Burkina Faso - Economy

Burkina Faso remains one of the poorest countries in the world. Agriculture accounts for about 35% of the GDP and employs about 90% of the labor force. Food staples—millet, sorghum, maize, and rice—are the principal crops grown for domestic consumption. Cotton is the principal export crop; its cultivation, however, is notably price sensitive. In addition, Burkina exports small amounts of shea nuts, sesame, groundnuts, sugar, cashews, and garden vegetables. The livestock sector was once substantial, but had declined by 2002.

The environmental conditions for agriculture are often precarious. Northern Burkina is at the edge of the Sahara Desert and has been subject to severe drought. Furthermore, Burkina soils are generally poor and lateritic. However, expansion of agriculture to more fertile fields in river valleys was supported by a multimillion-dollar UN project to eradicate "river blindness" (onchocerciasis) which had previously rendered these locations uninhabitable.

Burkina's mineral sector is largely undeveloped. Long underestimated, the Poura gold reserves have proven to be capable of generating nearly 10% of export earnings annually. Zinc and silver deposits at Perkoa have been judged commercially viable. The World Bank issued loans in 1996 to upgrade the mining industry.

Mineral deposits in the north of the country were hostage to the extension of the Abidjan-to-Ouagadougou rail line to Dori. Significant limestone deposits basic to cement manufacturing are located near Tambao at Tin Hrassan. Other mineral resources are manganese, vanadium-bearing magnetite, bauxite, lead, nickel, and phosphates.

In January 1994 France devalued the CFA franc, causing its value to drop in half overnight. Immediately, prices for almost all imported goods soared, including prices for food and essential drugs, like those to combat malaria. The devaluation was designed to encourage new investment, particularly in the export sectors of the economy, and discourage the use of hard currency reserves to buy products that could be grown domestically. Prior to devaluation, Burkina Faso imported most of its food and had little to export; since 1994, exports have risen. As of 2003, economic progress depended upon reducing the trade deficit, the continuation of low inflation rates, improving the infrastructure, pursuing privatization, developing mineral resources, and encouraging private investment. Foreign aid remains the chief source of finance for investment and economic development. In 1999, the World Bank agreed to implement a five-year structural adjustment program of $53 million, and in 2000, it approved an interest-free $45 million Poverty Reduction Support Credit (PRSC) for the country, to help it carry out poverty-reduction policies and programs.