IMF Executive Board Discusses Updated Ex-Post Assessment of Longer-Term Program Engagement in Burkina FasoPress Release No.13/266
July 24, 2013
On July 1, 2013, the Executive Board of the International Monetary Fund (IMF) discussed the updated Ex-Post Assessment (EPA) of Longer-Term Program Engagement in Burkina Faso.
Burkina Faso has been engaged with the IMF through a series of Fund-supported programs. A full EPA was conducted in 2006. This update focuses on the period 2007–12 and aims at identifying Burkina Faso’s policy challenges over the medium term and to distill lessons for future Fund involvement.
Burkina Faso enjoyed economic growth above regional standards since 2007, supported by a three-year arrangement under the Poverty Reduction and Growth Facility and a three-year arrangement under the Extended Credit Facility. Despite multiple adverse shocks, both programs managed to meet key objectives of the authorities’ poverty reduction and growth strategy, illustrating the importance of strong program ownership and flexibility in program implementation. While the authorities are to be commended for the significant progress achieved so far, some reforms could have been faster. Burkina Faso continues to face daunting economic challenges and acute poverty reduction needs; strengthened capacity to deliver pro-poor programs is therefore a priority.
Over the last few years, Burkina Faso has emerged as a large potential exporter of gold relative to other countries in Sub-Saharan Africa and to the size of its exports. Against the backdrop of low per-capita incomes, limited access to international capital markets, and scarcity of domestic capital, the opportunity is now to ensure that this exhaustible underground resource be transformed into a portfolio of other physical, human, and financial assets to support sustainable development for this and future generations.
Future Fund engagement would be important in further assisting the authorities anchor their reform efforts, and, in particular, in ensuring that Burkina Faso fully benefits from the surge in gold production, including by strengthening the tax regime while remaining attractive to foreign investors and local service companies. To build on recent progress and enhance medium-term prospects, structural reforms have to maintain momentum to diversify economic activity and enhance competitiveness. Improving the quality of public spending, further boosting revenue mobilization, strengthening governance and administrative processes, and, particularly, improving public investment selection and execution capacity—a key step in reducing poverty and accelerating sustainable growth via an expansion of physical and human capital—should continue to feature prominently on the authorities’ reform agenda.
Executive Board Assessment
Executive Directors agreed with the conclusions of the report on the ex-post assessment of longer-term program engagement. They noted that Fund engagement with Burkina Faso, together with the authorities’ strong program ownership, has supported macroeconomic stability and poverty alleviation. They considered that continued Fund engagement could further assist the authorities in achieving their development goals.