2023-08-11 11:33:53
- expert opinion
- “the social sectors will suffer”
Relations between France and Burkina are deteriorating. On August 7, 2023, the French authorities announced the suspension of their official development assistance (ODA) as well as budgetary support. We have requested the reading of Dr. Daouda Zouré, economist on the consequences of such a suspension on public finances and on the development of the country.
Should Burkina prepare for this eventuality of the suspension of French aid?
Burkina should have prepared for this eventuality, insofar as, on the one hand, certain bilaterals have suspended project financing and, on the other hand, the nature of economic and political governance which determines the financing of some partners.
What are the consequences on the budget and the management of ongoing projects?
Given the importance of budget support as a mode of financing unconditionally bedridden and the amounts which are the subject of the suspension approximately 325 billion, the immediate consequence is an already very significant drop in income with, as a corollary, an aggravation of the already very significant budget deficit, as well as an increase in debt.
How to mitigate this lack-has-earn ?
Budgetary adjustments will be needed and given the all-military option with regard to public spending, there is a big risk of underfunding the social sectors which contribute more to growth. The social sectors will suffer from the budgetary arbitration. The consequence is a drop in economic growth and an increase in poverty and even insecurity.
Ongoing projects are mainly in sensitive areas of extreme poverty which contribute to alleviating the suffering of populations in terms of health, education and drinking water in the absence of the sovereign state. It goes without saying that the suspension of this support, which has social and economic impacts, will aggravate poverty and the already very significant insecurity in the area.
Moreover, it will be very difficult if not impossible to make up for this shortfall because of the poor medium-term economic outlook. With a predominantly informal economy in a context of political instability and insecurity, it will be difficult to mobilize additional resources. At the level of companies and households which contributed to the war effort which had a negative impact on economic activity and favored the relocation of certain companies outwards. Therefore, it would be delicate (suicidal) to still ask the Burkinabe people for additional efforts to compensate for the mismanagement of the leaders who are responsible for this situation because of their inability to maintain a politically and economically stable state.
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