Country Brief

Last updated March 2009

History                                                                                 

Burkina Faso is a poor, landlocked, sub-Saharan country of 14 million inhabitants. Burkina Faso has limited natural resources and rainfall, an economy that is strongly dependent on cotton exports and vulnerable to exogenous shocks. Low cotton prices and adverse climatic conditions in 2007 resulted in a slow down of growth reversing a 10 year good performance of real gross domestic product (GDP) growth rates of over 5 percent per year since 1994 and 4 percent. In 2007, growth slowed down to 3.6 percent. After a rebound in 2008 with a 5 percent growth rate the projected growth rate for 2009 is 3.4 percent.

In 2007 real per capita income was US$430, an increase of over 50 percent since 1994, but still below the US$578 for low income countries and US$952 for Sub-Saharan African. After a significant decreased of poverty from 55 percent in 1998 to about 42.6 percent in 2007, poverty rate has slightly increased by 0.2 percent point in 2008 reflecting slower growth and increased household vulnerability.

Despite sustained efforts and investments resulting in some positive trends in social welfare - infant mortality rates fell from 107 per 1,000 live births in 1995 to 81 in 2008, maternal mortality rate at 484 per 100,000, and the contraceptive prevalence rate at 25.7%.

The gross primary school enrollment rate has also risen quickly, from 57 percent in 2005 to 72.5 in 2007 but is at 71.5 percent in 2008 due to adjustment made after the 2006 National Census which showed a substantial annual increase of the population from 2.3 percent in 1996 to 3.1% in 2006, youth literacy rate was 33 percent and life expectancy at birth was 52 years, compared to 70 percent and 50 years for Sub-Saharan Africa.

Political context

Burkina Faso has enjoyed political stability since 1987. In the last presidential elections in November 2005, President Blaise Compaoré won a third, five-year term. The President’s party “Congress for Democracy and Progress” (CDP), enjoys a strong position in Burkina’s multi party system: at the last elections of 2007, CDP won 73 seats out of the 111 seats of the National Assembly. Municipal elections took place on April 23, 2006, resulting in the first-ever elections of local governments for 302 newly established rural communes. Presidential elections are scheduled for the last quarter of 2010, with Parliamentary and local election following in 2011 and 2012.

Civil society is slowly gaining strength and position and is more actively included in the debates and implementation of Government’s development agenda. Since 1991, the number of the media, written or audiovisual, has increased significantly and Burkinabe press shows dynamism despite significant financial, technical and human constraints it faces.

Economy

Since 1991 the country has implemented substantial economic and social reforms with support from the World Bank, the IMF, and other donors. Much progress has been made in liberalizing the economy and developing the private sector. As a result, Burkina Faso has established a good track record over the past 10 years (1995-2005), on macroeconomic performance. However, deeper structural and institutional reform are still needed to support diversification of an economy still based on low productivity agriculture with a single major export crop (cotton)., which makes it vulnerable to exogenous shocks (volatility of export and import prices and fluctuations in rain fall. The country major challenges remain the unfavorable investment climate, including a cost of infrastructure (electricity and transportation), lack of skilled workers and a weak judicial system.

In the wake of the world financial crisis, Burkina Faso’s external environment remains fragile. The weaker external demand and lower commodity prices are likely to be the main transmission mechanism of the global financial crisis to Burkina’s economy. In 2000, Burkina Faso became one of the first developing countries to prepare a full Poverty Reduction Strategy Paper (PRSP). Donors have progressively aligned support to the PRSP. A third PRSP is scheduled to be presented in 2010 Key issues (among others) examined by the Government with the support of the World Bank include (i) how to better mitigate economic risks in the face of price, exchange rate and climatic volatility, (ii) how to identify new sources of growth and improve the investment climate, (iii) what reforms are needed for a more effective financial sector, (iv) how to increase the efficiency of government expenditure and ensure that it is pro-poor, (v) how to achieve effective decentralization, (vi) how to better protect the most vulnerable.

For general information on the country and economy, refer to the :

• Presidency web site at http://www.presidence.bf/,
• and the Ministry of Finance and Budget web site at  http://www.finances.gov.bf/SiteFinances

Donor coordination

Donor coordination and harmonization is well advanced in BF. Aligning with the Government PRSP, donors provide coordinated general budget support and investment funding including through pooled funding in education, health and HIV/AIDS. Overall, strong donor harmonization has contributed to more predictable aid flows and is encouraged the strengthening and use of country systems.

In 2007, supported by Burkina Faso’s “Plan d’Action National de l’Efficacité de l’Aide’’(PANEA) the donors agreed to prepare a joint strategy. Currently, four working groups are developing the strategy in the following areas: (i) better division of labor between donors; (ii) rationalization of the dialogue framework related to sector wide approaches; (iii) harmonization of donors’ administrative procedures; (iv) joint diagnosis and missions. The joint strategy is expected to be finalized in 2010 and will be aligned with the Burkina’s third Poverty Reduction Strategy (currently under preparation).

The government is actively taking the lead in donor harmonization: an Aid Management Platform, based on web technology, will help the Government monitor systematically aid flows and will support the National Action Plan for Aid Effectiveness (PANEA). Further facilitate alignment of aid to the country's priorities, improve predictability and strengthen coordination.

IDA

Since the beginning of 1994, total IDA commitments for Burkina Faso have amounted to US$1.2 billion, funding 72 operations. This includes 12 budget support operations, including eight Poverty Reduction Support Credits. Sustained support for Burkina’s transition to a market economy has been critical and has made a measurable difference in a number of areas. The current IDA portfolio consists of 18 active projects, with a total volume of US$617 million, including four regional programs. Overall portfolio quality and performance is satisfactory.

A Country Assistance Strategy (CAS) for the FY06-09, approved by the World Bank Board of Executive Directors in May 2005, supports the pillars of the national poverty reduction strategy with analytic work, technical advice, on-going operations and new financing.

A sharper focus on private sector development is being put in place with considerable progress in doing business indicators (Burkina jumped from the 163th rank in 2007 to the 148th rank in the overall ratings of the 2009 Doing Business Report Also, Governance diagnostic work, involving civil society, has been launched and the Bank is supporting the Government in improving the functioning of government control and audit institutions, and the demand for governance at the local level through support of decentralization and local development.

In 2008, in response to the food crisis, the World Bank has worked quickly with the Government to evaluate the size and impact of the shocks and help the country get through the crisis without reversing recent development trends. An emergency program was put in place to help mitigate immediately the harshness of the shocks, especially on the most vulnerable, helped to distribute 3,500 tons of improved seeds, 3.5 million meningitis vaccines, micronutrients such as plumpy’nut to more than 3 million children and pregnant women, school feeding programs to an additional 200,000 poor children for two years in 15 provinces.

A new 2010-2012 CAS is under preparation (Board, September 2009). The CAS is focusing on helping Burkina withstand the impact of the global recession and prepare for a transformation of the economy through intensification and diversification. The CAS will also focus on effectiveness of service delivery, and will put increased emphasis on social safety nets.

IFC Role in Country Strategy

IFC’s strategy for Burkina Faso is focused on:

• improving the investment climate;
• capacity-building for medium-size-enterprises and support to financial institutions to allow them to cater to the SME segment,
• providing direct technical support to medium-size enterprises operating in sectors that can have positive externalities on other related sectors (e.g. agriculture, construction, transport); and,
• proactive support for project development in the financial, hospitality, infrastructure and mining sectors.

In conjunction with World Bank, IFC is in the process of preparing a joint Country Assistance Strategy for Burkina, which will allow us to leverage on the strengths of the two institutions to more efficiently serve the country. Simultaneously, PEP Africa, in collaboration with FIAS and the World Bank, has established the Doing Business Better program to strengthen specific areas within the business environment.

As of February 28, 2009, IFC’s committed portfolio in Burkina Faso was US$18.7 million with US$17.7 million outstanding.

MIGA Role in Country Strategy

MIGA’s portfolio in Burkina Faso consists of 1 project, in support of the country’s tourism sector, with a gross exposure of US$1.7 million. The Agency issued guarantees (against the risks of transfer restriction, expropriation and war and civil disturbance) to a Malian investor for its equity investment and loan guarantee toward a hotel renovation and expansion. The project aims to support the country’s efforts to establish itself as a regional center for business tourism. It is a joint collaboration between IFC and MIGA and supports the Bank Group’s country assistance strategy for Burkina Faso, which identifies the development of the private sector as one of its pillars. Pipeline. During FY09, MIGA is working with Canadian investors to provide guarantees for their investment in a gold mining project in Burkina Faso.

World Bank Institute (WBI)

WBI has embarked on Strategic Renewal resulting in a focus on four cross-cutting themes that are responsive both to corporate priorities and to strong country demand, including: Fragile and Conflict-affected States, the Global Economic Crisis, Governance, and Climate Change. Three sectoral themes will also feature prominently: Health Systems, Public-Private Partnerships in Infrastructure, and Sustainable Urban Development. Several new business lines will be used to support these themes: structured learning programs; just-in-time practitioner knowledge exchanges (South-South; MIC-OECD); and innovation platforms to identify and incubate innovative ideas, and nurture practitioner-generated, replicable solutions to development challenges. The Institute will extend its reach and connect experts around the globe by partnering with country and regional organizations and practitioner networks and by applying new learning technologies more broadly. Burkina Faso continues to be an active participant in WBI programs, particularly in the areas of education and sustainable land management and natural capital. Several participants from Burkina Faso also attended WBI Regional events, such as those for parliamentarians on financial oversight and for policy makers on health system development.