Guinea Gets $37.7 Million In Extra IMF Financing to Help Combat Ebola

IMF Executive Board approves release of $25.9 million under existing program

Board also boosts financing under program by additional $37.7 million

Guinea sets up special budget account to channel Ebola-related spending

The IMF said the move aimed to enhance Guinea’s international reserves, cover its budget, and meet urgent balance of payments needs resulting from the Ebola crisis.

The package of extra IMF financing for Guinea comes on top of $100 million in debt relief funded by IMF grants, announced earlier this month. The debt relief followed $130 million in emergency assistance the IMF disbursed in September 2014 to the African countries worst hit by the Ebola outbreak—Guinea, Liberia, and Sierra Leone.

An IMF statement said the Board completed a review of Guinea’s economic performance under a program supported by a three-year Extended Credit Facility loan of $199 million approved in February 2012. All quantitative performance criteria had been met, but with the authorities focused on combating the Ebola outbreak, structural reforms had slowed and implementation of some benchmarks had been delayed. The program was extended to end-December 2015.

IMF staff said in a report that Guinea’s 2015 economic policies would support the fight against the Ebola outbreak, which looks set to persist well into the year and tip the economy into recession this year. The staff said a concerted international effort is required to help the authorities fully implement their Ebola response plan.

Special budget account

Guinea’s 2015 budget projects a wider deficit, in part to allow Ebola-related spending. Guinea’s authorities have created a special budget account to channel resources such as grants and concessional loans into Ebola-related spending. IMF staff noted that the special account would also help to ensure transparency and provide assurances to donors.

In its report, IMF staff said the Ebola outbreak had slowed Guinea’s economy, with 2014 growth projected at 0.4 percent compared with 2.3 percent in 2013. Economic activity was severely hampered by border closures and controls, population displacements...