INTRODUCTION
1. Agriculture
Burkina Faso - Agriculture employs the vast majority of the work force and accounted for an estimated 35% of GDP in 2000. However, only an estimated 13% of the total land area is under annual or perennial crops. Government attempts to modernize the agricultural sector have met with some success, especially with cotton, whose export accounted for 36% of total exports in 2001. In 1999, about 85% of the 136,000 tons of cotton produced was exported. The resistance to improvement has been due mostly to the insufficient water supply and poor soil.
Burkina Faso is not self-sufficient in food. titlehough total cereal production rose from 1,547,000 tons in 1990 to 2,662,000 tons in 1999, imports are needed to meet demand. |
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In the early 1980s, local laborers constructed a 1,144-km (711-mi) canal to bring water for irrigation from the Black Volta to the newly constructed Sourou Dam. This work was part of a plan to establish 40,000 hectares (100,000 acres) of irrigated land for smallholders and state projects. Production figures for principal subsistence crops in 1999 were sorghum, 1,203,000 tons; millet, 973,000 tons; corn, 378,000 tons; and rice, 89,000 tons. Commercial crops (with 1999 production figures) included cottonseed (185,000 tons), groundnuts (215,000 tons), cotton fiber (136,000 tons), and sesame (13,000 tons). Other important crops are cassava, cowpeas, sweet potatoes, and tobacco. Sugarcane has been introduced on a large scale and is becoming an important cash crop; 400,000 tons were produced in 1999.
2. Mining and mining code
Mining accounted for 1%-2% of GDP; revenues were dominated by gold, the third-leading export commodity. Gold mining output for 2000 was 1,000 kg, and artisanal miners have become the predominant producers. The gold mine at Poura, which was estimated to contain 450,000 tons of ore at a grade of 12 grams per ton of gold, closed in 1999, reportedly because of low gold prices, after completion of an $11.6 million rehabilitation project in 1997 financed by the European Union.
The mine was operated by the parastatal Société de Recherches et d'Exploitations Minères du Burkina (SOREMIB), and production was complemented by the output of tens of thousands of individual prospectors called orpaillages. An estimated 40%-60% of artisanal gold production was smuggled out of the country.Exploitation of an estimated 15 million tons of high-grade manganese ore at Tambao awaited better commercial prospects and completion of a railway extension from Ouagadougou to Tambao. Bauxite deposits have been located in the regions of Kaya and Bobo-Dioulasso.
Significant mineral deposits included copper at Gaoua and Wayen, graphite at Kaya, and phosphate at Kodjari. Four main deposits of limestone have also been discovered. For many years, iron has been worked at Ouahigouya and near Banfora to make farm and home implements. The Perkoa high-grade zinc ore deposit, in development, had resources of 7 million tons and planned to produce 60,000 tons per year with an estimated mine life of 15 years. Other deposits included cassiterite, cobtitle, diamonds, granite, lead, marble, nickel, phosphate rock, pumice, stitle, sand and gravel, uranium, and vanadium. The government adopted a new mining code in 1997 primarily to standardize all the legal measures used to regulate the sector and to amend those parts of the previous legislation that had hindered future development.
3. Business opportunities
Burkina Faso is one of the poorest countries in the world with an average income per capita of 250 (US$300). More than 80% of the population relies on subsistence agriculture, with only a small fraction directly involved in industry and services. Low rainfall, poor soils, lack of adequate communications and other infrastructure, a low literacy rate, and a stagnant economy are all longstanding problems. The export economy also remains subject to fluctuations in world prices.
Current GDP per capita 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 $2-3 per day.
4. Financial & banking institutions
In 1959, the Central Bank of West African States (Banque Centrale des États de l'Afrique de l'Ouest-BCEAO) succeeded the Currency Board of French West Africa and Togo as the bank of issue for the former French West African territories. In 1962, it was reorganized as the joint note-issue bank of Benin (then Dahomey), Côte d'Ivoire, Mauritania (which withdrew in 1973), Niger, Senegal, Togo, and Burkina Faso (then Upper Volta). BCEAO notes, known as CFA francs, are guaranteed by France without limitation. Foreign exchange receipts of Burkina Faso go into the BCEAO's exchange pool, which in turn covers its foreign exchange requirements.
Other banks are the International Bank for Commerce, Industry, and Agriculture of Burkina Faso, the National Development Bank (80% government-owned), the National Fund of Agricultural Credit of Burkina Faso (54% state-owned), the state-owned National Fund of Deposits and Investment, the International Bank of Burkina, Banque Nationale de Paris (BNP), Bank of Africa (BOA), and Ecobank Burkina.The International Monetary Fund reports that in 2001, currency and demand deposits an aggregate commonly known as M1 were equal to $357.8 million. In that same year, M2 an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds was $537.5 million. The money market rate, the rate at which financial institutions lend to one another in the short term, was 4.95%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 6.5%.
Macro Economy of BurkinaFaso
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I. Gross Domestic Product (GDP)
GDP Resources | 2004 | 2005 | 2006 | 2007 |
Current GDP (in billion FCFA)
| 2656.74 | 2862.73 | 3017.82 | 3245.78 |
Per capita GDP current prices (in FCFA) | 204 063 | 214 214 | 219 793 | 230 394
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GDP in constant 1999 FCFA (billions) | 2369.60 | 2537.95 | 2677.66 | 2785.28
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GDP per capita at constant prices (FCFA) | 182 008 | 189 911 | 195 019 | 197 707
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Source: MEF / DGEP, IAP, scenario of March 2008
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II. Consumer Prices
he rate of inflation was -0.3% in 2007 against 2.4 in 2006. The control of inflation can be explained by the 1.6% drop in food prices, 1.6% decline in prices of housing, water, electricity (governmental measures), etc. |
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III. Public Finances
Description | Amount in 2007 (billion FCFA) |
Tax revenue | 440.05 |
Non-tax revenue | 34.85 |
Source: Ministry of Economy and Finance, Review of implementation of priority actions of the CSLP for 2007 |
IV. External Debt
The outstanding global debt went from 1,068.98 billion CFA francs in 2005 (37.3% of current GDP) to 766.45 billion in 2007 (23.6% of current GDP). |
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V. External Situation
| 2006 | 2007 |
Exports (billion FCFA) | 307.6 | 292.7 |
Imports (billion FCFA) | 562 | 585.1 |
Trade balance (billion FCFA) | -254.4 | -292, 5 |
Source: Ministry of Economy and Finance, review of implementation of priority actions program of CSLP for the year 2007 |
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Burkina Faso has a structural trade deficit. The decline in exports in 2007 is due to lower exports of cotton fiber. |
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VI. Status of the Convergence Criteria of the UEMOA
Evolution of the main macroeconomic indicators
| 2006 | 2007 | UEMOA Norms |
Real GDP Growth (%) | 5.5 | 4 |
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Average annual inflation rate-IHPC-(%) | 2.4 | -0.3 | Max 3 |
Overall incidence of poverty (%) | 42.1 | -0.3 | 42.6 |
Basic fiscal balance excluding donations (% of GDP) | -4.5 | -4.9 | Min 0 |
Current account deficit excluding donations (% GDP) | 8.8 | 14.8 | Max 5 |
Gross international reserves (in import months) | 3.7 | 3 |
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Total outstanding debt relative to nominal GDP (%) | 21.8 | 23.6 | Max 70 |
Rate of Fiscal pressure(%) | 11.9 | 12.5 | Low 17 |
Ration on payroll tax revenue (%) | 44.1 | 46.4 | Max 35 |
Public investment financed from own resources related to tax revenue (%) | 42.7 | 35.5 | Min 20 |
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Source: Ministry of Economy and Finance, Review of implementation of priority actions of CSLP for the year 2007. |
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Economic Potential Agriculture and livestock
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Agriculture and livestock contribute on average 35.5% to the GDP and provide employment and income to 80% of the population. The fundamental objective Government is to increase agricultural production by 5 to 10% per year and raise the income level of farmers and ranchers to at least 3% per person per year. The implementation of such an objective requires the Government to seize all opportunities that exist to implement the potential of these two subsectors.
Industry and mining
The manufacturing industry, mining and BTP also hope to see an acceleration of growth in future years. Indeed, the industrial fabric offers real prospects in the field of food processing and import - substitution;
Gold can be found almost everywhere on the entire national territory, along with numerous other minerals;
Massive sulfide deposits at Perkoa contain more than 6 million tons of zinc ore .
More then 19 million tons of manganese ore deposits have been identified at Tambo. The tertiary sector
Contributing more than 40% to the GDP, the tertiary sector is the first economic branch of the country that can still consolidate its position.
Given its geographical position in the West African community, our country is challenging in its position of becoming a hub and crossroads of the regional economy especially in the tertiary sector: transport, forwarding, insurance, banking, services related to telecommunications, new technologies of Information and communication ... and hence the theme these days is “Investing in Burkina Faso: a door to the large West African market.”
Handicrafts
Handicrafts occupy about 900 000 people and contributes nearly 30% to the GDP.
This is the 2nd main source of employment after agriculture and Livestock.
Burkina Faso stands today as a showcase for African crafts, organizing every two years the International Handicrafts Show at Ouagadougou (SIAO).
The tourism industry - hospitality -
This sector is booming with nearly 310,000 arrivals in 2007 which today places us at the 5th position at the sub regional level.
The government's efforts to promote the tourism sector – hospitality aim especially at strengthening the regulatory framework activities for more professionalism and quality tourism service.
All this great potential is enhanced by our additional rendez-vous that are the International Handicrafts Show of Ouagadougou (SIAO), the eleventh edition of which was held from 31October to 9 November 2008, Pan African Film Festival of Ouagadougou (FESPACO), the International Book Fair of Ouagadougou (FILO) and the National Cultural Week (SNC).
With its six tourism zones, Burkina Faso can offer visitors a variety of products ranging from business tourism and vacation conventions through hunting and hiking;
Finally, to diversify its promotion strategies as well as to contribute to the development of sub regional tourism, Burkina Faso has created the SITHO, the International Exhibition of Tourism and Hospitality of Ouagadougou
This is a new space for contacts and partnership opportunities that we want to share with all professionals in the tourism and hospitality sector. |
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Main Important Programs & Projects
1. Major economic infrastructure projects
A large project to develop economic infrastructure which includes the reorganization of the business township in downtown Ouagadougou by the development of the Commercial and Administrative Activities Zone (ZACA) over an area of 46 hectares at a cost of 50 million Euros. Here investors find the opportunity to invest in real estate and construction of market units.
The extension of the Diverse Activities Zone (ZAD) with the development of 200 plots over an area of 46 hectares to establish interested SME/SMI particularly in the field of processing.
The construction of a new international airport near Ouagadougou, Tabtenga for nearly 183 million Euros, with BOT system with a strong private sector involvement.
The electric interconnection Burkina - Ghana and Burkina – Ivory Coast for a nominal voltage of 450,000 volts, 421 kms long and a global implementation cost of about 61 million Euros, with the aim of significantly reducing the cost of electricity.
Major rail interconnection projects in West Africa of which one that will link Ouagadougou to Kumasi, Ghana.
Projects for electrification of rural areas for nearly 40 million Euros.
The development of tourist sites for 2 million Euros.
The State has initiated other projects of public-private partnership in the domain of road infrastructure and hydro agricultural development whose cost of implementation researched with external partners amounts to over 144 million Euros.
2. Privatization program and disengagement of the State from productive sectors
The different areas of Privetisation are :-
The privatization of the Burkinabè National Electricity Company (SONABEL), a State corporation with a capital of 70,126 ,548 Euros and which produces over 360,000 MW of thermal and hydraulic energy.
The opening of the capital of the Burkinabè National Company of Hydrocarbons (SONABHY), a State corporation with capital of 4,573, 471 euros, which imports, stock and supplies the country with hydrocarbon for a demand of more than 135 million Euros per year.
The privatization of the international airports of Ouagadougou and Bobo-Dioulasso which have seen a marked change in their performance, since 1995.
Privatization of the Control Center of Automotive Vehicles (CCVA), a State corporation with a social capital of 649,768 Euros, which realizes all the technical visits of the Burkinabè industrial park.
3. Private sector projects
The strong delegation of the Burkinabe economic operators carries many mature and credible projects in terms of:
Processing of local products: oilseeds, fruits and vegetables, cotton, livestock, milk, animal feed.
Promotion of tourist sites.
Production of mineral water.
Import - substitution like the production of wheat, cement, paint and dyes and plastic bags.
Export of medicinal plants.
The tertiary sector.
Production of biofuels through jatropha, etc.
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