According to a new World Bank report released last Thursday, Burkina Faso’s economy grew by 7% in 2021 after slowing by 1.9% in 2020 due to Covid-19.
The resumption of growth is mainly due to the services sector and large investments in mining, including gold, as well as in manufacturing. Burkinabe’s economy is expected to continue its growth trajectory in 2022, reaching 4.8% due to private consumption, moderate growth in agricultural production and continued good performance in the gold sector.
Poverty factor: high birth rate
Poverty is expected to decline in 2021, although the absolute number of people living in extreme poverty is only slowly declining due to high population growth and the nature of the sectors that have led to this growth. The report, entitled “Sustainability in Times of Uncertainty: Promoting Digital Services,” examines the impact of the Covid-19 pandemic and the climate and security crisis on Burkinabe’s economy. He noted that the near future threatens many negative factors, including rising inflation after rising world prices due to the conflict between Russia and Ukraine. If these risks mitigate, growth should be 5.3% over the period 2023-2024, and extreme poverty will continue to decline in the medium term by about 1 percentage point per year.
Investing in digital technologies is the way to growth
“There is no doubt that Burkina Faso has shown resilience in 2021, despite the security and health crisis facing the country,” said Maimuna Mbou Pham, World Bank Manager in Burkina Faso. “Large-scale economic reforms and investment in digital infrastructure will allow the country to resume or even improve its growth rate before the Covid-19 pandemic.” In addition, the report notes that the effects of various crises, combined with structural problems, have had a negative impact on food security, and that export bans in response to rising food prices may be ineffective or counterproductive.
“Alternatively, the government could consider measures to replenish strategic food supplies, strengthen early warning systems, make them more transparent and predictable in identifying methods of withdrawal, and finally increase food aid for the most vulnerable, including understanding the Single Social Accelerated Operation. register, ”suggested Daniel Payank and Kodzovi Abalo, World Bank economists and co-authors of the report. The authors also recommend policy options to improve macro-fiscal and poverty prospects, digital financial services and digital technologies in general to enhance the country’s economic resilience and create new opportunities for growth through increased productivity, more innovation and inclusiveness.
In addition, the report proposes specific options for advancing digital technologies so that the private sector can increase its role in supporting economic growth and poverty reduction.
Source: World Bank Report