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Burkina Faso: Priorities for Poverty Reduction and Shared Prosperity

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Burkina Faso: Priorities for Poverty Reduction and Shared Prosperity Public Disclosure Authorized BURKINA FASO: PRIORITIES FOR POVERTY REDUCTION AND SHARED PROSPERITY Public Disclosure Authorized SYSTEMATIC COUNTRY DIAGNOSTIC Final Version Public Disclosure Authorized March 2017 Public Disclosure Authorized Abbreviations and Acronyms ACE Aiding Communication in Education ARCEP Regulatory Agency BCEAO Banque Centrale des Etats de l’Afrique de l’Ouest CAMEG Centrale d’Achats des Medicaments Generiques CAPES Centre d’Analyses des Politiques Economiques et Sociales CDP President political party CFA Communauté Financière Africaine CMDT La Compagnie Malienne pour le Développement du Textile CPF Country Partnership Framework CPI Consumer Price Index CPIA Country Policy and Institutional Assessment DHS Demographic and Health Surveys ECOWAS Economic Community of West African States EICVM Enquête Intégrale sur les conditions de vie des ménages EMC Enquête Multisectorielle Continue EMTR Effective Marginal Tax Rate EU European Union FAO Food and Agriculture Organization FDI Foreign Direct Investment FSR-B Fonds Special Routier du Burkina GDP Gross Domestic Product GNI Gross National Income GSMA Global System Mobile Association ICT Information-Communication Technology IDA International Development AssociationINTERNATIONAL IFC International Finance Corporation IMF International Monetary Fund INSD Institut National de la Statistique et de la Démographie IRS Institutional Readiness Score ISIC International Student Identity Card ISPP Institut Supérieur Privé Polytechnique MDG Millennium Development Goals MEF Ministry of Economy and Finance MFM Macro Economics & Fiscal Management MFPTSS Ministry of Civil Service, Labor and Social Security MW Mega Watts NBER National Bureau of Economic Research NPDS National Development Plan NTM Non Tarif Measures OECD Organisation for Economic Co-operation and Development OHADA Organisation pour l'Harmonisation en Afrique du Droit des Affaires OMD Organisation Mondiale des Douanes ONEA Urban water and sanitation utility of Burkina Faso ONG Non-Governmental Organization PACES Program for the Expansion of Secondary Education Coverage PAPSA Projet d'amélioration de la productivité agricole et de la sécurité alimentaire PEFA Public Expenditure and Financial Accountability PFM Public Financial Management PNR Programme National Routier PNSFMR National Policy for Rural Land in Rural Area PPP Public Private Partnership PSM Propensity Score Matching ii | P a g e QOF Vocational skills training QUIBB Questionnaire unifié des indicateurs de base du bien-être RAF Agrarian and Land Reform RTI Right-to-Information SAGCOT Southern Agricultural Growth Corridor of Tanzania SCD Systematic Country Diagnostic SEA Sciences Environnementales et Agriculture SEG Sciences Economiques et de Gestion SIGASPE Système Intégré de Gestion Administrative et Salariale du Personnel de l’Etat SJP Sciences Juridiques et Politiques SME Small and Medium Enterprise SPS Sanitary and Phytosanitary Measures TVET Technical and Vocational Training UK United Kingdom UN United Nations UN IRU United national International Road Transport Union UNCTAD United Nations Conference on Trade and Development UNICEF United Nations Children's Fund UNICEF United Nations Children's Fund US United States of America USF Universal Service Fund VAT Value-Added Tax WAEMU West African Economic and Monetary Union WAN Wide Area Network WBG The World Bank Group WDI World Development Indicators WEF World Economic Forum WITS World Integrated Trade Services WJP World Justice Project WSS Water & Sanitation Services WTO World Trade Organization iii | P a g e Contents Abbreviations and Acronyms .................................................................................. ii List of Figures ...................................................................................................... v List of Tables ...................................................................................................... vi EXECUTIVE SUMMARY .......................................................................................... viii INTRODUCTION ................................................................................................... 1 PART ONE: PAST PERFORMANCE AND CONTEXT ........................................................... 3 1.1: Growth and Economic Performance over the Past Decade ............................................ 4 1.2: Burkina Faso’s performance in light of its natural endowment, population, and institutions 13 1.3: Assessment of twin goals: Poverty and Inequality ..................................................... 31 1.4: Conclusion .................................................................................................... 47 PART TWO: IDENTIFYING THE CONSTRAINTS .............................................................. 50 2.1: The Proposed Analytical Framework ..................................................................... 51 2.2: The Main Constraints on the Creation of Productive Jobs ........................................... 53 2.3: The Main Constraints behind Limited Access to Services and Infrastructure ..................... 84 2.4: Conclusion ................................................................................................... 110 PART THREE: PRIORITIES FOR POVERTY REDUCTION, SHARED PROSPERITY, AND SUSTAINABILITY ............................................................................................... 112 3.1: Methodology for selecting cross priorities .......................................................... 112 3.2: First-tier of priorities: Natural resources management, skill development, and gender equity ......................................................................................................................... 117 3.3: Second-tier of priorities ................................................................................... 124 3.4: Identified data and knowledge gaps ................................................................. 138 ANNEXES ........................................................................................................ 140 Annex 1: List of Background Papers prepared for this SCD ............................................... 140 Annex 2: An analysis of fiscal policy in Burkina Faso ...................................................... 141 Annex 3: Recent trends in non-monetary indicators ....................................................... 148 Annex 4: The main determinants of poverty in 2014 – a multi regression analysis ................... 150 Annex 5: Summary matrix ...................................................................................... 153 Annex 6: The SCD priorities in light of the National Development Plan Axes ......................... 156 iv | P a g e List of Figures Figure 1: How the Burkinabé perceive their economy ............................................................ viii Figure 2: The SCD in one page .......................................................................................... 2 Figure 3: A booming economy since 1995 ............................................................................. 5 Figure 4: But more modest when adjusted by the population growth ........................................... 5 Figure 5: Drivers of growth on the demand side ..................................................................... 7 Figure 6: The concentration of trade in Burkina Faso .............................................................. 8 Figure 7: Decomposition of labor productivity changes .......................................................... 10 Figure 8: One of the countries with the highest share of agricultural employment… ...................... 12 Figure 9: … But with a very low labor productivity ............................................................... 12 Figure 10: Change in wealth per capita components (% of GDP per capita), 2010 .......................... 13 Figure 11: Mining sites and resources ................................................................................ 17 Figure 12: Population Dynamics: Almost 20 million people will live in urban centers by 2050 ........... 21 Figure 13: Unequal distribution of cities in Burkina Faso ........................................................ 22 Figure 14: The deterioration of Governance since 2008 ......................................................... 26 Figure 15: Poverty Incidence (in percentage) and Number of Poor (in 1000) ................................ 32 Figure 16: Many households are clustered around the poverty line -daily Per Capita Consumption in 2014 by Percentile ...................................................................................................... 33 Figure 17: Poverty Headcount, Percentage of the population and Percentage of poor per region ....... 35 Figure 18: Improving living conditions for most households but variability across income quintiles ..... 36 Figure 19: Pro-poor consumption growth between 2003 and 2014 ............................................. 39 Figure 20: Inequality Indexes.......................................................................................... 40 Figure 21. Poor households receive more transfers ............................................................... 42 Figure 22: Share of transfers by their origin........................................................................ 43 Figure 23: Share of transfers (in the total) by motive ............................................................ 43 Figure 24: Almost two
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