Country Risk Rating

A high-risk political and economic situation and an often very difficult business environment can have a very significant impact on corporate payment behavior. Corporate default probability is very high. - Source: Coface

Business Climate Rating

The business environment is difficult. Corporate financial information is often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional framework has many troublesome weaknesses. Intercompany transactions run major risks in the difficult environments rated C.


  • Major producer of gold (sixth largest in Africa) and cotton (second-largest in Africa in 2018)
  • Member of the West African Economic and Monetary Union, which ensures the stability of the CFA franc against the euro
  • Support from the international financial community (one of the first countries to benefit from the HIPC initiative)


  • Economy highly exposed to weather-related hazards
  • Vulnerable to changes in cotton and gold prices
  • Heavily dependent on external aid
  • Weak electrical infrastructure
  • Population pressure, very high poverty rate, very low Human Development Index score, and critical food insecurity
  • Significant informal sector and failing business environment (ranked 151st in the Doing Business 2020 index)
  • Presence of armed Islamist groups (foreign and domestic), particularly in the north and east of the country


Current Trends

A recovery is expected in 2021

After a mild recession in 2020, Burkina Faso should return to sustained growth in 2021, but at a slower pace than before the crisis. Private consumption, which accounts for 70% of GDP, is expected to grow vigorously in 2021 after a slight decline in 2020. This will be driven by a strong performance from agriculture, on which many Burkinabe households depend. Gross fixed capital formation may have declined by 5% in 2020 but will pick up again in 2021, rising by 7%, driven by foreign investors who are increasingly interested in the mining sector, particularly because the country's export tariffs are very low. In 2020, several public-private investment projects began to emerge, including one involving French group Urbasolar to build a 30MW solar power plant. Demand will remain sustained by public investment and implementation of the National Economic and Social Development Plan, which led to the launch of more than 30 road infrastructure projects in 2020 and numerous investments in the cotton-textile, food-processing, and construction materials sectors. A highway project between Ouagadougou and Yamoussoukro is also under discussion. Although gold sales held up, foreign trade made a negative contribution due to the decline in cotton exports and the increase in imports, especially of capital goods. The situation is unlikely to change much in 2021, with cotton sales picking up slowly and equipment purchases continuing.
Despite the decline in cotton prices (-20% between January and August 2020), agriculture, which employs 80% of the labor force, has not been overly affected by the crisis. The 2020-2021 agricultural season was considered good, and the situation is set to continue thanks to planned investments aimed at making the agricultural production system less weather-dependent and the resumption of cotton prices. Likewise, the mining sector, which represents 10% of GDP, is benefiting from rising gold prices. The service sector, which is traditionally the main contributor to growth (55% of GDP), was heavily impacted by the crisis but should see its growth rate increase in 2021.

International aid in support of public and external accounts

In April 2020, the government launched an economic response and recovery plan including health, economic and social measures. The overall cost of these measures is estimated at 394 billion CFA francs, or 4.45% of GDP, including 76 billion CFA francs for social measures such as utility bill waivers, sales of food at subsidized prices, and cash transfers. This plan, coupled with the decline in tax revenues following the recession, caused the public finances to deteriorate. The public surplus recorded in 2019 thanks to foreign aid (10% of GDP) and fiscal consolidation vanished in 2020, despite increased aid from international organizations. As a result, Burkina Faso's debt, which is 23% external, increased. In 2021, the budget balance, including grants, should remain close to balance.

The current account deficit narrowed in 2020 and should stabilize in 2021. However, despite the decrease in the oil bill and the rise in the price of gold, the trade-in goods surplus shrank in 2020 with the fall in cotton prices and demand. It could continue to decline next year with continued purchases of capital goods and other necessities for investment. The services deficit also worsened in 2020 because of the collapse of tourism and transportation and is not expected to get better in 2021. The improvement is due to multilateral assistance, including a USD 115.3 million disbursement from the IMF to respond to the COVID-19 pandemic, a USD 54.6 million financing package split equally between a grant and a loan from the African Development Fund, and a USD 21.15 million package from the World Bank, again half in grants and half in loans.

Political and security tensions run high

Security will remain the main challenge facing President Roch Marc Christian Kaboré and his government in 2021. The country is sinking into insecurity, with a resurgence of Islamist terrorist attacks, resulting in hundreds of deaths and massive population displacements (the country has more than one million internally displaced persons according to Conasur). With the government losing control of nearly one-third of the territory to armed groups, international observers now fear that the state could fail, especially as the G5 Sahel force is experiencing funding difficulties.

Furthermore, the central government is facing strong internal opposition. A constitutional referendum, originally scheduled for March 2019, which provided for a 10-year limit on the exercise of the presidential office, has been postponed to 2021. Legislative and presidential elections in November 2020 resulted in the victory of President Kaboré and his People's Movement for Progress party. However, the fact that the elections could not take place in a third of the country because of insecurity puts the legitimacy of the elected representatives into perspective. The new government, still led by Prime Minister Christophe Dabiré, and little reshuffled, was joined by the opponent Zéphirin Diabré.


Coface (02/2022)
Burkina Faso