The latest Country Economic Memorandum for Burkina Faso reveals that rapid economic growth over the past two decades has not resulted in the structural transformation needed for future success.
Despite a tripling of output in real terms, population growth has meant GDP per capita has not even doubled, and poverty levels have remained virtually unchanged. Economic growth benefits have been unevenly distributed across regions, with rising inequality. Industrial gold mining has driven growth but created few jobs and limited local business linkages. The sector's windfall profits have heightened political tensions amid worsening domestic and regional instability, culminating in two coups in 2022.
Growth has lacked efficiency, sustainability, and inclusivity. Increases in output across all sectors have primarily stemmed from labor and capital accumulation rather than productivity improvements. The expanding public sector absorbs most better-educated workers, contributing to a widening fiscal deficit and limiting public investment capacity. Deforestation for fuel and agricultural expansion has resulted in the loss of nearly half the country's forests over the past two decades. The labor market has struggled to keep pace with demographic growth, leaving many young people without adequate opportunities.
Low agricultural productivity growth has hindered the sector's poverty-reducing potential. Growth mainly stems from expanding cultivation areas rather than improved yields. Small-scale subsistence farming dominates the sector, with limited access to inputs, capital, and machinery. Violence and instability have fueled an exodus to cities, leaving agriculture short of labor. Heavy reliance on rainfall exposes the country to climate change risks, with about one-third of its land affected by desertification.
Technological sophistication remains low among Burkinabe firms, preventing productivity increases and job creation. Barriers include lack of information, inadequate skills among managers and workers, poor infrastructure leading to unreliable electricity supplies and limited internet access, and underdeveloped financial markets.
Inefficient resource allocation and poor transport connections prevent productive firms from reaching their potential. Market distortions arise from poor transport connectivity and rapid urbanization leading to unplanned sprawl within cities.
Greater gender parity could boost equitable growth. Although primary school enrollment gender gaps have reversed recently, Burkinabe women face significant societal inequalities such as early marriage, high care burdens, and lack of reproductive health control. Women farmers, entrepreneurs, and employees earn less than men due to lack of capital control over income lower use of male workers lower adoption of farming technology less commercialization of women-owned farms Closing these gaps would expand skilled labor supply enhance productivity
Far-reaching reforms addressing low productivity drivers could bring about structural transformation Three growth scenarios indicate that continuing on a low or medium-growth path without substantial reforms would maintain high poverty levels especially considering climate change effects
The report offers recommendations for creating efficient sustainable inclusive growth These include:
- Diversifying within outside agriculture by creating demand for agricultural products improving livestock productivity diversifying rural economy
- Enhancing domestic international market access promoting moves away from subsistence farming
- Mitigating managing agricultural risks through climate-smart agriculture irrigation land restoration insurance supporting displaced vulnerable populations
- Strengthening enabling environment for private firms by reducing barriers to accessing electricity digital services finance
- Developing firm-level capabilities using technology promoting external knowledge exposure international experience global value chains supporting collaborations reducing tariffs regulations hampering technology adoption
- Increasing human capital base developing digital skills especially among younger generation
- Investing in resilient transport infrastructure improving enabling environment for transport logistics reducing trading costs businesses
- Designing policies overcoming informality
- Increasing women's engagement higher-value sectors improving skills involvement management reducing occupational segregation
- Improving women's access productive inputs enhancing financial inclusion business capital increasing returns labor modern agricultural inputs land returns
- Increasing women's physical security household agency improving rights laws knowledge reproductive agency reducing care burden