MIL-OSI Translation: IMF Executive Board Completes First Review of Burkina Faso Agreement Under Extended Credit Facility and Approves $ 25.1 Million Disbursement

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MIL OSI Translation. Region: France and French Territories –

Source: IMF – News in French

December 21, 2018 Burkina Faso faces high levels of social and physical infrastructure deficits, a deteriorating security situation and the concern of a rapidly growing population in the face of economic prospects. The Burkina Faso Program aims to create the necessary fiscal space for priority expenditure. On 21 December 2018, the Board of the International Monetary Fund (IMF) completed the first review of the economic results obtained by Burkina Faso within the framework of a three-year program that is supported by the IMF’s Extended Credit Facility (ECF). The completion of this review disburses the equivalent of SDR 18.06 million (approximately $ 25.1 million), bringing the total disbursements under the agreement to the equivalent of 36.12. million SDRs (approximately $ 50.1 million). The Governing Board also approved the requests submitted by the authorities for a derogation for non-compliance with a performance criterion and the modification of a performance criterion. The triennial ECF agreement for Burkina Faso, an amount equivalent to SDR 108.36 million (approximately $ 150.3 million, or 90% of the country’s share at the time of approval), was approved on March 14, 2018 (see press release no. 18/86). One of the program’s main objectives is to create the fiscal space that is needed to undertake priority spending by strengthening revenue mobilization, controlling current expenditures and improving the efficiency of public investment. The Administration has also completed the 2018 Article IV consultation. A press release will be issued separately on the subject. Following the Board’s discussions, Mr. Tao Zhang, Deputy Director General and Acting Chairman, made the following statement: “With the recent measures taken by the authorities, the ECF-supported program is on track overall. Burkina Faso is a low-income country that faces major development challenges. Despite some progress in recent years, human development indicators remain among the lowest in the world, and poverty remains high. Priority should be given to reducing infrastructure bottlenecks, particularly in the energy and transport sectors, increasing productivity and value added in the agricultural sector, diversifying the economy and enabling financial sector to better support inclusive growth “The authorities remain strongly committed to implementing the ECF-supported program despite the challenges and risks to the outlook, particularly due to the security situation and social tensions. In the immediate term, the authorities must seek to achieve their development and security objectives while maintaining their commitment to achieve a budget deficit of no more than 3% of GDP by 2019. ” The growing need for security spending, combined with the broad social and development agenda, makes it crucial to accelerate reforms. In the short and medium term, fiscal space for priority spending (investment, social and security) needs to be created by mobilizing more revenue, controlling recurrent expenditures, particularly the wage bill, and improving the efficiency of government spending. “Authorities are encouraged to accelerate the vast reforms of the public sector pay system that are already under way to curb the unsustainable increase in the public sector wage bill. In the short term, efforts should be made to limit the growth of the wage bill, in particular by reducing recruitment in non-priority sectors and by examining the possibilities of rationalizing allowances and bonuses. “

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EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure not be perfect.

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