This paper discusses various economic development documents of Burkina Faso. Economic Development Documents are prepared by member countries in broad consultation with stakeholders and development partners. They describe countries’ macroeconomic, structural, and social policies in support of growth and poverty reduction, as well as associated external financing needs and major sources of financing. The aim of the 2016–2020 National Plan for Economic and Social Development (PNDES) is to structurally transform the Burkinabè economy to generate strong, sustainable, resilient, and inclusive growth in order to create decent jobs for all and improve social well-being. As a national benchmark, the plan aims to achieve cumulative growth of per capita income to reduce poverty and meet the population’s basic needs within a fair and sustainable social framework. During the entire PNDES implementation phase, measures will be taken to improve the quality of institutions and strengthen the governance and the availability of qualified human resources to meet the economy’s structural transformation needs.

Abstract

This paper discusses various economic development documents of Burkina Faso. Economic Development Documents are prepared by member countries in broad consultation with stakeholders and development partners. They describe countries’ macroeconomic, structural, and social policies in support of growth and poverty reduction, as well as associated external financing needs and major sources of financing. The aim of the 2016–2020 National Plan for Economic and Social Development (PNDES) is to structurally transform the Burkinabè economy to generate strong, sustainable, resilient, and inclusive growth in order to create decent jobs for all and improve social well-being. As a national benchmark, the plan aims to achieve cumulative growth of per capita income to reduce poverty and meet the population’s basic needs within a fair and sustainable social framework. During the entire PNDES implementation phase, measures will be taken to improve the quality of institutions and strengthen the governance and the availability of qualified human resources to meet the economy’s structural transformation needs.

Introduction

Burkina Faso is a landlocked West African country with a population estimated at 18.5 million inhabitants in 2015. It covers a surface area of 273.187 square kilometres. The country’s administrative organisation is structured around 13 regions, 45 provinces and 351 communes including 302 Rural Communes and 49 Urban Communes. The democratic outcome of Burkina Faso’s presidential and parliamentary elections of 25 November 2015 gave rise to a new political context marked by the regular functioning of republican institutions in a law-abiding State. In this context the Government, through an inclusive and participatory process, prepared and adopted, on 20 July 2016, the National Economic and Social Development Plan (PNDES) to be implemented during the 2016-2020 period.

The PNDES takes into account the lessons learnt from the assessment of the implementation of Burkina Faso’s past socioeconomic development strategies, and notably of the strategy for accelerated growth and sustainable development (SCADD). It is underpinned by a new dynamics of strong, sustainable and inclusive economic growth through the structural transformation of the economy. It is in keeping with the Presidential Programme which seeks to “Build, along with the people, a country of democracy, economic and social progress, freedom and justice”.

In addition to the presidential programme which is the reference base, the preparation of the PNDES also drew from other strategic orientations namely the Prospective National Study (ENP) Burkina 2025, the National Land Management and Sustainable Development Plan (SNADDT), Sustainable Development Goals (SDG), the African Union Agenda 2063, the Community Strategic Framework of the Economic Community of West African States (ECOWAS).

The PNDES document is divided into three parts: the diagnostic analysis of the economic and social situation, the economic and social development strategy 2016-2020 and the implementation, monitoring and evaluation arrangements.

Diagnostic Analysis of the Economic and Social Situation

Burkina Faso has been experiencing an erratic economic growth pattern since 1960. This fluctuating economic activity, combined with strong demographic growth of 3.1% per annum, made it difficult to achieve real economic and social development. Indeed, from 1960 to 2014, the per capita income increased on average by only 2% per annum. In 2014, the country’s Human Development Index (HDI) stood at 0.420, ranking the country 181st out of 187 countries.

uA01fig02

Evolution of GDP Growth Rate (%)

Citation: IMF Staff Country Reports 2018, 085; 10.5089/9781484348659.002.A001

Source: MINEFID (2016), Burkina Faso

At the social level, close to 40% of the Burkinabe population lived below the poverty line in 2014, compared to 46.7% in 2009. Poverty is more pronounced in the rural than in the urban areas. Life expectancy at birth is around 60 years and more than 65% of those over fifteen are illiterate. Burkina Faso is also confronted with migratory movements resulting in rural exodus and international migration towards countries of the sub-region.

In terms of inclusive and sustainable human development, the key constraints relate to persistent social inequalities, an inadequate national productive system, low-skilled human resources and an ineffective governance.

A Slow-Changing Social Dynamics Caracterized by Persistent Inequalities

The social dynamics was characterized by various major achievements in the implementation of past development policies, particularly the Poverty Reduction Strategy Paper (PRSP) and the Accelerated Growth and Sustainable Development Strategy (SCADD) implemented in the periods 2000-2009 and 2010-2015 respectively. These achievements concern the management of the economy, social issues and economic infrastructures.

These policies did not contribute to a significant decline in the poverty rate. Between 2009 and 2014, the poverty rate dropped by six points, moving from 46.7% to 40.1%. During the same period, the depth and severity of monetary poverty also dropped from 15.1% to 9.7% and 6.7% to 3/3% respectively. Between 2009 and 2014, poverty declined more in the urban areas (11.6 points) than in the rural areas (7.1 points). Nine out of 10 people living below the poverty line are in the rural areas. This situation brings up the issue of distribution and redistribution of the fruits of economic growth in Burkina Faso during the 2000-2015 period.

The evolution of multidimensional poverty, observed through the framework and living conditions of urban and rural households, | shows spatial disparities in the access to basic social services and income opportunities. On the basis of 2010 data, the multidimensional poverty rate in Burkina Faso is estimated at 84% (UNDP and Oxford University, 2010). The national rate of electricity-connected households (18.8%) in 2015 conceals disparities between the urban (59.8%) and rural areas (3.0%) in 2014. Concerning social housing, 77% of households lived in poor quality housing 39.5% of which are in the urban areas and 92% in the rural areas. The rate of access to sanitation facilities increased from 4.7% in 2007 to 8.1% in 2014. In the field of information and communication technologies, the service provision is irregular and expensive and does not satisfy the soaring demand. For example, the number of Internet users rose from 1% to 9.4% between 2009 and 2015.

In addition to the difficult access to basic social services, food crises, especially in the rural areas, led to the socio-economic vulnerability of the populations. About 3.5 million Burkinabe, i.e. 20% of the population, are food insecure. Chronic infant malnutrition is still very high, although it declined from 25.6% in 2009 to 20.1% in 2014. The consumption expenditure of the poorest households account for 8.4% of the total consumption expenditure of households against 44.1% for the poorest households.

In the field of Education, the gross enrolment rate (GER) rose from 48.7% in 2003 to 83% in 2014. In secondary education, gender inequalities have subsided. The girl-boy ratio improved from 0.51 in 2004 to 0.62 in 2014. At the higher education level, this ratio rose from 0.29 in 1997 to 0.48 in 2013. The proportion of women in the16 to 64 years age bracket who pursued technical and vocational training was 3.1% in 2010, against a national average of 4.5%.

The major difficulties of the current national system to combat poverty and the vulnerability of the populations are, on the one hand, the inadequate public policy coordination mechanisms and, on the other hand, the mode of targeting the poor populations. Despite the progress registered, inequalities in monetary poverty, education, access to economic resources and elective positions persist and primarily affect women and young people. The decline in the poverty rate is followed by an increase in the share of incomes of the poorest 20% and a decline in the incomes of the richest 20%.

Strong inequalities with regard to life expectancy, education and income impede the development of Burkina Faso. For example, the richest 20% had an average income 7 times higher than that of the poorest 20% during the 2003-2012 period. According to UNDP estimates, the focus on inequalities results in a loss in human development of about 35%, while these losses for the same causes stand at 22.8% at global level and 33.3% in Africa.

Strong inequalities with regard to life expectancy, education and income impede the development of Burkina Faso

A Slow-Changing Productive System With Weak Decent Job Creation Effects

Burkina Faso has registered an average economic growth rate of at least 5% per annum, since 1964. During the 1994-2014 period, the average share of the services sector in GDP formation exceeded 45%, while that of agriculture varied between 28% and 31% and that of industry fluctuated between 14% and 24%. Economic growth was thus combined with the relative stability of contributions of economic sectors to GDP formation, thus revealing the weak structural transformation of the productive base of Burkina Faso’s economy.

uA01fig03

Share of sectors in GDP in 2015

Citation: IMF Staff Country Reports 2018, 085; 10.5089/9781484348659.002.A001

Source: MINEFID (2015), Burkina Faso

The analysis of the dynamics of the production sectors of the economy showed that the major structural inadequacies of the economy are the low productivity of the agricultural sector, dominated by subsistence farming which is subjected to rainfall variability, the decline in the manufacturing sector due to uncompetitive industries, and weak development of agro-industrial sector, “informalisation” of the tertiary sector and poor access to financial services, narrow base of export products, insufficient human resources needed for the structural transformation of the productive system. Moreover, economic growth is vulnerable to climate change, the volatility of export product prices (gold and cotton) and declining Overseas Development Assistance (ODA).

In addition, the improvement of the business climate is hindered by the slow implementation of structural reforms, high costs of technical inputs, low-skilled human resources, weak support facilities and widening productive base of the Burkinabe economy.

In the field of employment, the proportion of women employed in the public and formal private sectors increased from 20.0% to 24.17% in 2013, midway to achieving gender parity in formal employment. In 2014, the unemployment rate at national level was estimated at 6.6%. In the rural areas, youths under 25 (14.1% in 2014) and women (9.9% in 2014) were most affected by unemployment. Regarding the political participation of women, the proportion of seats occupied by them in Parliament, since 2000, was below 30% in 2015. Some 24% of the workers are affected by under-employment. Barely 5% of workers have a social security cover. The unemployment rate among young graduates is 34.5% for higher education graduates and 17.2% for secondary education graduates.

An Insufficient Human Capital Ill-Adapted to the Needs of the National Productive System

Human capital can be defined as the set of expertise, talents, skills or experiences accumulated by an individual and which partly determine his capacity to generate income or contribute to the social stability of his country. It depends on the population dynamics, access to basic social services (health, education, water and sanitation), research-development, job opportunities, vocational training and urbanisation.

In 2015, Burkina Faso had a population of 18.5 million inhabitants, projected to reach 21.5 million in 2020, with a demographic growth rate of 3.1%. This strong demographic growth undermines the major impacts of public policies.

The population is characterized by the very high proportion of young people, with 67% under 25 years old. The population’s youthful profile is an important advantage for the country’s development, in the medium and long terms, provided that they enjoy good health, have adequate training and are effectively integrated into the production sector. It is observed that the current Burkina Faso population age structure is not yet exploited to sustainably increase the economic growth rate, create decent jobs and thus capture the demographic dividend.

The accumulation of human capital in Burkina Faso is constrained by the shortage of public facilities, the number of children per woman estimated at 6.6 in 2015, compared to 5.5 in West Africa, a demographic dependency rate of 92.2% against 87.4 in West Africa, a low school completion rate, disparities in access to drinking water, a low rate of access to skills training.

In the field of health, the profile of public health indicators is still a far cry from international standards in this regard, with maternal mortality indicators of 330 per 100 000 new births and infant mortality indicators of 43 per 1 000 new births. There is also the issue of chronic malnutrition (30.2% in 2015) which contributes to the death of one out of two children. The key structural constraints of the health sector are the inadequate provision of health services, the populations’ poor access to health services, the low-skilled human resources, poor technical facilities of health structures compared to international standards, the governance of health institutions, in particular the health information system.

Regarding education, Burkina Faso has a general purpose non-professionalising education system, which does not meet the needs of the labour market. In 2015, the net enrolment rate was 65.7%. Only 58.4% of pupils complete primary education and this raises questions about the performance of the Burkinabe education system. In the higher education sector, 63% of students are enrolled in the social sciences and humanities. In 2015, the student population in technical education and vocational training accounted for 3.4% of the total population of the education system. The challenges to be addressed by the education system consist in improving the quality of basic education, the match between the training provided by secondary, higher and technical education and the needs of the productive sector, and of the structural transformation of the economy, constructing school facilities for skills training and apprenticeship as well as promoting the teaching profession.

During the 2011-2015 period, significant improvement was registered in access to drinking water at country level, as well as progress in sanitation in the urban areas. The rate of access to drinking water in rural areas grew from 58.5% in 2011 to 65% in 2015. In the urban areas, 89.9% of the population had access to drinking water in 2015, against 80% in 2011. The populations’ access to sanitation was poor in

2015, 12% in the rural areas and 34% in the urban areas. The major challenges to be addressed are the mobilization and sustainable management of water resources, improved access to water and sanitation services, protection of existing ecosystems and improved knowledge of national water resources.

The field of scientific research is marked by institutional and organisational constraints which result in the poor coordination of scientific research activities at national level. Moreover, little value is placed on the findings of the national research system, the research facilities and equipment are obsolete, human resources of the research sector are ageing and public funding for research is insufficient.

Employment is still dominated by the informal sector with 94.6% of workers against 6.4% for the modern sector. In 2015, the number of formal jobs was estimated at 685 625, and 24.2% of these were occupied by women. These formal job holders at national level included 154 846 government employees (22.6%) a third of whom are women and 530 679 private sector workers (77.4%) registered with the National Social Security Fund (CNSS), 21.6% of whom are women.

Urbanisation in Burkina Faso is moving at a fast pace, with the growing concentration of the populations in the cities. The urbanisation rate is estimated at 31.50% in 2016, with an urban population that grows twice faster than the national population. Some 62% of the urban population live in the regions of Ouagadougou and Bobo-Dioulasso, resulting in the growing shortage of housing and the proliferation of squatter housing, in the housing and town planning sub sectors. Challenges to be addressed by the urbanisation policy relate to systematising regional planning and development, as well as access to decent housing.

Inefficient Administrative, Political, Economic and Local Governance

Regarding political governance, the progress made concerns the creation and strengthening of republican institutions, professionalising defence and security, the consolidation of the rule of law, contribution to the efforts of peace and security in third countries, social cohesion and the improvement of national solidarity. Despite these advantages, challenges still need to be addressed in the fields of administrative governance, economic governance and local governance.

In the area of administrative governance, despite the reforms undertaken, the Burkinabe administration is still confronted with challenges such as the maintenance of institutional stability, modernising the functioning of the administration, the advent of a service administration for the benefit of the populations, strengthening the independence of justice, restoring State authority and systematising the involvement of all stakeholders (private sector, civil society) in the preparation and implementation of public policies.

With regard to economic governance, progress was made, inter alia, in terms of steering and planning economic development and in public finance management. However, the key challenges that remain to be addressed are the consolidation of the consistency and rationalisation of economic policies, the institution of management for development results, the improved mobilization of domestic and external resources, the increase in effectiveness of public spending and accountability.

The major progress made in the field of local governance and decentralisation relate to the effectiveness of complete communalisation, the transfer of powers to local authorities and support to decentralised entities through the devolution of central administration services. The major challenges to de addressed to consolidate the territorialisation of public policies concern the update of the strategic decentralisation implementation framework, the acceleration of the transfer of powers, resources and assets, strengthening capacities of local development actors in the field of project management.

Major Challenges to Address to Ensure the Structural Transformation of the Burkinabe Economy

Based on the diagnosis of the economic and social situation, the three major challenges for the sustainable structural transformation of the Burkinabe economy are good governance and the improvement of the quality of institutions, the availability of skilled human resources for the needs of the structural transformation of the national economy, the development of productive bases.

The challenge of good governance and the improved quality of institutions entails the stability of republican institutions, the establishment of an efficient legal and judicial system, the development of a national culture for the safeguard and promotion of national pride and the identity.

The challenge of the availability and employability of human resources adapted to the needs of the national economy requires substantial investments to accumulate more human capital, thanks to the improved output of the education system, medical cover and the control of high population growth.

The challenge to develop productive bases and competitiveness relates to the weak industrial development and low competitiveness of the job-generating commodity production and processing sector. The transformation of this productive base depends on the availability and accessibility of technical factors of production (Water, Energy, Transport and Telecommunications), orientation of development research towards national needs for technical and technological innovations. Likewise, there is need to reallocate the resources low-productivity activitiestowards higher-productivityactivities.

Economic and Social Development Strategy 2016-2020

The PNDES strategy is built on foundations and a vision, implementation guidelines, a global objective, strategic axes and goals, expected impacts and an implementation, monitoring and evaluation mechanism.

The Presidential Programme which calls for the “Building, along with the people, of a country of democracy, economic and social progress, freedom and justice” is the first cornerstone of the PNDES. The other pillars are vision Burkina 2025, the African Union Agenda 2063 and the Sustainable Development Goals. On this basis, the following PNDES vision by 2020 was adopted by the political authorities: ‘Burkina Faso, a democratic, united and cohesive nation, transforming the structure of its economy to achieve a strong and inclusive growth, through sustainable consumption and production’.

The PNDES implementation guidelines principles are national leadership, equity, subsidiarity and partnership, results-based management (RBM) and proactivity.

The overall objective of the PNDES is to structurally transform the Burkinabe economy to achieve a strong, sustainable, resilient, inclusive growth, generating decent employment for all and eliciting improved social welfare.

The expected impacts of the PNDES are the improved effectiveness of political, administrative, economic, local and environmental governance, the achievement of an average annual growth rate of 7.7% creating at least 50 000 jobs every year, the decline in the poverty rate from 40.1% in 2014 to 35% in 2020, the drop in the demographic growth rate from 3.1% in 2015 to 2.7% in 2020, the acceleration of the human capital development level and the advent of production and consumption methods guided by a sustainable development perspective. The expected impacts will be pursued through the structural transformation of the economy which is underpinned by a growth pattern based on an intensification of investments over the 2016-2020 period. Growth will thus increase from 5.7% in 2016 to 7.7% per annum during the 20162020 period.

Two levers will be used to this end. The first is the creation of an environment favourable to industrial development by strengthening output support sectors. The second is the revival of a competitive and sustainable industrial development, through developmental investments of up to 8 408.2 billion francs CFA.

Burkina Faso, a democratic, united and cohesive nation, transforming the structure of its economy to achieve a strong and inclusive growth, through sustainable consumption and production

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Source: MINEFID (2016), Burkina Faso

Strategic Axes, Strategic Goals and Expected Impacts

Given the critical shortfalls revealed by the diagnostic analysis of the economic and social situation, the PNDES retained three strategic axes, broken down into strategic objectives and expected impacts. The axes are:

AXIS 1: Reform the institutions and modernize the administration,

AXIS 1 : :

Reform The Institutions and Modernize the Administration

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AXIS 2 : develop human capital,

AXIS 2 :

Develop Human Capital

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AXIS 3 : Stimulate sectors with growth potential for the economy and employment.

AXIS 3 :

Stimulate the Sectors With Growth Potential for the Economy and Employment

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Consistency Between the Strategic Objectives of the Pndes and the Sustainable Development Goals (SDG)

The SDG represent an ambitious undertaking to alleviate poverty in all its forms by 2030. This involves targeting those living in situations of vulnerability, improve access to basic social services and economic resources, and provide support to communities hit by conflicts and natural disasters. On the basis of the results of a participatory process regrouping a broad range of public and private actors, Burkina Faso considered as priorities 86 out of the 169 targets of the 17 SDG, because they are consistent with the strategic objectives of the PNDES.

Implementation, Monitoring and Evaluation Arrangement

The PNDES implementation mechanism is structured around three axes, namely the implementation instruments and actors, the organisational framework and monitoring and evaluation.

Implementation Instruments and Actors

The instruments selected for the implementation of the PNDES are sectoral policies, local development plans (regional and communal development plans), growth poles and competitiveness, strategic reforms, developmental investments and communication on the PNDES.

The actors involved in the implementation of the PNDES are the State, local authorities, the private sector, civil society organisations, technical and financial partners and the Burkinabé population, including those of the Diaspora.

Organisational Framework

The organisational framework for the implementation of the PNDES comprises organs and bodies. The organs include the National Steering Committee of the PNDES (CNP/PNDES), the Permanent Secretariat of the PNDES (PS/PNDES), the Sectoral Frameworks for Dialogue (CSD) and the Regional Frameworks for Dialogue (CRD). The bodies are composed of: the annual review, sectoral reviews and regional reviews.

Monitoring and Evaluation

The monitoring and evaluation of the PNDES hinges on a mechanism, tools and monitoring and evaluation indicators. The monitoring and evaluation mechanism includes a technical monitoring component and a technical evaluation component which have been formalized and set up by the Steering Committee/PNDES.

The following tools will be developed under the responsibility of the Permanent Secretariat/PNDES, the Structural Framework for Dialogue (CSD) and Regional Framework for Dialogue (CRD): an overall performance measurement framework, sectoral and regional logical frameworks, Ministerial Annual Work Plan (AWP), a framework for monitoring strategic reforms and structuring investments, a web tool to instantly visualize the trend of evolution of indicators, quarterly, half-yearly and annual global, sectoral and regional reports. The indicators selected to monitor and evaluate the PNDES are output, outcome and impact indicators

Funding Pattern

Under the target of an average annual growth target of 7.7% over the 2016-2020 period, the PNDES projected funding scheme is estimated at 15 395.4 billion CFA francs, i.e. an average annual cost of 3 079.1 billion CFA francs. The proportion devoted to capital expenditure (including capital transfers) will be 54.6%, corresponding to a total amount of 8 408.2 billion francs CFA for the period.

The PNDES will receive funding of up to9 825.2 billion CFA francs (63.8% ) from the State of Burkina Faso. A funding of 5 570.2 billion CFA francs, i.e. 36.2% of the overall cost of the plan, is therefore required.The PNDES will be funded through the implementation of an ambitious internal and external resource mobilization strategy, based on new and innovative methods, in addition to the use of the traditional ODA.

Withrespect to innovative funding, the national tax systems, the issuance of government bonds, voluntary contributions and lotteries, fund raising methods used by Burkinabe abroad, bonds backed by donor countries and sold on the financial market, allocations from funds generated by the sale of emission quotas, public-private partnerships (PPP), subsidized loans, crowdfunding, mass shareholding, could be used.

Financing Plan (in billions of CFAF)

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Source: MÍNEFÍD (2016), Burkina Faso

Risk Analysis

The national, sub regional and international environment presents risks that need to be minimized for the successful implementation of the PNDES. There are six main risks that could undermine the achievement of PNDES results: security risk, risk of sociopolitical unrest, financial risk, risk related to climate hazards, risk related to international and regional conditions, risk related to stakeholders’ lack of commitment.

Burkina Faso: Economic Development Documents
Author: International Monetary Fund. African Dept.