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. Real gross domestic product (GDP) growth, which has historically remained steady, is projected to decrease in 2009 to about 3.5%, from 5.3% in 2008.
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. The current global financial crisis and resulting job losses have also negatively impacted remittances.
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. The World Bank's 2009 “Doing Business” ranked Burkina Faso as one of the top ten reformers for 2009. These reforms include the adoption of a labor code in May 2008, improving the process to transfer property, the elimination of commune authorization requirements, the creation of a one-stop shop to facilitate construction permits, a decrease of the corporate tax rate from 35% to 30%, and a decrease on dividend taxes from 15% to 12%. Foreign investors, particularly in the mining sector, have taken note of this development; since 2007, four commercial gold mines and a manganese mine have been opened. Several 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 once again 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 (2008): $9.1 billion.
Annual growth rate (2008): 4.5%.
Per capita income (2008): $440.
Avg. inflation rate (2008): 10.4%.
Natural resources: Manganese, gold, limestone, marble, phosphate, zinc, uranium.
Agriculture (37% of GDP): Products--cotton, millet, sorghum, rice, livestock, peanuts, shea nuts, maize.
Industry (24% of GDP): Type--mining, agricultural processing plants, brewing and bottling, light industry.
Trade (2007): Exports--$404 million: cotton, gold, livestock, peanuts, shea nut products. Major markets--China, Singapore, Thailand, Ghana, Niger. Imports--$783 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).
