The main conclusion of Country EconomicMemorandum is that the previous model of extensive growthhas now exhausted its potential and must be renewed. Giventhe existing population dynamics, low environmentaltolerance due to its Sahelian climate and competition forcesimposed due to its open economy, Burkina Faso is heavilyinvesting in growth based on increased productivity toovercome its low level of initial human capital, capacityconstraints and regulation. To help define the new model ofdevelopment of Burkina Faso, the Country Economic Memorandumis exploring growth based on productivity both at macro-,meso-economic or sectoral, micro and institutional levelsonly. It also assesses the sustainability of growth in thehuman, demographic, financial, fiscal and physicalinfrastructure. Wherever possible, it evaluates theperformance of previous development programs and providesdiagnostics on problems. It analyzes the current situationin terms of challenges and opportunities. Several majorconstraints on growth have been identified and theMemorandum offers practical ways to reduce or mitigate them.These constraints are: i. The frequency of exogenous shockson agriculture in Burkina Faso, especially cotton,significantly slows the socio-economic development; ii. Thereal appreciation of the exchange rate has eroded the pricecompetitiveness; iii. The country's attractiveness toforeign direct investment, despite significant progress inthe business environment, limited growth potential; iv. Thehigh fertility rates impede growth per capita and socialdevelopment beginning with human capital; v. Environmentalconstraints limit the extensive growth of agriculture, whilefood security is always a challenge for human development;vi. The vulnerability of poor households prevents them fromtruly engaging in productive economic activities; vii.Constraints on institutional and human capacities reduce theeffectiveness of public policies. The first volume of theMemorandum emphasizes the need for Burkina Faso to considerthe macroeconomic and microeconomic constraints to growthand competitiveness, draws attention to the lowsophistication of its exports and suggests policyinstruments to facilitate the promotion of export andinvestment led by the private sector. The second volumeemphasizes (i) the need for appropriate choices to ensurethe viability of the cotton sector, (ii) the development ofsupply chains to achieve food security, growth and importsubstitution, (iii) the important role in the mining sectorfor growth, with good revenue management, and finally (iv)the potential of tourism as an industry will depend on theservice quality improvements and the accommodation capacityand infrastructure. The third volume identifies the actionsnecessary to (i) address the issues of demographic changethrough better information, education and communicationcampaigns to bring about behavioral changes, (ii) developinstruments of risk management to manage the risks ofeconomic, social, health, natural and food security, (iii)improve the country's access to regional andinternational markets, better connections to regionaltransport infrastructure, electricity, andtelecommunications, water services and improved irrigationsystems, (iv) exploiting the financial intermediation by newmechanisms of access to credit, reform the financial sectorand institutional capacity building in financial managementand risk in the business sector, and (v) create and use thebudget by prioritizing expenditures, ensuring the collectionof revenue and increasing the flow of aid.
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