Effects of insecurity on inflation in Burkina Faso

Abstract The price increase has been exacerbated in Burkina Faso compared to other member countries of the West African Economic and Monetary Union. According to the existing literature, plausible explanations for this galloping inflation include the recent health crisis and the economic policy measures taken. However, inflation persists, although the health crisis has subsided. This paper highlights persistent insecurity's effects on inflation in Burkina Faso. ARDL modeling on monthly data from January 2019 to April 2022 was used. The analysis results show that the influx of internally displaced persons (IDPs) and deteriorating agro-climatic conditions drive inflation in Burkina Faso in the short and long term. The marginal effects of IDPs on inflation are about 0.09640, 0.08917, 0.1043, and 0.07827 percent after three, two, one month, and at the current time, respectively. It is recommended that short-term actions support IDPs, such as food allocations and long-term actions. Actions to improve agro-climatic conditions, such as irrigation techniques, should be supported. Indeed, any anti-inflationary policy should take into account non-monetary and monetary factors. JEL Classification : E31 • J15 • J61 • Q15