Recent Developments & Prospects
Economic Cooperation, Regional Integration & Trade
Economic & Political Governance
Public Sector Management, Institutions & Reform
Natural Resource Management & Environment
Thematic analysis: Structural transformation and natural resources
Author: Tankien Dayo, Facinet Sylla , Isiyaka Sabo
- Despite the political crisis, lower gold and cotton prices and the Ebola epidemic, strong economic growth is expected in 2015 (5.5%) and 2016 (7%).
- With a high rate of poverty, the government’s main challenge in managing public finances is still to use the country’s mining revenue to create more inclusive growth.
- The government is counting on creating regional growth centres to improve land development, currently focused on the capital.
In 2014, the political crisis, along with lower gold and cotton prices and the Ebola epidemic in West Africa (which led to the cancellation of many international events), had a significant effect on Burkina Faso’s economy. Growth still reached 5.0% (6.6% in 2013) and the outlook for 2015 is positive (5.5%), mainly due to continued infrastructure investment. Thanks to a good 2014 harvest and lower oil prices, which could reduce the cost of imports, inflation should remain within the 3% limit set by the West African Economic and Monetary Union (WAEMU) in 2015.
The economy is vulnerable to changes in gold, cotton and oil prices, to an unpredictable climate and to the direction of political transition in 2015. The high level of poverty in a young population and regional disparities are still major concerns. Despite good progress in education, the fight against HIV/AIDS and better access to clean water, not all the Millennium Development Goals (MDG) will be reached in 2015.
The country has gradually developed a structure where the capital, Ouagadougou, has most of the modern economic infrastructure, while the countryside, where 77.3% of the population live, has little. The main development challenge is to implement a policy of growth centres based on the potential of each region, and provide the regions that have strong economic potential with modern infrastructure, such as roads, energy, water and information technology, that will attract private investment.
Table 1: Macroeconomic indicators
|Real GDP growth||6.6||5||5.5||7|
|Real GDP per capita growth||3.8||2.2||2.7||4.2|
|Budget balance % GDP||-4.4||-3.7||-4||-3.8|
|Current account balance % GDP||-10.4||-10.7||-8.7||-9.6|
Source: Data from domestic authorities; estimates (e) and projections (p) based on authors’ calculations.