Economy of Burkina Faso
The economy of Burkina Faso is based primarily on subsistence farming and livestock raising. Burkina Faso has an average income purchasing-power-parity per capita of $1,900 and nominal per capita of $790 in 2014. More than 80% of the population relies on subsistence agriculture, with only a small fraction directly involved in industry and services. Highly variable rainfall, poor soils, lack of adequate communications and other infrastructure, a low literacy rate, and a stagnant economy are all longstanding problems of this landlocked country. The export economy also remained subject to fluctuations in world prices.
Ouagadougou, the financial centre of Burkina Faso | |
| Currency | CFA Franc (XOF) |
|---|---|
| Calendar year | |
Trade organisations | AU, AfCFTA, CEN-SAD, ECOWAS, WTO |
Country group | |
| Statistics | |
| Population | 19,751,535 (2018) |
| GDP |
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| GDP rank |
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GDP growth |
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GDP per capita |
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GDP per capita rank |
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GDP by sector |
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| 1.4% (2020 est.) | |
Population below poverty line |
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| 35.3 medium (2014) | |
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Labour force |
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Labour force by occupation | agriculture 90%, Industry & Services 10% (2000 est.) |
| Unemployment | 77% (2004) |
Main industries | cotton, beverages, agricultural processing, soap, cigarettes, textiles, gold |
| External | |
| Exports | $3.14 billion (2017 est.) |
Export goods | gold, cotton, livestock, Sesame seeds |
Main export partners |
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| Imports | $3.305 billion (2017 est.) |
Import goods | capital goods, foodstuffs, petroleum |
Main import partners |
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FDI stock | n/av |
Gross external debt | $2.442 billion (31 December 2012) |
| Public finances | |
Government debt | 38.1% of GDP (2017 est.) |
| Revenues | $2.666 billion (2017 est.) |
| Expenses | $3.655 billion (2017 est.) |
Credit rating |
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| $0.049 billion (31 December 2017) | |
The country has a high population density, few natural resources, and a fragile soil. 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.
The Burkinabé financial system represents 30% of the country's GDP and is dominated by the banking sector, which accounts for 90% of total financial system assets. Eleven banks and five non-bank financial institutions operate in the country.
The banking sector is highly concentrated, with the three largest banks holding nearly 60% of total financial sector assets. Banks are generally adequately capitalized, but remain vulnerable due to their overexposure to the cotton sector, the prices of which are subject to significant oscillations.
A December 2018 report from the World Bank indicates that cotton had become the most important cash crop, while gold exports were increasing in recent years. In 2017, economic growth increased to 6.4% in 2017 (vs. 5.9% in 2016) primarily due to gold production and increased investment in infrastructure. The increase in consumption linked to growth of the wage bill also supported economic growth. Inflation remained low, 0.4% that year but the public deficit grew to 7.7% of GDP (vs. 3.5% in 2016). The government was continuing to get financial aid and loans to finance the debt. To finance the public deficit, the Government combined concessional aid and borrowing on the regional market. The World Bank said that the economic outlook remained favorable in the short and medium term, although that could be negatively impacted. Risks included high oil prices (imports), lower prices of gold and cotton (exports) as well as terrorist threat and labour strikes.