Supporting Guinea Bissau’s Fresh Start to a More Prosperous Future | WPN World People News

On March 24, the World Bank Group announced that it is resuming development operations in the West African nation of Guinea Bissau. The announcement came during a discussion by the Bank’s Board of Executive Directors on the future of its relationship with Guinea Bissau after the Bank suspended operations following a military coup.

The Bank’s recommendations for re-engagement and other policy measures, contained in a Guinea Bissau Country Engagement Note, lay out the milestones for World Bank Group support to the country over a 2015-2016 period. It signals the normalization of relations between the Bank Group and Guinea Bissau, and is designed to provide immediate short-term support to the government, to help build key institutions, to strengthen public sector capacity, and restore essential services.

“This Country Engagement Note marks a resumption in the World Bank’s continued support for Guinea Bissau, and will provide critical help for the country over the next two years. It will also pave the way for the country’s transition from a post-conflict crisis situation to that of sustained peace and rapid development,” said Vera Songwe, World Bank Country Director for Guinea Bissau.

Guinea Bissau is one of the few countries in Africa where poverty has stagnated or even increased over the past few years. Official estimates show poverty (at US$2 per day or less) at 69% and extreme poverty (under US$1 per day or less) at 33% in 2010. Following a military coup in April 2012, general elections in 2014 marked a return to constitutional order and an opportunity for donors to recommit their support in support of a peace dividend for the people of Guinea Bissau.

The World Bank’s new commitments are part of a broader coordinated effort by the international community, including the International Monetary Fund, the European Union, the African Development Bank and others to provide comprehensive support to the new government. The Bank held extensive consultations in crafting its new engagement strategy with all stakeholders within Guinea Bissau, including the government, members of civil society, the private sector, and development partners.

The Bank’s support under the CEN will focus on the short-term stabilization needs of the government which include building institutions and public sector capacity, and strengthening the provision of basic services to the poor. As a first step towards re-engagement the WBG Board also approved US$5 million for the Public Sector Strengthening Project on March 24. This financing in both IDA credits and grants will improve Guinea Bissau’s public finance management in order to create a foundation for enhanced transparency and accountability in the management and use of public resources.

The Bank will leverage IDA, IFC and MIGA interventions and will build on robust knowledge and analytical work including a recent Country Economic Memorandum and an ongoing Systematic Country Diagnostic. The proposed support is in line with the 2011 World Development Report on Conflict and the IDA17 focus on fragile states.

As part of the World Bank Group's re-engagement in Guinea Bissau, IFC is working with the World Bank to support the improvement of service delivery with private sector participation in key infrastructure sectors including water, electricity, and ports. IFC will also directly finance private sector projects to encourage others to invest, as well as improve the investment climate and enhance both access to finance and the capacity of the country's small and medium enterprises.

"Guinea Bissau presents promising opportunities for private enterprise, however, some of the fundamentals need to be in place to attract investors," said Jerome Cretegny, IFC Principal Country Officer for Guinea Bissau. "IFC's objective is to help create a favorable environment in which the private sector can play its role as an engine of economic growth and job creation."

The Bank Group’s re-engagement comes on the eve of an International Donors’ Conference for Guinea Bissau taking place in Brussels on March 25th. It will build upon the country’s positive momentum, bringing together the international community to endorse Guinea Bissau’s Strategic and Operational Plan for the period 2015-2020. The World Bank Group plans to pledge about US$250 million over the next 5 years.

The conference will also bring together stakeholders and potential private investors, particularly those seeking investment opportunities in Guinea Bissau’s primary sectors such as rice, fisheries and cashew. Cashews are the country’s most important agricultural product, grown by close to 55% of all agricultural households, and representing about 90% of the country’s exports.

Source: World Bank