Economic activity in 2022 is experiencing a slowdown in its growth rate, given an international context marked by the Russian-Ukrainian crisis. At the national level, it is marked by the persistence of terrorist attacks, the advent of a political transition and by the progress of the agro-sylvo-pastoral campaign, which is considered somewhat favourable. According to the Directorate General for the Economy and Planning (DGEP), which provided these details, economic activity in 2022 will be strongly affected by the drop in gold production compared to 2021. In addition to this drop in production, the price of an ounce of gold continues to fall. The combination of these declines has an impact on the state and local government budgets.
How does this decline in gold production in Burkina Faso manifest itself?
At the end of August 2022, industrial production of fine gold amounted to 4.292 tonnes. Although this quantity is up by 7.2% compared to the previous month, it is still down by 25.4% compared to the same month in 2021.
The drop concerns the production of almost all gold mining companies except Houndé, Essakane and Roxgold, according to the DGEP. From January to August 2022, total fine gold production was 38.737 tonnes. This is a 13.4% decrease compared to the same period a year earlier. This drop in production is explained, among other things, by the cessation of production by the mining companies Somita, Samtenga, Bouéré and BMC.
This drop in gold production will result in lower mining revenues as the price of an ounce of gold falls. According to the DGEP, the price of an ounce of gold, which stood at 1,765.6 US dollars at the end of August 2022, rose slightly by 1.5% compared to July 2022, after four months of successive falls. On a year-on-year basis, it is down by 1%. “The level of the gold price remains high in relation to the uncertainties weighing on the world economy,” the DGEP concluded.
Burkina Faso has not recorded any zinc production since the Perkoa mine flooded on the 16th of April 2022. At the time of the flood, total zinc production was 46,787.900 tonnes, down 21.7% compared to the same period last year. Burkina Faso will not benefit from the 15.5% increase in zinc prices in August 2022 after three months of successive declines. Indeed, the zinc price was 3,587.6 US dollars in August 2022 compared to 3,105.4 US dollars a month earlier. On a year-on-year basis, the price of a tonne of zinc rose by 20.5%.
Elie KABORE
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