Verified Facts
Doing business in Burkina Faso can be challenging due to its developing economy and infrastructure, but the country offers various investment opportunities in key sectors such as agriculture, mining, and energy.
Quick Facts
Business Environment
The business environment in Burkina Faso is characterized by a relatively open economy, with the government actively seeking to attract foreign investment. However, the country still faces significant challenges, including a high level of bureaucracy and corruption. The government has implemented various reforms to improve the business climate, such as simplifying business registration procedures and creating a one-stop shop for investors. Despite these efforts, the country's ranking in the World Bank's Ease of Doing Business index remains low, at 151 out of 190. The government's attitude toward foreign investment is generally positive, with a focus on promoting private sector development and encouraging foreign investment in key sectors.
The level of bureaucracy in Burkina Faso can be a significant obstacle for businesses, with complex and time-consuming procedures for obtaining licenses and permits. Corruption is also a major concern, with businesses often facing demands for bribes and other forms of corruption. However, the government has established an Anti-Corruption Agency to tackle this issue and has implemented various measures to increase transparency and accountability. The overall business environment in Burkina Faso is challenging, but the government's efforts to improve the climate and attract foreign investment offer opportunities for businesses that are willing to navigate these challenges.
The country's economy is heavily reliant on agriculture, which accounts for around 35% of GDP, and the government is seeking to diversify the economy and promote industrial development. The business environment is also influenced by the country's geographical location, with Burkina Faso being a landlocked country that relies heavily on neighboring countries for trade. Despite these challenges, the country offers a growing market with a population of over 24 million people and a strategic location in the West African region.
Starting a Business
Starting a business in Burkina Faso involves several steps, which are outlined in the following table:
| Step | Requirement | Time | Cost (USD) |
|---|---|---|---|
| 1 | Obtain a business license | 7 days | 100 |
| 2 | Register with the tax authority | 3 days | 50 |
| 3 | Obtain a social security number | 2 days | 20 |
| 4 | Open a bank account | 5 days | 100 |
| 5 | Register with the chamber of commerce | 2 days | 50 |
| 6 | Obtain any necessary permits | 10 days | 200 |
| 7 | Register with the statistics office | 2 days | 20 |
Investment Opportunities
Burkina Faso offers various investment opportunities in key sectors, including:
| Sector | Opportunity | Growth Potential | Notes |
|---|---|---|---|
| Agriculture | Cotton production, livestock farming | High | Government support for agricultural development |
| Mining | Gold, manganese, and limestone mining | Medium | Significant mineral resources, but infrastructure challenges |
| Energy | Renewable energy, particularly solar and wind power | High | Government targets for increasing renewable energy production |
| Manufacturing | Textiles, food processing | Medium | Opportunities for export-oriented manufacturing |
| Infrastructure | Road construction, transportation | Medium | Government investment in infrastructure development |
| Tourism | Eco-tourism, cultural tourism | High | Rich cultural heritage and natural attractions |
Foreign Direct Investment
- Foreign direct investment (FDI) in Burkina Faso has been increasing in recent years, with a focus on the mining and energy sectors.
- The main investing countries are France, Canada, and China, with a growing presence of investors from other African countries.
- The government offers various incentives to attract FDI, including tax breaks and investment subsidies.
- Restricted sectors for FDI include defense, security, and certain areas of the media.
- The government is seeking to promote diversification of FDI and attract investment in key sectors such as agriculture and manufacturing.
Legal & Regulatory Framework
- The business laws in Burkina Faso are based on the OHADA (Organization for the Harmonization of Business Law in Africa) system, which provides a framework for business law in several West African countries.
- Intellectual property protection is provided through copyright and patent laws, but enforcement can be challenging.
- Labor laws are governed by the Labor Code, which sets out rules for employment contracts, working conditions, and social security.
- Dispute resolution is provided through the commercial courts, which have jurisdiction over business disputes.
- The government has established a one-stop shop for investors to provide support and facilitate investment procedures.
- The investment code provides a framework for investment incentives and guarantees.
Challenges & Risks
- The main challenges facing businesses in Burkina Faso include infrastructure constraints, particularly in terms of transportation and energy.
- Security risks are also a concern, particularly in the northern regions of the country.
- The business environment is also affected by corruption, which can increase costs and uncertainty for businesses.
- Currency risks are a concern, with the West African CFA franc (XOF) being pegged to the euro.
- Market limitations are also a challenge, with a relatively small domestic market and limited access to regional markets.
- Political risks are a concern, with the country facing challenges related to governance and stability.
Free Zones & Incentives
- Burkina Faso has established two special economic zones (SEZs) to promote investment and economic development.
- The SEZs offer various incentives, including tax breaks, investment subsidies, and simplified procedures for obtaining licenses and permits.
- The government has also established an investment promotion agency to provide support and facilitation for investors.
- Other incentives include free land for investment projects and training programs for local staff.
- The government is seeking to promote private sector development and encourage foreign investment in key sectors.