Press Release No. 14/593

Press Release: IMF Staff Concludes Visit to Burkina Faso

December 19, 2014

An International Monetary Fund (IMF) team, led by Ms. Laure Redifer, visited Ouagadougou from December 13−19, 2014 to discuss the draft 2015 budget and ascertain the transition government’s views on future program engagement with the IMF.

At the conclusion of the visit, Ms. Redifer made the following statement:

“Over the course of 2014, economic activity in Burkina Faso was increasingly affected by significantly lower international commodity prices – especially gold and cotton -- and the regional impact of the Ebola crisis in neighboring countries. These developments significantly affected revenue collection, which led to lower government expenditures that in turn negatively affected growth. Growth and revenue projections were already being revised downward in October. The political events of end-October only marginally exacerbated this situation but are not a main factor for revised growth projections. Economic growth is now expected to be around 5 percent in 2014 and 2015 (earlier projections were 6−7 percent), with subsequent impacts on revenues anticipated for 2015. The authorities reported encouraging news that a recent T-bill issuance was subscribed in full, and upcoming domestic bond issuances were expected to be well received.

“Based on these developments, the transition authorities and the IMF team discussed broad parameters for a draft 2015 budget that would be both realistic and fully-financed. Agreement was reached on a resource envelope that takes into account estimates of additional budget support commitments under discussion by development partners, new measures to improve revenue administration, and an improved outlook for domestic financing. However, eliminating remaining financing gaps required some downward adjustment in planned expenditures for 2015, including for investment. The IMF team urged the authorities to continue seeking additional resources to preserve investment spending during 2015.

“The IMF team expressed its strong commitment to support Burkina Faso during the transition, and inquired about the authorities’ preferences for program engagement going forward. The authorities explained their wish to continue program engagement with the same modalities as in the past. The authorities indicated their full support for objectives of the 3 year IMF-supported program approved in December 2013, which include: (1) improved and transparent collection and management of natural resource wealth; (2) budget composition supporting more inclusive growth; (3) faster and more growth-enhancing public investment; and (4) a specific focus on investment to boost energy supplies, which have been identified as a main constraint to growth and job-creation. With regard to inclusive growth, the authorities underscored investment in education and job-creation for women and youth as critical priorities, as well as health, security, governance, and justice.

“The IMF team will provide an assessment of the macroeconomic situation and an evaluation of the transition authorities’ policy intentions in 2015 for development partners. The IMF team tentatively plans to return to Ouagadougou in the first quarter of 2015 to continue discussions on program engagement. In the interim, they will remain in close contact with the authorities.

“The team met with President Michel Kafando, Prime Minister Isaac Zida, Minister for Finance and Economy, Jean-Gustave Sanon, Deputy Minister of the Budget Amina Billa/Bembara, Minister for Mines and Energy Boubacar Ba, Minister for Health Amédée Prosper Djiguimde, as well as various development partners and the media.

The IMF team would like to thank the authorities for their hospitality and for the candid and fruitful discussions, which foretell close future collaboration between Burkina Faso and the IMF. “