Burkina Faso Currency

Burkina Faso Economic Situation

Africa

With extremely unfavorable economic conditions, Burkina Faso remains in the very bottom place in all country comparisons. A rudimentary agriculture and a lack of industry leave the population in poverty. The government is betting on economic growth and trying to make progress in the fight against poverty through acceleration programs.

GDP: US $ 15.75 billion (2019)

GDP per capita (PPP): 821 US $ (2019)

Human Development Rank (HDI): Rank 182 of 189 (2019)

Proportion of poverty (less than $ 1.25 per day): 40.1%, 2014

Distribution of income (Gini coefficient): 35.3 (2014)

Economic Transformation (BTI): Rank 100 of 137 (2020)

Burkina Faso is one of the poorest countries in the world. In the report of the United Nations Development Program (UNDP) of 2020, the country ranks 182th out of a total of 189 countries examined with a value of 0.452. Over 40% of the population live below the poverty line of US $ 1.25 per day (Lexas).
In Burkina Faso, almost all economic indicators are bad. The economy suffers significantly from fluctuating world market prices for the main export products. The unfavorable geographical location as inland and the lack of access to economic markets and the resulting high transport costs have no less negative effects. Although the country has great potential in terms of mineral resources (manganese, silver, gold, zinc, copper, phosphate, titanium, nickel, lead and bauxite), the infrastructures for mining are still lacking. Some experts lead the desperate economic situation as due to the low level of education and the relatively rapid population growth. Very fluctuating weather conditions (with floods and droughts) as well as a lack of inexpensive energy sources are further disadvantages of the location, which affect economic development and will also have a significant impact in the foreseeable future. Subsidies, cheap imports and gifts from leading industrialized and emerging countries (USA – cotton, textiles from Asia, EU – milk powder and meat, Japan – rice…) ensure that Burkina Faso in its very own areas as an agricultural country is no longer just for the Export can produce, but is no longer competitive even on the domestic market. That corruption, Oligarchy and bad governance are also obstacles to economic development, shows the licensing of gold mining. It is not transparent to what extent the enormous profits that are being made in this sector contribute appropriately to raising the level of education or building the infrastructure and thus improving the economic indicators.

The economic growth (GDP growth rate) was 2014 (the year of political upheaval), according to World Bank statistics, to 4.05% return. The real GDP growth rate remained stable at 4.0% in 2015, which, according to our own assessment, demonstrated the resilience of the economy in the face of external and internal shocks. For 2016 it was 5.4%, for 2017 6.74% and for 2018 6.5%. For 2019, growth is given at 5.7% (IMF). The reasons for the renewed growth lie in the export of gold and the return to democracy. After negative growth in 2020, a decrease of 2.0% is forecast for 2021. The inflation rate was 0.91% in 2015 and rose slightly to 2% in 2018. After a negative value in 2020, 2% is expected again for 2021.

With a population growth of 2.66% in 2020 and the high degree of underdevelopment, low growth rates mean stagnation and regression rather than actual development. The poverty rate is falling only very slowly and youth unemployment is becoming a growing problem.

Services

The tertiary sector regularly accounts for 40 to 45% of GDP. It is characterized by export and import trade as well as widespread, mostly informal retail trade, transport and catering.

Migrant work and youth unemployment

As a result of the poorly developed economy and the climate-related fluctuating crop yields, 3 to 5 million Burkinabe workers work abroad, mainly in the Ivory Coast. The civil war in the neighboring country had serious negative effects on Burkina Faso’s economy. However, these have turned out to be less dramatic than originally expected.

According to neovideogames, one of the greatest challenges for Burkina Faso today is to create jobs and employment opportunities so that the rapidly growing population does not fall into poverty. The orientation of the mid-2016 created the program “building with the people of Burkina Faso, a country of democracy, economic and social progress, freedom and justice,” the President to combat youth unemployment shows the strong commitment of the leaders in terms of the creation of Jobs in public administration and in the private sector:

  • 4,000 new jobs in the education sector
  • Co-financing of one-year jobs for graduates from technical vocational schools
  • Co-financing of internships in the technical field
  • Promotion of the informal sector
  • Promotion of young people in agricultural production

A program worth 512 million FCFA to support the education sector, in particular technical vocational training, was agreed by the responsible ministries and the employers’ association to combat youth unemployment in August 2016.

In October 2016, the government approved FCFA 4.8 billion (€ 7.3 million) for a program to integrate young people into the world of work (Program d’insertion socioprofessionelle des jeunes (PISJ)). 13,350 jobs are to be created.

Burkina Faso Currency