Ouagadougou, Burkina Faso: An International
Monetary Fund (IMF) team led by Mr. Martin Schindler, Mission Chief for
Burkina Faso, visited Ouagadougou during June 20 – 29, 2023, to discuss
with the Burkinabè authorities IMF support for their policy and reform
plans.
At the end of the mission, Mr. Schindler issued the following statement:
“I am pleased to announce that the IMF team reached staff-level agreement
with the Burkinabè authorities on a four-year program supported by an
arrangement under the
Extended Credit Facility (ECF)
in the amount of SDR 228.76 million, or about US$305 million. The economic
program aims to restore macroeconomic stability and debt sustainability
while laying the foundation for stronger and more inclusive growth. The
staff-level agreement is subject to IMF Management and Executive Board
approval and sufficient financing assurances by Burkina Faso’s development
partners.
“The Burkinabè authorities have committed to a wide-ranging economic reform
program, which builds on the government’s Action Plan for Stabilization and
Development (PA-SD) and tackles the challenges facing the country.
“Key reforms aim to ensure reducing the budget deficit to 3 percent of
nominal GDP by 2027 while protecting the most vulnerable and creating
fiscal space for priority spending. The fiscal strategy relies on measures
to increase domestic resource mobilization and rationalize public
expenditure. In addition, the authorities have committed to strengthening
social safety nets, including setting up a nation-wide targeted
cash-transfer program for the most vulnerable households. Finally, the
authorities are continuing to implement measures to address the ongoing
food insecurity crisis, including the sale of food and agricultural inputs
at subsidized prices, the distribution of free food to combat acute
malnutrition, as well as conditional and unconditional cash transfers to
the affected populations.
“Structural reforms will be introduced to underpin the fiscal strategy and
ensure a durable consolidation. These include improving the efficiency of
state-owned companies operating in the energy sector, ensuring that wage
bill growth is commensurate with fiscal resources, and advancing reforms to
bolster tax compliance and intensifying efforts to collect tax arrears.
These measures will help create space for growth-enhancing measures and
social spending.
“Efforts will also be made to improve fiscal transparency, including the
publication of budget execution reports. The authorities are committed to
appropriately balancing security-related, development, and social
expenditures. They will strengthen public expenditure commitment controls
(including the publication of audits on spending to address the food
insecurity crisis), tackle structural challenges in the energy sector,
improve the efficiency of public investment, and intensify efforts to
address financial integrity challenges.
“To support the authorities program request, sufficient financial
assurances will be needed before the proposed Fund-supported program can be
presented to the IMF Executive Board for approval.
“IMF staff held meetings with President of the Transition Traoré, Prime
Minister Tambela, Finance Minister Nacanabo, and BCEAO National Director Ki
Zerbo, and their teams, as well as other members of the government and
directors of various government agencies. The IMF team has also continued
to engage with other stakeholders and development partners. Staff would
like to express their gratitude to the Burkinabè authorities, and all
representatives of the international community, for their open and
constructive engagement over the past few months.”