Overview

Country Overview

Burkina Faso is a low-income ($690 gross per capita income in 2014), landlocked Sub-Saharan country, with limited natural resources.  Its population, which is growing at an average annual rate of 3%, was estimated at almost 17.9 million inhabitants in 2014.  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.

Political Context

2015 marked a new chapter in Burkina Faso’s history. One year after the popular uprising of October 2014 that forced President Blaise Compaore into exile after 27 years in power, the country organized presidential and legislative elections. On November 29, 2015,  Roch Marc Christian Kabore, head of the People’s Movement for Progress (MPP), was elected president of Burkina Faso with 53,46% of the votes in the first round. Zephirin Diabre from the Union for Change and Progress (UPC), was runner up with 29,62% of the votes.

President Kabore’s party, the MPP, won 55 of the 127 parliamentary seats. Through alliances with certain parties, the MPP is guaranteed a majority in Parliament. For the first time in the country’s history, the Burkinabe people have chosen a president through free and fair elections.

On January 15, 2016, Burkina Faso was struck by a terrorist attack which resulted in several casualties. 

Economic Overview

While Burkina Faso has experienced average annual growth of 6% over the past few years, growth slowed to a rate of 4% in 2014.  This may be attributed to the significant and persistent fall in the prices of gold and cotton (27% and 8% respectively), the decline in cereal production and the political crisis of 2014.

This situation has had an impact on public finances, reflected particularly in a decline in investments and public revenue.  Private investments also contracted, owing to the wait-and-see attitude adopted by private investors following the events of 2014.  The policy of providing cereal subsidies, pursued with support from technical and financial partners, together with a conservative monetary policy by the Central Bank for West African States (BCEAO) have helped to keep inflation at a rate of -0.3%, well below the 3% target set by WAEMU.  Following the second and third reviews of the Extended Credit Facility Agreement, the IMF in June 2015 approved the request to increase resources to Burkina Faso.  The World Bank is pursuing its policy of cooperation with the transition government through a number of projects, including the provision of budgetary support in the amount of $100 million. 

Medium-Term Outlook

The forecast for economic growth in 2015 is good, despite a morose international economic environment, characterized by the continued decline in commodity prices.  This situation is compounded by the negative consequences of power outages and the impact of the avian flu outbreak.  Growth in 2015 is projected at approximately 4.9%, while inflation should remain below the WAEMU threshold of 3%.  Public revenues should decline, owing to the fall in gold and cotton prices, as well as customs and tax fraud.  Budgetary support from the World Bank and recourse to the regional financial market will enable the budget deficit to remain well within the quantitative criteria agreed with the IMF.

Human Development

There have been positive changes in the human development outlook: (i) infant mortality dropped from 65 per 1000 live births in 2010 to 43 per 1000 live births in 2015; (ii) maternal mortality rates also fell from 484 deaths per 100,000 live births in 1995, to 341 deaths in 2010.  Life expectancy at birth stood at 57 in 2009, higher than the regional average of 50 years.

The gross primary school enrolment rate rose from 57% in 2005 to 81% in 2013.  Access to secondary education has also increased, improving from a 20% enrolment in lower secondary schools in 2005 to 37% in 2013 and from 5.6% to 14% for upper secondary education.  However, the quality of secondary education remains a matter of concern.  In addition, the literacy rate for young people, which in 2010 was 28.7%, is lower than the average rate of 70% for Sub-Saharan Africa.

The poverty rate was estimated at 40.1% in 2014, as against 46% in 2009.  Burkina Faso has moved up two places in the 2014 edition of the UNDP Human Development Index and now ranks 181 out of 187, as against 183 the previous year.

Development Challenges

Burkina Faso remains vulnerable to changes in rainfall patterns and unstable commodity prices.  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, will help to ensure sustainable growth.  

Last Updated: Jan 19, 2016

World Bank Commitment to Burkina Faso

The Country Partnership Strategy (CPS), developed in 2013 between Burkina Faso and the World Bank, is currently being implemented.  The mid-term review organized jointly with the government in the first quarter of 2015 was an opportunity to evaluate the first two years of operation of the strategy, with a view to applying the lessons learned in the two remaining years.  While the pillars of the Strategy, including the cross-cutting themes, were generally deemed to be appropriate, a number of adjustments will need to be made to shore up the World Bank Group’s support, to allow Burkina Faso to undertake a structural transformation of the country’s economy.  Moreover, the World Bank Group will continue its efforts to stimulate employment through the creation of growth poles and the development of value chains.  A substantial portion of World Bank financing will be used to help the government offset the lack of infrastructure and the energy deficit.

The World Bank’s overall engagement in Burkina Faso amounts to $1.2 million, of which $1.1 million is sourced from the International Development Association.  The present commitment from the International Finance Corporation (IFC) is estimated at $52 million.  The World Bank’s portfolio currently consists of 16 national and 8 regional projects.

The International Finance Corporation (IFC)

IFC investment in Burkina Faso is estimated at $52 million, with funding for projects in 5 main sectors: mining, finance, insurance, electricity supply, and trade.  It currently mobilizes more than $10 million in advisory services.

IFC’s Strategy rests on two pillars: (i) support and advice to the government for implementing measures to improve the business climate, the health sector and enhancing public-private partnerships; (ii) direct financing for businesses in the sectors of infrastructure, industry, services, agribusiness and for financial institutions.

IFC supports the development of small and medium enterprises (SMEs) in Burkina Faso, by providing financing and guarantees.  It also helps the government to implement reforms to improve the investment climate.

IFC is also helping to develop the health sector through the Health in Africa Initiative (HiA), with particular emphasis on private healthcare.

Last Updated: Jan 19, 2016

The World Bank has successfully contributed to Burkina Faso’s development, by providing support in the following areas:

Rural Development

The third phase of the second National Land Management Program (PNGT2-3) is aimed at building the institutional capacity of local communities and promoting decentralization.  This phase was made possible through a grant of $70 million from the World Bank and $7.71 million from the Global Environment Facility (GEF).  Over the past few years, the PNGT has emerged as a real example of endogenous development.

Transport Sector

The Transport Sector Project ($108 million) includes the rehabilitation of 3,336 km of unsurfaced roads.

Mining Sector

Burkina Faso has been declared “Extractive Industries Transparency Initiative (EITI) compliant” and has pledged to disclose its revenues from the mining sector.  In addition, the World Bank is financing the Mineral Development Support Project in Burkina Faso.  This will help to strengthen national capacity to monitor and evaluate the activities of the mining sector as well as ensure that revenues from mining benefit the country.  Such capacity building is important, especially in view of the new mining code adopted in June 2015 by the National Transition Council, which will serve to generate budget revenue, especially in communities and regions where mining companies operate.

Water and Sanitation

An $80 million project approved in May 2009 is supporting the government’s work to achieve the water and urban sanitation Millennium Development Goals (MDGs).  Additional financing has been approved to ensure more secure water and sanitation services in the city of Ouagadougou and improve access to basic services for the poor.

Urban Development Sector

A $10 million project has helped the government to prepare development plans for 12 regional capitals and to build capacity for mobilizing resources and for urban planning.

Last Updated: Jan 19, 2016

The Government of Burkina Faso is coordinating donor activities and has set up Sector Dialogue Frameworks (SDFs) to monitor the Strategy for Accelerated Growth and Sustainable Development (SCADD).  The National Plan for Effective Development Cooperation (PANED) has replaced the National Plan for Aid Effectiveness (PANEA).  This technical adjustment follows the Busan High-Level Forum on Aid Effectiveness. 

Last Updated: Jan 19, 2016


LENDING

Burkina Faso: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments