The International Monetary Fund said Friday it had completed the eleventh review of Guinea-Bissau’s economic reform program, unlocking a fresh disbursement of about US$1.6 million as the West African nation continues to implement fiscal and structural reforms despite mounting global economic uncertainties.
The IMF Executive Board approved the latest review under the country’s Extended Credit Facility (ECF) arrangement, allowing for the immediate release of 1.18 million Special Drawing Rights (SDRs), equivalent to roughly US$1.6 million. Total disbursements under the program have now reached SDR 38.59 million, or approximately US$54.8 million.
The three-year ECF arrangement, approved in January 2023 and later expanded in November of the same year, aims to strengthen debt sustainability, improve governance, reduce corruption and create fiscal space to support inclusive economic growth.
According to the IMF, Guinea-Bissau’s performance under the program has remained strong, with all quantitative performance criteria and indicative targets for the end of March 2026 achieved. The country also met all continuous structural benchmarks and performance criteria, demonstrating what the Fund described as firm policy implementation and commitment to reforms.
The Board also approved modifications to performance criteria relating to domestic tax revenue and the domestic primary balance, while completing a review of financing assurances.
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The IMF said economic growth in Guinea-Bissau was estimated at 5.8 percent in 2025, exceeding earlier projections. The expansion was driven largely by strong agricultural output, particularly cashew exports, which remain a cornerstone of the country’s economy, as well as sustained private-sector investment.
However, the Fund warned that growth is expected to slow in 2026 due to a more difficult external environment.
Rising global fuel prices linked to the conflict in the Middle East, together with risks affecting the cashew harvest, could weigh on economic activity. The IMF also cited adverse weather conditions, terms-of-trade shocks and tighter financing conditions as key downside risks facing the economy.
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To preserve macroeconomic stability, the Fund urged the authorities to maintain fiscal discipline, strengthen cash and debt management, and continue prioritizing public spending. It also encouraged efforts to diversify the economy, particularly through the fisheries and extractive industries.
The IMF highlighted the role of technical assistance and capacity development in supporting Guinea-Bissau’s reform agenda.
Since 2023, spending on capacity development programs has nearly doubled, reaching around $6 million over the 2023-2026 period and remaining above the average level for sub-Saharan Africa.
Support has focused primarily on tax policy and revenue administration, alongside improvements in public financial management, statistics and debt management.
According to the Fund, these efforts have contributed to a number of significant reforms, including the replacement of the sales tax with a value-added tax, the digitalization of revenue administration and stronger tax audit procedures.
The reforms have also helped authorities control public sector wages, reducing the wage bill by more than two percent of gross domestic product, while improving oversight of state-owned enterprises.
The IMF noted that losses at the country’s electricity and water utility, previously exceeding one percent of GDP, had been eliminated.
In a statement following the Board’s decision, IMF Deputy Managing Director and Acting Chair Bo Li said Guinea-Bissau had demonstrated resilience despite a challenging political and economic environment.
He said stronger-than-expected growth, restored fiscal discipline and solid program implementation reflected the authorities’ commitment to reform.
Li stressed that continued implementation of the IMF-backed program would be essential to maintaining economic stability, limiting debt vulnerabilities and addressing development needs, particularly amid elevated fuel prices.
He also welcomed ongoing efforts to increase domestic revenue collection through improved customs procedures and stronger monitoring of large taxpayers.
The IMF further praised progress on structural reforms, including the authorities’ withdrawal from an undercapitalized bank after a private investor injected fresh capital under a restructuring plan.
Authorities have also made advances in diversifying the country’s energy supply, measures the Fund said would help improve the business environment and support broader economic diversification in the years ahead.
