Burkina Faso is a low-income, landlocked, Sub-Saharan country with limited natural resources and population estimated at 14 million inhabitants. The country’s economy is dependent on cotton exports and vulnerable to exogenous shocks, though over the last two years mining is becoming increasingly important in the economy. Between 2000 and 2010, Burkina Faso maintained an average growth rate of over 5.2 % per annum. According to the IMF, annual growth rate contracted from 5.2% in 2008 to 3, 2% in 2009 as a result of a series of exogenous shocks: climate shock, energy crisis, fluctuating commodity prices and global financial crisis. The economy recovered in 2010 (7 % of economic growth) due to a substantial increase in gold exports and increase in the metal’s prices on international markets. Economic growth is targeted at 5.8 % in 2011.

Burkina’s poverty rate is estimated at 43, 9% and the country ranked 161th out of 169 countries in UNDP’s Human Development Index in 2010.

Political context

Since December 2010, an unprecedented succession of protests and civil unrest has weakened two decades of relative political stability. The unrest climaxed with military mutinies in March, April and end of May 2011 but stability was restored since. The President appointed a new Prime Minister, who together with his new cabinet has been conducting extensive consultations with a broad range all stakeholders to address the growing demand for better shared economic growth and better governance.

Development challenges

Despite reforms and progress in many areas over the years, important challenges remain.

Vulnerability and lack of diversification

Burkina Faso’s economy relies predominantly on the performance of the cotton sector (23% of exports in 2009, 32% in 2008). This makes the economy particularly vulnerable to fluctuating cotton prices and to the impact of climate changes. Despite the increase observed in gold exports (42% of exports in 2009 and 53% in 2010) the economy remains vulnerable. The newly-released Strategy for Accelerated Growth and Sustainable Development (SCADD) was designed with an ambitious goal of 10% economic growth per annum over the five upcoming years and a focus on addressing vulnerability through transformation and diversification of the economy and better sharing of the benefits of growth.

Human development

Sustained efforts and investments have resulted in positive trends in human development: infant mortality dropped from 107 deaths for 1000 live births in 1995 to 81 (DHS, 2003), maternal mortality ratio dropped from 484 for 100000 live births (DHS 1995) to 307, and contraceptive prevalence rate for modern methods increased from 13% is 26.7% (Source: Ministry of Health). Gross primary school enrolment is fast increasing, from 57% in 2005 to 72.4 % in 74.8% in 2010 and 77.6% in 2011.

Sustained efforts and investments have resulted in positive trends in human development: infant mortality dropped from 107 deaths for 1000 live births in 1995 to 81 (DHS, 2003), maternal mortality ratio dropped from 484 for 100000 live births (DHS 1995) to 307, and contraceptive prevalence rate for modern methods increased from 13% is 26.7% (Source: Ministry of Health). Gross primary school enrolment is fast increasing, from 57% in 2005 to 72.4 % in 74.8% in 2010 and 77.6% in 2011.

Despite increasing school age cohorts, the youth literacy rate is 28, 7 % for Burkina Faso in 2010, compared to 70% for the Sub-Saharan Africa region, and life expectancy at birth was 57 years (INSD, 2009), slightly above the regional average of 50 years. Access to secondary education has also improved, passing from 20% in 2005 to 30% in 2010, although quality is still an issue.

Nonetheless, the Overall figures remain alarming with regard to skills availability to improve youth employability and contribute to economic growth. Beyond the quantitative aspect of access to education, more important is an acceptable level of learning. A recent study found that 65 percent of students in grade 6 have not acquired the basic competencies specified in the curriculum. Inadequate learning achievement at the primary level is an important reason for the disappointing performance of students in lower secondary and is reflected in a high secondary repetition rate of about 25 percent.   Higher education in Burkina Faso also faces substantial challenges with regards to labor market relevance. Labor market analysis shows a quantitative imbalance between the outgoing tertiary education (estimated at 3,200 annually) and senior and middle level jobs commensurate with their training (about 900 per year). In addition, there is a qualitative imbalance between higher education graduates (over 50 percent study arts, law and other social sciences) and labor market needs. As result of these two factors, the unemployment rate is high among young tertiary graduates, 21 percent.

The government is preparing a new ten year program putting emphasis on learning outcomes improvement and inequities reduction. For TVET and tertiary education, the government and the Bank opened discussions aiming to prepare and implement an ambitious reform to improve the relevance and the efficiency of the TVET and the tertiary education system in order to provide the Burkinabe economy with highly skilled people with a strong link to the private sector needs.

With limited fiscal space and a rapidly growing population requiring more basic services, improved governance and efficiency in delivering services at the local level will be critical to underpin improvements in human development.

Demography

The 2006 census showed a demographic growth rate of 3.1% (compared to 2.3% in 1996).  This unbridled population growth results in the doubling of the population with every generation and greatly hinders the impact of initiatives to reduce poverty and foster human development. Burkina Faso’s population growth, if not managed, will increase food insecurity, accelerate environmental degradation and put the job market under stress. A review of the national population policy is expected to define measures to control demographic growth.

Government’s development strategy

After a comprehensive assessment of the ten-year implementation of the PRSPs, the authorities of Burkina Faso prepared, through a participatory process, involving key stakeholders (central and local administration, civil society, donors, parliament, etc.), the Strategy for Accelerated Growth and Sustainable Development (SCADD).  The SCADD targets a 10 percent per annum economic growth rate to reduce poverty to 35 percent between 2011 and 2015. The SCADD has four strategic pillars:

• Pillar 1: Accelerated growth. 
• Pillar 2: Human capital development and social protection.
• Pillar 3: Improving the governance environment.
• Pillar 4: Cross-cutting priorities and themes of development policies and programs.

Stronger private sector investments, public private partnerships and development of growth poles are key elements of the SCADD’s implementation. A new M&E framework was designed to help assess the impact of the SCADD on growth acceleration and poverty reduction.

 

The World Bank’s strategy in Burkina Faso 

The 2010-2012 Country Assistance Strategy was endorsed by the Board of Directors in September 2009. It is well aligned with the current Government’s development strategy.  The CAS’s underlying principles are: transformation of the Burkinabe economy, adaptability to a global context marked by crisis , selectivity of the Bank’s interventions, and lastly, a strong focus on results and efficiency.

The 2010-2012 CAS provides for a total engagement of 485 million US Dollars supporting the Strategy’s two thematic pillars: i) Reducing economic vulnerability and promoting growth through economic transformation and ii) Sharing growth through improved service delivery.

The strategy has three cross-cutting themes of focus:

• Capacity building;
• Demography;
• Governance and anti-corruption

 

The current Bank portfolio in Burkina Faso is composed of 14 national projects representing an engagement of 676 million USD, and 5 regional projects representing and engagement of 385 million USD. The portfolio’s overall implementation performance is satisfactory, with average on-going implementation duration of 4.6 years.

A few selected areas outlined below illustrate the World Bank contribution to Burkina’s development results:

Rural development

The Second Phase Community Based Rural Development Project’s support to the country’s 302 rural communes came in diverse forms : i) communes benefitted from technical and financial support to elaborate a participative communal development plan; ii) members of communal councils were trained – amongst others, on the elaboration of local development plans, procurement, participative monitoring and evaluation, communication, management of infrastructures, literacy campaigns, etc.; iii) in 2009, over 15 million USD financed the implementation of micro-projects in communes..

Private sector

The 30.7 million US Dollar Burkina Faso Competitiveness and Enterprise Development Project supported the improvement of competitiveness and the development of enterprises:

• The reform in the telecom sector lead to an increased teledensity (number of telephone lines per 100 inhabitants) from 1.5 in 2003 to 27.6 in 2009).
• The Maison de l’Entreprise du Burkina Faso (MEBF) assisted in the development of enterprises and set up a one-stop counter for the delivery of construction licenses.
• The project contributed to the creation of 3600 enterprises, 2500 formal jobs, the reduction of the delay to create an enterprise from 47 days in 2004 to 7 presently, the reduction of the delay for the issuance of a construction from 226 days in 2004 to 30 days today and the constant improvement of the country’s ranking in the Doing Business Better in Burkina Faso report. Lastly, the Bank has been advising the authorities to support Burkina’s candidacy to the Extractive Industries Transparency Initiative to strengthen the governance and transparency of the mining supply chain.

Water and sanitation

The Ouagadougou Water Supply Project, co financed by the World Bank, helped to restructure the Water and Sanitation Office (ONEA) improve operational management of the sector, increase access to drinkable water, and ensure reliability of water supply.

As a result, 1,040 million people have access to drinkable water (versus 300000 at project launch) mostly in low-income peri-urban areas; 24/7 water supply service is now assured to 94% of the capital’s population ;  bill/fee collection as well as the commercial staff productivity index improved and ONEA recovered it financial stability, making the utility one of the best performing in the region and the supply and quality of water in Ouagadougou an example for Sub-Saharan Africa.

Crisis response

The World Bank was quick to assist the Burkinabe Government in addressing the impacts of the September 2009 floods. By helping a Post Disaster Needs Assessment and restructuring its portfolio to address emergency needs and participate in the financing of the reconstruction of damaged social and economic infrastructure.

In 2010, the World Bank mobilized additional resources through the IDA Crisis Response Window and the Vulnerability Fund to support the Government in implementing the economic recovery plan.

International Finance Corporation in Burkina Faso

In April 2009, IFC and the Government of Burkina Faso signed a Share Purchase Agreement of up to 3% of Onatel’s capital. IFC signed, in July 2008, a Trade Finance agreement with Ecobank-Burkina Faso, as part of an investment package with its parent, Ecobank Transnational Inc. (“ETI”). The Trade agreement provides a trade finance guarantee for up to US$ 5 million.

In mining, IFC acquired in 2009 a 3 million dollar share in Gryphon Minerals. This participation will allow Gryphon to finance its on-going exploration program in the South western part of Burkina Faso.  In March 2010, IFC engaged an 8 million US dollar participation in the capital of Volta Resources, yet another mining company. This will support the company in financing its exploration operations as well. Notable is the fact that IFC’s activities alongside these two companies include assistance in the management of environmental and social issues.

In collaboration with the World Bank’s Department in charge of the improvement of business environment, IFC prepared the « Doing Business Better in Burkina Faso » report to improve specific aspects of the national investment climate. The program has achieved substantial results by assisting the Government in taking measures to facilitate the creation of enterprises, the issuance of construction permits, property registration, cross-border business and settlement of commercial disputes. A new labor code focusing on job creation was also adopted in May 2008.

Aid harmonization and partnership between the Government and donors is quite advanced in Burkina Faso, with the Government actively taking the lead in coordinating and harmonizing donor activities.  Development partners are well organized in joint groups of sector discussions, overall monitoring of development strategy implementation and joint budget support. An internet-supported aid management platform was set up to help the Government systematically monitor donor funds and will back-up the National Action Plan for Aid Efficiency (PANEA). This platform will also further facilitate the alignment of donor assistance with the country’s development priorities, improve predictability of aid flows and reinforce aid coordination.