• It is based on 5 assumptions defined by WAEMU
• Time of Transition; fight against terrorism, etc.
• Raise awareness on the need to support the country
QWhat are Burkina Faso’s economic and financial prospects? The Union’s macroeconomic framework note announces growth of 6% for 2023.
It would be driven mainly by mining production and the good performance of agriculture in a context of reduced terrorist attacks. In 2024, the progression of economic activity is projected, first, at 5.4% in 2024, then 5.7% and 5.4% in 2025 and 2026.
These forecasts, for the UEMOA experts, will come true on the basis of 5 hypotheses.
One of the first requirements to maintain the growth of our economy, according to the document, is “a good conduct of the roadmap of the Transition with a return to constitutional order within the deadlines agreed with the regional institutions”.
And on the ongoing Transition implementation process, Burkina received the current President of the Conference of Heads of State and Government of ECOWAS, Umaro Sissoco Embalo, on January 11th. At the end of the exchanges with the Head of State, the current President of ECOWAS, who was reassured of the good conduct of the Transition, reaffirmed the availability of the West African organization to support and accompany Burkina Faso in the fight against terrorism. The Transition Charter, signed on October 14, 2022, in its title 4 on the transitional and final provisions, stipulates in its article 21 that the duration of the Transition is 21 months, starting on October 2, 2022.
The second hypothesis at stake, according to UEMOA, is the “gradual control of terrorist threats, with support and resettlement, in the medium term, of internally displaced populations in their usual places of residence”. It must be said that in addition to the socio-political situation marked by two military coups in one year, the terrorist attacks have worsened the social situation. By way of example, we can retain closed schools (more than 4,000); non-functional health facilities; 2.8 million food insecure people; the cessation of exploitation of certain mining companies….
In addition to this lackluster social situation, the economic situation does not bode well either, with an inflation rate reaching a record level of 14%, on an annual average, at the end of November 2022, i.e. the highest rate high of the Union.
Strengthening mining production
To achieve the 6% growth forecast for 2023, it is also necessary to take into account the hypothesis of “strengthening of mining production with the resumption of production at the Netiana mine, as well as the entry into production of the Bomboé and that of Batié”.
After a drop of 10.3% in the first quarter, then a slight increase of 2.9% in the second quarter, extractive activities fell sharply by 14.4% in the third quarter. This drop “results from the considerable drop in the quantities of gold produced, dropping from 15.4 to 13.2 tonnes. It is linked to the closure of several mining sites during the year, due to insecurity”, specifies the report on the national accounts of the INSD.
To complete the Uemoa report, we can mention the Ouaré mine, which was attacked on January 30, 2022. Following the attack on Ouaré, Avesoro decided to suspend the activities of the 3 mining permits. There is also Nordgold, which suspended the operation of its Taparko/Bouroum mine in April 2022.
A suspension that Nordgold justified by the terrorist incursions on the site and the problems of access to the site. And finally, the Riverstone Karma mine, which was attacked on June 9, 2022. Two people were killed in the attack, as a result mine officials suspended operations. As of October 21, 2022, out of 17 mines, the country has increased to 8 mines in operation. Added to this is the closure of the Perkoa zinc mine, following the flooding of April 16, 2022.
Growth prospects are also based on “the continuation and acceleration of major public investment projects: construction work on Donsin international airport, construction of new social housing and the Yamoussoukro-Ouagadougou highway”. Last hypothesis to take into account, “the increase in electricity production: construction of 11 new photovoltaic solar power plants with a cumulative power of 532.8 MW and thermal power plants of 200 MW in PPP”.
ESS
framed
Risks and Recommendations
“An increasingly difficult security context which is hampering economic activity, leading to institutional upheavals with a widening of the overall budget deficit and a strong inflationary surge”. This is how the WAEMU macroeconomic rating views the economy of Burkina Faso. The document states that the macroeconomic forecasts are subject to important risks which are:
– the stagnation of the security crisis with a gradual loss of control of the territory by the authorities;
– non-compliance with the roadmap of the Transition, in particular, the section relating to the return to constitutional order which would lead to economic and financial sanctions by regional institutions against the country;
– the consequences of the constitutional upheaval in the implementation of certain major structuring projects financed, in part, from outside.
Thus, the Union’s experts call on the authorities to take steps to continue:
– efforts to ensure a safe environment conducive to the development of activities;
– the implementation of the Transition roadmap, in accordance with the commitments made to the population and partners;
– raising awareness among development partners of the need to support the country in certain sectors, given the difficulties of the moment.
(Source: MACROECONOMIC FRAMEWORK NOTE 2022-2026 OF THE UNION: UPDATE
file:///C:/Users/sandr/Downloads/CUEMOA_DPE_DPEE__Note_Cadrage_3%C3%A8me_Edition_2022.pdf)
