Since January 2023, Guinea-Bissau has benefited from an IMF extended credit facility agreement subject to periodic reviews for the disbursement of instalments of the agreed total figure of almost US$79 million (€67.5 million).
In order to access a further US$3.2 million (€2.7 million), which would bring the amount already disbursed to US$51.3 million (€43.8 million), Guinea-Bissau will have to comply with certain conditions agreed with the IMF as part of the new review of the agreement, the Fund announced today.
An IMF team, led by Niko Hobdari, head of the Mission for Guinea-Bissau, held meetings in Bissau between 23 September and 3 October 2025 to discuss macroeconomic policies in the context of the ninth review of the agreement.
According to the financial institution, Guinea-Bissau has agreed to the conditions for the design of another tranche of the loan, which is now dependent on the implementation of previously agreed actions and is subject to approval by the IMF Management and consideration by the Executive Board.
According to the IMF team’s conclusions, released in a statement, the Guinea-Bissau authorities “have committed to a package of corrective measures to reduce the deficit to 4.2% of GDP in 2025.” Forecasts indicate that the country will reach the end of 2025 with economic growth of 5.5% and inflation falling to 2%.
The IMF attributes economic growth “to strong cashew nut production and improvements in terms of trade,” coupled with “strong private consumption and investment.” However, the analysis points out that the deficit “is likely to be higher than expected, reflecting a decline in revenues.”
According to the IMF team’s conclusions, released in a statement, the Guinea-Bissau authorities “have committed to a package of corrective measures to reduce the deficit to 4.2% of GDP in 2025 (Photo by SAMBA BALDE / AFP)
The country’s performance is described as “mixed,” with seven of the ten Quantitative Performance Criteria (QPC) met for June 2025. According to the Fund, Guinea-Bissau missed the wage bill criterion “by a small margin” and also violated the zero ceiling for non-regularised expenditure (DNT) and the criterion on other common expenditure.
“However, the authorities continue to make progress on the structural benchmarks, albeit with some delays,” it notes. The IMF believes that “the 2025 budget faces significant pressures due to lower-than-expected revenues” and spending in the first half of the year, which has skyrocketed.
In this context, the authorities are committed to implementing a set of corrective fiscal measures to achieve the revised deficit target of 4.2% of GDP (Gross Domestic Product) in 2025,” it says.
The statement adds that the Guinea-Bissau government plans to “introduce new measures to increase domestic revenue mobilisation and strengthen expenditure controls in 2026, with the aim of achieving a fiscal deficit target of 3.5% of GDP”.
The IMF specifies that the necessary structural reforms should include improving “governance and combating corruption, and efforts to invest in infrastructure and ensure the supply of backup energy.”
On the fiscal front, it argues that “the authorities should rationalise tax exemptions, accelerate tax administration reforms, and strengthen the implementation of the new Value Added Tax to create fiscal space for much-needed development spending.”
To ensure fiscal sustainability, the IMF considers that “managing the fiscal risks of public enterprises and the banking sector and seeking highly concessional grants and loans will be essential.”
Platform with Lusa
