Tunis — The Board of Directors of the African Development Bank (AfDB) Group on Wednesday 17 March 2010 in Tunis approved a USD 8.7 million grant for Guinea Bissau. The budget support grant comprising USD 6.1 million from the Fragile States Facility (FSF) and USD 2.6 million from the African Development Fund (ADF) will help the country reduce its budget deficit.

The grant will also help Guinea Bissau mitigate the shocks caused by the global economic crisis and the difficult political situation. The programme will help strengthen budgetary reforms started in 2007, and will make budgetary operations more credible and transparent. Thus, it will enable the government to pursue its economic programme as well as important institutional reforms.

Since 2007, the country has put in place a fiscal consolidation programme whose action plan was validated recently by the government and the development partners. According to Gabriel Negatu, Director of the Economic and Financial Governance Department, "these efforts have enabled progress in terms of fiscal and macroeconomic performance, even if the results are still at a fragile stage. The Emergency Fiscal Reform Support Programme of the bank and the complementary support aiming to reinforce institutional capabilities provided by the bank, will be closely monitored and coordinated with the other partners. This support will allow to reinforce the effectiveness of economic policy and to stabilize the economy after several years of conflict."

Guinea Bissau is classed among the poorest countries in Africa. The global crisis and the political context impacted negatively on the overall economic situation in 2009. Indeed, the drop in world cashew nut prices by more than 30% (the country's main export product), and the uncertain business climate led to a slowdown in economic growth and intense pressures on major internal and external balances.

Contacts

Senvyraj Maistry