Economy of Burkina Faso

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Economy of Burkina Faso
Currency	CFA Franc (XOF)
Fiscal year	Calendar year
Trade organisations	AU, WTO
Statistics [1]
GDP ranking	118th (2004) [2]
GDP	$15.74 billion (2004)
GDP growth	4.8% (2004)
GDP per capita	$1,200 (2004)
GDP by sector	agriculture (39.5%), industry (19.3%), services (41.3%) (2004)
Inflation	2.4% (2004)
Pop below poverty line	45% (2003)
Labour force	5 million (note: a large part of the male labor force migrates annually to neighboring countries for seasonal employment) (2003)
Labour force by occupation	agriculture (90%), (2000)
Unemployment	N/A
Main industries	cotton lint, beverages, agricultural processing, soap, cigarettes, textiles, gold
Trading Partners [3]
Exports	$418.6 million (2004)
Export - Commodities	cotton, livestock, gold
Main partners	People's Republic of China 32.3%, Singapore 10.7%, Bangladesh 4.5%, Ghana 4.4%, Colombia 4.4% (2004)
Imports	$866.3 million (2004)
Imports - Commodities	capital goods, foodstuffs, petroleum
Main Partners	France 31.5%, Côte d'Ivoire 13.9%, Togo 8.5% (2004)
Public finances [4]
Public debt	N/A
Revenues	$695.2 million (2004)
Expenses	$876.3 million (2004)
Economic aid	$484.1 million (1995)

Burkina Faso is one of the poorest countries in the world with an average income per capita of €250 (US$300). More than 80% of the population relies on subsistence agriculture, with only a small fraction directly involved in industry and services. Low rainfall, poor soils, lack of adequate communications and other infrastructure, a low literacy rate, and a stagnant economy are all longstanding problems. The export economy also remains subject to fluctuations in world prices.

[edit] Macro-economic trend

This is a chart of trend of gross domestic product of Burkina Faso at market prices estimated by the International Monetary Fund with figures in millions of CFA Francs.

Year	Gross Domestic Product	US Dollar Exchange	Inflation Index (2000=100)
1980	412,240	211.29 CFA Francs	45
1985	642,387	449.22 CFA Francs	67
1990	848,910	272.26 CFA Francs	65
1995	1,330,159	499.12 CFA Francs	88
2000	1,861,522	711.86 CFA Francs	100
2005	3,027,196	526.56 CFA Francs	115

For purchasing power parity comparisons, the US Dollar is exchanged at 179.70 CFA Francs only.

Current GDP per capita of Burkina Faso grew 13% in the Sixties reaching a peak growth of 237% in the Seventies. But this proved unsustainable and growth consequently scaled back to 23% in the Eighties. Finally, it shrank by 37% in the Nineties.

Although handicapped by an extremely resource-deprived domestic economy, Burkina remains committed to the structural adjustment program it launched in 1991. It has largely recovered from the devaluation of the CFA in January 1994, with a 1996 growth rate of 5.9%.

Many Burkinabe migrate to neighbouring countries for work, and their remittances provide a substantial contribution to the balance of payments. 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 cereals.

The agricultural economy remains highly vulnerable to fluctuations in rainfall. The Mossi Plateau in north central Burkina faces encroachment from the Sahara. The resultant southward migration means heightened competition for control of very limited water resources south of the Mossi Plateau. Most of the population ekes out a living as subsistence farmers, living with problems of climate, soil erosion, and rudimentary technology. The 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.

Industry, still in an embryonic stage, is located primarily in Bobo-Dioulasso, Ouagadougou, Banfora, and Koudougou. Manufacturing is limited to food processing, textiles, and other import substitution heavily protected by tariffs. Some factories are privately owned, and others are set to be privatized. Burkina's exploitable natural resources are limited, although a manganese ore deposit is located in the remote northeast. Gold mining has increased greatly since the mid-1980s and, along with cotton, is a leading export moneyearner.

Summary: One of the poorest countries in the world, landlocked Burkina Faso has a high population density, few natural resources, and a fragile soil. Approximately 90% of the population is engaged in (mainly subsistence) agriculture which is highly vulnerable to variations in rainfall. Industry remains dominated by unprofitable government-controlled corporations. Following the African franc currency devaluation in January 1994 the government updated its development program in conjunction with international agencies, and exports and economic growth have increased. Maintenance of its macroeconomic progress depends on continued low inflation, reduction in the trade deficit, and reforms designed to encourage private investment.