The Executive Board of the International Monetary Fund (IMF) today completed the first review of Burkina Faso’s economic performance under the three-year Extended Credit Facility (ECF)-supported program. The Executive Board approved a request for a waiver for nonobservance of one performance criterion related to fiscal performance at end-June 2010. Completion of the review enables the immediate disbursement of SDR 6.45 million (about US$ 9.9 million), bringing total disbursements under the arrangement to SDR 13.904 million (about US$21.4 million).

The Executive Board approved a three-year SDR46.154 million (about US$70.9 million) ECF program for Burkina Faso on June 14, 2010 (see Press Release No. 10/241). The country has been a member of the IMF since May 2, 1963 and has a quota in the Fund of SDR 60.2 million (about US$ 92.5 million).

Following the Executive Board’s discussion of Burkina Faso, Mr. John Lipsky, First Deputy Managing Director and Acting Chair, said:

“Economic performance has been satisfactory under the Fund-supported program. Prudent macroeconomic policies have contributed to sustain a strong economic recovery and favorable conditions for cotton production and mining have improved economic prospects. Important reforms have been implemented in several areas, including tax administration. Burkina Faso’s productive base, however, remains narrow, making the economy vulnerable to weather-related and terms of trade shocks. Economic policies should therefore be focused on preserving macroeconomic stability and supporting economic diversification.

“Fiscal consolidation is essential for macroeconomic stability and long-term debt sustainability. The authorities’ continued resolve to enhance revenue mobilization has produced encouraging results that need to be consolidated. At the same time, expenditure should be reallocated to critical infrastructure and social sectors. Maintaining prudent borrowing policies will be essential to reduce risks of debt distress.

“Rapid progress in the structural reform agenda will help achieve the authorities’ objectives of sustainable broad-based growth and poverty reduction. In this regard, it will be important to accelerate financial sector reforms to promote financial development and increase access to financial services, which remains limited. Measures to improve the business environment, such as the new initiative to expedite customs clearance, will help promote private sector development. Favorable conditions for cotton production provide an opportunity to advance reforms needed to restore the sector’s financial viability.”