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Economy of Burkina Faso

From Academic Kids

Burkina Faso is one of the poorest countries in the world with an average income per capita of 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.

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.

GDP- Purchasing power parity - $12.4 billion (1999 est.)
GDP - Real growth rate: 5.5% (1999 est.)
GDP purchasing power parity per capita: $1,100 (1999 est.)
GDP - composition by sector:
   agriculture: 35%    industry: 17%    services: 48% (2001)

Population below poverty line: 45%
Labor force: 4.679 million (persons 10 years old and over, according to a sample survey taken in 1991)
Note: A large part of the male labor force migrates annually to neighboring countries for seasonal employment.
Unemployment rate: NA

Budget:
revenues: $277 million
expenditures: $492 million, including capital expenditures of $233 million. (1995 est.)

Industries: Cotton lint, beverages, agricultural processing, soap, cigarettes, textiles, gold.

Electricity production: 225 GWh (1998)

Agricultural products: peanuts, shea nuts, sesame, cotton, sorghum, millet, maize, rice; livestock.

Exports: $311 million (f.o.b., 1998 est.)
Export commodities: cotton, animal products, gold.
Exports - main partners: Côte d'Ivoire, Taiwan, France, Colombia, Italy, Mali.

Imports: $572 million (f.o.b., 1998 est.)
Import commodities: machinery, food products, petroleum.

Import partners: Côte d'Ivoire, France, Senegal, Togo, Nigeria, United States.

External debt: $1.3 billion (2000)
Economic aid received: $484.1 million (1995)
Currency: 1 Communaute Financiere Africaine franc (CFAF) = 100 centimes
Exchange rates: US$1 = 696.99 Communaute Financiere Africaine francs (CFAF) (2002)
Note: Since 1 January 1999, the CFA franc is pegged to the euro at a rate of 655.957 CFA francs per euro.
Fiscal year: Calendar year.

External link

  • CIA Factbook (http://www.cia.gov/cia/publications/factbook/geos/uv.html)

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