- Burkina Faso experienced an economic growth of more than 6 percent last year, according to preliminary analyses. In 2007, growth could be even stronger as oil prices seem to be lower than last year and as the 2006 cotton harvest - which is now to be marketed - was stronger than normal.
These are the principal conclusions of the economic data presented by the Ouagadougou government to an International Monetary Fund (IMF) mission visiting the Burkinabe capital. IMF mission leader Martin Petri today told the press in Ouagadougou that the Fund had been discussing the launching of a new anti-poverty programme and fiscal reforms with the government of Burkina Faso during the last fortnight.
"Burkina Faso's 2006 macroeconomic performance was generally strong despite substantial economic challenges resulting from low world cotton prices and high oil prices," Mr Petri said. "Cereal and cotton harvests have been good, which bolstered growth and led to declining cereal prices and overall food-price inflation. The construction and service sectors also performed well," he added.
All in all, this had resulted in a real GDP growth during 2006 estimated at 6.4 percent - somewhat above the African average. At the same time, average inflation had remained low at 2.4 percent.
Mr Petri expected these positive economic developments to continue or even strengthen in the year that has just begun. "Real GDP growth in 2007 is projected at 6½ percent, slightly above trend growth," he said. Burkinabe government and IMF data had put inflation projections for 2007 at about 2 percent.
Several positive trends were pointing towards this encouraging development of the Burkinabe economy. "The processing of the strong 2006 cotton harvest should support real GDP growth in 2007. Another positive growth impulse is likely to come from lower world oil prices and larger government spending," the IMF mission concluded.
But there were also several obstacles that could jeopardise this high growth rate. "Downside risks for growth outlook could result from the financial difficulties in the cotton sector, if they are not resolved shortly," Mr Petri warned. The IMF mission also strongly cautioned against "accelerating spending before sufficient and durable resources have been identified, thereby strictly limiting the accumulation of new debt."
Burkinabe officials had assured the IMF mission that stakeholders in the cotton sector were now "working hard to put the sector on a sustainable basis." The Fund however cannot help Burkina Faso in removing its main obstacle for a sustainable cotton sector, which are cotton subsidies in the US and Europe that keep world prices unbearably low.
But given the indigenous reform policies of Burkinabe Finance Minister Jean-Baptiste Compaoré, IMF officials were even positive about the long-term economic outlook of the poor Sahelian country. With the new anti-poverty programmed now discussed between government and Fund officials, Mr Petri said Burkina Faso stood a real chance of reaching the UN's Millennium Development Goals (MDGs).
With these new programmes, Burkina Faso was to move towards millennium goal of reducing its poverty rate "to below 35 percent by 2015 while achieving per-capita growth rates of at least 4 percent," Mr Petri said. The MDG poverty goal does only aim at halving national poverty rates from 2000 to 2015, independently from the starting level.
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