Burkina Faso: Second Review Under the Extended Credit Facility Arrangement and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Burkina Faso

SECOND REVIEW UNDER THE EXTENDED CREDITFACILITY ARRANGEMENT AND FINANCINGASSURANCES REVIEW—PRESS RELEASE;STAFFREPORT;AND STATEMENT BY THE EXECUTIVEDIRECTOR FORBURKINA FASO In the context of theSecond Review Under the Extended Credit Facility Arrangement andFinancing Assurances Review, the following documents have been released and areincluded in this package: •APress Releaseincluding a statement by the Chair of the Executive Board. •TheStaff Reportprepared by a staff team of the IMF for the Executive Board’sconsideration onDecember 19, 2024, following discussions,that ended onOctober25,2024, with the officials ofBurkina Fasoon economic developments andpolicies underpinning the IMF arrangement underExtended Credit Facility.Based oninformation available at the time of these discussions, the staff report was completedonDecember 5, 2024. •ASupplementary Informationupdating information on recent developments. •AStatement by the Executive DirectorforBurkina Faso. TheIMF’s transparency policy allows for the deletion of market-sensitive information andpremature disclosure of the authorities’ policy intentions in published staff reports andother documents. Copies of this report are available to the public from International Monetary Fund•Publication ServicesPO Box 92780•Washington, D.C. 20090Telephone: (202) 623-7430•Fax: (202) 623-7201E-mail:publications@imf.org Web:http://www.imf.org International Monetary FundWashington, D.C. IMF Executive Board Completes the Second Review under theExtended Credit Facility Arrangement for Burkina Faso FOR IMMEDIATE RELEASE •The IMF Executive Board today completed the second review under Burkina Faso’sExtended Credit Facility arrangement, thereby enabling an immediate disbursement ofabout US$31.4 million. •Burkina Faso’s performance under the program has been satisfactory. The authorities metall quantitative performance criteria, all indicative targets but one, and most structuralbenchmarks. The remaining structural benchmarks were implemented with delay. Theauthorities are progressing in their structural reform agenda, including on fiscal governance,while increasing social and development spending in a difficult context. •The volatile security situation continues to weigh on economic activity, especially goldmining, which remains a vital sector for the economy. Washington, DC–December 19, 2024:The Executive Board of the International MonetaryFund (IMF) completed the Second Review under the 48-monthExtended Credit Facility(ECF)arrangement that wasapproved on September 21, 2023. The completion of the second reviewenables the immediate disbursement of about US$31.4 million (SDR 24.08 million), bringingtotal IMF financial support under the arrangement to about US$ 94.3 million (SDR 72.24million). Conflict and adverse climate conditions continue to hamper economic growth and livingconditions. With real GDP growth in 2023 revised down to 3.0 percent from 3.6 percent, it isprojected to rise to a moderate 4.2 percent in 2024 and 4.3 percent in 2025. The volatilesecurity situation has had a negative impact on key sectors, especially gold mining. Inflationhas accelerated and is expected to rise to 3.6 percent on average in 2024 largely due to foodprice increases. The current account deficit is expected to improve from 8.6 percent of GDP in2023 to 5.2 percent in 2024 supported by higher gold prices despite weaker gold production.Fiscal performance remains strong, supported by robust revenue collection.As a result, theoverall fiscal deficit is projected to improve from 6.5 percent of GDP in 2023 to 5.0 percent in2024. The financial sector weakened amid lower capital adequacy and higher non-performingloan ratios. Risks to the outlook are tilted to the downside due to continuous threats of terroristattacks, which weigh on mining and agriculture, impact government revenues, and add tospending pressures. Progress under the ECF arrangement has been satisfactory. The authorities have met all sixquantitative performance criteria and indicative targets for end-June 2024, except for theindicative target on the non-accumulation of domestic arrears. They advanced their structuralreform agenda, meeting five out of seven structural benchmarks for the second review. Thestructural benchmark for the audit of government arrears was not met but completed withdelay. The tripartite performance contract with the state-owned energy companies was a prioraction. The authorities have provided a closing report and an audit of measures under theIMFFood Shock Window. They focus on improving fiscal governance and transparency, adding four structural measures, including in the areas of procurement and treasury management, totheir program at this review. At the conclusion of the Executive Board’s discussion, Mr. Kenji Okamura, Deputy ManagingDirector, and Acting Chair, issued the following statement: “Burkina Faso continues to face a fragile security situation on top of large development needsand recur