• Recourse to the financial market inflates domestic debt
• Treasury Bonds, the main financing tool
• Payment of service and principal has improved
Lhe management of public debt is one of the sovereign missions of the Ministry of the Economy, Finance and Foresight. Its proper management contributes to the proper functioning of public administration. In its statistical bulletin of 4e quarter 2023, published in February 2024, the General Directorate of Sectoral Studies and Statistics (DGESS) of the Ministry of the Economy took stock of the total outstanding debt at the end of December 2023.
7,161.61 billion FCFA. This is the total amount of loans that Burkina Faso has at the end of December 2023. This amount corresponds to all the financial commitments made in the form of loans by the State, public authorities and organizations that directly depend on them.
The total outstanding debt is dominated by its domestic component which represents 55.1, or 3,945.15 billion FCFA as of 4e quarter 2023. It is up compared to 2022, due in particular to the mobilization of funds on the regional financial market. Financial institutions hold the large portfolio of State debts, i.e. 3,853.40 billion FCFA, out of the 3,945.15 billion outstanding domestic debt. In this basket of financial institutions, we find the envelope of the Central Bank (111.21 billion), that of Treasury Bills (157.49 billion) and Treasury Bonds (3,029.81 billion). These Bonds are up by more than 324 billion FCFA between the end of December 2022 and the end of December 2023.
Bonds, a form favored by Burkina
Unlike businesses and households, the State does not repay its debt by using bank credit. It issues debt securities negotiable on the financial markets over a more or less long period. Two types of securities are issued by the State: Treasury Bonds and Assimilable Treasury Obligations (OAT). OATs constitute the preferred form of long-term State financing (maturities which can exceed ten years). It is also the main instrument for repaying the debt of States which allows them, at each maturity, to repay only the interest. If it issues a 10-year OAT, the State will reimburse the interest (for example 0.5% of the amount of the Bond issued) every year or every half-year for 10 years, but will reimburse the capital in one go, at deadline. For this, he will get back into debt.
External debt up 5.3%
Compared to the third quarter of 2023, the outstanding external debt decreased by 13.60 billion FCFA. It stood at 3,216.46 billion FCFA, compared to 3,054.84 billion FCFA for the same period, in 2022, an increase of 5.3% year-on-year, mainly attributable to loans taken out from multilateral creditors.
Among these multilateral creditors, we can cite the IMF (225.99 billion FCFA), the IDA association (1,426.35 billion); the African Development Fund (367.81 billion).
For bilateral partners (Paris Club and outside Paris Club), the evolution of the outstanding external debt shows a drop of 8.79 billion FCFA between the end of December 2022 and the end of December 2023. The 3e component of this external debt, namely commercial banks, holds 64.26 billion of the country’s debt. An amount divided between Bank of China, Nordea Bank Danmark and UCBA.
Debt refund
What is the evolution of debt service? The DGESS table shows that the amount paid on 4e quarter 2023 is on the rise. Good news which reassures about the country’s ability to keep its commitments. As the table indicates, in the fourth quarter of 2023, the total debt service stood at FCFA 313.03 billion. Compared to the situation in the fourth quarter of 2022, there is an increase of 157.21 billion FCFA (+100.9%).
Analysis of the components of debt service shows that external debt service recorded an annual increase of more than 69 billion CFA francs. A dynamic which is also found at the level of domestic debt service (+87.90 billion).
The payment of the principal of the external debt increased by 49.10 billion FCFA, while the payment of that of the domestic debt decreased by 52.46 billion FCFA in the fourth quarter of 2023, compared to the previous quarter. Year-on-year, the principal of the external debt and that of the domestic debt improved by 65.65 billion FCFA and 100.70 billion FCFA respectively.
NK
Boxed
Public securities 120 billion raised on 4e quarter 2023
AIn the fourth quarter of 2023, the Public Treasury mobilized 120.64 billion FCFA out of a quarterly forecast of 120.00 billion FCFA, i.e. a quarterly achievement rate of 100.5%. Compared to annual forecasts, the mobilization rate of public securities stood at 79.7% at the end of December. In comparison with the situation at the same period, in 2022, there is a drop in mobilizations of 179.71 billion FCFA.
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