Press Release No. 19/401

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

November 7, 2019

• Growth is expected to moderate to 6.0 percent in 2019 and over the medium term, but there are downside risks, given the difficult context the country is facing.
• The budget deficit is expected to be maintained within the West African Economic and Monetary Union (WAEMU) limit of 3 percent of GDP in both 2019 and 2020.
• Performance under the Extended Credit Facility-supported program remains broadly satisfactory and is scheduled to be discussed by the IMF Executive Board in December 2019.

A staff team from the International Monetary Fund (IMF), led by Calixte Ahokpossi, visited Ouagadougou during October 24 to November 6, 2019 to discuss the third review of Burkina Faso’s economic and financial program supported by the IMF under the Extended Credit Facility (ECF) arrangement.

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

“The economy has remained resilient in the face of security concerns and protracted labor disputes in the public sector. Growth is projected to stabilize at 6.0 percent in 2019 and 2020, following an estimated 6.8 percent in 2018. Meanwhile inflation has turned negative, mainly reflecting good harvests in late 2018 and early 2019. The growth outlook is subject to risks, however, owing to the impact from the security crisis.

“Budget implementation during 2019 has been broadly in line with program targets and is expected to result in the deficit being within the WAEMU convergence criterion limit of 3 percent of GDP. The creation and the endowment of a special treasury account for VAT reimbursement in June 2019 should accelerate the payment of VAT claims. Tax revenues are projected to be weaker than originally planned as a result of public sector pay disputes during the first half of the year. The authorities are nevertheless striving to make up the shortfall by stepping up tax recovery efforts during the rest of the year. At the same time, windfall revenues from the sale of telecommunication licenses have eased the pressure on development spending and allowed increased allocations to security. Expenditure on fuel subsidies is projected to decline as the fuel price adjustment mechanism has narrowed the gap between market and pump prices.

“The authorities have shown strong commitment to the implementation of the program with most performance criteria and structural benchmarks at end-June 2019 being met. The 2020 budget seeks to maintain the budget deficit at 3 percent of GDP while preserving fiscal space for critical investments and development expenditure. The budget contains appropriate tax measures to boost domestic revenue mobilization. With the view to improving the government’s ability to provide timely and targeted support for the most vulnerable, staff urged the authorities to step up their effort to rationalize existing social safety nets and to commit needed resources to respond to shocks. Staff also urged the authorities to develop a medium-term public sector compensation strategy that could provide the overall basis for reforms to salaries and allowances.

“The discussions have allowed the authorities and the IMF mission 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 December 2019.

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

The team met with Mr. Christophe Dabiré, Prime Minister; Mr. Lassané Kaboré, Minister of Economy, Finance and Development; Ms. Edith Clémence Yaka, Minister Delegate in charge of the budget; Mr. Seni Mahamadou Ouedraogo, Minister of Civil Service, Labor and Social Protection; 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.