ABIDJAN Dec 2 The International Monetary Fund
(IMF) on Friday resumed payments to Guinea-Bissau which were
suspended in June over the government's loan bailouts for two
The decision by the IMF's board could also lead donors,
which also suspended budget support equal to 2.1 percent of GDP
for this year, to follow suit.
Total donor contributions, including direct budget support
and financing for targeted sectors and projects, typically make
up around 80 percent of Guinea-Bissau's budget.
"The authorities' resolute stance in unwinding the bank
bailouts is welcome," Mr. David Lipton, the IMF's First Deputy
Managing Director, said in a statement following the board
"Following through all steps until the bailouts are
irreversibly unwound will be important to safeguard public
finance," he said.
The IMF agreed a programme with Guinea-Bissau last year
after 2014 elections followed a coup two years earlier, one of a
succession that spawned political instability and helped make
the West African country a haven for South American cocaine
Disbursements were suspended, however, after the government
took on 34 billion CFA francs ($58.3 million) in bad loans from
Banco da Africa Ocidental and Banco da União whose value
amounted to around 5.5 percent of GDP.
The IMF had argued the bailouts benefited the wealthiest
citizens and foreign investors. Authorities had said they were
needed to shield the private sector from bankruptcy.
The IMF will now disburse $6.9 million, bringing total
disbursements to date under the three-year programme to about
$10.8million, the statement said.
(Reporting by Joe Bavier)