The International Monetary Fund (IMF) has approved a disbursement of $31.4 million for burkina faso, recognising the significant progress made under the economic reform program supported by the institution.
In a press release published on Thursday, December 19, 2024, the IMF announced the completion of the second review of the agreement under the Extended Credit Facility (ECF) with Burkina Faso, paving the way for a new disbursement of approximately $31.4 million.
The decision, several reports from the country say, demonstrates the IMF’s satisfaction with the progress made by the country despite a complex socio-economic context.
The IMF financing aims to support priority spending, strengthen the country’s capacity to absorb economic shocks, reduce poverty and improve public finance management, particularly in terms of budgetary discipline, transparency and governance.
it will also help meet financing needs linked to current financial difficulties, budget deficits, debt vulnerability, food insecurity and the security situation.
Despite a complex situation in the country, marked by security instability, significant development needs and climatic hazards, the IMF judges the progress made within the framework of the Extended Credit Facility (ECF) to be “satisfactory”.
However, the institution underlines the need for continued commitment by the Burkinabé authorities to prudent fiscal policies and the implementation of reforms to ensure debt sustainability, improve the macroeconomic outlook and stimulate sustainable and inclusive growth.
The military government in Burkina Faso has been implementing economic reforms to stabilise its economy, including fiscal discipline, social protection, improving the Investment climate and reforming the mining sector.
The government has been working to reduce the budget deficit to 5% of GDP in 2024 and 3% by 2027. This includes controlling the public wage bill, energy subsidies, and raising the ceiling for VAT credit refunds.
The government has also shown increased commitment to strengthening and expanding social protection. However, the World Bank says that the current system remains inefficient.
A new investment code that offers tax breaks and incentives to foreign investors was adopted by the government. The International Finance Corporation (IFC) is also working to improve the investment climate.
In 2023, the military government amended the country’s mining code, raised mining taxes and royalties, and has discussed mandating mining companies to contribute to the national gold reserve.
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