## tarea2026001-source-pdf ## Source details **Canonical URL:** [tarea2026001-source-pdf](https://www.imf.org/-/media/files/publications/tar/2026/english/tarea2026001-source-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/tar/2026/english/tarea2026001-source-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/tar/2026/english/tarea2026001-source-pdf.pdf.json) --- ### Preface and mission - Mission responded to a request from the Government of Burkina Faso (GoBF) for capacity development (CD) on climate policy diagnostic (CPD). - A CD mission from the IMF Fiscal Affairs Department (FAD) visited Ouagadougou during June 2nd—13th, 2025. - Mission led by: Mr. Suphachol Suphachalasai (FAD). - Team members: Mr. Alberto Garcia Huitron (FAD), Ms. Sunalika Singh (FAD), Ms. Sylke von Thadden-Kostopoulos (FAD), Mr. Michal Pietrkiewicz (FAD short-term expert). - High-level engagements included: Ministre de l'Économie et des Finances, Dr. Aboubakar Nacanabo; Ministre de Environnement, eau et assainissement, Mr. Roger Baro; Groupe de travail interministériel. - Consulted institutions included DGB, DGEP, DGCOOP, DGI, DGD (MEF), DGRE, DGAEP, DGCE, SP/CNDD, SP/REDD+, DGEVCC (MEEA), MEMC, MID, MATM, MAHSN, MFPTS, MUH, ARSE, ANEREE, ABER, ONEA, SONABEL, SONAHBY. - Acknowledgements: Direction générale de la coopération du MEF, IMF Resident Representative Mr. William Gbohoui, and Ms. Hope Samiee (FAD). ### Executive Summary — macro-criticality and recent climate trends - Population and socio-economic context: - BFA population: about 23 million people. - Over 40 percent of the population live below the poverty line. - 80 percent of the workforce is employed in the agriculture sector. - Electricity access: only 26 percent of people are connected to electricity. - Climate exposure and projections: - IMF projection: BFA could face a loss of 2 percent of real gross domestic product (GDP) per capita by 2050 and up to 5 percent by 2100 under a high global emission scenario and without effective adaptation. - 2020–2024: extreme weather-related disasters affected over 6.5 million people (EMDAT 2025). - Global emissions share: less than 0.01 percent. - Warming to date: BFA has warmed by approximately 1.4°C relative to pre-industrial levels over the past four decades. - Baseline average annual temperature: approximately 29°C during the 1985–2014 baseline (about 0.9°C above pre-industrial levels); estimated 29.6°C by 2020. - High-emissions projection (SSP3-7.0, 90th percentile): warming could reach 4.5°C by 2085. - Climate trends: - No consistent long-term trend in annual rainfall, but increased year-to-year variability. - Number of hot days and intensity of maximum daily precipitation events have increased. - Days with max daily temperatures exceeding 35°C have risen over past two decades, notably central and Northern Burkina Faso. - Intense precipitation events (annual maximum over 1 or 5 days) have increased. ### Energy access, transition, and fiscal implications - Strategic objectives: - Dual objective: expand energy access and transition to cleaner energy while reducing fiscal burden and import dependence. - CPD focus: mobilize additional revenues, improve spending efficiency, and minimize fiscal costs associated with climate change and disasters. - Electricity sector statistics and targets: - In 2019, hydro and solar accounted for 16 percent of total installed generation capacity. - Solar installed capacity rose more than fivefold to 168 MW over the four years after 2019. - By 2024, government estimates indicate total on-grid solar capacity has reached 225 MW. - SONABEL identified an additional 700MW of bankable solar projects scheduled for 2026–2030, including a 300 MW World Bank-supported plant. - Target: reach 175 MWh of storage capacity by 2030, including 60 MWh from public sources. - Electricity consumption growth: averaging 8.1 annually since 2020, slowdown to 4.4 percent in 2022. - Electricity imports: approximately 58 percent of total national consumption. - Transmission and distribution losses average 15 percent (regional average ~23 percent); international benchmark ~10 percent. - Access targets by 2028: 90 percent access in urban areas and 50 percent access in rural areas. - Approximately three-quarters of the population lacks access to electricity; only 7 percent of the rural population has electricity access. - Mini-grid economics: - ABER estimates mini-grid generation costs range from 150 to 350 FCFA per kwh. - SONABEL’s wholesale price to rural operators is regulated and capped at 75 FCFA; most rural households charged 75 FCFA per kwh (October 1st 2023 tariffs). - ABER holds 60 percent of projects and community association 40 percent; ABER must subsidize 100 percent of capital cost, expecting to recoup 40 percent from community association over project lifetime. - Fiscal burden and subsidies: - Average subsidy rate represented 60 percent of SONABEL’s fuel purchases between 2020 and 2023. - Cost to public finances from the input subsidy ranged from 0.13 percent of GDP in 2020 to 0.7 percent in 2023. - Total fuel subsidies (implicit and explicit) estimated at 3.5 percent of GDP in 2023; declined to approximately 1 percent in 2024. - Electricity production input subsidy amounting to 0.7 percent of GDP in 2023. - Energy pricing and implicit carbon prices (2024): - Gasoline implicit carbon price: approximately $82 per ton (regional average $127 per ton). - Diesel implicit carbon price: $31 per ton (regional average $111 per ton). - Modeled fuel-tax reform scenarios and fiscal outcomes (modeled additional central government revenue by 2030): - Scenario 1 (extend TPP to HFO, full TPP of 140 FCFA per liter by 2030, phased from 2026): extending TPP to HFO alone yields additional 0.32 percent of GDP in 2030. - Scenario 2 (halfway diesel adjustment combined with HFO reform): yields 0.49 percent of GDP in 2030. - Scenario 3 (full harmonization diesel + HFO reform): yields 0.66 percent of GDP in 2030. - Modeled additional fiscal revenue range by 2030: 1 percent of GDP to 2.2 percent of GDP (central government). - Price and growth impacts: - Scenario 1: electricity prices rise by a maximum of 8.4 percent by 2030 relative to the baseline; initial impact approximately 2 percent. - Scenario 2: diesel price increase of 1.5 percent in 2026, rising to 7 percent by 2030. - Scenario 3: diesel increases of 3 percent in 2026 and 14 percent in 2030. - Purchasing power losses: - Scenario 1: average loss estimated at 0.7 percent. - Scenario 2: average loss estimated at 1.0 percent. - Scenario 3: average loss estimated at about 1.5 percent. - Transport sector average price increases in 2030: - 7 percent (scenario 1), 10 percent (scenario 2), 13 percent (scenario 3). - Short-term growth: modest negative impact; medium-term growth: potential strengthening if revenues are productively invested. - Policy measures and recommendations (selected): - Introduce a feed-in tariff for renewable energy with storage capacity. - Update decree on auto-production to allow households to sell excess supply to the grid; lower self-generation thresholds. - Require a minimum storage capacity in new renewable projects (e.g., storage equivalent to 10 or 20 percent of installed generation capacity). - Implement time-of-use tariff and gradually adjust electricity tariffs toward cost-recovery while introducing a social tariff. - Phase-in extension of the TPP to HFO and harmonize diesel TPP with gasoline based on carbon contents. - Prioritize solar mini-grids with storage and conduct thorough economic modeling of mini-grid alternatives. - Provide 50,000 households with solar rooftops between 2026 and 2030 (government plan). ### Water resources, food security, and water-sector governance - Resource endowment and vulnerability: - Burkina Faso traversed by five main cross-border rivers; only two are perennial. - About 80 percent of the country rely on low-yield, hard-rock aquifers. - Usable rainfall: recent estimates suggest less than 2 percent of rainfall is usable (~3.2 billion cubic meter (m3)/year) after environmental needs and losses. - By 2050, significant declines in water volumes are anticipated in major river basins. - Available renewable water resource per capita is well below the FAO scarcity threshold of 1,000 m³ per year per person. - Access and sanitation (2024/2020 figures): - In 2024, about 78.6 percent of the population had access to safe drinking water. - Only one out of five people has access to improved sanitation facilities. - In 2024, urban access to water reached 91.8% compared to 71.5% in rural areas. - Water use and sector dependence: - Agriculture accounts for 51 percent of water abstraction, municipal use 46 percent, industrial use 3 percent. - Agriculture employs 80 percent of the population and contributes 20 percent of GDP; nearly all arable land is rain-fed. - Land degradation and water stress: - Over 30 percent of land area (9 million hectares) is severely degraded; degradation expected to continue at 360,000 hectares per year. - Institutional and data gaps: - National Water Council (NWC) created in 2002 but has struggled to promote integrated policies and data sharing. - Five River Basin Authorities established since 2007; only three have River Basin Master Plans. - National water information system (established 2003) is not fully operational. - Recent World Bank study: in addition to 36 existing hydrometric stations, approximately 60 additional stations needed. - Approximately 80 percent of groundwater resources remain unassessed regarding productivity, recharge, and exploitation. - Negative investments (boreholes drilled in areas without water) can account for 30 percent or more of lost investments in certain regions. - Raw water levy and tariffs: - Raw water levy rates (as set/revised): - Companies producing drinking water for social purposes/ ONEA — 1 FCFA per m3 - Commercial companies — 50 FCFA per m3 - Mining and other industries — 125 FCFA per m3 - Civil engineering works — 10 FCFA per m3 of backfill executed; 20 FCFA per m3 of concrete used - The water levy for agricultural users is currently being developed, targeting large agricultural producers. - Recommendation: update economic water study and revise levy; expand coverage to large agro-pastoral consumers. - ONEA performance and tariffs (urban water): - ONEA oversees 60 urban centers. - ONEA urban water tariffs (households — banded): - Band 0 to 8 m3: 188 FCFA m3 - Band 9 to 15 m3: 463 FCFA m3 - Band 16 to 25 m3: 663 FCFA m3 - Band over 25 m3: 1104 FCFA m3 - Customer service charge: 1000 FCFA m3 - Fountain hydrants: 188 FCFA m3 - Independent sanitation fees: 21 FCFA m3 - Sanitation charge: 10 FCFA m3 - Collective sanitation fees: 60 FCFA m3 - TVA: 18% (fees, sewerage fees, and water consumption >50 m3) - Stand-alone water stations: 95 FCFA m3 - Individuals supplying standpipes and water stations (20-litre bucket: 5 FCFA; 40-litre basin: 10 FCFA; 220-litre drum: 60 FCFA) - Company tariffs (single rate): 1104 FCFA m3; customer service charge: 1000 FCFA m3; raw water: 439 FCFA m3; sanitation fee: 21 FCFA m3; sanitation charge: 52 FCFA m3; collective sanitation fees: 90 FCFA m3. - ONEA constraints: tariffs do not cover O&M, debt service, partial capital expenditure; high Non-Revenue Water (NRW) estimated at 30 percent. - Rural water tariffs (single tariff 500 FCFA/m3) allocation components listed by amounts (60, 50, 15, 75, 60, 100, 100, 40 FCFA/m3). - Recommendations (selected): - Adopt regulations clarifying responsibilities of sector agencies, sustainable abstraction rules, and water efficiency measures. - Strengthen NWC, coordination between RBAs and sector agencies, and National Water Information System. - Update the raw water levy and urban water tariffs to enhance cost recovery while maintaining social tariffs. - Incorporate climate targets in ONEA’s performance contract and invest in reducing NRW and operational costs (renewables, prepaid meters). ### Disaster risk management (DRM), social protection, and disaster risk financing (DRF) - Disaster history and impacts: - Since 1966, Burkina Faso experienced 67 disasters; close to 20 million people affected, injured, or made homeless; over 17,000 lives lost. - Major events 2005–2025 include floods (2009, 2015, 2020, 2024) and droughts (2021), displacing and affecting hundreds of thousands. - World Bank Hazard Portal: five major droughts over past forty years, average 1.8 million people affected per event and total economic cost of approximately 12.7 million. - Fiscal and institutional DRM gaps: - Burkina Faso ranked 183rd globally for exposure and 17th for vulnerability. - DRM Act No. 012-2014/AN assigns DRM cycle responsibility to central government but a defining decree for central DRM structure is not issued. - DRM not explicitly addressed in the mid-term budget strategy (DPBEP 2026–2028). - Fiscal risk statements introduced in 2022 include fiscal risks but lack details on priority adaptation areas and long-term risk financing strategy. - Line ministries routinely repurpose sectoral funds for shocks; common allocations often exceed PFM best-practice upper limits (examples of execution rates and program reallocations provided). - Special funds fragmentation: Patriotic Support Fund (~FCFA 100 billion annual allocation), National Solidarity Fund (annual budget exceeds 2 billion FCFA), DRM-dedicated fund envisioned but not in place. - Social protection and registry: - Single Social Registry covers approximately 30 percent of the population; data collection completed in only 2 out of 13 regions. - Cash transfers suspended in 2023 due to security situation; replaced by in-kind support. - Disaster risk finance and contingent financing: - Burkina Faso does not currently have access to any contingent lending products. - Debt servicing costs approximately 10 percent of GDP; interest rates on domestic bonds reaching 9 percent. - Recommendation: pre-position concessional funding, explore contingent credit options, include contingency clauses in concessional borrowing. - DRF strategy should include risk layering, insurance, pre-arranged contingent financing, and institutional reforms. - Insurance and risk transfer: - Total insurance penetration (2022): 1.21 percent; life: 0.54 percent; non-life: 0.51 percent; personal accident & healthcare: 0.16 percent. - Weather-index insurance being piloted; 2025 budget allocation FCFA 649,407 for promotion of insurance products to farmers. - Recommendations (selected): - Amend DRM Act/regulations to integrate disaster preparedness into medium-term planning and budgeting; mandate open access to DRM data and standards. - Create systems to track response costs, cost sectoral exposures, and right-size fiscal buffers (sectoral resources for frequent shocks; pooled reserves/contingent financing for less frequent events). - Enhance social protection scaling (expand Single Social Registry, consider phased reinstatement of cash transfers when security permits). - Pursue insurance and risk-transfer instruments and pre-arranged contingent financing. ### Forestry, land-use, clean cooking, artisanal mining, and waste management - Emissions profile: - Forestry, land use, agriculture and waste contribute to more than 80 percent of emissions in Burkina Faso. - Methane is the largest emitted gas, followed by nitrous oxide and carbon dioxide. - GDP emission intensity: 2,800 tons of carbon dioxide equivalent [CO2e] per million dollars (Sub-Saharan average: 1,750 tCO2e per million dollars). - Sector shares: LULUCF 39 percent, Agriculture 35 percent, Energy-related 14 percent, Waste 8 percent, Industry/IPPU combined 6 percent, Power 2 percent, Buildings 1 percent. - Deforestation drivers and trends: - Government estimates: roughly half of country’s forest cover lost over last 25 years; historical series: 48.5 percent (2002), 42.6 percent (2011), just over 20 percent (2015). - Global Forest Watch shows marked acceleration in natural forest loss since 2020. - Main drivers: agricultural expansion, urbanization, artisanal gold mining, wildfires, use of firewood and charcoal for cooking. - Clean cooking and fiscal instruments: - Only 17 percent of population has access to clean cooking technologies. - Butane gas subsidies reduce variable costs but do not cover upfront stove costs. - Recommendations: fiscal incentives for import or local production of solar stoves; targeted subsidies or financing schemes for upfront costs; subsidize initial capital cost with development partner support. - Artisanal mining: - Gold mining accounted for 85 percent of total exports in 2023. - Artisanal mining largely informal; recommended actions: update legal status, use fiscal incentives to support formalization, phased introduction of tax obligations, technical assistance to improve safety. - Forestry fiscal instruments and PES: - Current tax on profits in forestry sector: - 0 - 250,000 FCFA — 10% - 251,000 – 600,000 FCFA — 20% - 601,000 – 2,500,000 FCFA — 35% - Greater than 2,500,000 FCFA — 45% - Evidence: PES schemes can reduce deforestation by 47 percent in the first five years (study of 40 REDD+ projects); RCT in Uganda showed deforestation 2–5 percent in PES villages vs 7–10 percent in non-participating. - Burkina Faso potential: achieving 40 percent reduction in deforestation over five years could yield approximately 40 MtCO2e in avoided emissions; would move toward NDC target of sequestered carbon equal to 10.2 MTCO2e by 2033. - Recommendations: revise tax on forestry profits to reward sustainability certification; design PES with robust targeting, MRV, and fiscal sustainability; operationalize MRV system by 2028 with partner support. - Waste management: - Waste accounts for approximately 8 percent of total GHG emissions. - Ouagadougou produces approximately 130,000 tons of plastic waste annually (~14 percent of national waste). - Cost of plastic waste management in formal system: approximately FCFA 2 billion per year (municipal data). - Existing measures: 5 percent tax on local production/importation of plastic packaging (General Tax Code 2017); 2014 law banning non-biodegradable plastic packaging not fully enforced. - Policy instruments: - Advanced Disposal Fees (ADFs) and Advance Recycling Fees (ARFs) recommended to prepay disposal/recycling costs. - Deposit and Refund System (DRS) recommended as long-term option for one-use waste; DRS implemented in around 40 countries as of 2020. - Recommendations: implement ADFs for batteries, tires, plastic packaging, electronics; consider DRS for plastic/glass bottles, aluminum cans, automotive parts, electronic waste, tires. ### Climate governance, legislation, data, and finance - Legislative and institutional gaps: - Environmental Code 2013 and Sustainable Development Orientation Law 2014 do not adequately incorporate climate governance principles; no comprehensive climate law. - SP/CNDD acts as de-facto coordinator but lacks clear legislative mandate. - MRV Decree 2024 requires coverage of GHG emissions and climate actions and annual reporting but lacks sanctions for non-compliance. - Several sectoral laws and decrees pending approval (e.g., revised Urban Planning and Construction Code, EIA updates, carbon market bill, standardized carbon credit allocation decree). - Policy documents and commitments: - Submitted/Prepared: First–Third National Communication (2002, 2015, 2022); NDCs 2016 (revised 2021) and 2025 (forthcoming); First Biennial Update Report 2024; NAP I and II (2015, 2024). - Revised NDC 2021: unconditional emissions reduction commitment of 19.6 percent by 2030 relative to business as usual; conditional ambition up to 29.4 percent contingent on international funding and technology transfers. - NDC update process led by MEEA to be presented in November during COP in Belem, Brazil (as noted). - Institutional architecture (selected bodies and gaps): - Multiple bodies exist: CNDD, SP/CNDD, CNACC, DGEVCC, SP/REDD+, NDC Coordination Unit, NAP committees and Regional Dialogue Frameworks. - Overlaps and unclear mandates among SP/CNDD, CNACC, CNDD, CONEDD; many bodies underoperationalized. - Recommendation: assess parallel coordination mechanisms, streamline overlapping mandates, update responsibilities of Environmental Units in line ministries and provincial governments to include climate change. - Data and MRV gaps: - GHG inventories inconsistent; most recent forest inventory 2015; satellite and low-cost monitoring technologies recommended. - ANAM provides seasonal forecasts up to 6-month horizons; limited 24h forecast accuracy and no 24/7 operations. - Meteorological observation shortfalls: two weather radars not operational, 145 manual stations rely on physical logbooks, 260 automatic stations insufficient. - Recommended: modernize National Water Information System; create standards for DRM-critical data; mandate open hazard maps and data sharing. - Climate finance needs and status: - Revised NDC 2021 financial requirement: US$4.1 billion by 2050. - Adaptation allocation: approximately US$1.1 billion for agricultural sector. - Mitigation: about $1 billion required by the energy sector. - NAP 2024-2026 costed at US$3.2 billion. - 2019/20 climate-related investment: US$567 million (13 percent of NDC requirements); 76 percent provided by multilateral/bilateral partners (low-cost debt 42 percent, project-level debt 21 percent). - FIE received GCF accreditation; BFA applying for Adaptation Fund accreditation. - Recommendation: develop and adopt a comprehensive Climate Finance Strategy, enhance transparency and fiduciary functions of FIE, build a prioritized project pipeline, and strengthen data to improve bankability. - Role of the Ministry of Finance (Box 1): - Core entry points: economic strategy, fiscal policy and budget management, financial policy and regulation. - Critical capabilities to build: leadership capability, coordination capability, human and analytical capability. - Policy recommendations (selected legislative and institutional actions): - Amend the Sustainable Development Orientation Law 2014 to incorporate climate governance principles. - Revise CNDD/SP-CNDD decrees to refine legal mandates for climate management. - Review national and sectoral legislation (Environment Code, DRM Law, Forestry Code, Mining Code) and align with revised Sustainable Development Orientation Law. - Mainstream climate into MEF core functions: macro-fiscal planning, revenue mobilization, budget, and PFM. - Develop, adopt, and implement a comprehensive Climate Finance Strategy. *IMF Technical Assistance Report — Extracted content from the provided chapter/section.* ### Preface ................................................................................................................ ### Preface ### Mission mandate and dates - The mission responded to a request from the Government of Burkina Faso (GoBF) for capacity development (CD) on climate policy diagnostic (CPD). - A CD mission from the IMF Fiscal Affairs Department (FAD) visited Ouagadougou during June 2nd—13th, 2025. ### Mission leadership and team - Mission led by: Mr. Suphachol Suphachalasai (FAD). - Team members: Mr. Alberto Garcia Huitron (FAD), Ms. Sunalika Singh (FAD), Ms. Sylke von Thadden-Kostopoulos (FAD), and Mr. Michal Pietrkiewicz (FAD short-term expert). ### High-level government engagement - The mission had engaging and productive discussions with: - Ministre de l'Économie et des Finances, Dr. Aboubakar Nacanabo. - Ministre de Environnement, eau et assainissement, Mr. Roger Baro. - Groupe de travail interministériel. ### Government and institutional participants - Officials and entities consulted included: - Direction générale du budget (DGB). - Direction générale de l'économie et de la planification (DGEP). - Direction générale de la coopération (DGCOOP). - Direction générale des impôts (DGI). - Direction Générale des Douanes (DGD) du Ministère de l'Économie et des Finances (MEF). - Direction générale des ressources en eau (DGRE). - Direction générale de l'approvisionnement en eau potable (DGAEP). - Direction générale de la conservation de l'environnement (DGCE). - Permanent Secretariat of the National Council for Sustainable Development (SP/CNDD). - Permanent Secretariat for Reducing Emissions from Deforestation and Forest Degradation (SP/REDD+). - Directorate General of Green Economy and Climate Change (DGEVCC), du Ministère de l'Environnement, de l'Eau et de l'Assainissement (MEEA). - Ministère de l'Énergie, des Mines et des Carrières (MEMC). - Ministère des Infrastructures et du Désenclavement (MID). - Ministère de l'Administration territoriale et de la Mobilité (MATM). - Ministère de l’Action humanitaire et de la Solidarité Nationale (MAHSN). - Ministère de la Fonction publique, du Travail et de la Protection sociale (MFPTS). - Ministère de l'Urbanisme et de l’habitat (MUH). - Autorité de régulation de l'énergie (ARSE). - Agence nationale pour les énergies renouvelables et l'efficacité énergétique (ANEREE). - Agence burkinabè d'électrification rurale (ABER). - Office national de l'eau et de l'assainissement (ONEA). - Société Nationale d’électricité du burkinabè (SONABEL). - La Société nationale des hydrocarbures (SONAHBY). ### Acknowledgements - The mission expressed sincere gratitude for the cooperation of the staff of Direction générale de la coopération du MEF in organizing discussions with government stakeholders. - The mission was grateful to the IMF Resident Representative, Mr. William Gbohoui, and his team for efficient coordination and interface with the authorities before and during the mission. - The mission acknowledged support from Ms. Hope Samiee (FAD) in preparation of the mission and finalization of the TA report. *IMF Technical Assistance Report — Preface* ### Executive Summary ### Executive Summary ### Macro-criticality of climate change - Burkina Faso (BFA) population: about 23 million people. - Over 40 percent of the population live below the poverty line. - 80 percent of the workforce is employed in the agriculture sector. - Electricity access: only 26 percent of people are connected to electricity. - IMF projection: BFA could face a loss of 2 percent of real gross domestic product (GDP) per capita by 2050 and up to 5 percent by 2100 under a high global emission scenario and without effective adaptation. - Security and development context: fragile security situation intertwined with acute development challenges that constrain adaptive capacity. - 2020–2024: extreme weather-related disasters affected over 6.5 million people (EMDAT 2025). - Global emissions share: less than 0.01 percent. ### Recent climate trends and projections - BFA is among the hottest countries in the world; extreme heat and extreme rainfall are becoming more intense and are projected to worsen with climate change. - Warming trajectory: BFA has warmed by approximately 1.4°C relative to pre-industrial levels over the past four decades. - Baseline and recent temperatures: average annual temperature approximately 29°C during the 1985–2014 baseline (about 0.9°C above pre-industrial levels) and estimated to have reached 29.6°C by 2020. - Projection under a high global emissions scenario (SSP3-7.0, 90th percentile): warming in Burkina Faso could reach 4.5°C by 2085 and precipitation patterns could shift dramatically. ### Fiscal and balance-of-payments implications - Climate impacts can harm output and productivity, lower potential growth, worsen inequality and poverty, raise social spending needs, increase food imports, and put pressure on the balance of payments. - Damage to public and private infrastructure can reduce asset valuations and increase financial sector risks. - The Climate Policy Diagnostic (CPD) targets reforms that reduce balance of payment risks, boost fiscal resilience, and generate positive climate outcomes by mobilizing additional revenues, improving spending efficiency, and minimizing fiscal costs associated with climate change and disasters. - The CPD emphasizes addressing market failures, encouraging efficient resource use, and minimizing adverse impacts on vulnerable and poor households. ### Accelerating energy access and transition - Dual objective: expand energy access and transition to cleaner energy. - Fiscal levers: strengthen financial capacity of the state-owned power utility, gradual energy pricing reform, and a fiscal strategy to incentivize investments in utility-scale solar power coupled with battery storage and adoption in mini-grids. - Policy measures to accelerate renewable energy adoption: - Introduce a feed-in tariff for renewable energy with storage capacity. - Update the decree on auto-production (self-generation) to allow households to sell excess supply to the grid. - Require a minimum storage capacity in new renewable energy projects. - Electricity tariff reform: - Implement a framework for gradual adjustments aiming for cost-recovery and reduced fuel input subsidy. - Introduce a social tariff for low consumption levels and a time-of-use tariff to reduce peak demand and fossil fuel use. - Fuel pricing reform: - Phase-in approach encouraged, including extending the tax on petroleum products (TPP) to cover heavy fuel oil (HFO) and harmonizing the tax on diesel with that of gasoline based on carbon contents. - Estimated revenue gain: 0.3-0.7 percent of GDP by 2030. - Revenue recycling should be well-targeted to make reform progressive and boost economic growth. ### Promoting water and food security - Water is vital for productive sectors, especially agriculture; water scarcity can significantly impact fiscal performance and balance of payments stability. - Policy levers: - Reform legal framework and improve coordination across water-related institutions. - Strengthen water pricing framework and financial performance of public water utility. - Regulatory and institutional reforms proposed: - Develop regulations to clarify responsibilities of sector agencies, set requirements for sustainable abstraction of surface water and groundwater, and guide measures to improve water use efficiency and conservation. - Strengthen the National Water Council (NWC), coordination between river basin authorities (RBAs) and sector agencies, and the National Water Information System (NWIS). - Scale up land tenure management: implement land certificates and streamline registration procedures and mandates across land management agencies. - Water pricing and financing reforms: - Update regulation on raw water levy in line with economic value and expand to large agro-pastoral consumers. - Adjust urban water tariffs to enhance cost recovery while maintaining social tariff for low consumption levels. - Introduce efficiency improvement and sustainability indicators in the Framework Contract of the water utility. ### Disaster risk management (DRM) and financing - Balance ex-ante preparedness and ex-post response; build understanding of occurrence and impacts across small/frequent to severe/rare events. - Develop a comprehensive national disaster risk financing (DRF) strategy to: - Assess risks and improve efficiency and effectiveness of existing fiscal mechanisms. - Make social protection more shock-responsive and transfer risks outside the government budget where appropriate. - Specific DRM reforms: - Amend the DRM Act/regulations to integrate disaster preparedness into medium-term planning and budgeting and to improve availability of critical DRM data with mandated open access and uniform standards. - Move toward cash-based social protection—when the security situation permits—by increasing coverage and better targeting in risk-prone areas. - Establish a system for tracking response costs, starting with ministries with highest budgetary exposure. - Right-size fiscal buffers: frequent shocks financed through sectoral budget allocations, while less frequent events covered by common interministerial expenditures. - Consider leveraging pre-arranged contingent financing, insurance, and partnerships to transfer high risks away from the budget. ### Sustainable forestry, land-use, and waste management - Forestry, land use, agriculture, and waste sectors together contribute more than 80 percent of greenhouse gas (GHG) emissions in BFA. - Policy levers include green tax policy, climate-smart subsidy, results-based payments, and a forest information system. - Proposed measures: - Revise the tax on profits for forestry activities to provide preferable tax rates for companies with sustainability certification that meets international standards, balanced with higher tax rates for others. - Introduce sustainability-linked conditionality in farmer support. - Develop a payment for environmental services (PES) scheme to help households and firms realize the economic value of forests in areas at risk of deforestation. - Strengthen a forest information system via low-cost monitoring technologies, develop a monitoring, reporting and verification system, and maintain a database on sustainability certificates. - Provide fiscal incentives for import of butane gas and/or solar stoves and introduce targeted subsidy on upfront costs to promote clean cooking. - Implement Advanced Disposal Fees at point of sale (e.g., batteries, tires, plastic packaging, electronics and appliances) to fund waste collection and processing. - Introduce a deposit and refund system (DRS) for one-use waste (plastic and glass bottles, aluminum cans, automotive parts, electronic waste, tires) to promote recycling. ### Strengthening climate governance - BFA lacks a comprehensive climate change legislative framework establishing a legal mandate for climate action. - Environment Code 2013 and Sustainable Development Orientation Law 2014 do not adequately incorporate key climate governance principles; gaps exist in climate-relevant legislation. - Multiple climate strategic documents exist but implementation strains coordination and resources; sectoral strategies could be better aligned with national climate objectives. - Institutional proliferation and inconsistent laws have led to overlaps, coordination challenges, and inefficiency. - Proposed governance reforms: - Amend the Sustainable Development Orientation Law to incorporate climate governance principles and translate climate commitments into the domestic context. - Review and align national and sectoral legislative frameworks on climate change with the revised Sustainable Development Orientation Law if needed. - Assess effectiveness of parallel coordination mechanisms and streamline overlapping mandates. - Update responsibilities of Environment Units in line ministries and provincial governments to include climate change. ### Priority policy recommendations (selected highlights from Table 1) - Accelerating Energy Access & Transition - Introduce a feed-in tariff for renewable energy with storage capacity — Timing: MT; Priority: H; Lead: MEMC. - Revise the decree on self-generation to lower thresholds and allow households to sell excess renewable-based electricity to the grid — Timing: ST; Priority: M; Lead: MEMC. - Implement time-of-use tariff to reduce peak demand and fossil fuel use — Timing: ST; Priority: H; Lead: MEMC/ARSE. - Gradually adjust electricity tariffs aiming for cost-recovery and reduce fuel input subsidy, while introducing social tariff for low consumption levels — Timing: MT; Priority: M; Lead: MEF/MEMC. - Extend the TPP to cover heavy fuel oil and phase in over time with the aim to harmonize TPP across fuels based on carbon contents — Timing: ST; Priority: M; Lead: MEF. - Align TPP for diesel with that of gasoline based on carbon contents — Timing: LT; Priority: L; Lead: MEF. - Promoting Water & Food Security - Adopt regulations on responsibilities of sector agencies, sustainable use of surface and groundwater, and improving water use efficiency — Timing: MT; Priority: H; Lead: MEEA, Line ministries. - Update regulation on raw water levy and expand coverage to large agro-pastoral consumers — Timing: MT; Priority: H; Lead: MEEA. - Update decree on urban water tariffs to enhance cost recovery while maintaining social tariff — Timing: ST; Priority: H; Lead: ONEA, MEEA. - Disaster Risk Management & Financing - Amend the DRM Act/regulations to integrate disaster preparedness into medium-term planning and budgeting and improve DRM data availability — Timing: MT; Priority: M; Lead: MATM. - Implement cash-based social protection—when security permits—by increasing coverage and improving targeting in risk-prone areas — Timing: LT; Priority: H; Lead: DGPS, MAHSN. - Assess the cost of climatic shocks on specific sectors and establish a system for tracking future response costs — Timing: ST; Priority: H; Lead: MEF. - Develop a DRF strategy considering insurance, pre-arranged financing, and partnerships — Timing: MT; Priority: M; Lead: MEF. - Sustainable Forestry, Land-Use, and Waste - Revise tax on profits for forestry activities to provide preferable rates for sustainability-certified companies — Timing: MT; Priority: H; Lead: MEF. - Implement a payment for environmental services scheme for forests at risk of deforestation — Timing: LT; Priority: M; Lead: MEEA. - Provide fiscal incentives for import of butane gas and/or solar stoves and introduce targeted subsidy on upfront cost — Timing: ST; Priority: H; Lead: MEF. - Implement Advanced Disposal Fees to finance waste collection and processing — Timing: ST; Priority: H; Lead: MEF. - Introduce a deposit and refund system for one-use waste — Timing: LT; Priority: M; Lead: MEF. - Strengthening Climate Governance - Amend the Sustainable Development Orientation Law 2014 to incorporate climate governance principles — Timing: ST; Priority: H; Lead: MEEA. - Review national and sectoral legislative frameworks related to climate change and align with the revised law if needed — Timing: MT; Priority: L; Lead: MEEA. - Assess parallel coordination mechanisms and streamline overlapping mandates — Timing: MT; Priority: M; Lead: MEEA/MEF. - Update responsibilities of Environment Units at line ministries and provincial governments to include climate change — Timing: ST; Priority: M; Lead: MEEA. - Note on timing definitions: Recommendations labeled short-term (ST) may be undertaken quickly by the authorities (in a year). Medium-term (MT) could take over a year but can be done within 3 years. Long-term (LT) require 3+ years. *IMF Technical Assistance Report — Executive Summary* ### 3. Burkina Faso experiences variable rainfall, especially in the south. This variability is driven ### Climate, Economic, and Policy Findings for Burkina Faso ### Observed climate variability and recent trends - Burkina Faso experiences variable rainfall, especially in the south; variability is driven by global phenomena like El Niño–Southern Oscillation (ENSO) and large-scale climate systems such as the West African Monsoon and the Harmattan winds. - Southern Burkina Faso has a longer wet season and receives higher rainfall. - No consistent long-term trend in annual rainfall has been observed, but year-to-year fluctuations remain significant. - The number of hot days has risen and the intensity of maximum daily precipitation events has increased. - The number of days with maximum daily temperatures exceeding 35°C has risen over the past two decades, particularly in central and Northern Burkina Faso. - Intense precipitation events—measured by annual maximum rainfall over one or five days—have increased. ### Extreme events and projections of extremes - The incidence of droughts appears little changed based on observed maximum number of consecutive dry days (< 1 mm). - Projected increases (under SSP2-4.5 / current trends): - A marked increase in hot days above 35°C, with many areas projected to experience 50 to over 90 such days per year by the end of the century. - A substantial increase in the intensity of extreme single-day rainfall events; northern and central areas likely to experience up to 10–15 mm more rainfall in a single day. - Rx1day (maximum 1-day precipitation) projections show statistically significant increases with strong agreement among climate models. ### Future temperature and precipitation projections - Median temperature projections relative to the 1985–2014 baseline: - 1.4–1.9 °C by 2050. - 1.5–3.6 °C by 2085, depending on emissions pathways. - In a high-emissions scenario (SSP3-7.0, 90th percentile), warming could reach 4.5°C by 2085. - Projections for total annual precipitation do not indicate any statistically significant trend when compared to current year-to-year variability. ### Economic impacts and disaster history - Since 1966, Burkina Faso has experienced 67 disasters (primarily drought, flood, epidemics, and infestations). - Close to 20 million people have been affected, injured, or made homeless, and over 17,000 lives have been lost. - Under the fastest warming scenario considered (SSP3-7.0 90th percentile: +4.2 °C compared to the year 2000), and assuming slow adaptation, GDP per capita is projected to decline by over 8 percent by 2100 relative to continuation of present warming trends. - A scenario without adaptation at all causes damages approximately twice as large. - Fast adaptation can reduce losses to approximately 3 percent of GDP per capita for the same temperature change. - The welfare cost estimates noted exclude some impacts (e.g., costs of extreme weather requiring specialized models) and do not include the cost of adaptation. ### Adaptation policy progress and needs - Key national actions: - First National Adaptation Plan (NAP) formulated in 2016. - Communication on climate change adaptation issued in 2022. - Updated NAP for the period 2024-2026 published; objective: strengthen resilience of populations and ecosystems and improve socioeconomic conditions. - 2024 NAP focuses on water resources, agro-pastoral, forestry, fisheries and wildlife, infrastructure, housing, energy, gender, and health. - National Climate Security Strategy 2024 prepared, focusing on climate adaptation. - Estimated cost of adaptation to address vulnerability between 2015 and 2030: 3.8 billion Communauté Financière Africaine franc (FCFA). - Securing funding for NAP implementation has been a major challenge. ### Energy, emissions profile, and mitigation commitments - Energy consumption drivers: - Household consumption of firewood and charcoal accounts for nearly 70 percent of the country’s total energy consumption. - Transport and power sectors consume about one quarter of total energy and rely entirely on imported fuel. - Primary fossil fuels consumption shares: diesel 11.7 percent, gasoline 9.4 percent, heavy fuel oil 6.6 percent, LPG 2.7 percent. - Emissions magnitude and intensity: - Burkina Faso accounts for less than 0.01 percent of global emissions. - Burkina Faso is the 56th higher emitting country in absolute GHG emissions. - GDP emission intensity: 2,800 tons of carbon dioxide equivalent [CO2e] per million dollars. - Sub-Saharan average GDP emission intensity: 1,750 tCO2e per million dollars. - Emissions by sector and gas: - Land use, land use change and forestry: 39 percent of emissions. - Agriculture: 35 percent of emissions. - Energy-related emissions: 14 percent of emissions. - Waste: 8 percent of emissions. - Industry and industrial processes: combined 6 percent of emissions. - Power sector: 2 percent of emissions. - Buildings: 1 percent of emissions. - Methane is the largest emitted gas, followed by nitrous oxide and carbon dioxide. - Among CO2 emissions: diesel 38 percent, gasoline 29 percent, heavy fuel oil 24 percent. - Power sector notes: - About three-quarters of the population not connected to the grid. - Burkina Faso imports about 60 percent of the electricity it consumes; accounting for exporter-country emissions could almost double the country’s power-sector emissions share. - Mitigation commitments: - Updated Nationally Determined Contribution (NDC) in 2021 commits to a reduction in GHG emissions of 29.4 percent by 2030 relative to business as usual (conditional). - First NDC committed to a conditional emission reduction of 18.2 percent. - The 2021 NDC includes an unconditional emissions reduction commitment of 19.6 percent by 2030 relative to business as usual, and conditional ambition up to 29.4 percent contingent on international funding and technology/technical capacity transfers. - The Ministry of Environment, Water, and Sanitation (MEEA) is leading an NDC update process to be presented in November during the Conference of the Parties (COP) in Belem, Brazil. ### Regional frameworks and financing - WAEMU strategic and financing arrangements: - WAEMU 2025–2030 Strategic Plan emphasizes universal energy access at affordable cost and major scale-up of renewables. - Regional Initiative for Sustainable Energy (IRED) implementation supported by common rules, including a 2022 WAEMU directive for transparent mechanisms to crowd in private investment. - Financing is pooled through the West African Development Bank, which manages the Energy Development Fund and is a regionally accredited entity to the Green Climate Fund (GCF). *IMF Technical Assistance Report — Extracted content from the provided chapter/section.* ### 16. Adaptation and mitigation policies must recognize that climate change and development ### 16. Adaptation and mitigation policies must recognize that climate change and development challenges are deeply intertwined in Burkina Faso ### Development-climate nexus: context and challenges - Population and poverty: - Home to about 23 million people. - Over 40 percent of the country’s population still live below the poverty line. - Vulnerabilities: - Over 60 percent of the workforce is employed in the agriculture sector, increasing vulnerability to droughts and floods. - Only 26 percent of people connected to electricity. - Fragile security situation that climate change intensifies, adding macroeconomic and policy complexity. - Policy implication: - Meaningful progress on policy reforms that build climate resilience and pave the way toward a green transition are key to raising living standards and achieving long-lasting economic growth. ### Climate Policy Diagnostic (CPD): objectives and priorities - CPD goals: - Identify policy reforms that reduce balance of payment risks, boost fiscal resilience, and generate positive climate outcomes. - Assess climate policy and institutional landscape and prioritize recommendations that create fiscal space and support fiscal sustainability. - Fiscal focus: - Mobilize additional revenues, improve spending efficiency, and minimize fiscal costs associated with climate change and disasters. - Expected outcomes: reduce import bills and external financing needs, and improve the overall investment climate. - Analytical lens and priority areas: - Address market failures and encourage efficient resource use. - Minimize adverse impact on vulnerable/poor households. - Remainder of report assesses (i) accelerating energy access and transition, (ii) promoting water and food security, (iii) disaster risk management and financing, (iv) sustainable forestry, land-use and waste management, and (v) strengthening climate governance. ### II. Accelerating Energy Access and Transition — key findings - Strategic rationale: - Electricity sector reform is critical to unlocking economic growth, reducing fiscal costs and costly imports, and supporting climate objectives. - Renewable energy offers a pathway to ease the trade-off between expanding electricity access and maintaining low end-user tariffs. - Sector challenges: - Expanding electricity access while tariffs are not enough to recover costs. - Managing intermittency of renewable sources. - Need for targeted investment and improved system reliability. - Fiscal implication: - Comprehensive tariff reform required to create fiscal space; energy efficiency and consumption smoothing also contribute to cost reduction. - Reforms could release public resources for development priorities and peacebuilding efforts. ### Electricity sector context and statistics - Renewable deployment and capacity: - In 2019, hydro and solar accounted for 16 percent of total installed generation capacity. - Solar installed capacity rose more than fivefold to 168 MW over the four years after 2019. - By 2024, government estimates indicate total on-grid solar capacity has reached 225 MW. - SONABEL has identified an additional 700MW of bankable solar projects scheduled for development between 2026 and 2030, including a major 300 MW solar plant supported by the World Bank. - Burkina Faso has set a target of reaching 175 MWh of storage capacity by 2030, including 60 MWh from public sources. - Electricity demand and imports: - Electricity consumption has grown averaging 8.1 annually since 2020, with a slowdown to 4.4 percent in 2022 during COVID-19. - Electricity imports account for approximately 58 percent of total national consumption. - SONABEL has from 250-350 MW of thermal capacity in the pipeline. - SONABEL is currently receiving resources from the World Bank to build a 300MW solar power plant and targeted transmission lines. - Losses and network: - Transmission and distribution losses average 15 percent, below the regional average of approximately 23 percent. - International benchmarks suggest a loss rate around 10 percent, indicating scope to reduce losses by 1 to 2 percentage points. - Access targets and current coverage: - Government target: 90 percent access in urban areas and 50 percent access in rural areas by 2028. - Approximately three-quarters of the population lacks access to electricity. - Only 7 percent of the rural population has electricity access. - Mini-grid economics and costs: - ABER estimates mini-grid generation costs range from 150 to 350 FCFA per kwh, depending on technology. - ABER estimates mini-grid projects require full capital cost subsidies and subsidies covering 80 percent of variable costs to be financially viable, except solar mini-grids that only require a subsidy equal to the initial capital cost. - Most rural households consume below the first tariff tranche (0 to 75 kwh) and are charged 75 FCFA per kwh (October 1st 2023 tariffs published by SONABEL). SONABEL’s wholesale price to rural operators is regulated and capped at 75 FCFA. - ABER holds 60 percent of the project and the community association 40 percent; ABER must subsidize 100 percent of the capital cost, expecting to recoup the 40 percent from the community association over the project lifetime. ### Institutional arrangements - Roles and responsibilities: - Ministry of Energy and Mines: formulates, coordinates, implements national energy policy for conventional power, hydrocarbons, renewables, and efficiency. - Autorité de Régulation du Secteur de l’Énergie (ARSE): independent regulator that licenses operators, monitors performance, and oversees tariffs and contractual compliance. - SONABEL: state-owned utility responsible for generation, transmission, distribution, and sale of electricity; represents Burkina Faso in regional power-pool initiatives. - Société Nationale Burkinabè d’Hydrocarbures (SONABHY): secures national fuel supply and sells fuel to SONABEL at a discounted price used for thermal generation. - Agence Nationale des Énergies Renouvelables et de l’Efficacité Énergétique (ANEREE) and Agence Burkinabè de l’Électrification Rurale (ABER): coordinate renewable deployment, energy efficiency, and rural electrification (mini-grids). - Tariff setting: ARSE provides guidance and recommendations, but tariffs are mainly set by the Ministry of Energy. ### Policy recommendations — electricity access, renewables, and sustainability - Improving electricity access and planning: - Integrate grid extension and off-grid initiatives within the Electricity Master Plan to avoid inefficiencies and duplication between SONABEL and ABER. - Strengthen coordination between SONABEL and ABER to ensure an optimal long-term energy mix. - Diversify financing sources for transmission and distribution expansion; prioritize strengthening regional interconnections. - Mini-grid policy and fiscal sustainability: - Review the mini-grid economic model to ensure long-term sustainability and transparency around production costs by technology. - Improve data and modelling to plan subsidy requirements and avoid unsustainable subsidy commitments and service disruptions. - Private sector and mining partnerships: - Further develop IPP contracts with mining companies to purchase excess capacity, ensuring SONABEL retains ownership or long-term usage rights after mining operations cease. - Ensure negotiated tariffs align with prevailing market-based IPP prices to preserve cost efficiency and fiscal sustainability. - Scaling up renewable energy while managing variability: - Continue incorporating solar renewable energy while investing in storage capacity to manage intermittency. - Implement price- and non-price-based instruments to incentivize investments in energy storage. - Consider introducing a feed-in tariff linked to storage capacity, applying exclusively to projects that include storage, to reflect the value of flexibility. - Consider regulations requiring a minimum level of storage capacity for new renewable projects (e.g., storage equivalent to 10 or 20 percent of installed generation capacity). - Advance net metering and deployment of smart meters; lower self-generation thresholds to allow households to supply excess electricity to the grid under the same conditions as large producers. - Government plan: provide 50,000 households with solar rooftops between 2026 and 2030 in rural and urban areas. - Tariff reform and energy efficiency: - Comprehensive tariff reform is needed to improve financial sustainability of the electricity sector and create fiscal space. - Promote measures to increase energy efficiency and smoothen consumption throughout the day to reduce costs. *IMF Technical Assistance Report* ### 35. The electricity sector continues to impose a fiscal burden on the treasury largely due to ### 35. The electricity sector continues to impose a fiscal burden on the treasury largely due to ### Fiscal burden and fuel/subsidy dynamics - SONABEL is required to sell electricity at prices that do not reflect supply costs, even when considering the subsidized inputs provided by SONAHBY. - The true cost of the input subsidy is borne by SONAHBY rather than SONABEL. - The average subsidy rate represented 60 percent of SONABEL’s fuel purchases between 2020 and 2023. - Cost to public finances from the input subsidy ranged from 0.13 percent of GDP in 2020 to 0.7 percent in 2023. - In principle, the difference between the import price and selling price is transferred to SONAHBY via the budget process; in practice transfers can take the form of lower payment of taxes owed by SONAHBY and SONAHBY usually accumulates arrears with international suppliers. - Absence of a comprehensive tariff update since 2006 for residential consumers; limited reforms in 2016 reduced subsidies for embassies, banks, mines, and other commercial entities, but residential tariffs have remained unchanged. - Although an increasing block pricing (IBP) tariff structure exists, SONABEL applies a uniform rate across most consumers, increasing regressivity and limiting targeting effectiveness. ### Tariff reform necessity and options - Tariff reform is essential for long-term financial sustainability and mobilizing resources for critical investments, particularly transmission infrastructure. - Electricity tariffs should be cost-reflective, including the true cost of fossil fuels, and include a forward-looking component to enable SONABEL to service debt and expand the grid. - Without comprehensive tariff reform, objectives in the National Rural Electrification strategy may not be achievable. - Alternative tariff schemes to consider: - Enforcing the IBP schedule. - Introducing a volume differentiated tariff (VDT). - Additional technical assistance recommended to assess distributional impacts and ensure equity and affordability. - An IBP system could be designed so vulnerable households are not affected by increases in the price of heavy fuel oil. ### Time-of-use (ToU) tariff benefits - Consider implementing a ToU tariff to enhance system efficiency and reduce peak load pressures. - ToU sets different prices by time of day: higher during peak demand, lower during off-peak. - Benefits: - Reduces need for costly peak generation and limits use of expensive or carbon-intensive backup fuels. - Improves utilization of existing generation and transmission infrastructure, delaying additional investment. - Supports integration of variable renewable energy by aligning consumption with solar generation. - Encourages adoption of energy efficiency measures, including for electric vehicles and two-wheelers. ### Electric mobility - Transport sector accounts for approximately 8 percent of Burkina Faso’s total GHG emissions and has experienced rapid growth, particularly in two-wheelers. - Policy recommendations to curb emissions growth: - Emphasize development of public transport systems. - Regulate the secondary market, including price-based mechanisms to shift decisions toward cleaner vehicles. - Explore private participation models (public-private partnerships and concessions) to expand and modernize transport infrastructure. - Regulatory status: - A decree approved in November 2023 set conditions for installation and operation permits for public EV charging stations and implementing regulations on fees for permits. - Additional regulation on electricity tariffs used for public EV charging stations is yet to be approved. - Need to assess potential impact of vehicle electrification on the national grid; close coordination with SONABEL recommended. - Emerging approaches such as battery swapping (piloted in neighboring countries like Togo) could be explored. - If the government considers financial incentives for EV adoption, particularly two wheelers, these should take the form of fixed per-vehicle subsidies rather than exemptions or reductions in customs duties or taxes. ### Energy pricing policy and recent subsidy levels - Energy pricing policy sends mixed signals: generous support for renewable energy alongside persistent fuel subsidies. - 2023 estimates: - Total fuel subsidies, both implicit and explicit, were estimated at 3.5 percent of GDP in 2023. - Total fuel subsidies declined to approximately 1 percent in 2024. - Electricity production is subsidized via an input subsidy amounting to 0.7 percent of GDP in 2023. - Subsidies are typically regressive, disproportionately benefiting higher income groups. - Phasing out fuel subsidies would improve price signals, support the energy transition, and generate fiscal space for priority development spending. ### Regional context and implicit carbon pricing - Efficient energy prices in Burkina Faso are higher and similar to those in Senegal and Cote d’Ivoire. - Burkina Faso faces relatively high supply costs vis-à-vis neighboring countries because of its condition as a landlocked country. - In 2024: - Prices for diesel and gasoline have been set slightly above supply costs, while butane gas continues to receive a subsidy. - Burkina Faso’s implicit carbon prices (USD per ton of CO2 equivalent), based on excise or special consumption taxes: - Gasoline: approximately $82 per ton (regional average $127 per ton). - Diesel: $31 per ton (regional average $111 per ton). - Excise taxes on diesel are among the lowest in the region, suggesting room to gradually adjust fuel taxation toward regional benchmarks. ### Modeled energy pricing reform scenarios - Scenario 1: gradual introduction of the Tax on Petroleum Products (TPP) to Heavy Fuel Oil (HFO). - Align excise on HFO with gasoline on a per-ton basis; full TPP of 140 FCFA per liter implemented by 2030. - Phase-in begins in 2026 and increases in equal annual increments. - Scenario 2: halfway adjustment of diesel’s TPP. - Full alignment with gasoline on a per-ton basis would yield a TPP equal to 134 FCFA; scenario simulates only half the adjustment. - Adds 41.5 FCFA to the TPP applicable to diesel by 2030, starting in 2026 and increasing in equal annual increments. - Scenario 3: full harmonization. - TPP on diesel fully aligned with gasoline’s TPP on a per-ton basis. - Adds 83 FCFA to the TPP on diesel by 2030, starting in 2026 and increasing in equal annual increments. ### Revenue recycling and mitigation measures - Options to recycle additional revenues to mitigate adverse impacts: - Channel new resources into cash transfer programs; however, cash transfers are not currently in use in Burkina Faso. - Use in-kind support (e.g., food security program administered by Societe National de Gestion du Stock de Securite Alimentaire (SONAGESS)). - Start support a couple months before reforms enter into effect to signal government concern. - For modeling: assumed 50 percent of additional revenue from energy taxation reforms would be allocated to public investment in infrastructure gaps (electricity, water, sanitation). - Authorities should strengthen targeting mechanisms and social protection systems to enable more direct compensation over the medium term. ### Impact on fiscal revenues, energy prices, and growth - Modeled additional fiscal revenue for central government by 2030 ranges from 1 percent of GDP to 2.2 percent of GDP. - Specific modeled revenue gains by 2030: - Extending the TPP to HFO alone: additional 0.32 percent of GDP in 2030. - Scenario 2 (halfway diesel adjustment combined with HFO reform): 0.49 percent of GDP in 2030. - Scenario 3 (ambitious diesel tax of 83 FCFA combined with HFO reform): 0.66 percent of GDP in 2030. - Scenario 1 offers the most favorable balance between fiscal yield and political feasibility given gradual phase-in. - Impact on prices: - Scenario 1: electricity prices rise by a maximum of 8.4 percent by 2030 relative to the baseline; initial impact approximately 2 percent. - Scenario 2: diesel price increase of 1.5 percent in 2026, rising to 7 percent by 2030. - Scenario 3: diesel increases of 3 percent in 2026 and 14 percent in 2030. - Growth effects: - Short-term: modest negative impact on economic growth. - Medium-term: potential for strengthened growth if additional revenues are productively invested, leading to multiplier effects and a structurally higher growth path. ### Impact on emissions and public health - Modeled reforms expected to have a limited impact on total GHG emissions because non-energy sectors account for approximately 85 percent of Burkina Faso’s total emissions. - Under the most ambitious reform scenario, energy-related emissions would remain broadly stable relative to 2025 levels, at an estimated 60.8 MtCO2e, falling short of the country’s NDC target. - Estimated cumulative averted deaths could reach up to 1,500, driven mainly by reduced road traffic and associated accidents. ### Distributional and sectoral impacts - Distributional effects depend on how additional revenues are redistributed; energy price reforms can be designed to be progressive. - Model estimates on purchasing power losses across scenarios: - Scenario 1: average loss in purchasing power estimated at 0.7 percent. - Scenario 2: average loss in purchasing power estimated at 1.0 percent. - Scenario 3: average loss in purchasing power estimated at about 1.5 percent. - Largest price impacts concentrated in the transportation sector, followed by construction. - Transport activities, highly dependent on diesel, would face average price increases in 2030 of: - 7 percent under scenario 1. - 10 percent under scenario 2. - 13 percent under scenario 3. - Mining sector would experience limited price effects despite high emissions intensity because a significant portion of emissions stem from indirect sources rather than direct fuel consumption. ### Recommendations - Continue Expanding Electricity Access - Conduct thorough economic modeling of different mini-grid alternatives to assess financial viability and minimize fiscal costs. - Prioritize solar mini grids with storage to avoid incurring long-term variable costs. - Explore building on existing generation for mining companies while ensuring negotiated prices do not significantly deviate from other IPPs. - Continue investing in transmission and distribution, considering regional interconnection. - Continue Incorporating Renewable Energy While Managing Variability - Revise the self-generation decree to reduce thresholds so households can sell excess supply into the national grid. - Implement a feed-in tariff for renewable energy projects with storage capacity, potentially linked to MDB support to avoid fiscal costs. - Develop regulation to require minimum storage capacity for new renewable energy projects. - Electricity Tariff Reform - Implement a time-of-use tariff structure to encourage shifting consumption to cheaper hours. - Gradually adjust electricity tariffs to achieve cost recovery and reduce fuel input subsidy, while introducing a social tariff for low consumption levels. - Energy Pricing Reform - Extend the Tax on Petroleum Products to Heavy Fuel Oil following the phased implementation modeled. - Align diesel’s Tax on Petroleum Products with gasoline’s Tax on Petroleum Products on a per-ton basis following the phased implementation modeled. *IMF Technical Assistance Report | excerpt* ### 55. Climate-induced changes in freshwater availability impact water resources, agricultural ### Climate-induced changes in freshwater availability impact water resources, agricultural productivity, and food security ### Climate, water scarcity, and fiscal/economic impacts - Climate-induced changes in freshwater availability affect water resources, agricultural productivity, and food security, creating ripple effects on economic stability and growth. - Fiscal channels and macroeconomic risks: - Reduced rainfall can adversely affect rainfed agricultural production and pastoral activities, leading to food shortages and decreased export revenues, disrupting the trade balance. - Drought shocks can weaken sectors like mining and hydropower, leading to increased imports for essential goods and fiscal pressure. - Inflation caused by scarcity of essential goods (e.g., irrigated or rainfed crops) may pressure governments to increase subsidies, further straining fiscal resources. - Governments may resort to borrowing to manage water-related shocks, increasing public debt and widening fiscal deficits. - Policy role: - Fiscal policies can alleviate water-related risks by establishing regulatory frameworks promoting responsible water use, enhancing institutions to manage efficiency and productivity of water use, and influencing water resource planning and pricing to support sustainable water management, food security, and water security. ### Burkina Faso — resource endowment, trends, and vulnerability (Context) - Water endowment and use: - Burkina Faso is traversed by five main cross-border rivers, of which only two are perennial. - About 80 percent of the country rely on low-yield, hard-rock aquifers that are challenging to exploit. - The bulk of Burkina Faso’s water resources come from rainfall; recent estimates suggest less than 2 percent of rainfall is usable (~3.2 billion cubic meter (m3)/year) after accounting for environmental needs, evaporation from reservoirs, and downstream demands. - By 2050, significant declines in water volumes are anticipated in Burkina Faso's major river basins. - Currently, available renewable water resource per capita is well below the water scarcity threshold of 1,000 m³ per year per person established by the Food and Agriculture Organization (FAO) and the regional average. - Access and sanitation: - In 2024, about 78.6 percent of the population had access to safe drinking water. - Only one out of five people has access to improved sanitation facilities; disparities exist between rural and urban areas. - Sectoral water withdrawal and dependence: - Agriculture accounts for the largest share of water abstraction at 51 percent, municipal (domestic) use at 46 percent, and industrial use at 3 percent. - Agriculture employs 80 percent of the population and contributes 20 percent of GDP; nearly all arable land is reliant on rain-fed systems. - Climate and environmental degradation impacts: - A 2016 World Bank study estimated the Sahel’s annual GDP could decline by 0.82 percent to 11.7 percent by 2050 due to climate-related water scarcity. - Recurring droughts and increased evaporation have reduced usable water, intensifying competition and conflicts over resources. - Over 30 percent of Burkina Faso’s land area (9 million hectares) is severely degraded, with degradation expected to continue at a rate of 360,000 hectares per year. - Climate-induced flooding increases risk of critical water infrastructure failures, service interruptions, and loss of storage capacity. - Humanitarian and security context: - Since 2019, escalating violence from armed groups has displaced over one million people, disrupting agricultural activities. - Climate change exacerbates droughts and alters rainfall patterns, significantly affecting food production. - Nearly 5 million individuals urgently require humanitarian assistance, with many living under blockades restricting access to essential resources. - Internally displaced persons put additional strain on host communities’ food supplies and critical infrastructure such as water. ### Water governance — laws, institutions, coordination, and gaps - Legal and policy framework: - The 2001 Water Act provides a comprehensive legal framework for water supply, sanitation, and integrated water resources management (IWRM), emphasizing equitable access, conservation, water quality protection, decentralization, monitoring and evaluation, intersectoral cooperation, and sustainable development principles. - The law allows the Minister to regulate or prohibit certain uses of water to prevent shortages and manage competing demands. - A range of secondary legislation was issued supporting water resource management, quality standards, and operational frameworks for water supply and sanitation services. - Institutional architecture: - The National Water Council was created in 2002. - The Ministry of Environment, Water and Sanitation (Ministère de L'Environnement, de l'Eau et de l'Assainissement, MEEA) is responsible for setting priorities, policies, standards, and regulation for water development and sanitation. - The National Office for Urban Water Supply and Sanitation (Office National de l’Eau et de l’Assainissement, ONEA) provides water supply, on-site sanitation, and sewerage services in 60 urban centers. - Since 2009, municipalities are responsible for planning, developing, and delivering water supply and sanitation services in rural areas, though transfers were not accompanied by adequate financial and human resources. - The GoBF adopted a National Water Policy for 2016–2030 translated into operational programs (governance, water supply, IWRM, wastewater and sanitation infrastructure). - Coordination and implementation gaps: - Multiple actors (water, environment, agriculture, energy, forestry, mining, industry, health, education, related SOEs, and local governments) are involved but their responsibilities in managing water resource are not fully regulated, leading to insufficiently coordinated interventions. - Uncoordinated construction of drinking water facilities by different agencies has contributed to overexploitation and pollution of water resources. - Responsibilities for water extraction, production and coordination across sector ministries are unclear and not regulated, undermining integrated management. - Existing regulations do not sufficiently incentivize water-efficient practices (e.g., rainwater harvesting, water-saving technologies in agriculture), nor establish norms for groundwater protection perimeters, extraction governance, or regulation of private water distribution providers. - The National Water Council has held occasional meetings but has struggled to effectively promote integrated policies, resolve conflicts, and ensure data sharing and monitoring. - Decentralized and basin-level arrangements: - Since 2007, five national River Basin Authorities (RBA—Agences de l’Eau) were established; two have developed River Basin Master Plans for Water Management (SDAGE). - Local Water Commissions (CLE) coordinate IWRM at sub-basin level based on sub-basin plans (SAGE). - Burkina Faso participates in transboundary authorities: the Niger Basin Authority, the Volta Basin Authority, and the Comoé River-Bia-Tano Basin Authority. - Limited funding and operational challenges mean only three out of five RBAs have a River Basin Master Plan and some CLEs are not operational. - In the context of the Alliance of Sahel States (Mali, Niger and Burkina Faso), reassessment of collaboration among transboundary water authorities is essential to clarify partner roles. ### Land management, IWRM progress, and need for climate-informed planning - Land and water nexus: - Water scarcity is deeply intertwined with land degradation, land conflicts, and food security; poor land use reduces groundwater recharge and water quality. - Demographic pressures and conflicts further degrade soil productivity and reduce access to water resources. - Land governance initiatives and limitations: - The 2009 Rural Land Law introduced the rural land possession certificate (Attestation de Possession Foncière Rurale, APFR) to acknowledge customary occupancy and support decentralized rural land administration. - A legal framework for systematic land registration was set up (Decree 2010-405 and Decree 2014-481 article 263). - In 2020, the National Agency for Public Entities’ Land was established to secure funding for registration of state and municipal land, and pilot programs were initiated to regularize land occupation in select irrigation districts. - Issuance of APFRs remains very low and decentralized offices are few; overlapping mandates and challenges in municipal-level land administration hinder implementation. - IWRM SDG assessment and financing: - Burkina Faso has adopted IWRM practices and institutional arrangements; a 2023 assessment highlighted achievements in institutions and participation and enabling environment. - Financing sustainability and operationalization remain challenges for effective IWRM implementation. *Source: IMF Technical Assistance Report (excerpt).* ### 65. Planning, monitoring and predicting of the water resource face challenges related to ### Planning, monitoring and predicting of the water resource face challenges related to capacities and data planning tools. ### Monitoring, forecasting, and institutional capacity - Several institutions engaged in monitoring, development, and forecasting of weather, water, and climate information services and in delivery/response to warnings: - (i) The National Meteorological Agency (ANAM), which oversees weather and climate services, including agrometeorology. - (ii) The Directorate General for Water Resources (DGRE), responsible for monitoring surface and groundwater and information services on water resources. - Current limitations and service gaps: - These institutions currently provide few hydrometeorological information and warning services; interventions are limited in quality and effectiveness due to a lack of financial resources. - ANAM is unable to provide accurate and up-to-date weather forecasts (at the moment a 24h forecast is provided with low accuracy and ANAM does not operate 24/7), including for extreme weather and flooding events. - DEIE faces limitations in hydrological modeling, flood forecasting, and the availability of necessary tools. - Currently, there exists only an early warning system for high water levels and flooding. - Observed infrastructure shortfall: - A recent study funded by the World Bank indicated that, in addition to the 36 existing hydrometric stations, approximately 60 additional stations would be needed to improve water resource management, control pollution, and mitigate flood risks. ### Data availability, quality, and consequences for water management - Data gaps and collection constraints: - Burkina Faso lacks the data and knowledge necessary for proper water resource management. - In a context of conflict and challenging geological conditions, data collection remains a challenge and is financed by limited domestic resources while some partners support the process; this compromises continuity of data collection and effective use of data in planning. - The national water information system, established in 2003, is not yet fully operational. - The Directorate General of Drinking Water is conducting a national inventory of water points, with the last inventory dating back to 2017, to gather essential data on groundwater resources. - Quantified impacts of poor data: - Quantity and quality of data submitted can vary, leading to “negative” investments in boreholes drilled in areas without water, which can account for 30 percent or more of lost investments in certain regions. - Approximately 80 percent of groundwater resources remain unassessed regarding their productivity, recharge, and exploitation – though expected World Bank financed support will help to close this gap. - Consequences for policy and crisis response: - The lack of comprehensive information on surface and groundwater hampers the government's ability to meet increasing demands from agriculture, industry, and human consumption, to sustainably manage water resources, and to respond promptly to hydro-climatic crises. ### Water pricing and financing: objectives and instruments - Importance of pricing: - Effective water pricing is essential for promoting sustainable water resource management and ensuring the long-term viability of water supply systems. - A robust water pricing framework can strengthen macro-fiscal performance while addressing the water-climate nexus. - Pricing that reflects financial and economic cost of water encourages efficient use and conservation across extraction, exploitation, production, and delivery stages. - Legal and parafiscal framework: - Law 2009 established three parafiscal taxes, also called “financial contribution for water (FCW)”, including a tax on the changes to the water regime, a tax for water pollution and a raw water levy. - The water pollution tax, incorporating the polluter pays principle, has not yet been adopted but its preparation has been informed by a recent study and consultations with stakeholders. ### Raw water levy: rates, allocation, and assessment - History and recent adjustments: - Based on a study on the economic value of water, the MEEA established the water levy rate in 2011, which was revised in 2015 to lower the fee for mining and other industries from 200 FCFA/m3 to 125 FCFA/m3. - Current design and application: - The levy applies to service providers involved in drinking water, mining, industrial activities, civil engineering, as well as agricultural, pastoral, and fishing endeavors. - The water levy for agricultural users is currently being developed, targeting large agricultural producers, and will be issued as a separate regulation. - The Ministry of Agriculture, Animal Resources and Fisheries (Ministère de l'Agriculture, des Ressources Animales et Halieutiques, MARAH) is exploring the establishment of a dedicated agency for levy collection near the collection points. - The levy is collected by the five RBA and is allocated for IWRM activities. - The levy for raw water usage, designated for social purposes and ONEA, is set at 1 FCFA/m3 to ensure equal access to water. - Need for revision: - Given limited fiscal space and significant financing needs in the sector for water conservation, infrastructure development, ecosystem restoration, there is a need to update the economic water study and revise the levy accordingly. - Fee schedule (Table 2. Fee for Raw Water): - Companies producing drinking water for social purposes/ ONEA — 1 FCFA per m3 - Commercial companies — 50 FCFA per m3 - Mining and other industries — 125 FCFA per m3 - Civil engineering works — 10 FCFA per m3 of backfill executed; 20 FCFA per m3 of concrete used, all types of concrete combined *IMF Technical Assistance Report | 48* ### 70. The Authorities have made important progress to improve access of drinking water supply ### tarea2026001-source-pdf - 70. The Authorities have made important progress to improve access of drinking water supply ### Urban water supply, access, and infrastructure - ONEA is responsible for urban water supply, overseeing 60 centers. - As of 2020, Burkina Faso had the second highest rate of access to drinkable water in the region (Figure 24). - Note: In 2024, access to water in Burkina Faso reached 91.8% in urban areas compared to 71.5% in rural areas. - Urban delivery modes: network connections to private households and public taps; wells and boreholes also utilized, particularly in surrounding regions. - Significant initiatives that increased urban potable water access: - Hiring of skilled management staff. - Construction of the Ziga Dam. - Establishing a service contract with a private operator. - Implementing block rates. - Major sustainability challenge: rising water demand due to rapid urban population growth, particularly in Ouagadougou (ONEA’s largest center), coupled with limited financial resources. ### ONEA financial and operational performance, bottlenecks - Key constraints: - Insufficient water pricing hindering cost recovery and efficient service delivery. - Current tariffs do not sufficiently cover O&M costs, debt service, and partial contributions to capital expenditures. - Inefficient pricing system contributors: - Absence of regular tariff adjustments; the last adjustment occurred in 2018. - Tariff structure heavily relies on industrial and commercial users to subsidize the lifeline tariff. - Significant shift in customer profile: new customers often limit consumption to the subsidized lifeline tariff of less than 8 m³/month, resulting in 40 percent of all consumers falling under this category. - Backlog of unpaid bills from the public sector. - High Non-Revenue Water (NRW), estimated at 30 percent, due to aging infrastructure, leakages, illegal connections, and commercial losses (faulty meters). - Rapid, extensive peri-urban growth, especially in Ouagadougou and Bobo Dioulasso, requiring substantial investments in network expansion. - Climate change impacts increasing operational costs due to damages related to floods, pollution, and sedimentation of dams. - Performance and reform efforts: - ONEA shows a high collection recovery rate but needs improvement in physical and financial productivity and pricing (Figure 25). - ONEA is piloting cost-reduction strategies: prepaid meters and investing in solar energy. - Renewal of performance contract includes discussions on settlement of unpaid bills and tariff policy, exploring various tariff adjustment scenarios. - Opportunity to strengthen risk assessment in the performance contract by integrating climate change impacts into performance metrics. ### Tariff structure and exact tariff levels (Table 3) - Individuals and pensions: household tariffs - Band 0 to 8 m3: 188 FCFA m3 - Band 9 to 15 m3: 463 FCFA m3 - Band 16 to 25 m3: 663 FCFA m3 - Band over 25 m3: 1104 FCFA m3 - Customer service charge: 1000 FCFA m3 - Fountain hydrants: 188 FCFA m3 - Independent sanitation fees: 21 FCFA m3 - Sanitation charge: 10 FCFA m3 - Collective sanitation fees: 60 FCFA m3 - TVA: 18% (fees, sewerage fees, and water consumption >50 m3) - Stand-alone water stations: 95 FCFA m3 - Individuals supplying standpipes and water stations: - 20-litre bucket: 5 FCFA m3 - 40-litre basin: 10 FCFA m3 - 220-litre drum: 60 FCFA m3 - Category large firm, industry, municipalities, administrations: company tariffs - Single rate (no band): 1104 FCFA m3 - Customer service charge: 1000 FCFA m3 - Raw water: 439 FCFA m3 - Sanitation fee: 21 FCFA m3 - Sanitation charge: 52 FCFA m3 - Collective sanitation fees: 90 FCFA m3 - Source for tariff table: ONEA. ### Rural water sector reforms and performance - 2000 reform: management of boreholes with hand pumps delegated to AUE through a delegation agreement between the municipality and the AUE. - Pump maintenance and repair ensured by an operator under contract with the municipality. - Drinking water supply systems delegated to private operator selected by the municipality through competitive bidding. - Objective: achieve cost recovery through tariffs while ensuring affordability. - Functionality rates demonstrating reform success: - Hand pumps: 88.6 percent functionality. - Rural water systems: 84.3 percent functionality. - As of 2020, Burkina Faso had the highest access to water sources in rural areas within the region, reaching 76 percent. - Current rural tariff model: - Single water tariff of 500 FCFA/m3 allocated as: - 60 FCFA/m3 for the fountain operator - 50 FCFA/m3 for the center manager - 15 FCFA/m3 for the AUE FCFA/m3 - 75 FCFA/m3 for operating expenses - 60 FCFA/m3 for the local management centers (centre de gestion, CDG) - 100 FCFA/m3 for the maintenance fund - 100 FCFA/m3 for the renewal fund - 40 FCFA/m3 for the investment fund - This tariff does not fully cover all expenses, particularly investment costs. - Opportunity: consolidate management systems toward communal management to improve scalability and financial viability by streamlining commercial management and leveraging economies of scale. This would require new management frameworks, tariff revision, and an inter-municipal consultation mechanism. ### Recommendations (summarized) - Strengthen Water Resource Legislation - Adopt regulations on responsibilities of sector agencies, sustainable use of surface water and groundwater, and improving water use efficiency and conservation. - Adopt regulation for sustainable exploration, operation and management of surface and groundwater resources and water efficiency (rainwater harvesting, water reuse systems in agriculture). - Enhance Institutions for Effective Integrated Water Resource Management - Enhance the role of the National Water Council to be operational and provide guidance on planning, investment, and responsible water use. - Clarify coordination of the five RBAs with other sector agencies; review collaboration of transboundary water authorities not part of the Alliance of Sahel States (Mali, Niger and Burkina Faso). - Review and streamline mandates across land management agencies; scale up land certificates and streamline registration procedures. - Enhance Climate Informed Planning for Water Resource Management - Modernize the National Water Information System, strengthen the data repository, and establish requirements that integrate climate risks and source water protection. - Promote Sustainable Financing of Water Use and Services - Update regulation on the raw water levy, informed by a new study assessing the economic value of water resources; expand coverage to large consumers in the agro-pastoral sector. - Update decree on urban water tariffs to enhance cost recovery while maintaining social tariff for low consumption levels. - Incorporate climate relevant targets in ONEA’s performance contract to manage risks and improve sustainability. - Enhance cost recovery by reducing (i) NRW losses (invest in infrastructure, leak detection, illegal connections remediation, prepayment meters) and (ii) operational costs (invest in renewable energy equipment). ### Disaster Risk Management and Financing — context and implications for water - National context: - Burkina Faso: very low—but rising—exposure to disasters (ranked 183rd globally) and extremely high vulnerability (17th globally). - Main shocks: localized floods and droughts. - Contributing factors increasing shock impact: population growth (doubles every 35 years), uncontrolled settlements (urban growth rate of 5 percent), 2.1 million conflict-displaced people, north-to-south migration due to agricultural land degradation, growing stock of vulnerable infrastructure, rising average temperatures, and increased extreme heat events. - Major climatic events affecting Burkina Faso (2005–2025) with impacts: - 2009 Flood: 119,356 affected, 46 deaths, 63 injured; 15 dams broke, 42,000 homes destroyed, 22,220 ha farmland flooded. - 2015 Flood & Wind: 24,354 affected, 8 killed, 54 injured. - 2020 Flood: 71,341 affected, 3,347 houses destroyed; national disaster declared. - 2021 Drought/Water Crisis: 628,000+ in need, 350,000 displaced. - 2023 Water Crisis (Conflict): 290,000 directly, 520,000 indirectly affected; 32 water points destroyed. - 2024 Flood (Boulsa, Centre-Nord): 7,648 affected, 7 killed, 42 injured; 925 houses destroyed. - 2024 Flood (Nationwide): 16,000 affected, 3,884 women, 10,258 children. - Macrofiscal and resilience implications: - World Bank Hazard Portal: five major droughts over past forty years, average of 1.8 million people affected per event and total economic cost of approximately 12.7 million. - Direct impact of floods on population appears lower—averaging a human impact about 40 times smaller and total economic impact about 16 times smaller than droughts—but fiscal impacts (infrastructure damage, water competition, undermined development) may be significant and undercounted. - Modeling suggests partial adaptation investments can increase annual GDP growth by over 2.5 percentage points compared to a no-adaptation scenario over the long term. - DRM institutional and planning gaps: - Burkina Faso’s DRM approach prioritizes post-disaster resilience and humanitarian response. - Law No. 012-2014/AN assigns DRM cycle responsibility to central government (Prime Minister) but emphasizes two ministries with response-focused mandates; a defining decree for the central DRM structure has not been issued. - DRM is not currently guided by a national policy (government indicates such a document is being developed). - Civil protection and humanitarian response responsibilities are more clearly addressed: General Directorate for Civil Protection and Ministry of Humanitarian Action and National Solidarity; Ministry responsibilities defined in Decree No. 2024-1601/PRES/PM and SP/CONASUR established as executive body of CONASUR. - DRM is not explicitly addressed in the mid-term budget strategy (DPBEP 2026–2028) despite links between budget priorities and DRM. - Fiscal risk statements introduced in 2022 include fiscal risks; climate risk analysis in fiscal risk statement has been strengthened but gaps remain (no details on priority adaptation areas, no long-term risk reduction strategy, and no outlined improved risk financing strategy beyond streamlining funds into the reserve). - PNDES II (2021–2025) recognizes climate risk as a medium-level threat; proposed actions focus mainly on response measures rather than structural adaptation. - Implication for water sector: mainstreaming resilience-building and climate-informed investment in water and sanitation infrastructure, tariff and financing reforms, and DRM integration into budgeting and planning are critical to safeguard service continuity and fiscal sustainability. *IMF Technical Assistance Report* ### 85. Considering present and increasing risks of agricultural droughts, the agricultural policy ### tarea2026001-source-pdf - 85. Considering present and increasing risks of agricultural droughts, the agricultural policy ### Agricultural policy objectives and preparedness - Objectives the agricultural policy seeks to reconcile: - increasing employment in agriculture sevenfold - tripling productivity - doubling the rate of industrialization - increasing forest cover - Preparedness focus: - primarily diversifying crop production and expanding irrigation - greater emphasis on agriculture’s role in addressing food insecurity and protecting the rural population from disasters through: - market interventions - increased national grain reserves - higher intervention stock levels - targeted support to vulnerable households through production aid, efforts to diversify household diets, and measures to reduce structural food insecurity - integration of vulnerable populations, including displaced persons, into production systems ### Past damage, disaster risk, and data availability - Transparency and access to DRM-critical information: - access to information crucial for disaster risk finance remains very limited, fragmented, and difficult to obtain - an online portal developed under the World Bank–financed Faso eGovernment Project has been offline for at least a year - Fragmentation and sharing practices: - ministries and agencies primarily collect DRM-critical data for their own use and often require formal requests and justifications to share data - results in frequent data duplication and lack of coordination - Specific data holdings and gaps: - Civil Protection has developed a national plan for risk analysis and coverage, including hazard maps - Directorate of Water Resources holds partial hydrological hazard maps that are not available online, only partially validated, and accessible only upon request - Ministry of Urban Planning issued a decree in 2024 on flood zones; 26 urban master plans now include climate risk considerations and risk mapping integrated into planning tools - drone-based hazard mapping covered areas such as 45 hectares of informal settlements, but data is not currently accessible to other stakeholders - Geographic Institute produces thematic maps related to land use, forest cover, and meteorological data for dams and dykes - Standards, hardware, and observation network issues: - no shared standard for DRM-critical data collection, processing, or integration; collected data often not geotagged or geotagged incorrectly - Ministry of Infrastructure has only two road profiling UNIBOX V devices - neither of the two weather radars available in the country is currently operational - meteorological data collection relies on 145 manual stations that require physical logbook submissions, resulting in significant delays - there are also 260 automatic stations, but these remain insufficient, and the integration of satellite and ground data lacks full systematization ### Shock-responsive social protection - Legal and institutional framework: - there is no specific law for social protection - main policy, the National Social Protection Policy (PNPS, 2013–2022), is currently under revision - Single Social Registry development: - with World Bank support, the registry currently covers approximately 30 percent of the population - data collection has been completed in only 2 out of the country’s 13 regions - ongoing expansion with data collection supported by the World Food Programme in the northern regions and UNICEF in the eastern regions - guided by strong governance and overseen by a dedicated technical secretariat - objective to avoid duplication, ensure coordination, and enable integration with other databases such as CONASUR’s disaster victims database - Cash vs. in-kind transfers: - cash transfers are often the most efficient rapid response mechanism, effectiveness depends on functioning markets - in 2023, cash transfers managed by the government and humanitarian actors were suspended due to the security situation and were replaced with in-kind support focused on food security and seeds/fertilizers - authorities plan to gradually resume transfers in regions where the Single Social Registry is operational - currently no nationwide cash transfer program in place ### Disaster risk finance: budgeting, reserves, and reallocations - Current financing expectations and practices: - for mild to moderate shocks, expectation is response financed from sectoral resources via repurposing funds or virements - organic law caps virements that modify allocations between programs within the same ministry, but no limit on repurposing within a specific program if the nature of expenditure remains unchanged - Inefficiencies from current practice: - i) large fiscal buffers allocated at the beginning of the year reduce efficiency in using scarce fiscal resources - ii) within-year reallocations come at the expense of development projects - iii) response financing for medium- to high-return period events is siloed within line ministries - Sector expectations and consequences: - sectors are expected to cover more severe events with their own budgets, creating routine use of programs (e.g., maintenance) for crisis response and diversion of preparedness funds to response - insufficient tracking prevents precise estimation of resources redirected from planned activities to responses - Execution rates and implicit buffers (FY2024 examples): - Ministry of Territorial Administration executed 83 percent of its adjusted budget, and only 63 percent compared to the original budget - Ministry of Humanitarian Action spent 66 percent of its initial allocation (and 99 percent of the adjusted), with the national disaster program experiencing the largest reduction through reallocation - agriculture-related programs: food crisis prevention executed 83 percent of original allocations; agricultural development 77 percent; animal production 65 percent - infrastructure program execution was 60 percent of the initial allocation - average execution rate across all programs: 94 percent of the initial allocation and 98 percent of the adjusted budget - identified programs constitute approximately 18 percent of the initial approved budget for the year - Special funds and fragmentation: - government relies on a number of special funds to address contingent challenges; fragmentation leads to inefficient cash management and difficulty consolidating information - Patriotic Support Fund: annual allocation of about FCFA 100 billion; primarily focused on security but overlaps with disaster response - National Solidarity Fund: financed through government allocations and public donations; administered by the Ministry of Humanitarian Action; used for emergency relief in the first 72 hours following a shock; annual budget exceeds 2 billion FCFA with unused resources rolling over - DRM act envisions a dedicated disaster response fund, but such a structure is not in place and no near-term plans expressed; caution against proliferation of earmarked funds if created - Pre-positioned stocks and contingency reserves: - SONAGESS manages a pre-positioned food security stock for emergency response and market intervention, and engages in commercial activities - line ministries can draw on broad purpose contingency reserves that have for many years exceeded the good PFM practice upper limit of 10 percent of the initial budget; projected to remain at an average level of 11 percent over the next three years - common allocation covers all contingent expenditures (including fuel subsidies, unforeseen program costs, certain planned maintenance) and lacks clear sizing rules tied to climate-related contingency response - common allocations are rarely used for shock responses; last significant climate-related uses were during the 2009 floods and the COVID-19 pandemic - Reallocation processes and recommendations: - reallocations are frequent and significant, with supplementary budgets passed in most years but lacking explicit rationale - reallocations rely on bilateral negotiations between the MEF and line ministries without explicit rules guided by national policy priorities - recommendation: pursue both a reduction in the common allocation and a reallocation of some sectoral buffers into the common pool, supported by a robust risk financing strategy and improved efficacy of reallocation - right sizing buffers requires accurate risk estimation, with sectoral resources allocated to very low return period events and pooled resources reserved for medium return period events at the central reserve level ### Insurance and risk transfer - Insurance market context: - Axco ranked Burkina Faso in 2022 as the 136th non-life market, the 126th personal accident and healthcare market, and the 113th life market - market penetration extremely low by global standards but on par with regional peers - some insurers offer flood cover at an average rate of around 0.30 percent of the sum insured - Weather index insurance: - considered important by the GoBF, especially at the micro level, but currently implemented with limited coordination and differing methodologies across regions and line ministries - President’s initiative focuses on yield-index insurance for nine crops across three regions - "Index-Based Weather Insurance for Smallholder Farmers in Burkina Faso" supported by UNDP - latest budget allocated FCFA 649,407 in 2025 for the promotion of insurance products to farmers, responsibility assigned to the Ministry of the Environment, Water, and Sanitation - a similar drought insurance product underwritten by ARC is the responsibility of the Ministry of Agriculture - Insurance penetration figures (2022): - Burkina Faso total insurance penetration: 1.21 percent; total per capita: 10.12 - Burkina Faso life: 0.54 percent; life per capita: 4.49 - Burkina Faso non-life: 0.51 percent; non-life per capita: 4.27 - Burkina Faso personal accident & healthcare: 0.16 percent; per capita: 1.36 - Comparative figures: Ivory Coast total 1.22 percent (per capita 29.84); Mali total 0.61 percent (per capita 5.29); South Africa total 15.93 percent (per capita 1124.11) *IMF Technical Assistance Report | Excerpts from pages 58–63 (as provided).* ### 110. Burkina Faso does not currently have access to any contingent lending products. ### tarea2026001-source-pdf - 110. Burkina Faso does not currently have access to any contingent lending products. ### Contingent financing, fiscal pressures, and disaster risk financing (DRF) - Burkina Faso does not currently have access to any contingent lending products. - World Bank Contingent Emergency Response Components (CERCs) in several loans allow repurposing of some funds in eligible crises (natural disasters, health emergencies, other significant disruptions). - Current fiscal pressures: - Debt servicing costs reaching approximately 10 percent of GDP. - Interest rates on domestic bonds reaching 9 percent despite short maturities. - Risks: - Domestic market may be unable to absorb additional government debt in a major shock; borrowing costs could rise sharply. - Recommendation emphasis: - Pre-position as much concessional funding for shocks as possible by exploring contingent credit options and including contingency clauses in concessional borrowing agreements (Figure 28). - Role of a disaster risk financing (DRF) strategy: - Can create substantial savings by reducing actual and opportunity costs of response and increasing speed. - Supports consolidated PFM processes, enhances budget reliability, and reduces opportunity cost of reallocations. - Identifies data and institutional gaps, enabling a risk layering strategy beyond risk retention and budget-based responses, contemplating contingent credit, insurance, and humanitarian aid. - Addresses disbursement aspects of post-disaster response, reducing potential leakages in emergency procurement and exploring options for scaling up social protection mechanisms. ### Recommendations (DRM, data, social protection, costing, buffers, risk transfers) - Strengthen DRM Legislation and Planning to Balance Ex-Ante and Ex-Post Activities: - Mainstream disaster prevention and adaptation in medium-term planning and the fiscal risk statement; identify and prioritize prevention in sectors with highest current and forecasted disaster risk. - Amend the DRM Act and adopt a DRM policy that includes structural, financial, and post-disaster resilience measures to recognize national-level responsibility for disaster preparedness. - Improve Access to DRM Critical Data: - Create legislation (through amendment to the DRM Act or secondary legislation) that mandates open hazard maps in government and sharing with the public. - Create standards across ministries and agencies for data quality, data collection, and data storage to facilitate integration and avoid duplication. - Consolidate and maintain data on critical infrastructure using a uniform methodology. - Implement Fair, Efficient and Scalable Social Protection: - While updating the Social Protection Policy, develop a roadmap to: - Increase coverage to allow scaling up of social protection in risk-prone areas. - Prioritize coordination in data collection so each partner follows the same methodology and avoids duplications. - Ensure registry's can integrability with DRM data to allow for fast and targeted assistance scale-ups following shocks. - Assess whether the security situation allows reinstating cash transfers by national and humanitarian actors as a method of post-disaster assistance. - Cost the Impact of Shocks on Specific Sectors: - Focus on ministries most exposed to frequent reallocations (e.g., Ministry of Agriculture, Ministry of Infrastructure) and tag past response expenses. - Create a system for tracking future response costs. - Develop a disaster risk finance strategy that builds on the costing exercise. - Right-Size Fiscal Buffers: - Based on response cost tagging, create fiscal buffers that avoid inefficiency: finance only very frequent shocks from sectoral allocations, while less frequent events should be financed from common interministerial expenditures. - Strengthen Implementation of Ex-ante Risk Retention and Transfers: - Create a policy for insuring and guaranteeing major public assets. - As part of the DRF strategy, recognize high return period, severe events, their scale, and sources of exposure; consider transferring some risk away from the budget by leveraging pre-arranged contingent financing, insurance, and strong partnerships. ### Sustainable forestry, land-use, and waste — key findings - Emissions and sector contribution: - Forestry, land use, agriculture and waste contribute to more than 80 percent of emissions in Burkina Faso. - Drivers and trends in deforestation: - Government estimates suggest approximately half of the country’s forest cover has been lost over the last 25 years. - Historic estimates: 48.5 percent forest cover (2002 report); 42.6 percent (2011 report); just over 20 percent (2015 forest inventory). - Global Forest Watch data points to a marked acceleration in natural forest loss since 2020. - Main drivers: expansion of agricultural area (including due to conflict and displacement), urbanization, artisanal gold mining, wildfires, and use of firewood and charcoal as primary cooking fuels. - Food security, displacement, and forest pressure: - Food insecurity shifts focus away from mitigation policies that raise costs of economic activity. - Population displacement increases pressure on ecosystems via agricultural expansion in stable regions and altered urbanization patterns. - Example cited: Sudan forest cover declined by 5.9 percent between 2016 and 2022 due to conflict and displacement; similar trends in Libya and Yemen. ### Fiscal policy, taxation, and incentives for conservation - Current fiscal instruments: - Agricultural subsidies (input support and guaranteed-price purchasing schemes via SONAGESS up to a defined quota) create incentives favoring agricultural expansion. - Forestry taxed via a profit-based tax levied only on large-scale formal enterprises; tax base limited to activity without differentiation by production methods or sustainability standards. - Policy instrument framework: - Two categories: (i) regulatory instruments (mandatory restrictions/requirements) and (ii) price-based mechanisms (recurrent charges, output-based taxes, stumpage fees, export levies). - Output-based taxes penalize scale of activity rather than environmental impact; better to anchor taxation to sustainability of production methods. - Expenditure-side options: targeted payments such as payment for environmental services (PES); hybrid instruments (feebates) combine fees and rebates and can be revenue neutral. - Environmental taxes: - Efficient by internalizing social costs without prescribing technologies; grant firms flexibility to adopt cost-effective solutions and promote innovation. ### Tax on profits in the forestry sector (as in source) - Profit level — Tax rate - 0 - 250,000 FCFA — 10% - 251,000 – 600,000 FCFA — 20% - 601,000 – 2,500,000 FCFA — 35% - Greater than 2,500,000 FCFA — 45% ### Payment for Environmental Services (PES) — evidence and targets - Effectiveness: - Study of 40 REDD+ projects across nine countries: PES schemes can reduce deforestation by 47 percent in the first five years (impacts decline modestly for durations of 8 to 10 years). - Randomized control trial in Uganda: deforestation rates in PES-supported villages declined to 2-5 precent, compared to 7-10 percent in non-participating villages. - Burkina Faso potential: - Achieving a 40 percent reduction in deforestation over five years could yield approximately 40 MtCO2e in avoided emissions. - This would bring the country closer to the NDC target of sequestered carbon equal to 10.2 MTCO2e by 2033. - Pillars for effective PES implementation: - Well-established land rights (or use of de-facto land rights with community codesign). - Robust targeting mechanism using forest monitoring systems and geospatial data; debate exists around including poverty as a targeting criterion. - Sound methodology for estimating payments (opportunity cost, valuation of avoided CO2 emissions). - Fiscal sustainability: finance PES via revenue linked to ecosystem services (e.g., hydropower revenues), non-timber forest products, eco-tourism, or a share of fuel excise taxes/environmental levies. ### Data, monitoring, and MRV - Data gaps and limitations: - Most recent forest inventory dates to 2015; deteriorating security conditions have hindered updates due to inaccessibility of forested areas. - Past reliance on sampling and extrapolation; satellite imagery supplements field data. - Opportunities to expand low-cost technologies (e.g., drones) for monitoring in remote/insecure areas. - Certification and MRV: - Update existing tax on forest profits to include sustainability criteria through independent certification schemes aligned with international standards; use certifications to reduce information asymmetry where government enforcement is weak. - Certifications can serve as a proxy for a full MRV system in the short term. - Long-term priority: strengthen the National Forest Monitoring System and operationalize the MRV system established under national regulations. - Burkina Faso, with support from the Green Growth Global Institute and the government of Sweden, aims to operationalize an MRV system in 2028 to improve national GHG inventories and emphasize AFOLU sectors. *IMF Technical Assistance Report* ### 124. Two of the main drivers of deforestation in Burkina Faso are lack of access to clean ### Two of the main drivers of deforestation in Burkina Faso are lack of access to clean ### Deforestation drivers: clean cooking and artisanal mining - Only 17 percent of its population with access to clean cooking technologies. - Firewood and charcoal remain the dominant cooking fuels, particularly among lower-income households, closely associated with small-scale informal logging that is difficult to regulate and monitor. - Gold mining accounted for 85 percent of total exports in 2023 and is a key source of employment, fiscal revenues and foreign exchange. - Artisanal gold mining occurs informally; some operations are linked to non-state armed groups and often bypass environmental and work safety regulations, contributing substantially to forest degradation. ### Government strategy to increase access to clean cooking technologies - The government is developing a comprehensive strategy to coordinate existing efforts and increase access to clean cooking technologies. - Past attempts were largely isolated, donor funded, implemented with no scalability criteria, and resulted in limited long-term impact and little coverage. - Strategy components include: - Development of improved cooking stoves (still firewood-based but more efficient), including local production. - A biogas component based on animal waste, piloted in selected communities. - Analysis of limited deployment of solar stoves and consideration of whether cultural barriers constrain uptake; if so, include actions and communication strategies addressing cultural constraints and clear communication on negative health impacts of indoor pollution. ### Fiscal measures and incentives to expand clean cooking uptake - Current butane gas subsidies reduce variable costs of clean cooking fuels but do not cover the upfront cost of clean stoves. - Possible government actions: - Consider fiscal incentives for the importation or local production of inputs for solar stoves. - In urban areas, expand adoption of butane gas stoves through targeted subsidies or financing schemes for upfront costs. - On the supply side, use incentives such as tax exemptions or subsidized credit to encourage domestic production and private sector participation; additional studies should assess profitability. - Seek support from development partners to co‑finance initiatives to minimize fiscal pressure. ### Artisanal mining: legal status, risks, and formalization - Artisanal mining is not currently classified as illegal; no fiscal incentives are in place to promote its formalization. - Informal miners often operate in hazardous conditions without safety standards, exposing workers to significant health and safety risks. - Recommended government actions: - Update the legal framework to define the legal status of artisanal mining. - Use fiscal incentives—such as a phased introduction of corporate or income tax obligations—to support gradual formalization of small-scale producers. - Provide potential technical assistance from the Ministry of Energy and Mines to increase mine safety. - Objectives: improve oversight, enhance safety, increase the sector’s contribution to fiscal revenues and exports, and address a major driver of deforestation. ### Recommendations — Price-based mechanisms and forestry monitoring - Use Price-Based Mechanisms to Provide Clear Policy Signals in Favor of Sustainable Land Management and Conservation: - Revise the tax on profits for forestry activities so it varies according to sustainable certification; certification and KPIs should be led by independent third-party firms/organizations following international standards. - Conduct a review of the administrative feasibility to include conditionality in support provided to farmers to encourage uptake of smart agricultural practices, conservation agriculture and agroforestry. - Long term objective: assess feasibility to implement a payment for environmental services scheme providing support to households and firms in forests at risk of deforestation. - Strengthen the Forestry Information System: - Work in partnership with third-party agencies that provide forestry sustainable certificates to revise the structure of the tax on profits for forestry activities. - Explore the use of low-cost new technologies to monitor forests and provide deforestation alerts, particularly for large-scale informal logging activities. - Long term objective: operationalize a Monitoring, Reporting and Verification system with support from development partners. - Use Fiscal Incentives to Decrease Informal Activity in Forests and Increase Policy Coordination: - Develop a medium-term clean cooking strategy, coordinating efforts, providing a framework to engage stakeholders, addressing financial and cultural constraints. - Subsidize the initial capital cost of gas butane or solar stoves with financial support of development partners. - Provide fiscal incentives for the import of gas butane or solar stoves and assess potential profitability of local production. ### Waste management: scale, impacts, and fiscal tools - Waste accounts for approximately 8 percent of total GHG emissions in Burkina Faso. - Improving waste management could enhance public health outcomes and broader economic benefits through reduced healthcare costs, fewer lost workdays and increased productivity. - Key contextual data: - Ouagadougou alone produces approximately 130,000 tons of plastic waste annually, accounting for around 14 percent of total national waste generation. - Municipal data: cost of plastic waste management in the formal system is approximately FCFA 2 billion per year. - Existing fiscal measures: - A tax on plastic bags and packaging was introduced under the 2017 General Tax Code: levied at a rate of 5 percent on the local production and importation of plastic packaging; effectively collected at customs due to absence of domestic plastic production. - A 2014 law banning production, importation, marketing and distribution of non-biodegradable plastic packaging has not been fully enforced. ### Fiscal policy instruments to internalize waste externalities - Advanced Disposal Fees (ADFs) and Advance Recycling Fees (ARFs): - ADFs and ARFs could be imposed to prepay the cost of disposal or recycling; ADFs levied on importers are easier to administer than fees at the consumption/retail stage but may reduce consumer salience and not sufficiently incentivize recycling. - ADFs could help finance proper disposal but may not be fully effective alone. - Deposit and Refund System (DRS): - Long-term option: implement a DRS to incentivize collection, recycling and reduce littering; DRS imposes a surcharge at purchase and offers a rebate when returned. - As of 2020, a DRS had been implemented in around 40 countries and shown to substantially increase return rates for single-use containers and reduce plastic waste. - DRS raises prices mainly for consumers that do not recycle and can be progressive if wealthier consumers face higher opportunity costs for returning containers. - DRS could provide income for urban scavengers and incentives for microenterprises in recycling. - Deposit could be collected at import stage with refunds at designated collection locations; unclaimed refunds could finance integrated waste management over medium to long term. ### Waste management recommendations - Consider the implementation of advanced disposal fees for batteries, tires, plastic packaging, and consumer durables such as electronics and appliances. - Long-term recommendation: implement a deposit and refund system for one use waste, such as plastic and glass bottles, aluminum cans, automotive parts, electronic waste, tires, among others, to promote recycling and good waste management practices. ### Strengthening climate governance — legal and institutional context - Strong climate governance is essential to build resilience, reduce climate costs, and enable green growth opportunities. - BFA has ratified key international climate commitments (UNFCCC, 1993; Kyoto Protocol, 2005; Paris Agreement, 2015). - National legal framework highlights: - Constitution of Burkina Faso 1991 recognizes the fundamental right to a healthy environment and duties of the State regarding environmental protection. - Environmental Code 2013 requires EIAs and SEAs and addresses duties to adapt to climate change and preserve natural resources. - Orientation Law on Sustainable Development 2014 defines sustainable development principles and established the National Council for Sustainable Development (CNDD) at the Prime Minister’s Office and the Permanent Secretariat of the CNDD (SP/CNDD) at the MEEA. - Interministerial Decrees established the National Committee on Climate Change (CNACC) in 2024 and the MRV system in 2023 to support NDC implementation. - Sectoral legislation exists for energy, water, waste, land use planning, forestry, and agriculture; decentralization guided by the General Code of Local Authorities 2004 but constrained by limited local capacity. - PFM and revenue legislation govern resource mobilization and financial management of climate regulations (Organic Law on the Laws of Finance 2016; Law on Transparency in Public Financial Management 2015; Public Procurement Code 2008; General Tax Code 2017; Investment Code 2018). *IMF Technical Assistance Report | 71–77.* ### 139. Despite important progress, BFA presently lacks a comprehensive climate change ### Despite important progress, BFA presently lacks a comprehensive climate change ### Legislative framework - The Environmental Code 2013 and Sustainable Development Orientation Law 2014 do not adequately incorporate key climate governance principles related to climate change adaptation and mitigation planning, implementation, coordination, MRV, and compliance. - No central level institutional structure established by these laws currently has the legal mandate for climate change management. - In the absence of holistic climate legislation, the SP/CNDD assumes the mandate of coordination and technical facilitation across stakeholders. - The national MRV Decree of 2024 requires that BFA’s MRV system cover GHG emissions, mitigation and adaptation efforts, and other climate actions in NDC sectors, specifies bodies responsible for MRV operation, and requires annual reporting, but does not provide sanctions for non-compliance. - No legislation explicitly covers planning and implementation of climate actions prior to MRV. Examples of sectoral and regulatory gaps: - The revised Urban Planning and Construction Code (incorporating energy efficiency, rainwater drainage, bioclimatic design) has been awaiting Cabinet approval since 2021. - EIA requirements under the Environmental Code and its implementing decree address environmental harm without explicitly addressing climate change. - Waste management regulations primarily address pollution control and public health and lack integration of climate change mitigation, contributing to increased GHG emissions, improper disposal of waste, and lost opportunities for waste generation minimization and recycling. - The Humanitarian Crises and Disasters Law 2014 does not adequately incorporate disaster preparedness and is disproportionate in its coverage of different types of natural disasters which may be exacerbated by climate change. - The Water Act 2001 exists, but specific regulations for efficient water use and against depletion of water resources are absent. - The “Polluter Pays” principle in the Environmental Code is recognized in the Water Financial Contribution Law 2001 as a component to be included in the parafiscal tax on the water sector, but it still lacks an implementing decree. - The Mining Code 2024 introduces provisions for environmental management, including treatment of mining tailings, but is missing detailed implementing regulations. - Methane and fugitive emissions are not regulated, contributing to emissions in the extractive industry. - An interministerial decree makes the provisions of the NAP legally binding; however, there are no implementing regulations and sanctions to ensure compliance. ### Planned legislative updates and remaining needs - Government actions under consideration or pending approval: - Update EIA requirements under the Environmental Code 2013 and its implementing decrees to include climate change considerations (pending Cabinet approval). - Draft bill to regulate carbon markets (pending Cabinet approval). - Decree under development to formalize a standardized carbon credit allocation framework as a national standard for carbon credit certification. - Revised Urban Planning and Construction Code (pending approval) to integrate climate issues into land use planning and construction. - Intent to update the legal framework for urban planning (urban planning documents, master development plans, waste management plans, etc.) to strengthen cities' adaptation and contribute to mitigation through densification and controlling urban sprawl. - Remaining need: a comprehensive review of national and sectoral legislation to integrate key climate governance principles consistently across legal instruments and translate them into sustainable development planning. ### Policy framework: existing strategies and coverage - National policies and strategies anchoring commitment: - 2050 Vision for Low-Carbon and Climate -Resilient Development - National Sustainable Development Policy 2013 - National Plan for Economic and Social Development (PN-DES) II 2021-2025 - National Green Economy Strategy 2019 - Climate Security Strategy 2024 - UNFCCC reporting and planning instruments submitted/prepared: - First, Second and Third National Communication: 2002, 2015, and 2022 - NDCs: 2016 (revised 2021) and 2025 (forthcoming) - First Biennial Update Report 2024 - NAP I and II (2015 and 2024) identifying sectoral adaptation actions in agriculture, livestock, health, energy, infrastructure, and water resources - Sectoral policies/strategies adopted (examples): National Renewable Energy Policy, Energy Efficiency Policy, REDD+ Strategy, National Water Policy, Action Plan for Integrated Water Resources (PAGIRE) - Capacity-building instruments: Climate Learning Strategy (2016) and ongoing development of sectoral climate guides - Disaster Risk Reduction Strategy (DRR) currently under preparation ### Gaps and opportunities in policy framework - Proliferation of climate policy documents strains coordination and resources; climate policies and sector strategies often developed along different tracks (SP/CNDD for climate policies; line ministries/agencies for sector strategies). - Climate sector documents are at times prepared in silos despite frequent consultations. - Climate policy development is largely donor funded, leading to dependence on external technical expertise and resource availability and infrequent updates/revisions. - Key stakeholders such as the MEF do not currently play a leading role in climate policy development despite importance for fiscal policy, public policy, and capital investment oversight. - Tight fiscal space, limited resources, institutional and capacity weaknesses, and competing development priorities hinder implementation of numerous plans and subnational translation of national policies/action plans. - Data limitations: - Quality of greenhouse gas inventories is inconsistent due to fragmentation of data across government entities and technical capacity limitations. - Climate trends and projections for adaptation and disaster risk management are constrained by insufficient data sharing across institutions, lack of long-term forecasting, and limited analysis of physical impacts on natural resources. - Recommendation: coordinated effort led by SP/CNDD and ANAM to build and share common projections for natural resources to support cross-sectoral diagnostics and align sectoral strategies. - Sectoral alignment opportunity: - Power Sector Master Plan (2020-2040) sets renewables share target of 20 percent of the overall energy mix by 2030; the share of renewables in overall generation in 2023 was already 21 percent. Opportunity to update plans and reflect renewed ambition in the forthcoming NDC 2025. - PN-DES II recognized climate change as a development challenge and emphasized incorporation into planning and budgeting, promoting renewable energy and energy efficiency, sustainable development of agriculture/forestry/wildlife/fisheries, and reducing greenhouse gas emissions and environmental degradation. The transitional government's 2022 reorientation toward counterterrorism and humanitarian responses constrained climate prioritization. GoBF is preparing a new action plan with intentions to prioritize climate change adaptation and mitigation and explore climate change as an economic lever. - Opportunity to strengthen climate change priority in macro-fiscal planning. ### Institutional framework and arrangements - Legislation establishes multiple bodies: National Council for Sustainable Development (CNDD), Sustainable Development Commission, National Committee on Climate Change, among others. - The revised NDC 2021 provides for Coordination Units; NAP 2024-2026 lists three upper-level committees plus Regional Dialogue Frameworks (RDF). - Operationalization varies; information on composition, meeting schedules, and minutes is not available for several bodies. - Table of institutional arrangements (selected items preserved as described): 1. Sustainable Development Commission — parliamentary committee; operational but limited oversight capacity. 2. National Council for Sustainable Development (CNDD) — established under the Sustainable Development Orientation Law 2014; high-level interministerial body chaired by the Prime Minister. 3. National Conference on Sustainable Development (CONADD) — multistakeholder conference chaired by the Prime Minister; meets once every two years. 4. Permanent Secretariat of the National Council for Sustainable Development (SP/CNDD) — PS of the CNDD at the MEMC; operational Focal Point for the Global Environment Facility (GEF). 5. National Council for the Environment and Sustainable Development (CONEDD) — established in 2002; CONEDD and SP/CONEDD are not operational. 6. National Committee on Climate Change (CNACC) — consultative framework created by interministerial decree; has met once since establishment in 2024. 7. Directorate General for Green Economy and Climate Change (DGEVCC) — DG at MEMC overseeing green economy and climate change policy design, implementation and monitoring. 8. Secrétariat Permanent for REDD+ (SP/REDD+) — coordinates REDD+ activities. 9. Sector Coordination — Decree N ° 2008-125 / PRES / PM / MECV calls for creation of Environmental Units; Environmental Code 2013 upholds coordination mechanisms. 10. NDC Coordination Unit — proposed in Revised NDC 2021 under SP/CNDD with coordinating, adaptation technical, and mitigation technical units. 11. NAP National Technical Steering Committee — coordination and guidance body of the NAP; chaired by SP/CNDD. 12. NAP National Reporting Committee — technical arm responsible for validating annual sectoral technical reports, producing monitoring reports, and formulating recommendations. 13. NAP Sector Technical Committees — 4 committees: Energy, Industrial Processes and Product Use (IPPU), AFAT, and Waste. 14. NAP Regional Dialogue Framework — regional-level Steering Committee for NAP chaired by Regional Governor and co-chaired by President of Regional Council (and where applicable, President of Special Regional Delegation). ### Institutional gaps and opportunities - Proliferation of institutional structures and inconsistent climate-related laws/policies have resulted in overlaps, weak coordination, and institutional inefficiency. - Overlaps and unclear division of responsibilities: - SP/CNDD and CNACC have overlapping responsibilities without clear guidelines on distinct duties, synergies, and coordination frameworks. - CNDD and CONEDD have almost identical mandates and common membership and leadership. - Ad-hoc committees and working groups in lieu of formalized/permanent channels lead to high staff turnover, disrupted knowledge transfer, and continuity challenges; many bodies are never operationalized, increasing costs. - SP/CNDD is the de-facto climate coordination entity, but its authority is weakened by lack of legislative backing and reliance on informal relationships and an inefficient administrative system. - Opportunities for institutionalization and mainstreaming: - Expand Environmental Units to include climate change, formalize them in line ministries of key NDC sectors and subnational governments (potentially as climate change focal points) to support planning, coordination, resource mobilization, and effective resource use. - Mainstream climate change considerations into core functions of the MEF (fiscal policy formulation, taxation, expenditure planning, financing and debt management) to enable MEF to assume a stronger leadership role in driving climate priorities (referenced action: see Box 1). *Source: IMF staff.* ### Box 1. Strengthening the Role of Ministries of Finance in Driving Climate Action ### Box 1. Strengthening the Role of Ministries of Finance in Driving Climate Action ### Core functions where Ministries of Finance can mainstream climate - Economic strategy and vision: - Participate in the development of national climate strategies, greening national development and sector plans, shaping industrial and innovation strategies, and assessing investment needs for the transition—in partnership with relevant line ministries. - Use responsibility for oversight or involvement in national development strategies, sector plans and capital investment planning. - Fiscal policies and budget management: - Design carbon taxation and new forms of environmental taxation, reform fossil fuel subsidies, introduce new fiscal incentives for green sectors, reform multi-annual expenditure frameworks and annual budgets, and green public investment and procurement strategies. - The Ministry of Finance’s central role in the budget formulation process is a particularly important entry point for driving climate action and investment. - Financial policy and regulation and oversight of the financial system: - Regulate state-owned banks and enterprises, sovereign wealth funds, financial institutions and debt markets; interface with central banks; manage shareholdings and relationships with international finance institutions and multilateral development banks to green the entire financial system. - Mobilize finance into sustainable investments through frameworks for green bonds, catalyzing private capital, adaptation and disaster risk finance and insurance, and international climate finance—in partnership with central banks and the private sector. ### Critical capabilities to enhance core functions - Leadership capability: - Strengthen champions for climate action at the political and officials’ level; strengthen the Ministry’s vision, mission and mandate; create clear responsibilities and organizational structures for climate leadership. - Coordination capability: - Drive effective collaboration across government and with the private sector, civil society and international financial institutions, and multilateral platforms and processes supported by effective strategies for consultation and communication. - Human and analytical capability: - Ensure dedicated staffing resources for climate action, upgrade expertise in climate policy, and revamp tools and analytical approaches for data collection and economic decision-making. *Source: Coalition of Finance Ministers for Climate Action.* ### Climate-related data (findings) - Data importance: - Data provides objective insights to help GoBF make more informed choices, identify trends, assess risks, evaluate outcomes, reduce uncertainty, allow better projections, and enable more strategic planning. - Capacity and horizon limitations: - ANAM provides seasonal weather forecasts up to 6-month horizons. - The MEF’s resource envelop is determined through the Medium Term Expenditure Framework (MTEF) which typically covers a three year period. - The PN-DES II covers a 5-year horizon. - Traditional MDAs take a short-to-medium-run view; climate projections require very long-run forecasting and projections. - Data management and sharing gaps: - Lack of technical capacity and resources significantly limits climate-related data collection, analyses, dissemination. - Pockets of data exist across the GoBF, some overlapping with other data work, but not widely shared within or between MDAs; in some instances data resides with the Development Partner that originally supported the activity. - Instances where data was produced once and then not updated or maintained for future use. - Recommended data actions: - Introduce a system for effective data management and sharing between MDAs and development partners through standing MoUs. - Survey MDAs to understand main data needs and take stock of existing data they hold (and vintage). - Prioritize data areas discussed in the report including disaster risk data, GHG inventory, forestry inventory, climate scenarios and hazard vulnerability maps, and structural plans. ### Climate finance (current status and figures) - NDC and adaptation/mitigation requirements: - BFA’s financial requirements for NDC implementation (revised NDC 2021) are estimated at US$4.1 billion by 2050. - Adaptation: approximately, US$1.1 billion allocated for the agricultural sector. - Mitigation: about $1 billion required by the energy sector to promote renewable energy projects and reduce greenhouse gas emissions. - The NAP 2024-2026 is costed at US$3.2 billion. - Historical investments and funding composition: - In 2019/20, US$567 million was invested in climate related activities in BFA, representing only 13 percent of its total NDC requirements. - Of this, 76 percent was provided by multilateral and bilateral partners as low-cost debt (42 percent) and project-level debt (21 percent). - Corporations provided 65 percent of private climate finance, commercial financial institutions provided 24 percent, and institutional investors provided 10 percent. - Global funds and accreditation: - Climate related projects in BFA have received funding from Green Climate Fund (GCF), Global Environment Facility (GEF), and Climate Investment Funds (CIF). - The Environmental Intervention Fund (FIE) received GCF accreditation earlier this year. - Notable GCF-backed projects include the Africa Hydromet Program, the Yeleen Rural Electrification Project, and the Local Climate Adaptive Living Facility Plus (LoCAL+). - BFA is currently in the process of applying for Adaptation Fund accreditation. - Funding from all sources does not meet levels required to achieve the enhanced NDC, implement the NAP, and support a green transition; accreditation processes should help attract investment. ### Institutional arrangements and resource mobilization coordination - National Consultation Framework: - In 2022, The National Consultation Framework on National Focal Agencies for Climate Finance was established by a joint decree of MEF and MEEA (Decree n°2022-0520/MEFP/MEEA, 30 December 2022). - The body includes representation of all relevant agencies, global funds and development partners, and coordinates and improves climate finance mobilization. - The framework meets twice a year and extends invites to prospective development partners when a financing opportunity is identified. - In 2024, the framework developed a 3-year priority action plan with 3 strategic pillars: i) supporting the design of climate finance tools and instruments, ii) monitoring and evaluation, and iii) facilitation of the framework for key stakeholders. The action plan is available internally with an intention to eventually share it. - Ongoing initiatives: - The framework is considering climate finance tracking through nomenclature within a chart of accounts (COA). - GoBF is drafting a Climate Finance Strategy with the World Bank. - The FIE is developing a strategy on engaging the private sector in collaboration with an accredited private commercial bank. ### Gaps and opportunities (findings) - Capacity and institutional constraints: - Lack of operational, technical, financial, and institutional capacity limits GoBF’s efforts. - Government aspirations to become a delivery partner for projects require institutional reforms to set up an agency and technical committees, operational and technical appetite for organizing trainings and workshops, and funds to cofinance projects. - Data and project bankability: - Quality of data collection and processing needs significant improvement to develop bankable projects to attract financing. - Transparency and fiduciary concerns: - Transparency and fiduciary functions of the FIE and other funds seeking accreditation should be enhanced in line with international best practices. - Regulatory incentives: - Updates to the Investment Code 2018 can be considered to further incentivize investment in climate adaptation and mitigation technologies. - Climate Finance Strategy design requirements: - The forthcoming Climate Finance Strategy should quantify the gap by containing a status of current climate finance flows (private and public, domestic and international) and compare with needs. - The strategy should identify key recommendations to close the gap through systematic analysis of available instruments and their suitability for BFA. - If certain instruments cannot be used, the strategy should clarify why. - If feasible instruments are currently untapped, the strategy should identify regulatory and operational steps so BFA can start tapping those instruments. - The strategy should identify priority projects and include them in a pipeline. ### Recommendations (policy actions) - Strengthening the Legislative Framework for Climate Action: - Integrate climate change into sustainable development planning: - Amend the Sustainable Development Orientation Law 2014 to incorporate key climate governance principles related to climate change adaptation and mitigation (planning, implementation, monitoring, climate finance, decentralization, and responsible institutions). - Develop and adopt implementing decrees: - Revise the CNDD decree 2017-0459, 13 June 2017 and the SP/CNDD degree (N°2018-009, 11 January 2018) in line with the changes of the Sustainable Development Orientation Law 2014 to establish and refine the legal mandate of CNDD and the SP/CNDD for climate change management. - Clarify and coordinate responsibilities of SP/CNDD and CNACC with respect to the CNDD framework. - Consider regulations assigning responsibilities for policy, coordination, planning and reporting on climate change to subnational governments. - Review the current national and sectoral legislative framework on climate change (for example, Environment Code, DRM Law, Forestry Code, Mining Code), and align with the revised Sustainable Development Orientation Law if needed. - Improve the Institutional Framework for Climate Action: - Assess the effectiveness of parallel coordination mechanisms for climate change and sustainable development to identify overlapping mandates and streamline where needed. - Update responsibilities of Environmental Units at the line ministries of key NDC sectors and of decentralized governments to include climate change. - Mainstream climate change into the core functions of the MEF including macro-fiscal planning, revenue mobilization, budget, and PFM. - Climate Finance Mobilization: - Enhance transparency and fiduciary functions of the Environmental Intervention Fund (FIE) in line with international best practices. - Develop, adopt, and implement a comprehensive Climate Finance Strategy. *Source: Coalition of Finance Ministers for Climate Action.* --- _Source: https://www.imf.org/-/media/files/publications/tar/2026/english/tarea2026001-source-pdf.pdf_