2024-05-26-世界银行-几内亚比绍经济更新_2024年春季_消除财政风险（英）_60页_1mb

Summary of "Retiring the Fiscal Risk" - Guinea-Bissau Economic Update, Spring 2024

### **Introduction**
This Economic Update examines Guinea-Bissau's economy and the fiscal risks associated with its public pension system. The authorities' program aims to improve fiscal space by rationalizing and consolidating public expenditure, though implementation has been hampered by weak governance, limited data, and institutional constraints.

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### **Chapter 1: State of the Economy**

#### **Key Economic Highlights**
1. **Growth and Fiscal Performance**  
   - GDP growth was 4.2% in 2023, below potential due to challenges in translating high cashew production into economic growth.  
   - Fiscal deficit widened to 7.6% of GDP (from 6.1% in 2022), driven by reduced revenues (total revenues fell to 13.9% of GDP) and high discretionary spending.  
   - Public debt remained high at 77.8% of GDP, supported by grants but constrained by weak domestic revenue mobilization.

2. **Macroeconomic Challenges**  
   - Headline inflation averaged 7.2%, eased from 10% in 2023 due to supply chain improvements and price controls.  
   - Banking sector fragility (a lackluster SIB with high NPLs) poses a contingent fiscal risk, exacerbated by limited private sector lending.  
   - Poverty increased by 80,000 additional poor persons between 2018-2021, with rural areas being disproportionately affected.

3. **External and Revenue Challenges**  
   - Current Account Deficit (CAD) narrowed slightly to 9.4% of GDP in 2023 due to improved cashew exports and inflation moderation.  
   - IMF SDR allocation (US$38.4 million) helped mitigate external financing gaps, but fiscal consolidation remained challenging amid political instability.

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### **Chapter 2: Public Sector Pension Scheme**

#### **Pension Scheme Challenges**
- The system design lacks sustainability: the 2.8% accrual rate is high relative to a 6% contribution rate, creating a fiscal imbalance.  
- **Governance Issues**:  
   – Pension payments are often manipulated (discretionary adjustments to individual pensions), capturing public funds without accountability.  
   – Inequities prevail: 8.0% of the elderly population (over 60) receive pensions, but pensioners in the informal sector are excluded.  
   – Administrative inefficiencies include delayed or missing birth records, hindering benefit eligibility verification.  
- Fiscal Burden: Public pensions consume 6.8% of overall expenditure (equivalent to 10% of fiscal revenue), straining the budget.

#### **Key Recommendations**
1. **Design Reforms**  
   – Align contributory and benefit formulas with regional best practices (e.g., lower accrual rates, lifetime average salary basis).  
   – Integrate the pending and regular pension schemes to streamline eligibility and reduce leakage.

2. **Governance Improvements**  
   – Formalize pension administration to include continuous birth records and mandatory lifetime databases.  
   – Reduce discretionary payments by adopting transparent and rule-based systems.

3. **Fiscal Space**  
   – Explore a *Pension Fund Model* using PROST toolkit to forecast costs and evaluate reforms with parametric adjustments.  
   – Avoid creating a pension fund at this stage due to governance risks; instead, focus on grant-funded reforms to bolster DRM capacity.

4. **Medium-Term Goals**  
   – Reduce the systemic dependency ratio by improving life expectancy projections and aged workforce planning.  
   – Index pensions to inflation for stability and rebuild fiscal buffers through reduced grant dependency.

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### **Annex Summaries**
- **Annex 1**: A simple model demonstrates how balancing the pension system requires at least a 134% contribution rate increase (from 6%-equivalent), highlighting the gravity of reforms needed.  
- **Annex 2**: Key recommendations stress governance, transparency, lower contribution rates, and defined benefit structures to mitigate risks and ensure long-term fiscal health.