BURKINA FASO: THE NINTH ANNUAL REVIEW OF THE POVERTY

UNCLAS OUAGADOUGOU 000471


AF/W FOR ACOOK

E.O. 12958: N/A
TAGS: SOCI EAID AMED PGOV UV
SUBJECT: BURKINA FASO: THE NINTH ANNUAL REVIEW OF THE POVERTY
REDUCTION STRATEGY PAPER (PRSP)

REF: A) 08 OUAGADOUGOU 1024 B) 08 OUAGADOUGOU 202 C) 08 OUAGADOUGOU 420
D) OUAGADOUGOU 047


1. Summary. In April 2009, the Government of Burkina Faso (GOBF),
led by Prime Minister Tertius Zongo, met with the private sector,
civil society organizations and international donors to conduct the
ninth annual review of the country's Poverty Reduction Strategy
Paper (PRSP). According to the report, a reduced real GDP growth
rate of three percent and an unprecedented inflation of 10.7 percent
are indicators of an economic slowdown. The PRSP also reported that
despite numerous poverty reduction efforts, poverty gained ground in
Burkina Faso with the proportion of people living under the poverty
line increasing from 42.6 percent in 2007 to 42.8 percent in 2008.
This is the second consecutive year that the poverty rate has risen
in Burkina Faso. End Summary.


2. PRSPs are prepared by International Monetary Fund (IMF) member
countries and are updated every three years with annual progress
reports, describing the macroeconomic, structural and social
policies and programs that promote broad-based growth and reduce
poverty. The PRSP is a country-driven, results-oriented document,
involving the coordinated participation of development partners.
The annual review is a participatory process, offering an
opportunity for stakeholders to assess the progress made in the
implementation of the action plan.

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Exogenous Shocks Led to Increased Poverty
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3. According to the PRSP, the Burkinabe economy experienced two
major shocks during 2008; declining world cotton prices and soaring
inflation rates. Although Burkina Faso's economy is not heavily
dependent upon international markets, the world financial crisis has
adversely impacted the cotton sector, which accounts for more than
60 percent of exports. In 2008, inflation caused by increased food,
transportation, and fuel costs, climbed to 10.7 percent from an
annual average of -0.3 percent in 2007. Burkina Faso had not
experienced such high inflation since 1994 when the national
currency, the CFA franc, was devaluated. This rampant inflation led
to several violent demonstrations throughout the country (REF B)
during the first half of 2008. By early 2009, economic indicators
began to show that these shocks were taking their toll on the local
economy. In April 2009, the IMF concluded that "with Real Gross
Domestic Product (GDP) growth projected to decrease to about 3.5
percent in 2009, from 5.3 percent in 2008 there are signs that
economic activity may be slowing."


4. Skyrocketing inflation diminished consumer purchasing power and
pushed some Burkinabe below the poverty line. The PRSP reported
that poverty reduction efforts lost ground in 2008 with 42.8 percent
of the country population now living under the poverty line versus
42.6 percent in 2007 (REF C). Studies conducted by the National
Institute of Statistics from the Ministry of Economy and Finance
concluded that the situation was worse in rural areas (where 48.9
percent of the population is below the poverty line) than in urban
areas (where 20.3 percent live below the poverty line). This is the
second consecutive year that poverty levels increased in Burkina
Faso. The PRSP concluded that "the additional burden of the
international financial crisis leaves little hope that these trends
can be reversed in the near future."

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Key indicators
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5. Education: The PRSP reported that gross primary school
enrollment rates rose to 72.5 percent in 2008 from 66.5 percent in

2007. This improvement is linked to the ten-year plan implemented
by the government in 2007, which mandated free public school
education for children aged 6-16. The data also highlighted a trend
towards more gender-balanced attendance with 45.6 percent of girls
attending primary school in 2008, up from 44.8 percent in 2007.
Unfortunately, the gains experienced in primary schools did not
extend to secondary and higher education. In 2008, the gross
secondary school enrollment rate increased only three percentage
points to 20.7 percent from 17.7 percent in 2007. Although overall
school attendance rates have improved considerably to 72.5 percent
in 2008 from 39.2 percent in 1996, the adult (ages 15 and older)
literacy rate is only 28.7 percent. This low literacy rate is a
major contributor to Burkina Faso's low ranking of 176th out 177
countries on the United Nations Development Program's (UNDP) Human
Development Index (HDI). (REF D)


6. Health: With the exception of insufficient clinic staffing, the
PRSP described overall GOBF performance in the health sector as
"satisfactory." According to the GOBF, only 76.26 percent of health
centers met minimum staffing requirements versus a target of 78
percent because construction of health centers in 2008 outpaced the
government's capacity to recruit qualified medical staff. In 2008,
GOBF-reported immunization rates were 108.56 for tuberculosis;
106.92 percent for diphtheria, tetanus, and pertussis; 100.75
percent for measles; and 100.76 percent for yellow fewer. Partners
welcomed the recent progress made in the health sector, particularly
in immunization coverage, but questioned how 100 percent
immunization rates could coexist with a nationwide measles epidemic.


7. Water and Electricity: The PRSP also noted an imbalance between
rural and urban areas in terms of access to clean water and
electricity. Access to potable water still remains a big obstacle
for many living in Burkina Faso. PRSP indicators show that while
78.8 percent of people living in urban centers have access to clean
water this number falls to 56.6 percent in rural areas. The report
also found that nationwide access to electricity in Burkina Faso is
less than 20 percent. However, according to a recent study
conducted by the West African Development Bank, Burkina Faso is
slightly above the 17 percent national average for West Africa
Monetary and Economic Union countries. Although the PRSP report
indicates that 19.9 percent of Burkinabe have access to electricity,
donors commented that this data does not reflect the huge gap
between urban and rural areas, where access to electricity is
estimated at only 3.62 percent.
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Donor Remarks
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8. During the meeting, donors praised the GOBF for assuming
ownership of the PRSP review process, which now actively involves
civil society organizations. Donors also welcomed the innovative
organization of the PRSP review, which offers an improved framework
for productive debate. They also praised the PRSP's implemented
activities in 2008 and thanked the government for its effective
implementation of reforms in the public finance and business
sectors. These economic reforms earned Burkina Faso a place among
the World Bank's top ten reformers for 2009. However, a forecasted
economic slowdown for 2009 and an increased incidence of poverty,
led donors to urge the GOBF to be more creative with safety nets and
other social policies that target the neediest population segments.
Furthermore, they urged the GOBF to make water and sanitation a high
priority and allocate more financial resources to the sector.


9. Secondly, donors voiced concern that the government had not
undertaken an integrated impact analysis on the effectiveness of
measures to address the 2008 food crisis. They commented that
lessons learned from this incident would be useful in future crises.
Donors also suggested that the GOBF elaborate a global strategy for
agricultural development that pays special attention to the cotton
sector. Furthermore, Burkina Faso should conduct research that
would help determine how best to diversify the nation's exports.
Decreasing its reliance on a single crop would help the country to
maintain macroeconomic stability during exogenous shocks.


10. Thirdly, donors stated that corruption remained a key issue in
poverty alleviation, particularly in view of the aspirations of the
people of Burkina Faso. They conceded that the GOBF has made
progress in controlling corruption at regulatory and institutional
levels. Donors pointed out that although the 2008 Transparency
International report praised the country's progress, the GOBF should
continue to forge ahead with measures such as the renewal of a
regulatory framework for public procurements. Donors also stressed
the usefulness of the recently published 2006 and 2007 Court of
Accounts' reports, which review public revenues and ensure the audit
and management of state corporations and companies in which the
Government has a share capital. However, donors maintained their
stance that, "the political will to combat corruption can only be
measured by tangible results."


11. Finally, donors thanked the GOBF for designing a triennial plan
2008-10 to support the decentralization process in Burkina Faso.
They mentioned that numerous challenges remain in the transfer of
resources from the central government to local authorities, and
reminded the government of its fundamental role in strengthening
local stakeholder capacity. Donors criticized the 2009-12 PRSP plan
because "it appeared that targets for certain indicators were below
2008 achievement levels." They suggested that in order to be
effective, "the GOBF should find a better balance between caution
and ambition when determining relevant PRSP indicator targets."
Donors reminded the GOBF that a forecasted GDP rate of 3.5 percent
coupled with an annual population-growth rate of 3.1 percent will
make poverty-reduction efforts even more difficult in the future.

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Civil Society Organization (CSO) Remarks
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12. Pierre Ouedraogo, CSO spokesperson, said that CSOs were
well-integrated into the 2008 PRSP review process. During the
meeting, CSOs questioned the benefit of monitoring indicators that
focus on quantitative aggregated data but fail to include
qualitative data, which is also important for assessing poverty.
CSOs cited the example of gross enrollment rates, which demonstrate
the number of children attending primary school, but do not examine
the quality of education the children are receiving. CSOs also
pointed out several missing indicators including the youth
unemployment rate and malnutrition rates by gender and region.


13. CSOs also questioned the GOBF's lack of a coherent assistance
policy during its response to the 2008 food crisis. They voiced
concern that prior to the crisis; the GOBF had practically phased
out the agricultural sector by failing to provide substantial
support to the Ministry of Agriculture's extension services. Then
in 2008, dramatic price increases essentially forced the government
to intervene in the agricultural sector by subsidizing seeds and
fertilizers. According to CSOs, this assistance only addressed the
immediate crisis and lacked a mid or long-term strategy. CSOs also
claim that government assistance failed to reach the poorest farmers
because it was distributed according to political patronage instead
of need. (Comment: This criticism is a 180 degree change from the
Structural Adjustment Programs (SAP) of the 1990s when international
agencies like the World Bank and the IMF recommended reduced
government interference in the agricultural sector.)


14. Conclusion. The current international economic crisis, a
forecasted GDP rate of 3.5 percent, and an annual population growth
rate of 3.1 percent means that Burkina Faso will face many
challenges in its struggle to alleviate poverty and meet its
Millennium Development Goals (MDG). Donors and civil society
organizations seem convinced that despite negative exogenous
factors, the GOBF is committed to the implementation of its PRSP.
In order to reverse poverty trends, the GOBF will need to implement
innovative measures, continue to progress in the areas of healthcare
and education, and make a concentrated effort to diversify its
agricultural production.

LAEUCHLI