As recommended at the May 31, 2017 meeting, the IMF Resident Representative kindly sent us the following key messages likely to strengthen communication and dialogue with the government in the macro-budgetary field:
- Implementation of the PNDES should be anchored by a medium-term macroeconomic framework that maintains macroeconomic stability and is based on credible fiscal policy. For instance, the 2017 budget calls for a substantial scaling-up of public investment spending. It is also based on ambitious targets for revenue collection and assumes considerably more budget support than in recent years and than the levels confirmed by donors. As a consequence, full implementation of the expenditure side of the budget would imply a substantial increase in the fiscal deficit in 2017, up from the fiscal deficit of 3.2 percent of GDP recorded in 2016.
- The authorities medium-term framework should also be consistent with bringing the fiscal deficit to below 3 percent of GDP by 2019 in line with the convergence criteria adopted by the WAEMU Heads of States on January 19, 2015.
- Reforms should focus on enhancing revenue mobilization and strengthening public financial management, including containing the wage bill, to increase fiscal space for investment while also strengthening capacity for implementing efficient public investment spending.
- In the view of the IMF’s Burkina Faso team the government’s focus should be on the quality of public investment spending rather than the quantity of public investment spending. Efforts should be made to strengthen procedures for prioritization and selection of capital investment projects with a high growth impact to make sure that the government gets value for money for its projects and capital spending.
- A new IMF program, that would follow on the current ECF, would reconfirm the authorities commitment to time-bound sequenced growth-enhancing reforms consistent with achieving the objectives of the PNDES.
