The World Bank in Burkina Faso

Burkina Faso is a low-income Sahelian country with limited natural resources. Its economy is largely based on agriculture, although gold exports are on the rise. More than 40% of the population lives below the poverty line. Burkina Faso ranks 184th out of 191 countries in the 2021-2022 HDI report of the United Nations Development Programme (UNDP).

Political Context

Following the coup d’état of January 24, 2022 that ousted President Roch Marc Christian Kaboré, Lieutenant Colonel Paul Henri Sandaogo Damiba, the leader of the Patriotic Movement for Preservation and Restoration (MPSR), was sworn in as President of the Transition on March 2, 2022. Under the Transition Charter adopted by a national conference, Damiba will not be eligible to run in the next presidential elections.

The transitional bodies are the Transition Policy and Monitoring Council (conseil d’orientation et de suivi de la transition), the transitional government that comprises 25 ministers and includes a civilian prime minister, and a 71-member transitional legislative assembly.

In the wake of the coup, the Economic Community of West African States (ECOWAS) and the African Union have suspended Burkina Faso from their decision-making bodies until constitutional order is restored. However, ECOWAS and the transitional authorities have agreed to a 24-month transition timetable, starting on July 1, 2022.

Since 2015, the country has been the target of terrorist attacks that have resulted in population displacements. While there were fewer than 50,000 internally displaced persons (IDPs) in the country in January 2019, this number stood at roughly 1.5 million on April 30, 2022. 

In April 2022, more than 4,000 schools (more than 16% of educational facilities) were closed as a result of insecurity, affecting more than 700,000 students.

Economic Overview

The economy recovered strongly in 2021, growing by an estimated 6.9% (4% per capita). This growth was driven by a rebound in services (+10.4%) and a steady increase in gold exports. However, low rainfall led to a decline in agricultural production, resulting in a 4.1% contraction in the primary sector. 

Buoyed by the gold sector, exports grew by 6.5% in 2021 and imports also increased by 15.5%, driven mainly by purchases of electricity and hydrocarbons. This has widened the current account deficit, estimated at 3.0% of GDP, compared to just 0.1% in 2020. 

Strong domestic demand driven by growth in 2021, coupled with the effects of congestion on global supply chains throughout the year, led to record inflation of 3.9%, the highest in 10 years.

Lastly, as a result of the sharp increase in defense and security-related expenditure (20% of total expenditure), a structurally high public wage bill, and ever-increasing humanitarian needs, the fiscal deficit increased to

6.0% of GDP in 2021 (compared to 5.7% in 2020). At the same time, public debt topped the 50% of GDP mark (55.5%), with domestic debt now accounting for a majority share (54%).

Medium-Term Outlook 

Over the medium term, and against a backdrop of uncertainty, real growth is expected to continue on its pre-COVID-19 trajectory. While the medium-term outlook is generally positive, real GDP growth is nevertheless expected to slow in 2022, owing mainly to (i) an anticipated decline in private investment (including in the mining sector); (ii) the spread of insecurity in certain mining and agricultural areas, and lastly (iii) the Russia-Ukraine war and its impact through higher prices for food, fertilizers, and petroleum products.

Growth in 2022 is projected at 4.3% (1.4% per capita) and is expected to be driven by private consumption as well as exports, while investment could decline amid increased insecurity and uncertainty. With high oil prices and a decline in grants as a result of the political context, the current account deficit could widen to 6.0% of GDP and inflation could reach 7%.

In the medium term, growth is expected to return to its potential level of 5.3% (2.4% per capita). Services and the secondary sector are expected to remain the main drivers of this growth, while agricultural production is expected to continue its historical cyclical trend.

In light of the security, humanitarian, and social challenges (including those related to the food crisis) and the ongoing COVID-19 pandemic, the fiscal deficit could reach 7.4% of GDP in 2022 (compared to the initial projection of 6.5%). Its gradual return to the WAEMU ceiling of 3% is not expected before 2025.  

Last Updated: Sep 21, 2022

A mid-term review of the World Bank Group’s (WBG) Country Partnership Framework (CPF) for 2018-2023 was conducted in August 2022. This review aimed to adapt the strategy to the dramatic changes being experienced by the country, by making major adjustments that focus in particular on resilience and conflict prevention.

The strategy, which is aligned with the objectives of the government’s National Economic and Social Development Plan (PNDES), was revised to bring it in line with the country context and with the priorities of the political transitions under way.  This strategy will focus on the following areas:

• Accelerate sustainable private sector growth for job creation;
• Invest in human capital and social protection systems;
• Strengthen service delivery and the State’s presence in fragile areas.

As of July 31, 2022, the International Development Association (IDA), the World Bank Group institution that provides assistance to the poorest nations in the world, was financing 30 projects in Burkina Faso, 20 of which are national projects and 10, regional, representing a total commitment of $3.18 billion, as well as 11 Trust Funds totaling $113 million.  

IDA is mobilizing finance windows designed to address fragility in order to provide additional concessional resources to Burkina Faso. The country has been eligible for resources from the Prevention and Resilience Allocation since 2020.  It is in this context that the Burkina Faso Emergency Local Development and Resilience Project valued at $350 million plus additional financing of $123 million, and the Community-Based Recovery and Stabilization Project for the Sahel in the amount of $150 million were approved to help the government address the drivers of fragility and build resilience.

IFC 

The International Finance Corporation (IFC), the private sector development arm of the World Bank Group, works to improve the country’s investment climate, facilitate access to financing for small and medium enterprises, and contribute to the development of the agri-food, energy, finance, infrastructure, education, and health sectors. IFC has increased its commitments over the past decade to a total of $850 million. 

Last Updated: Sep 21, 2022

Energy

The Electricity Sector Support Project (PASEL) has:

• constructed the 7.5 MW Fada N’Gourma thermal power plant in the eastern part of the country;
• electrified 40 communities and 90 villages;
• installed 851 kilometers of low-voltage lines and 463 kilometers of medium-voltage lines;
• deployed 25,000 solar lamps in 400 schools.

Water and Sanitation

Since its inception in 2019, the Water Supply and Sanitation Program has achieved the following results:

• Access to drinking water sources has been provided for more than 515,000 persons;
• Access to improved sanitation facilities has been provided for over 230,000 persons;
• Under the capacity-building component, there are more than 1,300 short-term training beneficiaries and 62 graduates (from senior technicians to design engineers).

Agriculture

As a result of the Burkina Faso Livestock Sector Development Support Project (PADEL B):

• 262,359 herders benefited from agricultural goods and services in livestock value chains;
• 1,653 livestock microprojects launched by young people and women were financed;
• Access to financing from banks and microfinance institutions was provided to 263 women-owned livestock businesses and 152 businesses owned by young people.

Human Capital

The mobile childcare program serves 1,000 children in 20 communes/districts. These mobile childcare units are located near public construction sites where many mothers work. These simple and inexpensive structures allow women to have a job and contribute to the development and health of their children.

The Burkin-Naong-Saya  (end poverty in Burkina Faso) Social Safety Net project has been targeting the most vulnerable households for the past six years and aims to establish a social protection system:

• It is expected to eventually benefit more than 100,000 persons, the vast majority of whom are poor women (95% of beneficiaries) who receive, for example, cash transfers and parental education on breastfeeding;
• As a result of the pandemic, 43,000 new beneficiaries have received financial assistance;
• In October 2019, the World Bank approved close to $100 million in additional financing for the Social Safety Net project.
  

Education

Initial financing of the Project to Improve Access to Quality Education (PAAQE) was used to:

• build 327 classrooms in 45 lower and upper secondary schools thereby providing access to secondary education (post-primary and secondary) for approximately 20,595 students, 49% of whom were girls;
• provide grants (CFAF 100,000 per year) to 1,000 selected students, primarily girls from poor households, throughout their secondary education.

The program to build high schools for the teaching of science should allow for the construction of one science high school in all 13 regions:

• The initiative gives equal opportunities to girls and boys, as well as to adolescents from rural and urban areas;
• Two national science high schools have accommodated 274 students;
• The 65 students who sat the baccalaureate examinations in 2020 were all successful.

Under the Higher Education Support Project:

• 7,959 students, 36.7% of whom were women, enrolled in undergraduate studies in the priority areas financed by the project;
• 10 higher education and research institutions are receiving competitive funds totaling CFAF 11.5 billion.    

Last Updated: Sep 21, 2022

The World Bank Group works closely with the other development partners operating in Burkina Faso, including the European Union, Agence Française de Développement, agencies in the United Nations System, and bilateral partners.

In July 2017, Germany, the African Development Bank, the World Bank, France, the European Union, and the United Nations Development Programme launched the Sahel Alliance with the aim of providing a coordinated and tailored response to the challenges faced by the G5 Sahel member countries (Burkina Faso, Chad, Mali, Mauritania, and Niger). Since then, Denmark, Italy, Luxembourg, the Netherlands, Spain, and the United Kingdom have joined the Alliance.

Last Updated: Sep 21, 2022