Burkina Faso

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Burkina Faso's dire security and humanitarian situation accentuates political risks and weighs on the economy. A $302 million four-year program with the International Monetary Fund (IMF) should help alleviate funding constraints, but budgetary and external positions will remain vulnerable. --Terrorist threats have led to the internal displacement of nearly 10% of the country?s population; a further escalation could exacerbate political instability and delay the transition to a civilian regime. --Burkina Faso?s budget deficits should trend down in 2023-2026, although security risks and food shortages will continue to create important spending needs. --Despite this context, enhanced security at key mining operations and construction sites

...The security situation has continued to deteriorate in recent months, with terrorist groups affiliated with al-Qaida and the Islamic State staging attacks across a larger part of the country. S&P Global Ratings expects this situation will remain a key risk to economic activity and political stability in Burkina Faso in the coming years. This is despite the government's ongoing military campaign, and the recruitment of 50,000 additional civilian auxiliaries since the fourth quarter of 2022. We assume that increased military resources will enable a relative return to safety around large mining compounds and construction projects, bolstering activity in the secondary sector. That would also allow the military authorities to take sufficient steps toward the organization of democratic elections by July 2024, in keeping with the agreement reached with the Economic Community of West African States (ECOWAS) last year. Failure to do so could result in economic and financial sanctions from ECOWAS...

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