AfDB and Burkina Faso Sign FCFA 30.6 Billion Budget Support Agreements
Tunis, July 18, 2008 - The African Development Bank (AfDB) Group and the Burkina Faso government have signed a combined loan and grant agreement of 45 million Units of Account (UA*), equivalent to US$ 73.5 million (FCFA 30.6 billion) to finance Burkina Faso’s Fourth Poverty Reduction Strategy Support Programme (PRSSP IV).
The agreements for the loan of UA 20 million (FCFA 13.6 billion) and grant of UA 25 million (FCFA 17 billion) were signed on Thursday in Tunis by the AfDB Vice President for Operations, Zeinab El-Bakri, and Burkina Faso’s Minister of Economy and finance, Jean Baptiste Compaore, in the presence of his colleague in the transport ministry, Gilbert Ouedraogo and the Executive AfDB Executive Director for Burkina, Frederic Korsaga, among other senior Bank officials.
Speaking on the occasion, Mrs. El-Bakri commended the good economic performance achieved by the country in recent years adding that the Bank’s portfolio in the country had equally recorded a high performance.
She said that implementation of the three preceding PRSSPs of the Bank was generally satisfactory and had helped sustain annual growth at 6% since 2001 and the reduction of the incidence of poverty from 46.4% in 2003 to 42.6% in 2007, accompanied by a sharp increase in school enrolment as well as access to potable water and health services.
Mrs. El-Bakri said the rate of disbursements had shot up to more than 70% with Bank commitments net of cancellations currently at UA 620.87 million (FCFA 433 billion).
"The positive outcomes are due to the efficiency of monitoring and coordination mechanisms established under a joint agreement between the Bank and Burkinabe authorities as well as the commendable work of the institution’s field office in your country. It is thus reassuring that the current programme will be implemented under similar satisfactory conditions and will quickly attain the set objectives," she said.
"The budget support is a reflection of the importance your government and the Bank attach to improving economic and financial performance," she said, adding that "The programme will also support your government’s efforts to mitigate the impact of the food crisis and re-launch the production of cereals."
For his part, the economy and finance minister, Jean Baptiste Compaore, commended the Bank’s support to his country, saying the budget support program will further boost efforts by the government to improve the competitiveness and development of the private sector in spite of the unfavourable international environment with strong eternal shocks, especially the skyrocketing prices of oil prices and cereals.
"Through this program, the Bank has once more demonstrated its willingness to support the Government of Burkina Faso in its development efforts and in its constant quest for sustainable pro-poor private sector-led growth that will expand employment opportunities and income generating activities for the poor," Mr. Compaore said.
Overall, the programme is expected to return the country to an annual growth of at least 6%, maintain inflation below 3%, and increase tax revenues to at least 13.5% of GDP. It is also expected to improve the corruption perception index, and accelerate the process of decentralization, decongestion, and modernization of the civil service with a view to improving social indicators.
The ADF loan and grant account 14.7% of the program’s total financing requirement. The contribution by other partners amounts to UA 260.8 million (CFAF 183.3 billion). A financing gap of UA 36 million, FCFA 25.3 billion) will be covered by bilateral partners (France, Germany, Netherlands, Switzerland and Sweden), who plan to develop new programmes in 2008 and 2009.
*1UA = US$ 1,63362 = FCFA 679.768 as at 18 July 2008