Guinea-Bissau: Fourth and Fifth Reviews Under the Extended Credit Facility Arrangement and Requests For Rephasing of Access, Waiver of Nonobservance of Performance Criteria, Modification of Performance Criteria, and Financing Assurances Review

A political crisis in December 2023 resulted in another change in the government. In December 2023, the former Minister of Finance and Secretary of State of Treasury from the opposition-led government were arrested over corruption charges related to settlement of cross-arrears and NPLs of the large and undercapitalized bank. This led to a deadly shootout between the National and Presidential Guards. The President considered this event as a coup attempt, dismissed the opposition-led government, dissolved Parliament elected in June 2023, and appointed the new government in December 2023. The new legislative election is planned for the last quarter of 2024 and the presidential election for 2025. The new government has restored the strong program commitments. During the four-month tenure, the previous government demonstrated weaker reform orientation, which caused significant policy slippages and delayed the program implementation. As prior actions, the new government is implementing strong corrective actions to keep on track with the fiscal consolidation path, reduce public debt, and achieve the program objectives.