The executive board of the International Monetary Fund (IMF) on Friday approved the release of $24.9 million to Burkina Faso, part of 157.6 million loan secured in 2018 under an extended credit facility (ECF) arrangement.
An extended credit facility allows the borrowing country to take out money over an extended period of time rather than reapplying for a loan each time it needs money. In effect, a credit facility lets a country take out an umbrella loan for generating capital over an extended period of time.
The latest release of funds to Burkina Faso brings the total disbursements under the EFC arrangement to $99.5 million.
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Burkina Faso’s three-year ECF arrangement for $157.6 million was approved on March 14, 2018 with the aim to create a fiscal space for priority spending by strengthening revenue mobilization, containing spending and improving the efficiency of public investment.
IMF described as satisfactory policies and reform implementation under the ECF-supported program so far, a conclusion that explains why it decided to release additional funds to Burkina Faso.
“All end-June 2019 quantitative performance criteria and indicative targets were met as well as all, but one, structural benchmarks throughout end-November 2019,” IMF said in a statement received by TODAY NEWS AFRICA in Washington DC.
According to the IMF, despite security challenges, economic growth remains resilient in Burkina Faso, and is expected to stabilize in 2019 and over the medium term.
“Inflation is expected to be negative in 2019, owing to food price deflation following recent good harvests, and to rebound in 2020,” IMF said, adding that “However, the security crisis poses risks to the growth outlook and to the authorities”.