Guinea-Bissau: Good cashew prices boost household incomes in Guinea-Bissau

Bissau, Guinea-Bissau (PANA) - Record high prices of cashew have significantly increased incomes for rural households in Guinea-Bissau, besides supporting general economic activity in the West African country, according to an International Monetary Fund (IMF) that has just concluded a two-week visit to the capital, Bissau.

Looking ahead, however, the team concluded the visit on Tuesday suggesting that it will be important for the government to make inroads on diversifying the economy and reducing its reliance on cashew exports.

“This will require promoting an attractive business environment with stable and transparent regulation in support of healthy competition,” said Mr. Tobias Rasmussen who led the team in discussing with the government about economic and banking sector developments and the policies needed to lay foundations for sustained and broad-based economic growth.

In his end of mission statement, made available to PANA on Wednesday, Mr. Rasmussen noted that government’s economic programme supported by the IMF was broadly on-track and the mission was able to reach understandings, ad referendum, on policies needed to conclude the fourth Extended Credit Facility (ECF) review in December 2017.

Upon approval of the staff report for the 2017 Article IV consultation and the fourth ECF review by the IMF Executive Board, drawings of about US$4.3 million would become available to Guinea-Bissau, said the official.

“Programme implementation for the fourth review has been good. The mission welcomed the authorities’ strong commitment to the programme’s targets and its objectives of entrenching macroeconomic stability and advancing structural reforms to support strong and broad-based economic growth. All performance criteria and indicative targets for end-June 2017 were met, and there has been solid progress on structural reforms,” Mr. Rasmussen attested.

“Economic activity is buoyant. Real GDP growth for 2017 is now projected at 5.5 percent, with inflation around 2 percent and a broadly balanced external current account. The good results have been supported by record high prices of cashew.

“Prudent and effective fiscal management has improved the fiscal position and bolstered macroeconomic stability. Ongoing efforts to strengthen revenue mobilization, supported by technical assistance from the IMF and other partners, has supported a general upwards trend in collections."

He added that expenditure controls have been strengthened by more rigorous application of budgetary procedures. Debt management has also improved, including by consolidating outstanding loans from commercial banks and cancelling credit lines,” he added.

The IMF team suggested that advances in public financial management need to be broadened to include a structural overhaul of the wider public sector. This includes reforming the utility company, EAGB (Empresa de Eletricidade e Águas da Guiné-Bissau), to improve provision of water and electricity.
-0- PANA AR/MA 4Oct2017

04 october 2017 09:39:54

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