The World Bank in Burkina Faso

Burkina Faso is a low-income Sahel country with limited natural resources. Its economy relies on agriculture and mining, particularly gold production. More than 40% of its population lives below the national poverty line. The 2023-2024 Human Development Index (HDI) report by the United Nations Development Programme (UNDP) ranks Burkina Faso 185th out of 193 countries.

Political Situation

After the coup d'état of September 30, 2022, which ousted Lieutenant Colonel Paul-Henri Damiba, Captain Ibrahim Traoré was sworn in as the new transitional president on October 21, 2022. The Transitional Charter was amended and adopted on May 25, 2024. According to the new text, the transition period is extended by five years, starting on July 2, 2024. Since 2015, Burkina Faso has been targeted by terrorist attacks, leading to population displacements. While the country had fewer than 50,000 internally displaced persons (IDPs) in January 2019, it recorded 2.01 million as of March 30, 2023 (the most recent census), according to the United Nations Office for the Coordination of Humanitarian Affairs. The health and education sectors have been severely impacted, with 413 healthcare facilities affected (20%) as of December 2023, limiting access to care for approximately 3.8 million people. Additionally, 5,330 primary and secondary schools are closed, representing 20% of school infrastructure, affecting 820,865 students, including 396,716 girls.

On September 16, 2023, Burkina Faso, Mali, and Niger created the Alliance of Sahel States (AES) to pool their efforts against terrorism through a common defense architecture. Moreover, these countries decided to leave the Economic Community of West African States (ECOWAS) on January 28, 2024, citing a lack of support in their fight against terrorism.

Recent Economic Developments

GDP growth accelerated in Q1 2024 (+4.0% y/y) and is expected to reach 3.7% in 2024 (1.1% per capita). The agricultural sector is expected to grow above average, especially in cereal crops. The industrial sector is projected to recover but insecurity continues to disrupt mining. Services are expected to remain robust, driven by public administration, trade, and repair services. Consumption and private investment will drive growth, while net exports will contribute negatively. The current account deficit is expected to decline from an estimated 8.0% of GDP to around 6% in 2024 as mining exports benefit from a sharp rise in gold prices.

After a significant reduction in headline inflation in 2023 to 0.7%, inflation surged to a 12-month high of 5.7% y/y in August 2024. Food prices rose sharply (10.6% y/y) due to security and logistical supply constraints and price speculation given irregular rainfall in August. With a delayed start of the agricultural season, annual average inflation is projected at 3.4% in 2024.

The humanitarian situation remains dire, with over 2 million internally displaced persons, and an estimated 2.7 million people (11.9% of the population) facing severe food insecurity between June and August 2024.

The fiscal deficit for 2024 is projected to decline to 5.9% of GDP, underpinned by a rise in non-tax revenues and a substantial reduction in capital expenditures. The fiscal deficit will predominantly be financed through domestic borrowing from the regional market, where Burkina has faced a significant surge in interest rates exceeding 9% for 12-month bills. Consequently, public debt is anticipated to rise to 54.2% of GDP by end 2024.

Economic outlook

If the security situation remains unchanged, and assuming an orderly ECOWAS withdrawal that limits negative impacts to lower trade with non-WAEMU ECOWAS states, growth could settle at its new potential of around 4.0% (1.5% per capita) over 2025-2026. Mining production is expected to recover with the opening of new mines in 2025, and agricultural and service sector growth are anticipated to remain robust but lower than pre-conflict levels.

Despite the government’s fiscal consolidation efforts, the WAEMU ceiling of 3% of GDP will likely not be reached within the next 2-3 years, and public debt as a share of GDP is anticipated to increase until 2026.

Extreme poverty is expected to decrease slightly over the medium term, by approximately 1 percentage point per year. Accelerating poverty reduction will require higher growth per capita, particularly in agriculture, which employs 71% of the poor.

The economic outlook is subject to significant downside risks, including a deterioration in the security situation, climatic shocks, commodity price volatility, and regional defragmentation. Burkina Faso may also continue to face elevated borrowing costs, which could reduce development expenditures, amid increasing demands for defense and security spending. 

Last Updated: Oct 18, 2024

The World Bank Group's (WBG) Country Partnership Framework (CPF) for the period 2018-2023 underwent a mid-term review in June 2022. This review took into account the country's context and the priorities of the ongoing political transition, making significant adjustments while focusing on resilience and conflict prevention and continuing to improve long-term progress prospects in the following three intervention areas:

• Accelerating sustainable private sector growth for job creation;
• Investing in human capital and social protection systems;
• Strengthening service delivery and the state's presence in fragile areas.

As of September 30, 2024, the World Bank's portfolio in Burkina Faso consists of 30 operations covering 12 sectors, with total commitments of $3.79 billion for 19 national projects ($2.72 billion) and 11 regional projects ($1.07 billion).

In 2020, Burkina Faso was declared eligible for resources from the International Development Association (IDA) Prevention and Resilience Allocation for a four-year cycle. These resources have enabled the implementation of an Emergency Territorial Development and Resilience Project worth $350 million, followed by additional financing of $123 million and a Community Recovery and Stabilization Project in the Sahel worth $150 million, approved to support government efforts.

IFC

The International Finance Corporation (IFC) is working to improve the country's investment climate, facilitate access to financing for small and medium-sized enterprises, and contribute to the development of the agribusiness, energy, finance, infrastructure, education, and health sectors. Over the past ten years, the IFC has increased its commitments to a cumulative amount of $850 million.

Last Updated: Oct 18, 2024

Energy

The Electricity Sector Support Project (PASEL) has enabled:

• the construction of a 7.5 MW thermal power plant in Fada N'Gourma, in the east of the country;
• the electrification of 40 communities and 90 villages;
• the installation of 851 kilometers of low-voltage lines and 463 kilometers of medium-voltage lines;
• the deployment of 25,000 solar lamps in 400 schools.

Water and Sanitation

Since its inception in 2019, the Water Supply and Sanitation Program (PAEA-PforR) has enabled:

• access to drinking water sources for more than 829,000 people;
• access to improved sanitation facilities for more than 406,800 people;
• in the context of capacity building, the training of more than 3,500 people through short courses and the awarding of 177 diplomas ranging from senior technician to design engineer level.

Agriculture

Irrigation: The Regional Support Project for the Irrigation Initiative in the Sahel (PARIIS-BF) has developed/rehabilitated 1,800 ha, benefiting more than 21,062 direct beneficiaries.

The Burkina Faso Livestock Sector Development Support Project (PADEL B) has enabled:

• 392,850 livestock farmers to benefit from agricultural goods and services in livestock value chains;
• the financing of 1,653 micro-livestock projects launched by young people and women;
• 263 livestock businesses, women, and 152 youth businesses to access financing from banks and microfinance institutions;
• the acquisition of 260 prefabricated classrooms for internally displaced students.

Human Capital

The "Burkin-Naong-Sa ya" Social Safety Nets Project (ending poverty in Burkina Faso) targets the most vulnerable households and aims to lay the foundations for a social protection system. It has achieved the following results:

• more than one million poor individuals in Burkina Faso have benefited from social safety nets, including 763,714 individuals who received cash transfers in response to shocks;
• 21,265 women have benefited from economic inclusion activities, including community savings mobilization, capacity building for income-generating activities with a subsidy, and access to markets;
• support for the operation of 20 mobile nurseries and daycare centers;
• the deployment of the Unique Social Registry of poor and vulnerable households in its pilot phase, with more than 222,974 poor households registered in a management information system (MIS).

Education

The implementation of the initial funding for the Education Access and Quality Improvement Project (PAAQE) has enabled:

• the construction of 327 classrooms in 45 middle and high schools, allowing access to secondary
• education (post-primary and secondary) for approximately 20,595 students, 49% of whom are girls;
• 1,000 selected students, primarily girls from poor households, to benefit from a 100,000 FCFA/year ($166) scholarship throughout their schooling;
• the creation of a scientific high school construction program in each of the country’s 13 regions;
• equal opportunity for both girls and boys, as well as for adolescents from rural and urban areas;
• 1,343 students to be enrolled, with 38.57% being girls;
• a 100% success rate at the Baccalaureate from 2019 to 2022, and 98.5% in 2023.

Thanks to the Higher Education Support Project:

• 7,959 students, 36.7% of whom are women, have enrolled in undergraduate programs in priority areas financed by the project;
• 10 higher education and research institutions have benefited from competitive funds totaling 11.5 billion FCFA (more than $19 million).

Last Updated: Oct 18, 2024

The World Bank Group works closely with other development partners operating in Burkina Faso, including the European Union, the African Development Bank, United Nations agencies, and bilateral partners.

Since July 2017, Germany, the African Development Bank, the World Bank, France, the European Union, and the United Nations Development Programme have launched the Sahel Alliance, aimed at providing a coordinated and tailored response to the challenges faced by Sahel member countries (Burkina Faso, Mali, Mauritania, Niger, and Chad). Since then, Denmark, Spain, Italy, Luxembourg, the United Kingdom, and the Netherlands have joined the Alliance.

In March 2024, Burkina Faso was the subject of a joint visit by the Federal Republic of Germany and the World Bank, who respectively hold the presidencies of the General Assembly and the operational steering committee of the Sahel Alliance.

Last Updated: Oct 18, 2024