Guinea-Bissau government pays debt to commercial banks and announces private sector payment

14 January 2010

Bissau, Guinea-Bissau, 14 Jan – Guinea-Bissau has paid in full the state’s debt to commercial banks operating in the country and will begin separately paying part of the debt to local businessmen, the Bissau government has announced.

About 14 billion CFA francs (approximately US$30 million) had been owed to commercial banks in the country, State Secretary for Treasury Carlos Varela Casimiro said on Wednesday.

The payment to commercial banks will enhance liquidity and make it easier for them to back private sector operations, especially during the commercialisation campaign for cashew nuts, Guinea-Bissau’s main export product and economic activity.

That industry has faced problems in recent years as banks claimed they lacked liquidity to grant loans to the respective businesses.

The government also plans to begin in the next few days paying part of the debt to the private sector, Casimiro announced, adding that 3.5 billion CFA francs were already available.

Some 17 billion CFA francs remain to be paid from the total so-called internal audited debt (debt contracted by the Guinea-Bissauan state from the local private sector until the 1998/99 civil war), he said.

The money to pay the debts to the private sector and the banks was either granted by international partners through budget assistance or comes from internal revenues.