An International Monetary Fund (IMF) team, led by Ms. Corinne Deleacute;chat, visited Ouagadougou from March 29�April 8, 2016 to conduct discussions on the fourth and fifth reviews of the Extended Credit Facility arrangement (ECF).
Ms. Deleacute;chat issued the following statement at the end of the visit:
The mission reached staff level agreement with the authorities on economic and financial policies that could support approval of the fourth and fifth reviews of their three-year program under the ECF. The country#39;s economic program has remained broadly on track despite the challenging backdrop, with all quantitative performance criteria under the program met and structural reforms continuing to be implemented, albeit with some delays.
The presidential and parliamentary elections in late 2015 ended a period marked by the 2014 popular uprising and the foiled military coup in September 2015. The political uncertainty took a toll on economic activity, with GDP growth remaining at 4 percent in 2014 and 2015 (compared with 6.4 percent in 2009�13). The January 2016 terrorist attack dampened the post-election rebound, but staff projects that growth could increase to 5.2 percent for the year, supported by a broad-based recovery and the coming on stream of new gold mines. Quick implementation of the supplemental budget law and a favorable agricultural campaign could support growth further. In the medium term, growth is projected to recover gradually to historical averages (6�6.5 percent), although there are risks stemming from the uncertain global environment and the deteriorating regional security situation.
The 2016 supplemental budget rightly focuses on raising domestic revenue collection in order to rebuild fiscal space for priority investments, in the context of a two percentage points of GDP decline in tax revenue between 2013 and 2015. The revised budget targets an ambitious revenue increase, of about 1.5 percent of GDP relative to 2015, supported by new measures aimed at strengthening tax and customs administration. The budget also incorporates a number of new health, education and youth employment measures aimed at addressing pressing social needs. In this context, the mission welcomes the authorities’ efforts to contain the public wage bill, and encourages them to prioritize public investment in their new National Plan for Economic and Social Development (PNDES). The budget deficit is projected to remain at about 3 percent of GDP over the medium term.
The mission and the authorities discussed reforms that would allow the whole energy sector to benefit from the significant decline in world oil prices. Reforms to put the electricity company on a stronger financial footing are under consideration. This would support much-needed investments in production and improve supply, now a key growth bottleneck.
The Executive Board of the IMF is expected to discuss the combined fourth and fifth ECF review in June 2016.rdquo;
The mission met with Mr. Paul Kaba Thieacute;ba, Prime Minister; Ms. Rosine Sori Coulibaly, Minister of Economy Finance and Development; Mr. Alpha Oumar Dissa, Minister of Mines and Energy; Ms. Edith Cleacute;mence Yaka, Minister Delegate to the Budget; as well as other senior officials, private sector representatives, and development partners. The mission wishes to thank the authorities for their hospitality and the fruitful, collaborative discussions.
Distributed by APO (African Press Organization) on behalf of International Monetary Fund (IMF).