- The political crisis in neighbouring Côte d'Ivoire has provoked a measurable setback for the economy in Burkina Faso, according to the government in Ouagadougou. Both export and tax revenues have been hurt, cutting back the country's economic growth.
According to a Burkinabe Memorandum of economic and financial policies for 2003–06, published by the International Monetary Fund (IMF) today, growth in Burkina Faso has decreased substantially.
While real GDP growth had averaged 4.2 percent for the 1999-2002 period, it is dipping to an expected 2.6 percent in 2003. Most of this economic cooling is attributed to the crisis in Côte d'Ivoire. If the situation there settles, the Burkinabe government expects to see growth rated climb up to around 5 percent within short.
- The crisis that erupted in Côte d'Ivoire in September 2002 has seriously disrupted transportation, trade, and production in Burkina Faso, says Jean-Baptiste Compaoré, Burkinabe Minister of Finance and Budget.
Landlocked Burkina Faso has its main outlet to world markets via the Ivorian port of Abidjan. However, the Ouagadougou-Abidjan road connection has been closed due to civil war during most of the last ten months. Further, the Ivorian government has had a hostile attitude towards Ouagadougou, alleging the Burkinabe government was supporting its northern rebels. Burkinabe citizens have been attacked by Ivorian civilians and police officers.
Burkinabe exporters thus have found their Abidjan outlet either physically closed or too dangerous. More expensive export outlets therefore had to be found, mostly via Accra (Ghana) or Lomé (Togo). This again has cut margins and revenues for Burkinabe producers, decreasing GDP growth and government's tax revenue basis.
Minister Compaoré confirms that "efforts to improve the country's fiscal position were thwarted in the second half of 2002, in part owing to the negative impact of the crisis in Côte d'Ivoire."
In addition to decreased revenues for Burkinabe exporters, also the incomes generated by the many Burkinabe plantation workers in Côte d'Ivoire have shrinked. Burkinabe migrant workers used to be the largest working force on Ivorian plantations, but most had to return to Burkina Faso due to the conflict. Many were chased by increasingly xenophobic Ivorians and others found their plantations to have become battle grounds.
Money sent home from these migrant workers was known to have been one of Burkina Faso's main foreign revenues. For the Burkinabe government, a major source of tax and VAT income thus had diminished.
Reduced export revenues and money transfers from migrant workers had a harsh effect on many Burkinabe villages, depending on these incomes. While harvests have been good in most of the country, those regions with failed harvests however found themselves in a double crisis.
The Burkinabe government therefore also had to increase its humanitarian assistance due to the crisis in Côte d'Ivoire and give price support for agricultural inputs in cotton-growing areas.
Minister Compaoré however foresees a rapid improvement in his country's economy. Real GDP growth is expected to rise to well over four percent next year and keep growing. "The average annual real GDP growth rate is anticipated to be 5.2 percent in 2006," Mr Compaoré foresees.
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