Burkina Faso flag Burkina Faso: Economic and Political Overview

The economic context of Burkina Faso

Economic Indicators

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In recent years, Burkina Faso experienced strong economic growth, driven by gold and cotton production. However, the coronavirus crisis and then political and security issues negatively impacted this dynamic. After recovering from the pandemic in 2021 (reaching 6.9%), GDP growth slowed down to 2.5% in 2022 due to political uncertainty and deteriorating security conditions (IMF revised estimates). A rebound is expected in 2023 (4.8%) and 2024 (5.2%) with the opening of new mines and efforts to improve security conditions (IMF).

In 2022, the economic recovery was interrupted by two military coups, justified by its perpetrators by the government's inability to contain the jihadist insurgency. In addition, rising food prices as a result of the war in Ukraine worsened the food crisis and weighed on the budget. Inflation increased from 3.9% in 2021 to 14.2% in 2022, and it is expected to fall to 1.5% in 2023 and 1% in 2024 due to declining global oil and food prices (IMF). High current transfers and investment in security-related equipment have contributed to the widening of the fiscal deficit from 7.5% GDP in 2021 to 10.3% GDP in 2022 (IMF). Overall fiscal deficit is expected to remain large in 2023 (around 8% GDP), due to elevated security spending and subsidies (IMF). The deficit will be financed by bilateral and multilateral loans, international grants and recourse to the regional bond market (Coface). Public debt increased from 52.4% GDP in 2021 to 59.6% GDP in 2022, and is expected to decrease marginally to 59.3% GDP in 2023 and 58.5% GDP in 2024 (IMF). The 2023 budget is mainly focused on strengthening security, through the deployment of 3,000 additional soldiers and the purchase of new military equipment (Coface) ; and addressing the substantial social needs related to the humanitarian crisis. In February 2023, IMF staff and the Burkinabé authorities have reached a staff-level agreement for about USD 80 million in emergency financing through the IMF’s Food Shock Window of the Rapid Credit Facility. This agreement will help support measures to provide urgent assistance to households in acute food insecurity conditions (IMF). Besides, the National plan for economic and social development is channelling public investments in road infrastructures and construction. Burkina Faso's economy is hampered by its faulty infrastructure, including electrical infrastructure. The country is also vulnerable to the volatility of oil import prices as well as gold and cotton prices. In the medium term, the country will have to modernize its public affairs management, readjust public finances, reform the financial system and improve the business climate. Burkina Faso is considered to have a high risk of over-indebtedness, as it is extremely dependent on foreign aid.

According to the World Bank, more than 40% of the population still lives below the poverty line of USD 1.25 a day. In recent years, the country has made considerable progress in the area of education. Nevertheless, insecurity and terrorism are taking a heavy toll in several regions of the country, negatively affecting the education sector. More than 1.5 million persons have been internally displaced, 2.6 million people are in acute food insecurity and by May 2022, more than 16% of educational institutions were closed because of the insecure environment (World Bank, IMF). In 2021, the unemployment rate in the country was at 5.2% (ILO estimate).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 18.9320.7922.9224.8526.82
GDP (Constant Prices, Annual % Change) 1.54.46.46.05.6
GDP per Capita (USD) 8328889521,0051,054
General Government Gross Debt (in % of GDP) 58.361.261.261.460.9
Inflation Rate (%) n/a1.43.02.02.0
Current Account (billions USD) -1.17-1.06-1.18-1.20-1.21
Current Account (in % of GDP) -6.2-5.1-5.2-4.8-4.5

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

The economy of Burkina Faso is mainly based on agriculture, but the country is Africa's 5th largest producer of gold. The agricultural sector accounted for an estimated 17.5% of Burkina Faso’s GDP in 2021. About 26% of the population is engaged in subsistence farming and cotton is the main cash crop (World Bank). Other cash crops are groundnuts, shea nuts and sesame. Staple crops are pearl millet, sorghum, maize, and rice.

The industrial sector is dominated by State-owned corporations, and contributed to 32% of GDP in 2021. It employs 25% of the total workforce of the country (World Bank). Gold accounts for 77% of the country’s total exports (Comtrade), thus making Burkina Faso really sensitive to the fluctuations in the price of this commodity.

The services sector accounted 42.1% of the GDP in 2021, and employed 49% of the total workforce - almost 30% of these jobs were generated in the financial system. The banking sector – which is very dense, with the three largest banks holding almost 60% of total financial sector assets, is one of the economy’s pillars.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 73.3 7.1 19.7
Value Added (in % of GDP) 20.4 29.3 40.9
Value Added (Annual % Change) 8.5 -5.5 5.3

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

Score:
56,5/100
World Rank:
124
Regional Rank:
21

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.
 

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Latest Update: December 2023

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