IMF Staff Completes 2018 Article IV and First ECF Review Mission to Burkina Faso

November 1, 2018

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
  • Growth is expected to stabilize at 6 percent in 2018, but there are downside risks to the outlook.
  • The mission had extensive discussions with the authorities on policies going forward that would permit the IMF Executive Board to complete the first review of the ECF supported program.
  • Discussions also focused on policies to achieve the WAEMU 3 percent of GDP fiscal deficit target in 2019.

An International Monetary Fund (IMF) mission, led by Dalia Hakura, visited Ouagadougou during October 18-30, 2018 to conduct the discussions for the 2018 Article IV consultation and the first review of Burkina Faso’s economic and financial program supported by the IMF Extended Credit Facility (ECF) arrangement.

At the end of the visit, Ms. Hakura issued the following statement:

“GDP grew by an estimated 6.3 percent in 2017, up from 5.9 percent in 2016. Mining and the service sector were the main contributors to growth, while agricultural output contracted due to drought and pests affecting harvests. Inflation was 2.1 percent year-on-year at end-December 2017 and has remained at that level in 2018.

“Despite a 1.3 percentage points of GDP increase in tax revenue collection, the overall fiscal deficit widened sharply in 2017. The widening of the fiscal deficit was mainly driven by increases in public investment spending and faster than expected increases in wages and salaries and transfers. Public debt remained unchanged at 37.7 percent of GDP, as the impact of new borrowing was offset by the appreciation of the euro against the dollar in 2017 and robust GDP growth.

“The mission projects that GDP growth will stabilize at 6 percent in 2018, reflecting the drag from the security situation, the adverse impact of public sector strikes on private sector economic activity, and fiscal consolidation. Anchored by the peg to the euro, inflation is projected to remain around 2 percent per year.

“The balance of risks to the outlook is tilted to the downside as security threats may begin to weigh on mining and tourism, while social tensions could continue to impact government revenue collection and would add to pressures for increased current expenditures, thereby further reducing space for high-priority spending. In addition to its continued exposure to commodity price shocks (gold and cotton), Burkina Faso could be affected by spillovers from tightening global financing conditions, intensified protectionism, and weaker-than-expected global growth.

“The immediate challenge for the Burkinabe authorities is to pursue development and security objectives in a manner consistent with strengthening public finances and contributing to regional stability. Accordingly, the ECF-supported program targets a reduction in the overall fiscal deficit to 3 percent of GDP by 2019. For the near-to-medium term, it focuses on creating fiscal space for priority investment, social, and security spending through additional revenue mobilization; containment of recurrent spending, particularly the wage bill; and improved spending efficiency.

“Performance under the ECF-supported program was broadly satisfactory in the first half of 2018. However, tax revenue collections were 0.4 percentage points of GDP lower than projected, while domestically-financed capital spending was one half of what had been projected. All but one quantitative performance criteria and all indicative targets for end-June were met, and three of the six structural benchmarks for the first review under the ECF arrangement were completed while good progress was made on the remaining three.

“The mission had extensive discussions with the authorities on policies going forward that would permit the IMF Executive Board to complete the first review of the ECF supported program.”

The team met with Prime Minister Paul Kaba Thiéba, Minister of Economy, Finance, and Development Hadizatou Rosine Sori/Coulibaly, Minister Delegate responsible for the budget Edith Clémence Yaka, Minister of Agriculture Jacob Ouédraogo, Minister of Public Administration Séni Mahamoudou Ouédraogo, Minister of Security Clément Sawasogo and other senior government officials. The mission also met with the National Director of the Central Bank of West African States Charles Luanga Ki-Zerbo, and representatives of the private sector and civil society, and development partners.

The mission is grateful to the authorities for their warm hospitality and productive discussions.

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Lucie Mboto Fouda

Phone: +1 202 623-7100Email: MEDIA@IMF.org