Guinea Bissau: IMF considers macroeconomic climate “difficult” despite improvements in 2007

19 November 2007

Bissau, Guinea Bissau, 19 Nov – The macroeconomic situation in Guinea Bissau is “difficult” despite improvements seen in gathering taxes between July and October this year, Catherine McAuliffe of the International Monetary Fund (IMF) said Saturday in Bissau.

According to McAuliffe, the head of an IMF mission that has been in Bissau for the last two weeks to assess the country’s macroeconomic situation, the improvements made it possible to increase tax revenues by 28 percent.

This situation is an improvement in relation to the same period of 2006 when tax revenues fell by 13 percent year on year.

For the IMF this factor was possible due to a Public Finances clean up program put in practice by the government since Apriil this year, and the results of which “begin to be seen” namely at a level of controlling expenses and a transparent management of public funds.

“Despite this improvement in the management of Public Finance, the situation remains difficult,” said McAuliffe, who also said she believed that Guinea Bissau could see “better days” in 2008 with the consolidation of the Public Finance clean up program.

The head of the IMF mission also said that, due to the information she had received, the IMF could, as of January 2008, sign a Post-Conflict Assistance agreement, a tool which the Guinean Finance Minister, Issuf Sanhá said was crucial for the country’s macroeconomic stability.

With the signing of this agreement, in negotiation since 2003, Guinea Bissau will receive substantial help of US$5.5 million, the first tranche of which is expected to be released in January, McAuliffe said. (macauhub)