WASHINGTON, December 20, 2016—The World Bank approved $100 million to Burkina Faso to support the energy and tax reform programs that the country has undertaken. This amount includes a $55 million loan and a $45 million grant from the International Development Association (IDA), the World Bank’s fund for the poorest countries.
These reforms aim to enhance the financial viability of the energy sector and diversify energy sources by strengthening the sector’s legal and institutional framework. They will also improve tax collection and the public procurement system.
“These budget support programs are designed to address the challenges that the Government of Burkina Faso has faced in the implementation of the 2016-2020 National Economic and Social Development Plan (PNDES). The approval of this financing by our Board of Directors attests to the World Bank’s commitment to strengthen its partnership to ensure the success of the PNDES,” said Cheick Kanté, World Bank Country Manager in Burkina Faso.
The slowdown in economic growth, decrease in tax revenues, and increase in public expenditures needed to address the social pressures that arose after the political transition (November 2014 through the end of 2015) compelled the country to reduce its investment expenditures. Burkina Faso has limited energy production capacity and its increasingly dire financial situation has had an impact on the sector, the budget, and the entire economy.
In order to address this situation, these reform programs focus on the areas of the National Development Plan for improved economic governance, the structural transformation of the economy, and the development of the private sector.
“The proposed reforms will also have an impact on the development of human capital. Improved access to electricity will enhance the well-being of many households, which will therefore increase household members' learning abilities. Furthermore, increased fiscal space and streamlined public expenditures will help ensure a more efficient allocation of resources to social sectors, especially education and health,” noted Samba Ba, World Bank Task Team Leader.