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Burkina Faso

Overview

Burkina Faso, commonly known as the “Land of Men of Integrity”, is a country in the Sahel region with relatively limited resources and a population of 20.9 million, of which approximately 40 percent live below the poverty line.1 It is a member of both the West African Economic and Monetary Union (WAEMU) and the Economic Community of the States of West Africa (CEDEAO). Formerly known as the Republic of Upper Volta, Burkina Faso has experienced little peace since its independence and especially during the reign of President Blaise Compaoré, who ruled the country with an iron fist for 27 years. His fall in October 2014, by popular resistance,2 saw the newly elected President Roch Marc Christian Kaboré taking over in 2015.

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Burkina Faso has been severely impacted by the effects of the regional Sahel instability since 2016. Repeated terrorist attacks have led Burkina Faso to lead the joint force launched in 2017 by the G5 Sahel States (Burkina Faso, Mali, Mauritania, Niger and Chad). Burkina Faso was president of the G5 Sahel (since February 2019) but passed the torch to the Islamic Republic of Mauritania in February 2020.3 The ongoing conflicts have killed more than 500 people,4 forced schools to close5 and have displaced many people. This has resulted in an unprecedented humanitarian disaster as well as high levels of food insecurity and malnutrition.6

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The African Development Bank (ADB) projected a GDP growth rate of about six percent in 2020 and 6.1 percent in 2021. Despite the challenging security situation, the authorities have improved agricultural yields and have made strategic investments in the energy and infrastructure sectors. They have done this through the development of 25 000 hectares of irrigation in 2019 and 2020, by supplying agricultural producers with 150 000 animaldrawn equipment and through the construction of a tractor and motor cultivator assembly unit. To facilitate access to agricultural production areas, the proportion of developed rural roads is expected to increase to 43 percent in 2020, compared to 32.60 percent in 2018. In terms of energy, the construction of new photovoltaic solar power plants is expected to provide 155 megawatts of electricity. Gold production is expected to reach 55.3 tons in 2020 (52.9 tons in 2019),7 which will further enhance economic growth.

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​Inflation reached 1.4 percent in 2018 due to rising food prices. It is expected to remain below two percent and thus remains below the three percent mark set by WAEMU. With the rural exodus, caused by armed conflict and

KEY FIGURES

Main urban centres 

Ouagadougou

Bobo-Dioulasso

Exchange rate (1 July 2020): 1 USD = [a]

1 PPP$ = [b]

584.30 CFA Franc (XOF)

188.94 CFA Franc (XOF)

Total population [b] | Urban population [b]

Population growth rate [b] | Urbanisation rate [b]

GDP per capita (Current US$) [b]

Percentage of population below national poverty line (2017) [b]

20 321 378 | 6 092 349

2.84% | 4.94%

US$775

40.1%

Unemployment rate (% of total labour force, national estimate) (2017) [b]

6.3%

Proportion of adult population that borrowed formally (2017) [b]

9.1%

Gini coefficient (2017) [b]

35.3

HDI country ranking (2018) [c] | HDI country score (2018) [c]

182 | 0.43

GDP (Current US$)  [b]

Inflation rate (2019) [b]

GDP growth rate [b]Yield on 10-year government bonds

Lending interest rate (2017) [b]

US$15 746 million

5.69%

3.23%

n/a

5.10%

Number of mortgages outstanding (2018) [fd]
Value of residential mortgages (Current US$)

Ratio of mortgages to GDP

Typical mortgage rate | Term | Deposit(2019) [f]

Number of mortgage providers 

Number of microfinance loans outstanding(2019) [e]

Value of microfinance loans in local currency units [e]

Number of microfinance providers [f]

974

US$19.34 million

10% | 20 years | 20%

10.12%

15

n/a

178 862 492 184 XOF

69

Total number of formal residential dwellings in the country

Total number of residential properties with a title deed (2019) [g]

Number of formal housing units built in this year

Price of the cheapest, newly built house by a formal developer or contractor in an urban area in local currency units (2019) [h]

​Size of cheapest, newly built house by a formal developer or contractor in an urban area

Typical monthly rental for the cheapest, newly built house [i]

Time to register property [k]
Cost of standard 50kg bag of cement in local currency units [j]
Type of deeds registry: digital, scanned or paper [k]
World Bank Ease of Doing Business index rank [k]
Number of procedures to register property [k]
Cost to register property as share of property price [K]

World Bank DBI Quality of Land Administration index score (0-30) [l]

n/a

1 117

40 000 est

18 000 000 XOF

300m2

25 000 XOF

6 000 XOF (US$10.34)

(US$5.73)

Paper

151

4

67 days

11.9%

12.5

Percentage of women who own a house alone: Total | Urban (2017) [l]

Percentage of households with basic sanitation services:

Total | Urban (2017) [l]

Percentage of households with no electricity: Total | Urban (2017) [l]

Percentage of households with 3+ persons per sleeping room:

Total | Urban (2017) [l]

Percentage of urban population living in slums (2018) [m]

n/a | n/a


23.9% | 47.2%

83.1% | 36.3%

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36.0% | 31.1%

57.1%

NB: Figures are for 2020 unless stated otherwise.

[a] Xe.com

[b] World Bank World Development Indicators

[c] Human Development Reports, United Nations Development Programme

[dThe Central Bank of West African States (BCEAO)

[e]Societe Generale Burkina Faso

[f]Professional Association of Microfinance (APSFD-BF)

[g]Ministry of Housing

[h]MondesAffaires.com

[i] Expat.com

[j] World Bank Ease of Doing Business Indicators

[k] Demographic and Health Surveys, USAID

[l]Demographic and Health Surveys, USAID

[m] United Nations Human Settlements Programme

(UN-HABITAT)

persistent poverty, the rate of urbanisation has reached one of the highest rates on the continent (the urban population has increased by 4.99 percent between 2015 and 2020),8 exacerbating an already severe housing shortage in the capital Ouagadougou and in the country's second largest city, Bobo-Dioulasso.

 

Despite the unstable security situation in the country and the serious humanitarian concerns, the government continues to implement its flagship reconstruction programme post-Compaoré, the National Plan for Social Economic and Social Development (PNDES) 2016-2020. PNDES aims to improve the quality of life of people living in Burkina Faso by providing access to water and sanitation as well as reliable electricity supply. Through the PNDES, 5 167 social and economic housing units were built between 2017 and 2020, out of a total of 40 000 housing units that were planned.9

Access to finance

In terms of financial inclusion, Burkina Faso takes the 4th place in the WAEMU zone, behind Benin, Senegal and Côte d'Ivoire with an indicator of 0.594.10 Informal financial channels, including decentralised financial systems (DFSs), provide the greatest facilities for saving or borrowing in the country. Nearly two million customers were affiliated to 76 DFSs as of December 31, 2019, with total savings amounting to FCFA 231 185 million (nearly US$412 million) and total credit of FCFA 178 445 million (nearly US$219 million).11

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In addition, there are national funds, known as the National Financing Funds, aimed at eradicating poverty and the lack of development through direct or indirect financing in the form of loans, guarantees, training, grants, bonuses and equity investments (acquisition of shares, bonds and shares). "The 19 National Funds provided loans of FCFA 86.7 billion (nearly US$150 000 million) between 2012 and 2016," according to a recent report.12

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The Central Bank of West African States (BCEAO) estimates that 15 commercial banks and four financial institutions are operating in Burkina Faso as of 30 May 2020.

 

13 Housing loans are available in the country. The Société Générale Burkina Faso, a subsidiary of Société Générale based in France, provides loans ranging from FCFA 5 million (US$8 528) to FCFA 500 million (US$852 000). Payment terms depends on the amount borrowed and repayments can be spread over a period of five to 25 years, with an interest rate of 10 percent and an administrative cost of FCFA 30 000 (US$50). Coris Bank International offers a product called "Coris Bayiri", specially designed for Burkinabe living abroad. Its main feature includes interest of four percent per annum on all savings, regular contributions over a fouryear period and a credit rate of seven percent, excluding annual taxes over a period of five to 10 years. The loans granted amount to 2.5 times the sum of savings collected over four years and could be used as collateral for the bank loan agreement.14 The Housing Bank of Burkina Faso (BHBF) was founded by the State in July 2005 to address the problem of housing finance. BHBF was privatised in October 2018 and renamed International Business Bank (IB Bank).

Affordability

Agriculture and livestock account for nearly 80 percent of the country's employment.15 However, with an unemployment rate of 6.1 percent,16 and a minimum monthly wage of FCFA 34 664 (US$58),17 poverty persists and it is estimated that 40 percent of the population lives below the poverty line. This has a negative impact on the housing market, because buying a piece of land in a formal and decent neighbourhood is a privilege that only a few fortunate people can access. The alternative is therefore to live in informal areas or poorly settled neighbourhoods, where access to water and electricity is scarce and sanitation is often inadequate. In these neighbourhoods, prices are affordable because of the small sizes of land for sale. However, the price per square meter is still high, as demand is strong.18

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In recent years in Burkina Faso, land prices have continued to rise due to land speculation, with land costing FCFA four million (nearly US$7 143) being resold at about FCFA 10 million (US$17 857).19

 

The armed conflict has worsened the situation of many nationals in rural areas, as their livelihoods have been destroyed, and they have been forced to flee their land and rural homes and settle in precarious living conditions in urban areas. As a response, the government extended its Emergency Programme for the Sahel (PUS-BF) 2019/21 to 77 municipalities that are threatened by terrorist attacks, bringing the total number of municipalities affected by violent extremists and protected by the programme to 106 municipalities. The programme, in which the government invested nearly FCFA 81.5 billion (US$145.5 million) in 2017 and FCFA 98. 5 billion (US$175.8 million) in 2018, aims to improve security and reduce the vulnerability of the population. It is being implemented in four phases: "first, addressing priority emergencies, then strengthening the state's presence, followed by a response to security challenges and finally, laying the foundations for resilience".20

The sources of financing for housing, in particular mortgage loans, remain accessible only to a tiny part of the population. In these cases, the share of income that can cover home loans can go up to 45 percent with some banks like BOA BENIN for example. For households who cannot afford mortgage loans, self-construction provides an alternative for those households that have the financial means to build their own homes on an incremental basis. Others access rental housing at high costs and not always decent quality.

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The peri-urban area of Cotonou, which is undergoing the strongest development, is characterized by great land pressure on available housing and an anarchic development of peripheral areas.

 

As part of the action against the COVID-19 pandemic, the Beninese government has taken social measures to relieve households through cash donations for the most disadvantaged populations which took place after carrying out a census of the people in dire need.

COVID-19 response

Burkina Faso officially announced its first two cases of coronavirus (COVID-19) in March 2020.

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As a consequence Burkina Faso authorities announced that all public demonstrations and rallies were banned in March and April. Following a decline in new cases of COVID-19, in late April and early May, authorities began to ease some social and economic restrictions. Some urban markets and religious places of worship were allowed to reopen on April 20 and May 2, respectively

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The BCEAO announced the creation of a special 3-month refinancing window at a fixed rate of 2.5 percent for a limited amounts of “COVID-19 T-Bills " to be issued by each WAEMU sovereign to help cover financial needs related to the current pandemic.

This programme has enabled the construction of maternity services, clinics, health and social promotion centres, essential generic drug depots, incinerators and toilets. Schools (kindergartens, primary schools, CES and high schools) have been built, as well as offices and housing for teachers, shops, water stations and food was acquired for school canteens.

 

However, many people have expressed their dissatisfaction with the process of allocating the 40 000 homes currently being built by the government, as they are unable to meet the criteria. The marketing of the houses is carried out by registering with the Centre de gestion des cités (CEGECI), a real estate company controlled by the State. A committee at the CEGECI analyses housing applications. If the application is accepted, the beneficiary will have to make a contribution of 10 percent of the total price for social housing and 30 percent for economic housing. The rest can be financed by a loan and thus reach FCFA 6 500 000 for the acquisition of a villa type F2 type 1 social.21 A number of challenges remain, including the lack of water and electricity and lack of funds.22

Housing supply

Rural residents flee conflict and continue to arrive in Ouagadougou, where they take shelter in schools due to lack of alternative accommodation.23 It was planned to build 20 670 to 40 000 housing units in the following cities: Gaoua (567 dwellings), Manga (503), Tenkodogo (700), Banfora (100), Ziniaré (118), Kombissiri (50) Koudougou (100), Bobo Dioulasso (58) and finally Ouagadougou (3 118 dwellings). Bobo-Dioulasso in particular struggles to manage the influx of newcomers. Newcomers, anxious to find refuge, have built informal houses wherever they can. Illegal land occupation is therefore widespread, prompting the government to evict squatters using force and destroying temporary homes. In April 2019, informal residents, exasperated by the housing crisis in Ouagadougou, protested against the lack of housing and asked the government to give each household a parcel of land.24

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Sixty beneficiaries received the keys of their new houses in Bassinko (Bassinko is an extension of Ouagadougou) as part of the 1 240 dwellings planned under the PNCL in March 2019. Through this programme houses have been built on a plot of 204 m2 and include a living room, two bedrooms, a kitchen and an indoor shower. The beneficiaries paid FCFA 7.5 million (US$13 392.85) each for their house.25

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The construction of 300 houses is planned in Banfora (a town located 85 km southwest of Bobo-Dioulasso) under the supervision of real estate developer Barro Boubacar (EBB Immo) in collaboration with the Banque de l'Union-Burkina Faso. Using a sales/rental framework, the monthly rent will be FCFA 40 000 (US$ 67) over a period of 20 years.26

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Housing construction has also been planned in the city of Tenkodogo (in the centre-east of the country) and was due to start in December 2019. The construction of 1 000 housing units for Burkinabé living abroad has been planned in the Cité de La Diaspora. The accommodation will be F3, F4 and F5. The plots of land will be 330 m2 for F3 and F5 and 450 m2 for F5. The government is aware

BURKINA FASO

Annual income profile for rural and urban households based on consumption (PPP$), 2019

PPP$40 001 – PPP$10 000 000

Screenshot_33.png

PPP$23 001 – PPP$40 000

PPP$12 001 – PPP$23 000

PPP$8 001 – PPP$12 000

PPP$5 001 – PPP$8 000

PPP$3 601 – PPP$5 000

PPP$2 401 – PPP$3 600

PPP$1 601 – PPP$2 400

PPP$801 – PPP$1 600

<PPP$800

No. of households (thousands)

Population:

20 321 378

Urbanisation rate:

4.94%

Cost of cheapest newly built house:

18 000 000 XOF

House price PPP$:

PPP $95 268

Urban households that could afford this house with finance:

3.51%

1 PPP$:

188.94 CFA franc

that it will not be able to give a parcel of land to each Burkinabé,27 and has indicated that it plans to build a complex of buildings to house the poor, through low-rent housing. The project has encountered land mobilisation issues, but had delivered 4 000 houses units by May 2019.

 

Finally, the programme also encourages owners to build housing for themselves, since almost 30 percent of the 400 000 plots in Ouagadougou are not yet developed.

Property markets

that it will not be able to give a parcel of land to each Burkinabé,27 and has indicated that it plans to build a complex of buildings to house the poor, through low-rent housing. The project has encountered land mobilisation issues, but had delivered 4 000 houses units by May 2019. Finally, the programme also encourages owners to build housing for themselves, since almost 30 percent of the 400 000 plots in Ouagadougou are not yet developed.

Those who buy a property in Burkina Faso face a long and complicated registration process. Registering a property consists of four procedures and takes 67 days (the average is 51.6 days in sub-Saharan Africa and 23.6 days in high-income countries of the Organisation for Economic Co-operation and Development – OECD). Registration costs 11.9 per cent of the value of the property (an average of 7.3 per cent in sub-Saharan Africa and 4.2 per cent in high-income OECD countries). The quality of land administration indicator is 12.5 (9.0 in sub-Saharan Africa and 23.2 in high-income OECD countries). The World Bank ranked Burkina Faso 151 for its ease of doing business in 2020.30

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The ratio between the price of a property and the income is 11.05 in Burkina Faso, with the loan as a percentage of income being 102.83 percent and the property accessibility index 0.97. In the city centre, the price/rent ratio is 5.69 and the price/rent ratio outside of the city centre is 15.08. The gross rental yield in the city centre is 17.58 percent while it is 6.63 percent outside the city centre. These figures were calculated by Numbeo.31

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FCFA 24 646 (US$44) per hectare to the farmer who owns the land. Ultimately, the land belongs to the government. Fees associated with taxes due to the government, taxes and fees due to municipal experts (environmental, architectural) and other "unofficial" municipal fees can lead the buyer to pay between FCFA 2 800 696 (US$5 000) and FCFA 3 360 928 (US$6 000) for a hectare purchased at FCFA 24 646 (US$44). On the other side of the market spectrum, there are three expensive areas in the capital of Ouagadougou: zone Du bois, Zaca and Ouaga 2000. In these areas, the average price of undeveloped land is FCFA 100 000 (US$178.5) per square metre, and if built, the price per square metre can reach up to FCFA 500 000 (US$892.85). These are average prices, stemming from a global land price study conducted in November 2017, based on thousands of prices given by real estate agencies.32

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In this context, the prices are volatile and change from one real estate agency or from one owner to another. The dissemination and lack of information in the real estate sector is also a major problem in Burkina Faso.

Policy and legislation

n Burkina Faso, the Constitution registered the right to housing in Article 18. Act No. 034-2012 / AN of 2 July 2012 which repeals all previous provisions to the contrary, in particular Act No. 014/96 / ADP of 23 May 1996 on agrarian and land restructuring in Burkina Faso.33 The Act determines national territorial planning, general principles governing the planning and sustainable development of the territory, the management of land and other natural resources and the regulation of land assets and provides the framework of agrarian policy. It comprises 348 articles divided into nine titles, including:

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  • general provisions;

  • national territory;

  • spatial planning and sustainable development;

  • national territory management;

  • regulation of real estate

  • national territories abroad and territories of diplomatic and consular missions, governmental and international non-governmental institutions in Burkina Faso;

  • evaluation of territories and real estate transactions;

  • offences and sanctions; and

  • transitional and definitive provisions.

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n December 2015, the National Transitional Council (acting as interim parliament after the fall Compaoré’s regime) passed a law to regulate the private housing lease called Act No. 103-2015/CNT on the private housing lease in Burkina Faso. In section 6 of the Act, the rent price is set according to the rental value capped at seven percent of the value of the construction of the site. The 2018 government announced that the implementation of this legislation could take months because it must be inclusive and participatory so that all interested parties (donors, civil society organisations, tenants and technical structures) can give their opinions

Opportunities

The real estate sector is struggling in Burkina Faso. In order to grow it needs to be organised at all levels including promoters, administration and Financial Partners and requires funding, which is difficult to obtain.34 Some industrial players think that the price of real estate would not be so expensive if the sector did not pay as much taxes or customs and they asked for a tax exemption. The elevated price of building materials, insufficient financing and low purchasing power of households hamper real estate activity in Burkina Faso. The debt market remains inaccessible especially for the economically disadvantaged segments of the population who are most in need. The conditions under which banks provide loans limit demand. The economically disadvantaged have no chance of getting a loan. Those who are eligible consider the interest rate too high, making it difficult to acquire the property.35

Website

CEGECI http:// www.cegeci.bf/

Société Générale Burkina Faso https://societegenerale.bf/fr/particuliers

Ebomaf Group http://ebomaf.com

Journal du Net https://www.journaldunet.com/

Jeune Afrique https://www.jeuneafrique.com

World Food Program https://www.wfp.org/countries/burkina-faso

World Heath Organisation https://www.who.int/fr/

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