ECONOMY
Burkina Faso is one of the poorest countries in the world, with a per capita gross domestic product (GDP) of $440. More than 80% of the population relies on subsistence agriculture, with only a small fraction directly involved in industry and services. Drought, poor soil, lack of adequate communications and other infrastructure, a low literacy rate, and an economy vulnerable to external shocks are all longstanding problems. The export economy also remains subject to fluctuations in world prices.
Burkina remains committed to the structural adjustment program it launched in 1991, and it has been one of the first beneficiaries of the World Bank/International Monetary Fund (IMF) debt-relief and poverty reduction programs for highly indebted poor countries. At least 20% of the government budget is financed from international aid, and the majority of infrastructure investments are externally financed. Growth rates had been more than 5% from the late 1990s through 2006, but slowed in 2007 in part due to depressed world prices for cotton, Burkina Faso's largest export.
Many Burkinabe migrate to neighboring countries for work, and their remittances provide a contribution to the economy's balance of payments that is second only to cotton as a source of foreign exchange earnings. Political and economic problems in Cote d'Ivoire have had a direct impact on this source of revenue for millions of Burkina households. The military crisis in neighboring Cote d'Ivoire negatively affected trade between the two countries, due to the year-long closure of the border between Burkina Faso and Cote d'Ivoire from September 2002 to September 2003. Goods and services, as well as remittances, continue to flow from Burkinabe living in Cote d'Ivoire, but they have been rerouted through other countries in the region, such as Togo, Ghana, and Benin. Commercial and personal traffic across the border is slowly rebuilding steam.
Burkina
is attempting to improve the economy by developing its mineral
resources, improving its infrastructure, making its agricultural
and livestock sectors more productive and competitive, and stabilizing
the supplies and prices of food grains. Staple crops are millet,
sorghum, maize, and rice. The cash crops are cotton, groundnuts,
karite (shea nuts), and sesame. Livestock, once a major export,
has declined.
Manufacturing is limited to cotton and food processing (mainly in Bobo-Dioulasso) and import substitution heavily protected by tariffs. Some factories are privately owned, and others are set to be privatized. Burkina Faso's newly-written investment code has helped to promote foreign investment. U.S. investors, particularly in the mining sector, have taken note of this development, and in 2007, the country's only commercial gold mine was opened. Three others are slated to follow in the next two years. A railway connects Burkina with the port of Abidjan, Cote d'Ivoire, 1,150 kilometers (712 mi.) away. Due to the closure of the border with Cote d'Ivoire, this railway was not operational between September 2002 and September 2003, but cargo and limited passenger service are now offered. Primary roads between main towns in Burkina Faso are paved. Domestic air service and flights within Africa are limited. Phones and Internet service providers are relatively reliable, but the cost of utilities is very high.
GDP (2006): $6.2 billion.
Annual growth rate (2006): 6.4%.
Per capita income (2006): $440.
Avg. inflation rate (2006): 2.5%.
Natural resources (limited quantities): Manganese, gold, limestone, marble, phosphate.
Agriculture (37% of GDP): Products--cotton, millet, sorghum, rice, livestock, peanuts, shea nuts, maize.
Industry (19% of GDP): Type--mining, agricultural processing plants, brewing and bottling, light industry.
Trade (2004): Exports--$439 million: cotton, gold, livestock, peanuts, shea nut products. Major markets--Singapore, China, Thailand, European Union, Asia. Imports--$843 million.
Official exchange rate: Fixed to the euro. Communaute Financiere Africaine (CFA) francs 656=1 euro (2003: approx. CFA francs 579=U.S.$1; 2005: CFA francs 534=U.S.$1).
