Economy
Burkina Faso’s economy is heavily reliant on agricultural production, with close to 80% of the active population employed in the sector. Cotton is the country’s most important cash crop. The country experienced a slowdown in economic performance in 2014 and 2015 because of a combination of several factors that included persistent fall in prices of raw materials, the socio-political crisis and Ebola epidemic. The projected GDP growth rates of 5.4% in 2016, 4% in 2015 and 2014 were significantly lower than the average of 6% registered over the previous decade. The recovery is being led by the coming on stream of two new gold mines and a sharp projected rebound in agricultural output in late 2016-early 2017.
Inflation should remain modest (about 2% in 2016 and 2017) due to a good harvest and low world oil prices. The Government, through an inclusive and participatory process, prepared and adopted, on 20 July 2016, the National Economic and Social Development Plan (PNDES) to be implemented during the 2016-2020 period. The PNDES is based on the Presidential Programme dubbed “Building, along with the people, a country of democracy, economic and social progress, freedom and justice”
In 2016, the implementation of actions envisaged by the PNDES is expected to yield a 5.7% growth rate. It will stand at about 7.7% in the years ahead to reach an average of 7.3% during the 2016-2020 period. This growth will be driven by the national and international private sector which can seize the numerous business opportunities provided by the Burkinabe economy.
Why invest in Burkina Faso?
- Democracy has returned to the country after restoration of peace and successful elections.
- Africa’s leading cotton producer
- Increased importance of gold production (4th largest producer in Africa)
- Member of the West African Economic and Monetary Union (WAEMU)
- Good record on economic policy and implementation of structural reforms
- Support of the international financial community (one of the first countries to have benefited from the HIPC initiative)
- Participate in the development of the key sectors of mining, agriculture, infrastructure and small-scale manufacturing.
Political
After about thirty years during which the country’s political stability was regularly put to the test, Burkina Faso in 1991 entered an era of political stability characterized by the regular holding of free and democratic elections. The country did not experience civil war despite the coups d’état and a popular uprising in October 2014, that forced President Compaoré into exile after 27 years in power. The country held presidential and parliamentary elections in November 2015 and municipal elections in May 2016. Roch Marc Christian Kaboré of the People’s Movement for Progress was elected as the President. The democratic outcome of Burkina Faso’s presidential and parliamentary elections of 25 November 2015 gave rise to a new political context marked by proper functioning of government institutions.
Population
The population that is growing at an average annual rate of 3%, was estimated at almost 18.11 million inhabitants in 2015 by World Bank.
Urbanisation
It is estimated about 22.7% of the population of Burkina Faso live in urban areas. This makes the country fall among the least urbanised countries. Urban growth has speeded up in the past decade and the urban population is estimated to reach 35% of the total population by 2026. The cities and towns are poorly equipped to sustainably manage the urban growth.
Doing business in Burkina Faso
The highlights of World Bank score of doing business in Burkina Faso are summarised as follows;
| Topics | World Bank 2017 Rank | World Bank 2016 Rank | Change in Rank |
| Overall | 146 | 142 |
4 |
| Starting a Business | 72 | 77 |
5 |
| Dealing with Construction Permits | 61 | 61 | – |
| Getting Electricity | 181 | 181 | – |
| Registering Property | 136 | 137 |
1 |
| Getting Credit | 139 | 134 |
5 |
| Protecting Minority Investors | 145 | 145 | – |
| Paying Taxes | 150 | 149 |
1 |
| Trading across Borders | 104 | 104 | – |
| Enforcing Contracts | 161 | 161 | – |
| Resolving Insolvency | 112 | 113 |
1 |
http://www.doingbusiness.org/data/exploreeconomies/burkina-faso
The government is the in process of creating conducive environment for doing business.
Credit Rating
Standard & Poor’s credit rating for Burkina Faso stands at B- with positive outlook
Remittances
Burkina Faso’s investment code guarantees foreign investors the right to transfer of any funds associated with an investment, including dividends, receipts from liquidation, assets, and salaries to outside the country. The country is a member of the West African Economic and Monetary Union (WAEMU, or UEMOA whose currency is the CFA franc (XOF), or FCFA. FCFA is used in all eight member countries. The FCFA is freely convertible into euros at a fixed rate of 655.957 FCFA to 1 euro.
Arbitration
The Arbitration, Mediation and Conciliation Centre of Ouagadougou (CAMC-O) was officially launched in September 2007 as an alternative dispute settlement mechanisms. The CAMC-O plays a key role in the development and promotion of the Alternative Conflict Settlement methods. The CAMC-O missions are to contribute to a healthier legal and judicial business environment, promote the practice of arbitration and/or mediation through information, training, sensitization and publications, to implement arbitration and/or mediation procedures. Burkina Faso is a party to the Washington Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards and outlines arbitration procedures in its investment code. Burkinabè courts accept international arbitration as a means for settling investment disputes between private parties. Longstanding disputes that remain unresolved after administrative jurisdictional hearings are required to be submitted to arbitration. Burkinabè courts recognize and enforce foreign arbitral awards.
Key development challenges
- Weak urban governance leading to disorganised urban development.
- Burkina Faso remains vulnerable to changes in rainfall patterns and fluctuations in the prices of its commodity exports on world markets.
- Its economic and social development will, to some extent, be contingent on political stability within the country and sub-region, as well as its openness to international trade and export diversification.
Corruption index
Burkina Faso is the 72 least corrupt nation out of 175 countries, and scored 42 points out of 100 according to the 2016 Corruption Perceptions Index reported by Transparency International Burkina Faso adopted a legislation and set up institutions to eradicate corruption. Law n°004-2015/CNT on the prevention and repression of corruption in Burkina Faso, Law n° 072-2015/ CNT of 5 November 2015 establishing the independence of the magistracy. The key institutions are the Higher State Supervisory Authority / Fight against Corruption (ASCE/LC), the Court of Auditors and the National Coordination to Fight Against Fraud.
Security
Strengthening security to combat jihadist threats is still a major challenge to economic revival, especially after the January 2016 terrorist attack.
Unemployment and skilled labour
Latest figures not readily available.
Attitude to Foreign Direct Investment
The government’s focus is to attract more foreign direct investment (FDI) and has been implementing, over the years, a number of reforms to make Burkina Faso more attractive to international investors.
The investment code, revised in 2010, 2012 and 2013, demonstrates the government’s interest in attracting FDI to create industries that produce export goods and provide training and jobs for its domestic workforce. The code provides standardized guarantees to all legally established firms operating in Burkina Faso, whether foreign or domestic. Presidential Investment Council (CPI) is a consultative body that established the strategic framework of reflection for the formulation of investment in 2007. It is an advisory body, chaired by the head of state, whose mission it is to make recommendations on the development and implementation of policies to stimulate investment and economic growth.
The Burkina Faso Investment Promotion Agency (API-BF) created in August 2013 by the Council of Ministers, is the national body responsible for promoting the development of private investment. It is the interface between Burkina Faso and foreign economic operators wishing to invest and the potential offered by the country in terms of investment.
Restrictions on Foreign investment
There are no laws or regulations specifically limiting or prohibiting foreign investment, participation, or control.The government of Burkina Faso does not screen foreign direct investment
Intellectual Property (IP) Rights.
Burkina Faso has a legal system that protects and facilitates acquisition and disposition of all property rights, including intellectual property. Burkina Faso is a member of the World Intellectual Property Organization (WIPO) and the African Intellectual Property Organization (AIPO). The national investment code guarantees foreign investors the same rights and protection as Burkinabè enterprises for trademarks, patent rights, labels, copyrights, and licenses. In 1999, the government ratified both the WIPO Copyrights Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). In 2002, Burkina Faso was one of 30 countries that put the WCT and WPPT treaties into force.
Natural Resources
The natural resources of Burkina Faso in varying quantities include gold, manganese, limestone, marble, phosphates, pumice, and salt.
Information about investment climate has been summarized to include the following;
Development partners of Burkina Faso
Double Taxation Treaties in Burkina Faso
Exports of Burkina Faso
International Trade Agreements with Burkina Faso
Investment Authority of Burkina Faso
Investment Guarantees in Burkina Faso
Investment Incentives in Burkina Faso
Investment opportunities in Burkina Faso
Natural Resources of Burkina Faso BRVM Regional Stock Exchange
Shipping Status
Further reading
Sources of information
http://worldpopulationreview.com
https://www.state.gov/e/eb/rls/othr/ics/2016/af/254171.htm
http://www.pndes2020.com/pdf/02-en.pdf
http://www.worldbank.org/en/country/burkinafaso/overview
http://www.africaneconomicoutlook.org/en/country-notes/burkina-faso