Press Release No. 10/371

Press Release No. 10/371
October 1, 2010

An International Monetary Fund (IMF) mission visited Ouagadougou during September 16–30, 2010 to carry out the first review of the authorities’ economic and financial program supported by the IMF under the Extended Credit Facility (ECF see Press Release No. 10/241). The mission held discussions with Mr. Lucien Bembamba, Minister of Economy and Finance, and other Cabinet members, Mr. Bolo Sanou, the National Director of the Central Bank of West African States (BCEAO), and other senior officials. The staff team also met representatives of labor unions, non-governmental organizations, the private sector, and donors.

Ms. Malangu Kabedi-Mbuyi, IMF mission chief for Burkina Faso, issued the following statement in Ouagadougou today:

“In 2010, economic and financial developments point to a rebound in economic activity, driven by the agricultural and mining sectors. Therefore, the real gross domestic product (GDP) growth should reach 5.2 percent, compared with 3.2 percent in 2009. Inflationary pressures have abated, mostly reflecting a good harvest. The 12-month average inflation rate is expected to be below 1 percent. The external position is likely to be stronger than anticipated, thanks to higher gold exports and improved terms of trade.

“For 2011, real GDP growth is projected at 5.5 percent, and inflation is expected to remain low, reflecting a favorable outlook for agricultural production. The external position would deteriorate slightly, as terms of trade become somewhat less favorable and imports increase, in line with the expected economic recovery.

“The mission found that program implementation at end-June 2010 was generally good. The authorities adopted the legal texts that implement the new fiscal reform strategy approved by Parliament in January, and prepared the report on poverty-reducing expenditure covering the first quarter of 2010. They also made good progress on measures programmed for
end-September in the areas of treasury cash flow management, the cotton sector, and civil service reforms. Revenue performance was stronger than expected, thanks to the authorities’ continued resolve to strengthen tax administration and combat tax evasion. However, the program target on the overall deficit (on a commitment basis, including grants) was not observed, mostly because of an important shortfall in budget aid at end-June.

“The mission reached understandings with the authorities on a policy framework for 2010–11 that could form the basis for completing the first review under the ECF arrangement. Board consideration of the review could take place in late November.

“The mission is grateful for the open and frank discussions with the authorities and for their hospitality.”