IMF Executive Board Completes Sixth Review Under the ECF Arrangement, Approves US$6 Million Disbursement, and Concludes 2016 Article IV Consultation with Burkina Faso
IMF News, December 16, 2016
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- Published: December 16, 2016
Executive Board actions and financing
- The Executive Board completed the sixth review of Burkina Faso’s economic performance under a three-year program supported by the IMF’s Extended Credit Facility (ECF).
- The Board approved the disbursement of the equivalent of SDR 4.47 million (about US$6 million), bringing total disbursements to the equivalent of SDR 51.17 million (about US$68.6 million).
- The Board approved the authorities’ request for a 9-month extension of the ECF arrangement and an augmentation of access of SDR 4.47 million (about US$6 million).
- With the extension and augmentation, total access under the arrangement is SDR 55.64 million (about US$74.6 million).
- The ECF arrangement was originally approved in December 2013; an augmentation of access of 40 percent of quota was approved in June 2015.
Economic outlook, performance, and risks
- The IMF finds that “Burkina Faso’s performance under its Fund-supported program remains strong and the economic outlook is improving after two years of weaker growth.”
- Identified downside risks:
- potential reversal of the current favorable external conditions,
- further security threats,
- social pressures for higher recurrent spending that would crowd out needed public investment.
Policy measures, priorities, and recommendations
- Fiscal space and public investment:
- Authorities are implementing measures to create additional fiscal space, including reforms to boost domestic revenues by strengthening tax and customs administration.
- Efforts to contain recurrent expenditures, including on the public wage bill, are underway.
- Improvements in selection, budgeting, and procurement processes for investment projects are being implemented to enhance execution capacity.
- Careful sequencing and prioritization of projects is emphasized to ensure high development impact while maintaining fiscal and debt sustainability.
- Structural reforms and resilience:
- The authorities adopted the 2016–20 National Economic and Social Development Plan, envisaging a significant scaling-up of investment.
- Authorities are seizing low oil prices and recent improvements in the price of export commodities to increase the economy’s resilience and address structural barriers to sustained and inclusive growth.
- Energy sector reforms have improved the financial health of the state-owned petroleum and electricity companies, with the electricity company now in a better position to improve supply.
- Sectoral emphasis:
- Increasing value-added in the agricultural sector and enhancing access to financial services are highlighted as key to support economic expansion and poverty reduction.
Institutional and procedural notes
- The Board also concluded the 2016 Article IV consultation; a press release will be issued separately.
- Footnote on the ECF: “The ECF is a lending facility that provides sustained program engagement over the medium to long term in case of protracted balance of payments problems.”
- Press officer contact listed: PRESS OFFICER: Lucie Mboto Fouda; Phone: +1 202 623-7100; Email: MEDIA@IMF.org.
Source: IMF press release, December 16, 2016.