The Executive Board of the International Monetary Fund today completed the second and third reviews of Burkina Faso’s economic performance under a three-year program supported by the IMF’s Extended Credit Facility (ECF). The completion of the second and third reviews enables the immediate release of the equivalent of SDR 23.03 million (about US$32.28 million), bringing total disbursements under the arrangement to the equivalent of SDR 28.13 million (about US$39.42 million).
In completing the reviews, the Executive Board also approved the authorities’ requests for augmentation of access and modification of performance criteria. The 36-month, SDR 27.09 million ECF arrangement (about US$37.97 million, or 45 percent of Burkina Faso’s quota) was approved by the Executive Board in December 2013 (see Press Release 13/542).
Following the Executive Board’s discussion, Mr. Min Zhu, Deputy Managing Director and Acting Chair issued the following statement:
“Burkina Faso’s economy has faced severe challenges over the past year as a result of worsened terms of trade, spillovers from the Ebola crisis in the region, and internal political upheaval. In the run up to national elections in October, a transition government has taken action to safeguard macroeconomic stability and launch reforms to address long-standing structural problems. To support these efforts, the authorities plan to continue with the existing ECF arrangement with Fund.
“Low revenues and delayed budget support have forced a pro-cyclical compression of spending, particularly in public investment. Inflation has turned negative as a result of slower growth and lower food prices. Although reduced investment has narrowed the current account deficit somewhat, a large external imbalance persists and the country’s imputed international reserves have declined sharply.
“Notwithstanding these very difficult conditions, program performance has remained satisfactory, with most quantitative targets and structural reforms met. Overall, the Burkinabe authorities have demonstrated a strong commitment to their Fund supported economic program. The government is taking measures to boost revenues and contain public wages to limit the impact on investment of a necessary fiscal adjustment. Long-term reforms underway aim to reduce costs at public enterprises and address bottlenecks in the energy sector that have held back inclusive and sustainable growth.”