Evaluation of the impact of a first grant under the African economic policy reform program (AEPRP) in Guinea : English summary report

A $10 million AEPRP grant, aimed at providing balance of payment assistance in support of Guinea's economic policy reform efforts, was authorized in 9/86, and the first tranche ($5 million) was released in 6/87. The second tranche had not yet been released as of this 5/88 evaluation. The performance of Guinea in implementing a comprehensive program of macroeconomic policy reform has been clearly outstanding, at least during the period late 1985-mid 1987). However, a number of more specific microeconomic conditions of the AEPRP grant have not yet been met. In particular, the government is reluctant to liquidate the two existing state-owned agricultural input enterprises (AGRIMA and SEMAPE); a flexible approach is recommended. The Guinean government is confronted with major political, economic, and social difficulties. Vigorous action is required to reactivate the macroeconomic policy reform program undertaken in late 1985. Key issues to be addressed are exchange rate management, budget performance, wage policy, and food prices. Most of these issues will be discussed with a joint International Monetary Fund (IMF)/World Bank mission tentatively scheduled for late June 1988. If the Guinean government takes the appropriate measures to address these critical macroeconomic policy issues, A.I.D. should definitely join with other donors to provide additional quick disbursing policy-based financing in support of the Guinean reform program. Future AEPRP assistance should be linked with improved food pricing policy, a key issue for the long-term future of the agricultural sector in Guinea. (Author abstract,modified)