Journal Issue
Share
Article

Burkina Faso:Staff Report for the 2014 Article IV Consultation, First Review Under the Three-Year Arrangement Under the Extended Credit Facility, and Request for Waiver and Modification of Performance Criteria—Informational Annex

Author(s):
International Monetary Fund. African Dept.
Published Date:
July 2014
Share
  • ShareShare
Show Summary Details

Relations with the Fund

(As of March 30, 2014)

Membership Status Joined: May 02, 1963

General Resources Account

SDR Million%Quota
Quota60.20100.00
Fund holdings of currency (Exchange Rate)52.6287.40
Reserve Tranche Position7.5912.61

SDR Department

SDR Million%Allocation
Net cumulative allocation57.58100.00
Holdings48.1383.59

Outstanding Purchases and Loans

SDR Million%Quota
ECF Arrangements139.24231.30

Latest Financial Arrangements

TypeDate of ArrangementExpiration DateAmount Approved

(SDR Million)
Amount Drawn

(SDR Million)
ECFDec 27, 2013Dec 26, 201627.092.55
ECFJun 14, 2010Jun 14, 201082.2782.27
ECF1Apr 23, 2007Apr 22, 201048.1647.16

Projected Payments to the Fund1

(SDR Million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20142015201620172018
Principal4.0814.1314.4517.8024.15
Charges/Interest0.010.340.300.270.22
Total4.0914.4714.7518.0624.36

Implementation of HIPC Initiative

Commitment of HIPC assistanceOriginal FrameworkEnhanced FrameworkTotal
Decision point dateSep 1997Jul 2000
Assistance committed
by all creditors (US$ Million)2229.00324.15
Of which: IMF assistance (US$ million)21.7035.88
(SDR equivalent in millions)16.3027.67
Completion point dateJul 2000Apr 2002

Disbursement of IMF assistance (SDR Million)

Assistance disbursed to the member16.3027.6743.97
Interim assistance4.154.15
Completion point balance16.3023.5239.82
Additional disbursement of interest income32.012.01
Total disbursements16.3029.6845.98

Implementation of Multilateral Debt Relief Initiative (MDRI)

I. MDRI-eligible debt (SDR Million)462.12
Financed by: MDRI Trust57.06
Remaining HIPC resources5.06
II. Debt Relief by Facility (SDR Million)
Eligible Debt
Delivery DateGRAPRGTTotal
January 2006N/A62.1262.12

Safeguards Assessments

The Central Bank of West African States (BCEAO) is a common central bank of the countries of the West African Economic and Monetary Union (WAMU). The latest assessment of the BCEAO was completed on December 13, 2013. The assessment found that the bank continued to have a strong control environment and has, with the implementation of the 2010 Institutional Reform of the WAMU, enhanced its governance framework. Specifically, an audit committee was established to oversee the audit and financial reporting processes, transparency has increased with more timely publication of the audited financial statements, and the BCEAO is committed to IFRS implementation by end-2014. The assessment also identified some limitations in the external audit process and recommended that steps be taken to ensure the adequacy of the mechanism through selection of a second experienced audit firm to conduct joint audits.

Exchange System

Burkina Faso is a member of the West African Economic and Monetary Union (WAEMU). The exchange system, common to all members of the union, is free of restrictions on the making of payments and transfers for current international transactions. The union’s common currency, the CFA franc, had been pegged to the French franc at the rate of CFAF 1 = F 0.02. Effective January 12, 1994, the CFA franc was devalued and the new parity set at CFAF 1 = F 0.01. Effective December 31, 1998, the parity was switched to the euro at a rate of CFAF 655.96 = €1.

The authorities confirmed that Burkina Faso had not imposed measures that could give rise to exchange restrictions subject to Fund jurisdiction. They will inform the Fund, if any such measure is introduced.

Aspects of the exchange system were also discussed in the report “WAEMU: Common Policies of Member Countries” (Country Report No. 13/92 of March 8, 2013).

Article IV Consultations

The periodicity of Burkina Faso’s Article IV consultation is set in accordance with the July 15, 2002 Executive Board Decision on consultation cycles. Discussions took place in Ouagadougou during September 29–October 14, 2011 for the 2011 Article IV Consultation and the third review under the Extended Credit Facility. The latest Article IV consultation was completed by the Executive Board on December 21, 2011 (Country Report No.12/158). In concluding the 2011 Article IV consultation, Executive Directors welcomed the authorities’ sustained implementation of sound policies and structural reforms, which has contributed to robust economic growth, low inflation, and a broadly favorable external position. They underscored that continued fiscal consolidation, improved social policies, and decisive implementation of structural reforms will be critical to achieve sustained, broad-based economic growth and poverty reduction. Directors agreed with the authorities’ focus on scaling up investment to close the infrastructure gap and boost economic growth and stressed the need to improve investment efficiency, within financing strategies that are consistent with long-term debt sustainability.

Financial Sector Assessment Program (FSAP) and Report on the Observance of Standards and Codes (ROSC) Participation

A joint team of the World Bank and the International Monetary Fund conducted a mission under the FSAP program in 2008. A regional FSAP for the WAEMU was undertaken in 2007. A ROSC on the data module was published in 2002.

Technical Assistance

SubjectDate
Review of the Implementation of the WAEMU Harmonized Public Financial Management FrameworkApril 2014
Medium Term BudgetingFebruary 2014
Review the Implementation of PFM ReformsFebruary 2014
Finalize Preparation of the New Audit ManualFebruary 2014
Real Sector Statistics and National AccountsSeptember 2013
Mining Sector Fiscal RegimeJuly 2013
PFM Training for Courts of AccountJuly 2013
Review of Progress of the Strategy to Implement the WAEMU Harmonized PFM FrameworkApril 2013
Report on the Government Finance Statistics MissionApril 2013
Real Sector StatisticsApril 2013
Program BudgetingFebruary 2013
Customs AdministrationJanuary 2013
Debt Sustainability AnalysisNovember 2012
Public Debt ManagementSeptember 2012
Expenditure ChainSeptember 2012
Implementation of Electronic Transfer of Funds for Tax CollectionSeptember 2012
A Framework for Managing Fiscal Risks from Public-Private PartnershipsJuly 2012
Tax PolicyJune 2012
A Strategy to Implement WAEMU Public Finances FrameworkJanuary 2012
Tax Administration on Strengthening the Management of Tax ArrearsApril 2012
Bank Supervision(long-term expert March 2011-2012)
Program-based BudgetsNovember 2011
Public Debt/Portfolio Risk ManagementOctober 2011

Resident Representative

Mr. Jean-Baptiste Le-Hen was appointed Resident Representative to Burkina Faso in September 2012 and has been stationed in Ouagadougou since that time.

Joint Management Action Plan Implementation

TitleProductsMissionDelivery
A. Mutual information on relevant work programs
Bank work program in the next 12 months• Poverty MonitoringOct 2014
• Public Expenditure Review (including Public Investment Management)Nov 2014May 2015
• Financial sector policy note
• Study on the M&E System for the Cotton Input FundJune 2014Dec 2014
• Study on the mechanism and the functioning of a Guarantee fund in the transport sectorJune 2014Dec 2014
• Performance assessment of customsDone
IMF work in the next 12 monthsIMF-supported program
• Second ECF reviewOct 2014Dec 2014
• Third ECF reviewMar 2015May 2015
• Implementation of new debt policy, as needed
• Work at a national and regional level, on fiscal rule to manage natural resource revenues
• Analysis of regional energy needs
Technical assistance
• GFSM 2001
• BPM 6
• Follow up TA on mining taxation
• TA on program budgeting
• TA on National Accounts (quarterly and base year)
B. Mutual requests
Fund request• TA on public procurementTo be determined
• TA on judiciary sector
• Work on energy sector
• Artisanal mining issues (child work, environment, etc).
Bank request• Regular updates of medium-term macro projections
• Fund Relation Note (for budget support operations)
C. Agreement on joint products and missions
Joint product• Follow up TA on debt management (Bank lead)

Statistical Issues

I. Assessment of Data Adequacy for Surveillance

General: Data provision has some shortcomings, but is broadly adequate for surveillance. The most affected areas are: national accounts and price statistics. Burkina Faso has received technical assistance (TA) from the IMF; the TA has been partially financed by Japan.

National accounts: Annual GDP estimates are compiled by economic activity, by institutional sector accounts and by expenditure categories at current and constant prices (1999=100). Data quality is affected by the scarcity of suitable sources and deficiencies in statistical practices. Weaknesses include: coverage of the informal sector (due to limited, out of date surveys, and a failure of small enterprises to submit accounting statements or tax declarations); private household consumption, which is not adequately validated with supply-use tables and updated household budget-consumption surveys.

Price statistics: The CPI (2008=100) only covers African households in the capital; it excludes various types of purchased goods and services, and services of owner-occupied dwellings and prices of unavailable products are presumed unchanged for up to three months rather than imputed from recorded prices changes of closely related products. The producer price index and the wholesale price index are neither compiled nor envisaged due to budgetary constraints.

Government finance statistics: A committee was put in place to oversee the compilation of government finance statistics and strengthen coordination among fiscal agencies. The provision of expenditure data has also improved with the adoption of functional presentation of expenditure. The remaining areas for improvement include mainly the extension of the TOFE coverage to the general government and basing its compilation on the Treasury ledger.

Monetary finance statistics: Most of the problems in monetary statistics are not specific to Burkina Faso but affect all member countries of the WAEMU. The BCEAO has encountered difficulties in estimating currency in circulation in each WAEMU member country due to large backlogs of unsorted banknotes held by the central bank in its various national agencies.

II. Data Standards and Quality

Burkina Faso participates in the General Data Dissemination Standard since December 28, 2001. A data ROSC visited Burkina Faso during May 8-21, 2003.

III. Reporting to STA

Balance of payments (BOP): The coverage of informal trade is incomplete and that of services and transfers (especially workers’ remittances) depends on contacts with reporting bodies. Annual surveys, reporting FDI transactions, are conducted yearly. BCEAO authorities have indicated that quarterly data derived from banking settlement reports are used to assess BOP reports; payment statements provide early information and support data quality controls. The BCEAO has started publishing IIP data in line with the BPM 6 format and has revised its surveys design and software accordingly. The BCEAO does not provide any metadata (describing its methodology). It participates in ECID surveys corresponding to direct investment presented on a bilateral basis (with partner countries).

Government Finance: Since October 2010, annual data and quarterly data covering budgetary central government are reported to STA for publication in International Financial Statistics and the Government Finance Statistics yearbook. The latest reported data cover 2012. The BCEAO reports monetary data to STA with a lag of at most three months.

Burkina Faso: Table of Common Indicators Required for Surveillance
Date of latest observationDate receivedFrequency of Data6Frequency of Reporting7Frequency of Publication7Memo Items:8
Data Quality–Methodological soundness9Data Quality–Accuracy and reliability10
Exchange RatesCurrentCurrentDDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities13/20144/2014MMM
Reserve/Base Money2/20145/2014MMMLO, LO, LNO, OLO, O, O, O, O
Broad Money2/20145/2014MMM
Central Bank Balance Sheet12/20132/2014MMM
Consolidated Balance Sheet of the Banking System12/20133/2011MMM
Interest Rates23/20145/2014MMM
Consumer Price Index3/20144/2014MMMO, LNO, O, OLNO, O, O, O, NA
Revenue, Expenditure, Balance and Composition of Financing3 – General Government412/20133/2014IIIO, LO, O, OO, LO, O, O, LNO
Revenue, Expenditure, Balance and Composition of Financing3- Central Government12/20133/2014MMM
Stocks of Central Government and Central Government-Guaranteed Debt512/20133/2014AAA
External Current Account Balance20123/2014AAAO, O, O, OLO, O, LO, O, O
Exports and Imports of Goods and Services20123/2014AAA
GDP/GNP20113/2014AAALO, LNO, LNO, LOLNO, LNO, LO, LO,
International Investment Position620123/2014AAA
Revenue, Expenditure, Balance and Composition of Financing3 – General Government412/20133/2014IIIO, LO, O, OO, LO, O, O, LNO
Revenue, Expenditure, Balance and Composition of Financing3- Central Government12/20133/2014MMM
Stocks of Central Government and Central Government-Guaranteed Debt512/20133/2014AAA
External Current Account Balance20123/2014AAA
Exports and Imports of Goods and Services20123/2014AAA
GDP/GNP20113/2014AAALO, LNO, LNO, LOLNO, LNO, LO, LO, LNO
International Investment Position620123/2014AAA

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

These columns should only be included for countries for which Data ROSC (or a Substantive Update) has been published.

Reflects the assessment provided in the data ROSC or the Substantive Update (published on March 10, 2004, and based on the findings of the mission that took place during May 8-21, 2003) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording, respectively, are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 9 except referring to international standards concerning, respectively, source data, assessment of source data, statistical techniques, assessment and validation

Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Includes external gross financial asset and liability positions vis-à-vis nonresidents.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

These columns should only be included for countries for which Data ROSC (or a Substantive Update) has been published.

Reflects the assessment provided in the data ROSC or the Substantive Update (published on March 10, 2004, and based on the findings of the mission that took place during May 8-21, 2003) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording, respectively, are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 9 except referring to international standards concerning, respectively, source data, assessment of source data, statistical techniques, assessment and validation

1

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

2

Assistance committed under the original framework is expressed in net present value (NPV) terms at the completion point, and assistance committed under the enhanced framework is expressed in NPV terms at the decision point. Hence these two amounts cannot be added.

3

Under the enhanced framework, an additional disbursement is made at the completion point corresponding to interest income earned on the amount committed at the decision point but not disbursed during the interim period.

4

The MDRI provides 100 percent debt relief to eligible member countries that qualified for the assistance. Grant assistance from the MDRI Trust and HIPC resources provide debt relief to cover the full stock of debt owed to the Fund as of end-2004 that remains outstanding at the time the member qualifies for such debt relief.

Other Resources Citing This Publication