urkina Faso’s economic freedom score is 56.7, making its economy B the 117th freest in the 2020 Index. Its overall score has decreased by 2.7 points, with a plunge in the score for fiscal health. Burkina Faso is ranked 15th among 47 countries in the Sub-Saharan Africa region, and WORLD RANK: REGIONAL RANK: its overall score is slightly above the regional average and below the 117 15 world average. The dip in Burkina Faso’s economic freedom is the first significant ECONOMIC FREEDOM STATUS: decline in the past 10 years, during which the economy had briefly MOSTLY UNFREE touched the moderately free ranks. Despite that relatively stagnant performance, GDP growth has been robust for the past five years, albeit in the context of extremely low per capita income.
For the economy of Burkina Faso, now mostly unfree, to make the leap to moderately free, the government will have to implement deep, broad, and well-institutionalized reforms to improve scores for property rights, judicial effectiveness, and government integrity, while also addressing shortcomings in the regulatory environment for businesses and banks.
ECONOMIC FREEDOM SCORE
▼ DOWN 2.7 POINTS 56.7
0 50 60 70 80 100
REGIONAL AVERAGE WORLD (SUB-SAHARAN AFRICA REGION) 55.1 61.6 AVERAGE
HISTORICAL INDEX SCORE CHANGE (SINCE 1996): +7.3
RECENT FREEDOM TREND QUICK FACTS
POPULATION: UNEMPLOYMENT: 19.5 million 6.1% 59.1 59.6 60.0 59.4 56.7 GDP (PPP): INFLATION (CPI): $38.8 billion 2.0% 6.0% growth in 2018
5-year compound FDI INFLOW: $480.0 million annual growth 5.3% $1,996 per capita PUBLIC DEBT: 43.0% of GDP
2018 data unless otherwise noted. Data compiled as of September 2019
BACKGROUND: The former French colony of Burkina Faso is one of the world’s poorest countries. After popular protests forced President Blaise Compaoré from office in 2014, Roch Marc Christian Kaboré of the People’s Movement for Progress was elected to a five-year term as president in 2015. In January 2019, the country’s prime minister and its entire cabinet resigned, most likely in response to a recent dramatic surge in terrorist attacks in Burkina Faso. About 90 percent of the population is engaged in subsistence farming, and cotton is the principal cash crop. Literacy rates are well below the regional average. Other challenges include political insecurity in neighboring Mali, unreliable energy supplies, and poor transportation links.
156 2020 Index of Economic Freedom WORLD AVERAGE | ONE-YEAR SCORE CHANGE IN PARENTHESES 12 ECONOMIC FREEDOMS | BURKINA FASO
RULE OF LAW GOVERNMENT SIZE
(–2.2) (–0.3) (–2.5) (–0.6) (–3.0) (–12.6)
46.9 42.6 34.1 81.3 77.0 49.2 Property Judicial Government Tax Government Fiscal Rights E ectiveness Integrity Burden Spending Health
Protection of private property is weak. Since passage of The top individual income tax rate is 27.5 percent, and the the 2009 land tenure reform law, the government has top corporate tax rate is 28 percent. Other taxes include a been engaged in an effort to issue titles recognizing land value-added tax. The overall tax burden equals 18.1 percent of ownership rights. The judiciary is formally independent but total domestic income. Government spending has amounted historically has been subject to executive influence and to 27.7 percent of the country’s output (GDP) over the past corruption. Corruption is widespread, particularly in the three years, and budget deficits have averaged 5.4 percent of police force. Anticorruption laws and bodies are gener- GDP. Public debt is equivalent to 43.0 percent of GDP. ally ineffective.
REGULATORY EFFICIENCY OPEN MARKETS
(–4.0) (–0.2) (–3.8) (–3.4) (No change) (No change)
47.6 52.1 82.4 61.8 65.0 40.0 Business Labor Monetary Trade Investment Financial Freedom Freedom Freedom Freedom Freedom Freedom
Burkina Faso improved some protections for minority The total value of exports and imports of goods and services investors in 2018, but those protections still lag behind those equals 63.6 percent of GDP. The average applied tariff rate of most countries in the World Bank’s rankings. Enforcement is 9.1 percent. Coupled with the nontransparent regulatory of contracts has been made easier. The archaic labor market framework, layers of nontariff barriers continue to undermine largely revolves around the production of two commodities: the benefits of open trade. Bureaucratic barriers hinder cotton and gold. Despite the availability of expensive state investment. Despite the development of microfinance institu- subsidies for insecticides, fertilizers, and irrigation facilities, tions, overall access to credit remains low. cotton production fell significantly in 2019.
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