Burkina Faso - Structural Adjustment Credit Project

 Structural adjustment project Report No: ; Type: Report/Evaluation Memorandum ; Country: Burkina Faso; Region: Africa; Sector: Economic Management; Major Sector: Multisector; ProjectID: P000293 Burkina Faso: Structural Adjustment Credit (Credit 2281-BUR) The Implementation Completion Report (ICR) for the Burkina Faso Structural Adjustment Credit (SAC, Credit 2281- BUR) was prepared by the Africa Regional Office and the borrower also provided comments. The credit in the amount of SDR 60 million (US$80 million equivalent) was approved in June 1991 and amended in May 1994 to incorporate key conditions on education. The credit was fully disbursed in three tranches by March 1995, and closed in June 1995, after two extensions of the closing date. The second and third tranches were disbursed after the 1994 devaluation of the CFA franc. Cofinancing was provided by the governments of the Netherlands and Norway; the Government of the Netherlands commented on this operation. The SAC's objectives were to support the goals of the country's overall adjustment program (broad-based and sustainable growth and employment creation), to improve the efficiency of public resource use, and to promote an enabling environment for the private sector. The management of public resources was to be improved through reforms in budgetary processes, civil service reforms (designed to help improve the structure of current expenditures) and better programming and monitoring of public investments. Private sector incentives were to be improved by liberalizing prices and trade, privatizing public enterprises, restructuring the banking sector, and improving the regulatory framework. After some initial delays, the SAC succeeded in improving macroeconomics balances (fiscal and current account), initiating growth, and reducing inflation; significant progress was made in education and health; trade policy and price controls were substantially liberalized; and reforms in the investment, commercial and labor codes were adopted. However greater progress is needed to strengthen budgetary institutions and management and monitoring processes, privatize public enterprises and banks, and revise commercial and labor codes. The ICR rates the project's outcome as satisfactory, sustainability of benefits as uncertain and institutional development as negligible. The Operations Evaluation Department (OED) agrees with these ratings. OED also rates Bank performance as satisfactory. The experience with the SAC suggests that for complex operations and in countries engaged in significant political change, the Bank should allow for longer adjustment periods than the traditional 1-2 years. The ICR's quality is satisfactory. It discusses the major future actions needed and planned Bank assistance to sustain and enhance the program's benefits. No audit is planned.