2023-04-11 08:33:30
• In support of emergency aid measures
• Households in a situation of food insecurity concerned
• The government urged to continue its reforms
EAnother good news from the Bretton Woods institutions. After the World Bank, which reinforced its presence in Burkina by the inauguration of its headquarters in Ouaga 2000, it is the turn of the IMF to make an announcement of disbursement in favor of Burkina Faso.
The Board of Directors of the International Monetary Fund (IMF) approved, on March 27, 2023, a disbursement of 80.77 million dollars, or approximately 49,229,315,600 billion CFA francs (i.e. 50% of the quota -country’s share in the FM) under the food shock response financing window of the IMF’s Rapid Credit Facility (RCF).
According to the IMF press release, this financing is intended to support emergency aid measures for households in acute food insecurity. This aid can take the form of distribution of food products and drinking water, subsidized agricultural inputs and cash transfers to the most vulnerable households.
This decision of the Board of Directors comes following a mission carried out by the IMF in Burkina Faso, from January 31 to February 8, 2023, and which was responsible for examining the economic outlook, macroeconomic policy and possible measures to deal with the ongoing food crisis.
The post-Covid economic recovery has been disrupted by deteriorating security conditions, political changes and rising food prices with the war in Ukraine, aggravating the ongoing food crisis and significantly impacting the state budget.
External and fiscal reserves eroded significantly in 2022, with the current account deficit reaching 5.2% of GDP, while the overall fiscal balance widened to 10.3% of GDP. These deteriorations reflect persistent and overlapping exogenous shocks. All these shocks have hurt economic activity in Burkina Faso and deepened macroeconomic imbalances, bringing the growth rate in 2022 down to 2.5% year-on-year, following standing at 6.9% of GDP in 2021. With deteriorating security conditions, the effects of climate change, supply chain disruptions following the Covid-19 pandemic, the war in Ukraine, and rising prices for food and agricultural inputs such as fertilizers and seeds, regarding 16% of the Burkinabè population, according to the Food and Agriculture Organization of the United Nations (FAO), is in a situation of acute food insecurity. Indeed, Amnesty International’s 2022/2023 report, unveiled this week, mentions more than 4 million people affected by food insecurity. The IMF noted the efforts made by the government to deal with the food crisis, through the provision of affected households with immediate food aid, the prevention of malnutrition and the improvement of the supply of drinking water, as well as the support provided to the livestock sector.
The IMF has also welcomed the commitment of the Burkinabè authorities to improve the management of public finances and to progress towards the establishment of the single treasury account.
In view of the current economic context, the IMF has encouraged the government to intensify the dialogue with the international community to obtain concessional financing in 2023 and beyond, in order to create fiscal space, while ensuring debt sustainability. public.
JB
framed
About the reforms
PFor the long-term recovery of the Burkinabè economy, the International Monetary Fund has invited the government to pursue reforms in the field of public finances, in particular, measures to improve tax collection, the efficiency of public investments, control of the growth of the wage bill and the reform of subsidies in the energy.
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