Looking for a road out of nowhere

  • @TheIndyBusiness
ECONOMIC commentators rarely report from Burkina Faso. When they do travel, it is usually to the capitals of the developed countries, the rich world, or perhaps to the quickly becoming rich world - the booming economies of East Asia.

Reporting on the very poor countries of sub-Saharan Africa is left to other journalists: writers who specialise in the problems of economic development, or those who report on famines or coups. This seems a pity, most obviously because, although sub-Saharan Africa may not matter much in world economic terms, it matters enorm-ously in political and human terms.

But there is another powerful reason why more should be written about these countries: this is that quite small changes in the economic behaviour of rich countries can have a disproportionate impact on the poor, and our policy makers should be reminded of that.

Burkina Faso, formerly Upper Volta, is indubitably very poor. It is not the poorest country in the world - its income of $300 per head a year puts it well ahead of countries such as Mozambique or Ethiopia. But in the UNDP's 1993 Human Development Report it ranked 170 out of 173 countries, with only Afghanistan, Sierra Leone and Guinea behind it.

The figures published by Unicef for health and education are naturally disturbing. Under-five mortality is high, though not as high as neighbouring countries such as Niger or Sierra Leone. Still, some 30 per cent of the under-fives are moderately or severely malnourished or stunted.

Life expectancy at birth is 48 years, which is pretty much standard for the region. However, education levels are exceptionally poor: adult literacy at 18 per cent is the lowest in the world. It also has one of the highest fertility rates in the world - on average, mothers have 6.5 babies. Unsurprisingly, half the population is under 16.

But it does not feel like a disaster zone; just that life for most people is very precarious. That may be something to do with the good rains last summer. Or it may be that poverty in the countryside (and Burkina Faso is exceptionally rural, with only 18 per cent of its population in towns) always seems less gnawing than urban poverty.

What does feel quite extraordinary - and gives a measure of the poverty - is the lack of cars. An apparently prosperous town of 2,000 or 3,000 people will have not a single private car. There is hardly a petrol pump between Ouagadougou and Po, 100 miles to the south on the Ghana border, and not a working one in Po itself.

The area is not a disaster zone - yet. The population will double in the next generation, raising the brutal question as to how this country can manage to feed, clothe and house these extra people. It cannot hope to employ them: already an estimated one million Burkinabes work abroad, mostly in the neighbouring Ivory Coast. While the World Bank and IMF talk about structural adjustment programmes, the myriad aid agencies will carry out schemes according to their own priorities: they supply some 15 per cent of the country's GNP at the moment.

But without denying the need for sensible domestic economics or the value of much of the aid work, it all seems desperately precarious. Even assuming that the country has reasonably wise economic policies and that the aid programmes are maintained in real terms - neither of which is a safe assumption - it will be a tremendous struggle.

The question that keeps coming back is: this is a delightful country and under the circumstances they are not managing too badly, but what is the comparative advantage of a small landlocked country on the edge of the Sahara in a harsh competitive world?

Tourism? It cannot offer golden beaches, and even if it could, there is not much added value in that. It does have wonderfully undeveloped game parks that might be made more accessible and - a legacy of its colonisation by the French - it can feed its visitors well.

There is also an opportunity for cultural tourism - Ouagadougou is home to the Pan-African Film Festival at the end of this month. But tourism requires investment, and even with that investment it is hard to see Burkina Faso as a prime destination. (My own reason for coming was to visit my brother-in-law who is working for Unicef.) Nor should this country try to become a tourist haven, for success would threaten the balance of its society.

Merchandise exports? Burkina Faso is not going to become a manufacturing centre for electronic whatsits, following the path of the dynamic East Asian economies. It can produce some high-quality ethnic goods - textiles, for example - but it is competing against the rest of West Africa, and the market in Europe and North America is pretty limited.

Minerals? There are gold, zinc and manganese reserves and some production, but the whole sector has been dogged by difficulties. In any case, it is competing against South Africa, which mines on a vastly larger scale. There is no coal, oil or gas, and one of the country's problems is the reliance of the rural population on wood as a fuel for cooking.

Agricultural exports? Getting the produce out is the first problem. The cost of the railway and the quality of roads to the coast really mean that goods have to be flown out. That in turn means that these have to be high-value-added products: out-of-season vegetables and fruit. There is not enough margin in traditional tropical produce to overcome the additional transport costs incurred.

British supermarkets have helped develop a considerable trade in products such as Christmas strawberries and French beans with countries such as Kenya, but a francophone African country would find it easier to develop relations with France. It is not clear that the French supermarkets see similar opportunities. In any case, while in theory it should be easy to fly goods out, air freight costs between Ouagadougou and Europe are high.

Finally, all trade links with the rest of the world have to be undertaken through an exchange rate that Burkina Faso does not itself control: the currency is the CFA franc, run by the French for the former West African territories. That is fine if the rate is appropriate; not so good if the rate is wrong. Until January 1994, when it was devalued by 50 per cent, the CFA franc was vastly overvalued, making exports much more difficult.

Given all these difficulties, Burkina Faso has not done too badly: it has managed to increase standards of living through the 1980s, which is more than most of Africa achieved. Better communications - lower air fares and freight charges, plus cheaper phone links - would help enormously. Anything that cuts the import bill, such as better access to cheap generic drugs, would help, too. And it goes almost without saying that granting access to our markets is far more use than any handouts. Viewed from here, Europe appears less than helpful.

Take one well-documented example of Euronuttiness: before the devaluation of the CFA franc last year, subsidised beef from the European Union's beef mountain was being sold here in Ouagadougou, thus undercutting domestic livestock producers.

From the point of view of the European taxpayer it is irritating to have to pay the subsidies that have created the beef mountain. But from the point of view of a Burkinabe farmer it is a catastrophe for EU taxpayers' money to be used to try to put him out of business.