Embed This Data
- GDP (PPP):
- $24.3 billion
- 8.0% growth
- 5.7% 5-year compound annual growth
- $1,399 per capita
- Inflation (CPI):
- FDI Inflow:
Burkina Faso’s economic freedom score is 58.9, making its economy the 98th freest in the 2014 Index. Its overall score has decreased by 1 point since last year due to declines in financial freedom, trade freedom, monetary freedom, and labor freedom. Burkina Faso is ranked 13th out of 46 countries in the Sub-Saharan Africa region, and its overall score is above the world average.
Over the 20-year history of the Index, Burkina Faso has advanced its economic freedom by 9.4 points. It has recorded notable improvements in seven of the 10 economic freedom categories including freedom from corruption, business freedom, and monetary freedom, the scores for which have improved by about 20 points or more since the Index began assessing the country’s economic freedom in 1995.
Nonetheless, Burkina Faso has been largely confined to the ranks of the “mostly unfree” over the past 20 years. The lack of capable public institutions and weak rule of law continue to undermine the successful implementation of other critical reforms. Tariff and non-tariff barriers, coupled with burdensome investment regulations, continue to hamper development of a more dynamic private sector and interfere with diversification of the country’s economic base.
President Blaise Compaoré seized power in 1987, and the constitutional council has ruled that the constitutionally mandated two-term limit does not apply to him. Compaoré was re-elected to the presidency in 2010. Army revolts and mass protests contributed to a highly unstable political climate in 2011, but order has been restored. Burkina Faso has sent 500 troops to Mali to help secure the northern half of the country from Tuareg separatists and al-Qaeda–linked groups. Burkina Faso relies heavily on cotton and gold exports for revenue. Approximately 90 percent of the population depends on subsistence agriculture. Lack of adequate infrastructure, a low literacy rate, and an economy that is vulnerable to external shocks are long-standing problems.
Although the government stepped up anticorruption efforts in 2012, corruption remains widespread. Government procurement can be irregular, and public funds are not well accounted for. The judiciary is weak, judges can be removed arbitrarily, and legal codes are outdated. Civil servants, especially in the police and customs, may demand bribes. Members of the presidential family and the ruling party control key economic activities.
With a cut in the top corporate tax, the individual and corporate income taxes are both 27.5 percent. Other taxes include a value-added tax (VAT). The overall tax burden is 13.7 percent of total domestic income. Government expenditures are around 24 percent of GDP, and public finances have been boosted by strong growth and agricultural exports. Public debt has fallen below 30 percent of GDP.
Overall progress in easing regulatory constraints lags behind other developing countries. Getting necessary licenses costs over three times the level of average annual income. The labor market remains underdeveloped, and a large portion of the workforce is employed in the informal sector. The state subsidizes fuels and electricity, maintains price supports for cotton, and influences other prices through the public sector.
Burkina Faso has an average tariff rate of 8.6 percent. Importing is costly and time-consuming. In general, government policies do not discriminate against foreign investors. The financial system continues to evolve. The government has pursued banking liberalization and restructuring, encouraging competition in the financial sector. The use of credit has increased, reaching a level equivalent to over 20 percent of GDP in recent years.