A mission from the African Department of the International Monetary Fund (IMF) visited Ouagadougou during March 25-April 9, 2010 to conduct the sixth and final review of the authorities' economic and financial program supported by the IMF under the Extended Credit Facility (ECF), and reach understandings on a policy framework for a three-year program under the ECF. The mission met with Mr. Lucien Bembamba, Minister of Economy and Finance, and other Cabinet members, Mr. Bolo Sanou, the National Director of the Central Bank of West African States (BCEAO), and other senior officials. The mission also met with representatives of non-governmental organizations, the donor community, commercial banks, and members of Parliament.
At the end of the mission, Ms. Malangu Kabedi-Mbuyi, IMF mission chief for Burkina Faso, issued the following statement:
"The global economic downturn and the ensuing lower demand for cotton, as well as heavy floods in September, adversely affected economic activity and domestic demand in Burkina Faso in 2009. As a result, real gross domestic product (GDP) growth slowed to 3.2 percent, compared with 5.2 percent in 2008. Inflation decelerated, aided by the decline in global food and fuel prices. It averaged 2.6 percent, down from 10.7 percent in 2008. The external current account deficit improved, mostly on account of higher gold exports, and lower oil prices.
"The exogenous shocks that affected Burkina Faso during 2009 put a significant strain on the government budget. Actions taken by the authorities to address humanitarian and emergency needs related to the floods, support the cotton sector, and strengthen social safety nets translated into higher spending. Revenue collection improved, as a result of measures taken by the authorities to enhance efficiency in revenue collecting agencies and combat tax evasion. The overall budget deficit (including grants) widened moderately to 4.8 percent of GDP.
"Performance under the ECF-supported program was in line with expectations. Quantitative targets were met; and structural reform measures were implemented as planned, except for two measures that will be completed in coming weeks.
"The mission reached broad understandings with the authorities on an economic and financial program that could be supported by the IMF under the ECF. The new program seeks to consolidate macroeconomic stability, further structural reforms and strengthen social policies to support economic growth and poverty reduction. For 2010, real GDP growth would recover to 4.4 percent, mainly supported by agriculture and mining sectors while inflation would remain below 3 percent. In the fiscal area, revenue performance would strengthen further with the continued implementation of administrative measures and the expected economic recovery; while expenditure would reach about 23 percent of GDP. The overall budget deficit is projected at about 5 percent of GDP. Structural reforms would mostly aim at enhancing public financial management, supporting financial sector development, strengthening the cotton sector, and improving the business climate.
"It is expected that the review of performance under the current ECF and the proposed policy framework for a new ECF-supported program will be considered by the IMF's Executive Board in June 2010."
IMF EXTERNAL RELATIONS DEPARTMENT