Overview

Country Overview

Burkina Faso is a landlocked sub-Saharan country with limited natural resources. A low-income country, per capita income was at $670 in 2013. Its population was estimated at almost 17 million in 2013, and is characterized by a high percentage of youth (60%). The population growth rate averages around 3%. Burkina Faso’s economy is heavily reliant on agricultural production, with cotton being its main cash crop. With the discovery of large mineral deposits, gold exports have soared to record levels in the past three years. The country’s economy remains vulnerable to external shocks such as low rainfall, international financial and oil crises, and regional instability.

Political Context

In October 2014, a popular uprising resulting in violent protests and pillaging led to President Blaise Compaore’s resignation after 27 years in power. The uprising was a reaction to plans to modify elements of the constitution that limited the number of presidential mandates and would have allowed the former president to run in 2015.

Two weeks after the fall of President Compaore, negotiations gave way to a power transition plan adopted by an assembly of 80 members from the army, political parties, and civil society. The plan defines the institutional contours of the transition which is set to last a year. The document designated an interim president, a prime minister, and a national transition council as well as its leader.

The transitional government will remain in power for only one year. Its mission is to get the country back on track and organize the November 2015 presidential and legislative elections.  Members of the transitional government are prohibited from running in the upcoming elections.

Economic Overview

Over the last fifteen years, Burkina Faso has led the countries of the West African Economic and Monetary Union in economic growth with an average growth rate of 5.5% despite exogenous shocks. Falling gold and cotton prices, drops in grain production, and the recent political crisis have all contributed to low public revenues and investments. In addition, these factors have also had a negative impact on economic growth in 2014, lowering it to 5% from a predicted 6.6%. Inflation has been mitigated in part due to grain subsidies and a prudent monetary policy run by the Central Bank for West African States. The International Monetary Fund (IMF), having suspended its activities on the eve of the uprisings, resumed its work in December to evaluate macroeconomic conditions in the framework of the Extended Credit Facility Program. The World Bank will pursue its cooperation with the transitional government in partnership with other multilateral and bilateral partners.

Medium-term outlook

The growth forecast for 2015 is positive despite the morose international economic context marked by a drop in the price of raw materials. The rising value of the American dollar (currency that trades in petroleum) will unfortunately not permit Burkina Faso to benefit from falling oil prices observed on the international market. Growth in 2015 will hover around 5% and inflation will remain controlled under UEMOA standards. Public revenues will decline following the falling prices of gold and cotton. The budget deficit will remain within the quantitative measures agreed upon with the International Monetary Fund (IMF) thanks to exterior budget support notably from the World Bank and the regional financial market.

Social Context

There have been some positive human development trends in Burkina Faso. Infant mortality fell from 81 deaths per 1,000 live births in 2003 to 65 deaths per 1,000 live births in 2010.  In 2010, the maternal mortality rate stood at 341 per 100,000 live births, which is down from 484 in 1995. Life expectancy at birth stood at age 57 in 2009, which is slightly above the regional average of 50 years.

There have also been improvements in the education sector. Gross primary school enrolment rate rose from 57% in 2005 to 81% in 2013. The illiteracy rate among the youth stood at 28.7% in 2010, compared an average of 70% for sub-Saharan Africa. Access to secondary education also improved from 20% in 2005 to 37% in 2013 for first cycle students and from 5.6% to 14% for second cycle students during the same period. However, the quality of secondary education remains an issue.

Burkina Faso has other challenges ahead. According to the National Statistics and Demographics Institute, the poverty rate in Burkina Faso was estimated at 46% in 2009. In addition, the 2014 Human Development Index published by the United Nations Development Program ranked the country 181st out of 187 countries, up two places from last year.

Development Challenges

A landlocked country located more than 1,000 km from the nearest harbor, Burkina Faso remains vulnerable to variations in rainfall and in its export commodities. The socioeconomic development of the country will depend in part on its openness to international trade and a diversification of its exports. Additional measures such as reforms to liberalize Burkina’s economy and promote employment by small and medium enterprises (SMEs), will also help boost sustainable growth. 

 

Last Updated: Apr 09, 2015

World Bank Group Engagement in Burkina Faso

The Country Partnership Strategy (CPS) between Burkina Faso and the World Bank prepared in 2013 is now underway. A mid-term review, which is currently under preparation, will allow both parties to take stock of the progress made over the past two years and will provide some lessons learned going forward. The review will be performed jointly with the government and will require intensive consultation with all stakeholders including:  the private sector, regional and local governments, parliament, academics, discussion groups, the media, civil society representatives, and the donor community The midterm report will be submitted to the World Bank Group’s Board of Directors in May 2015.

The World Bank’s total commitment to Burkina Faso stands at $1,024 million, with $1,001 million coming from the International Development Association (IDA). The International Finance Corporation (IFC) commitment stands at $23 million, mainly for projects in the mining, finance, insurance, energy, and trade sectors. The current World Bank portfolio is composed of 15 national projects and 5 regional projects.

International Finance Corporation (IFC):

The International Finance Corporation’s (IFC) first operation in Burkina Faso was in 1975. Since the establishment of a local office in 2006, the IFC has been even more engaged with Burkina Faso to work on improving the business climate through the “Doing Business Better” program. The IFC is also involved in projects concerning lease financing, transborder trade, dispute settlements, the Health in Africa Initiative, and private sector investments. The IFC’s total commitment to Burkina Faso stands at $88 million.

The IFC strategy has two pillars: Advisory support for the government to improve the business climate, the health sector, and public-private partnerships; and direct financing of companies working in the infrastructure, industry, service, and agro-industry, and finance sectors.

From 2006 to 2014, the IFC has provided support to the mining sector, the telecommunications sector, the banking sector, the hotel industry, the energy sector, and trade.  It is also supporting small and medium enterprises (SME) in Burkina with financing and guarantees. Likewise, the IFC is involved in helping the government implement reforms that aim to improve the business and investment climate in the country. Through the Health in Africa Initiative (HiA), the IFC has been accompanying Burkina’s private sector to develop and improve health services in the country. 

 

 

 

Last Updated: Apr 09, 2015

The World Bank has contributed to Burkina Faso’s successful development performance in the following sectors:

Rural Development

The third phase of the Community Based Rural Development Project is aimed at building the institutional capacity of local communities and facilitating decentralization. Burkina Faso received a grant of $70 million from the World Bank and $7.71 million from the Global Environment Facility (GEF).

Energy

Burkina Faso has limited access to modern sources of energy. The rate of electrification was around 15% in 2013. In order to diversify its sources of energy and to increase access to energy, Burkina Faso has adopted a sectorial energy policy based on the development of internal renewable every sources. The power pool strategy with Ghana is under preparation and active Bank projects total $102.8 million.

Transportation

With $108 million in financing, projects in the transportation sector have succeeded in rehabilitating 3,336 km of dirt roads. In addition, since 2009, the IFC has been funding Air Burkina in the form of a loan of $19.5 million to buy new planes.

Mining

Burkina Faso has been declared “Extractive Industries Transparency Initiative (EITI) compliant” since February 2013. The country has therefore pledged to disclose the revenue derived from the mining sector. The Bank is financing a Mineral Development Support Project in Burkina in order to help the country better monitor and evaluate the mining sector to ensure that the profits benefit the entire country.

Water and Sanitation

The Board approved an $80 million project in May 2009. This new operation aims to support the government’s efforts to achieve the water and urban sanitation Millennium Development Goals (MDGs). Additional financing for this project has recently been approved under the new Country Partner Strategy, and seeks to boost water and sanitation services in Ouagadougou with a particularly emphasis on access for the poor.

Urban Planning

A $10 million project helped the government prepare development plans for 12 regional capitals as well as reinforce their urban planning capacities. These additional plans were added to existing documents such as the national housing and urban development policy, the urban planning code, and other related documents. 

 

Last Updated: Apr 09, 2015

The government is coordinating donor activities and has set up Sector Dialogue Frameworks (CSD) to monitor the Strategy for Accelerated Growth and Sustainable Development (SCADD). An improved version of the Internet-based aid management platform has also been presented to donors, who can now log in remotely to update data on the financing they grant the country. The Government has drawn up a National Action Plan for Effective Development Cooperation (PANED) to replace the National Action Plan for Aid Effectiveness (PANEA). This technical adjustment follows the Busan High-Level Forum on Aid Effectiveness.

Last Updated: Apr 09, 2015


LENDING

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

*Amounts include IBRD and IDA commitments