Burkina Faso is a low-income ($615 gross per capita income in 2015), landlocked Sub-Saharan country, with limited natural resources. Its population, which is growing at an average annual rate of 3%, was estimated at almost 18.11 million inhabitants in 2015 (World Bank data). The economy is heavily reliant on agricultural production, with close to 80% of the active population employed in the sector. Cotton is the country’s most important cash crop, while gold exports have gained importance in recent years.
In 2015, Burkina Faso turned a new page in its history. One year after the popular uprising of October 2014 that forced President Compaoré into exile after 27 years in power, the country held presidential and legislative elections. Roch Marc Christian Kaboré of the Mouvement du peuple pour le progrès (MPP) (People’s Movement for Progress) emerged as the first civilian president to be elected following free and transparent elections. The MPP also obtained a parliamentary majority. Municipal elections were held in May 2016.
Zéphirin Diabré of the Union pour le progrès et le changement (UPC) (Union for Progress and Change), placed second in the presidential elections and is now the leader of the opposition.
In July 2016, the Government of Burkina Faso adopted a new development strategy, as set forth in the 2016-2020 National Economic and Social Development Plan (PNDES), entailing an overall outlay of CFAF 15.478 billion (approximately $26.3 billion).
Two thousand people were affected by the severe floods that hit the country in August 2016.
In addition, on January 15, 2016 Burkina Faso was the target of a terrorist attack against a hotel and restaurant in Ouagadougou that claimed more than 29 lives.
A combination of several factors, including exogenous shocks linked to the persistent fall in the price of raw materials, the socio-political crisis experienced by the country in 2014 and 2015 and the impact of the Ebola epidemic in the sub-region have resulted in a slowdown in the rate of economic growth. GDP growth of 4% was recorded in 2014 and 2015, significantly lower than the average of 6% registered over the previous decade.
This downturn has had an impact on public finances, reflected particularly in a fall in domestic revenue and a drastic decline in public investment. Private investment also contracted, owing to the wait-and-see attitude adopted by private investors following the political events of October 2014 as well as the attempted coup d’état of September 2015.
The commitment-based budget deficit was 2.1% in 2015, although on a cash basis it was around 3.4% of GDP, due to the payment of expenses corresponding to the previous year. This deficit was covered by the financial support of technical and financial partners. Notably, following the second and third program reviews, the World Bank disbursed $100 million for budgetary support. Furthermore, in June 2015 the Board of Executive Directors of the International Monetary Fund (IMF) approved an extended credit facility. Inflation remained low, at less than 1%.
Burkina Faso’s external position improved in 2015, with a current account deficit of 7.7% of GDP against 11.1% in 2013. This improvement was due to the drop in imports (following the fall in oil prices) and the rise in exports. The external deficit was covered thanks to external support and commercial bank financing.
The forecast for growth over the next three years is positive, despite a gloomy international economic environment, characterized by the decline in the price of exports (gold and cotton) and insecurity in the sub-region. In the medium term, economic growth should be more sustained, driven in particular by mining exports (thanks to the commissioning of new mines), investments and consumption. Growth in 2016 is projected at approximately 5.2%, while inflation should remain below the WAEMU threshold of 3%.
There have been positive changes in the human development outlook: (i) infant mortality has fallen from 65 per 1000 live births in 2010 to 43 per 1000 live births in 2015; (ii) maternal mortality rates fell from 484 deaths per 100,000 live births in 1995, to 341 deaths in 2010. Life expectancy at birth stood at 58.6 years (2014).
The gross enrollment rate at the primary level increased from 57% in 2005 to 87% in 2014. Access to secondary education has also increased, improving from a 20% enrollment in lower secondary schools in 2005 to 39.7% in 2013-2014, and from 5.6% to 14% for upper secondary education. On the other hand, the literacy rate for young people, which in 2010 was 28.7%, is lower than the average rate of 71% for Sub-Saharan Africa.
The poverty rate fell slightly between 2009 and 2014, from 46% to 40.1%. Burkina Faso has moved up two places in the 2015 edition of the UNDP Human Development Index, and now ranks 183 out of 188 countries.
Burkina Faso remains vulnerable to changes in rainfall patterns and fluctuations in the prices of its commodity exports on world markets. Its economic and social development will, to some extent, be contingent on political stability within the country and sub-region, as well as its openness to international trade and export diversification. Second generation reforms, involving economic liberalization and employment generation by small and medium enterprises (SMEs), should help to ensure sustainable growth.
Last Updated: Oct 11, 2016