Burkina Faso / AfDB Group Approves US$ 73.5 Million Budget Support for Burkina Faso

 

OUAGADOUGOU, Burkina-Faso, July 10, 2008/African Press Organization (APO)/ — The Board of Directors of the African Development Fund (ADF), the concessional window of the African Development Bank (AfDB) Group on Wednesday in Tunis, approved a combined loan and grant of 45 million Units of Account (UA*), equivalent to US$ 73.5 million to finance Burkina Faso’s Fourth Poverty Reduction Strategy Support Programme (PRSSP-IV).

 

The UA 20 million (US$ 32.7 million) loan and UA 25 million (US$ 40.8) grants will enable the government to pursue the implementation of medium-term reforms which will have a direct impact on poverty reduction.

 

The PRSSP IV, which further consolidates the achievements of PRSSP III, aims at promoting strong and sustainable economic growth (annual average of at least 6%), based on private sector development and poverty reduction. The long-term objective of the country and the Bank is to achieve the Millennium Development Goals (MDG) by implementing the programme’s three components: improvement of competitiveness and private sector development, strengthening financial governance and improving administrative governance.

 

Burkina Faso’s economy is dominated by the agricultural sector, and exports mainly comprise cotton and livestock products. PRSSP IV will support the implementation of emergency measures to stabilize the macroeconomic framework and favor the revitalization of rice production. In order to improve the business climate, the AfDB will support the decongestion and the development of an integrated information system for Business Promotion Centres in the regions, which will facilitate the creation of new business with a view to helping increase the country’s exports.

 

Since 2001, the country has continued to consolidate the rule of law by strengthening consultative, regulatory and control institutions; the government is however confronted with the challenge of building a modern and effective civil service capable of supporting a more competitive and growing private sector. The AfDB’s support in this regard will help create an enabling environment for private sector development through capacity building, and a strategy to decentralize and foster a modernization of government and local development. The PRSSP IV will also contribute to enhancing anti-corruption dialogue and reform public procurement systems.

 

The programme is expected to return the country to an annual growth rate 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 the social indicators.

 

The ADF loan and grant account for 14.7% of total financing requirement. Other partners are expected to contribute UA 260.8 million (CFAF 183.3 billion). The residual financing gap (UA 36 million, equivalent to CFAF 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.

 

The AfDB Group operations in Burkina Faso started in 1970. To date, the Bank Group’s commitments in the country stand at US$ 916.5 million in 77 operations.

 

*1 UA = US$ 1.63362 = FCFA = 679.768 on 9 July 2008

SOURCE : African Development Bank (AfDB)