IMF Concludes Staff Mission to Burkina FasoPress Release No. 12/380
October 4, 2012
An International Monetary Fund (IMF) team visited Ouagadougou from September 19-October 3 to carry out discussions with the Burkinabè authorities on the fifth review of their economic and financial program supported by the IMF under the Extended Credit Facility (ECF). The mission met with Mr. Lucien Bembamba, Minister of Economy and Finance; Mr. François Zoundi, Minister of the Budget; Mr. Salif Kaboré, Minister of Mines; Mr.Laurent Sedogo, Minister of Agriculture; and Mr. Charles Ki-Zerbo, National Director of the Central Bank of West African States; as well as other senior officials, private sector representatives, and development partners.
At the end of the mission, Ms. Laure Redifer, IMF mission chief for Burkina Faso, issued the following statement in Ouagadougou:
“Early indicators point to a stronger rebound of economic activity in 2012 than previously expected, with gross domestic product (GDP) growth expected to reach 8 percent. This is explained largely by the prospect of a strong rebound in agricultural production, following a drought last year, and aided by measures taken by the government to improve agricultural productivity. Inflation was higher in the first half of 2012 due to a shortage in food supplies and higher fuel prices, but decreased over the summer and is expected to drop further with the new harvest, to around 2 percent year-on-year. External balances have deteriorated in 2012 as a result of higher food and fuel prices and more imports of food.
“Revenue collection in the first half of 2012 exceeded expectations as a result of improvements in tax administration, strong economic growth and some one-off factors. Revenue collection should remain strong in the second half of the year, and annual projections have been revised upward. Total expenditures in the first half were somewhat lower than expected, due to slower than anticipated execution of investment spending. The government is taking immediate measures to accelerate investment spending in the second half of the year, in order to implement more of its development program.
“The government’s food security program was successful in meeting food needs throughout the country in the first eight months of the year. At the same time, the government continues to contribute to the international effort to meet the needs of refugees from Mali encamped in northern Burkina Faso. Improved revenues will enable the fiscal deficit to be contained to about 3.2 percent of GDP.
“All quantitative targets and structural measures contained in the IMF-supported program were met for the first half of 2012. Although the government took the difficult decision to increase domestic fuel prices in March, prices have not been adjusted further since international prices began rising again in August. This has created financial pressure for the state-owned oil company, SONABHY. In the short term the government is considering options that will allow SONABHY to assure continued provision of adequate fuel supplies for Burkina Faso. In addition, to avoid build-up of further fiscal pressure in 2013, the government is considering ways to move toward a more sustainable framework that would still help mitigate the impact of international price volatility.
“Real economic activity is expected to remain strong in 2013, underpinned by the agricultural and development policies of the government’s development program, the SCADD (Strategy of Accelerated Growth and Sustainable Development), as well as current expansion of gold mining activities. Real GDP growth is forecast at 7 percent in 2013, while inflation is projected to remain around 2 percent, reflecting abundant supplies of food. The current account deficit is expected to improve slightly as a result of lower food imports and higher gold exports.
‘The mission had fruitful and collaborative discussions with the authorities. Discussions will continue in the coming weeks to finalize the policy framework for the remainder of 2012 and 2013 that would form the basis for completion of the fifth review under the ECF arrangement.”