Burkina Faso Aims To Boost Entrepreneurship In Struggle Against Jihadism

Burkina Faso Aims To Boost Entrepreneurship In Struggle Against Jihadism

Strolling the streets of Ouagadougou in Burkina Faso at night is quite a lively adventure, with youth everywhere on motorcycles and socializing at random stops in the city.

The culture is definitely Francophone West Africa, with French press coffee and baguettes the order of the day. The growth is palpable and development is visible. But the excitement with locals is not exactly uniform, nor is the energy uniformly flowing in the same direction.

The announcement by the Burkina Faso government last month regarding the launch of a $819 million jobs plan speaks to the diverging takeaways on the country’s growth. The plan includes the building of medical facilities, roads, schools and water infrastructure.

The plan also confronts the drastic cut in investment spending in the last several years, from 13.7 percent of GDP in 2013 to 8.6 percent in 2015, with a small bump to 10.7 percent in 2016.

Prime Minister Paul Kaba Thieba, in announcing this economic project, told the media that the funds will be disseminated to the public via distributions to small and medium-sized businesses in an effort to create jobs and combat militancy.

Thieba explicitly added that militancy and violence is “rooted in extreme poverty and despair.”

Burkina Faso’s growth story

The growth story has its “happy” recipients and an emerging group of “bothered” observers.

Economic growth slowed to 4 percent in 2014 and 2015 due to a drought and political unrest. It regained steam in 2016 – barely missing 5.5 percent – yet the violence was the major story of 2016.

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A Malian jihadist organization, Al-Mourabitou, crossed the border in January 2016 and orchestrated a heavily armed attack on the Splendid Hotel, a luxury hotel in the Burkina Faso capital.

The attack killed 30 people, with at least 56 wounded. An additional 176 hostages were held until the government counter-attack succeeded the following day in ending the assault. Later in the year, several dozen armed men attacked an army outpost in Nassoumbou, about 30km from the Malian border.

Estimates place economic growth north of 8 percent in 2017, largely driven by extractive industries and public spending.

Thieba’s spending announcement in August is generally aimed at achieving that forecasted growth. But local critics worry that the jihadist organizations will not be enticed by this olive branch.

Underpinning their attacks is a yearning to threaten the greater economic growth and undercut Burkina Faso’s reputation and incorporation into the large West African growth machine.

The emergence of jihadism in Burkina Faso is, at the same time, both expected and unexpected.

The country, according to Abdul (name changed), is a tolerant and loving one, but “a small few want to aggressively (and quickly) change this [aspect]” about Burkina Faso. Jihadism does not know borders and the region knows this story too well.

Boko Haram has claimed tens of thousands of lives in Nigeria since its radical transformation in 2009 and has carried its violence across the border to Cameroon, motivating officials in Niger and Senegal to strengthen efforts against jihadist forces and preachers within their borders.

The same spillover problems concern Burkina Faso and its neighbors in the Sahel region, including Chad and Niger. An uprising by militants in 2012 in Mali almost brought the country to its knees. Now the Sahel region is forming a joint military force, with financial support (amounting to roughly $59 million) from the European Union.

Still, the economics will have to improve. The growth of extractive resources in country, particularly gold (as Africa’s fourth-largest producer) and zinc, are helping economic growth. Yet the growth is missing a significant portion of the population.

Entrepreneurship is supported by recent economic reforms in the Burkina Faso Policy of the Industry, Commerce and Small Producers Sector, with an average of 6,500 firms a year created between 2011 and 2015.

The growth in new firms has not exactly materialized in the country’s strongest sectors, specifically within the agro-processing sector and extractive sector.

Tapping into these sectors for new companies and new opportunities for youth may be the way to excite all locals. Until then, the country will continue to worry about jihadism and its poor youth.

Kurt Davis Jr. is an investment banker focusing on the natural resources and energy sectors, with private equity experience in emerging economies. He earned a law degree in tax and commercial law at the University of Virginia’s School of Law and a master’s of business administration in finance, entrepreneurship and operations from the University of Chicago. He can be reached at kurt.davis.jr@gmail.com.