The International Monetary Fund has approved additional financing for Guinea-Bissau following the completion of two programme reviews, even as it highlighted weak reform progress and growing vulnerabilities in the fragile economy.
The IMF stated that its Executive Board had finalised the ninth and tenth reviews of Guinea-Bissau’s Extended Credit Facility (ECF), releasing approximately $3.2 million in new funds.
This disbursement raises the total support under the programme, which began in January 2023, to around $50.8 million.
The three-year initiative is designed to stabilise public finances, strengthen governance, reduce corruption, and create conditions for broader economic expansion.
Despite the fresh funding, the Fund noted that implementation of the programme had been inadequate.
In 2025, several key benchmarks were missed, including most of the quantitative performance criteria and all continuous structural targets, reflecting policy lapses and political disturbances toward the end of the year.
To maintain programme continuity, the IMF granted waivers for missed targets, adjusted future benchmarks, and extended the ECF arrangement by one year to December 2026.
The country’s economy, however, showed resilience. Growth was estimated at 5.5 per cent in 2025, largely driven by strong cashew production, the nation’s main export, and supportive trade conditions.
Inflation remained low at below 1 per cent, and the current account deficit narrowed during the year.
Fiscal challenges persisted, with the budget deficit widening more than anticipated due to weak revenue collection, higher interest payments, and lower external aid.
Public debt fell slightly to roughly 75 per cent of GDP, though the IMF cautioned that sustained reductions would require stricter fiscal discipline.
“The economy of Guinea-Bissau has shown continued resilience… Program performance was negatively affected by policy slippages as well as political disruptions,” said IMF Deputy Managing Director Bo Li.
Looking forward, the Fund noted that the government’s 2026 budget targets stronger fiscal consolidation, including deficit reduction and enhanced revenue collection through stricter tax enforcement and improved customs valuation.
Financial sector reforms have progressed, including efforts to recapitalise a struggling bank, though the IMF emphasised that timely completion is crucial for restoring stability.
Early reforms in the energy sector have helped reduce losses at the state electricity company and improve cost recovery, while the government is exploring ways to expand electricity supply through regional partnerships and private investment.
Governance initiatives have also advanced, particularly in enhancing transparency around public procurement, though the IMF stressed the need for further measures to strengthen accountability and improve the business climate.
Guinea-Bissau remains one of the world’s poorest nations, highly dependent on cashew exports and susceptible to political instability.
The IMF warned that downside risks remain high, highlighting the importance of sustained reform efforts and stronger policy discipline to secure economic stability.