1934 7685 Article A001 en

BURKINA FASO
CONTEXT
1. Burkina Faso has embarked on a challenging political transition. Following two military
coups in 2022, both motivated by a lack of progress in improving security, Burkina Faso has agreed
with the Economic Community of West African States (ECOWAS) on a return to constitutional order,
with democratic elections to be held by July 2024. The transitional government’s stated policy
priorities include (i) the restoration of security; (ii) improvement of the population’s quality of life;
and (iii) promotion of good governance, including ensuring macroeconomic stability and fighting
corruption. Any deviation from this agenda or its timeline poses risks to the country’s engagement
with its regional and international partners, including donors.
2. The country is facing urgent and acute food insecurity, with over 15 percent of the
population suffering from acute malnutrition. The effects of climate change on agriculture and a
bad harvest during the 2021-2022 season resulting from low rainfall have contributed to a food
crisis—compounding the impact of disrupted international supply-chains caused by the COVID-19
pandemic and Russia’s invasion of Ukraine, including through higher fertilizer costs. About 3.5 million
Burkinabé are estimated to be in acute food insecurity, which corresponds to Phase 3 or above of the
Integrated Food Security Phase Text Figure 1. Burkina Faso: Population in Acute Food
Classification and Cadre Insecurity and Internally Displaced, 2014–2022
Harmonisé (IPC/CH), as (Millions)
measured by the latest 2022
4 Acute Food Insecurity (IPC/CH 1.8
update of the United Nations
Phase 3 or above) (LHS)
Global Report on Food Crises 3.5 1.6
Internally Displaced People (RHS)
(Text Figure 1). 1 Regionally, the 1.4
3
Soum province, located in the
1.2
country’s Sahel region and 2.5
accounting for 4.4 percent of 1
2
Burkina Faso’s land area and 1.7 0.8
percent of its population, is 1.5
0.6
affected the most and is 1
0.4
considered to be in a food
emergency situation (equivalent 0.5 0.2
to Phase 4 in the IPC/CH). Given 0 0
Burkina’s security outlook, the 2014 2015 2016 2017 2018 2019 2020 2021 2022
FAO expects this assessment to Source: IMF Global Assumptions Live
worsen further in 2023. Political

insecurity, the premature
depletion of self-produced stocks, atypical increases in staple food prices, and declining incomes will
lead to a deterioration in food access for poor households in general and for internally displaced
persons (IDPs) in particular (about 1.9 million—8.5 percent of the population—as of end-December
2022).
1 The report is available at https://www.wfp.org/publications/global-report-food-crises-2022.
INTERNATIONAL MONETARY FUND 5
©International Monetary Fund. Not for Redistribution

BURKINA FASO
3. The authorities have implemented policies to attenuate the effects of these shocks. As
international prices of energy soared in the first half of the year and the domestic political situation
remained fragile following Text Figure 2. Burkina Faso: IMF Global Fertilizer Price Index,
the January coup, the Jan 2014–Oct 2022
authorities kept pump prices (Index, 2016 = 100)
constant and significantly
below international costs. To 450
mitigate the rising cost of 400
350
subsidies, the authorities
300
raised pump prices by 17
250
percent in May 2022, by 200
another 5 percent in August, 150
and by 13 percent in 100
February 2023. In 2022, the 50
fiscal cost of fuel subsidies is 0
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
May-14
May-15
May-16
May-17
May-18
May-19
May-20
May-21
May-22
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Sep-19
Sep-20
Sep-21
Sep-22
estimated to have risen to
CFAF 595 billion, or 4.9
percent of GDP, up from an Source: IMF Global Assumptions, IMF Staff Calculations
estimated 1.3 percent of
GDP in 2021. To cushion the
effect of the food price shock, in June the authorities waived customs duties on key food imports for
a period of 3 months, with a cost estimated at CFAF 14 billion, or 0.12 percent of GDP. In addition,
they have introduced a temporary ban on exports of grains (millet, corn, sorghum, and cowpea) and
flours, in line with similar policies in neighboring countries. Finally, to mitigate the effect of increasing
fertilizer prices (Text Figure 2), the government has capped the price of fertilizers sold to cotton-
producers at its 2021 level, thereby increasing the subsidies on imported fertilizers to CFAF 72.8
billion, or 0.6 percent of GDP, from 0.12 percent of GDP in 2021.
4. Staff and the authorities held protracted program negotiations before the January
2022 military coup. Negotiations on a possible ECF-arrangement were initiated in June 2021 but
suspended following the January 2022 coup. At the time of the suspension, staff and the authorities
had made significant progress on key policies and reforms that could have served as the basis for an
ECF arrangement. Key agreed policy measures included extending social protection to the most
vulnerable, creating fiscal space for priority spending by containing the civil service wage bill as a
share of revenues (currently accounting for a large percentage of tax revenues), enhancing domestic
revenue mobilization, and reforming energy subsidies.
5. Faced with urgent and acute food-related needs, the authorities have requested access
to the Food Shock Window (FSW) under the Rapid Credit Facility (RCF) in the amount of 50
percent of quota (SDR 60.2 million). Due to the gravity of acute food insecurity compounded
by the humanitarian crisis arising from deteriorating security conditions and the urgency to
address the balance of payments need created by the food shock, the authorities requested
IMF emergency financing. At a later stage, the authorities plan to resume negotiations on an
ECF arrangement with staff.
6 INTERNATIONAL MONETARY FUND

BURKINA FASO
RECENT ECONOMIC DEVELOPMENTS

6. The deteriorating domestic security situation and external shocks have weighed on
growth and spurred inflation. The uncertain economic environment following the two military
coups in January and September 2022 and deteriorating security conditions forced the permanent
closure of the zinc mine, and
Text Figure 3. Burkina Faso: Food and Energy CPI Index,
temporary closures of several
Jan 2014–Dec 2022
gold mines; the interruption of
(Index, Jan 2020 = 100)
construction projects; and the
160
displacement of 8.5 percent of
150
the population. As a result, real 140
GDP growth slowed down to 0.4 130 Food and Beverages
percent year-on-year (y-o-y) in 120 Energy and Transport
2022Q3, with overall growth in 110
2022 projected to moderate to 100
2.5 percent, from 6.9 percent in 90
2021. A lower-than-average 80
harvest during the 2021-2022
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
May-14
May-15
May-16
May-17
May-18
May-19
May-20
May-21
May-22
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Sep-19
Sep-20
Sep-21
Sep-22
season and the war in Ukraine
have led to a very fast increase Source: INSD, Burkina Faso
in local food prices (Text Figure

3). In addition, the disruption of domestic trade routes has weakened the link between food inflation
in Burkina Faso and in neighboring countries. This resulted in headline inflation peaking at over 18
percent y-o-y in August, from 8
Text Figure 4. Burkina Faso: Inflation in the WAEMU,
percent in December 2021. Since
2014–2022
then, inflation decelerated but
(Percent, annual average)
remained elevated at 9.6 percent
in December 2022, with annual 20
Burkina Faso Benin
average inflation expected at Côte d'Ivoire Guinea-Bissau
15 Mali Niger
about 14.1 percent, the highest Senegal Togo
among WAEMU countries (Text
10
Figure 4), reflecting not only the
impact of the Ukraine war on 5
prices of key imports, but also
the adverse impact of the fragile 0
domestic security conditions on 2014 2015 2016 2017 2018 2019 2020 2021 2022
agricultural production. -5
Source: IMF World Economic Outlook Live
7. Following a surplus in
2020, the current account balance has since trended downward and is estimated to have
reached a deficit of 5.2 percent of GDP in 2022. Nominal imports are estimated to have increased
by around 28 percent in 2022, mainly due to the rise in costs of food, fertilizers and energy imports.
Gold exports, which account for over 70 percent of total exports, are estimated to have decreased on
account of recent gold mine closures (Text Figure 5). Staff estimates nominal cotton exports to have

BURKINA FASO
increased by 56 percent y-o-y in 2022, supported by a sharp increase in cotton prices in 2022 (45
percent y-o-y) and a good harvest in the 2022-23 season, mitigating the impact of lower gold
exports. The capital account was supported by financial (mainly portfolio) inflows from bond
issuances in the regional bond market (Text Figure 6). 2
Text Figure 5: Burkina Faso: Current Text Figure 6: Burkina Faso: Financial
Account Balance and Components, Account Balance and Components,
2015−2022 2015−2022
(Percent of GDP) (Percent of GDP)
Secondary income, net
Other investment
Primary income, net
Portfolio investment
Imports
50 10 Direct investment
Financial account
5
0 0
-5
-50
-10
2015 2016 2017 2018 2019 2020 2021 2022
Sources: Burkinabe authorities; and IMF staff calculations 2015 2016 2017 2018 2019 2020 2021 2022
Sources: Burkinabe authorities; and IMF staff calculations
8. Fiscal outcomes have worsened substantially since the September 2022 staff visit, with
the overall fiscal deficit now estimated to have widened to 10.3 percent of GDP in 2022. Tax
revenue collection in 2022 performed well compared to 2021 at a projected 16.9 percent of GDP, an
increase of 1.4 percent of GDP over 2021. It was mostly driven by high import prices and continued
implementation of administrative measures, such as digitalization of services and reinforcement of
customs control. On the expenditure side, all public accounts were temporarily frozen immediately
after the January coup and spending discipline was reinforced, which helped contain the wage bill
and expenditure on goods and services within the budget envelope. However, current transfers
increased significantly to CFAF 1,009.7 billion (9 percent of GDP) in 2022 compared to 6.4 percent of
GDP in 2021, mainly driven by the fiscal cost of fuel subsidies (4.9 percent of GDP). Similarly,
domestically financed public investment expenditure increased significantly in 2022 to about CFAF
875 billion (7.2 percent of GDP) from nearly CFAF 528 billion (4.8 percent of GDP) in 2021, mostly
driven by the purchase of military equipment during the fourth quarter of 2022.
9. The authorities are facing severe financing constraints. With the exception of the World
Bank, which disbursed a budget grant (CFAF 60 billion, US$98 million) and loan (CFAF 56 billion,
US$92 million) in August 2022, albeit with a delay, budget support from other donors has remained
suspended since January 2022. The overall fiscal deficit was financed by new issuances of treasury
bills and bonds, issuances of syndicated bonds, withdrawals from government deposits at the BCEAO
2
In 2022, the share of Burkina Faso government bond issuance in overall WAEMU bond issuance was around 10
percent, down from 19 percent in the previous year.

BURKINA FASO
in the amount of 1.8 percent of GDP, and accumulation of payment floats of about 1.7 percent of
GDP on subsidies owed to SONABHY (the state-owned fuel company). New domestic debt included
about CFAF 150 billion (1.2 percent of GDP) and CFAF 129.5 billion (1.1 percent of GDP) in subsidies
that were converted into loans by issuing debt bond and promissory notes, respectively, to
SONABHY. The total gross financing needs of 13.6 percent of GDP included the amortization of
existing domestic debt coming due (about 5.6 percent of GDP).
10. Developments in the financial sector have been broadly favorable despite the
uncertainty and disruptions to economic activity in 2022. Private sector credit growth
decelerated to 7.2 percent in 2022 after 10.1 percent in 2021, partly reflecting the interruption of
construction projects. The banking system remains broadly sound, as at end-June 2022 banks held
13.6 percent of risk-weighted assets as equity capital, even though loan exposure to the top 5
borrowers increased to 81 percent from 67 percent at end-2021, while reported non-performing
loans net of provisions as a share of total loans stood at 6.6 percent at end-September 2022.
Reflecting the deceleration of private sector credit growth, bank retained more liquidity, which led to
an improvement of liquidity indicators. The share of liquid assets in total banks assets increased to 21
percent at end-June 2022 from 19 percent at end-2021, and the share of liquid assets in total
deposits increased to 29 percent from 26 percent. However, the level of domestic bank exposure to
sovereign securities is a source of concentration risk in the banking system. 3
OUTLOOK AND RISKS

11. The domestic security situation will continue to weigh on growth. As the measures
implemented by the recent governments to regain control of the national territory may eventually
materialize in 2023 and in 2024, economic activity is expected to recover slowly. Mining activity is
expected to accelerate during 2023 and 2024 as more mines reopen, leading to a projected mining
sector growth of 6.7 percent in 2023 and 12 percent in 2024. As prices of fertilizers remain high and
the relocation of displaced people will happen only progressively in 2023 and 2024, growth in
agriculture is expected to remain at 2.6 percent in 2023, reaching its long-term average of 2.8
percent in 2024.
12. Inflation is expected to drop sharply in 2023 and to fall within the WAEMU inflation
target band of 1 to 3 percent. After peaking at 14.1 percent in 2022, the annual average inflation
rate is forecasted to slow down sharply to 1.5 percent in 2023, driven by a projected decline in
international food and fuel prices in 2023 by -5.5 and -15 percent, respectively, and reflecting a
strong base effect. Local agricultural production, while remaining low due to the displacement of
population and higher fertilizer and energy prices throughout 2022, is not expected to further
deteriorate, thereby maintaining local food prices at a stable, if elevated level. A persistent core
inflation, reflecting second-round effects, may mitigate the decline in inflation. Overall, for 2023, end-
of-period inflation is projected at 2.7 percent, within the WAEMU inflation target band. The low
average annual rate of 1.5 percent in 2023 reflects a strong base effect, driven by elevated prices in
2022, and is consistent with a slow return of local prices to the regional trend. Uncertainty
3
As of November 2021, banks in Burkina Faso held around 25 percent of total public debt, see WAEMU: Financial
Sector Assessment Program – Financial System Stability Assesment, IMF Country Report No. 22/136.

BURKINA FASO
surrounding inflation is high: a bad harvest in the ongoing season could keep inflation at a higher
level while a better-than-expected harvest could lead to temporary deflation.
13. The current account deficit is expected to persist in 2023, while fragile security
conditions discourage private capital flows. It would be reduced to 4.4 percent of GDP in 2023
from 5.2 percent in 2022, and continue to improve thereafter, reaching 3 percent of GDP in 2025..
Projected current account deficits result from a deterioration in the services balance, which is
expected to more than offset projected trade surpluses, reflecting buoyant gold exports. While
access under the FSW may catalyze some donor support, such financing is expected to remain
limited going forward, in the absence of a credible policy framework and to the extent that the
volatile political environment may persist. In addition, fragile security conditions, which may take
time to be address, coupled with political uncertainty are expected to discourage private capital
flows, leading to a BoP financing gap.
14. Spending pressures will remain elevated in 2023 and over the medium-term, especially
as the authorities revamp efforts to tackle the security crisis and humanitarian needs. 4 In the
absence of measures to build fiscal space through enhanced revenue mobilization, control of civil
service wage bill growth, energy subsidy reforms, or improved expenditure efficiency, and in
presence of efforts to address fragile security conditions, the fiscal deficit is expected to remain high
in 2023 at 7.8 percent of GDP, delaying the return to the WAEMU convergence target of 3 percent of
GDP to 2027 (Text Table 1). Efforts to to address security include the creation of the Patriotic Support
Fund (FSP). Staff recommends to limit the duration of the FSP to one year only, and to subject the
fund to enhanced governance and transparency practices. With external budget support declining
following the military coups and in the absence of concessional development partner financing, the
fiscal deficit would need to be financed through historically high volumes of costly, non-concessional
bond issuances on the regional sovereign bond market, and accumulation of debt to the non-
banking sector, including SOEs. This is likely to become more expensive going forward on account of
tighter global financing conditions, and subject to absorption, rollover and liquidity risks. Additional
fiscal risks include cuts in needed development and capital spending, and accumulation of domestic
payment arrears.
15. Without significant reforms, the current fiscal path carries substantial risks and could
jeopardize growth potential and debt sustainability. Lack of financing, or only on highly non-
concessional terms, combined with an absence of reforms, may render achievement of the fiscal
consolidation plan either infeasible or only via further cuts in public investment spending, with
adverse impacts on potential growth and debt sustainability. Cognizant of these fiscal risks, the
Burkinabé authorities have requested a resumption of discussions of an UCT-quality IMF-supported
program to put public finances on a more sustainable footing. They are assessing a list of reform
4
In addition to equipment and other needs, the transitional government has announced its intention to recruit 8,000
soldiers – on top of a similar number recruited by the previous junta. It will also deploy (and give financial incentives
to) more than 50,000 volunteers (i.e., security auxiliaries) to increase the security footprint in the countryside. To
support these security efforts the authorities created the (extrabudgetary) Patriotic Support Fund (Fonds de Soutien
Patriotique (FSP)) by decree issued on January 23, 2023. The FSP (and its associated mechanisms) will be effective for
one year with the option to extend if the security situation necessitates. It will be financed by voluntary contributions
from residents, non-residents and technical partners, donations, and specific resource allocations (including possible
taxes on telecom companies and others).

BURKINA FASO
measures that could form the basis for such a program, with the aim of creating space for priority
spending needs while preserving debt sustainability and supporting high and inclusive potential
growth. The IMF-supported program would have the potential to also catalyze the resumption of
external budget support, including from the World Bank, the European Union, and other partners.
Text Table 1. Burkina Faso : Fiscal Deficit Path and Gross Financing Needs
In percent of GDP 2019 2020 2021 2022 2023 2024 2025 2026 2027
Act. Act. Act. Prel. Proj. Proj. Proj. Proj. Proj.
Overall Fiscal Deficit (commitment basis) 3.1 5.1 7.5 10.3 7.8 6.7 5.5 4.2 3.0
Overall deficit (cash basis) 3.1 5.2 6.4 7.1 7.8 6.7 5.5 4.2 3.0
Gross Financing Needs 9.3 14.1 15.2 13.6 16.7 16.7 17.8 16.7 16.0
Primary deficit (commitment basis) 1.9 3.7 5.8 8.4 5.9 4.9 3.5 2.0 0.7
Interest Payments 1.2 1.4 1.8 1.9 1.9 1.8 2.1 2.3 2.4
Domestic 1.0 1.1 1.5 1.6 1.6 1.6 1.8 2.0 2.1
External 0.2 0.2 0.3 0.3 0.3 0.2 0.2 0.2 0.2
Amortization 6.1 8.9 8.8 6.5 8.9 10.0 12.3 12.5 12.9
Domestic 5.4 8.2 8.1 5.6 7.9 9.0 11.1 11.5 12.0
Bills (maturity <1 year) 3.9 4.3 3.1 3.2 4.7 6.0 6.2 6.7 6.3
Bonds (maturity >1 year) 1.0 2.8 2.4 2.0 3.2 2.9 4.9 4.7 5.7
Other 0.5 1.1 2.6 0.5 - - - - -
External 0.7 0.7 0.7 0.9 1.0 1.0 1.1 1.0 0.9
Cash adjustment 0.0 0.1 (1.1) (3.2) - - - - -
Sources: Burkinabe Authorities; Staff estimates and projections
16. The Debt Sustainability Analysis (DSA) finds that Burkina Faso remains at moderate risk
of external debt distress and overall public debt distress, and debt remains sustainable over
the medium term (see DSA supplement). All external debt indicators remain below the relevant
indicative thresholds under the baseline scenario and the most extreme stress tests. While the
mechanical results point to a low risk of external debt distress, judgment was applied, considering
high uncertainties surrounding the macroeconomic outlook (both external and domestic), as well as
uncertainty regarding support from donors. The risk of external debt distress is therefore assessed to
be moderate. While overall public debt remains sustainable over the medium term and at moderate
risk of debt distress, it has increased as a share of GDP and is very close to the threshold for a high
debt distress risk rating while breaching the relevant benchmark under the most extreme scenario of
a commodity price shock. Burkina Faso has a medium debt-carrying capacity, with some, but limited
space to absorb shocks on public and external debt. 5
17. This outlook is highly uncertain with significant downside domestic risks (Annex I). The
main domestic risks relate to further security disruptions, leading to social and political uncertainty.
On the fiscal side, difficulties in revenue mobilization and pressures on spending, including on
security and public sector wages, could put further pressure on the government’s budget. The
materialization of these risks would be likely to exacerbate food insecurity and increase internal
displacement, and could seriously hamper the baseline macroeconomic projections (including
growth and inflation, as well as external accounts) both in the near and medium terms, further
adding to sustainability risks Deteriorations in security conditions also impact economic activity,
5Domestic debt is defined as debt denominated in the regional currency, the CFA franc (CFAF), with the exception of
BOAD debt which is treated as external. The choice of coverage is based on currency, rather than residency, due to
the difficulty of monitoring the residency of creditors for debt traded in the WAEMU regional market.

BURKINA FASO
especially mining and agricultural production, which could reduce exports and may negatively affect
FDI inflows.
18. The government’s recent requisitions of gold from mining companies present an
additional source of risks. In February 2023, the authorities requisitioned a total of 500 kg from two
gold mines . While these decisions
are in line with the existing mining Text Figure 7. Burkina Faso: Estimated BOP Need Related
code, which allows the to the Global Food Shock
government to requisition gold (Percent of GDP)
for public necessity at market 0.25
Food (five staple crops)
prices, the payment modalities in
0.2 Fertilizers
the current case, including
payment timeline, remain 0.15
confidential and the motives
0.1
behind the authorities’ actions
unclear. The requisitions are not 0.05
consistent with best PFM practices 0

and could further undermine 2021 2022 2023
BoP need calculated as difference between value of net imports
confidence and have adverse of five main staple crops and all fertilizers in shock and baseline scenarios
implications for donor support
and private investment going
forward (including FDI), increasing risks to the fiscal and real sectors.
19. Risks from the global outlook are also tilted to the downside. Burkina Faso is already
affected by the rising food and energy prices resulting from Russia’s war in Ukraine, and more
intense and/or protracted supply disruptions could affect food security, increase inflation and fiscal
deficits. A global slowdown or increasing geopolitical tensions could lead to increased volatility in
commodity prices, especially gold which comprises over 70 percent of exports. This would further
depress economic activity and weigh on mining, cotton production, and government revenue and
expenditure. Burkina Faso could also be adversely affected by climate shocks affecting crops, which
would strain the already limited fiscal space available to the authorities.
POLICIES
20. The global food shock affects Burkina Faso through several channels. The main channel
is through the prices of fertilizers which have sharply increased from the beginning of 2021 to 2022.
Burkina Faso imports all the fertilizers it uses, which represented about CFAF 33.2 billion in 2021, or 3
percent of GDP. Higher government subsidies partially absorbed the price increase, which helped
cushion its negative impact on the economy where the primary sector accounts for 20 percent of
GDP and 80 percent of total employment. The second channel is through the increase in food prices.
Between January and October 2022, food prices have increased by 21 percent (Text Figure 3),
dramatically decreasing the standard-of-living of the population, with food accounting for one half
of consumption spending. Although the direct effect of the increase in imported food prices is small,
with Burkina Faso importing only a small fraction of its consumption of staple crops, the indirect
effect through the transmission to local food prices due to the substitutability between local and

BURKINA FASO
foreign products has likely been stronger—an effect that is difficult to quantify, as the worsening
security situation has disrupted domestic trade. Finally, in an attempt to insulate their own economy
from the shock, export bans on cereals and flours, and in some cases fertilizers, by several
governments in the region, including Burkina Faso, Benin, Ghana, Mali and Togo, have amplified the
global food shock.
21. Food-related financing needs are large and urgent to address a dire and costly food
crisis. Following the approach in Tackling the Global Food Crisis. Impact, Policy Response and the
Role of the IMF, IMF Note 2022/004, staff estimates that the balance-of-payment need associated
with the global food shock is around 0.4 percent of GDP cumulatively during 2022 and 2023, largely
driven by the rise in the cost of (net) imports of fertilizers (see Text Figure 7 and Annex II for details
on the methodology).
22. The overall costs of tackling acute food insecurity would, however, be significantly
larger (Annex III). For example, based on the WFP’s “Global Operational Response Plan,” it would
cost about 0.5 percent of GDP to lift out of hunger, for a period of one year, the additional 0.6
million people who fell into acute food insecurity between August 2021 and August 2022. A more
ambitious and equitable goal of compensating all vulnerable households (US$1.9 or less per capita
per day, about 43.7 percent of the population) for the rise in food prices in 2022 would require nearly
3½ percent of GDP.
23. In this challenging crisis context, to address acute food-related needs, the authorities
requested IMF emergency financing, with discussions on a prospective IMF-supported
program to start subsequently. In the context of fragile security conditions and an acute food
crisis, rapid disbursement under the FSW will be key to address the food-related BOP need. It would
not be possible to implement the needed emergency response to attend the urgent BOP need, as an
IMF-supported arrangement would require time to negotiate program modalities, especially with a
new government, and reach a new understanding between staff and the authorities. Emergency
financial assistance from the IMF could also function as a catalyst for financial and in-kind support
from development partners to help the authorities implement their response plan to food insecurity
(Text Table 2). Development partners include the World Bank, the African Development Bank, and
bilateral partners. The authorities are actively engaged in seeking additional financing from other
donors.
24. The authorities’ plan to use the resources disbursed under the FSW to mitigate the
temporary challenges implied by the food price shock. The authorities are committed to
implementing these efforts through a sound macroeconomic policy framework (LOI, paragraph 4),
including achieving fiscal convergence within WAEMU in the medium-term, which is essential for
safeguarding macroeconomic stability. Key underpinnings of such a framework, including on the
needed ambition of the adjustment and specific measures, would be further refined in the context of
planned discussions towards a possible IMF-supported program. The authorities are also committed
not to introduce any new restrictions on international trade and to phase out existing, temporary
ones (LOI paragraph 8).

BURKINA FASO
25. The authorities’ response to food insecurity has several goals. The government’s 2023
food insecurity response plan (Plan de Réponse et de Soutien aux Populations Vulnérables) includes as
objectives (i) the provision of immediate food assistance; (ii) the prevention of malnutrition and the
improvement of the drinking water supply; and (iii) the protection of livelihoods. (See text table 2
and LOI paragraphs 5 and 6.) The response plan’s total cost amounts to US$362 million, which is
above the expected IMF emergency financing disbursement under the Food Shock Window (SDR
60.2 million, US$79.2 million). Immediate food assistance accounts for more than 80 percent of the
plan’s total cost.
Text Table 2. Burkina Faso: Response Plan to Support Vulnerable Households, 2023
Goals Measures Costs

CFAF (bn) US$ (mn)
Distribution of free food. 95.3 159.7
Monetary transfers 63.3 106.0
Immediate food
Sale of cereals at 19.9 33.3
assistance.
subsidized prices
Sub-total 178.6 299.0
Care of children, pregnant 23.7 39.7
Prevention and and lactating women
management of suffering from moderate
malnutrition; and severe malnutrition.
improving drinking Improving drinking water 1.5 2.5
water supply. supply and distribution
Sub-total 25.2 42.2
Distribution and sale of 4.9 8.3
agricultural inputs
(fertilizers, seeds) at
subsidized prices.
Protection of
Measures to support 7.2 12.1
livelihoods.
livestock (free vaccinations,
free distribution of feed for
livestock and poultry).
Sub-total 12.2 20.4
Evaluation and Data collection, evaluation 0.4 0.6
monitoring of the and implantation of the
agropastoral 2023 Action Plan;
campaign. preparation of the 2024
Action Plan
Sub-total 0.4 0.6
Total 216.4 362.2
Target groups: Populations affected by disasters during the 2022/23 agropastoral campaign; Populations
vulnerable to food insecurity and internally displaced persons; Children under five-year old vulnerable to
malnutrition and pregnant and lactating women; Populations with low access to drinking water.
Beneficiaries: 3.5 million people in a food crisis situation, including 550,000 people in food emergency
conditions and 20,000 in food catastrophe conditions.
Operators: National technical services, local authorities, NGOs, Associations, Private individuals, United
Nations agencies, multilateral and bilateral partners.
Source: Burkinabe Authorities

BURKINA FASO
26. Efforts to finance the food insecurity response plan are ongoing. The plan will be
financed partly though the mobilization of government’s budgetary resources, and partly through
the resources made available by the government’s partners involved in the response plan, which
include UN Agencies (FAO, WFP and UNICEF), Non-governmental Organizations (NGOs), multilateral
and bilateral partners. In this context, IMF emergency support will be an important component in
helping the authorities finance the food insecurity response plan.
27. The authorities are committed to use the disbursed resources under the FSW to
immediately implement key measures (LOI, paragraphs 5 and 6). Measures include immediate
distribution of free food, provision of well-targeted cash transfers and sale of cereals at subsidized
prices to the most vulnerable households; protecting children, pregnant and lactating women from
malnutrition; and supporting farmers and herders through subsidized inputs (seeds, fertilizers,
vaccinations and feed for livestock). The response plan also facilitates ongoing improvement in the
supply of clean water, to help mitigate the impact of the food crisis on the population and improve
agricultural production. Finally, while some of the measures may not be fully targeted in the near
term (e.g., fertilizer subsidies) given capacity constraints and the scope and urgency of needs, the
authorities are committed to provide more targeted support in the medium term, in line with
structural medium-term reform needs.
28. In this context, the authorities have been extending targeted social protection to the
most vulnerable households. While further developing and strengthening social protection
mechanisms would remain a key goal of a potential IMF-supported program, efforts to create a
system of well-targeted cash transfers to benefit the most vulnerable households, including the
creation of a Social Registry to identify cash transfer beneficiaries, have been instrumental to attend
to the ongoing food emergency.
29. Furthermore, the authorities are committed to gradually lift existing, temporary
imposed measures suspending exports of cereals, as well as to refrain from introducing any
new export or import restrictions. Like several countries in the region, Burkina Faso imposed
restrictions on exports of key cereals including millet, sorghum, corn and cowpea to protect domestic
supply. However, the authorities are committed to phasing out these temporary measures and not to
introduce similar trade-restrictive measures in the future (LOI paragraph 8). These commitments are
in line with the advice formulated by the IMF, the World Bank, and the WTO to keep trade open and
avoid restrictive measures that further exacerbate the suffering of the most vulnerable households.
30. The authorities commit to implementing transparency and good governance measures
in the use of the resources allocated under the FSW. In this regard, they will continue efforts to
maintain, and further improve, good Public Financial Management (PFM) practices including timely
publication on the Ministry of Finance website of the budget and budget execution reports on an
annual basis. The budget execution reports will also include information on the use of FSW funds.
The authorities will also progress towards the establishment of the Treasury Single Account (TSA),
including the implementation of the conclusions of the study on the impact of closure of public
accounts, and the recommendations of the Council of Ministers on the centralization of public funds.
The FSW funds will be channeled through the BCEAO and made available to the government as
budget support, and spending of the funds will be governed by the authorities’ emergency spending

BURKINA FASO
framework, which covers the (i) overall institutional arrangements; (ii) financing of emergency
mechanisms; (iii) appropriate budgetary, accounting and financial management procedures; (iv) ex-
post accountability mechanisms; and (v) tools to ensure the transparency of the framework. The
authorities intend to continue benefitting from IMF support in further improving PFM practices,
including on accounting and public investment management. The authorities also commit to prepare
semi-annual progress reports and publish audits on the implementation of the cash transfer program
and all food emergency spending by June 30, 2024. The audits will be performed by the General
Inspectorate of Public Finances (Inspection Generale des Finances) and will include a review of the
procedures and protocols used to ensure payments were received by the intended and appropriate
beneficiaries. Finally, the authorities commit to identification and publication of the beneficial owners
of entities awarded public procurement contracts, for contracts related to improving the supply of
clean water, and for purchasing agricultural inputs and food to be sold at subsidized prices (LOI
paragraph 7). 6
31. Following the FSW disbursement to address urgent needs, the authorities intend to
resume discussions to negotiate an IMF-supported arrangement. Putting Burkina Faso on a
stable macroeconomic path during the two-year transition period back to constitutional order
requires the creation of fiscal space to finance priority spending (see Letter of Intent). In this context,
an IMF-supported arrangement would be instrumental. Specifically, the authorities are committed to
implementing a UCT-program, building on their track record established in past IMF-supported
programs, progress in addressing governance issues, and good collaboration with IMF staff.
IMF ASSISTANCE MODALITIES

32. The access level is calibrated to the urgent balance-of-payment needs created by the
food shock. The urgent balance-of-payment needs associated with the global food shock are
estimated around 0.4 percent of GDP cumulatively for the period 2022 and 2023 (see Text Figure 7).
On this basis, staff proposes an access of 50 percent of quota, equivalent to 0.4 percent of GDP.
Emergency financing is provided in support of policies that will address the urgent balance-of-
payments needs.
33. Burkina Faso’s capacity to repay the IMF is adequate (Table 7). Based on existing and
prospective credit, total outstanding credit to the IMF is projected to peak at 227.8 percent of quota
by end-2023, equivalent to 1.7 percent of GDP, 6.3 percent of exports, and 9.4 percent of
government revenues. 7 Total obligations to the IMF are projected to peak at about 21 percent of
external debt-service obligations, 0.2 percent of GDP, and 0.8 percent of exports in 2026. Highly
concessional support from international partners will continue to be important to meet financing
needs over the medium term and promote macroeconomic stability and growth. The authorities
intend to intensify the dialogue with the international community to secure concessional financing in
2023 and beyond to create fiscal space. Risks to capacity-to-repay indicators include further political
6
The authorities already publish information of the ultimate beneficial owners of entities awarded public procurement
contracts related to response to the COVID-19 pandemic on the following website: https://www.dgcmef.gov.bf
7
Capacity-to-repay indicators have been calculated using (i) projected payments based on existing and prospective
drawings, and (ii) projected credit outstanding, also based on existing and prospective drawings.

BURKINA FASO
and social instability, with spill-overs to the fiscal sector, and increasing geopolitical fragmentation,
which may affect the external sector.
34. The authorities are committed to adopt policy measures across critical areas to address
acute food insecurity and reduce poverty. In their Letter of Intent, the authorities are committing
to use the disbursed resources under the FSW to rapidly support the most vulnerable and poorest
households through direct food support and the provision of well-targeted cash transfers.
Furthermore, they commit to use the disbursed resources to improve the clean water supply, and to
continue investing in techniques to harvest rainfall water and thus mitigate the risks for agricultural
production posed by extreme climate conditions. Finally, they also commit not to introduce
measures restricting international trade.
STAFF APPRAISAL
35. Like many countries in Sub-Saharan Africa, Burkina Faso is facing acute food insecurity.
In recent years, the country has been hit continuously by a series of exogenous shocks, namely the
deteriorating security conditions in the face of frequent terrorist attacks which has led to an
estimated 1.9 million internally displaced persons as of end-December 2022; extreme climate
conditions including droughts; the COVID-19 pandemic; and the war in Ukraine with its implications
for international food, fuel and fertilizer prices. The effects of climate change on agriculture and a
bad harvest during the 2021-2022 season resulting from low rainfall have contributed to the food
crisis, worsened by the disruption of international supply-chains caused by the COVID-19 pandemic
and exacerbated by Russia’s invasion of Ukraine, including through higher fertilizer costs. As a result,
about 3.4 million Burkinabé (out of a population of 21.5 million) are now estimated to be food
insecure.
36. To address acute food insecurity, the authorities requested IMF emergency financing.
In a context of fragile security conditions, rapid emergency financing will be key to mitigate the
impact of the food crisis on the population and address the balance-of-payments need induced by
acute food insecurity. Emergency financial assistance from the IMF could also function as a catalyst
for financial and in-kind support from development partners to help address the crisis.
37. Burkina Faso meets the qualification criteria to access the Food Shock Window under
the Rapid Credit Facility. The country is facing an urgent balance-of-payment need associated with
a situation of acute food insecurity, as per the United Nations Global Report on Food Crisis
(UNGRFC). Specifically, according to the GRFC Report, 3.4 million people are estimated to be in
IPC/CH Phase 3. In addition, according to the same source, the Soum province in the Sahel region is
in a food emergency situation (equivalent to IPC/CH Phase 4). In the context of fragile security
conditions and an acute food crisis, rapid disbursement under the RCF/FSW will be key to address
the food-related BOP need. Such a rapid response would not be possible through a UCT-quality
program, as it would require time to negotiate program modalities, especially with a new
government.
38. The authorities are rapidly putting in place measures to assist immediately the
populations in conditions of acute food insecurity, and are committed to good governance

BURKINA FASO
practices, even though there are some areas where efforts to improve governance should
continue. Immediate assistance measures include the distribution of free food and unconditional
cash transfers to the most vulnerable households, the sale of cereals and agricultural inputs at
subsidized prices, as well as improving the supply of drinking water. In this context, the authorities
are committed to putting strong safeguards in place, including to document their interventions by
publishing semi-annual reports as well as conduct an audit of the implementation of the 2023 cash
transfer program by June 30, 2024. In addition, as already done following the disbursement of IMF
emergency financing to respond to the COVID-19 pandemic, the authorities are committed to
identify and publish information of the ultimate beneficial owners of those entities awarded public
procurement contracts related to measures to address the food crisis, such as purchasing agricultural
inputs and food to be sold at subsidized prices, and improving the supply of clean water. Finally the
authorities are also committed to maintain and further improve good PFM practices (LOI paragraph
7). However, there are some areas where the authorities should maintain momentum in improving
good governance and transparency practices. Specifically, the requisitions of gold from mining
companies do not reflect best PFM practices, discourage foreign direct investment, and may have
adverse implications for donor support going forward, thereby increasing risks to the fiscal and real
sectors. In addition, the Patriotic Support Fund (FSP) created to fund additional security measures
through voluntary contributions should be phased out after one year and be subject to governance
and transparency best practices.
39. Discussions on access to the Food Shock Window helped lay the groundwork for a
possible future Fund-supported program. Building on their good track record established in past
engagements with the IMF, including the successful conclusion of an ECF-arrangement in 2019 and
the transparent management of the IMF’s COVID-related assistance during 2020-2021, the
authorities intend to resume program negotiations as soon as key measures to address the current
acute food insecurity have been put in place. They deem an IMF-supported program necessary to
restore macroeconomic stability, address growing debt vulnerabilities, and implement macro-critical
reforms. Program discussions would seek to entrench fiscal and debt sustainability, and encompass
key reforms needed for growth-friendly fiscal consolidation, such as the extension of social
protection to the most vulnerable and creating fiscal space for priority spending—including investing
in climate-resilient agriculture to improve food security permanently—by containing growth of the
civil service wage bill, enhancing domestic revenue mobilization, and reforming energy subsidies.
40. Finally, the BCEAO has implemented all recommendations from the 2018 Safeguards
Assessment. The assessment found that the BCEAO had broadly appropriate governance
arrangements and a robust control environment. An update assessment of the BCEAO is planned for
2023.
41. Against this background, staff support the authorities’ request for a Rapid Credit
Facility disbursement under the FSW and their plan to use the resources to mitigate the impact
of the food shock on the most vulnerable. The urgent intervention to accelerate direct food
support and the distribution of well-targeted cash transfers, while improving the supply of clean
water, would support the most vulnerable at a difficult time and improve the agricultural sector’s
prospects.

BURKINA FASO
Table 1. Burkina Faso: Selected Economic and Financial Indicators, 2019–27

Population (2020): 20.9 million Gini Index (2018): 47.3
Per capita GDP (2020): 790.7 USD Life Expectancy (years): 61
Share of population below the poverty line (2022): 43.7% Literacy rate (2018): 39%
2019 2020 2021 2022 2023 2024 2025 2026 2027
Act. Act. Prel. Proj. Proj. Proj. Proj. Proj. Proj.
(Annual percentage change, unless otherwise indicated)

GDP and prices
GDP at constant prices 5.7 1.9 6.9 2.5 4.9 5.9 5.8 5.3 5.2
GDP deflator 1.6 6.8 -0.8 8.6 1.8 2.3 2.1 2.0 2.0
Consumer prices (annual average) -3.2 1.9 3.9 14.1 1.5 2.3 2.0 2.0 2.0
Consumer prices (end of period) -2.6 2.3 8.2 9.6 2.7 2.0 2.0 2.0 2.0
Money and credit

Net domestic assets (banking system) 1/ 7.6 6.0 5.2 … … … … … …
Credit to the government (banking system) 1/ 2.6 1.1 -5.8 … … … … … …
Credit to private sector 11.1 9.9 10.1 … … … … … …
Broad money (M3) 8.8 18.0 19.1 … … … … … …
Private sector credit/GDP 28.1 28.3 29.4 … … … … … …
External sector
Exports (f.o.b.; valued in CFA francs) 4.8 21.2 4.5 6.8 2.8 9.8 8.2 5.0 5.8
Imports (f.o.b.; valued in CFA francs) 2.5 -3.0 21.2 28.5 1.0 6.7 6.1 6.0 5.9
Current account (percent of GDP) -3.2 4.1 -0.4 -5.2 -5.2 -4.4 -3.8 -4.1 -4.0
Real effective exchange rate … … … … … … … … …
(Percent of GDP, unless otherwise indicated)

Central government finances
Current revenue 18.4 16.1 17.8 18.8 18.4 18.6 18.6 18.7 18.9
Of which: tax revenue 2/ 15.0 13.3 15.4 16.9 16.3 16.3 16.4 16.5 16.7
Total expenditure and net lending 23.0 24.2 27.8 31.3 28.4 27.3 26.1 24.8 23.7
Of which: current expenditure 17.3 16.7 18.6 20.9 19.4 19.0 18.9 18.8 18.6
Overall fiscal balance, incl. grants (commitments) -3.1 -5.1 -7.5 -10.3 -7.8 -6.7 -5.5 -4.2 -3.0
Total public debt 42.0 44.9 48.2 54.3 58.0 60.2 61.3 61.3 60.1
Of which: external debt 23.6 22.9 25.1 25.3 24.5 23.7 22.9 22.3 21.9
Memorandum items:
Nominal GDP (CFAF billion) 9,479 10,322 10,945 12,179 13,008 14,088 15,214 16,338 17,536
Nominal GDP per capita (US$) 772 834 892 860 909 951 996 1,036 1,082
REER based on Consumer Price Index (CFAF per US$) 95 98 99
Sources: Burkinabé authorities; and IMF staff estimates and projections.

1/ Percent of beginning-of-period broad money.
2/This includes a large one-off reimbursement of VAT in 2021.

BURKINA FASO
Table 2. Burkina Faso: Balance of Payments, 2019–27

2019 2020 2021 2022 2023 2024 2025 2026 2027
Act. Act. Proj. Proj. Proj. Proj. Proj. Proj. Proj.
(CFAF billions, unless otherwise indicated)
Current account -307 428 -46 -631 -674 -616 -576 -667 -699
Trade balance 214 766 460 -40 14 113 193 167 172
Exports of goods 2,301 2,790 2,914 3,113 3,199 3,513 3,800 3,990 4,220
Of which: cotton 185 168 245 383 305 322 332 344 357
Of which: gold 1,686 2,279 2,280 2,230 2,388 2,649 2,902 3,054 3,244
Imports of goods -2,087 -2,024 -2,454 -3,153 -3,185 -3,400 -3,607 -3,823 -4,048
Of which: oil -420 -286 -488 -782 -680 -685 -688 -696 -705
Services, net -540 -433 -466 -509 -570 -595 -620 -644 -668
Primary income, net -299 -320 -352 -378 -404 -434 -460 -488 -515
Secondary income, net 318 416 312 296 287 299 311 297 312
Of which: Official transfers, net 169 246 167 147 130 134 121 106 107
Capital account 126 212 252 259 295 291 309 328 348
Project grants 72 142 182 189 225 221 240 259 279
Financial account 296 -500 116 -782 -131 -81 -79 -4 64

Direct investment 86 -53 59 57 52 40 31 48 46
Portfolio investment 59 -298 -193 -153 23 12 11 20 34
Other investment 152 -149 250 -686 -206 -133 -121 -73 -16
Commercial banks -105 -121 -137 -96 -22 -21 -19 -18 -9
General government 97 152 265 162 96 148 148 165 193
Project loans 91 143 292 199 216 223 241 259 278
Program loans 65 70 46 57 0 58 59 59 59
Amortization of public loans (excl. IMF) -59 -61 -72 -94 -120 -134 -151 -152 -144
Other private 159 -181 122 -752 -280 -260 -250 -220 -200
Errors and omissions -4 -4 0 0 0 0 0 0 0
Overall balance 111 135 322 -1,155 -510 -407 -345 -343 -286
Net change in foreign assets of the central bank -111 -135 -322 1,155 255 128 200 205 159
of which: IMF net financing -25 -104 16 0 -39 12 17 13 11
Disbursements (past and prospective) 44 111 0 0 49 0 0 0 0
Repayments (excluding charges) -19 -7 -16 0 -11 -12 -17 -13 -11
of which: SDR allocation … … 91 … … … … … …
Residual Financing Gap 0 0 0 0 255 279 145 139 128
(Percent of GDP, unless otherwise indicated)

Memorandum items:
Exports of goods 24.3 27.0 26.6 25.6 24.6 24.9 25.0 24.4 24.1
Imports of goods -22.0 -19.6 -22.4 -25.9 -24.5 -24.1 -23.7 -23.4 -23.1
Trade balance (goods) 2.3 7.4 4.2 -0.3 0.1 0.8 1.3 1.0 1.0
Trade balance (services) -5.7 -4.2 -4.3 -4.2 -4.4 -4.2 -4.1 -3.9 -3.8
Trade balance (goods and services) -3.4 3.2 -0.1 -4.5 -4.3 -3.4 -2.8 -2.9 -2.8
Current account (– = deficit) -3.2 4.1 -0.4 -5.2 -5.2 -4.4 -3.8 -4.1 -4.0
GDP at current prices (CFAF billions) 9,479 10,322 10,945 12,179 13,008 14,088 15,214 16,338 17,536
BCEAO Reserves
In billion USD 5 6 6 6 … … … … …
In months of next year's WAEMU imports 5.6 5.4 5.6 4.5 … … … … …
In percent of broad money 34.2 32.9 31.6 28.3 … … … … …
Sources: Burkinabè authorities and BCEAO; and IMF staff estimates and projections.

BURKINA FASO
Table 3. Burkina Faso: Monetary Survey, 2019–27

2019 2020 2021 2022 2023 2024 2025 2026 2027
Act. Act. Est. Proj. Proj. Proj. Proj. Proj. Proj.
(CFAF billions, unless otherwise indicated)
Net foreign assets 1,508 1,989 2702 1822 1631 1562 1417 1264 1130
BCEAO 1/ 76 211 533 -622 -877 -1005 -1205 -1410 -1569
Assets 1,048 974 1109 169 187 205 225 242 254
Liabilities 972 763 576 791 1064 1210 1430 1652 1823
Commercial banks 1,432 1,778 2169 2444 2508 2567 2622 2674 2699
Net domestic assets 2,488 2,718 2952 3551 4281 4847 5529 6082 6589
Domestic credit 3,074 3,390 3494 4148 4918 5484 6166 6719 7226
Net Bank credit to government 158 201 -60 56 1010 1792 2468 2981 3309
BCEAO -35 30 -89 67 106 94 77 64 52
Commercial banks 194 171 29 86 904 1698 2391 2918 3257
Credit to other sectors 2,916 3,188 3554 4092 3908 3693 3698 3738 3917
of which: Credit to private sector 2,663 2,925 3,220 3,558 3,357 3,124 3,111 3,135 3,303
Other items (net) 51 38 -182 -246 -189 -189 -189 -189 -189
Shares and other equities 535 633 724 826 826 826 826 826 826
Total broad money liabilities 3,996 4,707 5654 5498 5912 6410 6946 7346 7719
Liquid liabilities 3,812 4,498 5358 5104 5477 5933 6423 6783 7128
Non-liquid liabilites (excl. from broad money) 184 209 296 394 435 477 523 563 591
(Annual percentage change, unless otherwise indicated)

Memorandum items:
Net foreign assets 4.6 31.9 35.8 -32.6 -10.5 -4.2 -9.3 -10.8 -10.6
Net domestic assets 2/ 7.6 6.0 5.2 11.2 14.3 10.3 11.5 8.6 7.5
Net credit to government 2/ 2.6 1.1 -5.8 2.2 18.7 14.3 11.4 8.0 4.8
Credit to Private Sector 11.1 9.9 10.1 10.5 -5.7 -6.9 -0.4 0.8 5.4
Private sector credit (percentage of GDP) 28.1 28.3 29.4 29.2 25.8 22.2 20.4 19.2 18.8
Money supply 8.8 18.0 19.1 -4.7 7.3 8.3 8.3 5.6 5.1
Velocity of money (GDP/M2) 3/ 2.5 2.3 2.0 2.4 2.4 2.4 2.4 2.4 2.5
Sources: Burkinabè authorities; and IMF staff estimates and projections.

1/ Only includes current reserves in BCEAO Ouagadougou. It does not include all regional reserves.
2/ Annual change as a percentage of broad money from 12 months earlier.
3/ End-of-period average.

BURKINA FASO
Table 4. Burkina Faso: Selected Financial Soundness Indicators, 2014–22

(in percent)
Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 1/ Dec-19 Dec-20 Dec-21 Jun-22
Capital Adequacy
Reg. capital to risk-weighted assets 11.4 11.1 13.0 12.2 12.0 13.6 13.4 13.7 13.6
Asset Quality
Gross NPLs / Total loans 8.6 8.9 8.9 8.8 7.4 7.6 7.8 7.4 6.6
Provisions / NPLs 64.9 67.6 70.4 66.4 70.4 69.1 71.4 71.4 75.6
Loan Concentration
5 largest clients / equity 158.4 179.6 114.5 79.8 70.6 69.3 76.5 66.8 80.6
By Sector: (share of total)
Agriculture 2.8 1.9 3.7 4.4 4.7 3.7 1.8 2.3 2.0
Extractive Industries 2.0 2.3 1.5 2.0 2.9 4.1 4.6 4.3 5.5
Manufacturing 16.1 15.2 13.2 13.6 12.5 12.1 12.2 11.2 11.6
Electricity, gas, water 1.3 1.0 0.8 1.2 1.0 1.0 2.4 2.8 3.3
Buildings/Public Works 13.6 16.6 16.2 16.9 17.8 16.5 16.7 16.1 10.7
Commercial (restaurants, hotels) 26.0 28.3 25.6 23.9 23.6 18.5 18.0 18.2 23.0
Transportation/communication 9.5 8.4 10.3 8.8 9.1 10.9 9.9 9.0 8.8
Insurance, real estate, business services 3.7 3.0 5.0 5.6 7.2 7.3 10.1 9.9 7.3
Other 25.1 23.1 23.7 23.7 21.3 25.9 24.3 26.2 27.8
Liquidity
Loans to deposits 99.8 91.2 86.1 83.9 85.7 87.4 77.6 71.3 74.5
Liquid assets / total assets 34.8 29.2 23.2 24.7 25.7 22.5 20.9 18.7 20.6
Sources: Central bank (BCEAO) authorities and IMF staff estimates.

1/ First year of data reporting in accordance with Basel II/III prudential standards and the new banking chart of account (interim data).

BURKINA FASO
Table 5a. Burkina Faso: Consolidated Operations of the Central Government, 2019–27
(CFAF billions)
2019 2020 2021 2022 2023 2024 2025 2026 2027
Total revenue and grants 1,882.0 1,975.3 2,223.9 2,551.9 2,679.7 2,901.5 3,124.6 3,354.6 3,628.5
Total revenue 1,747.7 1,659.4 1,946.6 2,288.3 2,396.3 2,618.5 2,835.7 3,062.1 3,314.6
Tax revenue 1,424.9 1,377.0 1,687.5 2,052.4 2,118.6 2,302.9 2,494.9 2,696.2 2,921.8
Of which: Gold Mining CIT 53.1 50.8 135.3 100.4 119.4 145.7 159.6 168.0 178.4
Nontax revenue 322.8 282.4 259.1 235.8 277.7 315.6 340.8 366.0 392.8
Of which: Royalties from gold 36.8 91.2 74.0 89.2 95.5 106.0 116.1 122.1 129.8
Grants 134.3 316.0 277.3 263.7 283.5 283.0 288.9 292.5 313.9
Project 45.9 156.3 196.3 203.4 239.6 235.3 254.1 272.9 292.9
Program 88.4 159.7 80.9 60.3 43.9 47.7 34.8 19.6 21.0
Expenditure and net lending 1/ 2,177.4 2,500.0 3,047.8 3,807.3 3,695.4 3,843.0 3,966.4 4,046.4 4,160.8
Current expenditure 1,644.5 1,724.3 2,038.5 2,539.6 2,529.6 2,678.0 2,868.4 3,076.2 3,259.5
Wages and salaries 844.4 897.2 949.5 1,009.1 1,097.2 1,188.3 1,279.4 1,369.8 1,465.9
Goods and services 198.4 176.3 197.5 210.2 227.0 245.9 265.6 285.2 306.1
Interest payments 117.1 140.6 192.5 229.6 244.2 255.6 316.8 372.3 416.9
Domestic 95.6 117.0 163.9 196.3 210.1 222.2 280.6 333.1 374.3
External 21.5 23.5 28.6 33.3 34.1 33.4 36.1 39.2 42.5
Current transfers 484.6 510.2 698.9 1,090.7 961.2 988.2 1,006.6 1,048.8 1,070.6
Investment expenditure 556.8 780.0 999.1 1,277.2 1,165.8 1,165.0 1,098.0 970.2 901.3
Domestically financed 420.3 494.6 528.2 875.4 710.5 706.5 602.8 438.4 330.5
Externally financed 136.5 285.4 470.9 401.9 455.3 458.5 495.2 531.7 570.7
Net lending -23.8 -4.4 10.2 -9.5 0.0 0.0 0.0 0.0 0.0
Overall balance 1/ -295.5 -524.6 -824.0 -1,255.3 -1,015.7 -941.5 -841.8 -691.8 -532.2
Cash basis adjustment -2.6 -8.2 120.1 386.5 0.0 0.0 0.0 0.0 0.0
Overall balance (cash basis) -298.0 -532.8 -703.8 -868.8 -1,015.7 -941.5 -841.8 -691.8 -532.2
Financing 293.7 530.8 799.4 809.0 538.9 613.4 593.5 601.1 532.0
Foreign financing 97.2 152.4 265.0 161.9 96.1 147.7 148.4 165.3 193.0
Drawings 156.1 213.8 337.3 255.8 215.7 281.7 299.7 317.8 336.7
Project loans 90.6 143.5 291.6 199.1 215.7 223.2 241.1 258.9 277.8
Program loans 65.5 70.3 45.7 56.7 0.0 58.5 58.7 58.9 58.9
Amortization (excl. IMF) -58.9 -61.4 -72.3 -93.9 -119.6 -134.0 -151.3 -152.5 -143.7
Domestic financing 196.6 378.4 534.4 647.0 442.7 465.7 445.0 435.8 339.0
Bank financing 19.5 76.5 178.7 628.1 442.7 465.7 445.0 435.8 339.0
Central bank 11.2 118.3 -48.9 208.3 -10.6 -12.1 -16.9 -13.5 -11.2
of which: IMF net financing 28.7 103.8 -16.3 0.0 -10.6 -12.1 -16.9 -13.5 -11.2
Disbursements 47.8 110.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Repayments -19.1 -7.1 -16.3 0.0 -10.6 -12.1 -16.9 -13.5 -11.2
Commercial banks 8.3 -41.8 227.6 419.9 453.3 477.8 461.9 449.3 350.2
Nonbank financing 177.1 301.9 355.7 18.9 0.0 0.0 0.0 0.0 0.0
Errors and Omissions 4.3 2.0 -95.6 59.8
Financing gap 476.8 328.2 248.3 90.6 0.2
IMF disbursements 49.4 0.0 0.0 0.0 0.0
Outstanding financing gap 427.4 328.2 248.3 90.6 0.2
Memorandum items:
Mining revenue 267.9 306.4 371.2 471.0 504.4 559.5 612.8 644.9 685.1
Overall Balance excl. mining revenue -566.0 -839.3 -1,075.0 -1,339.8 -1,520.1 -1,501.0 -1,454.6 -1,336.7 -1,217.4

1/ Commitment ("engagement") basis.

BURKINA FASO
Table 5b. Burkina Faso: Consolidated Operations of the Central Government, 2019–27
(in percent of GDP)
2019 2020 2021 2022 2023 2024 2025 2026 2027
Total revenue and grants 19.9 19.1 20.3 21.0 20.6 20.6 20.5 20.5 20.7
Total revenue 18.4 16.1 17.8 18.8 18.4 18.6 18.6 18.7 18.9
Tax revenue 15.0 13.3 15.4 16.9 16.3 16.3 16.4 16.5 16.7
Of which: Gold Mining CIT 0.6 0.5 1.2 0.8 0.9 1.0 1.0 1.0 1.0
Nontax revenue 3.4 2.7 2.4 1.9 2.1 2.2 2.2 2.2 2.2
Of which: Royalties from gold 0.4 0.9 0.7 0.7 0.7 0.8 0.8 0.7 0.7
Grants 1.4 3.1 2.5 2.2 2.2 2.0 1.9 1.8 1.8
Project 0.5 1.5 1.8 1.7 1.8 1.7 1.7 1.7 1.7
Program 0.9 1.5 0.7 0.5 0.3 0.3 0.2 0.1 0.1
Expenditure and net lending 1/ 23.0 24.2 27.8 31.3 28.4 27.3 26.1 24.8 23.7
Current expenditure 17.3 16.7 18.6 20.9 19.4 19.0 18.9 18.8 18.6
Wages and salaries 8.9 8.7 8.7 8.3 8.4 8.4 8.4 8.4 8.4
Goods and services 2.1 1.7 1.8 1.7 1.7 1.7 1.7 1.7 1.7
Interest payments 1.2 1.4 1.8 1.9 1.9 1.8 2.1 2.3 2.4
Domestic 1.0 1.1 1.5 1.6 1.6 1.6 1.8 2.0 2.1
External 0.2 0.2 0.3 0.3 0.3 0.2 0.2 0.2 0.2
Current transfers 5.1 4.9 6.4 9.0 7.4 7.0 6.6 6.4 6.1
Investment expenditure 5.9 7.6 9.1 10.5 9.0 8.3 7.2 5.9 5.1
Domestically financed 4.4 4.8 4.8 7.2 5.5 5.0 4.0 2.7 1.9
Externally financed 1.4 2.8 4.3 3.3 3.5 3.3 3.3 3.3 3.3
Net lending -0.3 0.0 0.1 -0.1 0.0 0.0 0.0 0.0 0.0
Overall balance 1/ -3.1 -5.1 -7.5 -10.3 -7.8 -6.7 -5.5 -4.2 -3.0
Cash basis adjustment 0.0 -0.1 1.1 3.2 0.0 0.0 0.0 0.0 0.0
Overall balance (cash basis) -3.1 -5.2 -6.4 -7.1 -7.8 -6.7 -5.5 -4.2 -3.0
Financing 3.1 5.1 7.3 6.6 4.1 4.4 3.9 3.7 3.0
Foreign financing 1.0 1.5 2.4 1.3 0.7 1.0 1.0 1.0 1.1
Drawings 1.6 2.1 3.1 2.1 1.7 2.0 2.0 1.9 1.9
Project loans 1.0 1.4 2.7 1.6 1.7 1.6 1.6 1.6 1.6
Program loans 0.7 0.7 0.4 0.5 0.0 0.4 0.4 0.4 0.3
Amortization (excl. IMF) -0.6 -0.6 -0.7 -0.8 -0.9 -1.0 -1.0 -0.9 -0.8
Domestic financing 2.1 3.7 4.9 5.3 3.4 3.3 2.9 2.7 1.9
Bank financing 0.2 0.7 1.6 5.2 3.4 3.3 2.9 2.7 1.9
Central bank 0.1 1.1 -0.4 1.7 -0.1 -0.1 -0.1 -0.1 -0.1
of which: IMF net financing 0.3 1.0 -0.1 0.0 -0.1 -0.1 -0.1 -0.1 -0.1
Disbursements 0.5 1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Repayments -0.2 -0.1 -0.1 0.0 -0.1 -0.1 -0.1 -0.1 -0.1
Commercial banks 0.1 -0.4 2.1 3.4 3.5 3.4 3.0 2.8 2.0
Nonbank financing 1.9 2.9 3.2 0.2 0.0 0.0 0.0 0.0 0.0
Errors and Omissions 0.0 0.0 -0.6 0.3
Financing gap 3.7 2.3 1.6 0.6 0.0
IMF disbursements 0.4 0.0 0.0 0.0 0.0
Outstanding financing gap 3.3 2.3 1.6 0.6 0.0
Memorandum items:
Nominal GDP (CFAF billion) 9,479 10,322 10,945 12,179 13,008 14,088 15,214 16,338 17,536
Wage bill to tax revenue ratio (percent) 59.3 65.2 56.3 49.2 51.8 51.6 51.3 50.8 50.2
Primary balance excluding program grants -2.8 -5.3 -6.5 -8.9 -6.3 -5.2 -3.7 -2.1 -0.8
1/ Commitment ("engagement") basis.

BURKINA FASO
Table 6. Burkina Faso: External Financing Requirements, 2022–2027

(CFAF Billions)
2022 2023 2024 2025 2026 2027
Proj. Proj. Proj. Proj. Proj. Proj.
Financing need -1746 -1092 -1056 -1023 -1039 -1020

Current account balance (excl. official transfers) -778 -804 -751 -697 -773 -806
IMF repayments 0 -11 -12 -17 -13 -11
Private capital flows -874 -158 -159 -157 -100 -59
Amortization of public loans (excl. IMF) -94 -120 -134 -151 -152 -144
Financing 1,746 787 777 878 900 893

Project loans: 199 216 223 241 259 278
Program loans (excl. IMF): 57 0 58 59 59 59
Official transfers, net 147 130 134 121 106 107
Change in NFA central bank (excl. prospective IMF
1,155 216 140 217 218 170
disbursements and repayments)
Project grants 189 225 221 240 259 279
Errors and Omissions 0 0 0 0 0 0
Financing Gap 0 305 279 145 139 128

IMF Financing (past and prospective) 0 49.4 0 0 0 0
CCRT 1 … … …
DSSI … … … …
Other Donors … … … …
Sources: Burkinabè authorities and IMF staff estimates and projections.

26
BURKINA FASO
Table 7. Burkina Faso: Indicators of Capacity to Repay the IMF, 2022–35
INTERNATIONAL MONETARY FUND
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Act. Projections
Fund obligations based on existing and prospective credit

(in millions of SDRs)
Principal 6.8 14.2 16.3 30.7 42.2 41.2 41.0 45.2 27.7 12.0 12.0 6.0 0.0 0.0
Charges and interest 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total obligations based on existing and prospective credit

In millions of SDRs 6.8 14.2 16.3 30.7 42.2 41.2 41.0 45.2 27.7 12.0 12.0 6.0 0.0 0.0
In billions of CFAF 5.6 11.7 13.5 25.6 35.4 34.6 34.4 37.9 23.3 10.1 10.1 5.1 0.0 0.0
In percent of government revenues 0.2 0.5 0.5 0.9 1.2 1.0 0.9 1.0 0.5 0.2 0.2 0.1 0.0 0.0
In percent of exports of goods and services 0.2 0.3 0.3 0.6 0.8 0.7 0.7 0.7 0.4 0.2 0.2 0.1 0.0 0.0
In percent of debt service 1/ 4.7 9.4 10.1 16.9 20.8 19.7 17.6 18.3 10.8 4.7 4.3 2.1 0.0 0.0
In percent of GDP 0.0 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.1 0.0 0.0 0.0 0.0 0.0
In percent of quota 5.6 11.8 13.5 25.5 35.0 34.2 34.0 37.5 23.0 10.0 10.0 5.0 0.0 0.0
Outstanding IMF credit based on existing and prospective drawings

In millions of SDRs 228.3 274.3 258.0 227.3 185.1 143.9 109.2 57.8 30.1 18.1 6.0 0.0 0.0 0.0
In billions of CFAF 190.0 225.2 213.4 189.4 155.5 120.9 91.8 48.6 25.3 15.2 5.1 0.0 0.0 0.0
In percent of government revenues 8.3 9.4 8.1 6.7 5.1 3.6 2.5 1.2 0.6 0.3 0.1 0.0 0.0 0.0
In percent of exports of goods and services 5.5 6.3 5.5 4.5 3.5 2.6 1.8 0.9 0.4 0.3 0.1 0.0 0.0 0.0
In percent of debt service 1/ 157.8 181.4 160.2 124.9 91.3 68.7 46.9 23.4 11.7 7.0 2.2 0.0 0.0 0.0
In percent of GDP 1.6 1.7 1.5 1.2 1.0 0.7 0.5 0.2 0.1 0.1 0.0 0.0 0.0 0.0
In percent of quota 189.6 227.8 214.3 188.8 153.7 119.5 90.7 48.0 25.0 15.0 5.0 0.0 0.0 0.0
Net use of IMF credit (in millions of SDRs) -6.8 46.0 -16.3 -30.7 -42.2 -41.2 -41.0 -45.2 -27.7 -12.0 -12.0 -6.0 0.0 0.0
Disbursements 0.0 60.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Repayments and repurchases 6.8 14.22 16.3 30.7 42.2 41.2 41.0 45.2 27.7 12.0 12.0 6.0 0.0 0.0
Memorandum items:
Nominal GDP (in billions of CFAF) 12,179 13,008 14,088 15,214 16,338 17,536 18,826 20,213 21,706 23,313 25,026 26,869 28,851 30,984
Exports of goods and services (in billions of CFAF) 3,459 3,568 3,912 4,231 4,453 4,718 5,044 5,326 5,626 5,943 6,279 6,634 7,012 7,411
Government revenue (in billions of CFAF) 2,288 2,396 2,618 2,836 3,062 3,315 3,665 3,975 4,312 4,678 5,072 5,499 5,962 6,465
Debt service (in billions of CFAF) 1/ 2/ 120 124 133 152 170 176 196 208 216 216 233 242 251 262
CFAF/SDR (period average) 832 821 827 833 840 840 840 840 840 840 840 840 840 840
Sources: IMF staff estimates and projections.

1/ Total external debt service includes IMF repurchases and repayments.
2/ Includes state-owned enterprises debt.

BURKINA FASO
Figure 1. Burkina Faso: Recent Economic Developments
Growth is projected to fall in 2022 amid continued Since 2020, there has been reduced growth in Industry
security and external shocks. and mining.
Real GDP Growth, 2002-2022 Contribution to Growth, 2015−2022
(y/y percent change) (y/y percent change)
Real GDP Growth Agriculture Industry and Mining
10 Services Taxes
3-year moving average
GDP Growth
8 10
6
5
4
2 0
0
-5
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2015 2016 2017 2018 2019 2020 2021 2022
Private credit growth has been declining recently Surging food prices have led to a large increase in
reflecting the slowdown in growth. headline inflation since 2020.
Private Credit Growth, Jan 2013−Nov 2022 Average Inflation, Jan 2016−Dec 2022
(y/y percent change) (y/y percent change)
30
40
35
30 20
25
20 10
15
10 0
5
0 -10 Headline Food Non-food
-5
Sep-16
Sep-17
Sep-18
Sep-19
Sep-20
Sep-21
Sep-22
Mar-17
Mar-18
Mar-19
Mar-20
Mar-21
Mar-22
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Sep-13
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Sep-19
Sep-20
Sep-21
Sep-22
May-13
Jan-14
May-14
Jan-15
May-15
Jan-16
May-16
Jan-17
May-17
Jan-18
May-18
Jan-19
May-19
Jan-20
May-20
Jan-21
May-21
Jan-22
May-22
Tax revenue has been steadily increasing in recent ...while public investment expenditure has increased,
quarters but less than total expenditures..
Tax Revenue, 2015 Q1−2022 Q4 Investment and Total Expenditure,

(percent of GDP) 2012−2022
5 Other Direct VAT (percent of GDP)
35
4 30 Total Investment Expenditure
25 Total Expenditure
3
20
2 15
1 10
5
0
0
20122013201420152016201720182019202020212022
Source: Burkinabe authorities; and IMF staff calculations

BURKINA FASO
Figure 2. Burkina Faso: Real and External Developments

Gold nominal exports are estimated to have decreased ...as Gold and Cotton prices began to decline or
in 2022… stabilize.
Commodities Exports, 2012−2022 Gold and Cotton Prices,
(cotton in thousand tonnes, gold in 2019Q1−2022Q4
tonnes) (Gold in USD per troy ounce, Cotton in
400 Cotton (LHS) Gold (RHS) 80 US cents per lb)
Gold (LHS) Cotton (RHS)
300 60 2000 200
1800 150
200 40 1600
100
1400
100 20 1200 50
1000 0
0 0
2019Q3
2019Q4
2020Q1
2020Q2
2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
2022Q4
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
The gold mining sector continues to be the main driver

...while imports are increasingly driven by oil.
of total exports…
Composition of Exports, 2012−22 Composition of Imports, 2012−2022
(billion CFAF) (billion CFAF)
4000
3500 Gold Cotton Oil Other primary goods Manufactured goods
Food and live animals Manufactured goods 3500
3000
Other 3000
2500
2500
2000
2000
1500 1500
1000 1000
500 500
0 0
2012 2014 2016 2018 2020 2022 2012 2014 2016 2018 2020 2022
The current account deficit is expected to have widened The real exchange rate has begun to depreciate, with a
substantially in 2022. declining USD/CFAF rate.
Current Account Balance, 2012−2022 Exchange Rates, Jan 2012−Dec 2022
(billion CFAF, unless otherwise specified) (2000=100)
Exports of goods and services (LHS) 170 REER NEER USD/CFAF
Imports of goods and services (LHS)
4500 8
Current account (pct. GDP, RHS) 6 150
4000
3500 4
3000 2 130
2500 0
-2
2000 -4 110
1500 -6
1000 -8
500 90
-10
Jan-12
Jan-15
Jan-18
Jan-21
Oct-12
Oct-15
Oct-18
Oct-21
Apr-14
Apr-17
Apr-20
0 -12
Jul-13
Jul-16
Jul-19
Jul-22
2012 2014 2016 2018 2020 2022
Note: Figures for 2022 are projections


BURKINA FASO
Figure 3. Burkina Faso: Fiscal Developments

Domestic revenue is estimated to have continued Current spending remains high, and is estimated to
increasing in 2022. have increased in 2022.
Domestic Revenue, 2012−2022 Current Spending, 2012−2022
(percent of GDP) (percent of GDP)
25 20
Current transfers Goods and services
Wages and salaries
20 15
15 10
10 Benin Mali 5
Togo Senegal
Burkina Faso Côte d'Ivoire
5 0
20122013201420152016201720182019202020212022 2012 2014 2016 2018 2020 2022
Domestically financed investment spending is projected

The wage bill remains high relative to peers.
to have increased in 2022.
Public Wage Bill, 2012−2022 Public Investment Spending,
(percent of GDP) 2012−2022
14 (percent of GDP)
Burkina Faso WAEMU SSA
10 12 Domestically financed
Externally financed
10 Total
8 8
6
6 4
2
4 0
2012 2014 2016 2018 2020 2022 20122013201420152016201720182019202020212022
In 2022, the fiscal deficit has increased to over 10

...as domestic debt has increased to nearly 30% of GDP
percent of GDP…
Fiscal Balance, 2012−2022 Total Public Debt, 2012−2022
(percent of GDP) (percent of GDP)
Total revenue and grants (LHS) 50 Domestic Debt External Debt
35 12
Expenditure and net lending 40
(LHS)
30 9
Overall fiscal deficit (incl. grants, 30
RHS)
25 6
20
20 3
10
15 0
0
2012 2014 2016 2018 2020 2022
2012 2014 2016 2018 2020 2022
Note: Figures for 2022 are projections

BURKINA FASO
Annex I. Risk Assessment Matrix for Burkina Faso1

Relative
Source of Risk Impact if Realized Possible Policy Response
Likelihood
External
Intensifying spillovers from Russia’s war in

High High Create fiscal space; re-prioritize spending to
Ukraine.
address food emergency through cash
Further sanctions resulting from the war and
Higher food, fertilizer and energy transfers to protect the most vulnerable;
related uncertainties exacerbate trade and
prices, subsidies spending and fiscal seek from donors additional budget support
financial disruptions and commodity price
deficits. and concessional financing.
volatility.
Abrupt global slowdown or recession. High Medium
Tighter financial conditions on the

Sharp tightening of global financial conditions Seek from donors budget support, grants
eurobond market may increase
combined with volatile commodity prices leads and concessional financing; re-prioritize
competion to raise bond finance on
to spiking risk premia, widening of external spending; increase efforts to mobilize
the regional bond market, leading to
imbalances and fiscal pressures, capital domestic revenues.
higher costs of deficit financing and
outflows, sudden stops, and debt and financial
deterioration of the overall fiscal
crises across EMDEs.
balance.
Deepening geo-economic fragmentation and

High High
geopolitical tensions.
Broadening of conflicts and reduced

international cooperation accelerate Implement reforms to improve
deglobalization, resulting in a reconfiguration of competitiveness; diversify exports; access
Challenges for export diversification,
trade, supply disruptions, technological and new markets and pursue efforts to promote
higher import prices (if global supply is
payments systems fragmentation, rising input regional trade.
disrupted) and lower FDI.
costs, financial instability, a fracturing of
international monetary and financial system,
and lower potential growth.
Medium High
COVID-19 outbreaks Create fiscal space for higher health
spending; re-prioritize public spending to
Outbreaks or emergence of vaccine-resistant
support the most affected sectors and
variants may lead to lockdowns and inhibit
households; seek from donors additional
trade. This results in new supply chain
grants and concessional financing.
disruptions and slower growth.
Natural disasters related to climate change Medium High Re-prioritize spending to address food
emergencies through cash targeted transfers
More frequent natural disasters create damage to protect the most vulnerable; create fiscal
Lower agricultural output and exports
to infrastructure and amplify supply chain space; seek concessional financing to invest
abd food insecurity; higher food
disruptions and inflationary pressures, causing in infrastructure to enhance resilience to
prices; rising poverty and internally
water and food shortages and reducing climate-related shocks; step up efforts to
displaced people.
medium-term growth. safeguard food security.
Domestic
Widespread social discontent and political

High High
instability, and intensification of terrorist
activity. Adverse impact on economic activity, Re-prioritize spending to address social
revenues and foreign investment; risk emergencies; implement social and financial
of higher fiscal deficit and financing inclusion; seek support from regional and
needs. Increased food insecurity and international security arrangements.
gold smuggling. Rising internally
displaced people.
Pressures for higher recurrent spending, Contain recurrent spending, and pass
High High
particularly on wages. legislation to contain the public wage bill.
Crowding out of investment spending;
Intensify efforts to mobilize domestic
pressure on fiscal deficit target and
revenues.
prices.
Revenue mobilization lags Medium High

Pursue tax policy and revenue administration
reforms; optimize current spending and re-
Reduced fiscal space and risk of higher
prioritize public investment.
fiscal deficit and financing needs.
1/ The Risk Assessment Matrix (RAM) shows events that could materially alter the baseline path (the scenario most likely to materialize in the view of
IMF staff. The likelihood of risks listed is the staff's subjective assessment of the risks surrounding the baseline. The RAM reflects staff views on the
source of risks and overall level of concern as of the time of discussions with the authorities. Non-mutually exclusive risks may materialize jointly and
interact

BURKINA FASO
Annex II. Quantification of the Balance of Payment Need

Associated with the Global Food Shock
1. This Annex quantifies the impact of the global food shock on the current account
balance following the methodology proposed in the IMF note, “Tackling the Global Food Crisis:
Impact, Policy Response and the Role of the IMF”. 1 The first purpose of this approach is to quantify
the cost of the global food shock associated with the financing needs for cross-border payments.
Annex III describes complementary approaches that capture the budgetary costs of the global food
shock for the most vulnerable households. Staff then uses this assessment of the balance of payment
needs to propose a level of access to the Food Shock Window under the Rapid Credit Facility of 50
percent of quota, equivalent to 0.4 percent of nominal GDP.
2. We compare the value of net imports of five cereals (wheat, barley, maize, rice,
sorghum) and all types of fertilizers in two different scenarios: a baseline scenario and a global
food shock scenario. Net import volumes for 2022 and 2023 are projected using UN Comtrade data
for 2021, assuming that net import volumes would then grow proportionately with real GDP. Net
import volumes are the same across both scenarios.
3. Scenarios differ in the prices of cereals and fertilizers in 2022 and 2023. In the baseline
scenario, we use the WEO projections of 2022 and 2023 price indices from October 2021. In the
shock scenario, we instead use updated projections from November 2022. The assumption is that the
IMF WEO’s price forecasts as of end-2021 would have prevailed in the absence of the recent price
hikes associated with the war in Ukraine.
4. While the above-mentioned IMF note proposes to include in the basket of fertilizers
the three main types, namely, diammonium phosphate, urea and potassium chloride, the most
commonly used fertilizers in Burkina Faso are NPK fertilizers, a combination of Nitrogen, Potassium,
and Phosphorus. 2 We therefore include this fourth type into our basket of fertilizers 3. However,
because price forecasts are not available for this fourth category, we instead use the composite
Fertilizer Index provided by the IMF’s WEO Global Assumptions.
5. The table below reports the difference in percent of GDP between the value of net
imports in the shock and baseline scenarios in 2022 and 2023, and for the two groups of
products (crops and fertilizers). For comparability with the method proposed in the IMF note, we also
report the estimate when NPK fertilizers are excluded from the basket. It turns out to be five times
lower than the estimate that includes all fertilizers, highlighting the importance of including all types.
Staff’s overall estimate of Burkina Faso’s food-shock-related BOP needs over 2022-23, based on this
1Rother et
al. (2022) “Tackling the Global Food Crisis: Impact, Policy Response and the Role of the IMF”, available at
https://www.imf.org/-/media/Files/Publications/IMF-Notes/2022/English/INSEA2022004.ashx.
2
In 2021, 59% of imports of fertilizers were made of NPK, according to the UN Comtrade data
3Adapting the basket of fertilizers to the specific set of imports of Burkina Faso follows the guidelines in the IMF
“Proposal for a food shock window under the RFI and RCF” on how to evaluate the balance-of-payment needs when
assessing eligibility to the Food Shock Window.

BURKINA FASO
methodology, is equal to 0.4 percent of GDP, equivalent to 50 percent of quota or about SDR 60.2
million.
Text Table 1. Burkina Faso: Difference Between the Value of Net Imports in the Shock and Baseline
Scenarios in 2022 and 2023
(Percent of GDP)
2022 2023
Crops and All Fertilizers 0.21 0.19
Staple crops (wheat, barley, maize, sorghum, rice) 0.01 0.01
Fertilizers 0.20 0.18
Crops and Selected Fertilizers 0.04 0.03
Selected Fertilizers (Urea, DAP, and MOP) 0.03 0.02

BURKINA FASO
Annex III. Quantification of the Fiscal Costs Associated with Food

Price Inflation and Acute Food Insecurity
1. This Annex describes two approaches that capture the budgetary costs of the global
food shock for the most vulnerable households, drawing on the second and third methodologies
proposed in the IMF note, “Tackling the Global Food Crisis: Impact, Policy Response and the Role of
the IMF”. 1
2. The first approach assesses the fiscal cost of compensating the impact of higher food
prices in 2022 relative to 2021 on the most vulnerable households’ budget. Vulnerable persons
are assumed to be those with less than US$1.9 per day per capita. According to the World Bank, 43.7
percent of the Burkinabé population falls into this category, about 9.4 million people. Assuming that
vulnerable households consume 50 percent of their budget on food, which is the national average,
and live with exactly US$1.9 per day per capita, their total food consumption over the year amounts
to CFAF 2,019.9 billion. Given that food prices have increased by 19.6 percent from November 2021
to November 2022, it would require CFAF 395.9 billion, or 3.4 percent of GDP, to compensate these
households for the higher food costs.
3. The second approach focuses on the individuals most severely affected by food
insecurity, based on the increased number of people suffering acute food insecurity (Phase 3 or
above in the ICP/CH) over the past year. According to the WFP, this number has risen by 0.6 million
in one year, from 2.8 million in August 2021 to 3.4 million in August 2022. To derive an estimate of
the cost associated with lifting people out of acute food insecurity for 12 months, we apply the
WFP’s estimated operational cost of support per beneficiary based on their “Global Operational
Response Plan.” In the most recent update, the operational cost was estimated at US$22.2 billion to
support 151.6 million people in 2022, which represents an annual cost of US$146.4 per beneficiary. 2
It would thus require 0.5 percent of GDP to lift the 0.6 million additional people out of acute food
insecurity.
1Rother et
al. (2022) “Tackling the Global Food Crisis: Impact, Policy Response and the Role of the IMF”
2 World Food Programme, 2022b. “WFP Global Operation Response Plan 2022, Update #5.” June.

BURKINA FASO
Appendix I. Letter of Intent
March 9, 2023
Kristalina Georgieva
Managing Director
International Monetary Fund
Washington, D.C.
U.S.A.
Dear Madame Georgieva:
1. Like many countries in Sub-Saharan Africa, Burkina Faso is facing acute food
insecurity. In recent years, the country has been hit continuously by a series of exogenous shocks,
namely the deteriorating security conditions in the face of frequent terrorist attacks; extreme climate
conditions including droughts; the COVID-19 pandemic; and the war in Ukraine with its implications
for international food, fuel and fertilizer prices. The ongoing security crisis has led to about 1.9
million internally displaced persons as of end-December 2022. The effects of climate change on
agriculture, a bad harvest during the 2021-2022 season resulting from low rainfall, and population
displacement have contributed to the food crisis. The crisis has been worsened by the disruption of
international supply-chains during the COVID-19 pandemic and exacerbated by rising fertilizer costs
following the Russia-Ukraine conflict, as a result, about 3 million Burkinabé (out of a population of
21.5 million) are now estimated to be food insecure.
2. The ongoing food crisis is exacerbating Burkina Faso’s balance-of-payments deficit.

Higher import prices and capital outflows are expected to lead to a deterioration of the balance of
payments in 2023. The government intends to resume program discussions with the IMF, which
were interrupted in January 2022, as soon as possible in 2023 to address these larger balance-of-
payments as well as other development needs. More urgently, however, over the period 2022-2023,
we estimated that the food crisis will induce a balance of payments financing requirement of at least
0.4 percent of GDP given the increases in fertilizer and major food prices.
3. To address the balance-of-payments need caused by the ongoing food crisis, we

request emergency financial support from the IMF under the Food Shock Window (FSW) of
the Rapid Credit Facility (RCF) in the amount of SDR 60.2 million (50 percent of quota, or
US$79.2 million), in the form of budget support. The RCF disbursement under the FSW will be

BURKINA FASO
essential to address our urgent balance-of-payments need associated with acute food insecurity and
to allow the implementation of the food insecurity response plan. Financial assistance from the IMF
should also function as a catalyst for financial and in-kind support from other development partners
to help address the crisis, including the World Bank, the African Development Bank, and bilateral
partners. Furthermore, we are actively engaged in seeking additional financing from other donors.
4. We plan to use the resources disbursed under the FSW to address the urgent
challenges implied by the food price shock. The policy measures would help address imminent
balance of payments needs, make progress in poverty reduction, sustain growth, and help lay the
groundwork for reducing structural food insecurity. We are committed to implementing these
efforts through a sound macroeconomic policy framework, which will seek to achieve and maintain
fiscal convergence within WAEMU, which is essential for safeguarding macroeconomic stability. Key
underpinnings of such a framework, including specific measures, would be further refined in the
context of discussions towards a possible ECF-arrangement in coming months.
5. We have already begun implementing a series of urgent measures to address the

current food crisis. As illustrated in the 2023 Plan de Réponse et de Soutien aux Populations
Vulnérables (PRSPV), the overall objective of our intervention is to address food insecurity through
immediate food assistance and livelihood protection. More specifically, our actions aim to facilitate
food access for the most vulnerable; to reinforce efforts to prevent and cure malnutrition among
children, pregnant and lactating women; and to protect the livelihoods of food insecure households.
The overall cost of our intervention amounts to at least US$362 million (see Annex). The
implementation horizon of our actions extends to March 2024.
6. Most of our efforts will focus on providing immediate food assistance to the most
vulnerable households, including internally displaced persons. Specific measures include free
food distribution, unconditional cash transfers, and the sale of cereals at subsidized prices. The
number of beneficiaries of these measures is approximately 3.5 million people in food insecurity
crisis or worse, including at least 550 thousand people in emergency conditions and around 20
thousand people in a food catastrophe situation. The cost of these measures is approximately US$
300 million.
• In this critical context, the ongoing food crisis presents an opportunity to accelerate the
extension of social protection to the poorest households, including internally displaced
people and farmers. In our efforts to develop a social protection system including cash
transfers, we have already taken important steps to create a social registry to identify the most
vulnerable households who will be the future beneficiaries. These efforts can be immediately
leveraged to help attend the ongoing food security emergency through the existing system.
Looking ahead, a nationwide cash transfer program could be an objective to be discussed in the
context of a future IMF-supported program.
• We plan to allocate part of the disbursed resources under the FSW to improve water
supply and distribution (see Annex). Resources under the FSW would help improve ongoing

BURKINA FASO
efforts to boost the supply of and access to clean water, which is an essential and urgent
element to alleviate the suffering of the population affected by the food crisis (e.g., through low-
lands development, simplified drinking water supply and new wells in areas of origin of
internally displaced people).
7. We commit to implement transparency and good governance measures in the use of

the resources allocated under the FSW. In this regard, we will continue efforts to maintain and
improve good Public Financial Management (PFM) practices including timely publication on the
ministry of finance website of the budget and budget execution reports on an annual basis. The
budget execution reports will include information on the use of FSW funds. We will also pursue the
establishment of the Treasury Single Account (TSA), including the implementation of the conclusions
of the study on the impact of the closure of public accounts, and the recommendations of the
Council of Ministers on the centralization of public funds. The FSW funds will be channeled through
the budget and spending of the funds will be governed by our emergency spending framework,
which covers the (i) overall institutional arrangements; (ii) financing of emergency mechanisms; (iii)
appropriate budgetary, accounting and financial management procedures; (iv) ex-post
accountability mechanisms; and (v) tools to ensure the transparency of the framework. We intend to
continue benefitting from IMF support in further improving PFM practices, including on accounting
and public investment management. We also commit to prepare semi-annual reports and publish
the audit of the implementation of the 2023 cash transfer program by June 30, 2024. The audit will
be performed by the General Inspectorate of Public Finances (Inspection Generale des Finances). The
audit will include a review of the procedures and protocols used to ensure money was received by
the intended and appropriate beneficiaries. Finally, we commit to identification and publication of
the beneficial owners of entities awarded public procurement contracts, for contracts related to
improving the supply of clean water and purchasing agricultural inputs and food to be sold at
subsidized prices.
8. We intend not to introduce or intensify restrictions on international trade on goods or

other measures or policies that would aggravate Burkina Faso’s balance of payments
difficulties. We will endeavor to gradually lift the current trade restrictions on foodstuffs – which
were put in place temporarily to help alleviate national food shortages.
9. We are determined to continue our close engagement with the IMF, with a view
towards resuming program negotiations in the future. We recognize that putting Burkina Faso
on a stable path in its two-year transition back to constitutional order will require the creation of
fiscal space to finance priority spending. In this context, a Fund-supported program will be
instrumental. We stand ready to implement such a program building on our strong track record in
past Fund-supported programs, our focus on good governance, and the good collaboration with
IMF staff. Assistance under the FSW would provide immediate support to address imminent food-
related needs and allow Burkina Faso to move speedily to discussions on a Fund-supported
program to address more medium-term structural challenges and balance-of-payments needs. We
are committed to continued collaboration with the IMF, including through policy advice, continued
CD support, and financial assistance of a medium-term reform program.

BURKINA FASO
10. In line with our commitment to transparency and accountability, we authorize the IMF
to publish this letter and the staff report for the request for disbursement under the FSW of
the RCF.
Please accept, Madame Managing Director, the assurance of our highest consideration.
/s/
Aboubakar NACANABO
Chevalier de l’Ordre du Merite
Minister of the Economy, Finance and Prospective

BURKINA FASO
Annex I. Response Plan to Support Vulnerable Households, 2023
Goals Specific measures Costs

CFAF (billions) US$ (millions)
Distribution of free food. 95.3 159.7
Immediate food Monetary transfers 63.3 106.0
assistance. Sale of cereals at subsidized prices 19.9 33.3
Sub-total 178.6 299.0
Care of children, pregnant and lactating 23.7 39.7
Prevention and
women suffering from moderate and
management of
severe malnutrition.
malnutrition;
Improving drinking water supply and 1.5 2.5
improving drinking
distribution
water supply.
Sub-total 25.2 42.2
Distribution and sale of agricultural 4.9 8.3
inputs (fertilizers, seeds) at subsidized
prices.
Protection of
Measures to support livestock (free 7.2 12.1
livelihoods.
vaccinations, free distribution of feed
for livestock and poultry).
Sub-total 12.2 20.4
Evaluation and Data collection, evaluation and 0.4 0.6
monitoring of the implantation of the 2023 Action Plan;
agropastoral preparation of the 2024 Action Plan
campaign. Sub-total 0.4 0.6
Total 216.4 362.2
Target groups: Populations affected by disasters during the 2022/23 agropastoral campaign; Populations
vulnerable to food insecurity and internally displaced persons; Children under five-year old vulnerable to
malnutrition and pregnant and lactating women; Populations with low access to drinking water.
Beneficiaries: 3.5 million people in a food crisis situation, including 550,000 people in food emergency
conditions and 20,000 in food catastrophe conditions.
Operators: National technical services, local authorities, NGOs, Associations, Private individuals, United
Nations agencies.
Source: Burkinabe Authorities

1934 7685 Article A001 en

Uploaded by

Copyright:

Available Formats

1934 7685 Article A001 en

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

1934 7685 Article A001 en

Uploaded by

Copyright:

Available Formats

BURKINA FASO

worsen further in 2023. Political

1 The report is available at https://www.wfp.org/publications/global-report-food-crises-2022.

INTERNATIONAL MONETARY FUND 5

©International Monetary Fund. Not for Redistribution

6 INTERNATIONAL MONETARY FUND

©International Monetary Fund. Not for Redistribution

RECENT ECONOMIC DEVELOPMENTS

in local food prices (Text Figure

INTERNATIONAL MONETARY FUND 7

©International Monetary Fund. Not for Redistribution

8 INTERNATIONAL MONETARY FUND

©International Monetary Fund. Not for Redistribution

OUTLOOK AND RISKS

INTERNATIONAL MONETARY FUND 9

©International Monetary Fund. Not for Redistribution

10 INTERNATIONAL MONETARY FUND

©International Monetary Fund. Not for Redistribution

INTERNATIONAL MONETARY FUND 11

©International Monetary Fund. Not for Redistribution

consistent with best PFM practices 0

©International Monetary Fund. Not for Redistribution

INTERNATIONAL MONETARY FUND 13

©International Monetary Fund. Not for Redistribution

Goals Measures Costs

Source: Burkinabe Authorities

14 INTERNATIONAL MONETARY FUND

©International Monetary Fund. Not for Redistribution

INTERNATIONAL MONETARY FUND 15

©International Monetary Fund. Not for Redistribution

IMF ASSISTANCE MODALITIES

16 INTERNATIONAL MONETARY FUND

©International Monetary Fund. Not for Redistribution

INTERNATIONAL MONETARY FUND 17

©International Monetary Fund. Not for Redistribution

18 INTERNATIONAL MONETARY FUND

©International Monetary Fund. Not for Redistribution

Table 1. Burkina Faso: Selected Economic and Financial Indicators, 2019–27

2019 2020 2021 2022 2023 2024 2025 2026 2027

Act. Act. Prel. Proj. Proj. Proj. Proj. Proj. Proj.

(Annual percentage change, unless otherwise indicated)

Money and credit

(Percent of GDP, unless otherwise indicated)

Sources: Burkinabé authorities; and IMF staff estimates and projections.

INTERNATIONAL MONETARY FUND 19

©International Monetary Fund. Not for Redistribution

Table 2. Burkina Faso: Balance of Payments, 2019–27

(CFAF billions, unless otherwise indicated)

Financial account 296 -500 116 -782 -131 -81 -79 -4 64

Errors and omissions -4 -4 0 0 0 0 0 0 0

Residual Financing Gap 0 0 0 0 255 279 145 139 128

(Percent of GDP, unless otherwise indicated)

20 INTERNATIONAL MONETARY FUND

©International Monetary Fund. Not for Redistribution

Table 3. Burkina Faso: Monetary Survey, 2019–27

(CFAF billions, unless otherwise indicated)

(Annual percentage change, unless otherwise indicated)

Sources: Burkinabè authorities; and IMF staff estimates and projections.

INTERNATIONAL MONETARY FUND 21