Country Economic Memorandum for Burkina Faso: Making Growth More Efficient, Sustainable, and Inclusive

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Table of Contents

• ACKNOWLEDGEMENTS 3
• ABBREVIATIONS AND ACRONYMS 4
• Acknowledgements Executive Summary 5
• CHAPTER 1 5
• CHAPTER 2 5
• CHAPTER 3 5
• CHAPTER 4 5
• CHAPTER 5 5
• CHAPTER 6 5
• CHAPTER 7 5
• Annexes References 5
• 3 9 5
• 75 79 5
• TABLE OF CONTENTS 5
• LIST OF TABLES 6
• LIST OF FIGURES 7
• EXECUTIVE SUMMARY 9
• Growth in Burkina Faso Looking Back 17
• CHAPTER 1 17
• Between 2000 and 2022 economic output has more than tripled in real terms but this has not translated into a significant reduction in the number of people in extreme poverty. 18
• Economic growth has been highly volatile due to exposure to weather and climate shocks political instability and conflict and external shocks such as the COVID-19 pandemic and the war in Ukraine. 20
• Shortcomings of Burkina Fasos Growth Model 25
• CHAPTER 2 25
• Growth has not been efficient resilient or inclusive due to the underemployment of young people and women in the formal sectors of the economy and little redistribution of the fruits of growth. 30
• Boosting Agricultural Productivity 35
• CHAPTER 3 35
• The insufficient improvements in productivity means the agriculture sector has not been able to fulfil its potential to support GDP growth and reduce poverty. 36
• The drivers of low and declining agricultural productivity are limited access to inputs finance and equipment labor shortages dependence on rainfall and gender gaps. 38
• Policy options are available to diversify within and outside of agriculture enhance domestic and international market access and mitigate and manage climate and fragility risks. 40
• Increasing Technological Sophistication of Firms 43
• CHAPTER 4 43
• Very low levels of technological sophistication are hampering Burkinabè firms from increasing productivity and creating more and better jobs. 44
• Information asymmetries lack of capabilities poor infrastructure and underdeveloped financial markets are the key barriers to the adoption and use of technology. 46
• Policy options are available to strengthen the enabling environment develop firm-level capabilities and increase the human capital base. 48
• Improving Resource Allocation and Productivity through Better Transport 51
• CHAPTER 5 51
• Large market distortions prevent the efficient allocation of factors of production across provinces and industries which results in more productive firms producing less than their optimal output. 52
• Poor connectivity due to a lack of roads inefficient transport systems and rapid urbanization are key drivers of market distortions and the misallocation of resources. 54
• Policy options are available to alleviate the large market distortions and improve resource allocation and productivity of firms in Burkina Faso. 57
• Boosting Growth through Gender Parity 59
• CHAPTER 6 59
• Women farmers entrepreneurs and employees earn less than their male counterparts with the gender differences highest for wage earnings. 60
• The most important drivers of gender gaps across sectors are womens lack of capital and low use of male labor lack of control over income and lower economic benefits from marriage. 63
• Policy options are available to strengthen womens engagement in higher-value sectors improve their access to productive inputs and increase their physical security and household agency. 64
• Growth in Burkina Faso Looking Forward 67
• CHAPTER 7 67
• . With per capita GDP only 50 percent higher by 2050 Burkina Faso will remain a low-income country and see the poverty rate decline only very modestly. 69
• . With stagnating per capita GDP Burkina Faso will remain in the group of low-income countries and the poverty rate will rise substantially. 71
• With per capita GDP tripling by 2050 Burkina Faso could be upgraded to the group of lower middle-income countries LMICs by 2040 and remain in the group thereafter. 73
• ANNEXES 75
• REFERENCES 79