IMF lowers Burkina growth forecast, hit by revolution, Ebola, mining slump

by Reuters 0

The International Monetary Fund has lowered its forecasts for Burkina Faso's economic growth in 2014 and 2015 to 5 per cent.

This was after a revolution in October added to the impact of lower commodity prices and a regional Ebola outbreak.

(READ MORE: Burkina president rejects opposition calls to step down after violence)

The IMF, which previously forecast an expansion of 6 to 7 per cent for the period, is sending a team to Ouagadougou on 13 December for a week-long visit to do a deeper assessment and advise the country’s interim authorities.

Former president Blaise Compaore was forced from power when hundreds of thousands of people took to the streets to protest his efforts to change the constitution so he could stand for re-election next year. The military briefly seized power after he quit and fled the cotton and gold producing nation.

Michel Kafando, a former foreign minister, is the new interim president. But he has a military prime minister and soldiers head five other ministries in a government due to lead the country to elections within a year.

(READ MORE: Kafando sworn in as Burkina Faso transitional president)

“The (IMF) team was already in the process of revising growth projections downward in October,” Burkina Faso mission chief Laure Redifer told Reuters in an emailed statement on Thursday. “The political upheaval at end-October adds to the downward revision but is not the main factor.

“On the macroeconomic front, a main priority is to address the more difficult fiscal situation, including through passage of a supplemental budget for 2014 and a realistic budget for 2015,” Redifer said.

Neither the IMF nor the interim administration have given details, but the upheaval has hit tax collection and debt issues. Unrest caused some gold mines to suspend activities.

Redifer said the IMF mission to Burkina Faso would help provide information to donors inclined to increase or accelerate financial pledges for 2015, to help authorities bridge the gap and prevent public investments from cuts.

Under Compaore, Burkina Faso positioned itself as a key player in regional diplomacy. However, years of impressive economic growth failed to improve unemployment and the lack of development, fomenting unrest.