Burkina Faso - Economic memorandum (Vol. 1 of 2) : Main report

Report No. 7594 JUR Burkina Faso Economic Memorandum (In Two Volumes) Volume l: Main Report Decemnber 5, 1989 Africa Regio,-al Office Saheliza Department FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency unit: CFA Franc (CFAF) Parity: 50 CFAF - 1 French franc AVERAGE EXCHANGE RATE Year CFAF per dollar 1980 211.3 1981 271.7 1982 328.6 1983 381.1 1984 437.0 1985 449.3 1986 346.3 1987 300.5 1988 297.9 The fiscal year follows the calendar year - Symbols used: . not applicable figure not available ... negligible - nil - When a growth rate is presented for a period defined by an initial year and an end year, it is calculated by using the initial year indicated as the base year; for example, 1982-87 signifies that the base year is 1982.  FOR OFFICIAL USE ONLY BURKINA FASO ECONOMIC MEMORANDUM The Economic Memorandum published in September 1983 (Report No. 4040-UV) described economic developments in the country over the period 1977-82, with particular emphasis on h'unan resource development issues. The present report opens with a survey of trends in Burkina's economy and financial situation over the period 1982-87, together with preliminary results for 1988. The second part of the report examines the recent performance of main economic and social sectors in greater detail. In the third section of the report, we shall try to indicate the elenents of an adjustment strategy with the triple objective of improving tha management of public resourc s, maintaining sustainable economic growth. and making substantial progress toward solving the grave demographic, ecological and social problems that will exert a dominant influence over the country's long-term future. This report is based on the work of a mission that visited Burkina Faso in June-July 1988. The mission members were: Mr. X. de la Renaudi6re (mission leader), Ms. D. Lallement (Senior Agro-Economist), Me. E. Goldstein (Economist), Mr. R. Vaurs (Senior Socio-Economist), Mr. F. Steier (Economist), Mr. P. Saverot (Industrial Economist - Consultant) and Mr. S. Samen (Industrial Economist). Others who contributed to the preparation of the report were: Mrs. B. Mitchell (Senior Transportation Economist), Messrs. J. Barro (Resident Mission Economist), H. Suzuki (Public Enterprise Sector Specialist), F. Pechon- (Urban Development Financial Analyst), J.P. Dailly (Operations Officer), Ms. H. Albouy, Ms. C. Desilets (Secretary) and Mr. F. Laporte (Lead Economist, Sahelian Department). A second mission, composed of Mr. X. de la Renauditre, Mr. F. Laporte, Ms. D. Lallement and Ms. E. Goldstein, visited Burkina Faso in January-February 1989 to discuss the draft report with government authorities. These missions benefited from the active cooperation of the Commission Technique Interministerielle Burkinab&. I This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  BURKINA FASO ECONOMIC MEMORANDUM Table of Contents Volume I: Main Report ECONOMIC AND SOCIAL INDICATORS Pege SUMMARY AND CONCLUSIONS i INTRODUCTION 1 A. General Features of Burkina's Economy 1 B. Political Developments 4 I. RECENT ECONOMIC AND FINANCIAL TRENDS 6 A. Production, Income and Prices 7 B. Use of Resources and Savings 12 C. Performance of the Economy in 1988 15 D. The Public Sector 16 (i) General Considerations 16 (ii) Budget Trends 17 (iii) Public Investment 27 (iv) The Parastatal Sector 32 E. The Banking System, Money and Credit 35 (i) The Banking System 35 (ii) Money and Credit 38 F. The External Financial Situation 41 (i) Foreign Trade 41 (ii) Balance of Payments 45 (iii) External Debt 47  Table of Contents (cont'd.) II. THE MAJOR SECTORS 52 A. Agriculture 52 B. Industry 66 C. Transportation 71 D. The Social Sectors 76 III. DEVELOPMENT PROSPECTS AND ELEMENTS OF A GROWTH STRATEGY 86 A. An Indicative Scenario for Growth with Financial Equilibrium 86 B. k4aragement of Public Resource, 101 (i) Public Sector Management 101 (ii) Role of the Parastatal Sector 111 C. Production Policies and Incentives 112 (i) Agricultural Policies 112 (ii) Industrial Policies 124 (iii) Transportation 129 D. Human Resource Development 132 (i) Population Policy 132 (ii) Public Health. Policy 133 (iii) Education and Training Policy 135 (iv) Urban Housing Policy 137 (v) Employment Policy 140 MAP 20660 Volume II: Sectoral and Statistical Annexes Annex I: THE INDUSTRIAL SECTOR Annex II: STATISTICAL TABLES  ACRONYMS AND ABBREVIATIONS BALIB - Banque Libyenne-Burkinabe BCEAO - Banque Centrale des Etats d'Afrique de l'Ouest BF,I - Banque pour le Financement du Commerce et des Investissements BIB - Banque Internationale du Burkina BIC - Imp6ts sur les Benefices Industriels et Commerciaux BICIA-B - Banque Internationale pour le Commerce, l'Industrie et l'Agriculture du Burkina BND-B - Banque Nationale de Developpement du Burkina BRAKINA - Societe des Brasseries du Burkina BTP - Bltiments et Travaux Publics BUMIGEB - Bureau de la Geologie et des Mines du Burkina CAI - Caisse Autonome d'Investissement CBC - Conseil Burkinabe des Chargeurs CBMP - Comptoir Burkinabe des Metaux Precieux CDR - Comites de Defense de la Revolution CEAO - Communaut6 Economique d'Afrique de l'Ouest CGP - Caisse Gen6rale de P6rOquation CIMAT - Societe Burkinabt des Ciments et Matdriaux CNCA - Caisse Nationale de Credit Agricole CNDI - Caisse Nationale des Depots et des Investissements CNE - Caisse Nationale d'Epargne CNEA - Centre National d'Equipement Agricole CNPAR - Centre National pour la Promotion de l'Artisanat Rural CNR - Conseil National de la Revolution CNSS - Caisse Nationale de Securite Sociale COBU - Confiserie du Burkina COFA - Confiserie du Faso COMiKI - Compagnie Minibre de Kiere CRPA - Centre Regional de Production Agropastorale CSPPA - Caisse de Stabilisation des Prix des Produits Agricoles EPA - Etablissement public A caractere administratif EPIC - Etablissement public A caractere industriel ou commercial FASOPLAST - Societe des Plastiques du Faso FGPME - Fonds de Garantie aux Petites et Moyennes Entreprises GMB - Grands Moulins du Burkina INSD - Institut National de la Statistique et de la Demographie IUTS - Imp6t Unique sur les Traitements et Salaires MABUCIG - Manufacture Burkinabe de Cigarettes  ACRONYHS AND ABBREVIATIONS (cont'd) OFNACER - Office National des Cereales ONAC - Office National du Commerce Exterieur ONBAH - Office National des Barrages et Amenagements Hydro-Agricoles ONEA - Office National de l'Eau et de l'Assainissement ONERA - Office National d'Exploitation des Ressources Animales ONG - Organisation Non-gouvernmentale ONPE - Office National de la Promotion de 1'Emploi ONPEB - Office de Promotion de 1'Entreprise Burkinabe ORD - Organisme Regional de Developpement PNGTV - Programme National de Gestion des Terroirs Villageois RAN - Regie Abidjan-Niger RNTC-X9 - Regie Nationale de Transports en Commun SAP - Societe Africaine de Pneumatiques SBE - Societe Burkinabb d'Equipement SEG - Societe d'Entreprise Generale SEN - Societe d'economie mixte SHSB-CITEC - Socidt4 des Huiles et des Savons du Burkina SICOMAF - Societe Industrielle et Commerciale des Allumettes du Faso SIEL - Societe Internationale d'Equipement par le Leasing SIFA - Societ6 Industrielle du Faso SINAC - Societe de l'Industrie Nationale de la Chaussure SISP - Systeme Informatique de Suivi des Projets SMG - Soci4td des Mines de Guiro SMIG Salaire Minimum Interprofessionel Garanti SOBBRA - Societe Burkinab6 des Brasseries SOBCA - Societe Burkinabe de Credit Automobile SOBEMA - Societe Burkinabe d'Emaillerie SOBUGAZ - Societe Burkinabe du Gaz SOCOGIB - Societe de Construction et de Gestion Imiobilibre du Burkina SOFAPIL - Societe de Fabrication des Piles SOFITEX - Societ6 Burkinabe des Fibres Textiles SOMICOB - Societe Miniere Cordo-BurkinabC SONABEL - Societe Nationale d'Electricite du Burkina SONABHY - Soci4te Nationale Burkinabe d'Hydrocarbure SONACAB - Societe Nationale des Carreaux du Burkina SONACEB - Societe Nationale de Cartonnerie et d'Emballage du Burkina SOREMIB - Societe de Recherches et d'Exploitation Miniare du Burkina SOSUCO - Societe Sucriere de la Comoe TCA - Tase sur le Chiffre d'Affaire TVA - Tale sur la Valeur Ajoutde UMOA - Union Monetaire Ouest Africaine UREBA - Union Revolutionnaire des Banques  LIST OF TEXT TABLES 1. Sectoral Breakdown of GDP 2. Infonmal-Sector Contribution to Sectoral Value Added 3. Growth in Value Added, by Sector 4. Value Added of the Public Administration 5. Origin ard Use of Resources 6. Breakdown of Fixed Investment, by Economic Agent 7. Savings and Investment 8. Treasury Operations, 1982-87 9. Growth and Elasticity of Budget Revenue, 1982-87 10. Budget Expenditure, by Economic Category, 1982-87 11. Budget Implementation Rates, 1985-87 12. Budget Expenditure, by Function, 1982-07 13. Programme Populaire de Developpement, October 1984-December 1985 14. The Five-Year Plan, 1986-90 15. Public Investment Program for 1988 and Pipeline of Future Proiects 16. Principal State-Owned Enterprises and Mixed Enterprises, 1986 17. Capital Structure of the Banks (September 1988) 18. Banking Ratios (September 1987) 19. Monetary Survey 20. Breakdown of Bank Credit, by Sector 21. Foreign Trade, 1982-87 22. Geographical Distribution of Foreign Trade 23. Balance of Payments 24. Total Indebtedness 25. Debt Service and Accumulated Arrears 26. Real Growth Rates in the Primary Sector (X) 27. Trends in Crop Production, Area and Yields 28. Cereals Food Balance 29. Trends in the Agricultural Trade Balanca 30. Trends in Agricultural Prices and Protection Ratios 31. Growth of Road Network between 1974 and 1988 32. Sectoral Value Added, 1987-97 33. Origin and Use of Resources, 1987-97 34. Projection of Consolidated Government Operations, 1987-97 35. Balance of Payments, 1987-97 36. External Debt, 1987-97 37. Projected World Prices of Key Agricultural Commodities, 1988-2000 38. Agriculture Sector Growth Prospects, 1988-1997  COWNTRY DATA SHE