The Executive Board of the International Monetary Fund (IMF) has approved an emergency financial assistance under the Rapid Credit Facility (RCF) in the equivalent of Special Drawing Right (SDR) 3.55 million (about US$5.4 million) for
An IMF statement obtained by PANA in New York on Tuesday said the fund would enable the country’s authorities to meet their urgent balance of payment and fiscal needs.
It said the board’s approval enabled the immediate disbursement of the full amount, which is equivalent to 25 per cent of Guinea Bissau’s quota in the IMF.
The statement also said the IMF financial assistance was aimed at restoring macroeconomic stability and addressing urgent budgetary and balance of payments gaps, reducing poverty by resuming key government services and strengthening the capacity of the government of Guinea-Bissau.
The approval of the RCF disbursement would also enable the authorities to engage in discussions with development partners regarding further assistance, it said
The IMF noted that the newly elected government inherited very difficult conditions, saying: “After two years of economic disruption, eroded government revenues, a compression in
social spending and accumulated external and domestic arrears, real gross domestic
product (GDP) fell by 2 per cent and poverty increased markedly.”
Mr. Min Zhu, IMF Deputy Managing Director and acting board’s chair, said: “The
newly-elected government of Guinea-Bissau is taking action to confront the country’s
economic and social challenges.
“To maintain macroeconomic stability, the government must continue with a prudent fiscal policy that limits spending to available resources and prioritises it carefully.”