Guinea to get $25.6 million IMF payment under Extended Credit Facility

Following the sixth and seventh reviews of an International Monetary Fund (IMF) Extended Credit Facility (ECF) arrangement, a payment of $25.6 million will be disbursed to Guinea, the IMF said on Tuesday.

The original arrangement, which was for $200 million, was approved by the IMF in 2012.

Abdoul Aziz Wane, an IMF Executive Board member who led the mission during which the reviews took place, said that since the ECF was approved, Guinea's economy has suffered due to the Ebola epidemic and tumbling commodity prices.

"Beyond the impact of these shocks, policy slippages have increased macroeconomic tensions," Wane said. "The fiscal deficit increased, without adequate financing being secured, as the authorities sought to implement a large public investment program in roads, electricity and water."

Consequently, increased spending has led to shrinking international reserves, as well as an increase in exchange rates.

"Most performance criteria and indicative targets under the ECF arrangement in 2015 were not met," Wane said. "Against the backdrop of weak economic growth and low fuel prices, inflation has remained subdued at some 7.5 percent at end-November 2015."

Still, as the Ebola epidemic ended, Wane said, the economy began to rebound.

"The fiscal deficit will be limited to what can be financed through secured external budget support and project loans, and limited recourse to domestic financing, avoiding the (incurring) of any new arrears," Wane said.

Members of the mission urged Guinea officials to make the nation's private investments more transparent.

“The IMF team thanks the authorities for their hospitality and for the constructive discussions,” Wane said.