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Economic situation Great dependency on gold and cotton
Economic growth between 2016 and 2019 ranged from 5.7 to 6.6 per cent. In 2020, it dropped to 1.9 per cent due to the pandemic. Following a significant economic recovery in 2021 (6.9 per cent), 2022 saw growth back down again at about 2.5 per cent as a result of the crisis. The International Monetary Fund (IMF) has predicted growth rates of about five per cent for the next few years.
The COVID-19 pandemic has clearly shown that Burkina Faso's economy is not able to cushion the impact of a crisis. The economy lacks diversification. The main export products are gold and cotton, with the effect that the country is highly dependent on external factors such as world market prices, supply chains and climatic conditions.
A critical security situation, low educational levels and poor infrastructure are holding back the country's economic development. Then there is the unfavourable geographical position: Burkina Faso is landlocked, which means high transportation costs for export industries.
The situation is further exacerbated by high population growth. Although good farmland is scarce, the country needs to feed more and more mouths. Often, new farmland is not used in a sustainable manner, so that over the long term the soil becomes unsuitable for agriculture. Even now, it is estimated that about one third of the country’s land surface is degraded, whilst at the same time Burkina Faso is not fully exploiting the existing potential for increased production. For instance, farmers have no access to modern methods of agricultural production or to appropriate financial services. This is where German development cooperation comes into play (see also core area “Transformation of agricultural and food systems”).
As at: 20/04/2023