	22,863
Production	15,481	17,493	19,418	21,748	24,358
Domestic consumption	−260	−266	−272	−278	−283
Exports	−16,410	−18,250	−3,650	−16,990	−46,460
Change in stocks	−1,189	−1,023	15,496	4,480	−22,385

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 6.

Guinea-Bissau: Industrial and Artisanal Fishing, 1990–94

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 6.

Guinea-Bissau: Industrial and Artisanal Fishing, 1990–94

			1990	1991	1992	1993	1994
				(In metric tons)
Artisanal fishing
	(all species)		13,425	13,940	16,163	16,951	18,002
Industrial fishing by
	domestic operators
		Fish	3,000	3,274	3,393	3,546	3,723
		Shrimp	310	315	406	410	450
		other crustaceans	54	60	69	71	76
				(In millions of U.S. dollars)
Fish and shrimp exports			3.3	2.6	0.9	0.7	0.3
Revenue from fishing licenses			22.9	13.5	13.5	10.8	11.7
Memorandum items:
	Number of fishing licenses		315	323	242	141	169
	Number of authorized boats		208	213	162	120	108

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 6.

Guinea-Bissau: Industrial and Artisanal Fishing, 1990–94

			1990	1991	1992	1993	1994
				(In metric tons)
Artisanal fishing
	(all species)		13,425	13,940	16,163	16,951	18,002
Industrial fishing by
	domestic operators
		Fish	3,000	3,274	3,393	3,546	3,723
		Shrimp	310	315	406	410	450
		other crustaceans	54	60	69	71	76
				(In millions of U.S. dollars)
Fish and shrimp exports			3.3	2.6	0.9	0.7	0.3
Revenue from fishing licenses			22.9	13.5	13.5	10.8	11.7
Memorandum items:
	Number of fishing licenses		315	323	242	141	169
	Number of authorized boats		208	213	162	120	108

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 7.

Guinea-Bissau: Manufacturing Production in Major Industries, 1990–94

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 7.

Guinea-Bissau: Manufacturing Production in Major Industries, 1990–94

		1990	1991	1992	1993	1994
Food industries
			(In thousands of metric tons)
	Hulled rice	65.7	68.3	68.3	69.6	72.3
	Peanuts processing	9.5	7.7	8.2	9.5	9.5
	Bakery products	6.6	6.8	7.0	7.2	7.5
	Frozen fish	1.0	1.0	1.1	1.1	1.2
	Dry and smoked fish	1.6	1.7	2.0	2.0	2.2
			(In millions of litres)
	Vegetable oils	17.3	17.5	26.5	33.5	35.8
	Beverages	1.9	2.0	2.0	1.7	2.7
	Distilled liquor	0.9	0.9	0.9	0.9	1.0
Nonfood industries			(In thousands of metric tons)
	Wood processing	696.1	1,165.4	2,209.1	3,212.1	4,107.4
	Wood products	2.9	5.1	4.4	4.4	4.2
	Soap	2.6	2.7	2.7	2.8	2.8

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 7.

Guinea-Bissau: Manufacturing Production in Major Industries, 1990–94

		1990	1991	1992	1993	1994
Food industries
			(In thousands of metric tons)
	Hulled rice	65.7	68.3	68.3	69.6	72.3
	Peanuts processing	9.5	7.7	8.2	9.5	9.5
	Bakery products	6.6	6.8	7.0	7.2	7.5
	Frozen fish	1.0	1.0	1.1	1.1	1.2
	Dry and smoked fish	1.6	1.7	2.0	2.0	2.2
			(In millions of litres)
	Vegetable oils	17.3	17.5	26.5	33.5	35.8
	Beverages	1.9	2.0	2.0	1.7	2.7
	Distilled liquor	0.9	0.9	0.9	0.9	1.0
Nonfood industries			(In thousands of metric tons)
	Wood processing	696.1	1,165.4	2,209.1	3,212.1	4,107.4
	Wood products	2.9	5.1	4.4	4.4	4.2
	Soap	2.6	2.7	2.7	2.8	2.8

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 8.

Guinea-Bissau: Electricity and Water Production, 1990–94

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 8.

Guinea-Bissau: Electricity and Water Production, 1990–94

		1990	1991	1992	1993	1994
			(In mega kilowatts)
Electricity production		41,584	48,233	44,029	44,024	44,924
	Of which: Bissau	(35,540)	(42,040)	(37,704)	(37,553)	(38,304)
			(In millions of cubic meters)
Water production		4,846	5,179	5,437	5,730	6,042
	Of which: Bissau	(4,000)	(4,314)	(4,552)	(4,825)	(5,116)

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

Table 8.

Guinea-Bissau: Electricity and Water Production, 1990–94

		1990	1991	1992	1993	1994
			(In mega kilowatts)
Electricity production		41,584	48,233	44,029	44,024	44,924
	Of which: Bissau	(35,540)	(42,040)	(37,704)	(37,553)	(38,304)
			(In millions of cubic meters)
Water production		4,846	5,179	5,437	5,730	6,042
	Of which: Bissau	(4,000)	(4,314)	(4,552)	(4,825)	(5,116)

Source: National Statistics and Census Institute (INEC), Ministry of Planning and International Cooperation.

4. Prices

The CPI for Guinea-Bissau is very limited in that it comprises only three commodity groups—foodstuffs, beverages, and tobacco—and covers only the capital city of Bissau. Moreover, the basket weights date back to a 1986 consumption survey and appear to be seriously biased by the large relative weight of the tobacco component. ^1/, In any case, the rate of inflation as measured by the CPI decelerated to an historic low of 15 percent in 1994, reflecting both fiscal and monetary tightening through most of the year, as well as a slower pace of depreciation of the peso (Table 9). However, monetary slippages in late 1994 appear to have rekindled inflation, which reached almost 12 percent during the first four months of 1995, compared with a negative 1 percent for the corresponding period in 1994.

Table 9.

Guinea-Bissau: Consumer Price Indices, 1990-April 1995

Source: Directorate-General of Statistics, Ministry of Planning and International Cooperation.

^{^1/}The CPI covers only Bissau and three commodity groups (weights in parenthesis) - food (0.830), beverages (0.061), and tobacco (0.109).

^{^2/}Average inflation during last 12 months.

^{^3/}Change from December 1994.

Table 9.

Guinea-Bissau: Consumer Price Indices, 1990-April 1995

				1990	1991	1992	1993	1994	1995
									April
Period average basis
	Indices (February 1986–100)
		Total CPI ^1/		1,076	1,696	2,873	4,259	4,905	6,196
			Food	1,071	1,725	2,931	4,427	5,068	6,183
			Beverages	1,039	1,332	2,482	3,139	3,415	5,128
			Tobacco	1,135	1,686	2,646	3,616	4,511	6,888
	Changes from previous period (in percent)
		Total CPI		33.0	57.6	69.4	48.2	15.2	23.3 ^2/
			Food	34.5	61.1	69.9	63.1	14.5	…
			Beverages	24.7	28.3	86.3	26.5	8.8	…
			Tobacco	26.7	48.6	56.9	36.3	24.7	…
End-of-period basis
	Indices (February 1986–100)
		Total CPI ^1/		1,191	1,906	3,559	4,652	5,548	6,196
			Food	1,205	1,908	3,590	4,820	5,749	6,183
			Beverages	1,064	1,857	3,281	2,643	4,469	5,128
			Tobacco	1,155	1,922	3,479	4,502	4,643	6,888
	Changes from previous period (in percent)
		Total CPI		32.1	60.1	86.7	30.7	19.3	11.7 ^3/
			Food	39.5	58.4	88.2	34.3	19.3	7.5 ^3/
			Beverages	−1.8	74.5	76.7	−19.4	69.1	14.7 ^3/
			Tobacco	0.2	66.4	81.0	29.4	3.1	48.4 ^3/

Source: Directorate-General of Statistics, Ministry of Planning and International Cooperation.

^{^1/}The CPI covers only Bissau and three commodity groups (weights in parenthesis) - food (0.830), beverages (0.061), and tobacco (0.109).

^{^2/}Average inflation during last 12 months.

^{^3/}Change from December 1994.

Table 9.

Guinea-Bissau: Consumer Price Indices, 1990-April 1995

				1990	1991	1992	1993	1994	1995
									April
Period average basis
	Indices (February 1986–100)
		Total CPI ^1/		1,076	1,696	2,873	4,259	4,905	6,196
			Food	1,071	1,725	2,931	4,427	5,068	6,183
			Beverages	1,039	1,332	2,482	3,139	3,415	5,128
			Tobacco	1,135	1,686	2,646	3,616	4,511	6,888
	Changes from previous period (in percent)
		Total CPI		33.0	57.6	69.4	48.2	15.2	23.3 ^2/
			Food	34.5	61.1	69.9	63.1	14.5	…
			Beverages	24.7	28.3	86.3	26.5	8.8	…
			Tobacco	26.7	48.6	56.9	36.3	24.7	…
End-of-period basis
	Indices (February 1986–100)
		Total CPI ^1/		1,191	1,906	3,559	4,652	5,548	6,196
			Food	1,205	1,908	3,590	4,820	5,749	6,183
			Beverages	1,064	1,857	3,281	2,643	4,469	5,128
			Tobacco	1,155	1,922	3,479	4,502	4,643	6,888
	Changes from previous period (in percent)
		Total CPI		32.1	60.1	86.7	30.7	19.3	11.7 ^3/
			Food	39.5	58.4	88.2	34.3	19.3	7.5 ^3/
			Beverages	−1.8	74.5	76.7	−19.4	69.1	14.7 ^3/
			Tobacco	0.2	66.4	81.0	29.4	3.1	48.4 ^3/

Source: Directorate-General of Statistics, Ministry of Planning and International Cooperation.

^{^1/}The CPI covers only Bissau and three commodity groups (weights in parenthesis) - food (0.830), beverages (0.061), and tobacco (0.109).

^{^2/}Average inflation during last 12 months.

^{^3/}Change from December 1994.

III. Public Finance

1. Main developments

During 1994, government budgetary revenues increased by more than 1 percentage point of GDP to 11 ⅔ percent (Table 10 and Chart 2). At the same time, total expenditure and net lending declined from 39 ⅔ percent of GDP in 1993 to 33 ¼ percent of GDP in 1994, owing mainly to a slowdown in public investment. As a result, the overall fiscal deficit (on a commitment basis and excluding grants) fell to 21 ½ percent of GDP, from 29 ⅓ percent in 1993. Although the Treasury stepped up cash payments on external debt service and initiated reschedulings with creditors, in 1994 there was another large accumulation of external payments arrears on a net basis. On the other hand, domestic arrears were reduced, and the Government built up a net creditor position vis-à-vis the banking system.

Table 10.

Guinea-Bissau: Central Government Operations, 1990–94

Source: Directorate-General of the Treasury, Ministry of Finance.

^{^1/}Including privatization receipts.

^{^2/}Use of proceeds from previously disbursed foreign loan contracted by the Central Bank and assumed by the Treasury in 1994.

^{^3/}Current budget, excluding scheduled external interest payments.

Table 10.

Guinea-Bissau: Central Government Operations, 1990–94

				1990	1991	1992	1993	1994
				(In billions of Guinea-Bissau pesos)
Total revenue and grants				196.3	262.7	434.8	657.7	819.1
	Total revenue			99.7	116.4	187.4	253.7	375.8
		Tax revenue		41.3	56.3	60.2	121.0	207.4
			Of which: international trade taxes	(25.1)	(33.4)	(31.3)	(73.5)	(134.6)
		Nontax revenue ^1/		58.4	60.2	127.1	132.6	168.4
			Of which: fishing licenses	(50.0)	(52.3)	(99.5)	(113.7)	(150.6)
	Grants			96.5	146.2	247.5	404.1	443.3
		Marketable food aid		—	13.2	—	—	—
		Balance of payments support		33.2	13.3	49.9	35.3	21.8
		Project aid		63.3	119.7	197.5	368.8	421.6
Total expenditure and net lending				230.9	427.4	774.7	967.8	1,063.3
	Current expenditure			85.0	164.6	250.7	343.3	440.8
		Wages and salaries		21.7	43.9	60.1	77.9	80.8
		Other goods and services		33.2	56.0	80.8	90.4	135.6
		Transfers		7.3	14.7	36.8	37.5	60.5
		Scheduled external interest payments		22.8	49.9	72.9	137.4	163.9
	Capital expenditure			114.8	218.0	445.4	587.6	604.7
	Net lending			31.1	44.9	78.7	37.0	17.8
Overall balance (commitment basis)
	Including grants			−34.6	−164.8	−339.9	−310.1	−244.2
	Excluding grants			−131.1	−311.0	−587.4	−714.2	−687.5
Changes in external arrears				−9.7	113.3	235.0	245.3	420.0
Changes in domestic arrears				—	—	25.6	−7.9	−3.1
Float and errors and omissions (net)				−112.7	−27.6	3.0	−13.3	44.9
Overall balance (cash basis)				−157.0	−79.1	−76.2	−86.0	217.6
Financing				98.0	40.3	65.8	−66.8	−221.6
	Domestic banking system (net)			30.4	−26.8	29.4	18.5	−117.9
	Foreign (net)			67.6	67.1	36.4	−85.3	−145.3
		Drawings		67.6	134.3	245.6	225.2	220.1
			Balance of payments loans	24.8	52.1	—	9.3	39.5
			Project loans	42.8	82.2	245.6	216.0	180.6
		Amortization		—	−67.2	−209.2	−310.5	−365.4
	Other financing ^2/			—	—	—	—	41.6
Debt relief				59.0	38.8	10.4	152.8	4.0
					(In percent of GDP)
	Total revenue			19.3	13.4	12.1	10.4	11.7
	Tax revenue			8.0	6.5	3.9	5.0	6.5
	Current expenditure			16.5	18.9	16.3	14.1	13.8
	Capital expenditure			22.2	25.1	28.9	24.1	18.9
	Primary balance ^3/			7.3	0.2	0.6	2.0	3.1
	Overall balance (commitment basis)
		Excluding grants		−25.4	−35.8	−38.1	−29.3	−21.5
				(In billions of Guinea-Bissau pesos)
Memorandum items:
	Stock of domestic arrears (end-of-period)			…	…	35.9	28.0	24.9
	Arrears regularized during the year			…	…	…	−24.7	−19.7
	New arrears incurred			…	…	…	16.6	16.6

Source: Directorate-General of the Treasury, Ministry of Finance.

^{^1/}Including privatization receipts.

^{^2/}Use of proceeds from previously disbursed foreign loan contracted by the Central Bank and assumed by the Treasury in 1994.

^{^3/}Current budget, excluding scheduled external interest payments.

Table 10.

Guinea-Bissau: Central Government Operations, 1990–94

				1990	1991	1992	1993	1994
				(In billions of Guinea-Bissau pesos)
Total revenue and grants				196.3	262.7	434.8	657.7	819.1
	Total revenue			99.7	116.4	187.4	253.7	375.8
		Tax revenue		41.3	56.3	60.2	121.0	207.4
			Of which: international trade taxes	(25.1)	(33.4)	(31.3)	(73.5)	(134.6)
		Nontax revenue ^1/		58.4	60.2	127.1	132.6	168.4
			Of which: fishing licenses	(50.0)	(52.3)	(99.5)	(113.7)	(150.6)
	Grants			96.5	146.2	247.5	404.1	443.3
		Marketable food aid		—	13.2	—	—	—
		Balance of payments support		33.2	13.3	49.9	35.3	21.8
		Project aid		63.3	119.7	197.5	368.8	421.6
Total expenditure and net lending				230.9	427.4	774.7	967.8	1,063.3
	Current expenditure			85.0	164.6	250.7	343.3	440.8
		Wages and salaries		21.7	43.9	60.1	77.9	80.8
		Other goods and services		33.2	56.0	80.8	90.4	135.6
		Transfers		7.3	14.7	36.8	37.5	60.5
		Scheduled external interest payments		22.8	49.9	72.9	137.4	163.9
	Capital expenditure			114.8	218.0	445.4	587.6	604.7
	Net lending			31.1	44.9	78.7	37.0	17.8
Overall balance (commitment basis)
	Including grants			−34.6	−164.8	−339.9	−310.1	−244.2
	Excluding grants			−131.1	−311.0	−587.4	−714.2	−687.5
Changes in external arrears				−9.7	113.3	235.0	245.3	420.0
Changes in domestic arrears				—	—	25.6	−7.9	−3.1
Float and errors and omissions (net)				−112.7	−27.6	3.0	−13.3	44.9
Overall balance (cash basis)				−157.0	−79.1	−76.2	−86.0	217.6
Financing				98.0	40.3	65.8	−66.8	−221.6
	Domestic banking system (net)			30.4	−26.8	29.4	18.5	−117.9
	Foreign (net)			67.6	67.1	36.4	−85.3	−145.3
		Drawings		67.6	134.3	245.6	225.2	220.1
			Balance of payments loans	24.8	52.1	—	9.3	39.5
			Project loans	42.8	82.2	245.6	216.0	180.6
		Amortization		—	−67.2	−209.2	−310.5	−365.4
	Other financing ^2/			—	—	—	—	41.6
Debt relief				59.0	38.8	10.4	152.8	4.0
					(In percent of GDP)
	Total revenue			19.3	13.4	12.1	10.4	11.7
	Tax revenue			8.0	6.5	3.9	5.0	6.5
	Current expenditure			16.5	18.9	16.3	14.1	13.8
	Capital expenditure			22.2	25.1	28.9	24.1	18.9
	Primary balance ^3/			7.3	0.2	0.6	2.0	3.1
	Overall balance (commitment basis)
		Excluding grants		−25.4	−35.8	−38.1	−29.3	−21.5
				(In billions of Guinea-Bissau pesos)
Memorandum items:
	Stock of domestic arrears (end-of-period)			…	…	35.9	28.0	24.9
	Arrears regularized during the year			…	…	…	−24.7	−19.7
	New arrears incurred			…	…	…	16.6	16.6

Source: Directorate-General of the Treasury, Ministry of Finance.

^{^1/}Including privatization receipts.

^{^2/}Use of proceeds from previously disbursed foreign loan contracted by the Central Bank and assumed by the Treasury in 1994.

^{^3/}Current budget, excluding scheduled external interest payments.

2. Revenues

Tax collections in 1994 rose strongly by 71 percent, boosted by a surge in customs revenues, which increased by 83 percent (Table 11). Although improved customs assessment procedures were partly responsible for this gain, the main contributing factor was the record cashew nut exports, which enabled export tax collections to more than triple, despite a reduction in the cashew nut export tax rate from 18 percent to 13 percent. In contrast, taxes on income accounted for less than 8 percent of budgetary revenue (i.e., excluding grants), as the formal sector’s personal and corporate income tax bases remained very narrow. Similarly, taxes on consumption accounted only for about 7 percent of revenue, as many informal domestic transactions remained outside the web of taxation. With respect to consumption taxes, that on rice was raised to 14 percent to bring total tax levies on imported rice to 20 percent by end-1994. Nontax revenues increased by 27 percent, mostly on account of the higher domestic currency value of fishing license receipts. In 1994, no privatization revenues accrued to the Treasury.

Table 11.

Guinea-Bissau: Central Government Revenue, 1990–94

Source: Directorate-General of the Treasury, Ministry of Finance.

Table 11.

Guinea-Bissau: Central Government Revenue, 1990–94

				1990	1991	1992	1993	1994
					(In millions of Guinea-Bissau pesos)
Tax revenue				41,296	56,267	60,248	121,018	207,370
	Income taxes			7,378	6,938	11,473	18,005	25,190
		Business profits		5,213	3,817	6,225	9,223	11,823
		Individuals		1,457	2,133	2,920	5,395	9,474
			Salaries and fees	395	852	1,263	2,129	3,015
			Rental income	1,062	1,281	1,657	3,266	6,460
	Complementary tax			267	752	1,662	1,947	2,171
	Capital tax			14	90	174	508	1,456
	Other taxes			428	146	491	932	266
	Property tax			22	—	—	—	—
	Consumption taxes			6,217	12,719	12,603	23,362	27,659
		On imports		5,781	11,943	11,623	22,209	25,572
		On local production		437	776	980	1,153	2,087
	Taxes on international trade			25,102	33,406	31,266	73,535	134,625
		Import duties		6,558	13,539	12,406	25,150	33,476
		Export taxes		12,128	11,346	5,687	17,987	57,463
		Port service charges		6,417	8,521	13,173	30,398	43,685
	Other taxes			2,576	3,203	4,906	6,116	19,897
Nontax revenue				58,447	60,172	127,130	132,637	168,408
	Entreprenurial and property
		income		1,090	591	1,312	1,301	1,458
	Fees and duties			50,630	52,711	100,084	114,643	151,300
		Of which: fishing licenses		(49,962)	(52,309)	(99,476)	(113,659)	(150,579)
	Government employees
		contribution to social security		396	1,838	1,915	3,484	4,267
	Privatization receipts			—	—	19,387	4,404	—
	Other			6,332	5,032	4,432	8,805	11,383
		Total revenue		99,743	116,439	187,378	253,654	375,778
					(In percent of total revenue)
Tax revenue				41.4	48.3	32.2	47.7	55.2
	Income taxes			7.4	6.0	6.1	7.1	6.7
	Consumption taxes			6.2	10.9	6.7	9.2	7.4
	Taxes on international trade			25.2	28.7	16.7	29.0	35.8
Nontax revenue				58.6	51.7	67.8	52.3	44.8

Source: Directorate-General of the Treasury, Ministry of Finance.

Table 11.

Guinea-Bissau: Central Government Revenue, 1990–94

				1990	1991	1992	1993	1994
					(In millions of Guinea-Bissau pesos)
Tax revenue				41,296	56,267	60,248	121,018	207,370
	Income taxes			7,378	6,938	11,473	18,005	25,190
		Business profits		5,213	3,817	6,225	9,223	11,823
		Individuals		1,457	2,133	2,920	5,395	9,474
			Salaries and fees	395	852	1,263	2,129	3,015
			Rental income	1,062	1,281	1,657	3,266	6,460
	Complementary tax			267	752	1,662	1,947	2,171
	Capital tax			14	90	174	508	1,456
	Other taxes			428	146	491	932	266
	Property tax			22	—	—	—	—
	Consumption taxes			6,217	12,719	12,603	23,362	27,659
		On imports		5,781	11,943	11,623	22,209	25,572
		On local production		437	776	980	1,153	2,087
	Taxes on international trade			25,102	33,406	31,266	73,535	134,625
		Import duties		6,558	13,539	12,406	25,150	33,476
		Export taxes		12,128	11,346	5,687	17,987	57,463
		Port service charges		6,417	8,521	13,173	30,398	43,685
	Other taxes			2,576	3,203	4,906	6,116	19,897
Nontax revenue				58,447	60,172	127,130	132,637	168,408
	Entreprenurial and property
		income		1,090	591	1,312	1,301	1,458
	Fees and duties			50,630	52,711	100,084	114,643	151,300
		Of which: fishing licenses		(49,962)	(52,309)	(99,476)	(113,659)	(150,579)
	Government employees
		contribution to social security		396	1,838	1,915	3,484	4,267
	Privatization receipts			—	—	19,387	4,404	—
	Other			6,332	5,032	4,432	8,805	11,383
		Total revenue		99,743	116,439	187,378	253,654	375,778
					(In percent of total revenue)
Tax revenue				41.4	48.3	32.2	47.7	55.2
	Income taxes			7.4	6.0	6.1	7.1	6.7
	Consumption taxes			6.2	10.9	6.7	9.2	7.4
	Taxes on international trade			25.2	28.7	16.7	29.0	35.8
Nontax revenue				58.6	51.7	67.8	52.3	44.8

Source: Directorate-General of the Treasury, Ministry of Finance.

In order to expand the tax base and improve fiscal administration, the authorities took measures in the context of the 1995 budget: a taxpayer number identification system was introduced; customs collections procedures were made more stringent by requiring the payment of the consumption tax on oil products simultaneously with customs duties; and the number of tariff exemptions was reduced by 60 percent.

During 1994, external grants accruing to the Government’s capital budget declined by US$6 million, to US$34 million, including donor support for the logistics of the first national multiparty elections.

3. Expenditure

In 1994, government current expenditure declined in relation to GDP by ⅓ of 1 percentage point. The nominal wage bill was virtually stable relative to its 1993 level, reflecting the downsizing of the civil service and a salary freeze in effect since 1993 (Table 12). Transfers to public enterprises were increased sharply to help strengthen the capital position of some of the companies, in line with the strategy to reform the state enterprise sector. Scheduled interest payments were again the largest component of current expenditure at about 37 percent of the total.

Table 12.

Guinea-Bissau: Central Government Expenditure, 1990–94

Source: Directorate-General of the Treasury, Ministry of Finance.

Table 12.

Guinea-Bissau: Central Government Expenditure, 1990–94

				1990	1991	1992	1993	1994
					(In millions of Guinea-Bissau pesos)
Current expenditure				85,022	164,582	250,665	343,327	440,757
	Wages and salaries			21,669	43,888	60,089	77,935	80,815
	Goods and services			33,188	56,042	80,802	90,435	135,571
		Durable goods		255	71	90	5	3,038
		Nondurable goods		2,913	16,297	10,115	10,921	12,449
			Of which: gasoline	(…)	(2,913)	(5,705)	(6,625)	(7,589)
		Acquisition of goods and services		4,977	11,801	30,750	35,569	37,208
			Of which: electricity and water	(…)	(…)	(5,148)	(20,972)	(23,040)
		Food and housing		2,462	3,233	4,621	10,384	31,721
		Clothing		74	725	165	250	710
		Travel		4,639	7,043	9,909	14,219	17,295
		Maintenance		1,329	2,084	2,894	5,878	6,348
		Other		16,540	14,787	22,258	13,210	26,802
	Transfers			7,349	14,711	36,829	37,540	60,513
		Civil servants and other individuals		4,155	10,492	18,713	20,088	20,971
		Rest of public administration		863	574	612	1,962	2,861
		Public enterprises		258	281	1,117	690	26,681
		Abroad		2,073	3,365	1,769	1,825	—
		Voluntary departure program		—	—	14,618	12,975	10,000
	Scheduled external interest payments			22,816	49,940	72,945	137,416	163,858
Capital expenditure				114,787	217,965	445,412	587,561	604,693
	Foreign financing			106,082	201,932	443,146	584,720	602,175
	Domestic financing			8,705	16,033	2,266	2,841	2,518
		Total expenditure		199,809	382,546	696,078	930,888	1,045,450
					(In percent of current expenditure)
	Wages and salaries			25.5	26.7	24.0	22.7	18.3
	Goods and services			39.0	34.1	32.2	26.3	30.8
	Transfers			8.6	8.9	14.7	10.9	13.7
	Scheduled external interest payments			26.8	30.3	29.1	40.0	37.2
				(In percent of current expenditure excluding interest payments)
	Social expenditure			…	…	20.6	23.6	22.5
	Military expenditure			…	…	7.1	9.6	9.4
					(In percent of GDP)
	Wages and salaries			4.2	5.1	3.9	3.2	2.5
	Goods and services			6.4	6.5	5.2	3.7	4.2
	Transfers			1.4	1.7	2.4	1.5	1.9

Source: Directorate-General of the Treasury, Ministry of Finance.

Table 12.

Guinea-Bissau: Central Government Expenditure, 1990–94

				1990	1991	1992	1993	1994
					(In millions of Guinea-Bissau pesos)
Current expenditure				85,022	164,582	250,665	343,327	440,757
	Wages and salaries			21,669	43,888	60,089	77,935	80,815
	Goods and services			33,188	56,042	80,802	90,435	135,571
		Durable goods		255	71	90	5	3,038
		Nondurable goods		2,913	16,297	10,115	10,921	12,449
			Of which: gasoline	(…)	(2,913)	(5,705)	(6,625)	(7,589)
		Acquisition of goods and services		4,977	11,801	30,750	35,569	37,208
			Of which: electricity and water	(…)	(…)	(5,148)	(20,972)	(23,040)
		Food and housing		2,462	3,233	4,621	10,384	31,721
		Clothing		74	725	165	250	710
		Travel		4,639	7,043	9,909	14,219	17,295
		Maintenance		1,329	2,084	2,894	5,878	6,348
		Other		16,540	14,787	22,258	13,210	26,802
	Transfers			7,349	14,711	36,829	37,540	60,513
		Civil servants and other individuals		4,155	10,492	18,713	20,088	20,971
		Rest of public administration		863	574	612	1,962	2,861
		Public enterprises		258	281	1,117	690	26,681
		Abroad		2,073	3,365	1,769	1,825	—
		Voluntary departure program		—	—	14,618	12,975	10,000
	Scheduled external interest payments			22,816	49,940	72,945	137,416	163,858
Capital expenditure				114,787	217,965	445,412	587,561	604,693
	Foreign financing			106,082	201,932	443,146	584,720	602,175
	Domestic financing			8,705	16,033	2,266	2,841	2,518
		Total expenditure		199,809	382,546	696,078	930,888	1,045,450
					(In percent of current expenditure)
	Wages and salaries			25.5	26.7	24.0	22.7	18.3
	Goods and services			39.0	34.1	32.2	26.3	30.8
	Transfers			8.6	8.9	14.7	10.9	13.7
	Scheduled external interest payments			26.8	30.3	29.1	40.0	37.2
				(In percent of current expenditure excluding interest payments)
	Social expenditure			…	…	20.6	23.6	22.5
	Military expenditure			…	…	7.1	9.6	9.4
					(In percent of GDP)
	Wages and salaries			4.2	5.1	3.9	3.2	2.5
	Goods and services			6.4	6.5	5.2	3.7	4.2
	Transfers			1.4	1.7	2.4	1.5	1.9

Source: Directorate-General of the Treasury, Ministry of Finance.

In view of the prevalent poverty in Guinea-Bissau—per capita income is estimated at only some US$235—and associated unfavorable social indicators, the Government endeavored to keep social expenditures in 1994 at about 23 percent of current expenditure (excluding interest payments), and, simultaneously, priority was given to investment in health and education. In contrast, military expenditures were kept at 9 percent of current expenditure (excluding interest payments), or less than 1 percent of GDP, in line with the ongoing streamlining of the armed forces.

Government capital outlays increased by less than 3 percent in 1994, as the Government dissociated itself from donor-financed projects carried out through nonofficial domestic entities. However, no information is available on the sectoral distribution of public investment during 1994. Net government lending was positive again in 1994, as the Government failed to recover balances owed by domestic operators from the sale of merchandise provided through external aid.

4. Arrears accumulation and other financing

In view of the heavy external debt service burden confronting Guinea-Bissau, in 1994 the Treasury continued to accumulate arrears—some US$18 million on a net basis. Guinea-Bissau made cash payments in 1994 of US$6 million on 1994 maturities and of US$5 million on pre-1994 arrears. However, no major debt rescheduling agreement was formalized until a February 1995 Paris Club meeting. Debt relief granted during 1994 was less than US$300,000 (from France, Libya, and Sweden). ^1/

In contrast, domestic arrears were reduced by PG 3 billion, as the Treasury endeavored to catch up on unsettled payments from previous years. The PG 25 billion in domestic arrears still outstanding at end-1994 related mainly to unpaid civil servant income supplements and purchases from suppliers.

In 1994, the Government built up a net creditor position vis-à-vis the banking system to the extent of some PG 90 billion by accumulating deposits generated by counterpart funds. Owing to the more selective and restrained public investment program, external loan disbursements fell from US$22 million in 1993 to US$17 million in 1994, thus rendering net foreign financing negative on the basis of scheduled amortization of US$28 million. An additional source of financing (PG 41 billion) became available when the Treasury assumed a medium- and long-term credit to the Central Bank, which had been disbursed previously but not fully utilized.

IV. Structural and Social Reforms

1. Introduction

The structural reform program under way in Guinea-Bissau is aimed at fostering market-driven economic efficiency by increasing the role of the private sector. This strategy has entailed a general liberalization of prices and regulations, as well as the downsizing of the extensive public administration and state enterprise sector. In this context, in 1991, the Government initiated an overhaul of the civil service as well as a privatization program. However, in view of the social realities, the Government has also been alert to the adverse effects of the transition process on the most vulnerable segments of the population and has sought to provide safety nets to the extent that resources allow. The Government is also aware of the potentially detrimental impact on future economic growth of an overexploitation of the country’s natural resource base, and has sought to enforce stricter environmental standards.

2. Civil service reform

In 1991, the Government launched a broad civil service reform program with three major objectives: (i) to reduce significantly the size of the civil service; (ii) to increase the efficiency of public administration by upgrading the qualifications and working conditions for civil servants; and (iii) to enhance transparency in the salary structure by accounting for all direct remunerations and other benefits.

With regard to the reduction in the size of the civil service, the strategy was to encourage voluntary departures by offering separation incentives to lower-ranked civil servants, who account for the larger part of the overstaffing in public administration. For these staff, the severance pay package (in the US$1,000–2,000 range during 1992–94) averaged the equivalent of about two years’ salary, and employee interest was considerable. At end-1994, some 2,549 workers, or some 11 percent of the estimated 23,000 workers on the government payroll at end-1991 (including military and paramilitary personnel), had left the civil service under the voluntary departure program, with 1,043 departures in 1992, 742 in 1993, and 764 in 1994 (Table 13). A census of the public administration was initiated in early 1995, which should allow a more adequate monitoring of the size of the civil service in the future.

Table 13.

Guinea-Bissau: Civil Service Employment and Developments Under the Voluntary Departure Program, December 1992-June 1995

Sources: Directorate-General of the Civil Service, Ministry of the Civil Service and Labor; and Directorate-General of Public Accounting and Budget. Ministry of Finance.

^{^1/}The military personnel assigned to the Presidency are accounted for under the Ministry of Defense and the Ministry of Home Affairs.

^{^2/}In the absence of detailed information, all Ministry of Defense and Ministry of Home Affairs staff are counted as military personnel.

Table 13.

Guinea-Bissau: Civil Service Employment and Developments Under the Voluntary Departure Program, December 1992-June 1995

				1992	1993	1994	1995
				December			June
Total civil servants				…	…	20,031	20,095
	Nonmilitary personnel			12,504	12,933	12,269	13,646
		Presidency ^1/		…	…	…	234
		National Assembly		…	…	…	—
		Prime Minister’s Office		…	…	…	34
		Courts of Law		…	…	…	112
		State Attorney’s Office		…	…	…	33
		Ministries
			Civil Service and Labor (MAPT)	…	…	…	62
			Commerce (MC)	…	…	…	139
			Defense (MDN) ^2/	…	…	…	…
			Education (MEN)	…	…	…	5,552
			Energy, Industry and National Resources (MEIRN)	…	…	…	472
			Finance (MF)	…	…	…	758
			Fisheries (MP)	…	…	…	199
			Foreign Affairs and Guinean Communities (MPCI)	…	…	…	92
			Home Affairs (MAI) ^2/	…	…	…	…
			Justice (MJ)	…	…	…	211
			Planning and International Cooperation (MPCI)	…	…	…	133
			Public Health (MSP)	…	…	…	2,356
			Rural Development and Agriculture (MDRA)	…	…	…	1,555
			Social Affairs and Women’s Promotion (MASPF)	…	…	…	256
			Social Communications and Parliamentary Affairs (MCSAP)	…	…	…	102
			Social Infrastructure (MES)	…	…	…	837
		Secretaries of State
			Tourism, Crafts, and Environment (SETAA)	…	…	…	66
			Veterans Affairs (SECLP)	…	…	…	69
			Youth and Sports (SECJD)	…	…	…	374
	Military personnel ^1/			…	…	…	6,449
		Ministry of Defense (MDN) ^2/		…	…	…	2,992
		Ministry of Home Affairs (MAI) ^2/		…	…	…	3,457
Net changes from end of previous year				…	…	…	64
	Terminations
		Under the Voluntary Departure Program		1,043	742	764	…
		Other		…	…	…	…
	New hirings			…	…	96	…
				(In millions of Guinea-Bissau pesos)
Memorandum items:
	Total outlays under the Voluntary Departure Program			14,932	14,500	10,000	…
	Average compensation paid			14.3	19.5	13.0	…

Sources: Directorate-General of the Civil Service, Ministry of the Civil Service and Labor; and Directorate-General of Public Accounting and Budget. Ministry of Finance.

^{^1/}The military personnel assigned to the Presidency are accounted for under the Ministry of Defense and the Ministry of Home Affairs.

^{^2/}In the absence of detailed information, all Ministry of Defense and Ministry of Home Affairs staff are counted as military personnel.

Table 13.

Guinea-Bissau: Civil Service Employment and Developments Under the Voluntary Departure Program, December 1992-June 1995

				1992	1993	1994	1995
				December			June
Total civil servants				…	…	20,031	20,095
	Nonmilitary personnel			12,504	12,933	12,269	13,646
		Presidency ^1/		…	…	…	234
		National Assembly		…	…	…	—
		Prime Minister’s Office		…	…	…	34
		Courts of Law		…	…	…	112
		State Attorney’s Office		…	…	…	33
		Ministries
			Civil Service and Labor (MAPT)	…	…	…	62
			Commerce (MC)	…	…	…	139
			Defense (MDN) ^2/	…	…	…	…
			Education (MEN)	…	…	…	5,552
			Energy, Industry and National Resources (MEIRN)	…	…	…	472
			Finance (MF)	…	…	…	758
			Fisheries (MP)	…	…	…	199
			Foreign Affairs and Guinean Communities (MPCI)	…	…	…	92
			Home Affairs (MAI) ^2/	…	…	…	…
			Justice (MJ)	…	…	…	211
			Planning and International Cooperation (MPCI)	…	…	…	133
			Public Health (MSP)	…	…	…	2,356
			Rural Development and Agriculture (MDRA)	…	…	…	1,555
			Social Affairs and Women’s Promotion (MASPF)	…	…	…	256
			Social Communications and Parliamentary Affairs (MCSAP)	…	…	…	102
			Social Infrastructure (MES)	…	…	…	837
		Secretaries of State
			Tourism, Crafts, and Environment (SETAA)	…	…	…	66
			Veterans Affairs (SECLP)	…	…	…	69
			Youth and Sports (SECJD)	…	…	…	374
	Military personnel ^1/			…	…	…	6,449
		Ministry of Defense (MDN) ^2/		…	…	…	2,992
		Ministry of Home Affairs (MAI) ^2/		…	…	…	3,457
Net changes from end of previous year				…	…	…	64
	Terminations
		Under the Voluntary Departure Program		1,043	742	764	…
		Other		…	…	…	…
	New hirings			…	…	96	…
				(In millions of Guinea-Bissau pesos)
Memorandum items:
	Total outlays under the Voluntary Departure Program			14,932	14,500	10,000	…
	Average compensation paid			14.3	19.5	13.0	…

Sources: Directorate-General of the Civil Service, Ministry of the Civil Service and Labor; and Directorate-General of Public Accounting and Budget. Ministry of Finance.

^{^1/}The military personnel assigned to the Presidency are accounted for under the Ministry of Defense and the Ministry of Home Affairs.

^{^2/}In the absence of detailed information, all Ministry of Defense and Ministry of Home Affairs staff are counted as military personnel.

However, the Government has encountered more difficulties in implementing the other two components of the civil service reform. In particular, revision of the salary structure has been slow, owing mainly to problems with standardizing total benefits across different personnel categories, and, in some cases, between staff in the same category. As to career development and the improvement of working conditions, staff training and equipment upgrade programs are envisaged but have not yet been implemented, owing to a lack of resources.

3. Reform of the public enterprise sector

Following the termination of central planning, in 1990, Guinea-Bissau launched a reform program for the state enterprise sector geared to making public companies financially autonomous and to privatizing them as soon as practicable. At the same time, the Government sought to improve the institutional and legal framework for private sector development and for public enterprises that remained state-owned.

The Government’s initial strategy was to select a few enterprises for sale, with the expectation that resources thus generated would help meet the financial restructuring needs of other public enterprises. The first group of public enterprises for sale consisted of ten companies, and, as of end-May 1995, all but one (CICER—brewery) had been privatized, put up for tender, or placed under private management (Table 14). In addition, specific operations of two public enterprises were spun off into joint ventures (GUINÉ-TELECOM and GUIPORT) with majority private sector positions. Five other companies had no viable prospects for privatization and were liquidated, closed, or merged.

Table 14.

Guinea-Bissau: Status of Public Enterprise Reform, June 1995

Source: Managing Unit for the Reform of Public Enterprises (UGREP), Ministry of Finance.

^{^1/}Three types of private management arrangements have been employed: (i) leasing under which profits/losses accrue to the Lessee; (ii) management contracts, under which profits/losses accrue to the State; and (iii) concession contracts, which are joint ventures for extended periods with the State holding a minority position

Table 14.

Guinea-Bissau: Status of Public Enterprise Reform, June 1995

Companies		Ownership/operational status
Privatized companies
	Fábrica Espuma (mattresses)	Fully privatized.
	Leite Blufo (dairy)	Fully privatized.
	Hotel 24 de Setembro (hotel)	75 percent of capital privatized.
	Armazéns do Povo (commerce)	71 percent of capital privatized.
	NAVIPESCA/SEMAPESCA (fishing)	65 percent of capital privatized.
Companies operated by private management ^1/
	Fábrica de Plásticos (plastics)	Under leasing contract.
	EAGB (electricity and water)	New management contract under negotiation.
	Estância Balnear de Bubaque (hotel)	Under management contract.
	Hotel Hotti-Bissau (hotel)	Under management contract.
	Hotel Ilha de Maio (hotel)	Under management contract.
	GUINE-TELECOM (telecommunications)	Under concession contract; 49 percent of capital state-owned.
	GUIPORT (port services)	Under concession contract; 25 percent of capital state-owned.
Companies put up for tender
	Comp. Frig. Bolola (frozen foods)	Tender opened in 1993; no bids received; interim lease.
	CMV (automobile maintenance)	Tender opened in April 1995.
	FOLBI (wood products)	Tender opened in April 1995.
	SOCOTRAM (wood processing)	Tender opened in April 1995.
Companies scheduled to be put up for tender
	CICER (brewery)	Tender to be open by December 1995.
	RODOFLUVIAL (river transport)	Tender to be open by December 1995.
Companies liquidated or extinct
	EGA (automobile maintenance)	Liquidated in 1994.
	GUINEMAR (shipping)	Liquidated in 1995.
	JAPG (port authority)	Liquidated in 1995.
	SOCAJU (farm)	Merged with CICER.
	Titina Sila (processed fruits)	Out of business.
Companies to be liquidated
	DICOL (petroleum products distribution)	Liquidation by September 1995.
	GUINAVE (shipyards)	Liquidation by September 1995.
	GUINEGAZ (gas distribution)	Liquidation by September 1995.
	SILO DIATA (urban transportation)	Liquidation by September 1995.
	ENATUR (tourism)	Liquidation by December 1995.
	ENAVI (poultry)	Liquidation by December 1995.
	GUIALP (joint fishing venture with Algeria)	Liquidation by December 1995.
Other public enterprises
	CAIC-CUMERE (agro-industry)
	Cerámica Eafatá (ceramics)
	ENAG (airport services)
	FARMEDI (pharmaceuticals import and distribution)
	Granja Agricola de Gambiel (sugar)
	GUIMETAL (metalworks)
	INACEP (printer)
	OMETAL (metalworks)
	PETROGUIN (petroleum exploration)
	SUINAVE (pork and poultry)
	TAGB (airline)
Cther mixed companies
	FRETAMAR (shipping)	70 percent of capital state-owned.
	Estrela do Mar (fishing)	51 percent of capital state-owned; Russia owns balance.
	BIGB (bank)	26 percent of capital state-owned.
	TRANSTER (urban transportation)	25 percent of capital state-owned.

Source: Managing Unit for the Reform of Public Enterprises (UGREP), Ministry of Finance.

Table 14.

Guinea-Bissau: Status of Public Enterprise Reform, June 1995

Companies		Ownership/operational status
Privatized companies
	Fábrica Espuma (mattresses)	Fully privatized.
	Leite Blufo (dairy)	Fully privatized.
	Hotel 24 de Setembro (hotel)	75 percent of capital privatized.
	Armazéns do Povo (commerce)	71 percent of capital privatized.
	NAVIPESCA/SEMAPESCA (fishing)	65 percent of capital privatized.
Companies operated by private management ^1/
	Fábrica de Plásticos (plastics)	Under leasing contract.
	EAGB (electricity and water)	New management contract under negotiation.
	Estância Balnear de Bubaque (hotel)	Under management contract.
	Hotel Hotti-Bissau (hotel)	Under management contract.
	Hotel Ilha de Maio (hotel)	Under management contract.
	GUINE-TELECOM (telecommunications)	Under concession contract; 49 percent of capital state-owned.
	GUIPORT (port services)	Under concession contract; 25 percent of capital state-owned.
Companies put up for tender
	Comp. Frig. Bolola (frozen foods)	Tender opened in 1993; no bids received; interim lease.
	CMV (automobile maintenance)	Tender opened in April 1995.
	FOLBI (wood products)	Tender opened in April 1995.
	SOCOTRAM (wood processing)	Tender opened in April 1995.
Companies scheduled to be put up for tender
	CICER (brewery)	Tender to be open by December 1995.
	RODOFLUVIAL (river transport)	Tender to be open by December 1995.
Companies liquidated or extinct
	EGA (automobile maintenance)	Liquidated in 1994.
	GUINEMAR (shipping)	Liquidated in 1995.
	JAPG (port authority)	Liquidated in 1995.
	SOCAJU (farm)	Merged with CICER.
	Titina Sila (processed fruits)	Out of business.
Companies to be liquidated
	DICOL (petroleum products distribution)	Liquidation by September 1995.
	GUINAVE (shipyards)	Liquidation by September 1995.
	GUINEGAZ (gas distribution)	Liquidation by September 1995.
	SILO DIATA (urban transportation)	Liquidation by September 1995.
	ENATUR (tourism)	Liquidation by December 1995.
	ENAVI (poultry)	Liquidation by December 1995.
	GUIALP (joint fishing venture with Algeria)	Liquidation by December 1995.
Other public enterprises
	CAIC-CUMERE (agro-industry)
	Cerámica Eafatá (ceramics)
	ENAG (airport services)
	FARMEDI (pharmaceuticals import and distribution)
	Granja Agricola de Gambiel (sugar)
	GUIMETAL (metalworks)
	INACEP (printer)
	OMETAL (metalworks)
	PETROGUIN (petroleum exploration)
	SUINAVE (pork and poultry)
	TAGB (airline)
Cther mixed companies
	FRETAMAR (shipping)	70 percent of capital state-owned.
	Estrela do Mar (fishing)	51 percent of capital state-owned; Russia owns balance.
	BIGB (bank)	26 percent of capital state-owned.
	TRANSTER (urban transportation)	25 percent of capital state-owned.

Source: Managing Unit for the Reform of Public Enterprises (UGREP), Ministry of Finance.

Following a loss of momentum in late 1994 in the aftermath of the national elections, the pace of the divestment program was stepped up in early 1995 with the opening of tenders for three enterprises (CMV—automobile maintenance; FOLBI—wood products; and SOCOTRAM—wood processing) and the liquidation of two more (GUINEMAR—shipping; and JAPG—port authority). Before the end of the year, two more enterprises are scheduled to be put up for tender and seven more to be liquidated.

As for the public enterprises remaining in the government portfolio, there has been an attempt to enhance their efficiency through private management contracts. However, this has only occurred for three hotels and for the Bissau utilities company. For the most part, enterprises continue to be run by appointed civil servants or managers with little or no professional accountability. As a result, the financial situation of these enterprises continues to be difficult, and in some cases they have all but ceased operations.

4. Poverty and social adjustment measures

According to the World Bank, the results of a household survey conducted in 1991 indicated that 49 percent of Guinea-Bissau’s population were living in poverty, with 26 percent of the population living in extreme poverty. ^1/ Poverty was overwhelmingly a problem in rural areas, where 85 percent of the poor lived. The average poor household was relatively large, with a high dependency ratio (eight or more people), and had little or no access to utilities, medical care, schools, or public transportation.

Lacking the resources to set up direct income transfers to the poor, the Government has sought to alleviate poverty by giving priority to expenditure in the social areas, with a view to providing wider access to basic services—health, education, and safe water. In this context, priority is being given to improving the quality of primary health care and education, while, for access to safe water, the Government, with UNDP and World Bank support, is seeking to rehabilitate existing urban systems and expand the rural networks. ^2/

At present, social safety nets in Guinea-Bissau are in place for only a few vulnerable groups: departing civil servants, who receive benefit packages for voluntary separations; and schoolchildren, teachers, and hospital patients, who receive free meals under a food supplement program.

As for food security, the Government, with assistance from the World Food Program, monitors the situation closely, and emergency food aid has been mobilized on occasion. Rice remains the basic food staple in Guinea-Bissau, and, although its price has been liberalized, the Government tries to keep it affordable by dissuading merchants from speculative hikes, and, when food aid in kind is available, by conducting sales to the public.

5. Environmental priorities

Guinea-Bissau has valuable natural resources that could provide a much higher living standard for its population. Irrigated agricultural land is plentiful and rainfall is abundant, and the country’s maritime platform is rich in sea life, including several commercially valuable fish and crustacean species. There are relatively untouched ecosystems of great importance, especially the mangroves and wood forests of the mainland and the unique marshy islands of the Bijagós archipelago. However, some of these resources are coming under strong pressure from economic interests and the subsistence needs of the population. In particular, two areas of immediate concern have emerged: excessive fishing and deforestation.

While local fishermen employ artisanal methods that do not threaten the renovation of stocks, foreign operators exploit Guinea-Bissau’s offshore waters virtually unchecked under licensing agreements that the Government has considerable difficulty in monitoring. As a result, the commercial exploitation of some species is not sustainable. These problems were highlighted in a recent report issued by the USAID-sponsored Trade and Investment Policy Support Project (TIPS), which also pointed out that the financial counterparts paid for the fishing licenses were too low and other environmental safeguards inadequate. ^1/ With this in mind, the Government is trying to negotiate licenses on better terms and has achieved some success recently in the context of negotiations with the European Union. As for coastal monitoring, the situation is expected to improve with the recent activation of a patrol boat and the prospective commencement of regional patrolling operations.

The other major environmental problem—deforestation—has resulted from the expansion of agriculture, the pressing need for firewood in urban centers, and the emergence of small wood processing and log exporting companies. Deforestation, in turn, is causing a rise in salinity in the rivers, estuaries, and coastal waters that serve as breeding grounds for sea life, thus aggravating the fisheries situation. The Government will address these issues in the context of a national environment strategy currently under preparation. For the time being, government actions include an ongoing national survey of forest resources and the application of cost recovery criteria for logging permits.

V. Money and Banking

1. Banking system

Guinea-Bissau’s banking system consists of the Central Bank of Guinea-Bissau (BCGB) and two private commercial banks—the Banco Internacional da Guiné-Bissau (BIGB), established in 1990, and an agency in Bissau of the Portuguese bank Banco Totta & Açores (BTA), established in 1992. A third bank, Banco de Crédito Nacional (BCN), was set up as a public commercial bank in March 1990 mainly to monitor the recovery of the medium-term portfolio of the former Banco Nacional, which was closed in mid-1991 and subjected to a liquidation process. The BCN liquidation committee ceased its operations at end-1993, and its responsibilities were transferred to a recovery unit in the Treasury.

2. Monetary developments. 1994–95

After a successful tightening of the monetary and credit policy stance during 1993 and most of 1994, a surge in credit to the economy late in the year led to an annual expansion in broad money of almost 49 percent, well in excess of the estimated 31 percent growth of nominal GDP (Table 15 and Chart 3). The growth in credit to the economy, most of which was recorded in November and December, more than offset the sharp decline in net bank claims on the Government of almost 33 ¼ percent in terms of beginning-of-period broad money. This contributed importantly to an increase in net domestic assets of 54 ¾ percent, in terms of the beginning-of-period broad money, although the largest part of that increase resulted from the impact on other items net of the 25 percent depreciation in the Guinea-Bissau peso vis-à-vis the U.S. dollar during 1994. The net foreign assets position of the banking system deteriorated sharply by about 58 ½ percent in terms of beginning-of-period broad money, but this was due mostly to a reclassification of some medium- and long-term liabilities as short-term. In fact, gross official foreign reserves grew to US$18 million, from US$14 million at end-1993. Foreign currency deposits accounted for about one third of broad money, which resulted in a endogenous linkage between broad money and the depreciation of the peso. When the excessive pace of monetary expansion during the last two months of 1994 became apparent in early 1995, the BCGB took corrective actions by raising both interest rates and reserve requirements.

Table 15.

Guinea-Bissau: Monetary Survey, 1990-March 1995

Source: Central Bank of Guinea-Bissau (BCGB).

^{^1/}Revised since issuance of SM/95/185.

^{^2/}During 1994, the Treasury assumed all of the Central Bank’s medium- and long-term liabilities to official creditors (PG 110 billion), and the Central Bank reclassified its remaining (commercial) medium- and long-term liabilities (PG 85 billion) as short-term.

Table 15.

Guinea-Bissau: Monetary Survey, 1990-March 1995

							1990	1991	1992	1993	1994	1995
												March ^1/
							(In billions of Guinea-Bissau pesos: end of period)
Net foreign assets							−6.5	−59.7	6.8	−91.2	−299.6	−301.6
	Central Bank						−15.2	−72.6	−83.0	−208.1	−374.7	−428.0
		Assets					45.8	72.5	154.9	162.6	283.2	348.6
		Liabilities					−61.0	−145.0	−237.9	−370.7	−657.9 ^2/	−776.6
	Commercial banks						8.7	12.9	89.8	116.9	75.1	126.4
		Assets					11.2	13.9	104.6	124.3	−185.6	209.4
		Liabilities					−2.5	−1.0	−14.8	−7.4	−110.5	−82.9
Net domestic assets							118.0	228.7	470.6	633.1	827.6	858.9
	Net domestic credit						115.1	105.6	148.4	231.3	239.8	177.2
		Claims on Government (net)					6.5	−20.3	9.1	27.5	−90.4	−138.8
			Central Bank				6.6	−19.8	24.1	36.1	−87.3	−135.8
				Claims			130. 4	128.8	185.7	207.8	232.2	233.4
					Advances to the Treasury		6.0	—	40.9	48.0	—	—
					Loans		124.5	128.8	144.8	159.8	232.2	233.4
				Deposits			−123.8	−148.6	−161.6	−171.7	−319.5	−369.1
					Counterpart funds		−90.8	−115.4	−128.5	−135.1	−174.3	−218.8
					Other deposits		−33.0	−33.2	−33.2	−36.6	−145.2	−150.3
			Commercial banks				−0.1	−0.6	−15.1	−8.5	−3.1	−3.0
				Claims			—	—	—	—	—	—
				Deposits			−0.1	−0.6	−15.1	−8.5	−3.1	−3.0
		Credit to the economy					108.6	126.0	139.3	203.8	330.2	316.0
			Public enterprises				28.8	29.9	40.6	35.4	53.8	53.8
			Private enterprises				91.1	108.6	113.8	185.8	320.9	312.6
			Write-offs				−11.3	−12.5	−15.1	−17.4	−44.5	−50.4
	Other items (net)						2.9	123.1	322.2	401.8	587.8	681.8
		Of which: valuation changes					(10.1)	(112.0)	(276.6)	(389.2)	(542.2)	(639.4)
Broad money							88.0	119.8	253.0	355.4	527.6	556.9
	Currency in circulation						36.5	54.5	104.2	132.6	196.0	207.7
	Deposits						51.5	65.3	148.7	222.8	331.7	349.2
		Of which: foreign currency deposits					(15.2)	(23.7)	(68.9)	(113.0)	(167.3)	(185.5)
						local curency deposits	(36.2)	(41.6)	(79.9)	(109.8)	(164.4)	(163.7)
Medium- and long-term foreign liabilities							23.5	49.2	224.4	186.5	0.4 2/	0.4
							(In percent of beginning-of-period broad money unless otherwise indicated)
Net foreign assets							77.6	−60.5	55.5	−38.7	−58.6	−0.4
Net domestic assets							31.3	125.8	201.9	64.3	54.7	5.9
	Net domestic credit						99.1	−10.8	35.7	32.8	2.4	−11.9
		Claims on Government (net)					58.5	−30.5	24.5	7.3	−33.2	−9.2
		Credit to the economy (change in percent)					24.1	16.0	10.6	46.3	62.0	−4 3
Broad money							68.8	36.2	110.9	40.5	48.5	5.6
Memorandum items:
Velocity							5.9	7.2	6.1	6.9	6.1	…
Foreign assets of the Central Bank
	Gross foreign assets in US$ millions						18.3	14.6	17.9	14.2	18.4	20.8
	Net foreign assets in US$ millions						−6.0	−14.6	−9.6	−18.2	−24.4	−25.6
Exchange rate (PG per US$; end of period)							2,508.6	4,959.1	8,655.6	11.463.8	15,369.3	16,748.4

Source: Central Bank of Guinea-Bissau (BCGB).

^{^1/}Revised since issuance of SM/95/185.

Table 15.

Guinea-Bissau: Monetary Survey, 1990-March 1995

							1990	1991	1992	1993	1994	1995
												March ^1/
							(In billions of Guinea-Bissau pesos: end of period)
Net foreign assets							−6.5	−59.7	6.8	−91.2	−299.6	−301.6
	Central Bank						−15.2	−72.6	−83.0	−208.1	−374.7	−428.0
		Assets					45.8	72.5	154.9	162.6	283.2	348.6
		Liabilities					−61.0	−145.0	−237.9	−370.7	−657.9 ^2/	−776.6
	Commercial banks						8.7	12.9	89.8	116.9	75.1	126.4
		Assets					11.2	13.9	104.6	124.3	−185.6	209.4
		Liabilities					−2.5	−1.0	−14.8	−7.4	−110.5	−82.9
Net domestic assets							118.0	228.7	470.6	633.1	827.6	858.9
	Net domestic credit						115.1	105.6	148.4	231.3	239.8	177.2
		Claims on Government (net)					6.5	−20.3	9.1	27.5	−90.4	−138.8
			Central Bank				6.6	−19.8	24.1	36.1	−87.3	−135.8
				Claims			130. 4	128.8	185.7	207.8	232.2	233.4
					Advances to the Treasury		6.0	—	40.9	48.0	—	—
					Loans		124.5	128.8	144.8	159.8	232.2	233.4
				Deposits			−123.8	−148.6	−161.6	−171.7	−319.5	−369.1
					Counterpart funds		−90.8	−115.4	−128.5	−135.1	−174.3	−218.8
					Other deposits		−33.0	−33.2	−33.2	−36.6	−145.2	−150.3
			Commercial banks				−0.1	−0.6	−15.1	−8.5	−3.1	−3.0
				Claims			—	—	—	—	—	—
				Deposits			−0.1	−0.6	−15.1	−8.5	−3.1	−3.0
		Credit to the economy					108.6	126.0	139.3	203.8	330.2	316.0
			Public enterprises				28.8	29.9	40.6	35.4	53.8	53.8
			Private enterprises				91.1	108.6	113.8	185.8	320.9	312.6
			Write-offs				−11.3	−12.5	−15.1	−17.4	−44.5	−50.4
	Other items (net)						2.9	123.1	322.2	401.8	587.8	681.8
		Of which: valuation changes					(10.1)	(112.0)	(276.6)	(389.2)	(542.2)	(639.4)
Broad money							88.0	119.8	253.0	355.4	527.6	556.9
	Currency in circulation						36.5	54.5	104.2	132.6	196.0	207.7
	Deposits						51.5	65.3	148.7	222.8	331.7	349.2
		Of which: foreign currency deposits					(15.2)	(23.7)	(68.9)	(113.0)	(167.3)	(185.5)
						local curency deposits	(36.2)	(41.6)	(79.9)	(109.8)	(164.4)	(163.7)
Medium- and long-term foreign liabilities							23.5	49.2	224.4	186.5	0.4 2/	0.4
							(In percent of beginning-of-period broad money unless otherwise indicated)
Net foreign assets							77.6	−60.5	55.5	−38.7	−58.6	−0.4
Net domestic assets							31.3	125.8	201.9	64.3	54.7	5.9
	Net domestic credit						99.1	−10.8	35.7	32.8	2.4	−11.9
		Claims on Government (net)					58.5	−30.5	24.5	7.3	−33.2	−9.2
		Credit to the economy (change in percent)					24.1	16.0	10.6	46.3	62.0	−4 3
Broad money							68.8	36.2	110.9	40.5	48.5	5.6
Memorandum items:
Velocity							5.9	7.2	6.1	6.9	6.1	…
Foreign assets of the Central Bank
	Gross foreign assets in US$ millions						18.3	14.6	17.9	14.2	18.4	20.8
	Net foreign assets in US$ millions						−6.0	−14.6	−9.6	−18.2	−24.4	−25.6
Exchange rate (PG per US$; end of period)							2,508.6	4,959.1	8,655.6	11.463.8	15,369.3	16,748.4

Source: Central Bank of Guinea-Bissau (BCGB).

^{^1/}Revised since issuance of SM/95/185.

The most significant development in the central bank accounts in 1994 was the elimination of medium- and long-term external liabilities, which were either transferred to the Treasury (PG 110 billion) or reclassified under short-term liabilities (PG 85 billion) (Table 16). The Treasury continued to build up deposits in the Central Bank to the extent that it became a net creditor to the banking system, despite a sizable rise in loans.

Table 16.

Guinea-Bissau: Summary Accounts of the Central Bank of Guinea-Bissau, 1990-March 1995

(In billions of Guinea-Bissau pesos; end of period)

Source: Central Bank of Guinea-Bissau (BCGB).

^{^1/}Revised since issuance of SM/95/185.

^{^2/}During 1994, the Treasury assumed all of the Central Bank’s medium- and long-term liabilities to official creditors (PG 110 billion), and the Central Bank reclassified its remaining (commercial) medium-and long-term liabilities (PG 85 billion) as short-term.

Table 16.

Guinea-Bissau: Summary Accounts of the Central Bank of Guinea-Bissau, 1990-March 1995

(In billions of Guinea-Bissau pesos; end of period)

				1990	1991	1992	1993	1994	1995
									March ^1/
Net foreign assets				−15.2	−72.6	−83.0	−208.1	−374.7	−428.0
	Assets			45.8	72.5	154.9	162.6	283.2	348.6
	Liabilities			−61.0	−145.0	−237.9	−370.7	−657.9 ^2/	−776.6
Net domestic assets				90.1	239.7	504.1	653.5	716.5	762.9
	Claims on Government (net)			6.6	−19.8	24.1	36.1	−87.3	−135.8
		Claims		130.4	128.8	185.7	207.8	232.2	233.4
			Advances to the Treasury	6.0	—	40.9	48.0	—	—
			Loans	124.5	128.8	144.8	159.8	232.2	233.4
		Deposits		−123.8	−148.6	−161.6	−171.7	−319.5	−369.1
			Counterpart funds	−90.8	−115.4	−128.5	−135.1	−174.3	−218.8
			Other deposits	−33.0	−33.2	−33.2	−36.6	−145.2	−150.3
		Claims on commercial banks		78.5	148.1	201.4	277.2	281.4	281.4
		Credit to the private sector		—	—	—	—	22.1	22.1
			Public enterprises	—	—	—	—	16.3	16.3
			Private enterprises	—	—	—	—	20.8	20.8
			Write-offs	—	—	—	—	−15.1	−15.1
		Other items (net)		5.0	111.3	278.5	340.2	500.3	595.2
			Of which: valuation changes	(10.1)	(112.1)	(275.8)	(388.4)	(541.3)	(638.5)
Base money				51.5	118.0	196.8	259.2	341.7	334.9
	Currency in circulation			36.5	54.5	104.2	132.6	196.0	207.7
	Banks reserves and cash			14.9	63.4	92.6	126.6	145.8	127.2
	Medium- and long-term foreign
	liabilities			23.5	49.2	224.2	186.3	—^2/	—
Memorandum item:
	Gross official reserves (in US$ million)			18.3	14.6	17.9	14.2	18.4	20.8

Source: Central Bank of Guinea-Bissau (BCGB).

^{^1/}Revised since issuance of SM/95/185.

^{^2/}During 1994, the Treasury assumed all of the Central Bank’s medium- and long-term liabilities to official creditors (PG 110 billion), and the Central Bank reclassified its remaining (commercial) medium-and long-term liabilities (PG 85 billion) as short-term.

Table 16.

Guinea-Bissau: Summary Accounts of the Central Bank of Guinea-Bissau, 1990-March 1995

(In billions of Guinea-Bissau pesos; end of period)

				1990	1991	1992	1993	1994	1995
									March ^1/
Net foreign assets				−15.2	−72.6	−83.0	−208.1	−374.7	−428.0
	Assets			45.8	72.5	154.9	162.6	283.2	348.6
	Liabilities			−61.0	−145.0	−237.9	−370.7	−657.9 ^2/	−776.6
Net domestic assets				90.1	239.7	504.1	653.5	716.5	762.9
	Claims on Government (net)			6.6	−19.8	24.1	36.1	−87.3	−135.8
		Claims		130.4	128.8	185.7	207.8	232.2	233.4
			Advances to the Treasury	6.0	—	40.9	48.0	—	—
			Loans	124.5	128.8	144.8	159.8	232.2	233.4
		Deposits		−123.8	−148.6	−161.6	−171.7	−319.5	−369.1
			Counterpart funds	−90.8	−115.4	−128.5	−135.1	−174.3	−218.8
			Other deposits	−33.0	−33.2	−33.2	−36.6	−145.2	−150.3
		Claims on commercial banks		78.5	148.1	201.4	277.2	281.4	281.4
		Credit to the private sector		—	—	—	—	22.1	22.1
			Public enterprises	—	—	—	—	16.3	16.3
			Private enterprises	—	—	—	—	20.8	20.8
			Write-offs	—	—	—	—	−15.1	−15.1
		Other items (net)		5.0	111.3	278.5	340.2	500.3	595.2
			Of which: valuation changes	(10.1)	(112.1)	(275.8)	(388.4)	(541.3)	(638.5)
Base money				51.5	118.0	196.8	259.2	341.7	334.9
	Currency in circulation			36.5	54.5	104.2	132.6	196.0	207.7
	Banks reserves and cash			14.9	63.4	92.6	126.6	145.8	127.2
	Medium- and long-term foreign
	liabilities			23.5	49.2	224.2	186.3	—^2/	—
Memorandum item:
	Gross official reserves (in US$ million)			18.3	14.6	17.9	14.2	18.4	20.8

Source: Central Bank of Guinea-Bissau (BCGB).

^{^1/}Revised since issuance of SM/95/185.

^{^2/}During 1994, the Treasury assumed all of the Central Bank’s medium- and long-term liabilities to official creditors (PG 110 billion), and the Central Bank reclassified its remaining (commercial) medium-and long-term liabilities (PG 85 billion) as short-term.

During 1994, the commercial banks sharply expanded their loan portfolios, in particular credit to private enterprises, which increased by 61 percent, largely in connection with trade financing (Table 17). The net foreign assets position of the commercial banks fell from US$10 million to US$5 million. Deposits in the commercial banks increased by 48 percent. Some outstanding credit was recovered and the expansion in deposits was slowed in early 1995, following the Central Bank’s tightening of policies.

Table 17.

Guinea-Bissau: Summary Accounts of the Commercial Banking System, 1990-March 1995

(In billions of Guinea-Bissau pesos; end of period)

Source: Central Bank of Guinea-Bissau (BCGB).

^{^1/}Revised since issuance of SM/95/185.

Table 17.

Guinea-Bissau: Summary Accounts of the Commercial Banking System, 1990-March 1995

(In billions of Guinea-Bissau pesos; end of period)

				1990	1991	1992	1993	1994	1995
									March ^1/
Net foreign assets				8.7	12.9	89.8	116.9	75.1	126.4
	Assets			11.2	13.9	104.6	124.3	185.6	209.4
	Liabilities			−2.5	−1.0	−14.8	−7.4	−110.5	−82.9
Net domestic assets				106.2	137.4	163.0	248.9	378.2	371.1
	Domestic credit			108.5	125.4	124.2	195.2	305.0	290.9
		Claims on Government (net)		−0.1	−0.6	−15.1	−8.5	−3.1	−3.0
			Claims	—	—	—	—	—	—
			Deposits	−0.1	−0.6	−15.1	−8.5	−3.1	−3.0
		Credit to the economy		108.6	126.0	139.3	203.8	308.1	293.9
			Public enterprises	28.8	29.9	40.6	35.4	37.4	37.4
			Private enterprises	91.1	108.6	113.8	185.8	300.1	291.7
			Write-offs	−11.3	−12.5	−15.1	−17.4	−29.4	−35.3
		Other items (net)		−2.3	12.0	38.7	53.7	73.1	80.2
Legal reserves and cash				14.9	61.7	96.5	133.4	157.4	132.1
Deposits				51.3	64.3	148.6	221.7	329.0	348.0
Liabilities to the Central Bank				78.5	147.7	200.5	277.2	281.3	281.3
Long-term foreign liabilities				—	—	0.2	0.3	0.4	0.4

Source: Central Bank of Guinea-Bissau (BCGB).

^{^1/}Revised since issuance of SM/95/185.

Table 17.

Guinea-Bissau: Summary Accounts of the Commercial Banking System, 1990-March 1995

(In billions of Guinea-Bissau pesos; end of period)

				1990	1991	1992	1993	1994	1995
									March ^1/
Net foreign assets				8.7	12.9	89.8	116.9	75.1	126.4
	Assets			11.2	13.9	104.6	124.3	185.6	209.4
	Liabilities			−2.5	−1.0	−14.8	−7.4	−110.5	−82.9
Net domestic assets				106.2	137.4	163.0	248.9	378.2	371.1
	Domestic credit			108.5	125.4	124.2	195.2	305.0	290.9
		Claims on Government (net)		−0.1	−0.6	−15.1	−8.5	−3.1	−3.0
			Claims	—	—	—	—	—	—
			Deposits	−0.1	−0.6	−15.1	−8.5	−3.1	−3.0
		Credit to the economy		108.6	126.0	139.3	203.8	308.1	293.9
			Public enterprises	28.8	29.9	40.6	35.4	37.4	37.4
			Private enterprises	91.1	108.6	113.8	185.8	300.1	291.7
			Write-offs	−11.3	−12.5	−15.1	−17.4	−29.4	−35.3
		Other items (net)		−2.3	12.0	38.7	53.7	73.1	80.2
Legal reserves and cash				14.9	61.7	96.5	133.4	157.4	132.1
Deposits				51.3	64.3	148.6	221.7	329.0	348.0
Liabilities to the Central Bank				78.5	147.7	200.5	277.2	281.3	281.3
Long-term foreign liabilities				—	—	0.2	0.3	0.4	0.4

Source: Central Bank of Guinea-Bissau (BCGB).

^{^1/}Revised since issuance of SM/95/185.

3. Interest rates and reserve requirements

In response to moderating price pressures, the Central Bank reduced interest rates four times during 1994, and, at end-December, the benchmark six-month deposit rate stood at 25 percent, down from 40 percent one year earlier (Table 18). Throughout the year, real interest rates remained positive and reached more than 20 percentage points during the second quarter. However, the acceleration of inflation in early 1995 led the Central Bank to effect a small rate rise in April.

Table 18.

Guinea-Bissau: Interest Rates and Required Reserve Ratios for Commercial Banks, 1990-June 1995

Source: Central Bank of Guinea-Bissau (BCGB).

Table 18.

Guinea-Bissau: Interest Rates and Required Reserve Ratios for Commercial Banks, 1990-June 1995

			1990	1991	1992	1993	1994	1995
			End-December					End-June
					(In percent per annum)
Lending interest rates
	Up to 180 days		47.0	47.0	57.0	48.0	28.0	30.0
	181 days to 1 year		48.0	48.0	58.0	55.0	35.0	37.0
	More than 1 year		49.0	49.0	59.0	57.0	37.0	38.0
Deposit interest rates
	Demand deposits		5.0	5.0	5.0	3.0	3.0	3.0
	Saving deposits (15 days’ notice)		17.0	17.0	17.0	13.0	10.0	10.0
	Time deposits
		Up to 90 days	34.0	34.0	45.0	34.0	21.0	22.0
		91 days to 180 days	36.0	36.0	46.0	37.0	23.0	24.0
		181 days to 1 year	38.0	38.0	48.0	40.0	25.0	26.0
		More than 1 year	38.5	38.5	50.0	46.0	28.0	29.0
Central Bank discount rate			45.5	45.5	51.0	41.0	26.0	27.0
Interest rates on operations between
	the Central Bank and the Treasury
		Deposits	5.0	5.0	5.0	5.0	5.0	5.0
		Loans	—	—	—	—	—	14.0
Interest rate on excess reserves
	of commercial banks 1/		—	—	—	—	—	24.0
Commercial bank reserve requirements				(In percent of the respective deposit basis)
	Demand deposits
		In Guinea-Bissau pesos	15.0	25.0	30.0	25.0	15.0	20.0
		In foreign currency	20.0	25.0	30.0	25.0	20.0	20.0
	Time deposits
		In Guinea-Bissau pesos	15.0	25.0	30.0	20.0	10.0	20.0
		In foreign currency	20.0	25.0	30.0	25.0	20.0	20.0
				(In percent above banks’ 1-year lending rate)
Penalty rate on required reserves shortfalls
	Shortfalls for up to two weeks		2.0	2.0	2.0	2.0	2.0	2.0
	Shortfalls in excess of two weeks		2.0	2.0	2.0	2.0	2.0	5.0

Source: Central Bank of Guinea-Bissau (BCGB).

Table 18.

Guinea-Bissau: Interest Rates and Required Reserve Ratios for Commercial Banks, 1990-June 1995

			1990	1991	1992	1993	1994	1995
			End-December					End-June
					(In percent per annum)
Lending interest rates
	Up to 180 days		47.0	47.0	57.0	48.0	28.0	30.0
	181 days to 1 year		48.0	48.0	58.0	55.0	35.0	37.0
	More than 1 year		49.0	49.0	59.0	57.0	37.0	38.0
Deposit interest rates
	Demand deposits		5.0	5.0	5.0	3.0	3.0	3.0
	Saving deposits (15 days’ notice)		17.0	17.0	17.0	13.0	10.0	10.0
	Time deposits
		Up to 90 days	34.0	34.0	45.0	34.0	21.0	22.0
		91 days to 180 days	36.0	36.0	46.0	37.0	23.0	24.0
		181 days to 1 year	38.0	38.0	48.0	40.0	25.0	26.0
		More than 1 year	38.5	38.5	50.0	46.0	28.0	29.0
Central Bank discount rate			45.5	45.5	51.0	41.0	26.0	27.0
Interest rates on operations between
	the Central Bank and the Treasury
		Deposits	5.0	5.0	5.0	5.0	5.0	5.0
		Loans	—	—	—	—	—	14.0
Interest rate on excess reserves
	of commercial banks 1/		—	—	—	—	—	24.0
Commercial bank reserve requirements				(In percent of the respective deposit basis)
	Demand deposits
		In Guinea-Bissau pesos	15.0	25.0	30.0	25.0	15.0	20.0
		In foreign currency	20.0	25.0	30.0	25.0	20.0	20.0
	Time deposits
		In Guinea-Bissau pesos	15.0	25.0	30.0	20.0	10.0	20.0
		In foreign currency	20.0	25.0	30.0	25.0	20.0	20.0
				(In percent above banks’ 1-year lending rate)
Penalty rate on required reserves shortfalls
	Shortfalls for up to two weeks		2.0	2.0	2.0	2.0	2.0	2.0
	Shortfalls in excess of two weeks		2.0	2.0	2.0	2.0	2.0	5.0

Source: Central Bank of Guinea-Bissau (BCGB).

With the termination of credit ceilings for the two commercial banks, the Central Bank has sought to control the money supply through more active use of required reserve ratios. Thus, in early 1995, the Central Bank made required reserve ratios uniform at 17 percent for domestic and foreign currency deposits and subsequently increased this rate to 20 percent. Also, given the lack of compliance with required reserve ratios in the past, the Central Bank recently raised the penalty rate on shortfalls in excess of two weeks from 2 to 5 percentage points above the one-year commercial bank lending rate. At the same time, to compensate banks for the opportunity cost of the high reserve ratios, the Central Bank began paying interest at the six-month deposit rate on excess reserves.

VI. External Trade and Payments

1. Current account

In 1994, Guinea-Bissau recorded a significant improvement in its external current account position, which, including official transfers, showed a surplus (about US$9 million) for the first time (Table 19 and Chart 4). Excluding official transfers, the current account also improved, with the deficit narrowing to 18 ½ percent of GDP in 1994, from 28 ½ percent in 1993, owing to a doubling of export receipts to US$33 million and a small reduction in imports. These favorable trade developments occurred despite the fact that, in U.S. dollar terms, cashew nut prices fell by 9 percent and average import prices rose by almost 5 percent, leading to a terms of trade deterioration of some 16 ½ percent (Table 20). However, no progress was made in export diversification, as cashew nuts accounted for 93 percent of all exports (Table 21). Food imports declined by US$9 million, while the import bill for other categories increased (Table 22). Guinea-Bissau’s major trading partner was Portugal, which accounted for 36 percent of exports and 41 percent of imports; India was the top export destination for unprocessed cashew nuts and accounted for 48 percent of all exports (Table 23).

Table 19.

Guinea-Bissau: Balance of Payments, 1990–94

Source: Data provided by the Guinea-Bissau authorities.

Table 19.

Guinea-Bissau: Balance of Payments, 1990–94

					1990	1991	1992	1993	1994
						(In millions of U.S. dollars, unless otherwise indicated)
Trade balance					−48.8	−47.0	−77.0	−37.9	−19.1
	Exports, f.o.b.				19.3	20.4	6.5	16.0	33.2
		Of which: cashew nuts			(11.6)	(14.1)	(3.0)	(13.0)	(31.0)
	Imports, f.o.b.				−68.1	−67.5	−83.5	−53.8	−52.4
		Of which: foodstuffs			(−13.0)	(−18.6)	(−27.8)	(−21.9)	(−13.5)
				petroleum products	(−7.2)	(−8.7)	(−4.6)	(−2.8)	(−5.2)
Services (net)					−12.6	−33.8	−30.3	−29.1	−25.5
	Of which: scheduled interest				(−10.6)	(−17.0)	(−13.5)	(−15.3)	(−12.9)
				fishing license fees	(22.9)	(13.5)	(13.5)	(10.8)	(11.7)
Transfers (net)					45.2	38.1	38.8	42.0	53.3
	Private				1.0	−4.1	−0.6	−1.6	−1.1
	Official				44.2	42.3	39.5	43.7	54.4
Current account					−16.2	−42.7	−68.5	−24.9	8.7
	Excluding official transfers				−60.4	−84.9	−108.0	−68.6	−45.7
Capital account					11.2	−8.3	32.8	−33.2	−41.0
	Official medium- and long-term
		disbursements			30.9	38.6	44.4	22.3	17.1
			Balance of payments support		11.3	14.2	—	0.9	3.1
			Projects		19.6	22.5	35.4	21.4	14.0
			Loans to the Central Bank		—	1.9	9.0	—	—
	Scheduled amortization				−18.4	−31.2	−33.3	−35.0	−28.3
	Short-term capital, including
		errors and omissions			−1.3	−15.7	21.7	−20.5	−29.7
Overall balance					−5.0	−51.0	−35.7	−58.0	−32.3
Financing					5.0	51.0	35.7	58.0	32.3
	Net foreign assets (increase -)				−17.6	8.6	−5.0	8.6	6.2
		Use of Fund resources (net)			−0.3	−0.6	—	−0.2	−0.7
			Purchases		—	—	—	—	—
			Repurchases		−0.3	−0.6	—	−0.2	−0.7
		Other (net)			−17.3	9.1	−5.0	8.8	6.9
	Debt relief				27.0	10.6	1.5	15.2	0.3
	Change in debt service
		arrears (net) (decrease -)			−4.4	31.8	39.2	34.3	25.8
Memorandum items:
	Current account deficit,
		excluding official transfers
			(in percent of GDP)		−25.6	−35.8	−48.5	−28.4	−18.4
	Exchange rate (Guinea-Bissau pesos
		per U.S. dollar, period average)			2,185	3,659	6,934	10,082	12,892

Source: Data provided by the Guinea-Bissau authorities.

Table 19.

Guinea-Bissau: Balance of Payments, 1990–94

					1990	1991	1992	1993	1994
						(In millions of U.S. dollars, unless otherwise indicated)
Trade balance					−48.8	−47.0	−77.0	−37.9	−19.1
	Exports, f.o.b.				19.3	20.4	6.5	16.0	33.2
		Of which: cashew nuts			(11.6)	(14.1)	(3.0)	(13.0)	(31.0)
	Imports, f.o.b.				−68.1	−67.5	−83.5	−53.8	−52.4
		Of which: foodstuffs			(−13.0)	(−18.6)	(−27.8)	(−21.9)	(−13.5)
				petroleum products	(−7.2)	(−8.7)	(−4.6)	(−2.8)	(−5.2)
Services (net)					−12.6	−33.8	−30.3	−29.1	−25.5
	Of which: scheduled interest				(−10.6)	(−17.0)	(−13.5)	(−15.3)	(−12.9)
				fishing license fees	(22.9)	(13.5)	(13.5)	(10.8)	(11.7)
Transfers (net)					45.2	38.1	38.8	42.0	53.3
	Private				1.0	−4.1	−0.6	−1.6	−1.1
	Official				44.2	42.3	39.5	43.7	54.4
Current account					−16.2	−42.7	−68.5	−24.9	8.7
	Excluding official transfers				−60.4	−84.9	−108.0	−68.6	−45.7
Capital account					11.2	−8.3	32.8	−33.2	−41.0
	Official medium- and long-term
		disbursements			30.9	38.6	44.4	22.3	17.1
			Balance of payments support		11.3	14.2	—	0.9	3.1
			Projects		19.6	22.5	35.4	21.4	14.0
			Loans to the Central Bank		—	1.9	9.0	—	—
	Scheduled amortization				−18.4	−31.2	−33.3	−35.0	−28.3
	Short-term capital, including
		errors and omissions			−1.3	−15.7	21.7	−20.5	−29.7
Overall balance					−5.0	−51.0	−35.7	−58.0	−32.3
Financing					5.0	51.0	35.7	58.0	32.3
	Net foreign assets (increase -)				−17.6	8.6	−5.0	8.6	6.2
		Use of Fund resources (net)			−0.3	−0.6	—	−0.2	−0.7
			Purchases		—	—	—	—	—
			Repurchases		−0.3	−0.6	—	−0.2	−0.7
		Other (net)			−17.3	9.1	−5.0	8.8	6.9
	Debt relief				27.0	10.6	1.5	15.2	0.3
	Change in debt service
		arrears (net) (decrease -)			−4.4	31.8	39.2	34.3	25.8
Memorandum items:
	Current account deficit,
		excluding official transfers
			(in percent of GDP)		−25.6	−35.8	−48.5	−28.4	−18.4
	Exchange rate (Guinea-Bissau pesos
		per U.S. dollar, period average)			2,185	3,659	6,934	10,082	12,892

Source: Data provided by the Guinea-Bissau authorities.

Table 20.

Guinea-Bissau: Trade and Exchange Rata Indicators, 1990-June 1995

Sources: Central Bank of Guinea-Bissau (BCGB); and IMF Information Notice System.

^{^1/}From December 1994.

Table 20.

Guinea-Bissau: Trade and Exchange Rata Indicators, 1990-June 1995

				1990	1991	1992	1993	1994	1995
									June
					(Annual percentage change)
Trade indicators
	Exports, f.o.b.
		Value (U.S. dollars)		37.7	6.1	−68.3	146.3	108.2	…
		Volume		41.7	5.4	−70.2	161.8	138.0	…
		Prices (U.S. dollars)		−4.2	0.7	6.5	−5.9	−12.5	…
	Imports, f.o.b.
		Value (U.S. dollars)		−1.2	−0.9	23.8	−35.6	−2.7	…
		Volume		−6.0	−.5	21.4	−32.1	−7.3	…
		Prices (U.S. dollars)		5.1	−1.4	2.0	−5.1	4.9	…
	Terms of trade (deterioration -)			−8.9	2.2	4.5	−0.9	−16.6	…
Exchange rates
					(In Guinea-Bissau pesos per U.S. dollar)
	Peso/U.S. dollar rate (PG/USS)
		Period average		2,185	3,659	6,934	10,082	12,892	…
		End of period		2,509	4,959	8,656	11,464	15,369	18,127
						(Index. 1990–100)
	Nominal effective exchange rate
		(end of period)		88.6	49.2	30.4	27.8	24.2	19.2
						(In percent)
	Annual variations (depreciation -)
		USS/PG; period average		−17.2	−40.3	−47.2	−31.2	−21.8	…
		US$/PG; end of period		−20.8	−49.4	−42.7	−24.5	−25.4	−15.2 ^1/
		Nominal effective exchange rate
			(end of period)	−19.0	−44.5	−38.2	−8.6	−12.9	−20.7 ^1/

Sources: Central Bank of Guinea-Bissau (BCGB); and IMF Information Notice System.

^{^1/}From December 1994.

Table 20.

Guinea-Bissau: Trade and Exchange Rata Indicators, 1990-June 1995

				1990	1991	1992	1993	1994	1995
									June
					(Annual percentage change)
Trade indicators
	Exports, f.o.b.
		Value (U.S. dollars)		37.7	6.1	−68.3	146.3	108.2	…
		Volume		41.7	5.4	−70.2	161.8	138.0	…
		Prices (U.S. dollars)		−4.2	0.7	6.5	−5.9	−12.5	…
	Imports, f.o.b.
		Value (U.S. dollars)		−1.2	−0.9	23.8	−35.6	−2.7	…
		Volume		−6.0	−.5	21.4	−32.1	−7.3	…
		Prices (U.S. dollars)		5.1	−1.4	2.0	−5.1	4.9	…
	Terms of trade (deterioration -)			−8.9	2.2	4.5	−0.9	−16.6	…
Exchange rates
					(In Guinea-Bissau pesos per U.S. dollar)
	Peso/U.S. dollar rate (PG/USS)
		Period average		2,185	3,659	6,934	10,082	12,892	…
		End of period		2,509	4,959	8,656	11,464	15,369	18,127
						(Index. 1990–100)
	Nominal effective exchange rate
		(end of period)		88.6	49.2	30.4	27.8	24.2	19.2
						(In percent)
	Annual variations (depreciation -)
		USS/PG; period average		−17.2	−40.3	−47.2	−31.2	−21.8	…
		US$/PG; end of period		−20.8	−49.4	−42.7	−24.5	−25.4	−15.2 ^1/
		Nominal effective exchange rate
			(end of period)	−19.0	−44.5	−38.2	−8.6	−12.9	−20.7 ^1/

Sources: Central Bank of Guinea-Bissau (BCGB); and IMF Information Notice System.

^{^1/}From December 1994.

Table 21.

Guinea-Bissau: Merchandise Exports, f.o.b., 1990–94

Source: Central Bank of Guinea-Bissau (BCGB).

Table 21.

Guinea-Bissau: Merchandise Exports, f.o.b., 1990–94

				1990	1991	1992	1993	1994
					(In millions of U.S. dollars)
Total merchandise exports				19.3	20.4	6.5	16.0	33.2
	Agricultural products			13.2	16.3	4.2	14.0	32.2
		Groundnuts		0.8	0.2	0.2	—	—
		Palm kernels		0.3	0.7	0.4	0.3	0.1
		Cashew nuts		11.6	14.1	3.0	13.0	31.0
		Other		0.5	1.3	0.6	0.8	1.1
	Fish products			3.3	2.6	0.9	0.7	0.3
		Fish		0.6	1.1	0.1	0.5	0.1
		Shrimp		2.7	1.5	0.7	0.1	0.1
		Other		—	—	0.1	0.1	0.1
	Wood products			2.4	1.4	1.3	1.2	0.6
		Sawn wood		0.9	—	0.1	0.1	0.3
			Logs	1.3	1.2	1.1	0.9	0.3
			Other	0.2	0.2	0.1	0.3	—
	Miscellaneous			0.3	0.2	0.1	0.1	0.2
					(In thousands of metric tons)
Volume
	Groundnuts			2.2	0.5	0.4	—	—
	Palm. kernels			1.6	4.7	3.2	2.3	0.8
	Cashew nuts			16.4	18.3	3.7	17 0	46.5
	Fish (frozen)			1.0	1.9	0.1	0.8	—
	Shrimp (frozen)			0.4	0.4	0.1	—	—
	Sawn wood			3.0	0.1	0.2	0.2	1.4
	Logs			6.0	5.4	5.2	3.4	1.3
				(In U.S. dollars per metric ton)
Unit prices
	Groundnuts			346.1	375.3	435.8	435.8	449 2
	Palm kernels			206.1	149.0	117.0	109.6	71.5
	Cashew nuts			707.5	771.0	824.7	764.0	666.5
	Fish			598.6	561.7	600.0	614.5	1,800.0
	Shrimp			6,112.4	4,166.7	6,481.5	4,000.0	8,812.5
	Sawn wood			305.7	409.8	343.1	291.7	234.0
	Logs			215.9	214.0	209.6	258.9	221.7

Source: Central Bank of Guinea-Bissau (BCGB).

Table 21.

Guinea-Bissau: Merchandise Exports, f.o.b., 1990–94

				1990	1991	1992	1993	1994
					(In millions of U.S. dollars)
Total merchandise exports				19.3	20.4	6.5	16.0	33.2
	Agricultural products			13.2	16.3	4.2	14.0	32.2
		Groundnuts		0.8	0.2	0.2	—	—
		Palm kernels		0.3	0.7	0.4	0.3	0.1
		Cashew nuts		11.6	14.1	3.0	13.0	31.0
		Other		0.5	1.3	0.6	0.8	1.1
	Fish products			3.3	2.6	0.9	0.7	0.3
		Fish		0.6	1.1	0.1	0.5	0.1
		Shrimp		2.7	1.5	0.7	0.1	0.1
		Other		—	—	0.1	0.1	0.1
	Wood products			2.4	1.4	1.3	1.2	0.6
		Sawn wood		0.9	—	0.1	0.1	0.3
			Logs	1.3	1.2	1.1	0.9	0.3
			Other	0.2	0.2	0.1	0.3	—
	Miscellaneous			0.3	0.2	0.1	0.1	0.2
					(In thousands of metric tons)
Volume
	Groundnuts			2.2	0.5	0.4	—	—
	Palm. kernels			1.6	4.7	3.2	2.3	0.8
	Cashew nuts			16.4	18.3	3.7	17 0	46.5
	Fish (frozen)			1.0	1.9	0.1	0.8	—
	Shrimp (frozen)			0.4	0.4	0.1	—	—
	Sawn wood			3.0	0.1	0.2	0.2	1.4
	Logs			6.0	5.4	5.2	3.4	1.3
				(In U.S. dollars per metric ton)
Unit prices
	Groundnuts			346.1	375.3	435.8	435.8	449 2
	Palm kernels			206.1	149.0	117.0	109.6	71.5
	Cashew nuts			707.5	771.0	824.7	764.0	666.5
	Fish			598.6	561.7	600.0	614.5	1,800.0
	Shrimp			6,112.4	4,166.7	6,481.5	4,000.0	8,812.5
	Sawn wood			305.7	409.8	343.1	291.7	234.0
	Logs			215.9	214.0	209.6	258.9	221.7

Source: Central Bank of Guinea-Bissau (BCGB).

Table 22.

Guinea-Bissau: Merchandise Imports, c.i.f., 1990–94

(In millions of U.S. dollars)

Source: Central Bank of Guinea-Bissau (BCGB).

Table 22.

Guinea-Bissau: Merchandise Imports, c.i.f., 1990–94

(In millions of U.S. dollars)

			1990	1991	1992	1993	1994
Total merchandise imports			77.8	77.1	95.4	61.5	63.5
	Foodstuffs		14.8	21.3	31.7	25.1	16.4
		Rice	10.8	16.1	21.7	17.2	8.6
		Wheat flour	0.7	0.6	0.8	0.6	0.5
		Sugar	0.8	1.0	0.2	0.5	0.9
		Oil	1.8	1.5	4.3	1.1	1.8
		Dairy products	0.7	0.2	1.4	1.1	0.9
		Others	—	2.0	3.4	4.5	3.9
	Beverages and tobacco		2.8	2.0	3.3	3.2	3.7
	Other consumer goods		11.7	10.3	7.1	5.1	5.3
		Clothing and shoes	1.2	0.6	1.3	0.6	1.5
		Durable consumer goods	…	5.7	3.1	2.7	2.3
		Nondurable consumer goods		3.9	2.8	1.8	1.5
	Petroleum products		8.2	10.0	5.3	3.2	6.3
		Diesel and gasoline	7.6	9.1	4.5	2.5	4.3
		Gas	0.3	0.2	0.2	0.1	0.1
		Others	0.4	0.7	0.6	0.7	1.9
	Construction material		6.0	3.4	7.6	4.9	6.0
	Transport equipment		15.1	17.4	19.6	8.9	14.5
		Passenger vehicles	8.7	11.5	13.3	3.6	5.7
		Freight vehicles	5.1	5.1	2.6	1.8	6.7
		Vehicle parts	1.3	0.8	3.7	3.5	2.1
	Electrical equipment
		and machinery	11.2	10.8	14.1	5.3	6.5
	Parts and accessories		1.2	1.8	3.1	2.3	2.0
	Miscellaneous		6.6	0.2	3.6	3.7	2.7

Source: Central Bank of Guinea-Bissau (BCGB).

Table 22.

Guinea-Bissau: Merchandise Imports, c.i.f., 1990–94

(In millions of U.S. dollars)

			1990	1991	1992	1993	1994
Total merchandise imports			77.8	77.1	95.4	61.5	63.5
	Foodstuffs		14.8	21.3	31.7	25.1	16.4
		Rice	10.8	16.1	21.7	17.2	8.6
		Wheat flour	0.7	0.6	0.8	0.6	0.5
		Sugar	0.8	1.0	0.2	0.5	0.9
		Oil	1.8	1.5	4.3	1.1	1.8
		Dairy products	0.7	0.2	1.4	1.1	0.9
		Others	—	2.0	3.4	4.5	3.9
	Beverages and tobacco		2.8	2.0	3.3	3.2	3.7
	Other consumer goods		11.7	10.3	7.1	5.1	5.3
		Clothing and shoes	1.2	0.6	1.3	0.6	1.5
		Durable consumer goods	…	5.7	3.1	2.7	2.3
		Nondurable consumer goods		3.9	2.8	1.8	1.5
	Petroleum products		8.2	10.0	5.3	3.2	6.3
		Diesel and gasoline	7.6	9.1	4.5	2.5	4.3
		Gas	0.3	0.2	0.2	0.1	0.1
		Others	0.4	0.7	0.6	0.7	1.9
	Construction material		6.0	3.4	7.6	4.9	6.0
	Transport equipment		15.1	17.4	19.6	8.9	14.5
		Passenger vehicles	8.7	11.5	13.3	3.6	5.7
		Freight vehicles	5.1	5.1	2.6	1.8	6.7
		Vehicle parts	1.3	0.8	3.7	3.5	2.1
	Electrical equipment
		and machinery	11.2	10.8	14.1	5.3	6.5
	Parts and accessories		1.2	1.8	3.1	2.3	2.0
	Miscellaneous		6.6	0.2	3.6	3.7	2.7

Source: Central Bank of Guinea-Bissau (BCGB).

Table 23.

Guinea-Bissau: Direction of Trade, 1990–94

(In percent of total)

Source: Central Bank of Guinea-Bissau (BCGB).

Table 23.

Guinea-Bissau: Direction of Trade, 1990–94

(In percent of total)

			1990	1991	1992	1993	1994
Exports
	Europe		77.6	60.4	73.7	58.3	37.5
		France	4.9	4.7	—	3.5	1.5
		Netherlands	2.4	1.5	—	0.3	0.1
		Portugal	45.3	41.4	60.1	51.5	35.7
		Spain	13.6	3.7	13.1	3.0	—
		Other	11.5	9.0	0.5	—	0.1
	Africa		6.1	31.5	18.7	2.6	5.7
		Cape Verde	2.4	0.2	7.4	2.4	5.5
		Gambia, The	—	5.2	2.0	—	—
		Guinea	—	1.5	5.7	0.2	0.2
		Nigeria	—	6.4	—	—	—
		Senegal	0.4	10.3	3.6	—	—
		Other	3.3	7.9	—	—	—
	Asia		16.3	8.1	7.7	39.1	56.9
		China, P.R.	—	—	—	—	8.8
		India	16.3	8.1	7.7	39.1	48.1
		Total	100.0	100.0	100.0	100.0	100.0
Imports
	Europe		88.8	70.5	76.3	58.5	68.2
		France	2.3	2.1	5.3	1.5	5.4
		Germany	3.1	10.2	4.4	2.2	0.7
		Italy	3.4	2.6	4.1	0.7	1.8
		Netherlands	20.9	15.9	23.2	21.1	16.6
		Portugal	56.6	35.7	28.4	31.3	40.5
		Spain	0.3	1.2	5.5	1.0	0.6
		Sweden	—	1.5	1.2	—	0.4
		United Kingdom	0.4	—	3.3	0.1	0.7
		Other	1.9	1.3	0.9	0.6	1.5
	Africa		9.0	8.2	7.9	11.9	6.4
		Cape Verde	1.7	0.1		0.3	0.1
		Senegal	5.2	6.6	2.9	2.3	2.4
		Other	2.1	1.5	5.0	9.3	4.0
	Asia		0.7	20.6	15.0	29.1	24.1
		China, P.R.	0.2	12.9	8.5	20.3	7.7
		Japan	0.5	1.9	2.5	6.1	14.8
		Pakistan	—	—	1.5	—	—
		Other	—	5.8	2.5	2.8	1.6
	United States		0.5	0.4	0.5	0.5	1.3
	Other		1.0	0.4	0.4	—	—
		Total	100.0	100.0	100.0	100.0	100.0

Source: Central Bank of Guinea-Bissau (BCGB).

Table 23.

Guinea-Bissau: Direction of Trade, 1990–94

(In percent of total)

			1990	1991	1992	1993	1994
Exports
	Europe		77.6	60.4	73.7	58.3	37.5
		France	4.9	4.7	—	3.5	1.5
		Netherlands	2.4	1.5	—	0.3	0.1
		Portugal	45.3	41.4	60.1	51.5	35.7
		Spain	13.6	3.7	13.1	3.0	—
		Other	11.5	9.0	0.5	—	0.1
	Africa		6.1	31.5	18.7	2.6	5.7
		Cape Verde	2.4	0.2	7.4	2.4	5.5
		Gambia, The	—	5.2	2.0	—	—
		Guinea	—	1.5	5.7	0.2	0.2
		Nigeria	—	6.4	—	—	—
		Senegal	0.4	10.3	3.6	—	—
		Other	3.3	7.9	—	—	—
	Asia		16.3	8.1	7.7	39.1	56.9
		China, P.R.	—	—	—	—	8.8
		India	16.3	8.1	7.7	39.1	48.1
		Total	100.0	100.0	100.0	100.0	100.0
Imports
	Europe		88.8	70.5	76.3	58.5	68.2
		France	2.3	2.1	5.3	1.5	5.4
		Germany	3.1	10.2	4.4	2.2	0.7
		Italy	3.4	2.6	4.1	0.7	1.8
		Netherlands	20.9	15.9	23.2	21.1	16.6
		Portugal	56.6	35.7	28.4	31.3	40.5
		Spain	0.3	1.2	5.5	1.0	0.6
		Sweden	—	1.5	1.2	—	0.4
		United Kingdom	0.4	—	3.3	0.1	0.7
		Other	1.9	1.3	0.9	0.6	1.5
	Africa		9.0	8.2	7.9	11.9	6.4
		Cape Verde	1.7	0.1		0.3	0.1
		Senegal	5.2	6.6	2.9	2.3	2.4
		Other	2.1	1.5	5.0	9.3	4.0
	Asia		0.7	20.6	15.0	29.1	24.1
		China, P.R.	0.2	12.9	8.5	20.3	7.7
		Japan	0.5	1.9	2.5	6.1	14.8
		Pakistan	—	—	1.5	—	—
		Other	—	5.8	2.5	2.8	1.6
	United States		0.5	0.4	0.5	0.5	1.3
	Other		1.0	0.4	0.4	—	—
		Total	100.0	100.0	100.0	100.0	100.0

Source: Central Bank of Guinea-Bissau (BCGB).

Net services also improved, by almost US$4 million, relative to 1993 (Table 24). However, large debits for nonfactor services, particularly for technical assistance and freight and insurance, caused the nonfactor services deficit to remain at about US$24 million. The factor services balance improved slightly on account of higher fishing license fees and lower scheduled interest payments.

Table 24.

Guinea-Bissau: Factor and Nonfactor Services, 1990–94

(In millions of U.S. dollars)

Source: Central Bank of Guinea-Bissau (BCGB).

Table 24.

Guinea-Bissau: Factor and Nonfactor Services, 1990–94

(In millions of U.S. dollars)

					1990	1991	1992	1993	1994
Nonfactor services (net)					−24.8	−30.2	−30.3	−24.5	−24.2
	Credit				6.8	13.1	11.5	9.8	12.2
		Transportation			0.2	0.2	—	0.3	0.6
		Foreign government embassies			3.2	3.3	2.8	3.0	3.1
		Other			3.5	9.5	8.7	6.5	8.5
	Debit				31.6	43.3	41.9	34.3	36.4
		Freight and insurance			9.7	9.1	11.9	7.7	11.1
		Technical assistance			11.6	15.9	14.3	13.2	12.2
		Other transport and travel			4.0	4.1	3.6	4.3	3.0
		Scholarships			0.6	0.6	0.4	0.6	0.6
		Other private			3.4	11.1	9.4	6.1	6.5
		Miscellaneous			2.2	2.6	2.2	2.5	3.0
Factor services (net)					12.2	−3.5	—	−4.5	−1.3
	Credit				22.9	13.5	13.5	10.8	11.7
		Fishing license fees			22.9	13.5	13.5	10.8	11.7
	Debit				10.6	17.0	13.5	15.3	12.9
		Interest payments scheduled			10.6	17.0	13.5	15.3	12.9
			Medium- and long-term		10.4	15.7	13.3	14.8	12.7
			Short-term		0.2	1.3	0.2	0.5	0.2
				IMF	0.2	0.2	0.1	0.1	0.1
				Other	—	1.1	0.1	0.4	0.1
Total services (net)					−12.6	−33.8	−30.3	−29.1	−25.5
	Credit				29.7	26.5	25.0	20.5	23.8
		Nonfactor services			6.8	13.1	11.5	9.8	12.2
		Factor services			22.9	13.5	13.5	10.8	11.7
	Debit				42.3	60.3	55.3	49.6	49.3
		Nonfactor services			31.6	43.3	41.9	34.3	36.4
		Factor services			10.6	17.0	13.5	15.3	12.9

Source: Central Bank of Guinea-Bissau (BCGB).

Table 24.

Guinea-Bissau: Factor and Nonfactor Services, 1990–94

(In millions of U.S. dollars)

					1990	1991	1992	1993	1994
Nonfactor services (net)					−24.8	−30.2	−30.3	−24.5	−24.2
	Credit				6.8	13.1	11.5	9.8	12.2
		Transportation			0.2	0.2	—	0.3	0.6
		Foreign government embassies			3.2	3.3	2.8	3.0	3.1
		Other			3.5	9.5	8.7	6.5	8.5
	Debit				31.6	43.3	41.9	34.3	36.4
		Freight and insurance			9.7	9.1	11.9	7.7	11.1
		Technical assistance			11.6	15.9	14.3	13.2	12.2
		Other transport and travel			4.0	4.1	3.6	4.3	3.0
		Scholarships			0.6	0.6	0.4	0.6	0.6
		Other private			3.4	11.1	9.4	6.1	6.5
		Miscellaneous			2.2	2.6	2.2	2.5	3.0
Factor services (net)					12.2	−3.5	—	−4.5	−1.3
	Credit				22.9	13.5	13.5	10.8	11.7
		Fishing license fees			22.9	13.5	13.5	10.8	11.7
	Debit				10.6	17.0	13.5	15.3	12.9
		Interest payments scheduled			10.6	17.0	13.5	15.3	12.9
			Medium- and long-term		10.4	15.7	13.3	14.8	12.7
			Short-term		0.2	1.3	0.2	0.5	0.2
				IMF	0.2	0.2	0.1	0.1	0.1
				Other	—	1.1	0.1	0.4	0.1
Total services (net)					−12.6	−33.8	−30.3	−29.1	−25.5
	Credit				29.7	26.5	25.0	20.5	23.8
		Nonfactor services			6.8	13.1	11.5	9.8	12.2
		Factor services			22.9	13.5	13.5	10.8	11.7
	Debit				42.3	60.3	55.3	49.6	49.3
		Nonfactor services			31.6	43.3	41.9	34.3	36.4
		Factor services			10.6	17.0	13.5	15.3	12.9

Source: Central Bank of Guinea-Bissau (BCGB).

External grants rose from US$44 million in 1993 to US$54 million in 1994, thanks to donor support for the 1994 elections and high levels of assistance from nongovernmental organizations, which donated more than US$8 million (Table 25). As to the composition of external grants, project assistance (US$44 million) and support for the elections (US$4 million) accounted for the larger part, while balance of payments support and food aid amounted to only about US$2 million each. By source, the largest amounts came from Sweden (US$10 million) and the European Union (US$8 million).

Table 25.

External Grant Disbursements, 1990–94

(In millions of U.S. dollars)

Source: Directorate-General of External Financing, Ministry of Planning and International Cooperation.

^{^1/}Not included in the Public Investment Program.

^{^2/}Not included in the Public Investment Program, except for SNV disbursements.

Table 25.

External Grant Disbursements, 1990–94

(In millions of U.S. dollars)

					1990	1991	1992	1993	1994
Total					44.16	42.26	39.48	43.69	54.38
	Project aid				28.96	32.72	28.49	36.58	44.27
		Of which: technical assistance			(10.14)	(9.13)	(7.41)	(8.41)	(…)
		From multilateral donors			…	…	…	6.28	13.13
			European Union		…	…	…	5.38	7.35
			FAO		…	…	…	…	0.45
			UNDP		…	…	…	…	3.50
			UNICEF		…	…	…	…	0.97 ^1/
			WHO		…	…	…	…	0.86
		From bilateral donors			…	…	…	16.93	24.80
			Canada		…	…	…	…	0.27
			China		…	…	…	…	3.30
			France		…	…	…	…	4.67
			Japan		…	…	…	…	2.38
			Sweden		…	…	…	5.70	8.08
			Portugal		…	…	…	…	0.03
			United States		…	…	…	…	6.08 ^1/
		From nongovernmental organizations			…	…	…	4.96	6.34 ^2/
			Of which: Association of Dutch
				Volunteers (SNV)	(…)	(…)	(…)	(…)	(2.10)
	Balance of payments aid				15.20	3.64	7.20	3.50	1.69
		From bilateral donors			15.20	3.64	5.40	3.50	1.69
			China		…	…	…	…	0.19
			Japan		2.40	1.60	2.42	2.64	0.30
			Sweden		1.41	2.04	1.17	0.06	1.20
			Other		11.39	—	1.81	0.80	—
	Food aid				—	5.90	3.79	1.80	2.06
		Of which: World Food Program			(…)	(…)	(…)	(…)	(2.03)
	Other aid				…	…	…	1.81	6.36
		Of which: elections aid			(—)	(—)	(—)	(…)	(4.15)
		From multilateral acnors			…	…	…	…	1.22
			European Union		…	…	…	…	0.75
			UNDP		…	…	…	…	0.32
			UNICEF		…	…	…	…	0.12
			Other		…	…	…	…	0.03
		From bilateral donors			…	…	…	…	3.38
			China		…	…	…	…	0.17
			France		…	…	…	…	0.63
			The Netherlands		…	…	…	…	0.28
			Portugal		…	…	…	…	0.57
			Sweden		…	…	…	…	1.18
			United States		…	…	…	…	0.51
			Other		…	…	…	…	0.06
		From nongovernmental organizations			…	…	…	…	1.77
			Of which: Association of Dutch
				Volunteers (SNV)	(…)	(…)	(…)	(…)	(1.32)

Source: Directorate-General of External Financing, Ministry of Planning and International Cooperation.

^{^1/}Not included in the Public Investment Program.

^{^2/}Not included in the Public Investment Program, except for SNV disbursements.

Table 25.

External Grant Disbursements, 1990–94

(In millions of U.S. dollars)

					1990	1991	1992	1993	1994
Total					44.16	42.26	39.48	43.69	54.38
	Project aid				28.96	32.72	28.49	36.58	44.27
		Of which: technical assistance			(10.14)	(9.13)	(7.41)	(8.41)	(…)
		From multilateral donors			…	…	…	6.28	13.13
			European Union		…	…	…	5.38	7.35
			FAO		…	…	…	…	0.45
			UNDP		…	…	…	…	3.50
			UNICEF		…	…	…	…	0.97 ^1/
			WHO		…	…	…	…	0.86
		From bilateral donors			…	…	…	16.93	24.80
			Canada		…	…	…	…	0.27
			China		…	…	…	…	3.30
			France		…	…	…	…	4.67
			Japan		…	…	…	…	2.38
			Sweden		…	…	…	5.70	8.08
			Portugal		…	…	…	…	0.03
			United States		…	…	…	…	6.08 ^1/
		From nongovernmental organizations			…	…	…	4.96	6.34 ^2/
			Of which: Association of Dutch
				Volunteers (SNV)	(…)	(…)	(…)	(…)	(2.10)
	Balance of payments aid				15.20	3.64	7.20	3.50	1.69
		From bilateral donors			15.20	3.64	5.40	3.50	1.69
			China		…	…	…	…	0.19
			Japan		2.40	1.60	2.42	2.64	0.30
			Sweden		1.41	2.04	1.17	0.06	1.20
			Other		11.39	—	1.81	0.80	—
	Food aid				—	5.90	3.79	1.80	2.06
		Of which: World Food Program			(…)	(…)	(…)	(…)	(2.03)
	Other aid				…	…	…	1.81	6.36
		Of which: elections aid			(—)	(—)	(—)	(…)	(4.15)
		From multilateral acnors			…	…	…	…	1.22
			European Union		…	…	…	…	0.75
			UNDP		…	…	…	…	0.32
			UNICEF		…	…	…	…	0.12
			Other		…	…	…	…	0.03
		From bilateral donors			…	…	…	…	3.38
			China		…	…	…	…	0.17
			France		…	…	…	…	0.63
			The Netherlands		…	…	…	…	0.28
			Portugal		…	…	…	…	0.57
			Sweden		…	…	…	…	1.18
			United States		…	…	…	…	0.51
			Other		…	…	…	…	0.06
		From nongovernmental organizations			…	…	…	…	1.77
			Of which: Association of Dutch
				Volunteers (SNV)	(…)	(…)	(…)	(…)	(1.32)

Source: Directorate-General of External Financing, Ministry of Planning and International Cooperation.

^{^1/}Not included in the Public Investment Program.

^{^2/}Not included in the Public Investment Program, except for SNV disbursements.

2. Capital account and reserves

In 1994, net external medium- and long-term financing was negative, as scheduled amortization payments of about US$28 million exceeded the US$17 million in inflows for project and balance of payments support. Moreover, a US$30 million outflow in short-term capital (including errors and omissions) is estimated to have occurred in response to the surge in domestic credit late in the year and ensuing pressure on the peso.

The overall balance of payments in 1994 recorded a deficit of US$32 million, which was financed by a net accumulation of US$26 million in debt service arrears and by a decline of US$6 million in the Central Bank’s net reserve position. Regarding the latter, at end-1994, the Central Bank had gross reserves of US$18 million against foreign liabilities of almost US$43 million. The commercial banks maintained a positive net foreign assets position through 1994.

3. External debt and debt service

With official external debt liabilities at end-1994 of US$813 million—more than three times gross domestic product—Guinea-Bissau is, in relative terms, one of the most heavily indebted countries in the world. Moreover, since the early 1980s, annual debt service obligations in excess of total exports of goods and nonfactor services have resulted in the accumulation of more than US$300 million in payments arrears, despite occasional debt relief concessions (Table 26).

Table 26.

External Debt and Arrears Outstanding, 1993–94

(In millions of U.S. dollars)

Sources: Directorate-General of the Treasury, Ministry of Finance; and Central Bank of Guinea-Bissau (BCGB).

Table 26.

External Debt and Arrears Outstanding, 1993–94

(In millions of U.S. dollars)

								End-December 1993		End-December 1994
								Debt	Of which:	Debt	Of which:
								stock	arrears	stock	arrears
Stocks outstanding (end-of-year)								760.19	(259.06)	813.13	(303.06)
	Medium- and long-term							726.19	(225.16)	769.72	(261.16)
		Multilateral						342.32	(28.23)	371.32	(31.87)
			Treasury					337.52	(28.23)	366.72	(31.87)
				African Development Bank				11.68	(2.91)	13.20	(5.06)
				African Development Fund				104.59	(1.96)	110.63	(3.28)
				BADEA				5.38	(4.70)	7.28	(4.05)
				CEDEAO				1.39	(0.51)	1.62	(0.75)
				European Investment Bank				7.90	(0.92)	8.40	(1.25)
				FIDA				9.01	(0.30)	9.43	(0.48)
				IDA				178.74	(0.31)	197.61	(0.41)
				IDA/European Union				0.74	(—)	0.74	(—)
				Islamic Development Bank				9.34	(9.11)	9.36	(9.12)
				OPEC Fund				8.75	(7.51)	8.45	(7.47)
			Central Bank (IMF loans only)					4.80	(—)	4.60	(—)
		Bilateral						383.87	(196.93)	398.40	(229.29)
			Treasury					368.17	(190.63)	398.40	(229.29)
				Paris Club (Cutoff date: December 1986)				228.45	(131.69)	250.16	(161.70)
					Pre-cutoff never rescheduled			—	(—)	—	(—)
					Pre-cutoff rescheduled Paris Club III-1995			168.36	(77.34)	186.07	(103.36)
						Not previously rescheduled		122.74	(69.43)	134.37	(88.67)
							Brazil	15.16	(—)	15.83	(0.67)
							Germany	3.15	(0.06)	3.15	(0.40)
							Italy	30.63	(23.87)	33.20	(31.60)
							Portugal	73.80	(45.50)	82.19	(56.00)
						Rescheduled Paris Club I-1987		22.93	(3.92)	25.84	(7.41)
							Belgium	3.63	(0.78)	4.26	(1.14)
							France	8.32	(1.77)	9.40	(4.91)
							Italy	4.84	(0.47)	5.39	(0.68)
							Sweden	0.55	(—)	0.47	(—)
							Switzerland	5.59	(0.90)	6.32	(0.68)
						Rescheduled Paris Club II-1989		22.69	(3.99)	25.86	(7.28)
							Belgium	1.79	(0.45)	2.21	(0.64)
							France	2.81	(0.71)	3.16	(0.91)
							Italy	13.52	(2.13)	15.21	(2.83)
							Sweden	0.11	(—)	0.26	(—)
							Switzerland	4.46	(0.70)	5.02	(2.90)
					Post-Cutoff			60.09	(54.35)	64.09	(58.34)
						Italy		53.90	(53.90)	57.82	(57.82)
						Spain		6.19	(0.45)	6.27	(0.52)
				Non-Paris Club				139.72	(58.94)	148.24	(67.59)
					Abu Dhabi			0.18	(0.18)	0.19	(0.19)
					Algeria			6.40	(4.34)	6.44	(5.06)
					Angola			18.80	(18.80)	18.80	(18.80)
					China, P.R.			2.02	(0.37)	1.00	(0.45)
					Cuba			2.64	(2.64)	2.86	(2.86)
					Kuwait			18.79	(5.37)	20.44	(6.41)
					Lybia			1.86	(—)	1.24	(—)
					Pakistan			2.55	(0.76)	2.59	(0.99)
					Russia			50.13	(22.28)	51.10	(27.92)
					Saudi Arabia			12.95	(3.15)	12.50	(3.08)
					Taiwan, P.C.			22.39	(0.94)	30.18	(1.53)
					Non-sovereign (Banque Franco-Portugaise)			1.01	(0.11)	0.90	(0.30)
			Central Bank					15.70	(6.30)	—	(—)
	Short-term							34.00	(33.90)	43.41	(41.90)
		Treasury						1.80	(1.80)	1.80	(1.80)
			Pakistan					1.80	(1.80)	1.80	(1.80)
		Central Bank						32.20	(32.10)	41.61	(40.10)
			Other central banks					26.20	(26.20)	19.17	(19.00)
			Commercial banks					…	(…)	9.19	(9.00)
			Suppliers’ credits					…	(…)	13.26	(12.10)

Sources: Directorate-General of the Treasury, Ministry of Finance; and Central Bank of Guinea-Bissau (BCGB).

Table 26.

External Debt and Arrears Outstanding, 1993–94

(In millions of U.S. dollars)

								End-December 1993		End-December 1994
								Debt	Of which:	Debt	Of which:
								stock	arrears	stock	arrears
Stocks outstanding (end-of-year)								760.19	(259.06)	813.13	(303.06)
	Medium- and long-term							726.19	(225.16)	769.72	(261.16)
		Multilateral						342.32	(28.23)	371.32	(31.87)
			Treasury					337.52	(28.23)	366.72	(31.87)
				African Development Bank				11.68	(2.91)	13.20	(5.06)
				African Development Fund				104.59	(1.96)	110.63	(3.28)
				BADEA				5.38	(4.70)	7.28	(4.05)
				CEDEAO				1.39	(0.51)	1.62	(0.75)
				European Investment Bank				7.90	(0.92)	8.40	(1.25)
				FIDA				9.01	(0.30)	9.43	(0.48)
				IDA				178.74	(0.31)	197.61	(0.41)
				IDA/European Union				0.74	(—)	0.74	(—)
				Islamic Development Bank				9.34	(9.11)	9.36	(9.12)
				OPEC Fund				8.75	(7.51)	8.45	(7.47)
			Central Bank (IMF loans only)					4.80	(—)	4.60	(—)
		Bilateral						383.87	(196.93)	398.40	(229.29)
			Treasury					368.17	(190.63)	398.40	(229.29)
				Paris Club (Cutoff date: December 1986)				228.45	(131.69)	250.16	(161.70)
					Pre-cutoff never rescheduled			—	(—)	—	(—)
					Pre-cutoff rescheduled Paris Club III-1995			168.36	(77.34)	186.07	(103.36)
						Not previously rescheduled		122.74	(69.43)	134.37	(88.67)
							Brazil	15.16	(—)	15.83	(0.67)
							Germany	3.15	(0.06)	3.15	(0.40)
							Italy	30.63	(23.87)	33.20	(31.60)
							Portugal	73.80	(45.50)	82.19	(56.00)
						Rescheduled Paris Club I-1987		22.93	(3.92)	25.84	(7.41)
							Belgium	3.63	(0.78)	4.26	(1.14)
							France	8.32	(1.77)	9.40	(4.91)
							Italy	4.84	(0.47)	5.39	(0.68)
							Sweden	0.55	(—)	0.47	(—)
							Switzerland	5.59	(0.90)	6.32	(0.68)
						Rescheduled Paris Club II-1989		22.69	(3.99)	25.86	(7.28)
							Belgium	1.79	(0.45)	2.21	(0.64)
							France	2.81	(0.71)	3.16	(0.91)
							Italy	13.52	(2.13)	15.21	(2.83)
							Sweden	0.11	(—)	0.26	(—)
							Switzerland	4.46	(0.70)	5.02	(2.90)
					Post-Cutoff			60.09	(54.35)	64.09	(58.34)
						Italy		53.90	(53.90)	57.82	(57.82)
						Spain		6.19	(0.45)	6.27	(0.52)
				Non-Paris Club				139.72	(58.94)	148.24	(67.59)
					Abu Dhabi			0.18	(0.18)	0.19	(0.19)
					Algeria			6.40	(4.34)	6.44	(5.06)
					Angola			18.80	(18.80)	18.80	(18.80)
					China, P.R.			2.02	(0.37)	1.00	(0.45)
					Cuba			2.64	(2.64)	2.86	(2.86)
					Kuwait			18.79	(5.37)	20.44	(6.41)
					Lybia			1.86	(—)	1.24	(—)
					Pakistan			2.55	(0.76)	2.59	(0.99)
					Russia			50.13	(22.28)	51.10	(27.92)
					Saudi Arabia			12.95	(3.15)	12.50	(3.08)
					Taiwan, P.C.			22.39	(0.94)	30.18	(1.53)
					Non-sovereign (Banque Franco-Portugaise)			1.01	(0.11)	0.90	(0.30)
			Central Bank					15.70	(6.30)	—	(—)
	Short-term							34.00	(33.90)	43.41	(41.90)
		Treasury						1.80	(1.80)	1.80	(1.80)
			Pakistan					1.80	(1.80)	1.80	(1.80)
		Central Bank						32.20	(32.10)	41.61	(40.10)
			Other central banks					26.20	(26.20)	19.17	(19.00)
			Commercial banks					…	(…)	9.19	(9.00)
			Suppliers’ credits					…	(…)	13.26	(12.10)

Sources: Directorate-General of the Treasury, Ministry of Finance; and Central Bank of Guinea-Bissau (BCGB).

At end-1994, Guinea-Bissau’s multilateral debt accounted for almost half of its total debt, and the International Development Agency (IDA) was the single largest creditor, with outstanding loans of just below US$200 million. Among bilateral creditors, the largest creditors were Portugal, Russia, and Italy. In the latter part of the year, the Treasury initiated contacts with its bilateral and multilateral creditors with the aim of obtaining concessional rescheduling/refinancings of debt arrears and current maturities.

During 1994, the Central Bank eliminated all of its medium- and long-term external liabilities (excluding those to the Fund) by reclassifying them as short-term or by transferring them to the Treasury. At end-December, the Central Bank’s short-term external debt stood at about US$42 million, almost all of which was arrears. Roughly half of that amount was owed to foreign central banks, largely the BCEAO (US$12 million) and the Bank of Portugal (US$5 million), and the other half to commercial creditors.

As part of its strategy to regularize relations with creditors, in 1994, Guinea-Bissau made cash payments of almost US$12 million for current debt service and arrears settlement. In deciding which debts to service, the Treasury and the Central Bank sought to pay as many creditors as possible, so as to initiate rescheduling negotiations with those creditors. However, Guinea-Bissau received little debt relief during 1994, as the major creditors awaited the eventual Paris Club meeting of February 1995. As a result, Guinea-Bissau accumulated US$26 million in arrears.

In February 1995, the Paris Club granted Guinea-Bissau its third concessional debt rescheduling since 1987. This time, Guinea-Bissau obtained the new, maximum concessionality “Naples terms.” The rescheduling provides for a 67 percent reduction in the net present value of Guinea-Bissau’s debt service flow for all eligible pre-cutoff-date arrears and current maturities during 1995-97. ^1/ In addition, Guinea-Bissau also obtained a nonconcessional rescheduling over ten years for post-cutoff-date arrears owed to Italy. Guinea-Bissau is seeking comparable relief from non-Paris Club bilateral as well as multilateral creditors. Since the Paris Club meeting, the formal bilateral agreement with Switzerland has been finalized as has been a trilateral agreement between Guinea-Bissau and The Netherlands and Switzerland providing for the clearance of arrears to the African Development Bank and African Development Fund and the servicing of 1995–97 maturities to these institutions. Furthermore, Guinea-Bissau is negotiating the settlement or refinancing of commercial debt owed by the Central Bank and the Treasury.

4. Exchange rate developments

After holding relatively steady against most major foreign currencies through May 1994, the peso depreciated sharply during the rest of the year. Thus, for 1994 as a whole, the peso fell by almost 22 percent against the U.S. dollar on a period average basis and by 25 ½ percent on an end-of-period basis. In 1993, the respective rates of depreciation were 31 ¼ percent and 24 ½ percent. During the first six months of 1995, the peso depreciated by an additional 15 percent on an end-of-period basis against the U.S. dollar. The rate of depreciation in the trade-weighted nominal effective exchange rate during 1994 was less pronounced, at 13 percent, reflecting the devaluation of the CFA franc in January. Although no real effective exchange rate is calculated for Guinea-Bissau, ^2/ the pace of depreciation in 1994–95 has exceeded that for domestic inflation as measured by the CPI.

5. Exchange and trade system

In early 1994, the foreign exchange market was unified when the Central Bank adopted a policy of adjusting, as necessary, the official exchange rate so as to keep it within 2 percent of an average of the freely determined rates quoted by the two commercial banks, an exchange bureau, and the informal market. To date, the Central Bank has strictly adhered to this policy. The U.S. dollar serves as the intervention currency, and the official and the commercial rates are subject to a maximum 2 percent spread between buying and selling rates. The Central Bank occasionally intervenes in the market through sales of foreign currencies to commercial banks.

Major changes to the exchange and trade system during 1994 consisted of the abolition of minimum shipping requirements for agricultural exports and the reduction in the special tax on cashew nut exports from 18 percent to 13 percent.

APPENDIX I

Guinea-Bissau: Summary of Tax System, May 1995

Sources: Directorate-General of Taxes and Contributions and Directorate-General of Customs, Ministry of Finance.

Guinea-Bissau: Summary of Tax System, May 1995

Tax		Nature of Tax	Exemptions and Deductions	Rates
1. Direct taxes
	1.1 Business Profit Tax. (Contribuicão Industrial)	Levied on income from commercial or industrial activities, whether permanent or occasional; chargeable to individuals and to legal entities having their main offices or a permanent agency in Guinea-Bissau and to nonresidents which are owed payments or loans by resident entities, for the exercise of such activities and for a period of less than six months, at a rate of 10 percent on turnover.	Exemptions granted to legally constituted political parties; employers’ and professional associations; legal entities engaged in activities in the public interest; international organizations deemed legal entities under international public law; diplomatic missions; religious organizations and welfare, sports, cultural, recreational, and similar associations. Rate reductions awarded as incentives to selected productive actitivies.	Income Prackets (In PG millions) Up to 6 6-50 Over 50 Profits from commercialization of oil products	Rates 20 percent 30 percent 35 percent 50 percent
	1.2 Tax on Urban Rental Income (Contribuicao Predial Urbana)	Income from urban real estate (rent or utility obtained or potentially obtainable by the owner of record from the use or enjoyment thereof, including compensation for any right of use or enjoyment through normal or principal use or through accessory, secondary, or occasional uses). Chargeable to the owner of record of income (those persons in whose name the property is registered or who are in possession of it); to each joint owner; to lessees in the case of subleasing.	Site exemptions for national monuments, properties used for religious purposes, cemeteries and their structures; properties on which are located schools, hospitals, or assistance stations, provided they do not generate income. Owner exemptions for the State, including local governments; legally constituted political parties; public institutions; legal entities engaged in activities in the public interest; cultural, recreational and sports associations; diplomatic and consular missions, and missions of international organizations deemed legal entities under the international public law. Also exempted are buildings whose gross taxable income does not exceed PG 120,000 per year, and, for 10 years, new residential buildings for owner occupancy or for rental yielding up to PG 600,000 per year. Reduction of 25 percent of the gross taxable income (rental value) for property maintenance expenses.	Income Brackets (In YG millions) Up to 1.5 Over 1.5	Rates 15 percent 20 percent
	1.3 Tax on Rural Income (Contribuicao Predial Rural)	Assessed by the customs department on the f.o.b. value of the main agricultural export commodities.	None.	Products Cashew nuts Coconuts Groundnuts Cotton Palm oil Cotton seed Logs and wood products	Rates (On f.o.b. value) 2 percent 1 percent 1 percent 2 percent 1 percent 2 percent 1 percent
	1.4 Labor Income Tax (Imposto Profissional)	Earned income, in cash or in kind, from employment for others, contracts for furnishing of services, or exercise of professional or technical activities (day wages, wages and salaries, gratuities and bonuses, and other forms of compensation, including honoraria, paid to scientists, artists and technical professionals, or permanent or occasional services). Chargeable to public servants, employees of public semipublic and private enterprises, workers in cooperatives (including their members), self-employed, and to those who are not permanent residents of Guinea-Bissau but are the owners of record of income generated from work therein.	Does not cover income from family allowance or other allowances based on household composition or status; sickness allowances and pensions; relocation allowances and severance pay, income earned by aliens in diplomatic or official activities for organizations deemed to be governed by international public law; annual income up to PG 3.3 million.	Income Brackets (In PG millions) I. Employees: 3.3 - 8.3 8.3 - 9.6 9.6 - 13.0 13.0 - 23.0 23.0 - 40.0 40.0 - 45.0 45.0 - 55.0 Over 55.0 II. Self-employed professionals: Up to 6.0 6.0 - 35.0 Over 35.0	Rates 2 percent 4 percent 6 percent 8 percent 10 percent 13 percent 16 percent 20 percent 10 percent 20 percent 30 percent
	1.5 Complementary Tax (Imposto Complementar)	Levied on aggregate income generated in Guinea-Bissau by individuals or legal entities subject to the preceding taxes or to the Capital Income Tax and having their domicile, actual residence, main offices or a permanent agency in Guinea-Bissau for a period in excess of six months per year. Individuals are assessed on household income earned by both spouses and dependent children and on income arising from their shares in partnerships.	Exemptions: The State, including local governments; legally constituted political parties; legal entities engaged in activities in the public interest; sports, recreational, cultural and welfare associations; entities engaged in activities of significant national interest; and exemptions granted under agreements (limited to the income from the activities covered by the agreements). Deductions I. From gross taxable income: a. Schedular taxes paid on aggregate income b. Income exempt from the Complementary Tax II. From the taxable income of individuals: a. Taxpayers without dependents: PG 885,000 b. Taxpayers with dependents: PG 2,520,000 c. Mandatory social contributions chargeable to wages and salaries	Income Brackets (In PG millions) I. Individuals: Up to 2.5 2.5 - 8.0 8.0 - 12.0 12.0 - 18.0 Over 18.0 II. Legal entities: Up to 12.0 12.0 - 24.0 Over 24.0	Rates 4 percent 8 percent 12 percent 16 percent 20 percent 5 percent 10 percent 20 percent
	1.6 Capital Income Tax (Imposto de Capitals)	Interest from capital lent out, in cash or in kind; income arising from deferral of installments or from late compliance with obligations; profits or dividends imputed to partners; profits earned in participation accounts; interest on deposits; interest from partners’ capital contributions or supplies to companies; interest earned in current accounts; interest on obligations issued by any public or private entity; income arising from the temporary assignment of commercial or industrial establishments or received as compensation for the suspension or reduction of commercial or industrial activities; income from franchising or assignment of patents, exploration licenses, utility models, industrial designs and models, trade marks, establishment names or insignia, manufacturing processes, or any kind of assignment of technology; any income from capital investments not provided for and not subject to any other schedular tax.	Exemptions: The State, including local governments; legally constituted political parties; legal entities engaged in activities in the public interest; credit institutions subject to Business Profits Tax on interest from loans extended; businessmen subject to Business Profits Tax on income arising from services rendered or obtained from the exercise of activities not explicitly excluded from the Business Profits Tax Code.	Standard rate - 25 percent Reduced rate - 10 percent Applicable to: a. Profits or dividends imputed to partners; b. Profits earned in participation accounts; c. Income from franchising or assignment of patents, exploration licenses, utility models, industrial designs and models, trademarks, establishment names or insignia, manufacturing processes, or any kind of assignment of technology or of income from capital investments not explicitly provided for and subject to any other schedular tax.
	1.7 National Reconstruction Tax (Imposto de Reconstrucão Nacional)	Poll tax levied, according to the ability to pay, on each citizen 18 years of age or older.	Exemptions: Students without income; technical assistance workers; individuals at least 60 years old; sick and disabled persons; pensioners and retirees; members of the armed forces; diplomatic and consular corps.	Male citizens: PG 20,000 Female citizens: PG 10,000
2. Indirect taxes
	2.1 Domestic Consumption Tax (Imposto sobre o Consurmoe Fabrico)	Levied on consumer goods produced in Guinea-Bissau, except export goods chargeable to all producers and enterprises.	For exceptional cases, as determined by ministerial order.	Ad valorem and specific rates, examples of which are the following: Beer - 50 percent; Rum - PG 1,200/liter Bricks, tiles - 5 percent; Painted, glazed or decorated construction bricks - 10 percent; Statuettes and the like - 30 percent; Gasoline sales - 45 percent.
	2.2 Stamp Tax (Imposto de Selo e Estampilhas)	Levied on all documents, books, papers, acts and products listed in the Schedules.	As listed in the Schedules, including court proceedings and records, partition and distribution proceedings, award deeds, sea rescue service charters, and many others.	Variable fixed amounts or rates for specific transactions: “Papel selado” - PG 5,000 “Selo de Assistancia” - PG 1,000 “Selo de Reconstruçăo” - PG 1,000
	2.3 Motor Vehicle Transfer Tax (Imposto de transacções)	Levied on the transfer of automobiles, ships or boats, motorcycles, and airplanes	Exemptions: For imports for the importer’s own use or for use by a taxpayer already subject to Business Profits Tax on the same event. Deduction of 50 percent when a used vehicle is received as part payment for a new vehicle.	Rates (In percent) Self-Use Rental Motorcycles 3 6 All other vehicles Business use 6 10 Private use Land vehicles 3 … Aircraft, boats 5 …
	2.4 Real Estate Transfer Tax (Imposto de Sisa)	Levied on transfers of real estate.	Same as for rental value tax.	10 percent
	2.5 Inheritance and Gift Tax (Imposto sobre Sucessões e Doações)	Levied on net value of property transferred as gifts or inheritances.	Same as for rental value tax.	5, 10, 20, 25, and 50 percent depending on degree of kinship.
3. Taxes on international trade
	3.1 Import Duty (Direitos de importaçõo)	Levied on the c.i.f. fiscal value of imported goods. (Customs Tariff; Decree 39/80 of November 1, 1980 and ministerial Order No. 17/91 of 05/02/91).	Exemptions: Goods imported by State agencies, public enterprises, nongovernmental bodies under contracts, agreements, political parties, and medicines imported by Public Health.	Rates ranging from 0 to 70 percent, depending on kind of merchandise imported.
	3.2 Extraordinary Tax on Cashew Nut Exports (Imposto Extraordinário sobre a Exportaçõo de Castanha de Cajú)	Incidence: Levied on the f.o.b. fiscal value of exports of cashew nuts (Decree 8/87 of May 4, 1987).	None.	13 percent of the f.o.b. value. (Since 1989 this rate has been reduced from 34 percent.)
	3.3 Port Service Charges (Emolumentos Gerais Aduaneiros)	Levied on the fiscal value of exports or imports and customs services. (Decree 36/A-83 of December 23, 1983).	Same as for the Import Duty. Diplomatic representatives and religious missions.	- 6–10 percent ad valorem on fiscal value of imports. (Rice imports - 6 percent). - 5 percent ad valorem on fiscal value of exports.
	3.4 Consumption Tax (Imposto de Consumo)	Levied on the c.i.f. fiscal value of certain imported goods. (Decree 36/A-83 of December 23, 1983).	Same as for the Import Duty, and rice is exempted.	Rates ranging from 5 to 85 percent, depending on kind of merchandise imported. (Rice imports - 14 percent.)
	3.5 Transit Fees (Taxas de Tráfego)	Levied on the circulation of merchandise within customs areas. (Decree 36/A-83 of December 23, 1983).	None.	Specific rates.
	3.6 Storage Fees (Taxas de Armazenagem)	Levied on the warehousing of merchandise. (Decree 36/A-83 of	None.	Specific rates.
	3.7 Tonnage Tax (Imposto de Tonelagem)	Levied on gross measurement tonnage of ships. (Decree 36/A-83 of December 23, 1983).	Exemptions: Warships, ships carrying grant aid, scientific missions, and fishing vessels.	Specific rates.
	3.8 Maritime Commerce Tax (Imposto do Cormércio Maritimo)	Levied on goods offloaded at the Port of Bissau. (Decree 36/A-83 of December 23, 1983).	Exemptions: Military material, grants, scientific missions, and fishing vessels.	Specific rates.

Sources: Directorate-General of Taxes and Contributions and Directorate-General of Customs, Ministry of Finance.

Guinea-Bissau: Summary of Tax System, May 1995

Tax		Nature of Tax	Exemptions and Deductions	Rates
1. Direct taxes
	1.1 Business Profit Tax. (Contribuicão Industrial)	Levied on income from commercial or industrial activities, whether permanent or occasional; chargeable to individuals and to legal entities having their main offices or a permanent agency in Guinea-Bissau and to nonresidents which are owed payments or loans by resident entities, for the exercise of such activities and for a period of less than six months, at a rate of 10 percent on turnover.	Exemptions granted to legally constituted political parties; employers’ and professional associations; legal entities engaged in activities in the public interest; international organizations deemed legal entities under international public law; diplomatic missions; religious organizations and welfare, sports, cultural, recreational, and similar associations. Rate reductions awarded as incentives to selected productive actitivies.	Income Prackets (In PG millions) Up to 6 6-50 Over 50 Profits from commercialization of oil products	Rates 20 percent 30 percent 35 percent 50 percent
	1.2 Tax on Urban Rental Income (Contribuicao Predial Urbana)	Income from urban real estate (rent or utility obtained or potentially obtainable by the owner of record from the use or enjoyment thereof, including compensation for any right of use or enjoyment through normal or principal use or through accessory, secondary, or occasional uses). Chargeable to the owner of record of income (those persons in whose name the property is registered or who are in possession of it); to each joint owner; to lessees in the case of subleasing.	Site exemptions for national monuments, properties used for religious purposes, cemeteries and their structures; properties on which are located schools, hospitals, or assistance stations, provided they do not generate income. Owner exemptions for the State, including local governments; legally constituted political parties; public institutions; legal entities engaged in activities in the public interest; cultural, recreational and sports associations; diplomatic and consular missions, and missions of international organizations deemed legal entities under the international public law. Also exempted are buildings whose gross taxable income does not exceed PG 120,000 per year, and, for 10 years, new residential buildings for owner occupancy or for rental yielding up to PG 600,000 per year. Reduction of 25 percent of the gross taxable income (rental value) for property maintenance expenses.	Income Brackets (In YG millions) Up to 1.5 Over 1.5	Rates 15 percent 20 percent
	1.3 Tax on Rural Income (Contribuicao Predial Rural)	Assessed by the customs department on the f.o.b. value of the main agricultural export commodities.	None.	Products Cashew nuts Coconuts Groundnuts Cotton Palm oil Cotton seed Logs and wood products	Rates (On f.o.b. value) 2 percent 1 percent 1 percent 2 percent 1 percent 2 percent 1 percent
	1.4 Labor Income Tax (Imposto Profissional)	Earned income, in cash or in kind, from employment for others, contracts for furnishing of services, or exercise of professional or technical activities (day wages, wages and salaries, gratuities and bonuses, and other forms of compensation, including honoraria, paid to scientists, artists and technical professionals, or permanent or occasional services). Chargeable to public servants, employees of public semipublic and private enterprises, workers in cooperatives (including their members), self-employed, and to those who are not permanent residents of Guinea-Bissau but are the owners of record of income generated from work therein.	Does not cover income from family allowance or other allowances based on household composition or status; sickness allowances and pensions; relocation allowances and severance pay, income earned by aliens in diplomatic or official activities for organizations deemed to be governed by international public law; annual income up to PG 3.3 million.	Income Brackets (In PG millions) I. Employees: 3.3 - 8.3 8.3 - 9.6 9.6 - 13.0 13.0 - 23.0 23.0 - 40.0 40.0 - 45.0 45.0 - 55.0 Over 55.0 II. Self-employed professionals: Up to 6.0 6.0 - 35.0 Over 35.0	Rates 2 percent 4 percent 6 percent 8 percent 10 percent 13 percent 16 percent 20 percent 10 percent 20 percent 30 percent
	1.5 Complementary Tax (Imposto Complementar)	Levied on aggregate income generated in Guinea-Bissau by individuals or legal entities subject to the preceding taxes or to the Capital Income Tax and having their domicile, actual residence, main offices or a permanent agency in Guinea-Bissau for a period in excess of six months per year. Individuals are assessed on household income earned by both spouses and dependent children and on income arising from their shares in partnerships.	Exemptions: The State, including local governments; legally constituted political parties; legal entities engaged in activities in the public interest; sports, recreational, cultural and welfare associations; entities engaged in activities of significant national interest; and exemptions granted under agreements (limited to the income from the activities covered by the agreements). Deductions I. From gross taxable income: a. Schedular taxes paid on aggregate income b. Income exempt from the Complementary Tax II. From the taxable income of individuals: a. Taxpayers without dependents: PG 885,000 b. Taxpayers with dependents: PG 2,520,000 c. Mandatory social contributions chargeable to wages and salaries	Income Brackets (In PG millions) I. Individuals: Up to 2.5 2.5 - 8.0 8.0 - 12.0 12.0 - 18.0 Over 18.0 II. Legal entities: Up to 12.0 12.0 - 24.0 Over 24.0	Rates 4 percent 8 percent 12 percent 16 percent 20 percent 5 percent 10 percent 20 percent
	1.6 Capital Income Tax (Imposto de Capitals)	Interest from capital lent out, in cash or in kind; income arising from deferral of installments or from late compliance with obligations; profits or dividends imputed to partners; profits earned in participation accounts; interest on deposits; interest from partners’ capital contributions or supplies to companies; interest earned in current accounts; interest on obligations issued by any public or private entity; income arising from the temporary assignment of commercial or industrial establishments or received as compensation for the suspension or reduction of commercial or industrial activities; income from franchising or assignment of patents, exploration licenses, utility models, industrial designs and models, trade marks, establishment names or insignia, manufacturing processes, or any kind of assignment of technology; any income from capital investments not provided for and not subject to any other schedular tax.	Exemptions: The State, including local governments; legally constituted political parties; legal entities engaged in activities in the public interest; credit institutions subject to Business Profits Tax on interest from loans extended; businessmen subject to Business Profits Tax on income arising from services rendered or obtained from the exercise of activities not explicitly excluded from the Business Profits Tax Code.	Standard rate - 25 percent Reduced rate - 10 percent Applicable to: a. Profits or dividends imputed to partners; b. Profits earned in participation accounts; c. Income from franchising or assignment of patents, exploration licenses, utility models, industrial designs and models, trademarks, establishment names or insignia, manufacturing processes, or any kind of assignment of technology or of income from capital investments not explicitly provided for and subject to any other schedular tax.
	1.7 National Reconstruction Tax (Imposto de Reconstrucão Nacional)	Poll tax levied, according to the ability to pay, on each citizen 18 years of age or older.	Exemptions: Students without income; technical assistance workers; individuals at least 60 years old; sick and disabled persons; pensioners and retirees; members of the armed forces; diplomatic and consular corps.	Male citizens: PG 20,000 Female citizens: PG 10,000
2. Indirect taxes
	2.1 Domestic Consumption Tax (Imposto sobre o Consurmoe Fabrico)	Levied on consumer goods produced in Guinea-Bissau, except export goods chargeable to all producers and enterprises.	For exceptional cases, as determined by ministerial order.	Ad valorem and specific rates, examples of which are the following: Beer - 50 percent; Rum - PG 1,200/liter Bricks, tiles - 5 percent; Painted, glazed or decorated construction bricks - 10 percent; Statuettes and the like - 30 percent; Gasoline sales - 45 percent.
	2.2 Stamp Tax (Imposto de Selo e Estampilhas)	Levied on all documents, books, papers, acts and products listed in the Schedules.	As listed in the Schedules, including court proceedings and records, partition and distribution proceedings, award deeds, sea rescue service charters, and many others.	Variable fixed amounts or rates for specific transactions: “Papel selado” - PG 5,000 “Selo de Assistancia” - PG 1,000 “Selo de Reconstruçăo” - PG 1,000
	2.3 Motor Vehicle Transfer Tax (Imposto de transacções)	Levied on the transfer of automobiles, ships or boats, motorcycles, and airplanes	Exemptions: For imports for the importer’s own use or for use by a taxpayer already subject to Business Profits Tax on the same event. Deduction of 50 percent when a used vehicle is received as part payment for a new vehicle.	Rates (In percent) Self-Use Rental Motorcycles 3 6 All other vehicles Business use 6 10 Private use Land vehicles 3 … Aircraft, boats 5 …
	2.4 Real Estate Transfer Tax (Imposto de Sisa)	Levied on transfers of real estate.	Same as for rental value tax.	10 percent
	2.5 Inheritance and Gift Tax (Imposto sobre Sucessões e Doações)	Levied on net value of property transferred as gifts or inheritances.	Same as for rental value tax.	5, 10, 20, 25, and 50 percent depending on degree of kinship.
3. Taxes on international trade
	3.1 Import Duty (Direitos de importaçõo)	Levied on the c.i.f. fiscal value of imported goods. (Customs Tariff; Decree 39/80 of November 1, 1980 and ministerial Order No. 17/91 of 05/02/91).	Exemptions: Goods imported by State agencies, public enterprises, nongovernmental bodies under contracts, agreements, political parties, and medicines imported by Public Health.	Rates ranging from 0 to 70 percent, depending on kind of merchandise imported.
	3.2 Extraordinary Tax on Cashew Nut Exports (Imposto Extraordinário sobre a Exportaçõo de Castanha de Cajú)	Incidence: Levied on the f.o.b. fiscal value of exports of cashew nuts (Decree 8/87 of May 4, 1987).	None.	13 percent of the f.o.b. value. (Since 1989 this rate has been reduced from 34 percent.)
	3.3 Port Service Charges (Emolumentos Gerais Aduaneiros)	Levied on the fiscal value of exports or imports and customs services. (Decree 36/A-83 of December 23, 1983).	Same as for the Import Duty. Diplomatic representatives and religious missions.	- 6–10 percent ad valorem on fiscal value of imports. (Rice imports - 6 percent). - 5 percent ad valorem on fiscal value of exports.
	3.4 Consumption Tax (Imposto de Consumo)	Levied on the c.i.f. fiscal value of certain imported goods. (Decree 36/A-83 of December 23, 1983).	Same as for the Import Duty, and rice is exempted.	Rates ranging from 5 to 85 percent, depending on kind of merchandise imported. (Rice imports - 14 percent.)
	3.5 Transit Fees (Taxas de Tráfego)	Levied on the circulation of merchandise within customs areas. (Decree 36/A-83 of December 23, 1983).	None.	Specific rates.
	3.6 Storage Fees (Taxas de Armazenagem)	Levied on the warehousing of merchandise. (Decree 36/A-83 of	None.	Specific rates.
	3.7 Tonnage Tax (Imposto de Tonelagem)	Levied on gross measurement tonnage of ships. (Decree 36/A-83 of December 23, 1983).	Exemptions: Warships, ships carrying grant aid, scientific missions, and fishing vessels.	Specific rates.
	3.8 Maritime Commerce Tax (Imposto do Cormércio Maritimo)	Levied on goods offloaded at the Port of Bissau. (Decree 36/A-83 of December 23, 1983).	Exemptions: Military material, grants, scientific missions, and fishing vessels.	Specific rates.

Sources: Directorate-General of Taxes and Contributions and Directorate-General of Customs, Ministry of Finance.

Bibliography

Fund sources:

Fund sources, SM/95/185, Guinea - Bissau-Staff Report for the 1995 Article IV Consultation. July 28, 1995.
Fund sources, SM/95/57, Guinea - Bissau-Report on External Debt Renegotiation. March 23, 1995.
Fund sources, EBS/94/247, Guinea - Bissau-Request for Arrangements Under the Enhanced Structural Adjustment Facility. December 22, 1994.
Fund sources, EBD/94/171, Guinea-Bissau - Enhanced Structural Adjustment Facility - Medium-Term Economic and Financial Policy Framework Paper (1994–97). October 24, 1994.
Fund sources, SM/94/38, Guinea-Bissau - Recent Economic Developments. February 11, 1994.
Fund sources, SM/94/18, Guinea-Bissau - Staff Report for the 1993 Article IV Consultation, January 14, 1994.

World Bank sources:

World Bank sources, Social Indicators of Development 1995. June 1995.
World Bank sources, Report No. 14331-GUB, Republic of Guinea-Bissau - Transport and Urban Infrastructure Project. Staff Appraisal Report. May 31, 1995.
World Bank sources, Report No. 13155-GUB, Republic of Guinea-Bissau - Poverty Assessment and Social Sectors Strategy Review. Vols. I, II, and III, June 3, 1994.

Official sources:

Official sources, Sintese da Conjuntura Económica. Ministério das Finanças and Banco Central da Guiné-Bissau (BCGB), April 1995.
Official sources, Orcamento Geral do Estado 1995. Ministério das Finanças, February 1995.
Official sources, Anuário 1993. Ministério do Desenvolvimento Rural e Agricultura, August 1994.

Other sources:

Other sources, Novas Orientações de Politica Pesqueira Nacional. Trade and Investment Policy Support Project (TIPS), Bissau-Seattle, October 25, 1994.

A new CPI based on a nationwide consumption survey carried out in 1992 is currently being constructed.

A bilateral rescheduling agreement with Portugal was also concluded in July 1994, covering outstanding arrears and 1994 maturities of approximately US$70 million. However, the Portuguese Treasury and the Guinea-Bissau Government agreed in February 1995 to replace this agreement with another of similar coverage in the context of the Paris Club meeting.

The poverty test employed for these estimates was “total real per capita expenditure” in 1991. The poverty and extreme poverty lines were defined respectively at two thirds and one third of the mean per capita household expenditure of PG 201,626 (US$55) in 1991.

UNDP, United Nations Development Program.

USAID, United States Agency for International Development.

See Guinea-Bissau - Report on External Debt Renegotiations (SM/95/57).

The absence of nontradables and of manufactured traded goods in Guinea-Bissau’s CPI renders it inappropriate for the purpose of computing real effective exchange rates.

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Guinea-Bissau: Recent Economic Developments

Author:

International Monetary Fund

Volume/Issue:: Volume 1995: Issue 120

Publisher:: International Monetary Fund

ISBN:: 9781451815689

ISSN:: 1934-7685

Pages:: 57

DOI:: https://doi.org/10.5089/9781451815689.002

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CHART 1

GUINEA-BISSAU SELECTED NATIONAL ACCOUNTS AND PRICE INDICATORS 1990–94

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CHART 2

GUINEA-BISSAU SELECTED FISCAL INDICATORS 1990–94

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CHART 3

GUINEA-BISSAU SELECTED MONETARY INDICATORS 1990–94

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CHART 4

GUINEA-BISSAU SELECTED EXTERNAL INDICATORS 1990–94

Foresee

Guinea-Bissau: Summary of Tax System, May 1995

Tax		Nature of Tax	Exemptions and Deductions	Rates
1. Direct taxes
	1.1 Business Profit Tax. (Contribuicão Industrial)	Levied on income from commercial or industrial activities, whether permanent or occasional; chargeable to individuals and to legal entities having their main offices or a permanent agency in Guinea-Bissau and to nonresidents which are owed payments or loans by resident entities, for the exercise of such activities and for a period of less than six months, at a rate of 10 percent on turnover.	Exemptions granted to legally constituted political parties; employers’ and professional associations; legal entities engaged in activities in the public interest; international organizations deemed legal entities under international public law; diplomatic missions; religious organizations and welfare, sports, cultural, recreational, and similar associations. Rate reductions awarded as incentives to selected productive actitivies.	Income Prackets (In PG millions) Up to 6 6-50 Over 50 Profits from commercialization of oil products	Rates 20 percent 30 percent 35 percent 50 percent
	1.2 Tax on Urban Rental Income (Contribuicao Predial Urbana)	Income from urban real estate (rent or utility obtained or potentially obtainable by the owner of record from the use or enjoyment thereof, including compensation for any right of use or enjoyment through normal or principal use or through accessory, secondary, or occasional uses). Chargeable to the owner of record of income (those persons in whose name the property is registered or who are in possession of it); to each joint owner; to lessees in the case of subleasing.	Site exemptions for national monuments, properties used for religious purposes, cemeteries and their structures; properties on which are located schools, hospitals, or assistance stations, provided they do not generate income. Owner exemptions for the State, including local governments; legally constituted political parties; public institutions; legal entities engaged in activities in the public interest; cultural, recreational and sports associations; diplomatic and consular missions, and missions of international organizations deemed legal entities under the international public law. Also exempted are buildings whose gross taxable income does not exceed PG 120,000 per year, and, for 10 years, new residential buildings for owner occupancy or for rental yielding up to PG 600,000 per year. Reduction of 25 percent of the gross taxable income (rental value) for property maintenance expenses.	Income Brackets (In YG millions) Up to 1.5 Over 1.5	Rates 15 percent 20 percent
	1.3 Tax on Rural Income (Contribuicao Predial Rural)	Assessed by the customs department on the f.o.b. value of the main agricultural export commodities.	None.	Products Cashew nuts Coconuts Groundnuts Cotton Palm oil Cotton seed Logs and wood products	Rates (On f.o.b. value) 2 percent 1 percent 1 percent 2 percent 1 percent 2 percent 1 percent
	1.4 Labor Income Tax (Imposto Profissional)	Earned income, in cash or in kind, from employment for others, contracts for furnishing of services, or exercise of professional or technical activities (day wages, wages and salaries, gratuities and bonuses, and other forms of compensation, including honoraria, paid to scientists, artists and technical professionals, or permanent or occasional services). Chargeable to public servants, employees of public semipublic and private enterprises, workers in cooperatives (including their members), self-employed, and to those who are not permanent residents of Guinea-Bissau but are the owners of record of income generated from work therein.	Does not cover income from family allowance or other allowances based on household composition or status; sickness allowances and pensions; relocation allowances and severance pay, income earned by aliens in diplomatic or official activities for organizations deemed to be governed by international public law; annual income up to PG 3.3 million.	Income Brackets (In PG millions) I. Employees: 3.3 - 8.3 8.3 - 9.6 9.6 - 13.0 13.0 - 23.0 23.0 - 40.0 40.0 - 45.0 45.0 - 55.0 Over 55.0 II. Self-employed professionals: Up to 6.0 6.0 - 35.0 Over 35.0	Rates 2 percent 4 percent 6 percent 8 percent 10 percent 13 percent 16 percent 20 percent 10 percent 20 percent 30 percent
	1.5 Complementary Tax (Imposto Complementar)	Levied on aggregate income generated in Guinea-Bissau by individuals or legal entities subject to the preceding taxes or to the Capital Income Tax and having their domicile, actual residence, main offices or a permanent agency in Guinea-Bissau for a period in excess of six months per year. Individuals are assessed on household income earned by both spouses and dependent children and on income arising from their shares in partnerships.	Exemptions: The State, including local governments; legally constituted political parties; legal entities engaged in activities in the public interest; sports, recreational, cultural and welfare associations; entities engaged in activities of significant national interest; and exemptions granted under agreements (limited to the income from the activities covered by the agreements). Deductions I. From gross taxable income: a. Schedular taxes paid on aggregate income b. Income exempt from the Complementary Tax II. From the taxable income of individuals: a. Taxpayers without dependents: PG 885,000 b. Taxpayers with dependents: PG 2,520,000 c. Mandatory social contributions chargeable to wages and salaries	Income Brackets (In PG millions) I. Individuals: Up to 2.5 2.5 - 8.0 8.0 - 12.0 12.0 - 18.0 Over 18.0 II. Legal entities: Up to 12.0 12.0 - 24.0 Over 24.0	Rates 4 percent 8 percent 12 percent 16 percent 20 percent 5 percent 10 percent 20 percent
	1.6 Capital Income Tax (Imposto de Capitals)	Interest from capital lent out, in cash or in kind; income arising from deferral of installments or from late compliance with obligations; profits or dividends imputed to partners; profits earned in participation accounts; interest on deposits; interest from partners’ capital contributions or supplies to companies; interest earned in current accounts; interest on obligations issued by any public or private entity; income arising from the temporary assignment of commercial or industrial establishments or received as compensation for the suspension or reduction of commercial or industrial activities; income from franchising or assignment of patents, exploration licenses, utility models, industrial designs and models, trade marks, establishment names or insignia, manufacturing processes, or any kind of assignment of technology; any income from capital investments not provided for and not subject to any other schedular tax.	Exemptions: The State, including local governments; legally constituted political parties; legal entities engaged in activities in the public interest; credit institutions subject to Business Profits Tax on interest from loans extended; businessmen subject to Business Profits Tax on income arising from services rendered or obtained from the exercise of activities not explicitly excluded from the Business Profits Tax Code.	Standard rate - 25 percent Reduced rate - 10 percent Applicable to: a. Profits or dividends imputed to partners; b. Profits earned in participation accounts; c. Income from franchising or assignment of patents, exploration licenses, utility models, industrial designs and models, trademarks, establishment names or insignia, manufacturing processes, or any kind of assignment of technology or of income from capital investments not explicitly provided for and subject to any other schedular tax.
	1.7 National Reconstruction Tax (Imposto de Reconstrucão Nacional)	Poll tax levied, according to the ability to pay, on each citizen 18 years of age or older.	Exemptions: Students without income; technical assistance workers; individuals at least 60 years old; sick and disabled persons; pensioners and retirees; members of the armed forces; diplomatic and consular corps.	Male citizens: PG 20,000 Female citizens: PG 10,000
2. Indirect taxes
	2.1 Domestic Consumption Tax (Imposto sobre o Consurmoe Fabrico)	Levied on consumer goods produced in Guinea-Bissau, except export goods chargeable to all producers and enterprises.	For exceptional cases, as determined by ministerial order.	Ad valorem and specific rates, examples of which are the following: Beer - 50 percent; Rum - PG 1,200/liter Bricks, tiles - 5 percent; Painted, glazed or decorated construction bricks - 10 percent; Statuettes and the like - 30 percent; Gasoline sales - 45 percent.
	2.2 Stamp Tax (Imposto de Selo e Estampilhas)	Levied on all documents, books, papers, acts and products listed in the Schedules.	As listed in the Schedules, including court proceedings and records, partition and distribution proceedings, award deeds, sea rescue service charters, and many others.	Variable fixed amounts or rates for specific transactions: “Papel selado” - PG 5,000 “Selo de Assistancia” - PG 1,000 “Selo de Reconstruçăo” - PG 1,000
	2.3 Motor Vehicle Transfer Tax (Imposto de transacções)	Levied on the transfer of automobiles, ships or boats, motorcycles, and airplanes	Exemptions: For imports for the importer’s own use or for use by a taxpayer already subject to Business Profits Tax on the same event. Deduction of 50 percent when a used vehicle is received as part payment for a new vehicle.	Rates (In percent) Self-Use Rental Motorcycles 3 6 All other vehicles Business use 6 10 Private use Land vehicles 3 … Aircraft, boats 5 …
	2.4 Real Estate Transfer Tax (Imposto de Sisa)	Levied on transfers of real estate.	Same as for rental value tax.	10 percent
	2.5 Inheritance and Gift Tax (Imposto sobre Sucessões e Doações)	Levied on net value of property transferred as gifts or inheritances.	Same as for rental value tax.	5, 10, 20, 25, and 50 percent depending on degree of kinship.
3. Taxes on international trade
	3.1 Import Duty (Direitos de importaçõo)	Levied on the c.i.f. fiscal value of imported goods. (Customs Tariff; Decree 39/80 of November 1, 1980 and ministerial Order No. 17/91 of 05/02/91).	Exemptions: Goods imported by State agencies, public enterprises, nongovernmental bodies under contracts, agreements, political parties, and medicines imported by Public Health.	Rates ranging from 0 to 70 percent, depending on kind of merchandise imported.
	3.2 Extraordinary Tax on Cashew Nut Exports (Imposto Extraordinário sobre a Exportaçõo de Castanha de Cajú)	Incidence: Levied on the f.o.b. fiscal value of exports of cashew nuts (Decree 8/87 of May 4, 1987).	None.	13 percent of the f.o.b. value. (Since 1989 this rate has been reduced from 34 percent.)
	3.3 Port Service Charges (Emolumentos Gerais Aduaneiros)	Levied on the fiscal value of exports or imports and customs services. (Decree 36/A-83 of December 23, 1983).	Same as for the Import Duty. Diplomatic representatives and religious missions.	- 6–10 percent ad valorem on fiscal value of imports. (Rice imports - 6 percent). - 5 percent ad valorem on fiscal value of exports.
	3.4 Consumption Tax (Imposto de Consumo)	Levied on the c.i.f. fiscal value of certain imported goods. (Decree 36/A-83 of December 23, 1983).	Same as for the Import Duty, and rice is exempted.	Rates ranging from 5 to 85 percent, depending on kind of merchandise imported. (Rice imports - 14 percent.)
	3.5 Transit Fees (Taxas de Tráfego)	Levied on the circulation of merchandise within customs areas. (Decree 36/A-83 of December 23, 1983).	None.	Specific rates.
	3.6 Storage Fees (Taxas de Armazenagem)	Levied on the warehousing of merchandise. (Decree 36/A-83 of	None.	Specific rates.
	3.7 Tonnage Tax (Imposto de Tonelagem)	Levied on gross measurement tonnage of ships. (Decree 36/A-83 of December 23, 1983).	Exemptions: Warships, ships carrying grant aid, scientific missions, and fishing vessels.	Specific rates.
	3.8 Maritime Commerce Tax (Imposto do Cormércio Maritimo)	Levied on goods offloaded at the Port of Bissau. (Decree 36/A-83 of December 23, 1983).	Exemptions: Military material, grants, scientific missions, and fishing vessels.	Specific rates.

Sources: Directorate-General of Taxes and Contributions and Directorate-General of Customs, Ministry of Finance.

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About

Resources

Abstract

I. Introduction

II. Production, Expenditure, and Prices

1. Overview

2. National accounts

3. Production

4. Prices

III. Public Finance

1. Main developments

2. Revenues

3. Expenditure

4. Arrears accumulation and other financing

IV. Structural and Social Reforms

1. Introduction

2. Civil service reform

3. Reform of the public enterprise sector

4. Poverty and social adjustment measures

5. Environmental priorities

V. Money and Banking

1. Banking system

2. Monetary developments. 1994–95

3. Interest rates and reserve requirements

VI. External Trade and Payments

1. Current account

2. Capital account and reserves

3. External debt and debt service

4. Exchange rate developments

5. Exchange and trade system

APPENDIX I

Bibliography

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World Bank sources:

Official sources:

Other sources:

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