Press Release No. 19/187

IMF Staff Completes Second Extended Credit Facility Review Mission to Burkina Faso

May 30, 2019

• GDP growth is projected at 6.0 percent in 2019, but this outlook is contingent on security and social unrest pressures subsiding; Burkina Faso is expected to reach the WAEMU convergence criteria of fiscal deficit of 3 percent of GDP in 2019.
• Performance under the IMF-supported program has been generally satisfactory.
• The authorities intend to step up their efforts to create fiscal space to reach the objectives of their National Development Program (PNDES), including supporting investment and social spending.

A staff team from the International Monetary Fund (IMF), led by Calixte Ahokpossi, visited Ouagadougou during May 16–29, 2019 to conduct discussions for the second review of Burkina Faso’s economic and financial program supported by the IMF under the Extended Credit Facility (ECF) arrangement. Dominique Desruelle, Deputy Director of the African Department of the IMF also joined the discussions.

At the end of the visit, Mr. Ahokpossi issued the following statement:

“The discussions for the second review under the ECF-supported program have allowed the authorities and the IMF team to reach a staff level agreement, subject to approval by IMF management and the Executive Board. Consideration by the IMF’s Executive Board is expected in July 2019.

“The security and social situation remains challenging, with security incidents increasing and continued public sector pay disputes. The authorities are taking measures to address these challenges by providing increased resources to security and developing their medium-term public sector pay strategy.

“Notwithstanding this difficult backdrop, GDP growth reached 6.8 percent in 2018, as the agriculture sector rebounded strongly, and other sectors remained resilient. Inflation reached 2.0 percent on average and the current account deficit narrowed to 5.8 percent of GDP, reflecting strong exports of gold and agricultural products. The fiscal deficit also narrowed to 4.9 percent of GDP, essentially at the cost of lower investment.

“GDP growth is projected to reach 6.0 percent in 2019, as agricultural growth reverses to normal. Inflation is expected to remain well below the 3 percent regional ceiling of the West African Economic and Monetary Union (WAEMU). The current account deficit is expected to widen to 6.1 percent of GDP, reflecting lower cotton exports in 2019, following a sharp decrease of cotton production in 2018. The fiscal deficit is expected to meet the WAEMU convergence criterion of 3.0 percent of GPD in 2019. However, this outlook is subject to security and social unrest pressures subsiding.

“The government remains committed to the implementation of the reforms under its program supported by the ECF. Most performance criteria and structural benchmarks at end-December 2018 were met. The authorities are taking necessary measures and actions to preserve program objectives, including making fiscal space for investment, security and social spending. In this context, IMF staff encourage the government and social partners to agree on a package of civil service reforms that would put the wage bill ratio on a firmly downward path.

“The IMF team thanks the authorities for their hospitality and productive discussions.

“The team met with Mr. Roch Marc Christian Kaboré, President of Faso; Mr. Christophe Dabiré, Prime Minister; Mr. Lassané Kaboré, Minister of Economy, Finance and Development; Ms. Edith Clémence Yaka, Minister Delagate responsible for the budget; Mr. Stanislas Ouaro, Minister of Education; Mr. Bassirou Kamadji Ly, President of the Finance and Budget Commission of the National Assembly, and his colleagues; and other senior government officials. The mission also met with Mr. Charles Luanga Ki-Zerbo, National Director of the Central Bank of West African States, and development partners.”