IMF国际货币组织全球-Guinea_Third-Review-Under-the-Extended-Credit-Facility-Arrangement-Request-for-Modification-of-Performance-Criterion-and-Financing-Assurances-Review_121页_3mb

Guinea: IMF Third Review Under the Extended Credit Facility Arrangement

Core Content

The IMF completed the third review under Guinea's Extended Credit Facility (ECF) arrangement on July 26, 2019, and approved the disbursement of SDR 17.213 million (about US$23.9 million), bringing total disbursements under the arrangement to SDR 68.849 million (about US$95.7 million). The review also included a request for modification of performance criteria and a financing assurances review.

Guinea's ECF arrangement, approved in December 2017, aims to support high and broad-based growth, reduce poverty, and preserve macroeconomic stability. It is aligned with the 2016-20 National Social and Economic Development Plan (PNDES) and is part of the IMF's Capacity Building Framework for fragile states.

Main Views and Key Information

Economic Performance

• Growth Momentum: Guinea's real growth was 5.8% in 2018 and is expected to remain around 6% in 2019-20.
• Fiscal Performance:
  • A basic fiscal surplus of 0.8% of GDP was achieved at end-2018.
  • At end-March 2019, a surplus of 0.4% of GDP was recorded.
  • The program's indicative targets on tax revenue and new domestic arrears were not met, due to social unrest and delays in revenue mobilization measures.
• Program Performance:
  • Overall performance against end-December 2018 targets was satisfactory.
  • Most indicative targets (ITs) were met by end-March 2019.
  • Two out of four structural benchmarks were met, with substantial progress on the other two, expected to be fully completed by end-2019.

Program Strategy

• Fiscal Adjustments: Additional measures were implemented to achieve the end-2019 fiscal target, including:
  • Increased electricity tariffs to reduce untargeted subsidies.
  • Mobilization of additional non-tax revenues.
  • Containing public expenditures.
  • Rephasing non-priority public investments.
• Public Investment: Scaling up public investment in infrastructure while preserving debt sustainability remains a key focus.
• Social Safety Nets: Strengthening targeted social safety nets is prioritized to protect the most vulnerable and reduce poverty.
• Monetary Policy: Maintaining a prudent monetary policy to moderate inflation and limit central bank lending to the government.
• Exchange Rate Flexibility: Enhancing competition in the foreign exchange market and finalizing a rule-based intervention strategy to build external buffers.
• Debt Sustainability: Ensuring non-concessional borrowing stays within programmed levels and maximizing debt concessionality.

Risks and Outlook

• Growth Outlook: Favorable, with real growth expected at about 6% in 2019-20.
• Downside Risks:
  • Social unrest and political instability before legislative and presidential elections could weaken growth, policy discipline, and reform implementation.
  • Delays in mining projects, decline in commodity prices, weaker demand for bauxite due to tariffs, and constraints in public investment execution may affect medium-term growth.
• Current Account: Expected to remain at about 19% of GDP in 2019-20, financed by large FDI inflows and external project loans.
• Reserves: International reserves are projected to increase to 3.8 months of import coverage by 2020.

Key Reforms and Initiatives

• Tax Reforms:
  • Programmed tax measures mobilized 0.05% of GDP in additional revenues by end-May 2019.
  • Performance contracts with tax authorities were signed to improve revenue collection.
  • A new organizational structure for the Directorate of Taxes (DNI) was adopted, along with a permanent tax number system for businesses.
• Structural Reforms:
  • Reforms to reduce untargeted electricity subsidies, improve public financial management, and strengthen governance and the business climate are advancing.
• Debt Management:
  • Maintaining non-concessional loans within programmed amounts and improving debt management to preserve sustainability.
• Private Sector Development:
  • Efforts to improve the business climate and governance are expected to support private sector development in the medium term.

Program Modality and Disbursements

• The disbursement of SDR 17.213 million is expected to catalyze donor support.
• The revised fiscal framework for 2019 includes additional adjustment measures totaling about 1.3% of GDP and a modest easing of the end-year target to avoid excessive contraction in spending.
• The quarterly fiscal path was re-profiled, with a basic fiscal surplus of 0.3% of GDP expected at end-June 2019 and 0.4% at end-September 2019.

Conclusion

The IMF staff supports the authorities' request for the completion of the third review and the modification of performance criteria. While program performance has been satisfactory, the country faces significant risks, particularly related to social and political instability, which could impact the sustainability of reforms and economic growth. Continued strong program ownership and implementation are essential to achieve the program's objectives and ensure macroeconomic stability.