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Overview

Recent Developments & Prospects

Macroeconomic Policy

Fiscal Policy

Monetary Policy

Economic Cooperation, Regional Integration & Trade

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Thematic analysis: Structural transformation and natural resources

Author: Tankien Dayo

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  • Burkina Faso suffered from lower gold prices in 2013. Despite difficult economic circumstances, real growth remained strong at 6.9%. It was down, however, from 9.0% the previous year. Agriculture and mining remained the main engines of growth in 2013.
  • The weak capacity to absorb public investment is the main problem with state finances. This constitutes a growth constraint and could harm Burkina Faso’s chances of reaching the Millennium Development Goals by 2015.
  • Burkina Faso struggles to participate in global value chains (GVCs) because of poor infrastructure and access to energy and a lack of skilled labour. The country needs to put in place a coherent strategy to develop GVCs.

Burkina Faso saw dynamic economic growth in 2013 despite a fall in gold prices on international markets. The GDP is estimated at 6.9% in 2013 after 9.0% the previous year. Growth of 7.0% is predicted for 2014. Agriculture and mining should be the main growth generators. The agricultural sector could benefit from measures to speed up productivity gains, particularly through access to agricultural inputs and equipment. Mining should be boosted in 2014 by increased gold production.

Inflation should be controlled through lower food prices. The government has set up special stores across the country to sell consumer products at prices accessible to low-revenue households. Inflation is expected to remain under 3% in 2014 and 2015, below the average for West African Economic and Monetary Union (WAEMU) member states.

The government is also launching a vast infrastructure building programme as part of its accelerated growth and sustainable development strategy, known under the French acronym SCADD. Work will concentrate on buildings and roads, events for the commemoration of Burkina Faso’s independence and paving major roads, particularly from Dédougou to Nouna and the Mali frontier, Ziniaré to Zitenga and Boromo to Skeins. Work is also about to start on Ouagadougou’s new Donsin airport. Major work on the runways should start in 2014 and the airport should be finished in 2017. The government is also pushing ahead with development programmes and growth zones, including at Bagre, Sourou and Samandéni. Low capacity to absorb public investment is a key obstacle, so the country must reform the way it prepares and executes projects to improve results.

The social climate remained tense in 2013 because of the authorities’ intention to revise the country’s constitution to allow the president to serve a fifth term, and also because of the high cost of living.

After major political tensions in 2011, legislative and municipal elections were held in December 2012 without any major incidents, and a normalisation of the social-political atmosphere was expected in 2013. However, the adoption in May 2013 of a law creating a senate set off a new peak in tensions, with protest marches organised by opposition political parties and civil society groups.

In a bid too calm protests, the government slowed the process towards creating a senate and, in September, took social measures to counter the high cost of living. The government still intends to set up the senate and revise Article 37 of the constitution on the limitation of mandates. The period up to the next presidential election in 2015 is certain to be a risky one for the country. The main political challenge will be to ensure a smooth political transition in 2015.

Table 1: Macroeconomic indicators

 20122013(e)2014(p)2015(p)
Real GDP growth96.976.3
Real GDP per capita growth6.14.14.23.5
CPI inflation3.82.11.71.9
Budget balance % GDP-3.1-3.2-3.6-4.7
Current account balance % GDP-0.8-0.7-1.5-1.4

Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.

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