Press Release No. 24/71

Ouagadougou, Burkina Faso: An International Monetary Fund (IMF) team, led by Martin Schindler, Mission Chief for Burkina Faso, visited Ouagadougou from February 29 to March 7 to discuss macroeconomic policies in the context of the first review of the four-year program supported by the Extended Credit Facility (ECF) arrangement and the article IV consultation. The arrangement was approved by the IMF Executive on September 21 , for a total amount of SDR 228.76 million (US$302 million).

At the conclusion of the mission, Mr. Schindler issued the following statement:

“I am pleased to announce that the Burkinabè authorities and IMF staff have reached a staff-level agreement on the economic and financial policies that could support the approval of the first review of the program under the ECF arrangement. Conclusion of the first review by the IMF Executive Board, tentatively scheduled for May, would enable the disbursement of about US$32 million (SDR 24.1 million), bringing the total IMF financial support disbursed under the arrangement to US$64 million (SDR 48.2 million).

“We commend the authorities’ strong efforts in implementing critical macroeconomic adjustment and reforms in a highly challenging environment characterized by elevated borrowing costs, political uncertainty, fragile security conditions in some parts of the territory, and food insecurity.

“All quantitative indicators and most of the structural benchmarks have been met. We especially commend the authorities for the progress in making the provision of social protection more targeted and less fragmented, including through the creation of the Unique Social Registry and the operationalization of the new flagship social safety net, the Programme national d’appui à l’autonomisation des ménages pauvres et vulnérables (PAMPV).

“The authorities expressed their continued commitment to maintaining macroeconomic stability. In line with program objectives, fiscal policy remains geared towards consolidation to create fiscal space, and gradual convergence to a deficit of 3 percent of GDP by 2027. The authorities are therefore committed to reducing the deficit further in 2024 to around 5½ percent of GDP in 2024. They also have an ambitious reform agenda in the areas of social protection, governance, fiscal transparency, and the energy sector.

If maintained, all these efforts will create fiscal space to finance priority spending to reduce poverty and inequality, ensure debt sustainability, and improve resilience.

Given the heightened uncertainty around regional prospects, the authorities reaffirmed their commitment to WAEMU membership.

“We discussed recent macroeconomic developments and the near-term outlook. Burkina Faso’s security situation remains challenging, but efforts to combat terrorism and secure territories previously not under state control are expected to pay dividends soon. Real GDP growth is projected to accelerate to 5.5 percent in 2024 from an estimated 3.6 percent last year, as efforts to restore security should boost economic activity further.

“Fiscal performance in 2023 was in line with program objectives. The overall deficit declined to 6.7 percent of GDP from 10.4 percent in 2022, underpinned by improved revenue mobilization—supported by digitalization efforts—which more than offset a decline in grants and accommodated higher current transfers and domestically financed investment spending. At the same time, there are several sources of fiscal vulnerability which need to be carefully monitored, including elevated borrowing costs on the regional bond market and fuel subsidies.

“In the context of the Article IV consultation, we also discussed the medium-term drivers of growth, as well as policy challenges and vulnerabilities, including an assessment of medium-term fiscal risks to debt sustainability. We also discussed macro-criticality of well-targeted social protection, which is expected to play an important role to promote financial inclusion and economic development in the medium term. Finally, we examined risks and opportunities presented by climate change.

“The IMF mission held meetings with the Minister of Economy, Finance and Prospective, Hon. Aboubakar Nacanabo, who on behalf of the high authorities confirmed the country's membership of WAEMU; the BCEAO National Director, Armand Badiel; and other senior government officials. The team also met with representatives of the private sector and the international community.

“The IMF staff wishes to express its gratitude to the Burkinabè authorities and stakeholders for the constructive and open discussions and support during the mission and their warm hospitality.”