IMF Finishes Burkina Faso Credit Facility Review

• The IMF Executive Board completed today the third review under the Extended Credit Facility Arrangement for Burkina Faso. This enables an immediate disbursement of about US$32.8 million.
• Supportive policies and favorable weather conditions boosted agricultural output in 2024; however, widespread insecurity continues to weigh on economic activity in other sectors, especially gold mining, the primary source of export earnings for the country.
• Program performance has been broadly satisfactory. While end-December 2024 performance criteria for the primary fiscal deficit and net domestic financing were missed by 0.6 percent of GDP, the 2025 budget includes adequate corrective measures. On this basis, the Executive Board approved waivers of nonobservance of these performance criteria. All continuous performance criteria were met. Seven out of eight structural benchmarks were achieved, with the remaining one implemented later as a prior action.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the third review under the 48-month Extended Credit Facility (ECF) arrangement that was approved on September 21, 2023 . The completion of the review enables the immediate disbursement of SDR 24.08 million (about US$32.8 million), bringing total IMF financial support under the arrangement to SDR 96.32 million (about US$131.3 million).

Real GDP growth is estimated to have reached 5.0 percent in 2024. Strong growth in agriculture and services outweighed contractions in mining and manufacturing. Real GDP growth is projected to average 4.2 percent in 2025, as growth in the agricultural output is expected to soften in line with average rainfall conditions. Inflation is projected to ease to 3.0 percent in 2025 amid moderating food prices.

Balance of payments strengthened, reflecting a positive shift in terms of trade. The current account deficit rose from 5.0 percent of GDP in 2023 to 5.7 percent in 2024 but is expected to narrow to 3.4 percent in 2025 due to record-high gold prices. Trade policy turbulences will likely have a marginal impact as the United States are not a major trading partner.

Elevated capital spending affected fiscal performance in 2024. Nonetheless, the overall fiscal deficit narrowed from 6.7 percent of GDP in 2023 to 5.8 percent in 2024. Building on the 2025 budget, fiscal policy is expected to be tightened considerably in 2025, with the overall fiscal deficit projected in the 3.3 to 4.0 percent of GDP range, depending on the availability of external concessional financing. Risks to the outlook are tilted to the downside due to terrorist threats.

Progress under the ECF arrangement has been broadly satisfactory. Due to fiscal pressures in late 2024, the end-December performance criteria (PCs) on the primary fiscal deficit and net domestic financing were missed by 0.6 percent of GDP, while all other PCs were met. Three out of six indicative targets (ITs) were missed by small margins. All three continuous PCs and five end-March 2025 ITs, including on the primary fiscal deficit and net domestic financing were met, while the remaining four ITs were missed by small margins.

The Burkinabè authorities advanced their structural reform agenda under the program. They met seven out of eight structural benchmarks (SBs) and have addressed the missed SB on the preparation of the clearance plan for domestic arrears as a prior action for the third review. They have also implemented two other prior actions: they shared a list of treasury deposit accounts and cleared all domestic arrears outstanding at end-2023. Three new SBs under the program aim to strengthen the governance in public procurement, uphold integrity in revenue administration, and increase control over the public wage bill.

At the conclusion of the Executive Board's discussion, Mr. Kenji Okamura, Deputy Managing Director, and Acting Chair, issued the following statement:

"Burkina Faso's economy has proven resilient notwithstanding security challenges, a difficult humanitarian situation, and weather shocks. A lasting improvement in socio‑economic conditions will require progress on security and structural reforms to foster diversification, fiscal governance, and resilience.

"While the policy framework remains strong, fiscal pressures affected program performance in 2024. For the first time, and in difficult circumstances, performance criteria on the primary fiscal deficit and net domestic financing were missed. The margin of nonobservance—while not negligible—did not undermine the fiscal consolidation trend. The authorities counteracted the slippage with strong measures on the expenditure side and remain committed to reducing the overall fiscal deficit to three percent of GDP by the end of the ECF arrangement, while safeguarding fiscal space for poverty-reducing social spending. This commitment is reflected in the 2025 budget and fiscal performance through end-March.

"The authorities are on track and have expanded their structural reform agenda, focusing on fiscal governance and transparency. They have provided a list of treasury deposit accounts, adopted an arrears' clearance plan, and cleared all arrears outstanding at end-2023 following their audit. These measures are informed by the preliminary findings of the IMF's Governance Diagnostic Assessment (GDA). The GDA report is being finalized. The authorities intend to publish the final report in coming weeks and adopt, within four months from publication, an action plan reflecting its key recommendations. Structural conditionality for the fifth review has been strengthened with the addition of benchmarks on implementing the action plan from the procurement audit and strengthening further wage bill control and governance in revenue services."