IMF Reaches Staff Deal on Burkina Faso Credit Review
Washington, D.C.: An International Monetary Fund (IMF) team led by Jaroslaw Wieczorek, Mission Chief for Burkina Faso, held meetings in Ouagadougou during April 1–8 in the context of the third review of Burkina Faso’s four-year Extended Credit Facility (ECF) program. 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 end of the mission, Mr. Wieczorek 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 third 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$ 128 million (SDR 96.3 million). The meeting of the IMF Executive Board is tentatively scheduled for June 2025.
“Despite a challenging humanitarian and security context, growth is estimated to have accelerated to 5 percent in 2024, driven by strong performance of agriculture and services. Economic activity is expected to remain robust in 2025 while inflation, which reached 4.2 percent in 2024, should recede to 3 percent.
“The ECF arrangement aims to ensure fiscal space for priority spending, reduce debt vulnerability; strengthen resilience to shocks, reduce poverty and inequality; and improve fiscal discipline and governance.
“The authorities have made substantial efforts in advancing their agenda of structural reforms in a highly challenging security environment. They made commendable progress in mobilizing domestic revenue, while increasing spending on education, health, and social protection, and containing the public wage bill. The authorities also prepared a strategy to clear domestic arrears and are committed to improving further fiscal governance and transparency, including in public procurement, budget execution, and treasury management, as well as expanding social protection.
“Nonetheless, due to spending pressures, including security-related, overall fiscal deficit objective of 5 percent of GDP was exceeded and several program targets at end-December 2024, including the ceilings on the primary fiscal deficit and domestic arrears, were not observed. In response, the authorities have adopted a budget for 2025 aiming to accelerate Burkina Faso’s convergence of the overall fiscal deficit to the WAEMU ceiling of 3 percent of GDP.
“Discussions revealed that a less sharp consolidation would be preferable to avoid potentially overly drastic spending cuts in 2025. With this understanding, staff would support a relaxation of the fiscal deficit target, up to 4 percent of GDP in 2025, if additional external financing in the amount of 0.7 percent of GDP is available, while underscoring that strengthening further domestic revenue mobilization would expand the resource envelope without the recourse to additional borrowing.
“Staff also had initial discussions on the government’s resilience agenda in view of their request for initiating preliminary discussions on a possible arrangement under the IMF’s Resilience and Sustainability Fund (RSF) in the future.
“The IMF mission held meetings in Ouagadougou with the Minister of Economy, Finance and Prospective, M. Aboubakar Nacanabo; the BCEAO National Director, M. Armand Badiel; and other senior government officials. The team also met with private sector representatives and development partners.
“The IMF staff wish to express its gratitude to the Burkinabè authorities and stakeholders for the constructive and open discussions as well as their warm hospitality and support.”
https://www.imf.org/en/News/Articles/2025/04/08/pr-2592-burkina-faso-imf-reaches-agreement-on-3rd-review-of-ecf