Press Release No. 24/419

IMF Reaches Staff-Level Agreement with Burkina Faso on the Second Review of the Extended Credit Facility

November 14, 2024

• International Monetary Fund (IMF) staff and the Burkinabè authorities have reached a staff-level agreement on economic policies to conclude the second review of the Extended Credit Facility (ECF) arrangement. Once the review is approved by IMF Management and completed by the IMF Executive Board, Burkina Faso will have access to about US$ 32 million (SDR 24.1 million) in financing.
• Discussions focused on macroeconomic and fiscal developments, improving fiscal transparency and governance, reducing fiscal risks, and enhancing efficiency in the energy sector.
• The performance of Burkina Faso under the program has been generally satisfactory. All quantitative performance criteria and all indicative targets except one have been met. Progress has been made in the implementation of structural reforms. The authorities are making progress in the reform of subsidies and the management of public finances.

Washington, D.C.: An International Monetary Fund (IMF) team led by Martin Schindler, Mission Chief for Burkina Faso, held meetings in Ouagadougou during September 30–October 9 and in Washington during the 2024 IMF/World Bank Annual Meetings to discuss macroeconomic policies in the context of the second review of the four-year program supported by the Extended Credit Facility (ECF) arrangement. The arrangement was approved by the IMF Executive Board on September 21, 2023 for a total amount of SDR 228.76 million (about US$ 302 million).

At the conclusion of the discussions, 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 second review of the program under the ECF arrangement. The conclusion of this review by the IMF Executive Board would enable the disbursement of about US$ 32 million (SDR 24.1 million), bringing the total IMF financial support disbursed under the arrangement to about US$ 96 million (SDR 72.3 million). The meeting of the IMF Executive Board is tentatively scheduled for December 2024.

“We discussed macroeconomic developments and the near-term outlook. Burkina Faso’s security situation remains challenging. While real GDP growth is still projected to accelerate in 2024, amid resilience of the economy especially in the services sector, at a projected rate of 4.2 percent the momentum has weakened in light of insecurity and climate-related headwinds.

“The authorities have made strong efforts in implementing macroeconomic adjustment reforms in a highly challenging environment due to a volatile security situation, elevated borrowing costs, and food insecurity.

“Most quantitative indicators and structural benchmarks have been met. We commend the authorities for the progress on the public wage bill and energy subsidy control, and for raising the ceiling on VAT credit reimbursements.

“The authorities are committed to macroeconomic stability. They aim to reduce the deficit to around 5.0 percent of GDP in 2024 and gradually converge to 3 percent of GDP by 2027. These efforts will create fiscal space to finance priority spending to reduce poverty, ensure debt sustainability, and improve resilience.

“The authorities are also committed to further enhancing fiscal governance and transparency, including in public procurement, budget execution, and Treasury management, as well as strengthening and expanding social protection.

“The authorities will continue their efforts to reform energy subsidies. In this context, staff also had initial discussions on the government’s climate agenda. in view of the authorities’ request for initiating preliminary discussions on a possible RSF arrangement in the future.

“Staff had final discussions with the authorities on the implementation of measures under the IMF’s 2023 Food Shock Window. An audit found that it contributed to alleviating the extreme vulnerability of people in food insecurity, and the authorities will provide a final report on the 12-month program.

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

“The IMF mission held meetings, in both Ouagadougou and Washington, with the Minister of Economy and Finance, Hon. Aboubakar Nacanabo; the BCEAO National Director, Armand Badiel; and other senior government officials. The team also met with private sector representatives and development partners in Ouagadougou.”