R 121052Z JUN 09
FM AMEMBASSY OUAGADOUGOU
TO SECSTATE WASHDC 5086
INFO ECOWAS COLLECTIVE
MILLENNIUM CHALLENGE CORP
CDR USAFRICOM STUTTGART GE

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. 
 
----------------------------------------- 
Exogenous Shocks Led to Increased Poverty 
----------------------------------------- 
 
¶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." 
 
-------------- 
Key indicators 
-------------- 
 
¶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. 
------------- 
Donor Remarks 
------------- 
 
¶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. 
 
---------------------------------------- 
Civil Society Organization (CSO) Remarks 
---------------------------------------- 
 
¶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