New York News: Burkina Faso is now one of the fastest-growing gold producers in Africa, but back in early 2007 Burkina Faso had not seen any commercial gold production for several years. Since that point production has exploded with six mines coming into production – vaulting Burkina into its current position of fourth largest gold producer and third largest region for exploration in Africa.
These new gold mines contain impressive resources but are just the tip of the iceberg when you consider that a further 14 discoveries have been made during this time.
Faso relies heavily on cotton and gold exports for revenue. The country has few natural resources and a weak industrial base. About 90% of the population is engaged in subsistence agriculture, which is vulnerable to periodic drought. Cotton is the main cash crop.
Since 1998, Burkina Faso has embarked upon a gradual privatization of state-owned enterprises and in 2004 revised its investment code to attract foreign investment. As a result of this new code and other legislation favoring the mining sector, the country has seen an upswing in gold exploration and production. By 2010, gold had become the main source of export revenue.
Gold mining production doubled between 2009 and 2010. Two new mining projects were launched the third quarter of 2011. Local community conflict persists in the mining and cotton sectors, but the Prime Minister has made efforts to defuse some of the economic cause of public discontent, including announcing income tax reductions, reparations for looting victims, and subsidies for basic food items and fertilizer. An IMF mission to Burkina Faso in October 2011 expressed general satisfaction with the measures.
The risk of a mass exodus of the 3 to 4 million Burinabe who live and work in Cote D’Ivoire has dissipated and trade, power, and transport links are being restored. Burkina Faso experienced a severe drought in 2011 which decimated grazing land and decreased harvests, creating food insecurity and damaging the country’s agricultural base.