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The economy of Burkina Faso performed really well over the years and was therefore able to resist the external influences caused by the crisis in Cote d’Ivoire, the continous down fall of the dollar, the steep rising oil price, the food crisis and the steep fall of the cotton prices on the international market for which Burkina Faso, stands among ever since 2005 the top two cooton producers in Africa.

the remarkable outcome in political and economic governance has kept Burkina Faso continuously eligible to the Millennium Challenge Corporation of which Technical negotiations have been successfully concluded with an upcoming of the compact signature scheduled for the end of July 2008.

The MCC fund will allow substantial additional financial resources for the development of agriculture, land tenure and road network.

ECONOMIC GROWTH

In 2008The difficult sub regional context and a hard international environment featured by the oil prices rising, food crisis resulted in a slight decrease of the economic growth from 6.5% to 4%. However, the Country is forecasting a growth of 5% in 2009 despite the current situation.

The good resistance to the current economic turbulence is attributable not only to the reforms that the government has been implementing, to skilful handling of the exogenous shocks but also to final private consumption growth.

INFLATION

Given the awareness of the importance of mining sector in the development of Burkina Faso, the Government intensified over the past year the geological and mining activities research and some careers substances resulting in an increase in the number of mining titles and approvals .

Let’s underscore with contentment the effective kickoff of the construction of the gold mines of Youga in Boulgou and of Taparko in Namentenga, from which the first gold bars are expected before the end of the ongoing year.

It is also necessary to underline the termination of the study of practicability of the three (3) mining projects of the gold mines of Mana-Fobiri in the Balé, of Inata in the Soum and of the zinc mine of Perkoa in the Sanguié, for which the exploitations are ongoing since March 2007.

As part of the promotion of the private sector, the permanent dialog inaugurated by the government was continued in 2006 resulting in important measures taken by the government such as : the launching of a special operation for issuing land ownership titles all over the thirteen regional capitals cities ; (the review of the perception mode of the 80 % VAT deduction which is now at 20 % as part of the finance act 2007); the organization of a special operation for the renewal of the taxis (parking cars areas), which is under way; the reduction of transfer expenses from 15 % to 10 %, which is effective in the finance act 2007; and the effective launching of a program so called "Doing Business in Burkina Faso," with the purpose of speeding up reforms for the improvement of the business climate and making the country one of Africa’s most attractive country.

The implementation of a Center for business development to help business formalities and complexities (Known by its French acronym CEFORE) has led to reducing the administrative costs by 40 % as well as the time to start up a business from 23 days to 7 days. As a result, a total of 4,700 new firms were created in 2006, which represents an increase of more than 23 % in comparison to 2005.

In the same way, the government has taken actions aiming at improving the investments frame resulting in the issuance of 43 consents (Click here to view the investment codes) (Click N0.) including 22 in the industrial sector, for projected investments of 193.5 billion CFA francs and the creation of 2,346 jobs

The Government also developed rehabilitation campaigns for the industrial firms listed below and created in 2005 some others with the purpose of consolidating existent industrial gap: FILSAH, JOSSIRA, Les Grands Moulins of Burkina (the Big Mills of Burkina) and Burkina Faso Textile (FASOTEX by its French acronym).

As part of the approvals of the establishment of industrial units, the year 2006 recorded fifty one (51) approvals for projected investments of around 16 billions CFA francs and projected 1,316 new jobs. Moreover, important efforts were unfolded with the objective of starting the transformation of our cotton on site, which will increase the added value for our economy.

In the commercial sector, the emphasis accent was put on the promotion of our own made products. In this regard and due to the creation of the Burkinabè company of fruits and vegetables (Known by its French acronym SOBFEL) and the activation of the fruit Terminal of Bobo-Dioulasso, the fruits and vegetables industry goes through a certain revival and already shows very encouraging results.

By obtaining textile visa as part of the African Growth and Opportunity Act (AGOA), the Government nowadays displays informative actions, awareness and support to the economic operators, with the objective of reinforcing the volume of our exports and notably to the American market, (where all should allow the promotion of our textile and craft products at best).

Burkina Faso also took part in the different negotiations rounds on Economic Partnership Agreements (EPA), voicing together with other countries of the Region the necessity of reaching agreements deemed true instrument in the development of our economies.

In the course of the 2005/2006 harvest year, the organization of the cotton industry was consolidated by the setting up of an inter-branch organization and the adoption of a new mechanism to set up producer’s price. On the performance plan, Burkina Faso’s cotton production settled at 806,000 tons of cotton seed, which represents a 13 % increase compared to the production of the previous year.

The industry remains nevertheless confronted to a deep financial disequilibrium mainly due to the weakness of worldwide costs in most cases. The government and the actors of the industry have put in place an exit strategy from a crisis, which puts the emphasis on the conditions of its sustainable development.

Besides, the marketing campaign of 2006/2007 would have been disastrous without the Government’s special and significant financial effort.

One of the major points of the Government's strategy when it comes to the commercial field is to transform our country into a major economic pole in West Africa. It is in this perspective that the government has launched an international Railway freight station of 5 billion in cost in Bobo-Dioulasso, thus becoming the crossroad and the meeting point of the sub-region.

Finally, besides the building of facilities for the reception and treatment of goods in the harbor of Téma, the abilities of the international railway station when it comes to the goods from Ouagadougou (OUAGARINTER) are going to be reinforced by the building of a container terminal.

In the field of privatization, the year 2006 has experienced the release of 51 % of ONATEL's shares by the burkinabè Government to the favor of Morocco Telecom. This first stage in ONATEL’s privatization process was made effective with the signature of the release convention on December 29th, 2006.

The partial withdrawal of the State from ONATEL will continue in 2007, with the realization of public offering of securities at a set price (French acronym: OPV) which will consist of the release of 20 % of ONATEL's shares through the regional stock market (French acronym BRVM), to promote people’s shareholding. Six percent (6 %) of the shares will return to the personnel. At the end of the process, the State will remain a minor sharehold in the firm’s capital with a 23 % share.

In March, 2006, Burkina Faso possessed a network of 630,000 mobile phone customers, with a 30 % growth rate compared to 2005. On January 1st, 2007, the number of subscribers has reached 1.016.605 customers, which is a 62 % progress rate.

The number of fixed telephone lines has gone from 91,000 to about 100,000 main lines. This represents a total of 5.5 – 8.5 telephones for 100 inhabitants (mobile and fixed).

The bandwidth of the international connection to the Internet has gone from 42 to 197 megabits / seconds, upward, and from 60 to 215 megabits / seconds downward

For the rural telephone, 27 new localities are from now on equipped.
The development of electronic communications has recorded stupendous progress in 2006.

Being an essential factor in development and in the fight against poverty, employment remains a constant concern for the Government

In the field that finances micro-projects, the Support funds for the promotion of employment (French acronym FAPE) financed in 2006, a hundred and four (104) firms in the agro-pastoral, craft, commercial field, services performance and transport at a cost of 371 million CFA francs. These actions of financing firms and pre financing promoters generated 670 new jobs in total.

As for the Support funds to the Informal sector (French acronym FASI), it has financed 623 micro-projects at a cost of 755.6 million CFA francs, thus allowing the creation of 339 jobs and the strengthening of 4,087 others.

While ensuring the improvement of professional training quality, the certification of professional trainings to promote and open bigger perspectives to the trained youth was tested in 2006.

The 2007 macro economic program aims at specifying macro economic stability and lays the foundations for a favorable growth to the poor.
The growth rate is projected to be 6.5 % supported by the transformation of the good cotton crops year in 2006. The expected improvement from the terms of exchange will rise up to 4 %.

Based on the good cereal revenue in 2006, inflationary pressures will be weak and the inflation rate is projected to reach 2 % in conformity with WAEMU’s convergence criteria.
On the subject of public finances, with the intention of supporting a careful macroeconomic management and in order to preserve the sustainability of debt, the total balance, including donations, is projected to be 4,1 % of the GDP.

In the area of structural policies, the government will continue to improve the business climate, to carry out the privatization program, the promotion of good governance and the fight against corruption, and simplification of the fiscal system to develop the private sector in order to strengthen growth.