• A new report on the national economy
• Growth of 7.0% in 2021
• “Investment in digital infrastructure would improve the growth rate”
The World Bank organized a dissemination ceremony for the “Report on the situation of the economy in Burkina Faso” on June 09, 2022 in Ouagadougou, under the chairmanship of the Minister of Economy, Finance and Prospective, Seglaro Abel Somé . “The production of such analytical work aims to support countries in the formulation of their strategies and public policies and to better target the areas of intervention for the benefit of the populations,” said Maïmouna Mbow Fam, Resident Representative of the World Bank in Burkina Faso. The Burkina Faso Economic Brief is a periodic World Bank publication that highlights recent economic trends and discusses development issues relevant to the country. It draws on existing and ongoing World Bank analytical work to present and analyze key economic and social issues of the day. The update is intended for the general public and serves as materials to contribute to discussions between policy makers, non-state actors, researchers and citizens regarding the economic choices facing the country.
Three people presented the April 2022 report entitled “Resilience in times of uncertainty: promoting digital services”: Daniel Pajank and Kodzovi Abalo, respectively Principal Economist and Economist at the World Bank and co-author of the report, and Fatimata Dicko. It can be noted that the economy of Burkina Faso recorded growth of 7.0% in 2021, after a deceleration of 1.9% in 2020, due to Covid-19. This rebound in growth is mainly due to that of the service sector and to major investments in mining production, notably gold, as well as in the manufacturing industry. The Burkinabè economy should continue its growth trajectory in 2022 to reach 4.8% thanks to private consumption, a moderate rebound in agricultural production, and the continued good performance of the gold sector. The poverty rate is expected to have declined in 2021, although the absolute number of people living in extreme poverty is only slowly decreasing, due to the country’s high population growth and the nature of the sectors that have driven this growth. The report analyzes the impact of the Covid-19 pandemic and the climate and security crises on the Burkinabè economy. He noted that the near-term outlook is subject to multiple downside risks, including rising inflation following rising world prices, due to the conflict between Russia and Ukraine. If these risks were to ease, growth should stand at 5.3% over the period 2023-2024 and the extreme poverty rate would continue to fall in the medium term, by about 1 percentage point per year. The effects of the various crises in combination with structural challenges have had a negative impact on food security and export bans in response to food price increases could prove ineffective or counterproductive. According to the authors, “the government could consider measures to replenish strategic food stocks, strengthen early warning systems, make them more transparent and predictable while defining the methods of withdrawal, and finally, strengthen food aid to the most vulnerable, including through an accelerated operationalization of the single social register”. They also recommend policy options to improve the macro-fiscal and poverty outlook, digital financial services, and more generally digital technologies to strengthen the country’s economic resilience, and create new opportunities for growth through productivity gains, more of innovation and inclusion.
Professor Pam Zahonogo, President of Thomas Sankara University, and Deputy Director General of Economics and Planning, Kabiogda Larba Issa, cast a critical eye over the report. Discussions between participants in the dissemination ceremony and World Bank officials focused, among other things, on methodology, digital services, the cost of Internet connection, the growth index, the dematerialization of procurement procedures of markets. The Covid-19 pandemic has revealed that the adoption of digital technologies globally has been the most common coping mechanism for businesses, and those that have led the way have, on average, gained better results than companies that were slow to adapt. “Digital services could and should be an opportunity to increase the resilience of the Burkinabè economy,” said Maïmouna Mbow Fam.
Promotion of new sectors
The April 2022 edition of the report focuses not only on public finance reforms capable of freeing up more budgetary space to strengthen the delivery of goods and services to populations, but also on the promotion of new sectors capable of create jobs and boost long-term growth, as well as its resilience and inclusion. Under these sectors, the digital service, which is extensively discussed in the report, occupies a central place.
Edition number: 443