Overview

Country overview

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.

Political context

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.  

Economic overview

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.

Medium-term outlook

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%. 

Human development

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.

Development challenges

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

The World Bank’s Commitment to Burkina Faso

The Country Partnership Strategy (CPS), developed in 2013 between Burkina Faso and the World Bank, will come to a close at the end of 2016. While the pillars of the strategy were generally deemed to be appropriate in the last mid-term review, 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. The World Bank has held consultations with various social, professional and economic groups in Burkina Faso to establish a Systematic Country Diagnostic (SCD) for the country and develop the new Country Partnership Framework (CPF). The SCD is the analytical framework on which the World Bank Group bases its activities with each of its partner countries.

This CPF should align with the National Economic and Social Development Plan (PNDES) approved by the Council of Ministers on July 20, 2016.

The World Bank Group’s current portfolio in Burkina Faso includes 18 national projects, representing a total commitment of more than $1.3 billion, and 7 regional projects, representing a commitment of $163.8 million.

The International Financial Corporation (IFC)

The IFC’s commitment in Burkina Faso is currently estimated at $52 million, with funding for projects in five main sectors: mining, finance, insurance, electricity supply and trade. It also 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 and the health sector, and enhancing public-private partnerships; (ii) direct financing for businesses in the sectors of infrastructure, industry, services and agribusiness, as well as for financial institutions.

IFC supports the development of small and medium enterprises (SMEs) in Burkina Faso by providing financing and guarantees to banks. 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 health care.

Last Updated: Oct 11, 2016

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

Rural development sector

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 grants 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

transport sector project in the amount of $108 million and concluded in March 2013 included the rehabilitation of 3,336 kilometers of unsurfaced roads and created 3,864 temporary jobs as part of highly labor intensive public works. 

Mining sector

Burkina Faso has been declared “Extractive Industries Transparency Initiatives (EITI) compliant.” The Mining Sector Development Support Project will help the country to strengthen its national capacity to better monitor and evaluate the activities of the mining sector to ensure that revenues from mining benefit the country.

Water and sanitation sector

An $80 million project approved in May 2009 is supporting the government’s efforts to achieve the urban water and sanitation Millennium Development Goals (MDGs). Additional financing has recently 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 the development plans for twelve regional capitals and to build their capacity for mobilizing resources and for urban planning.

Education sector

The project to finance the International Engineering Institute for Water and the Environment (2IE) was implemented between April 2009 and May 2015 and benefited from an initial outlay of $5 million and a subsequent allocation of 10 million. These allocations have helped to support the development of 2IE, establish it as a regional center of excellence and increase the number of qualified professionals in the fields of water, energy, environment and infrastructure engineering.

Last Updated: Oct 11, 2016

The Government of Burkina Faso is coordinating donor activities and has set up Sector Dialogue Frameworks (SDFs). The National Plan of Action for Effective Development Cooperation has replaced the National Plan for Aid Effectiveness. This technical adjustment follows the 2011 Busan High-level Forum on Aid Effectiveness.

Last Updated: Oct 11, 2016


LENDING

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

*Amounts include IBRD and IDA commitments