IMF Executive Board Completes Second Review Under the ECF Arrangement with Nation and Approves U.S.$3.85 Million Disbursement

International Monetary Fund (Washington, DC)

25 May 2011

press release

The Executive Board of the International Monetary Fund (IMF) has completed the second review of Guinea-Bissau’s economic performance under a three-year Extended Credit Facility (ECF) arrangement.1 The Board’s decision, which was taken on a lapse-of-time basis,2 enables the authorities to draw an additional SDR 2.414 million (about US$3.85 million), bringing total disbursements under the arrangement to an amount equivalent to SDR 12.709 million (about US$20.27 million).

Satisfactory policy implementation continues in the Fund-supported program under challenging conditions. The authorities have met all performance criteria through end-December 2010 and all structural reforms for the second review.

Sound macroeconomic policies, strengthened institutions, and debt relief have stabilized the economy and supported confidence building. While medium-term growth prospects are bright, huge developmental challenges remain. It is critical that the government maintain the reform momentum and continue to build on the satisfactory performance under the ECF.

The three-year ECF arrangement for Guinea-Bissau was approved on May 7, 2010 (see Press Release No. 10/185) in an amount equivalent to SDR 22.365 million (about US$33.3 million, or 157.5 percent of the country’s quota in the Fund). On December 16, 2010 the Executive Boards of the IMF and the World Bank’s International Development Association decided to support US$1.2 billion in debt relief for Guinea-Bissau under the Heavily Indebted Poor Countries (HIPC) Enhanced Initiative and the Multilateral Debt Relief Initiative (MDRI—see Press Release No. 10/498).

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