It is in a press release that the Board of Directors of the International Monetary Fund (IMF) announced on Monday, May 6, 2024 financial support for Guinea of 53.55 million SDRs (approximately 71 million dollars) under the exogenous shocks component of the rapid credit facility.
“…Guinea’s growth is expected to slow to 4.1% in 2024 due to fuel shortages and rebound to 5.6% in 2025, supported by a resilient mining sector.
Policies for 2024 aim to mitigate the impacts of the fuel explosion while minimizing gaps from medium-term growth and economic development goals.
In the medium term, the mobilization of domestic revenues, particularly from the mining sector, the modernization of tax administration, the improvement of public finance management and the efficiency of investments, as well as the increase in expenditure on Education, health and social protection, while anchoring spending on available resources, will help increase productivity and reduce poverty.
Emergency financial assistance under the Rapid Credit Facility will help address urgent balance of payments needs associated with the blowout of a major fuel import and storage facility in late 2023.
Urgent needs include those related to decontamination of the site, assistance to affected people, households and the reconstruction of buildings, infrastructure and a new fuel depot. A temporary easing of fiscal policy is warranted to respond to the explosion.
In the medium term, domestic revenue mobilization, particularly from the mining sector, and improved public financial management would create space to increase spending on education, health and social protection, thereby helping to boost growth. productivity, reduce poverty and preserve debt sustainability. Reforming the electricity sector to address shortages remains essential.”
Guinea remains exposed to a moderate risk of debt distress, with some room to absorb shocks. However, domestic debt vulnerabilities have increased, due to the issuance of Treasury bonds to finance significant public investment spending. Prudent macroeconomic policies, including maximizing the concessional nature of new debt, avoiding repeated accumulation of domestic arrears, strengthening debt management capacity and improving public investment management, remain essential to preserve the debt sustainability in the medium term…”, we could read in the press release published for this purpose.
Mohamed SOUMAH
2024-05-07 14:15:26