Statement by an IMF Staff Mission to Burkina FasoPress Release No. 11/370
October 17, 2011
An International Monetary Fund (IMF) team visited Ouagadougou during September 29–October 14, 2011 to carry out discussions with the Burkinabè authorities on the third review of their economic and financial program supported by the IMF under the Extended Credit Facility (ECF); and on the 2011 Article IV consultation.
Ms. Malangu Kabedi-Mbuyi, IMF mission chief for Burkina Faso, issued the following statement in Ouagadougou today:
“Economic activity is recovering after a downturn in the first half of the year caused by the impact of adverse shocks, notably the social turmoil and the rise in global oil and food prices. As the recovery takes hold, supported by increases in public and private investment, and expansion in the mining sector, the real gross domestic product (GDP) is projected to remain above 5 ½ percent in 2011-12. Inflation has been trending down in 2011, and price pressures are expected to remain moderate thanks to a sustained food production. The annual average inflation rate is projected at 1.4 percent and 2 percent in 2011 and 2012 respectively. Burkina Faso’s external position is benefiting from increased exports earning from high global cotton and gold prices, and high capital inflows. Nonetheless, the current account deficit is projected to widen from 3.6 percent of GDP in 2011 to 6.9 percent partly reflecting high oil prices and the expected increase in domestic demand.
“Medium-term prospects are positive, and reflect the authorities’ commitment to increase the pace and quality of economic growth and reduce poverty, in line with the new growth strategy (Strategy for Accelerated and Sustainable Growth – SCADD). In this context, the authorities concurred with IMF staff on the need to continue fiscal consolidation efforts, covering revenue-enhancing measures and prudent expenditure policies, to pursue growth-enabling structural reforms, particularly aimed at increasing access to financial services for small-and medium sized enterprises, and improving the business climate. Diversifying the productive base will also be critical to support growth, and reduce the economy’s vulnerability to exogenous shocks.
“The mission found that program implementation at end-June was generally satisfactory. The authorities completed the audits of expenditure commitment systems in line ministries, and put in place an integrated system to monitor external financing. They also advanced cotton sector reforms, notably with the adoption, in consultation of other stakeholders, of a new mechanism to set up cotton producer prices. The authorities have also made commendable progress in preparing the implementation of structural reform measures planned for the remainder of 2011 and for 2012.
“The mission reached understandings with the authorities on a policy framework for 2011–12 that could form the basis for the completion of the third review under the ECF arrangement. Board consideration of the review could take place in early December.”