Economy of Burkina Faso

Burkina Faso has an average income purchasing-power-parity per capita of $1,666 and nominal per capita of $790 in 2014. More than 80% of the population relies on subsistence agriculture, with only a small fraction directly involved in industry and services. Highly variable rainfall, poor soils, lack of adequate communications and other infrastructure, a low literacy rate, and a stagnant economy are all longstanding problems of this landlocked country. The export economy also remained subject to fluctuations in world prices.

The country has a high population density, few natural resources, and a fragile soil. Industry remains dominated by unprofitable government-controlled corporations. Following the African franc currency devaluation in January 1994 the government updated its development program in conjunction with international agencies, and exports and economic growth have increased. Maintenance of its macroeconomic progress depends on continued low inflation, reduction in the trade deficit, and reforms designed to encourage private investment.

The Burkinabé financial system represents 30% of the country’s GDP and is dominated by the banking sector, which accounts for 90% of total financial system assets. Eleven banks and five non-bank financial institutions operate in the country.

The banking sector is highly concentrated, with the three largest banks holding nearly 60% of total financial sector assets. Banks are generally adequately capitalized, but remain vulnerable due to their overexposure to the cotton sector, the prices of which are subject to significant oscillations.

A December 2018 report from the World Bank indicates that cotton had become the most important cash crop, while gold exports were increasing in recent years. In 2017, economic growth increased to 6.4% in 2017 (vs. 5.9% in 2016) primarily due to gold production and increased investment in infrastructure. The increase in consumption linked to growth of the wage bill also supported economic growth. Inflation remained low, 0.4% that year but the public deficit grew to 7.7% of GDP (vs. 3.5% in 2016). The government was continuing to get financial aid and loans to finance the debt. To finance the public deficit, the Government combined concessional aid and borrowing on the regional market. The World Bank said that the economic outlook remained favorable in the short and medium term, although that could be negatively impacted. Risks included high oil prices (imports), lower prices of gold and cotton (exports) as well as terrorist threat and labour strikes.[8]

Economy of Burkina Faso
Downtown ouaga2
Ouagadougou financial centre of Burkina Faso
CurrencyCFA Franc (XOF)
Calendar year
Trade organisations
AU, WTO
Statistics
GDPIncrease$35.8 Billion (PPP) (2017 est.)[1]
Increase$12.6 Billion (Nominal) (2017 est.)[2]
GDP growth
3.9% (2015), 5.9% (2016),
6.4% (2017e), 6.0% (2018f) [3]
GDP per capita
Increase$1,900 (PPP) (2017 est.)[1]
Increase$790 (Nominal) (2014 est.)[1]
GDP by sector
agriculture 31%, industry 23.9%, services 44.9% (2017 est.)
Increase0.95% (CPI, 2015 est.)
Population below poverty line
46.7% (2009)
39.8 (2009)
Labour force
8.501 million (2017) Note: a large part of the male labor force migrates annually to neighboring countries for seasonal employment
Labour force by occupation
agriculture 90%, Industry & Services 10% (2000 est.)
Unemployment77% (2004)
Main industries
cotton, beverages, agricultural processing, soap, cigarettes, textiles, gold
146th (2017)[4]
External
ExportsIncrease$3.14 billion (2017 est.)
Export goods
gold, cotton, livestock, Sesame seeds
Main export partners
 Benin 25.9%
 Togo 12%
 Japan 5.7%
 Thailand 5.6%
 Turkey 5.1%
 Côte d'Ivoire 4.9%
 Ghana 4.6%(2013 est.)[5]
ImportsIncrease$3.305 billion (2017 est.)
Import goods
capital goods, foodstuffs, petroleum
Main import partners
 Côte d'Ivoire 18.9%
 Pakistan 18.1%
 Ghana 4.5%
 India 4.3%
 China 4.3%
 Togo 4.2% (2013 est.)[6]
FDI stock
n/av
Increase$2.442 billion (31 December 2012)
Public finances
38.1% of GDP (2017 est.)
Revenues$2.666 billion (2017 est.)
Expenses$3.655 billion (2017 est.)
B (Domestic)
B (Foreign)
BBB- (T&C Assessment)
(Standard & Poor's)[7]
Foreign reserves
Decrease $0.049 billion (31 December 2017)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

Macro-economic trend

This is a chart of trend of gross domestic product of Burkina Faso at market prices estimated by the International Monetary Fund with figures in millions of CFA Francs.

Year Gross Domestic Product US Dollar Exchange Inflation Index (2000=100)
1980 412,240 211.29 CFA Francs 45
1985 642,387 449.22 CFA Francs 67
1990 848,910 272.26 CFA Francs 65
1995 1,330,159 499.12 CFA Francs 88
2000 1,861,522 711.86 CFA Francs 100
2005 3,027,196 526.56 CFA Francs 115

For purchasing power parity comparisons, the US Dollar is exchanged at 470.70 CFA Francs only. Mean wages were $0.56 per man-hour in 2009.

2006Burkinabe exports
Burkinabé exports in 2006

Current GDP per capita[9] of Burkina Faso grew 13% in the Sixties reaching a peak growth of 237% in the Seventies. But this proved unsustainable and growth consequently scaled back to 23% in the Eighties. Finally, it shrank by 37% in the Nineties. Average wages in 2007 hover around 2 to 3 dollars per day.

Although handicapped by an extremely resource-deprived domestic economy, Burkina Faso remains committed to the structural adjustment program it launched in 1991. It has largely recovered from the devaluation of the CFA in January 1994, with a 1996 growth rate of 5.9%.

Many Burkinabé migrate to neighbouring countries for work, and their remittances provide a substantial contribution to the balance of payments. Burkina Faso is attempting to improve the economy by developing its mineral resources, improving its infrastructure, making its agricultural and livestock sectors more productive and competitive, and stabilizing the supplies and prices of cereals.

The agricultural economy remains highly vulnerable to fluctuations in rainfall. The Mossi Plateau in north central Burkina Faso faces encroachment from the Sahara. The resultant southward migration means heightened competition for control of very limited water resources south of the Mossi Plateau. Most of the population ekes out a living as subsistence farmers, living with problems of climate, soil erosion, and rudimentary technology. The staple crops are pearl millet, sorghum, maize, and rice. The cash crops are cotton, groundnuts, karite (shea nuts), and sesame. Livestock, once a major export, has declined.

A 2018 report by the African Development Bank Group discussed a macroeconomic evolution: "higher investment and continued spending on social services and security that will add to the budget deficit". This group's prediction for 2018 indicated that the budget deficit would be reduced to 4.8% of GDP in 2018 and to 2.9% in 2019. Public debt associated with the National Economic and Social Development Plan was estimated at 36.9% of GDP in 2017.[10]

External trade

Burkina Faso Exports Treemap (2009)
Burkina Faso Exports Treemap (2009). See the 2016 figure

Industry, still in an embryonic stage, is located primarily in Bobo-Dioulasso, Ouagadougou, Banfora, and Koudougou. Manufacturing is limited to food processing, textiles, and other import substitution heavily protected by tariffs. Some factories are privately owned, and others are set to be privatized. Burkina Faso's exploitable natural resources are limited, although a manganese ore deposit is located in the remote northeast. Gold mining has increased greatly since the mid-1980s and, along with cotton, is a leading export moneyearner. However, both gold and cotton are listed as goods produced mostly by child labor and forced labor according to a recent U.S. Department of Labor report.[11]

See also

References

  1. ^ a b c "Burkina Faso". International Monetary Fund. Retrieved 2 October 2014.
  2. ^ "Burkina Faso". International Monetary Fund. Retrieved 2 October 2014.
  3. ^ "World Bank forecasts for Burkina Faso, June 2018 (p. 153)" (PDF). World Bank. Retrieved 11 September 2018.
  4. ^ "Ease of Doing Business in Burkina Faso". Doingbusiness.org. Retrieved 24 January 2017.
  5. ^ "Export Partners of Burkina Faso". CIA World Factbook. 2012. Retrieved 27 July 2013.
  6. ^ "Import Partners of Burkina Faso". CIA World Factbook. 2012. Retrieved 27 July 2013.
  7. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
  8. ^ "Burkina Faso". Danube Travel. 5 December 2018. Retrieved 6 January 2019.
  9. ^ "What We Do". Archived from the original on 20 February 2009. Retrieved 11 June 2015.
  10. ^ https://www.afdb.org/en/countries/west-africa/burkina-faso/burkina-faso-economic-outlook/
  11. ^ "List of Goods Produced by Child Labor or Forced Labor". Retrieved 11 June 2015.

External links

BRVM

The Bourse Régionale des Valeurs Mobilières SA ("Regional Securities Exchange SA"), or BRVM, is a regional stock exchange serving the following west African countries:

Benin

Burkina Faso

Guinea Bissau

Côte d'Ivoire

Mali

Niger

Senegal

Togo.The exchange is located in Abidjan, Cote d'Ivoire. Market offices are maintained in each country.

BRVM is a private corporation with 2,904,300,000 CFA francs in capital.

The BRVM Composite Index climbed 18 percent in 2015.

Bank of West Africa (BAO)

Banque d'Afrique Occidentale (also B.A.O. or BAO or Banque de l'AOF): (French for Bank of West Africa) was a bank French colonial authorities established in 1901 in Dakar, Sénégal, as the central bank of the colonies of French West Africa.

Central Bank of West African States

The Central Bank of West African States (French: Banque Centrale des États de l'Afrique de l'Ouest, BCEAO) is a central bank serving the eight west African countries which share the common West African CFA franc currency and comprise the West African Economic and Monetary Union (UEMOA):

Benin

Burkina Faso

Guinea-Bissau

Ivory Coast (Côte d'Ivoire)

Mali

Niger

Senegal

TogoThe Bank is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.

Human trafficking in Burkina Faso

Burkina Faso is a country of origin, transit, and destination for persons, mostly children, subjected to trafficking in persons, specifically forced labor and forced prostitution. The Government of Burkina Faso provided data from the Ministry of Social Action showing that, in 2009, security forces and regional human trafficking surveillance committees intercepted 788 children Burkinabe and foreign children, 619 of whom were boys, destined for exploitation in other countries, principally Côte d'Ivoire, Mali, and Niger. Child trafficking victims who remain inside Burkina Faso are usually found in large cities such as Ouagadougou, Bobo-Dioulasso, Nouna, and Hounde. Child victims face conditions of forced labor or services as plantation and mining hands, laborers on cocoa farms, domestic servants, beggars recruited as pupils by unaccredited Koranic schools, or captives in the prostitution trade. To a lesser extent, traffickers recruit Burkinabe women for nonconsensual commercial sexual exploitation in Europe. Women from neighboring countries like Nigeria, Togo, Benin, and Niger migrate to Burkina Faso on the promise of respectable work, but are subjected to forced labor in bars or forced prostitution.The Government of Burkina Faso does not fully comply with the minimum standards for the elimination of trafficking; however, it is making significant efforts to do so, despite limited resources. The number of child victims intercepted in 2009 exceeds by 100 the already high rate recorded in the previous reporting period. Yet massive flooding in September 2009 destroyed many files and computer systems holding data on trafficking investigations and prosecutions during the year. In prior years, the government conscientiously reported such information. Protection and assistance efforts for victims continued to the extent the country's strained resources allowed.U.S. State Department's Office to Monitor and Combat Trafficking in Persons placed the country in "Tier 2 Watchlist" in 2017.

Liptako-Gourma Authority

The Liptako–Gourma Authority (LGA) is a regional organization seeking to develop the contiguous areas of Mali, Burkina Faso, and Niger.

Created in December 1970, the Authority has as its goal the promotion of the areas mineral, energy, hydraulic, and agricultural resources within a regional framework. The zone covered by the authority corresponds to the border regions of the three countries, and covers an area of 370,000 km², including 19 provinces of Burkina Faso, 4 administrative regions of Mali, and two departments and an urban community of Niger.

This zone is composed entirely of the semi-arid Sahel region. The dominant economic activity is agriculture and livestock herding, but the zone has considerable energy, hydraulic, and mining potential.

List of banks in Burkina Faso

This is a list of commercial banks in Burkina Faso

Bank of Africa (BOA)

Banque Atlantique Burkina Faso

Banque de l'Habitat du Burkina Faso

Banque Régionale de Solidarité

Société Générale de Banques au Burkina (SG-BB)

Banque Internationale du Burkina (BIB)

Banque Sahélo-Saharienne pour l'Investissement et le Commerce (BSIC)

Banque Internationale pour le Commerce, l'Industire et l'Agriculture du Burkina

Banque Commerciale du Burkina

Ecobank Burkina

Banque Agricole et Commerciale du Burkina

United Bank for Africa

Coris Bank

List of companies of Burkina Faso

Burkina Faso, also known by its short-form name Burkina, is a landlocked country in West Africa around 274,200 square kilometres (105,900 sq mi) in size. Burkina Faso is part of the West African Monetary and Economic Union (UMEOA) and has thus adopted the CFA Franc, which is issued by the Central Bank of the West African States (BCEAO), situated in Dakar, Senegal. There is mining of copper, iron, manganese, gold, cassiterite (tin ore), and phosphates.

List of regions of Burkina Faso by Human Development Index

This is a list of administrative regions of Burkina Faso by Human Development Index as of 2017.

Mining industry of Burkina Faso

Gold Mining often plays a significant role in Burkina Faso’s economy. Burkina Faso has become Africas 4th biggest producer of gold in 2012. Production of mineral commodities is limited to cement, dolomite, gold, granite, marble, phosphate rock, pumice, other volcanic materials, and salt. Child slavery is common place in the gold industry.

Outline of Burkina Faso

The following outline is provided as an overview of and topical guide to Burkina Faso:

Burkina Faso – landlocked sovereign country located in West Africa. It is surrounded by six countries: Mali to the north, Niger to the east, Benin to the south east, Togo, Ghana to the south, and Côte d'Ivoire to the south west. Formerly called the Republic of Upper Volta, it was renamed on August 4, 1984, by President Thomas Sankara to mean "the land of upright people" in Moré and Dioula, the major native languages of the country. Literally, "Burkina" may be translated, "men of integrity," from the Moré language, and "Faso" means "father's house" in Dioula.

Shea nut and butter production in Burkina Faso

Vitellaria paradoxa (the shea tree) is extremely important in Burkina Faso. Termed "women's gold" by Burkinabé villagers, the nuts of shea tree can be collected and processed by crushing and grinding to yield shea butter, which is widely used in soap and in cosmetics as a moisturizer, salve, or lotion. Shea butter is also edible and may be used in food preparation; it is sometimes used in the manufacture of chocolate. The bark of the tree is also used as an ingredient in traditional medicines and the shell of nut is said to be able to repel mosquitoes and is also said to protect existing trees.Shea nuts are important in the economy of Burkina Faso. It is the country's third most important export, after cotton and livestock. In 1997, an average tonne of unprocessed shea nuts sold domestically for CFA700,000 (US$980) and overseas for CFA1,000,000 (US$1400). The most important centres of shea butter production are in Sissili Province and Ziro Province.

Telecommunications in Burkina Faso

Telecommunications in Burkina Faso include radio, television, fixed and mobile telephones, and the Internet.

Radio is the country's most popular communications medium. Use of telecommunications in Burkina Faso are extremely low, limited due to the low penetration of electricity, even in major cities. There were just 141,400 fixed line phones in use in 2012, in a country with a population of 17.4 million. Use of mobile phones has skyrocketed from 1.0 million lines in 2006 to 10 million in 2012. Internet use is also low, with only 3.7 users per 100 inhabitants in 2012, just over 643,000 users total. The Internet penetration rate in Africa as a whole was 16 users per 100 inhabitants in 2013.

West African CFA franc

The West African CFA franc (French: franc CFA; Portuguese: franco CFA or simply franc, ISO 4217 code: XOF) is the currency of eight independent states in West Africa: Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo. These eight countries had a combined population of 105.7 million people in 2014, and a combined GDP of US$128.6 billion (as of 2018).The acronym CFA stands for Communauté Financière d'Afrique ("Financial Community of Africa") or Communauté Financière Africaine ("African Financial Community"). The currency is issued by the BCEAO (Banque Centrale des États de l'Afrique de l'Ouest, "Central Bank of the West African States"), located in Dakar, Senegal, for the members of the UEMOA (Union Économique et Monétaire Ouest Africaine, "West African Economic and Monetary Union"). The franc is nominally subdivided into 100 centimes but no centime denominations have been issued.

The Central African CFA franc is of equal value to the West African CFA franc, and is in circulation in several central African states. They are both called the CFA franc.

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