The group also approved financing under the programme by an extra 37.7 million US dollars.
The International Monetary Fund said the move aimed to enhance Guinea’s international reserves, cover its budget, and meet urgent balance of payment needs resulting from the Ebola crisis.
The package of extra IMF financing for Guinea comes on top of 100 million US dollars in debt relief funded by IMF grants.
The debt relief followed 130 million US dollars in emergency to the African countries worst hit by the Ebola outbreak—Guinea, Liberia, and Sierra Leone.
The fund’s statement said the board completed a review of Guinea’s economic performance under a programme supported by a three-year Extended Credit Facility loan of 199 million US dollars approved in 2012.
(READ MORE: Ebola shrinks West Africa’s poorest economies)
“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,” said the fund.
IMF staff said, 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 a recession this year.
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 said the Ebola outbreak had slowed Guinea’s economy, with 2014 growth projected at 0.4 per cent compared with 2.3 per cent in 2013.
“Economic activity was severely hampered by border closures and controls, population displacements that created farm labour shortages, fewer international visitors, and a falloff in foreign investment,” added the fund.
Guinea’s Ebola infection rate slowed and levelled out at the end of 2014, the report said.
“While concentrated in the south-east border region with Liberia and Sierra Leone, the epidemic has lately extended north toward bauxite and gold producing regions of the country,” added the IMF.
IMF said, uncertainty clouds Guinea’s medium-term outlook, the report said.
“Eradication of the Ebola epidemic this year should allow a broad-based recovery in activity and a GDP growth rebound in 2016. But persistent Ebola outbreaks beyond 2015 and a continued fall in commodity prices could reduce investor interest in developing Guinea’s large mining potential,” said the fund.
“Prospective growth and investment could also be adversely affected by continued delays in structural reforms, caused mainly by Ebola-related diversion of administrative resources and delays in planned external technical assistance.”
The fund also said, renewed socio-political tensions and political uncertainty could arise ahead of presidential elections scheduled for late 2015.