In Burkina Faso, economic news is marked by the publication of the WAEMU report on the economic convergence criteria within the union. We note that in Burkina Faso, the wage bill reached 48% in 2019, thus exceeding the standard of 35% set by WAEMU. It is also a question of the economic prospects for the union, which estimates that all the member countries will manage to respect all the convergence criteria in 2020. In the mining sector, as in general in illicit financial flows, a study established that Burkina loses hundreds of billions a year. On the financial market, the BRVM indices come back to life from Friday, September 27. A look back at some of the economic news of the past few days.

The ratio of the wage bill to tax revenue is 48% in 2019 in Burkina, thus exceeding the WAEMU community standard which is 35% maximum. In a press conference, dated September 23, 2019, the commission in charge of economic policies and internal taxation of the West African Economic and Monetary Union (UEMOA) presented the report on the multilateral surveillance of the WAEMU area, in which she made this previous statement.

From this press conference, it should be noted that Burkina Faso does not respect many of the convergence criteria set by WAEMU, in particular the second-tier criteria, which are the ratio of the wage bill to tax revenue, which is 48 % in 2019 against 52.1% in 2018 and the tax pressure rate forecast at 19.9% in 2019 against 17.2% in 2018. A country should not devote the major part of its tax revenue to the payment of salaries, support Félicien Arigdo, director of macro-economic surveillance of WAEMU. But the ratio of payroll to tax revenue is a secondary criterion.

In 2018, Burkina Faso met two convergence criteria. These are the criteria relating to the inflation rate and the outstanding public debt. No second-tier criteria were met in 2018, as in 2017. In 2019, only the three first-tier criteria would be met. As primary criteria, these are the ratio of the budget balance (including grants) which will be at -3.0% in 2019, the average annual inflation rate and the ratio of the outstanding public debt relative to nominal Gross Domestic Product (GDP), which is expected to stand at 46.9% in 2019, compared to 42.3% in 2018.

The second-tier criteria are the ratio of payroll to tax revenue and the tax burden rate. Convergence of all these criteria towards the same standard for all WAEMU member countries could allow harmonious development of the economies and facilitate the standardization of economic and monetary policies.

The report concludes for Burkina Faso that economic growth continued with a rate of 6.6% in 2018 after 6.3% in 2017, despite a particularly worrying security context. This performance was recorded in a context of moderate price increases. The members of the commission also stressed that economic growth could be better. “But security issues, the insufficient quality of governance are among other factors that affect this growth”.

Within the union itself, the monitoring report notes that in 2018, no state met all three first-tier criteria. With regard specifically to the key criterion, it was respected by Togo (-0.8%). In 2019, the year of the convergence horizon, forecasts indicate that all Member States will respect the three first-tier criteria. However, this would not be enough for the entry of the union into the stability phase in 2020, due to non-compliance with the provisions relating to sustainability.

Burkina Faso is losing a lot of money in the mining sector, writes Mahamadi Sangla, in a study commissioned by the Center for Studies and Applied Research in Public Finance (CERA-FP), with the support of the NGO OXFAM in Burkina Faso. This study carried out in 2019 focused on: "Assessment of budgetary losses in the mining sector in Burkina Faso". In three years (2015, 2016 and 2017), he says, the Burkinabè State has granted more than 200 billion in exemptions to mining companies established on its soil.

Another economic crime, and even more harmful, noted by the economist-manager in his study, is that of Illicit Financial Flows (IFFs). He believes that the country has no data on the subject except for the few snapshots drawn up by the parliamentary commission of inquiry on the management of mining titles and the social responsibility of mining companies. According to this commission set up in 2016, the Burkinabè State has lost, as of September 2016, the sum of 551,163,803,556 CFA francs due to the practices of the FFIs, a huge loss for the national economy.

State investments in areas such as health, education, road infrastructure, security, allocation of scholarships, etc. take a hit and the shortfall becomes very considerable. The money lost negatively impacts economic growth and ultimately the creation of decent jobs. IFFs, he argues, are the result of a desire to hide wealth and evade taxes. To overcome this, Mahamadi Sangla recommends strengthening mining and tax legislation.

After the measure to impose the images on the packaging of cigarettes, it is the Label of African consumers which invites itself to the land of honest men, under the prerogative of three actors which are the Ministry of Commerce, the Committee of ethics of the Label and consumers of products and services. The official launching ceremony of its activities took place on September 26, 2019. It is a company that aims to label products and services on the basis of their quality.

Products and services will now be rated on three criteria, namely the quality/price ratio, consumer satisfaction and attractiveness (consumer preference for the product). This is an initiative that will provide consumers with a quality benchmark to guide them in choosing the products and services presented to them, says Manuella Ollo, director of the African Consumer Label. From now on, any company that wishes can have its products labeled by the Label. And this is where the insufficiency can be found because it is the company itself which formulates the request for labeling of its products.

Labeling is not mandatory for any marketed product. But in return, it is a production policy orientation tool for companies, which can take consumer preferences into account and thus optimize their production. Alcoholic products, lighteners and cigarettes will not be affected.

The Ministry of Economy, Finance and Development has signed financing agreements with sub-regional and international structures. With the World Bank for the financing of the Burkinabè agricultural sector (the agricultural resilience and competitiveness project, PReCA) at more than 100 billion F FCA, on September 24, 2019. The PReCA aims to increase agricultural productivity and access to market for the benefit of smallholders and small and medium agribusinesses in the targeted value chains of rice, onion, tomato, fruit growing, maize and shea.

The ministry then signed an agreement with the French Development Agency (AFD), on September 26, 2019, for an amount of approximately 20 billion CFA francs, to support the efforts of the Burkinabè State in vulnerable areas affected by insecurity. Concomitantly with the signing of the agreement with the AFD, the ministry signed another financing agreement of 25 billion CFA francs with the West African Development Bank (BOAD).

20 billion for the Local Development Support Program (PADEL) to extend to the other six remaining regions of Burkina and 5 billion to finance the Inclusive Finance Promotion Project for access to financial services for low-income populations , which plans to ultimately benefit 1,032,000 Burkinabe people excluded from traditional financial systems, whether they come from poor or low-income households or even micro-entrepreneurs.

Let's take a look at Ghana, where China is helping the country secure a new cocoa bean processing plant in the west of the country, at a cost of around $100 million. This, to allow Ghana, the second largest cocoa producer after Côte d'Ivoire, to be closer to the Asian market and the Chinese market in particular. Second world producer, Ghana processes only 15% of its current production (850,000 tonnes per year).

Joseph Boahen Aidoo, managing director of Cocobod (the cocoa plantation), said the country hoped to "increase its production from 850,000 tons to 1.5 million tons in the long term" and said the government wanted to transform it into organic matter at domestic use cocoa bean waste, which represents 20% of the total volume of production. With the Chinese market, this product will be able to target approximately 1.38 billion consumers, an important market for this industry which must move heaven and earth to succeed in the bet.

On the financial market, the BRVM index had been in perpetual decline for weeks until Friday, September 27. The market closed on Monday, Tuesday, Wednesday and even Thursday with very significant declines in the performance of its indices. On Friday 26, Sikafinance wrote: “A burst of pride from investors is tipping the BRVM into the green this Friday”.

Such a wave of buying had not taken place on the regional financial market for a while, he adds. Several titles came out of their lethargy during this Friday's session and the volumes traded are more or less important. This awakening of buyers boosted the performance of the global market index (BRVM Composite) which closed the session on a comfortable increase of +0.59% to 142.84 points.

The BRVM 10 also recovered +0.99% to 136.55 points. According to the site, one would be tempted to say that this revolt would have come from the securities of SOGR, which has accumulated a gain of +22.03% over the last three sessions. He notes that a focus on the behavior of the SOGB share shows how the absence of information can weaken a share and beyond that a market, which makes information the investor's compass.

Finally, we are interested in the international where Kristalina Georgieva replaces Christine Lagarde at the head of the International Monetary Fund (IMF). After the resignation of Christine Lagarde to take the reins at the European Central Bank (ECB), the board of directors of the IMF has appointed the Bulgarian Kristalina Georgieva to replace her. She is thus the 12th person to hold this position since the creation of the IMF in 1944 and the second woman to take up this position. A challenge for Kristalina Georgieva which measures the size of the challenge at the head of this institution.

Indeed, she said, "it is a huge responsibility to lead the IMF at a time when global economic growth continues to disappoint, trade tensions persist and debt levels are at a record high”. Prior to her appointment, she had been Managing Director of the World Bank since January 2017 and Acting President of the World Bank Group from February 1, 2019 to April 8, 2019. Kristalina Georgieva will take office on October 1 for a five-year term.

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