"Program performance was weaker than expected, reflecting the challenging economic and socio-political environment," the press release issued tonight in Washington reads, announcing that, even so, the fourth and fifth reviews of the Extended Credit Facility (ECF) Program were approved, allowing for an immediate disbursement of about €7.5 million. The government, says the IMF, is "firmly committed to implementing the reforms that underpin the program" approved in January 2023, which aims to reduce poverty, ensure debt sustainability, improve governance and reduce corruption, while creating fiscal space for inclusive growth".

Despite this, Guinea-Bissau needs to improve several aspects, including debt management and the fight against corruption, according to the IMF.

"Implementing a successful fiscal consolidation strategy is critical to reduce vulnerabilities and bring down the elevated levels of public debt," added the Deputy Director of the Fund, Bo Li, warning: "it is imperative to strengthen the implementation of structural reforms, including strengthening the anti-corruption framework, increasing transparency, improving the rule of law, and addressing weaknesses in the financial sector".

The approval of the fourth and fifth reviews of this adjustment program, which has already made available a total of US$25.7 million, about €23.8 million, out of a total of €35 million for the program, comes after several targets and objectives were changed to accommodate the difficulties in implementing the program, says the IMF.

"Continued implementation of structural reforms and fiscal consolidation will be crucial to ensure debt sustainability, strengthen financial stability, and create fiscal space for development policies," said Deputy Director of the Fund, Bo Li, adding that "program performance under the fourth and fifth reviews was weaker than expected, mainly due to policy slippages late last year and delays in reform implementation by the previous government".

The new government, however, "has demonstrated strong commitment to the program, taking concrete steps to address the previous deviations", namely in the areas of "additional revenue mobilization, reducing unsustainable subsidies, and strengthening controls on non-priority spending and the civil service".

Last year, Guinea-Bissau grew by 4.3%, with inflation at 7.2%, which would have reached double digits without tax cuts on fuel and food, and a budget deficit of 8.2%, in a country that has a debt-to-GDP ratio of 80.2%.

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