afrol News - Burkinabe structural reforms receive new funds


Burkina Faso
Burkinabe structural reforms receive new funds

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afrol News, 15 January  - The so-called poverty reduction programme of the government of Burkina Faso today received extra financing of US$ 34 million. The Burkinabe programme to fight poverty is based on structural reforms that in turn are meant to produce revenues to develop the health, education and water sectors.

The Abidjan-based African Development Fund (ADF) today announced that it had approved a loan of franc CFA F 21.25 billion (euro 33 million) to finance the so-called "second Poverty Reduction Strategy Support Programme (PRSSP II)" in Burkina Faso. 

This programme seeks to consolidate the planned poverty reduction defined for 2001-2003 and is supposed to "contribute to the rational and equitable utilization of public resources with a view to increasing the share of the budget devoted to social public expenditure in favour of the poor, namely in health, education and water sectors," according to a communiqué by ADF.

The principal components of the Burkinabe poverty reduction programme are diversification and consolidation of the sources of growth and competitiveness; enhancement of the efficiency and effectiveness of public services in favour of the poor; and improvement of governance. This is in line with classic structural reforms, prescribed and approved by the International Monetary Fund (IMF). The IMF and the World Bank also support the programme.

According to ADF, the government's poverty reduction programme is to achieve its aims in Burkina Faso "by boosting economic growth based on increase in agricultural productivity that will create jobs and generate income for the most disadvantaged people." 

- Furthermore, the programme will enable the government to put in place an efficient management method capable of inducing more sustained growth, the Fund states. The programme also is thought to help "establish a global framework for equitable and sustainable growth based on the utilisation of the comparative advantages of the actors of the national economy, namely the state, the decentralised communities, the civil society and the private sector." 

The Burkinabe poverty reduction programme is a product of the concessional IMF and World Bank credits to the country. These institutions foresee that, given reforms to reduce the public sector, privatise state utilities, cut subsidies, liberalise trade, fight corruption and improve tax collection, the revenue basis of government will enhance, enabling the state to fight poverty.

According to the latest IMF assessment of Burkina Faso, of November 2002, government was following the agency's prescriptions. However, authorities were further "encouraged to sustain their efforts to broaden the tax base," improve tax administration and reduce subsidies on petroleum for electricity generation. Revenue increases would "ensure that the necessary budgetary savings are generated to finance infrastructure investment and poverty reduction programs," the IMF assessed. 

The new ADF loan will aid the Burkinabe government in implementing the reforms needed to raise revenues that are expected to be channelled towards poverty reduction. It would "also help the government to mobilise budgetary resources under a unified priority activities programme, with a view to good governance," according to the Fund, which means basically the same. It is not expected that Burkinabe citizens will see any quick results of the new credit.

Sources: Based on ADF, IMF and afrol archives


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