By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The Executive Board of the International Monetary Fund (IMF) has granted Burkina Faso a US$28.4 million Extended Credit Facility (ECF).
This is contained in a Press Release from the Fund and made available to www.investadvocateng.com in Lagos Nigeria.
“The Executive Board of the International Monetary Fund (IMF) has completed the fifth review under a three-year arrangement under the Extended Credit Facility (ECF) for Burkina Faso1.The completion of the review enables the disbursement of an amount equivalent to SDR 18.49 (about US$ 28.4 million), which will bring the total disbursements under the arrangement to SDR 75.82 million (about US$116.5 million). The Executive Board’s decision was taken on a lapse of time basis[1]†the Statement said.
The IMF affirmed that the three-year (3) Special Drawing Rights (SDR) 46.15 million (about US$ 70.8 million) ECF arrangement with Burkina Faso was approved by the IMF’s Executive Board on June 14, 2010.
“The Executive Board subsequently approved augmentation of access under the ECF arrangement to SDR 82.27 (about US$ 126.4 million) on June 8, 2012†the IMF said.
According to the Fund, in spite of multiple external shocks, Burkina Faso’s macroeconomic performance has remained strong. 2011 real GDP growth has been weaker than anticipated as a result of political events in the region, short-lived social turmoil in Burkina Faso, and a drought in the Sahel that led to a strong contraction in grain production.
The IMF further affirmed that in early 2012, the authorities moved decisively to implement a comprehensive program to meet food needs created by the drought, as well as work with the international community to manage an influx of refugees fleeing political upheaval in Mali.
As a result of this shock-related spending, the overall fiscal and current account deficits will expand modestly in 2012. The government’s food security program also helped to dampen food prices, which had spiked in the spring. “Thanks to good rains and measures taken to boost agricultural productivity, this year’s harvest is expected to lead to a rebound in real GDP growth to about eight percent (8%).
The IMF said Burkina Faso has made notable progress under the program. “All targets and structural reforms under the program through end-July were respected. Domestic revenue collection has increased, as a result of tax policy and administrative reforms in recent years, as well as new revenues from fast-growing gold mining activities. Burkina Faso is well-poised to meet WAEMU revenue targets in the next year or so. Some of the higher-than-expected domestic revenues will be used to pay for retail fuel subsidies†the IMF said.
The IMF affirmed that for the remainder of the program through mid-2013, the policy agenda is aimed at ensuring increased resources directed toward implementation of the authorities’ development program, the SCADD (Strategy for Accelerated Growth and Sustainable Development).
It said that the SCADD aims at building on innovative projects to promote inclusive growth; building up needed public infrastructure (including provision of energy); improving agricultural productivity, resilience, diversity and sustainable farming practices; and strengthening social safety nets, including through direct transfers, as well as expanded provision of school lunches and health services for pregnant mothers and young children.
“To help meet resource needs, the authorities will move gradually toward cost recovery for retail fuel, contain public wage costs through efforts to eliminate fraud, continue efforts to expand domestic revenues, and streamline approval processes to execute fully priority investment spending†the Statement said.
