IMF Executive Board Approves a US$115.3 Million Disbursement to Burkina Faso to Address the COVID-19 Pandemic
April 14, 2020
- The COVID-19 pandemic has taken a major toll on Burkina Faso economy, with the near-term outlook deteriorating quickly.
- To address the urgent balance-of-payments needs, the IMF approved US$115.3 million emergency assistance for Burkina Faso under the Rapid Credit Facility. The country will also benefit from IMF debt service relief under the Catastrophe Containment and Relief Trust.
- The immediate challenge is to contain the spread of COVID-19, strengthen medical care, implement the social distancing and other containment measures, and mitigate the socio-economic impact of the pandemic, especially on the most vulnerable.
Washington, DC –
The Executive Board of the International Monetary Fund (IMF) today approved
a disbursement of SDR 84.28 million (about US$115.3 million or 70 percent
of its SDR quota) for Burkina Faso under the
Rapid Credit Facility
(RCF). The financing provided under the RCF will help finance the health,
social protection and macroeconomic stabilization measures, meet the urgent
balance of payments needs arising from the COVID-19 outbreak and catalyze
additional support from the international community.
The economic impact of the COVID-19 pandemic in Burkina Faso is rapidly
unfolding, with the short-term outlook worsening quickly. The pandemic
comes at a time when Burkina Faso was already gripped by a heightened
security crisis. The authorities responded by putting in place measures to
help contain the spreading of the virus, including by closing schools and
universities, banning mass gatherings, and suspending international travel.
Though absolutely needed to contain the outbreak these measures, together
with the global response, have significantly worsened the economic outlook
in the near term, with real economic growth declining substantially, and
both the fiscal and balance of payments deficits widening significantly.
Burkina Faso has also benefited from the IMF Executive Board decision of
April 13, 2020 to provide debt service relief to all countries eligible for
support from the International Development Association (IDA) in the form of
grant assistance under the Catastrophe Containment (CC) window of the Catastrophe Containment and Relief Trust
(CCRT). As a result, Burkina Faso will receive relief from the CCRT on debt
service falling due to the IMF in the next 6 months (about US$11.9
million). This relief could be extended for up-to 2 years, subject to the
availability of resources under the CCRT.
The IMF continues to monitor Burkina Faso’s situation closely and stands
ready to provide policy advice and further support as needed.
Following the Executive Board discussion, Mr. Mitsuhiro Furusawa, Deputy
Managing Director and Acting Chair, issued the following statement:
“Burkina Faso has been adversely impacted by the COVID-19 pandemic. The
near-term economic outlook has deteriorated quickly, compounding existing
challenges posed by the security crisis in the Sahel region and the
associated high number of internal displacements and humanitarian
assistance needs. The authorities’ measures to contain and mitigate the
socio-economic fallout of the pandemic have given rise to substantial and
urgent fiscal and balance of payments needs. With uncertainties surrounding
the duration and scope of the pandemic, the fallout could intensify
further. The IMF emergency support under the Rapid Credit Facility will
provide much-needed resources to support the authorities’ response to the
crisis and help catalyze further donor support.
“A widening of the fiscal deficit in 2020 is warranted to create room for
health care spending, social safety nets and for the mitigation of the
economic impact of the shocks. Prioritized, well-targeted and
cost-effective spending would be critical. Fiscal measures introduced as a
response to the shocks should also be temporary to ensure medium-term debt
Once the impact of the COVID-19 pandemic has abated, fiscal policy
should be rebalanced toward a more growth-friendly composition,
including scaling down current transfers to increase space for
domestically financed development spending.
“Additional external support, preferably in the form of grants, is urgently
required to meet Burkina Faso’s elevated financing needs, ease the
financial burden of the pandemic and preserve recent macroeconomic
stability and development gains.”
IMF Lending Tracker (emergency financing request approved by the IMF
IMF Executive Board calendar
IMF Communications Department
PRESS OFFICER: Gediminas Vilkas
Phone: +1 202 623-7100Email: MEDIA@IMF.org