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, which employs 80% of the workforce, although gold exports have increased. Despite the progress made, Burkina Faso faces a number of development challenges, particularly in the areas of health and education. It currently ranks 144th among 157 countries on the new human capital index established by the World Bank and 40.1% of its population lives below the national poverty line. Furthermore, the deteriorating security conditions caused by terrorist attacks have created an unprecedented humanitarian crisis.

Security and Sociopolitical Situation

Growing insecurity, particularly in the north along the border with Mali and Niger, has displaced several communities in Burkina Faso. While there were fewer than 50,000 internally displaced persons (IDP) in the country in January 2019, a report issued by the National Council for Emergency Assistance and Rehabilitation (CONASUR) put this figure at more than one million at the end of December 2020. This IDP population, approximately 54% of whom is under the age of 15, is composed of 53% women and 47% men. In June 2020, more than 2,500 schools were closed, depriving 350,000 children of an education.

On the political front, presidential and legislative elections were jointly held in November 2020. The incumbent, President Roch Marc Christian Kaboré, was reelected in the first round, garnering 57.74% of the votes. The ruling People's Movement for Progress (MPP) party and its allies secured a comfortable majority in the National Assembly.

Economic Overview

• As a result of steps taken to contain COVID-19, year-on-year real GDP fell by just over 5% during the first half of 2020. Favorable terms of trade and the implementation of the emergency government plan designed to counter the effects of the COVID-19 crisis paved the way for an 8% year-on-year turnaround in the third quarter. Real GDP grew at an estimated 0.6% over the year.
• The current account deficit narrowed from 4.8% of GDP in 2019 to 2.6% in 2020, owing primarily to an improved trade balance through increased gold export revenues (85% of exports) driven by higher international prices and to a decline in oil imports fueled by lower international oil prices.
• Inflation turned positive again in 2020 owing to the COVID-19 shock (3.2% compared to -3.2% in 2019). This pressure was chiefly driven by high food prices and the gradual increase in rental costs and energy prices.
• The fiscal deficit stood at 5.6% in 2020 (3.2% in 2019), owing to the deferral or temporary cancellation of taxes, additional COVID-19-related expenditure, and increased spending on security. This deficit was financed by a mix of concessional external financing (35%) and domestic debt (65%). Overall, public debt, which grew from 42.7% in 2019 to 47.6%, is sustainable and Burkina Faso’s risk of global and external debt distress continues to be moderate.

Medium-Term Outlook 

• The economy is expected to gradually recover, growing by 3.1% in 2021 and reaching 5% in 2022. Against a backdrop of uncertainty, the recovery initiated in 2021 is expected to be driven by a gradual rebound in services, continuing high gold production levels, and a stable agricultural sector.
• The steady deterioration in the trade balance and in net revenues as well as the stagnation of net transfers are projected to lead to a gradual increase in the current account deficit in the medium term.
• Inflation is expected to remain positive at around 2% in 2021. In view of the security threats that could reduce the food supply and the ongoing uncertainties surrounding the pandemic, inflation is expected to remain high in 2021, albeit below the 3% limit set by WAEMU. 
• In light of the ongoing COVID-19 shock and the current security, humanitarian and social challenges, the fiscal deficit is expected to remain high in 2021 at 5.2% of GDP.

Last Updated: Apr 28, 2021

The World Bank’s Group work in Burkina Faso is guided by a Country Partnership Framework, an engagement strategy that is prepared every five years. This strategy, which is aligned with the objectives of the government’s National Economic and Social Development Plan (PNDES), is currently being revised to bring it in line with the priorities of the revised National Development Plan and will include the following priority areas:

• Strengthening of resilience and social cohesion through increased security, peace, and sustainable, lasting development;
• Strengthening of sustainable development, human capital, and cooperation;
• Boosting of potential economic growth sectors and job creation; 
• Improvement of governance and citizen participation through institutional reforms and the modernization of the public administration.

As of February 28, 2021, the International Development Association (IDA), the World Bank Group institution that provides assistance to poorest nations in the world, was financing more than 30 projects in Burkina Faso, 22 of which are national projects and 10, regional, representing a total commitment of $2.8 billion, as well as 8 Trust Funds totaling $77.9 million.

To help Burkina Faso cope with fragility, conflict and violence, IDA is mobilizing finance windows designed to address fragility in order to provide additional concessional resources to Burkina Faso. This is how Burkina Faso became eligible for more than $700 million in available funding from the IDA-19 Prevention and Resilience Allocation over the 2021-2023 period.

In order to respond quickly to the COVID-19 pandemic, World Bank support is being provided in three phases: (i) in the short term, saving lives; (ii) in the medium term, protecting livelihoods; and (iii) in the long term, preparing for the future. To that end, on December 15, 2020 the World Bank approved financing for budget support to address the health crisis and for the Local Development and Resilience Project —in the amount of $100 million and $350 million, respectively—all designed to ensure resilient economic growth. Other projects have also been restructured to ensure the continuity of public services and support vulnerable households and the country’s economic program.

The International Finance Corporation (IFC), the private sector development arm of the World Bank Group, is focusing on (i) assisting with efforts to improve the business climate and attract private investment, (ii) financing the development of small and medium enterprises, the agrifood industry, infrastructure, energy, education, health, and the financial sector.

Despite the security risks, IFC increased its commitments over the past decade to a total of $850 million in long-term financing, short-term financing and resource mobilization, $825 million of which covers the 2015-2021 period.

Last Updated: Apr 28, 2021

Social Protection

World Bank support through safety net programs over the past six years has helped Burkina Faso achieve significant results in reducing the vulnerability of the poorest households.

The Burkin-Naong-Sa ya (end poverty in Burkina Faso) Social Safety Net project ultimately targets over 100,000 beneficiaries. As part of the COVID-19 pandemic response, 43,000 new beneficiaries have begun receiving cash transfers. Women account for 95% of the beneficiaries. In addition to cash transfers, poor women also receive parental education on breastfeeding for example, which helps improve infant health and strengthens human capital. In October 2019, the World Bank approved additional financing of close to $100 million for the Social Safety Net project.

Employment and Early Childhood Development 

In 2016, Burkina Faso launched a short-course training and temporary job program at public work sites, in which 46,000 unemployed youth participated.  This Burkina Faso Youth Employment and Skills Development Project (PEJDC) also helped launch an innovative initiative to provide mobile childcare units to help mothers working on the sites balance their work and family lives. These units were closed at the start of the COVID-19 pandemic but were reopened in October 2020 and now tend to 1,000 children.

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.

In addition, 1,000 students, primarily girls from poor households, were selected to receive grants (CFAF 100,000 per year) throughout their secondary education.

The two national upper secondary STEM schools that were constructed accommodated 274 students (3 cohorts). A total of 65 students from both schools sat the 2020 baccalauréat examinations and were all successful.

Under the Higher Education Support Project, 7,959 additional students, 36.7% of whom were women, enrolled in undergraduate programs in the priority areas financed by the project; 10 higher education and research institutions will receive competitive funds totaling CFAF 11.5 billion (20% already disbursed). The project has already provided financing for close to 7,500 computers for undergraduate students through the One Student, One Computer program.  

Last Updated: Apr 28, 2021

The World Bank Group works closely with the other development partners involved with Burkina Faso, including the European Union, Agence Française de Développement, and agencies in the United Nations System. The World Bank held joint portfolio reviews with AfDB and JICA.

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: Apr 28, 2021