Subchapters:
- Basic data
- Public finances and the state budget
- Banking system
- Tax System
Basic data
Burkina Faso’s economy recorded 5.7% GDP growth in 2019 despite security threats in the country. Due to the COVID-19 outbreak, GDP growth slowed to -1.5% in 2020. 2021 saw a slight recovery and 3.8% GDP growth. Inflation is highly sensitive to domestic agricultural production, for 80% of the population, which relies on plant and animal production for its livelihood, this means that food has a significant weight in the consumer price basket. Food shortages will worsen. Inflation is expected to rise from an annual average of 3.9% in 2021 to 4.5% in 2022. The trade surplus relative to GDP will narrow in 2022-23 as the import bill grows (partly) driven by rising global oil prices in 2022. Check ebizdir for economical facts of Burkina Faso.
Agriculture employs approximately 24.7% of the people, while industry and services employ 33.9% and 41.4% respectively. Agriculture accounts for 20.3% of the total GDP. About 80% of the population is engaged in subsistence agriculture, with cotton being the main crop. Other crops are peanuts and sesame, sorghum, maize and rice. The industrial sector is dominated by government-owned companies and contributes about 22.4% of GDP.
| Pointer | 2019 | 2020 | 2021 | 2022 | 2023 |
| GDP growth (%) | 5.7 | -1.5 | 3.8 | 2.3 | 3.1 |
| GDP/population (USD/PPP) | 2,274.70 | 2,273.20 | 2,370.00 | 2,450.00 | 2,520.0 |
| Inflation (%) | -3.2 | 2.1 | 3.9 | 4.5 | 3.4 |
| Unemployment (%) | 4.7 | 4.9 | ON | ON | ON |
| Export of goods (billion USD) | 3.2 | 3.2 | 4.9 | 5 | 5 |
| Import of goods (billion USD) | 3.6 | 3.6 | 4.3 | 4.5 | 4.7 |
| Trade Balance (Billion USD) | -1 | 0.4 | 0.7 | 0.6 | 0.5 |
| Industrial production (% change) | ON | ON | ON | ON | ON |
| Population (millions) | 20.3 | 20.9 | 21.5 | 22.1 | 22.7 |
| Competitiveness | ON | ON | ON | ON | ON |
| OECD export risk | 07.VII | 07.VII | 07.VII | ON | ON |
Source: EIU, OECD, IMD
Public finance and state budget
| Public finance | 2021 |
| State budget balance (% of GDP) | -2.1 |
| Public debt (% of GDP) | 39.3 |
| Current account balance (billion USD) | 0 |
| Taxes | 2022 |
| AFTER | ON |
| F.O | ON |
| VAT | ON |
The new regime will adhere to the new National Development Plan for 2021-25, which was announced in July 2021. The policy will initially maintain a focus on limiting the impact of the pandemic on the economy. However, as life with covid-19 increasingly becomes the new normal over the forecast period, attention will gradually shift back to economic development to raise living standards. Revenues as a proportion of GDP will decrease in 2022 due to the slowdown in economic growth caused by the coup. Revenues will increase slightly in 2023 as economic growth accelerates. Spending relative to GDP will decline in 2022 as the government tries to control spending in the face of weaker growth and falling revenues following the January military coup.
In 2021, Burkina Faso’s government debt (% of GDP) was 39.3%. Burkina Faso’s government debt (% of GDP) increased from 20.1% in 2006 to 44.3% in 2020, growing at an average annual rate of 6.08%. On the foreign exchange market, the exchange rate of the dollar against the CFAF is stabilizing. In the first quarter of 2021, the rate remained at 544.1FCFA compared to 544.2FCFA in the previous quarter. However, in a year-on-year comparison, the current rate is below the value relative to the CFAF in the same quarter of the previous year.
Burkina Faso is a member of the Economic Community of West African States (ECOWAS) and the West African Economic and Monetary Union (WAEMU). It has also ratified the African Continental Free Trade Agreement, which entered into force on 30 May 2019. The main objective of the AfCFTA is to create a single continental market for goods and services with free movement of businesses and investments, paving the way for an accelerated customs union. It will also expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation and instruments across regional economic communities and across Africa in general. The AfCFTA is expected to enhance competitiveness at the sectoral and corporate level by leveraging large-scale production opportunities, continental market access and better reallocation of resources.
Banking system
Burkina Faso’s financial system includes 13 commercial banks, 3 banking financial institutions, 16 insurance and reinsurance companies, and 153 entities licensed for microfinance. These institutions operate within a harmonized regulatory framework and are organized around several community bodies, the most important of which are the Central Bank of West African States (BCEAO), the Banking Commission of the West African Economic and Monetary Union (WAEMU), the Ministry of Economy and Finance and the Inter-African Conference on Insurance Markets ( CIMA). Supervision of the banking sector and prudential control is carried out by the WAEMU Banking Commission, which is responsible for granting and revoking operating licenses to credit institutions, with the exception of microfinance institutions whose licenses are administered by the Ministry of Finance. The Commission is also responsible for administrative supervision and the imposition of disciplinary measures and sanctions against non-compliant credit institutions. The National Insurance Directorate of the Ministry of Economy and Finance oversees the insurance industry together with the Inter-African Conference on Insurance Markets (CIMA), which oversees the activities of entities at the regional level. CIMA’s role is to assist national authorities in regulating the insurance industry and ensuring compliance with prudential rules. The WAEMU Financial Markets Authority (AMF-UEMOA), formerly known as the Regional Council for Investments and Financial Markets (CREPMF), is the regulatory body of the Regional Stock Exchange (BRVM) to which Burkina belongs. Two Burkinabe companies are listed on the BRVM. Banks continue to dominate Burkina Faso’s financial sector. The four largest banks hold almost 65% of all banking and financial sector assets under BCEAO control. Thirteen banks in the country had a balance sheet total of CFAF 4.466 billion in 2016, which is 19% more year-on-year. Burkinabe banks are well capitalized and contribute roughly CFAF 70 billion per year to the cotton season. The Agricultural Bank of Burkina Faso (BADF) officially began operations in March 2019. Despite recent progress, difficulties in accessing financial services persist. About 39% of Burkinabe adults are excluded from the financial system.
Tax system
Income tax is progressive and depending on the amount of earnings is between 1- 25% with the first 30,000 XOF being tax-free, corporate tax is 27.5% dividends are taxed at 12.5% (for residents and non-residents) interest is taxed 12.5%/25% (for residents and non-residents) license fees for residents 0% for non-residents 20% VAT is 18%.
