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BURKINA FASO Climate Policy Diagnostic October2025 Suphachol Suphachalasai, Alberto Garcia Huitron, Michal Pietrkiewicz, Sunalika Singh, andSylke von Thadden-Kostopoulos Fiscal Affairs Department High-LevelSummary Technical Assistance ReportFiscal Affairs Department Burkina Faso: Climate Policy DiagnosticPrepared by Suphachol Suphachalasai, Alberto Garcia Huitron, Michal Pietrkiewicz,Sunalika Singh, and Sylke von Thadden-Kostopoulos TheHigh-LevelSummary Technical Assistance Reportseries provides high-level summaries of theassistance provided to IMF capacity development recipients, describing the high-level objectives,findings, and recommendations. ABSTRACT: Climate-related risks are macro-critical considerations for Burkina Faso. This Climate PolicyDiagnostic identifies policy reforms that reduce balance of payment risks, boost fiscal resilience, andgenerate positive climate outcomes. A robust package of fiscal policies is key to accelerating energyaccess and transition, while a holistic approach to reform is needed to promote water and food security.Efficient disaster risk management and financing will save lives and build economic resilience, andsustainable forestry, land-use, and waste management can be supported by good fiscal policies. Inaddition, strong climate governance helps streamline implementation and reduce costs toward buildinglong-term resilience. Keywords: Fiscal policy, Climate Adaptation, Climate Mitigation The contents of this document constitute a high-level summary of technical advice provided by the staff ofthe International Monetary Fund (IMF) to the authorities of a member country or international agency (the"CD recipient") in response to their request for capacity development. Unless the CD recipient specificallyobjects within 30 business days of its transmittal, the IMF will publish this high-level summary on IMF.org(seeStaff Operational Guidance on the Dissemination of Capacity Development Information). MainMessages andRecommendations Climate-related risks are macro-critical considerations for Burkina Faso(BFA).Home to about 23million people,the country still hasover 40 percent ofitspopulation livingbelow the poverty line withlimited capacity to absorb economic shocks from conflicts and increasingly severe weather conditions.The Burkinabe economy and its people are highly vulnerable to droughts and floods, as 80 percent of theworkforce is employedin the agriculture sector.BFA is among the hottest countries in the world. Extremeheat and extreme rainfall are becoming more intense and are projected to worsen with climate change.The impact of climate changehamperspovertyreduction efforts and iscompounded by a lack of energyaccess,asonly26percent ofpeopleconnected to electricity currently.IMF’s analysis shows that BFAcould face a loss of 2 percent of real gross domestic product (GDP) per capita by 2050 and up to 5percent by 2100 under a highglobalemission scenario and without effective adaptation.BFAcontinues toface a fragile security situation, intertwined withacutedevelopment challenges—meaningful progress onpolicy reforms build climate resilience andpave the waytowarda green transition are key to raising livingstandards and achieving long-lasting economic growth. A robust package of fiscal policies is key to accelerating energy access and transition.A dualobjective of expanding energy access and transitioning to cleaner energy makes economic sense forBFA. To accelerate renewable energyadoption, BFA could introduce a feed-in tariff for renewable energywith storage capacity, update the decree on auto-production to allow households to sell excess supply tothe grid, and require a minimum storage capacity in new renewable energy projects. Electricity tariffreformwould be greatly beneficial: a framework for gradual adjustments, with a view to achieve cost-recovery and reduce fuel input subsidy, while introducing social tariff for low consumption levels,shouldbe put in place and combined with a time-of-use tariff to reduce peak demand and fossil fuel use. Aphase-in approach to fuel pricing reform is strongly encouraged, including to extend the tax on petroleumproducts to cover heavy fuel oil and to harmonize the tax on diesel with that of gasoline based on carboncontents. The recommended fuel pricing reform is estimated to raise additional revenues of 0.3-0.7percent of GDP by 2030 and a well-targeted revenue recycling strategy could be designed to make thereform progressive and boost economic growth. A holistic approachto reformis needed to promote water and food security.Regulationsshould bedeveloped to (i) clarify the responsibilities of sector agencies involvedin the water sector, (ii) setrequirements and parameters for sustainable abstraction of surface water and groundwater, and (iii)guide the adoption of measures to improve water use efficiency. Key institutions and their coordinationcanbe strengthened to enable better planning and decision making, including the role of