Invest in burkina faso

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Roch Marc Christian KaborĂŠ President of the Republic of Burkina Faso

SUMMARY

8 BURKINA FASO: THE “COUNTRY OF UPRIGHT PEOPLE” 12 INVESTMENT OPPORTUNITIES IN A FAVOURABLE CLIMATE 14 MAIN POINTS OF THE 2016-2020 NATIONAL PLAN FOR ECONOMIC AND SOCIAL DEVELOPMENT 16 INTERVIEW: "THE AIM IS TO CREATE A CLIMATE OF CONFIDENCE CONDUCIVE TO INVESTMENT."STÉPHANE OUÉDRAOGO SPECIAL FINANCE, ECONOMIC AFFAIRS AND INVESTMENT ADVISOR TO THE PRESIDENT OF BURKINA FASO 18 MACROECONOMIC OUTLOOK: ALL THE LIGHTS ARE GREEN

20 AN ECONOMY OPEN TO TRADE AND INVESTMENT 22 BUSINESS CLIMATE: “DOING BUSINESS BETTER”

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25 LEGAL AND INSTITUTIONAL GUARANTEES FOR INVESTORS 29 INTERVIEW: “THE API-BF IS THE MAIN INTERFACE BETWEEN PRIVATE INVESTORS AND GOVERNMENT.” DIRECTOR-GENERAL OF THE BURKINA FASO INVESTMENT PROMOTION AGENCY (API-BF) 32 IMPROVING POLITICAL GOVERNANCE 34 INTERVIEW: “THE STATE IS NOT A SUBSTITUTE FOR A PRIVATE PARTNER” ALIZATOU ROSINE COULIBALY, MINISTER OF ECONOMY, FINANCE AND DEVELOPMENT

36 AGRICULTURE: IMPROVE PRODUCTIVITY AND PROMOTE LOCAL PROCESSING 38 LAND, WATER: UNDERUTILISED ASSETS 40 OBJECTIVE: AGRIBUSINESS 42 INSIGHTS - “OUR PARTNERSHIP WITH DONORS IS BASED ON OUR RESULTS” WILFRIED YAMÉOGO, MANAGING DIRECTOR OF SOFITEX 44 LIVESTOCK: STRONG POTENTIAL 46 FOCUS - OUAGADOUGOU DAIRY LIVESTOCK PROJECT, AN EXAMPLE OF PRIVATE-PUBLIC COLLABORATION 48 FISH-FARMING : DOMESTIC DEMAND INSUFFICIENTLY MET BY LOCAL PRODUCTION 50 COMPANY - SN-CITEC, A RETURN TO PROFIT AND INVESTMENTS

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52 MORE INCLUSIVE MINING GROWTH TO MAKE INDUSTRY A DRIVER OF THE ECONOMY

SUMMARY

78 TERTIARY: SERVICES WITH A FUTURE 80 TRADE: A SECTOR IN NEED OF REDEFINITION 81 A BOOMING BANKING SECTOR 82 PRICE DROP: TO SPUR COMPETITION IN ICT

54 GOLD INDUSTRY BOOM

83 ENTRETIEN: “BANK RATES AND REQUIREMENTS ARE EXCESSIVE” - MAMADOU TRAORÉ, CEO OF BAKOU LOGISTICS

56 COMPANY: ENDEAVOUR DOUBLES ITS AMBITIONS FOR BURKINA FASO

84 TOURISM: A JEWEL TO BE POLISHED

58 MANUFACTURING: COMPETITIVENESS MUST IMPROVE

86 CULTURE, CRAFTS AND SPORT: TALENT TO BE NURTURED

61 FOCUS - GROWTH CENTRES 62 FOCUS - BAGRÉ: A PILOT PROJECT TO SHOW THE WAY FORWARD FOR RAW MATERIALS PROCESSING

64 INFRASTRUCTURE: BUILDING BURKINA’S ROADS TO DEVELOPMENT 66 TRANSPORT: A WEST AFRICAN CROSSROADS 68 WATER: PROGRESS TO BE CONTINUED 69 ENERGY: AN AMBITIOUS PLAN TO IMPROVE SUPPLY AND LOWER COSTS 72 FOCUS: NEW LAW OPENS THE ENERGY SECTOR TO PRIVATE INVESTMENT 73 HOUSING: 40,000 DWELLINGS TO BE BUILT

88 HUMAN RESOURCES: A SOLID FOUNDATION FOR DEVELOPING BURKINA FASO 90 HEALTHCARE: A MAJOR CHALLENGE 92 EDUCATION: PREDOMINANTLY TERTIARYORIENTED TRAINING TO BE DIVERSIFIED 94 EMPLOYMENT: FROM INFORMAL TO FORMAL 95 COMPANY - IST AIMS TO BECOME A CENTRE OF EXCELLENCE

96 INDEX 97 FOCUS - THE INSTITUTIONS IN CHARGE OF INVESTMENT FACILITATION 99 FOCUS - SECTORAL INVESTMENT LAWS IN BURKINA FASO 102 PNDES PRIORITY PROJECTS

EDITORIAL

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Mr. Paul Kaba Thiéba, Prime Minister

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INVEST IN BURKINA FASO

EDITORIAL

“A CONSTRUCTIVE DISCUSSION BETWEEN BURKINA FASO AND ITS PARTNERS”

In July 2016, Burkina Faso adopted a new development framework, namely its National Plan for Economic and Social Development (PNDES). This plan is part of the mission entrusted to the Government by the President of the Republic, His Excellency Roch Marc Christian Kaboré, to lay the foundations of “democracy, economic and social progress, freedom and justice”. The foundations of a Burkina Faso built with its citizens and according to the legitimate and profound aspirations expressed by them during the popular uprising of 2014.

Developed as a participatory process, the Plan defines the priorities of the presidential mandate at a national and sectoral level.

The PNDES is integral to the dynamic structural transformation of our economy, so that everyone in Burkina Faso, through inclusive and sustainable growth, can find his or her place in the country.

To achieve the aims of this development plan, we want to be able to count on the support of our partners and on their capacity for discussion and an exchange of ideas.

For this reason we held a conference in

December 2016 and presented the PNDES and the opportunities offered by our country in agribusiness, mining, energy, tourism and services. The government has begun to implement numerous projects and reforms and to continue the efforts already made by our country, which is ranked among the most advanced in Africa in terms of improving the business climate.

Since our institutions must survive their creators, our ambition is indeed to establish a system that guarantees freedom of enterprise, peace, social cohesion, security, the rule of law, transparency in the management of public affairs and political changeover. We commit ourselves to the challenge of good governance at the political, administrative, economic, local and environmental levels.

With this guide, we are able to present the considerable potential of our economy.

With you by our side we believe we can transform Burkina Faso and, with the PPPs advocated by our programme for the achievement of many projects, we will optimise the respective performances of the public and private sectors.

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INTRODUCTION

INVEST IN BURKINA FASO

BURKINA FASO “THE COUNTRY OF UPRIGHT PEOPLE”

A CROSSROADS AND LAND OF HOSPITALITY Burkina Faso is located in the heart of West Africa. It shares borders with Ghana, Togo, Côte d’Ivoire and Benin to the south, Mali to the north and Niger to the east. Its surface area is 274,000 square kilometres. Located about an hour and a half flying time from the capitals of neighbouring countries, it offers an ideal regional base to expand into the WAEMU region. It is a strategic transit point for inter-country trade.

TWO MAIN SEASONS Burkina Faso has a primarily tropical climate with two very distinct seasons of unequal duration: a rainy season of 3 to 4 months, from June to September, and a

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dry season of 8 to 9 months, which runs from October to May. The best tourist season runs from November to February, because it is dry and offers reasonable temperatures. The hunting season runs from 1 December to 31 May. A YOUNG AND ENTERPRISING POPULATION According to estimates by the National Institute of Statistics and Demographics of Burkina Faso, the population was 18.5 million in 2015. People under the age of 20 represent 59% of this population, which is growing at a rate of 3.1% per year. A land of hospitality, Burkina Faso is the result of many migrations of peoples from diverse origins who settled and formed the community of 63 ethnic groups we find there today. They are determined and hardworking men and women.

A detail of the Bobo-Dioulasso mosque

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INTRODUCTION

LANGUAGES SPOKEN The official language of Burkina Faso is French and the most widely spoken national languages are Mooré, Dioula and Fulfuldé.

A COUNTRY OF DIALOGUE Burkina Faso is subdivided into 13 administrative regions, 45 provinces and 352 municipalities. The two main cities are Ouagadougou, the political capital, and Bobo-Dioulasso, the economic capital. It is a democratic and secular country. It has strong institutions and applies the multiparty system.

Freedom of expression is guaranteed. The country ranks first in Francophone Africa in terms of freedom of the press and the

fifth in Africa. Burkina Faso is a land with centuries-old traditions, the result of a permanent quest for social dialogue. It is rich in its diversity and advocates inter-religious dialogue and peaceful coexistence.

A COUNTRY INTEGRATED INTO GLOBAL DIPLOMACY With strong regional and international leadership, Burkina Faso promotes peace and integration through active participation in regional and international forums. It is a member of the Conseil de l’Entente, the G5 Sahel, the Permanent Interstate Committee for Drought Control in the Sahel (CILSS), the Liptako-Gourma Authority (LGA), the West African Economic and Monetary Union (WAEMU), the Economic Community of West African States (ECOWAS), the Organization for the Harmonization of Business Law in Africa (OHADA), the African Union and the United Nations.

Traditional chiefs in Burkina Faso

Demonstrations the led to the overthrowing of Blaise Compaoré

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INTRODUCTION

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PROCEDURES TO ENTER BURKINA FASO Visa Citizens of ECOWAS member states do not require a visa to enter Burkina Faso.

Citizens of other countries must obtain an entry visa from the Burkina Faso diplomatic mission closest to their area of residence.

Visas can also be obtained upon arrival at the Ouagadougou International Airport.

Health An international yellow fever vaccination certificate is required to enter the country.

Vaccinations against hepatitis and meningitis are recommended.

As malaria is prevalent in Burkina Faso, antimalarial medication is recommended.

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INTRODUCTION

Mali Niger

Ouagadougou

Ghana

Togo

Côte d’Ivoire

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INTRODUCTION

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INVESTMENT OPPORTUNITIES IN A FAVOURABLE CLIMATE The Government of Burkina Faso set a meeting in Paris in December 2016, to present its National Plan for Economic and Social Development (PNDES) and invited the world to take part. An opportunity to showcase the country’s many strengths, presented herein.

A government accountable to the people “The land of honest people” held democratic elections in November 2015 in which a government that was conscious of being accountable to its constituents was elected.

On-the-ground reforms Burkina Faso’s institutional framework (constitution, sectoral investment codes, etc.) is being reviewed in the light of the political, social and economic demands expressed by the people over the last three years. The

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Social-Democratic Government is giving a bigger role to the private sector and is working on a better link between the latter and the administration.

At the heart of ECOWAS Sharing borders with six countries to which it is linked by road, Burkina Faso is at the heart of the West African Economic and Monetary Union and the Economic Community of West African States, a market of nearly 300 million people in which freedom of movement of persons, goods and capital is guaranteed.

Land: a challenge that has been defused Burkina Faso is one of the few African countries to have clarified the conditions of access to land to attract and safeguard investors.

Burkina Faso’s president with the president of the African Development

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Many sectors in need of investment nevertheless have national, regional or international market demand: > This is the case for agriculture and agribusiness, where the country has already invested with its financial partners in ambitious growth centres. Livestock production generates products in demand by the subregion. > Gold has become, in the space of six years, one of the engines of the Burkina Faso economy. The development of the mining sector (20% of the West African potential) is continuing so that it contributes even more to the development of other sectors and the well-being of all citizens.

INTRODUCTION

> The government is determined to invest in its infrastructure (health, education, roads, energy, ICT, etc.), as well as in the reorganisation of its management, by promoting public-private partnerships. > Recognised internationally, thanks to its regular hosting of festivals, as a country of culture, handicrafts and even sport, being the venue for Africa’s most famous cycling tour, Burkina is full of opportunities in these areas, in particular in terms of improving the handicraft market.

One of the most welcoming countries in Africa, Burkina Faso offers a large number of investment opportunities in tourism, in Ouagadougou, in the eastern hunting reserves, in the Sahel and in the savannah around Bobo-Dioulasso.

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INTRODUCTION

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THE 2016-2020 NATIONAL PLAN FOR ECONOMIC AND SOCIAL DEVELOPMENT (PNDES) Main points to consider Adopted on 20 July 2016, the 2016-2020 National Plan for Economic and Social Development (PNDES 2016-2020), is based on President Kaboré’s programme, as well as on the Burkina Faso Vision 2025, while taking into account the country’s international commitments. It succeeds the 20112015 Strategy for Accelerated Growth and Sustainable Development (SCADD), and borrows certain aspects from the second cycle such as pertinent products and the studies and surveys recently carried out.

It is strongly influenced by the recent socio-political and security situation, which culminated in the popular insurrection of 30 and 31 October 2014, the attempted coup on 16 September 2015 and the terrorist attack of 15 January 2016. It highlights the compelling social demand for justice and security, access to employment, quality infrastructure and social services.

reduces poverty, builds human capacity and meets basic needs, in an equitable and sustainable social framework.

It is based on three strategic pillars:

> The first, “reforming institutions and modernising the administration”, is devoted to strengthening governance in its political, administrative, security, economic and local dimensions > The second, “developing human capital”, focuses on education, professional and technical training, healthcare, access to drinking water and sanitation > The third, “boosting sectors that support economic growth and jobs”, aims to improve agricultural productivity, increase the value added of the agribusiness industries and service industries Two additional levers will be implemented:

Strong and inclusive growth Its overall objective is to structurally transform Burkina Faso’s economy in order to achieve strong, sustainable, resilient and inclusive growth. As a national objective for state and partner interventions over the 2016-2020 period, it aims to achieve cumulative per capita income growth that

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> Strengthening industrial development support sectors, including energy, transport infrastructure, technology, reform of the education system and improvement of the productivity of the primary sector > The construction of a competitive and sustainable industrial fabric

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Ambitious but achievable goals The ambition of the PNDES is to reach an average annual economic growth rate of 7.7% by 2020, create 50,000 decent jobs per year, reduce the incidence of poverty to less than 35%, reduce population growth to 2.7%, accelerate the level of development of human capital, and change production and consumption patterns from a sustainable development perspective.

8,000 billion CFA francs pledged by the international community Last December, the country raised 12,7 billion euros (8,000 billion CFA francs, excluding public-private partnerships) when presenting its plan to the international community in Paris.

The overall cost of implementing the PNDES is estimated at 15,395.4 billion CFA francs.

The financing strategy adopted is based on a multi-stakeholder approach that involves all stakeholders in economic life, both public and private. Funding will be provided by the State to the tune of 63.8%.

The remaining financing requirement thus amounts to 5,570.2 billion CFA francs, or 36.2% of the total cost of the plan. This will be covered by the mobilisation of national and sub-regional savings, including that of BurkinabĂŠ people living abroad, the issuance of government bonds, contributions from technical and financial partners and the public-private partnership (PPP) mechanism.

INTRODUCTION

"The ambition of the PNDES is to reach an average annual economic growth rate of 7.7% by 2020, create 50,000 decent jobs per year, reduce the incidence of poverty to less than 35%."

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SOCIAL, PRODUCTIVE SECTOR, INFRASTRUCTURE – TO EACH SECTOR ITS OWN FINANCING MODE The resource mobilisation strategy will target domestic as well as external resources.

It gives priority to increased mobilisation of grants to finance social sectors. Loans on concessional terms are directed towards the productive sectors while infrastructure is prioritised with a view to respecting the viability and sustainability ratios of the public debt. The PPP will be a privileged tool for mobilising resources to finance growth centres and the development of the agriculture, mining, infrastructure, energy, tourism, crafts, industrial sectors and SMEs-SMIs. In order to improve efficiency, two follow-up mechanisms are to be activated after the financing conference held in Paris in December 2016: the partner conference mechanism, and the follow-up of the conclusions and recommendations made at the conference.

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INTRODUCTION

INTERVIEW

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THE AIM IS TO CREATE A CLIMATE OF CONFIDENCE CONDUCIVE TO INVESTMENT. StĂŠphane OuĂŠdraogo Special Finance, Economic Affairs and Investment Advisor to the President of Burkina Faso

What is the current architecture of the investment support institutions, particularly in the context of PPPs? The investment framework for a number of sectors is being revised (mining, agriculture, energy, housing, etc.) According to which guideline have these changes been made?

The guideline followed is the implementation of institutional reform and modernisation of the administration. This is essential if the State is to contribute effectively to the inclusive and sustainable development of the country, with the aim of creating a climate of confidence conducive to investment. This means defining the rules for the functioning of strong, coherent, accountable and responsible institutions in order to meet the challenge of good political, administrative, economic, local and environmental governance. The establishment of an independent legal system and the implementation of a policy that breaks with the current management of public finances are also essential.

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The reforms made it possible to set up an institutional system increasingly specialised in the promotion, facilitation and support of private investment. In the context of PPPs, the PPP National Development Strategy, adopted in September 2011, forms the basis for the institutional framework put in place in July 2012, with the setting up of the PPP Directorate General for Cooperation (DGCOOP) in the Ministry of Economy, Finance and Development. The Burkina Faso Investment Promotion Agency (API-BF), established in 2013, is the contact point and the gateway for investors. Its mission is to welcome, guide and guarantee State support. It is one of the investment promotion operational structures, like the Export Promotion Agency, the Burkina Faso Chamber of Commerce and Industry, the SMESMI Financing and Promotion Agency, and Land Single Windows, etc.

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INTRODUCTION

"The private sector was heavily involved in the development of the PNDES" Should there be special efforts to make the PNDES attractive to Burkina Faso’s entrepreneurs?

The private sector was heavily involved in the development of the PNDES as well as in the mobilisation of financing. Following the donors’ conference in Paris, a Forum on PPPs was organised to better equip the private sector in the implementation of the National Plan. To make the business environment more attractive, the government will put in place financing mechanisms tailored to the needs of the structural transformation of the economy and will encourage the informal sector to formalise its businesses. It should also be noted that, in order to promote good economic governance, development planning, management and financing will be the main instruments of economic policy. To this end, the government has decided to adopt 14 planning sectors, raise the tax burden from 14.2% in 2015 to 20.1% in 2020 and increase the absorption rate of external resources from 59% in 2014 to 100% from 2018 onwards.

President Kaboré at the headquarters of MEDEF (employers), France

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INTRODUCTION

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OUTLOOK MACROECONOMICS: THE LIGHTS ARE GREEN The prospects for economic growth in Burkina Faso are favourable, with 6.2% recorded in 2016 and 7.6% expected in 2017, according to the latest estimates of the Ministry of Economy (January 2017).

This is a very positive sign, in the light of the country’s difficult three-year political transition, as well as the regional security context and falling prices of its main export products – gold and cotton.

This positive trend is certainly the result of the return to democratic institutions in 2015, as well as the vitality of almost all sectors of activity in the country. The main sectors, all marked by the informal nature of the labour market, remain agriculture (17.4% of GDP), trade (14.9% of GDP), mining (11.3% of GDP), livestock (10.6% of GDP) and construction (9.6%).

Livestock and grain production in good shape Growth in the primary sector was 3% in 2015, compared with 2% in 2014. It was boosted by grain production (+3% compared with the previous season), which increased due to the availability of more than 4,000 tons of improved seed, inputs, agricultural equipment and advisory support. Cotton, the main cash crop, virtually stagnated in 2015 at 714,000 tons (+0.8%).

Livestock production grew by 3% (2.7% in 2014), mainly because of efforts to improve food security and campaigns to combat animal diseases.

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Cotton ginning and mining lead the secondary sector The secondary sector recorded slower growth at 3.4% in 2015, slightly more than half of the performance achieved in 2014.

It remains dominated by cotton ginning (6.1% growth), and gold and manganese mining, even though prices have declined in the international market. The mining sector has virtually stagnated, due to the social and political instability which led to reduced activity in certain gold and manganese mines. But short-term prospects are favourable, with the resumption of work and the entry into production of new gold mines in particular.

A still-dynamic services sector The tertiary sector remained as dynamic in 2015 as it was in 2014, with growth at 5%. It is stimulated by trade, telecommunications and financial services, which include thirteen banks and four institutions.

Although poorly diversified, this sector is relatively stable. It is marked by a low banked population rate, but the context is changing rapidly with the arrival of mobile banking services (telephony) and the robust growth in microfinance. With 82 institutions and 1.4 million clients, Burkina Faso ranked second in terms of deposits in the WAEMU, after Senegal, with 153.8 billion CFA francs. The transport, tourism and hospitality sectors have been

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INTRODUCTION

GDP BY SECTOR, IN % OF GDP (Source : African Economic Outlook 2016)

2010 Public administration and defence ; mandatory social security Financial brokering, real estate, hiring and business services

negatively impacted by the recent political context, but now that the situation is calm, their prospects are good.

Budget and inflation under control Despite, once again, a difficult context, public finances remained stable in 2015.

The overall budget deficit, supported by Burkina Faso’s technical and financial partners (IMF, World Bank, AfDB), but also by its bonds issuance on the WAEMU market, remained moderate at 2.5% of GDP, against 1.8% in 2014. Inflationary pressures should also remain moderate under the WAEMU threshold of 3%.

Foreign trade: opportunities to restore the balance The country is still in deficit in its trade with the WAEMU and ECOWAS. According to the 2013 edition of the WAEMU trade monitoring report, the coverage rate of exports by imports was less than 30% in 2012 and its share of trade within the Union represented 7.9%, putting it in fourth position after Côte d’Ivoire, Senegal and Mali. Burkina Faso, by virtue of its geographical position and its production (livestock, agriculture and agribusiness), nevertheless has a significant commercial potential to reset its trade balance with its neighbours.

Transport, warehousing and communication

Other services Agriculture, forestry, fishing and hunting

2,1 %

16,8 % 4,4 %

35,5 %

4,3 %

15,4 %

Wholesale and retail trade; automotive repairs, hospitality

0,3 % 5,1 % 7,5 % 0,8 %

7,1 %

Of which fishing

Extractive industries

Manufacturing

Construction Production and distribution of electricity, gas and water 2015 Public administration and defence ; mandatory social security Financial brokering, real estate, hiring and business services Transport, warehousing and communication

Other services Agriculture, forestry, fishing and hunting

2,3 %

20,7 % 6%

34 %

3,4 %

Wholesale and retail trade; automotive repairs, hospitality

14,9 %

0,2 % 9,6 % 4,4 % 0,8 %

11,3 %

Of which fishing

Extractive industries

Manufacturing

Construction Production and distribution of electricity, gas and water

MAIN ECONOMIC INDICATORS (Source : African Economic Outlook 2016 – (e) estimate (p) projected) * Non-updated estimates of the PEA 2016

2014

2015(e)

2016(p)

2017 (p)

GDP growth

5

4,8

5 *

5,9 *

Growth of per capita GDP

2,1

1,8

2,1*

3 *

Inflation

-0,3

0,8

2

1,9

Budget balance (% GDP)

-1,8

-2,5

-3,1

-3,7

Current account (% GDP)

-6,1

-4,5

-5,3

-6,9 19

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A cement plant belonging to Moroccan company Ciments de l’Afrique

AN ECONOMY OPEN TO TRADE AND INVESTMENT

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A quarter of a century ago, Burkina Faso affirmed its option for a market economy based on the principles of free enterprise. The liberalisation of the economy has been effective and all sectors of activity, including energy and aviation, are open to private investment. To promote private investment, a driver of development, and generate sustainable growth, Burkina Faso has also created a competitive business climate, governed by a set of standards, laws and regulations in line with international best practices. This framework, already performing well, is currently being revised to strengthen the rights and guarantees granted to investors.

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AN ECONOMY OPEN TO TRADE AND INVESTMENT

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A CONSTANTLY IMPROVING BUSINESS CLIMATE The country’s commitment and consistency in its pursuit of reforms to improve the business climate and the promotion of private investment led to the country being ranked as the fourth most consistent reformer in the world in 2011. This progress is monitored, appreciated and encouraged by national and international development stakeholders and is reflected in the successive World Bank Doing Business reports. In 2006, Burkina Faso also set up a dedicated programme called “Doing Business Better in Burkina Faso”. Ranked 143rd in the 2016 report, the Government’s ambition now is to be ranked 130th by 2020.

Conclusive reforms The improvement in Burkina Faso’s ranking is directly linked to the adoption of regulatory provisions that have reduced both

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the number of procedures and the cost of setting up a business as well as lifting the constraint of the minimum capital required to start a company. On 26 May 2014, the Government adopted a decree authorising the articles of limited liability companies (SARL) to be drawn up by private deed or notarial deed. The decree of 26 May 2016 made it possible for founders of limited liability companies to decide for themselves on the amount of capital they want to invest.

It is logical that Burkina Faso’s Doing Business 2016 ranking reflects the country’s consistency in pursuing reforms, including during the recent transitional period.

It also reflects a renewed confidence on the part of investors following the political stabilisation of the country after the presidential (November 2015), legislative and municipal elections (May 2016).

Ouagadougou city centre

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AN ECONOMY OPEN TO TRADE AND INVESTMENT

OVERALL RANKING OF BURKINA FASO BY CATEGORY FROM 2015 AND 2017 (Source : 2017 Doing Business Report)

2015

2016

2017

Overall

149

142

146

Starting a business

153

77

72

Dealing with construction permits

71

61

61

Getting electricity

182

181

181

Registering property

149

137

136

Getting credit

128

134

139

Protecting minority investors

143

145

145

Paying taxes

153

149

150

Trading across borders

102

104

104

Enforcing contracts

163

161

161

Resolving insolvency

112

113

112

WAEMU COUNTRY 2016 DOING BUSINESS RANKINGS (Source : 2016 Doing Business Report)

Country

Rank

Côte d’Ivoire

142

Burkina Faso

143

Mali

143

Togo

150

Senegal

153

Benin

158

Niger

160

Guinea-Bissau

178 BURKINA FASO RANKING “STARTING A COMPANY” INDEX, 2016 DOING BUSINESS (Source : 2016 Doing Business Report)

Indicators

Burkina Faso

Sub-Saharan Africa

OECD

Time (days)

13

26,8

8,3

Cost (% income/capita)

43,5

53,4

3,2

Minimum capital paid in (% income/capita)

28,5

45,1

9,6

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AN ECONOMY OPEN TO TRADE AND INVESTMENT

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Specific objectives of ongoing reforms The 2016-2020 National Plan for Economic and Social Development (PNDES) aims to promote good economic governance in order to implement a budgetary policy that breaks with the past and is geared towards development priorities. It aims to streamline public policies, create a climate of confidence conducive to investment and strengthen private sector capacity, in particular SMEs and SMIs, as well as the capacity for planning, management and financing of development. This means ramping up anti-corruption and anti-fraud measures, as well as promoting greater transparency in the management of public finances.

These reformist ambitions are not wishful thinking and, for each of the fields concerned, the PNDES has set specific objectives: In order to improve public policy coherence, the proportion of planning objectives approved by the National Development Planning Commission (CNPD) and those of the ministerial departments applying the budget will have to be 100% by 2018. The tax burden must increase from 14.2% in 2015 to 20.1% in 2020.

A law on the steering and management of development will have to be adopted before 2019. It will establish 14 planning sectors and define a typology of public policies based on long-term objectives (30 years), matched with medium-term strategies.

A revision of the legal and institutional framework for PPPs is foreseen, while the framework for public procurement will be reformed, and a regional planning and land use law adopted.

With regard to fraud and money laundering court cases that are dismissed without further action, the objective is to ensure that their proportion is zero by 2020.

In terms of development cooperation, the government wants to increase the aid predictability rate to 80% by 2020 and to achieve a 100% funding absorption rate by 2018, compared with 59% in 2014, by streamlining project and programme management units.

The PNDES aims to increase the potential of the informal sector by putting in place the means to formalise it, thus reducing its share in the value added of the tertiary sector to 15%, compared with 20.7% in 2015.

" To achieve a 100% funding absorption rate by 2018, compared with 59% in 2014."  -

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AN ECONOMY OPEN TO TRADE AND INVESTMENT

LEGAL AND INSTITUTIONAL GUARANTEES FOR INVESTORS On the institutional and legal front, reforms have been oriented towards the establishment of increasingly refined mechanisms to promote, facilitate and support private investment. The ambition of the PNDES is to continue to strengthen good economic governance in order to increase the effectiveness of the Government and its partners, thus stimulating the private sector.

On 22 January 2014, it adopted a National Justice Policy (PNJ) with a priority action plan for 2014-2019, a new sectoral reference for the Government. The aim is to make justice more effective, more accessible and more protective of rights and freedoms.

Justice dedicated to business disputes

Guaranteed freedoms Within the framework of the free movement of persons and goods, Burkina Faso’s judicial system protects and secures any investor who starts a design, production or marketing business. Burkina Faso has recently made significant efforts to improve the quality and reliability of this principle.

Although having been established relatively recently, in Ouagadougou in 2009 and in Bobo-Dioulasso in 2010, commercial courts have helped to strengthen the legal security of investors. There are 119 business lawyers (including 101 individuals and 18 law firms) provide litigation and dispute services to investors.

BURKINA FASO LEGAL SYSTEM It currently comprises : Supreme Court, the Commercial Court, the District Court

COMMERCIAL DISPUTES FROM 2011 TO 2015 (Source : Ministry of Justice, Department of Sector Statistics)

2011

2012

2013

2014

2015

New cases

504

590

633

769

848

Of which court referred

170

254

277

343

397

Rulings handed down

461

512

567

610

713

of which court referred

142

230

256

313

341

Written decisions

449

503

546

596

621

of which court referred

150

226

244

313

249

% written decisions / rulings handed down

97,4 %

98,2 %

96,3%

97,7 %

87,1 %

Court of Appeal, the Administrative Court, the Labour Court Court of Auditors, the Council of State, the Court of Cassation Joint Court of Justice and Arbitration / OHADA, the WAEMU Court of Justice and the ECOWAS Court of Justice

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One of the alternative dispute resolution mechanisms set up by Burkina Faso is the Ouagadougou Arbitration, Mediation and Conciliation Centre (CAMC-O), which strengthens the system of legal security for investors. Its mission is to contribute to the improvement of the legal and judicial environment, to promote arbitration and/ or mediation through information, training and awareness-raising, and to implement alternative procedures. It allows businesses to quickly resolve disputes with their partners while continuing to their business relationships.

In nine years of operation, CAMC-O recorded 402 cases that were processed in a timely manner, i.e. within three months.

In addition, the Burkina Faso judicial system guarantees the execution of contracts, the application of international agreements and judgments of specialised bodies, in particular those of the Joint Court of Justice and Arbitration (CCJA) of the Organization for the Harmonization of African Business Law (OHADA) and the International Centre for Settlement of Investment Disputes (ICSID).

BREAKDOWN OF CASES BY MODE OF RESOLUTION BY CAMC-O (Source : CAMC-O)

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2007

2008

2009

2010

2011

2012

2013

2014

Arbitration

22

16

Mediation

5

15

TOTAL

27

31

2015 TOTAL

11

8

18

10

18

16

36

155

18

78

28

28

20

31

11

234

29

86

46

38

38

47

47

389

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Tax incentives Following several tax reforms, Burkina Faso has succeeded in setting up a cost-effective, modern system that reconciles the government’s budgetary objectives with the imperative of promoting private investment.

The various reforms also contributed to taking into account the expectations of companies in terms of simplification of tax legislation and procedures, transparency, coherence and stability of the tax system.

Modern labour laws The new Labour Law has made significant progress in two areas: the elimination of market rigidities and the strengthening of the efficiency of labour administration.

Since the adoption of a Labour Law Act in 2008 which guarantees freedom of hiring, employment and dismissal, Burkina Faso is the leader in the WAEMU and OHADA countries in terms of regulation in this field.

The Labour Law recognises the right of every investor to run his or her business on the basis of environmental contingencies.

It restores the authority of the investor in the management of his company and improves its security. It introduces greater clarity, transparency and predictability in the management of human resources and the resolution of labour disputes (especially financial). This law applies to anyone who wishes to work in Burkina Faso.

Beyond the Labour Law, Burkina Faso has ratified several international conventions on labour and the protection of workers’ rights, including the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families, adopted by the General Assembly of the United Nations in its resolution 45/158, ratified by Decree 2003-369 of 1607-2003. It also committed itself to observing the standards of the International Labor Organization (ILO) in strict compliance with the tripartite framework.

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MAIN TAX INFORMATION TO REMEMBER Civil law VAT: 18% for domestic operations and 0% for exports, exemption from the sale of unprocessed agricultural products Tax rate on companies: 27.5% Tax rate on stock market gains: 12.5% reduced by half (6.5%) for the first three years. This tax is payable in advance and deducted from corporate tax No registration fees for corporate procedures (incorporation, capital increase, sale of shares, etc.)

Free access to property, in the form of a lease (long lease) or as property by acquisition with a registration fee fixed at 8% of the value of the building Contribution of the licenses according to the estimated or achieved turnover, with a proportional right of 8% of the rental value of the professional establishment Special tax measures for SME-SMEs Exemption from the contribution of licenses for two financial years from the date on which their activities were actually started, duly recorded by the tax authorities Special tax measures for members of approved administration centres 30% reduction in income tax 50% reduction in the flat rate 20% reduction in employer tax and apprenticeship Sectoral advantages Special investment incentives (Investment Code, Mining Code, Special Tax and Customs Law applicable to investments in growth centres) grant important advantages to any investor who fulfils certain conditions (without citizenship requirements) and exemptions from the duties and taxes of domestic and customs taxation for periods varying between 5 and 7 years according to the volume of the investments.

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A sustained fight against corruption

Pro-investor land legislation The difficulty of gaining access to land – industrial, agricultural or other – is a common problem in many African countries, which is detrimental to national and international investment and for which Burkina Faso has taken the lead. The country has re-examined its land legislation in order to drive real transformation of the economy and, in particular, of rural development.

In this context, the texts revising the Agrarian and Land Reorganisation (RAF) Law were adopted on 2 July 2012.

In addition, the adoption and promulgation of Act No. 0034-2009/AN of 24 July 2009 on rural land tenure by the National Assembly ensures the securing of the right to land ownership of any investor, whether national or foreign, investing in a rural area. The aim of this law is to promote productive investments in the agricultural sector and to lay the foundations for the modernisation of agriculture and its integration into the market economy.

Measures have also been taken to facilitate the issuance of land ownership or occupation titles (in particular, the special land titling operation and the creation of a Single Window for Property called the Guichet Unique du Foncier – GUF). Tax legislation reform allows the private sector to gain easy and free access to land, either as an owner (by acquiring the property transfer rights fixed at 8% of the value of the property) or as a long lease holder through emphyteutic leases.

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The change in Transparency International’s Corruption Perceptions Index for Burkina Faso indicates that efforts to fight corruption have not been consistent over time.

This index rose from 3.4/10 in 2005 (70th in the world, on a scale from 0 to 10, from the most to the least corrupt, from 0 to 100 since 2012), to 2.9/10 (105th) in 2007, putting the country into the “endemic corruption” category. In 2009, Burkina Faso rose to 79th out of 180 countries, with an index of 3.6, which made it number one in the least corrupt countries in the WAEMU and the third in the ECOWAS, after Cape Verde and Ghana. The last five years have seen a certain reduction in the problem, as the perception index rose from 3 points in 2011 to 4,2 in 2016.

To strengthen the fight against corruption, Burkina Faso has set up institutions and adjusted its legislation. Among these measures, the country has established: - The High Authority for State Control and Anti-Corruption (ASCE/LC) - The Court of Auditors - The National Coordination for the Fight against Fraud - Law n° 004-2015/CNT on the prevention and repression of corruption in Burkina Faso - Organic Law No. 017-2015/CNT on the composition and functioning of the High Court of Justice and the procedure applicable to it - Organic Law No. 049-2015/CNT on the organisation, composition, attribution and functioning of the Supreme Judicial Council 25/08/15 - Organic Law No. 050-2015/CNT on the status of the judiciary - Law N ° 072-2015/CNT of 5 November 2015, which enshrined the independence of the judiciary

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THE API-BF IS THE MAIN INTERFACE BETWEEN PRIVATE INVESTORS AND GOVERNMENT. Ms. Bintou Diallo Director-General of the Burkina Faso Investment Promotion Agency (API-BF)

The API-BF is the pivot of the investment facilitation scheme in Burkina Faso and, by the same token, of the PNDES: what is the classic course of action for investor interested in getting involved in the projects supported by the National Plan?

The formal approach to public-private partnerships (PPP) starts by responding to a call for tenders. This process comprises a pre-qualification phase and a selection phase (examining of bidders’ technical and financial records, selecting the best bids, negotiation and contracting). However, investors interested in PPP structuring projects are invited to address their interest, in writing, at any time, to the ministerial departments responsible for the projects in question.

This allows us to get an idea of the level of interest, on one hand and, on the other, create a reliable database of potential investors for these projects. The API-BF ensures the transmission of information relating to projects (feasibility studies, pre-qualification notification, calls for tender, etc.) to interested investors. It is the main interface between private investors and the government. It acts mainly in the mobilisation of private investors, providing information on projects, clarifying the regulatory and institutional framework, facilitating administrative procedures and monitoring. It also arranges meetings with local bodies involved in investment projects.

A lot of work may have to be accomplished in terms of the absorption of funds raised for the implementation of the PNDES. Is this a problem for the API-BF, when there are plans to increase this rate from 59% to 100%?

The low rate of funds absorption is a concern which we are addressing at the highest level and which has been the subject of consultation between the main stakeholders and Ministry of the Economy, Finance and Development (MINEFID), in favour of the joint review in 2016 of the project and programme portfolios of the World Bank, the African Development Bank (AfDB) and the International Fund for Agricultural Development (IFAD). Shortcomings have been identified and the various stakeholders have agreed on the mechanisms for ensuring maximum absorption of available resources.

What are the recommended solutions?

The PNDES implementation and monitoring mechanism, through the establishment of various bodies, will make it possible to improve coordination between the various stakeholders and the resolution of potential difficulties. Among other things, there are plans for the establishment of a National Steering Committee for the PNDES, a Permanent Secretariat, sectoral and regional dialogue committees and annual, sectoral and regional reviews.

The State provides for a streamlining of the laws to facilitate public procurement and improve PPP efficiency. Lastly, funds will be allocated for the finalisation of priority projects, in order to speed up their implementation.

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IMPROVING POLITICAL GOVERNANCE After around thirty years during which the country’s political stability was regularly tested, Burkina Faso introduced a multiparty system in 1991, with regular elections. In1998, the country implemented its first National Good Governance Plan (NGGP), followed by a second in 2004, of which some measures helped lay the groundwork for a nascent democracy.

However, stability appeared fragile in view of the various socio-political crises shook the peacefulness of the country, the most important being that of Sapouy (19981999) and those related to the socio-political demands and military mutinies that broke out at the beginning of 2011.

The popular uprising of 30 and 31 October 2014 and the handling of the failed coup d’état of 16 September 2015 showed the world the maturity of civil society in Burkina Faso. Since the presidential and legislative

Governance objectives set by the PNDES In this context, the PNDES aims to boost voter turnout for the presidential election from 60% in 2015 to 80% in 2020, while the achievement rate of the Universal Periodic

elections of November 2015 and the municipal elections of May 2016, the socio-political tensions arising from the October 2014 insurrection have dissipated.

The current government is determined to take advantage of this new political phase in the history of Burkina Faso to permanently anchor a rule of law in which only the ballot box grants legitimacy. This prerequisite is also necessary for the establishment of a climate of confidence and the attraction of investments essential to the economic development of the country.

From the government’s point of view, promoting good political and administrative governance will depoliticise the administration and establish efficient and accountable institutions. In this sense, Burkina Faso’s democratic system is strengthened, as are republican values, national cohesion and citizen security.

Review (UPR) recommendations is expected to rise from 35% to 45% for the same period. Burkina Faso will also have to rely on recognised international indicators, such as the World Bank’s Country Policy and Institutional Assessment. The PNDES plans to improve the country’s score from 3.6 to 4.8 points in the next four years.

"Promoting good political and administrative government will depoliticise the administration."

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"We need institutions that survive their creators."

President Kaboré

-

Towards a new Constitution The rules on the functioning of strong institutions will have to be defined, in particular for the drafting of a new Constitution.

September 29, 2016, in Ouagadougou, President Roch Marc Christian Kaboré set up a Commission mandated with drafting a new Constitution that will take the country into the Fifth Republic. The Commission is made up of 92 members and includes representatives of the Government, political parties, civil society, defence and security forces, rural and economic communities, lawyers and environmentalists.

“We need strong institutions that survive their creators,” said President Kaboré on this occasion, delighted to announce that he was in the process of delivering on one of his campaign promises.

At the beginning of November 2015, the members of the National Transitional Council (CNT), the interim assembly set up after the fall of Blaise Compaoré, had already adopted an amendment that limits the number of presidential terms. It was this issue that cost the former president his position. The rebalancing of power and the independence of the judiciary are two of the concerns of President Kaboré in the current constitutional reform process.

Military environment : professionalism and depoliticisation On 1st November, to improve security and overcome the terrorist threats facing his country, the President undertook to submit a draft military planning law for the period 2017-2027 to the National Assembly. The PNDES already provides for an increase in the regional deployment of the ORSEC plan (Organisation of a Civil Defence Response) from 53% in 2015 to 75% in 2020. The coverage rate of the country will have to increase from 56.8% to 100% in 2020, while the ratio of the number of security officers to number of inhabitants will increase from 1/948 to 1/910 within four years.

At the same time, the government is committed to improving the performance of the armed forces, whose completion rate of field exercises will have to reach 80%, compared with the current 50%. Another major objective to be achieved is the depoliticisation of the military, just like that of the administration. This process will take place concurrently with the professionalisation of the institution, which will undergo equipment upgrades and strengthening of its operational capacities.

While the scope of the work is significant, it is important to underline the substantial gains that enabled the National Armed Forces (FAN) to respond in a republican way and defeat the 16 September 2015 coup d’état as well as participate in the establishment and functioning of the institutions of the political transition following the popular uprising of 30-31 October 2014. Similarly, the National Armed Forces are carrying out their peace support operations in the sub-region with professionalism.

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Continuing decentralisation and improving local governance One of the national political issues is the consolidation of decentralisation and the improvement of local governance. The government’s ambition, as laid out in the PNDES, is to increase the role of elected

local authorities in the implementation of public policies and to provide the regions with efficient institutions. By giving them more autonomy and speeding up the transfer of skills and human and financial resources, the goal is also to implement efficient land-use planning and boost economies from the bottom up.

"Implement efficient land-use planning and boost economies from the bottom up."

PNDES decentralisation objectives The objectives set by the PNDES are to increase the share of the State budget transferred to local authorities from 4.65% (2015) to 15% by 2020. Similarly, the number of secondary administrative centres will have to increase from 987 to 5,000. By 2018, all the sectoral and lo-

32

cal objectives will have to be drawn up in line with the strategy of the National Rural Planning and Development Master Plan. The rate of achievement of the expected results of the Local Development Plans will have to reach 75%. It should also be taken into account that the attractiveness of local authorities will be improved in the context of the creation of regional development clusters.

President KaborĂŠ with Chancellor Angela Merkel on his official trip to Germany

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Strengthening international cooperation At the regional and sub-regional level, Burkina Faso is contributing to the construction of the existing large geo-economic and geopolitical organisations, namely the African Union, the Economic Community of West African States (ECOWAS), The West African Economic and Monetary Union (WAEMU), and the Council of the Entente and the Community of Sahel-Saharan States (CEN-SAD). These political and Integration objectives Burkina Faso is committed to strengthening its role in the sub-regional and regional integration process, in promoting partnership and cooperation relations conducive to the structural transformation of the economy and in raising awareness among technical and financial partners (TFPs) so as to align their interventions with national priorities.

To achieve this, there has to be 100% internalisation of Community laws within national legal systems by 2020. The government also intends to increase the proportion of compliance notices issued in relation to new projects and programmes with 100% external financing in 2020, whereas the annual rate

economic organisations are making steady progress in getting Member States to cooperate for the achievement of their development objectives.

However, the demands of globalisation impose multifaceted challenges in the areas of strengthening institutions and governance mechanisms, the free movement of goods and people, crisis prevention and management and the fight against terrorism and insecurity. of change in the volume of official development assistance (ODA) will have to reach 3% in 2020, as against 1.1% in 2015.

Involving the diaspora Despite the numbers and quality of the Burkina Faso diaspora, it remains weakly protected by the State and has little involvement in national development. It has the right to vote, but the conditions for the effective exercise of this right are not met.

Not enough of the diaspora are getting involved in entrepreneurship and innovation in the country. The government will put in place measures to raise the contribution of Burkina Faso nationals living abroad to the country’s GDP from 1.9% in 2011 to 3% in 2020.

Burkina Faso’s Prime Minister with the Managing Director of the IMF, Christine Lagarde

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INTERVIEW

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THE STATE IS NOT A SUBSTITUTE FOR A PRIVATE PARTNER CAPABLE OF DOING A BETTER JOB Mrs. Alizatou Rosine Coulibaly Minister of Economy, Finance and Development of Burkina Faso

Energy plays an important role in the PNDES. What are the challenges of the sector?

The government is deeply involved in this area because the issue of access to energy remains a problem for households and businesses. It aims, in particular, to increase the installed electrical capacity from 300 megawatts to 1,000 megawatts by 2020 and the national electrification rate from 18.83% to 45% by 2020, by strengthening thermal production and increasing the share of renewable energy in total production from 6.4% to 30%. The construction of several hydroelectric power stations is planned, the most important being that of Bagré-aval, being built at the site of the planned Bagré Growth Pole. Eight photovoltaic solar power plants with a cumulative power of 100 MWp must also be installed, as well as an assembly unit for solar equipment in collaboration with international firms.

What about mining, a sector that has been growing strongly for six years?

Investment opportunities in the mining sector are proportional to the diversity of the country’s potential, including minerals already mined (gold, zinc, lead, phosphates, reconstituted marble, etc.), but also minerals not yet being exploited (manganese, iron, titanium, copper, vanadium, etc.). To this varied potential

34

is added the adoption of a new attractive Mining Code in 2015 which emphasises safeguards for mining operations.

The public-private partnerships (PPP) framework must be revised and the new mining investment code awaits its implementing regulation. How will this be done to satisfy the interests of the State, the private sector and citizens?

As you know, PPPs aim to provide goods or services by optimising the respective performances of the public and private sectors. This makes it possible to achieve, as soon as possible, infrastructure and public services development projects, while respecting the principles of equity, transparency, risk-sharing and long-term viability. Within the PNDES framework, one of the guiding principles adopted in development actions is that of subsidiarity and partnership, whereby the State is not a substitute for a partner that is capable of doing a better job. It was therefore necessary to ensure the judicious involvement of certain stakeholders in the implementation of development actions, including local and regional authorities. In the end, the revision of the legal framework for PPPs aims to enable the State to make savings on its budget, to make the private sector more efficient and to enable people to benefit from quality infrastructure and services. As regards the new mining code,

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"1,000 MW Burkina Faso’s installed power capacity by 2020" -

the adoption of its implementing regulation should make it possible to better regulate mining activity and improve its impact on the rest of the economy.

What does Burkina Faso still have to do to secure access to land for investors?

In Burkina Faso, any investor, whether Burkinabè or not, can be a landowner provided he has the means to acquire the land area necessary for his professional activity and as long he goes through all the procedures. Taking this into account, the ambition with regard to land is to increase the proportion of land titles issued on applications from 4.9% in 2015 to 45% by 2020.

Burkina Faso has established numerous institutions to deal with business affairs.

Does this arsenal suit the government?

Indeed, our country has a number of institutions which aim to facilitate the development of business and to reassure the investor of legal recourse in case of disputes related to the setting up and carrying out of business activities. Overall, these institutions are functioning well. But our ambition is to make them work even better.

In particular, we intend to reduce the average processing time of a civil case from 2 months and 21 days (in 2015) to 1 month and 15 days (by 2020) and a commercial case from 7 months and 3 days (in 2015) to 3 months (by 2020).

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AGRICULTURE: IMPROVE PRODUCTIVITY AND PROMOTE LOCAL PROCESSING

2

The government is injecting new vitality into the key economic sectors in its drive to overcome the structural shortcomings of Burkina Faso’s production system. To help businesses seize the opportunities offered by the market and become the engines of economic development, a budget of 6.814 billion CFA francs has been allocated under the PNDES. The agriculture sector, essential to creating jobs (80% of the working population), ensuring inclusive economic growth and contributing to food security, is a priority. Under the PNDES, a budget of 1,233.9 billion CFA francs (excluding agricultural growth centres) has been allocated to this sector to improve production infrastructure and boost agribusiness.

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LAND AND WATER: UNDERUTILISED ASSETS

38

The budget allocated to the agriculture sector is to improve production and processing infrastructure and boost agribusiness by enabling the sector to process more of what it produces. Public policy is aiming for a more market-oriented national production, rather than the current subsistence-oriented system, while maintaining smallholder farmers and helping them grow. The growth poles in progress thus focus on agriculture and agribusiness. The ambition for 2020 is to ensure that the primary sector reaches a growth rate of 5.3% and contributes 28% of GDP.

nually. The potential for irrigated agriculture, in particular, is estimated at about 233,500 hectares, of which only 26,758 hectares are currently cultivated (11.5%).

The main agricultural activities in Burkina Faso are cotton, grain, (maize and rice), cowpea, tubers (yams, sweet potatoes, cassava and potatoes), oil products, fruits and vegetables. They can be grown especially in the Bagré and Samendéni/Sourou growth centres. (SEE PAGE 61).

Burkina Faso has significant surface and groundwater potential. It consists of perennial rivers (Mouhoum and its tributary Kou, Comoé and its tributary Leraba, Pendjari), intermittent rivers (Nazinon, Nakambé, Béli, Sourou, etc.), lakes (Dem, Bam, Tengrela), hydro-agricultural dams (Kompienga, Bagré, Ziga and soon Samendéni) and other reservoirs. This potential is estimated at 10 billion m3 in surface water and 113 billion m3 in groundwater.

Two thirds of uncultivated farmland

Cotton Cotton, of which Burkina Faso is the leading producer in Africa and which was previously the main export product, now second only to gold, supports about 3.5 million people and contributes more than 4% in national GDP. Despite the considerable volume of cotton production, less than 5% of cotton fibre production is processed in the country.

The country expects to produce 750,000 tons of cotton in 2017, i.e. 150,000 tons more than the previous year, mainly due to discontinuing the use of GM seeds.

Potential arable land areas is estimated at nine million hectares, of which only one third (3.5 million hectares) is exploited an-

Food crops The main commercial grain crops are maize, rice, cowpea and wheat, while

Agricultural production in Burkina Faso in brief

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AGRICULTURE: IMPROVE PRODUCTIVITY AND PROMOTE LOCAL PROCESSING

root and tuber crops include yams, sweet potatoes, cassava and potatoes. These crops have strong potential for growth and extension and improved seed introduction and development, with the added advantage of high sub-regional demand, particularly for rice and white beans.

Fruit and vegetables Around 30,000 hectares are under fruit and vegetables (increasing by 7% per year) with potential extension of 225,000 hectares.

The main crops are green beans, tomatoes, onions and mangoes. These crops are well managed by Burkina’s producers and have considerable potential for development, while also benefiting from an existing sub-regional export route to Ghana, Togo, Benin, Côte d’Ivoire and Equatorial Guinea, as well as to Europe.

Oil products This group comprises cotton seed, shea nuts, sesame, peanuts and cashew nuts.

MAIN CROP PRODUCTION BETWEEN 2011 AND 2015 (THOUSANDS OF TONS) (Source : DGEP/IAP) Gross production

2011

2012

2013

2014

2015

Sorghum

1 505

1 924

1 880

1 707

1 435

Maize

1 077

1 556

1 585

1 433

1 469

Paddy rice

241

319

319

347

325

Millet

829

1 078

1 078

972

946

Cowpea and Voandzou

490

663

656

561

564

Yam

99

113

91

44

28

1 669

1 272

1 446

1 430

1 558

Shea nut

796

778

539

216

500

Sesame

85

100

137

319

235

Cottonseed

417

601

650

707

588

Fruit and Vegetables

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OBJECTIVE: AGRIBUSINESS

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By 2020, the PNDES aims to increase primary sector productivity by 50% and improve the rate of grain supply to meet demand, set to grow from 96% in 2015 to 140% by 2020. The private sector will be the partner of choice. Many of the measures laid out in the PNDES to stimulate the sector translate into business oppor-

tunities. The conditions under which such partnerships could be achieved are being clarified in an Agro-Forestry-Pastoral, Fisheries and Wildlife Investment Code. The setting up of agricultural growth and competitiveness clusters and agropastoral mini-clusters around mining areas will also have to be stepped up.

Mechanisation, training, inputs and irrigation

neral fertiliser production plant (19 billion CFA francs).

The PNDES plans to set up a tractor assembly unit (budget 11 billion CFA francs), develop tens of thousands of hectares of agro-sylvo-pastoral activities throughout the country (Sono-Kouri, Dangoumana, Bissan, for a hundred billion CFA francs) and establish agricultural high schools in the region (55 billion CFA francs). A purchasing group for inputs and agricultural equipment will be set up (263 billion CFA francs), as well as a natural phosphate mi-

The share of irrigated production in total agricultural production will have to be increased from 15% in 2015 to 25% by 2020.

To improve water management, tens of thousands of hectares of irrigated area will be developed in the Sourou Valley (18 billion CFA francs) and in SamendĂŠni (59 billion CFA francs). At least four dams (Bougouriba, Ouessa, Bambakari/ Tin-Akoff and Sanghin) will be built, as will some fifty water reservoirs in thirteen regions.

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Related services to be developed by the private sector

AGRICULTURE: IMPROVE PRODUCTIVITY AND PROMOTE LOCAL PROCESSING

"Increase private sector productivity by 50%."

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Private sector know-how can be used in numerous other areas. This is the case in support services to promote the competitiveness of agriculture (cold chain, processing into finished and semi-finished products), the production and treatment of seedlings, product quality certification services and produce preservation and marketing services (packaging, etc.).

The rate of agricultural product marketing (including cash crops) will thus have to increase to 37.5% by 2020, compared with an average of 25% between 2005 and 2010, while the growth rate of supplies to agro-industry will have to reach 50%.

Following the progress achieved in the sector, the resilience of agro-sylvo-pastoral households to risks will be strengthened.

The proportion of these non-resilient households is expected to fall from 49.2% in 2010 to 25% in 2020, while those households affected by structural vulnerability should decrease from 10% in 2010 to 5% in 2020.

EBID SUPPORTS LOCAL AGRIBUSINESS In July 2016 the ECOWAS Bank for Investment and Development (EBID) granted additional financing of $8 million (4 billion CFA francs) to Burkina Faso for the establishment of a tomato and mango processing plant for the Société de Transformation des Fruits et Légumes de Loumbila (STFL – Loumbila Fruit and Vegetable Processing Company).

This industrial company had already been given a 7.2 billion CFA franc loan for the same structure, thanks to the support of its Indian industrial partner. The government can now ensure the involvement of this private shareholder to speed up the process of the company’s privatisation. Based on a recommendation from farmers in 2006, the objective of the processing plant was to collect 60,000 tons of tomatoes and 28,000 tons of mangos from local producers.

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INTERVIEW

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Our partnership with donors is based on our results Wilfried Yaméogo Managing Director of Sofitex As the second most important export product after gold, cotton supports about 3.5 million people and contributes more than 4% to Burkina Faso’s GDP. Wilfried Yaméogo heads up the Société des Fibres et Textiles (Sofitex) which, with its 1,260 employees and 3,900 seasonal workers, holds more than 80% of the market share of the national cotton industry.

How is Sofitex doing and how does it contribute to Burkina Faso’s cotton sector ?

It’s doing well. Even though world prices for cotton fibre have improved recently, there are still uncertainties about their continuing at current levels. Our average turnover for the last three seasons was 255 billion CFA francs, with an average production level of 521,300 tons of seed cotton. This result was unfortunately affected by the substantial price drop suffered by the fibre because of its shortening; I am referring to the incident with the Monsanto firm on genetically modified cotton (discontinued because of its quality) and the loss on the international market of the premium linked to the “Burkina Faso cotton” label. The net income paid to producers by Sofitex over the last three marketing years averaged 123 billion CFA francs. In terms of direct taxes and income taxes, our contribution was around 4.1 billion CFA francs over the last three fiscal years.

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Is being a public enterprise an advantage or does it hamper Sofitex’s ability to negotiate with its financial partners?

Our credibility with our financial backers and partners cannot be measured by the fact that Sofitex is partially owned by the State. Our partnership is based on our results and the seriousness with which the business of the sector is conducted. More than just words, the signing of annually renewed conventions with the national and international banking pool reflects the quality of these relationships.

Will the forecast target of 800,000 tons of cotton be reached ? What can you learn from the return to conventional cotton ?

I can tell you that the target of 600,000 tons set by Sofitex at the beginning of the campaign will be reached. The shortage, about 200,000 tons, is expected to be harvested by the other two cotton companies, Socoma and Faso Coton. The more than 180,000 producers affiliated with 7,014 cotton producer groups have demonstrated professionalism in achieving these results. Regarding the quality of the fibre, the first indications we have are encouraging.

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AGRICULTURE: IMPROVE PRODUCTIVITY AND PROMOTE LOCAL PROCESSING

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STRONG REGIONAL DEMAND FOR LIVESTOCK The livestock sector (including fish farming and fisheries) accounts for more than 18% of GDP and 25% of export earnings. This is therefore a key issue for Burkina Faso, especially as there is high demand from the domestic and subregional market for both “raw� and processed products. The processing of livestock products, the promotion of modern livestock farms and the organisation of the market offer attractive investment opportunities for private investors.

Recent progress An added incentive for private investors is the improved legal and regulatory framework for the livestock sector. The delineation of pastoral areas and the marking out of the cattle tracks were carried

out, while artificial insemination for breed improvement has become a predominant practice as has livestock vaccination. Fodder production capacity has been increased with the establishment of the Koubri feed mill (SOFAB), which has a production capacity of 100,000 tons per year.

As a result, there has been a general increase the numbers of cattle (8.24%), small ruminants (12.55%) and poultry (12.55%), despite epidemics of animal diseases such as highly pathogenic avian influenza in April 2015. Efforts are being continued in order to increase the coverage rate of livestock feed requirements (from 69% in 2015 to 80% in 2020), the vaccination coverage rate and the quantity of fish produced from 20,000 tons in 2015 to 30,000 tons in 2020.

ANIMAL BREED NUMBERS 2011 TO 2015 (IN THOUSANDS) (Source : DGEP/IAP)

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Species

2011

2012

2013

2014

2015

Zebu

5 569

5 680

5 794

5 910

6 028

Bulls

2 998

3 058

3 119

3 181

3 245

Sheep

8 491

8 745

9 008

9 278

9 556

Goats

13 735

14 284

14 855

15 449

16 067

Pigs

2 589

2 692

2 800

2 912

3 029

Donkeys

1 072

1 093

1 115

1 137

1 160

Poultry

37 716

38 470

39 239

40 024

40 825

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Livestock investment opportunities

The main investment opportunities identified in the livestock sector, including PPP possibilities are: - The setting up of milk production units (Bobo-Dioulasso and Ouagadougou dairy areas) - the installation and operation of meat processing units, concentrated feeds for livestock or poultry, veterinary drugs - the establishment of an animal vaccine production unit - the construction and rehabilitation of re-

AGRICULTURE: IMPROVE PRODUCTIVITY AND PROMOTE LOCAL PROCESSING

frigerated slaughterhouses, in particular in Ouagadougou, Bobo-Dioulasso and five medium-sized towns - the installation and operation of leather goods production units, modern livestock farms to strengthen the supply of meat and dairy products - Improved seed production in forage crops - Product traceability improvement through the implementation of modern infrastructure (laboratories and quality control equipment) - The setting up of quality control structures managed by private professionals - Improving the availability and accessibility of veterinary and zootechnical inputs

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AGRICULTURE: IMPROVE PRODUCTIVITY AND PROMOTE LOCAL PROCESSING

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OUAGADOUGOU DAIRY LIVESTOCK PROJECT, AN EXAMPLE OF PRIVATE-PUBLIC COLLABORATION Private dairy sector operators are implementing an integrated agribusiness project, from upstream to downstream, with State support.

With the exception of the cotton sector, there are too few initiatives targeting all the value-added segments of a given sector, from upstream to downstream. This is the challenge being tackled by the Ouagadougou Dairy Livestock Development Project (PDEL-ZPO), formed by private sector players coming together to counter a clear demand: every year, Burkina Faso spends between 15 and 20 billion CFA francs on imported dairy products. The industrialists collected and aggregated the producers’ ideas and needs so that the PDEL-ZPO could proceed with solutions for improving dairy famers’ performance (inputs, cows), to enable them to supply the right quality milk in quantities sufficient to run a brand new factory with a processing capacity of 30,000 litres of milk per day (UHT milk, yoghurt, cheese, butter, etc.).

loan covers three components: structural investments (civil engineering, factory), capacity building of farmers and their structures (skills, dairy yield and livestock feed) and the availability of inputs. The State has invested 2 billion CFA francs to carry out the project and then hand over the completed infrastructure to the private sector partners, who will manage it and pay back the cost over a period of 17 years, with a 3-year grace period. In addition to managing the cooperatives created, Coprolait and Soprolait will supply inputs to producers. At each level (production, collection, processing, etc.), partnership contracts link the cooperatives with each other. In this way, farmers will be able to benefit from inputs supplied by the industrialists, guaranteed by their prospective production.

A partnership between Burkina Faso’s private and public sectors

Improved productivity

To achieve this, Coprolait and Soprolait, the main private partners, sought the support of the State, which took out a 10.9 billion CFA franc loan from the Islamic Development Bank (IDB) in 2012. The

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Of the 13 billion CFA franc programme budget, 80% will go towards the construction of the factory, the 20 planned collection centres and a high-producing dairy cow breeding centre. The factory has to be regularly supplied, including during dry sea-

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"Every year, Burkina Faso spends between 15 and 20 billion CFA francs on imported dairy products."

-

sons when there is a shortage of fodder.

One of the project initiatives is to improve the productivity of local cattle breeds, which today provide around two to five litres and up to a maximum of 10 litres of milk per day, far short of the EU average of 40 litres per day. During its first five years of operation, the factory will process the milk from 1,600 pregnant heifers imported from Brazil. An experiment carried out from 2000 to 2008 proved the suitability of these cows, which will provide 20,000 litres during the first year of operation, with the remaining 10,000 litres coming from local production. The results of insemination programmes, aimed at achieving production levels of 15 litres of milk per day, should be visible within 5 to 6 years, after which there is a forecast reversal of the production ratio between imported and local cows.

A project to be replicated in the regions If successful, the pilot project, which is expected to run for five years, will be replicated in the three other dairy-producing regions in Burkina Faso: in the west,

within a 100 km radius of Bobo-Dioulasso, in the Sahel, around Dori, and in the east around Fada Ngourma. The project is being monitored with interest by the West African Economic and Monetary Union, as well as by neighbouring Mali, because of its structuring capabilities in a strategic sector, with employment and income potential, including for women, who are often in charge of the processing works.

FORECAST KEY RESULTS OF THE PROJECT : - Milk production: +30% - Livestock-related household income: +30% - Milk imports: -20% - Poverty in the area covered by the project: -40%

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FISH-FARMING: DOMESTIC DEMAND INSUFFICIENTLY MET BY LOCAL PRODUCTION In recent years, Burkina Faso has experienced high demand for fishery products, with increasing – but not always sufficient – imports. The sector, which also contributes to the fight against poverty, unemployment and malnutrition, offers significant investment opportunities.

The country consumes about 100,000 tons of fish each year (fresh, frozen, dried, smoked, etc.) but has an annual production of only 22,000 tons. Although it has adequate water resources, with three major international river basins (Volta, Comoé, Niger), its more than 1,200 reservoirs are not big enough to provide a base for the national capture fishery supply. Aquaculture, which was promoted in the PNDES, is the only socially, economically and environmentally viable alternative for meeting growing demand and reducing costly imports. Annual per capita consumption, while low, at about 3.5 kg per year, has tripled over the past two decades, having grown from barely 1.2 kg, with 4,000 tons of fish imported annually.

Aquaculture will help meet demand The National Strategy for Sustainable Development of Fisheries and Aquaculture (SNDDPA) by 2025 and the Presidential Programme (2016-2020) plan to increase

domestic fishery production from 20,000 to 30,000 tons. To this end, they plan to build new dams to increase capture fishery, integrate aquaculture into irrigation schemes, train and strengthen the capacity of fisheries and aquaculture producers, and participate in sector financing, currently one of the main obstacles to its development. The Bagré Growth Centre already offers 50 hectares dedicated to aquaculture, with a local fish food factory, although this is still insufficient.

The current total aquaculture infrastructure, comprising about a hundred small units, some of which have only one or two ponds, achieves an annual production of about 300 tons of fish. In addition to Bagré, this production is supported by the aquaculture centres in Ziga (Plateau-Central) and Bazèga (Centre-Sud) and the hatcheries in BilangaYanga (Est), Douna (Cascades), Tougou (Nord), Poa, Seboun (Centre-Ouest) and Selmiga (Centre-Nord). An aquaculture research laboratory located in Bobo-Dioulasso, supported by the city university and the WAEMU Commission, contributes to the development of the sector. Based on the results of other countries with strong aquaculture sectors, research is essential to its success. There are significant opportunities in the production and supply of quality food as well as high-quality strains of fish.

"The country consumes about 100,000 tons of fish each year (fresh, frozen, dried, smoked, etc.) with a domestic production of only 22,000 tons."

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Research and professionalisation essential to success The main species bred in Burkina Faso are Tilapia and Catfish. The potential for aquaculture development is estimated at 110,000 tons per year (SNDDPA, 2011). In terms of profitable species for fish farming, there are around 140 species with substantial productive potential.

Imports of fishery products into Burkina Faso are handled by about 10 importers, while wholesaling and retailing, as well as domestic production (20,000 tons), is handled by around 5,500 merchants. A WAEMU survey, conducted in 2012, shows that out of the 12,023 Burkina Faso households involved in fisheries (production, sales, processing, etc.), only 369 focused exclusively on this sector of activity for their livelihoods.

A sprirulina manfacturing plant in NayalguĂŠ FISHERIES FIGURES (Source : DGRH 2016)

2015

2013

2011

Imported fish (tons, gross)

83 541

70 487

59 825

- of which frozen mackerel

65 191

49 399

40 050

Value (CFA francs) Fisheries production

6 095 047 457 4 945 998 802 4 227 998 472 20 950

20 700

16 260 49

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AGRIBUSINESS: SN-CITEC, INVESTMENT AND PROFIT After years in the red due to unsold stocks and fraud, this Burkina Faso oilseed specialist is once again seeing profitable results. It is rolling out an investment plan to consolidate its position.

Société Nouvelle Huilerie et Savonnerie (SN-Citec), in which the Geocoton group has a 52.94% controlling interest, is recovering slowly from years spent in the red.

Between 2007 and 2013, the company’s accumulated losses exceeded 4 billion CFA francs, while at the same time its turnover stagnated at around 15 billion CFA francs.

Over the past two years, it reached 18.4 billion and, for the current fiscal year, the company is aiming at turnover of 20 billion CFA francs. This steady improvement allowed the company to balance its books and earn a profit of 400 million CFA francs last year.

Investments in packaging, bottling and nutritional supplements To reinforce its position as an industrial leader, the company is implementing an investment plan to improve the quality of its products and to renew its industrial facilities. In 2016, over a billion was invested in the acquisition of packaging equipment.

“This is how we are going to differentiate ourselves from cheap oils,” CEO Alexander Zanna told reporters. The oil manufacturing specialist markets its oils under the label

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Savor and its soap as SN-Citec, highly prized by the local market, and wants to build a bottling plant to add to its existing range of 5 litre and 20 litre flagons. By the beginning of next year, it will be producing half-litre and 1 litre bottles in order to reach as many consumers as possible. SN-Citec also intends to diversify its animal feed products by manufacturing nutritional supplements to meet the needs of the market.

Unfair competition These efforts are aimed at putting this agribusiness flagship back on the rails. It faces unfair competition from cheap oils massively imported from neighbouring countries and Malaysia, according to Mr. Zanna. SN-Citec also has to compete with poor quality oils produced by hundreds of artisanal workshops. As a result, in 2015, this Burkina Faso oilseed leader ended up with over 20,000 tons of unsold oil, including an additional 1,000 tons from the previous year, which is equivalent to two months worth of sales. However, the company can be proud of having sold 85% of its production, estimated at some 20,000 tons of vegetable oil.

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Mr. Sommanogo Koutou, Minister of Animal and Fisheries Resources during a visit to SN-CITEC

Cotton seedcake produced by SN-CITEC

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INDUSTRY: MORE INCLUSIVE MINING GROWTH

3

Industry could become a driver of Burkina Faso’s economy. The mining sector, which is led by gold, already makes up the lion’s share of the country’s main exports, but its contribution to inclusive growth needs to be shored up. The Government is also determined to make the necessary investments to boost the manufacturing industry, particularly in the special zones.

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INDUSTRY: MORE INCLUSIVE MINING GROWTH

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THE GOLD INDUSTRY BOOM The development of the mining sector is fairly recent (2008) in Burkina Faso, but its growth, closely linked to that of gold, has been spectacular. Between 2008 and 2014, the contribution of the mining sector to GDP increased from 0.79% to about 12.4%.

The budgetary revenues generated by the sector also increased significantly, from 9 billion CFA francs (13.7 million euros) in 2008 to 168.5 billion CFA francs (337 million euros) in 2015.

Gold, alone, accounted for 55.16% of ex-

port value in 2015, surpassing that of cotton, while production rose from 0.362 tons in 2007 to 34 tons in 2015. Standing at 0.3 tons in 2007, it increased to a ton, then twelve tons, rising to twenty-three tons to finally reach thirty tons from 2011 onwards.

Eight mines are currently in operation compared to just one in 2007, which was operated in an artisanal way at the time.

The production of zinc remained constant (45 tons) between 2013 and 2015, while that of manganese ceased in 2012.

CHANGES IN GOLD MINING IN BURKINA FASO (IN TONS – ESTIMATIONS FROM 2013 TO 2016) (Source : Burkina Faso Chamber of Mines)

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Industrial production

0,362

0,5

11,6

22,5

32,1

29,2

30,2

29,9

33

32,4

Artisanal production

0,362

0,442

0,535

0,6

0,468

0,973

1

1

1

1

"Gold accounted for 55.16% of export value in 2015."

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PNDES mining sector objectives: more jobs and shared growth The problem is that the growth of the mining sector has not had a ripple effect on other sectors of the economy or on employment, and no decent jobs have been created, especially at a local level. It has also led to a degradation of natural resources, including water pollution, and requires evaluation by strategic studies, as stated in the PNDES. The PNDES therefore aims to create the conditions for improving the impact of mines on local development. The authorities also intend to encourage small mechanised mines and to better supervise artisanal mining. In quantitative terms, the Burkina Faso Development Plan aims to increase the share of mining industries’ local procurement from less than 14% in 2015 to 25% by 2020. The average amount of local investments made by companies will have to be stepped up from 2 billion CFA francs in 2015 to 5 billion CFA francs by 2020, while the number of direct and indirect jobs created by the mining sector needs to rise from less than 10,000 in 2015 to 20,000 by 2020.

A new Mining Code for more balanced partnerships In order to better oversee mining activity, particularly with regard to environmental conventions, the Government also intends to make good use of mining revenues. Income from the mining sector amounted to 16 billion CFA francs in 2016 (revenue from services, tax and customs), mainly related to gold mining. The Government also intends to create and foster national expertise, in particular the research, de-

velopment and generation of geological and mining information. Ultimately, the PNDES plans to increase the extractive industries share of GDP from 7.9% in 2015 to 10.2% by 2020.

In June 2015, the Transitional Government reformed the 2003 Mining Code to make the industry more conducive to the country’s economic development, while maintaining an incentive framework for business investment. Even though world prices of mining commodities have fallen in recent years, the new government may review some of the provisions of this Mining Code, pending the codification of the law.

Significant mining potential In addition to mines in operation or under construction, there are numerous other mineral deposits in the country. This is the case for ferrous metals such as manganese (in Oudalan and Mouhoun), magnetite (Oudalan) or nickel (Sanguié and Sanmatenga).

Non-ferrous metal deposits, such as zinc (Sanguié), copper (Poni, Sanmatenga) and lead (Sourou) exist throughout the country, as do non-metallic substances such as phosphate (Tapao), calcareous materials (Samendeni and Tiara) and siliceous sand (Houet).

In its growth plan of 7.7% per year, the PNDES expects gold production to increase by 7.2% as a result of improvements to artisanal production and the entry into service of three new gold mines. Zinc production will remain at about 130,000 tons per year, while manganese production will gradually recover, with production increasing from 500,000 tons in 2017 to almost 1.250,000 tons by 2020.

"Encourage small mechanised mines and better supervise artisanal mining."

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INDUSTRY: MORE INCLUSIVE MINING GROWTH

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MINING: ENDEAVOUR DOUBLES ITS AMBITIONS FOR BURKINA FASO In June 2016 President Roch Marc Christian Kaboré in person kicked off operations at the Houndé gold mine in western Burkina Faso. Endeavour Mining is the new owner of this deposit and fully intends to position itself as the country’s leading gold producer.

The investment is commensurate with this Canadian mining group’s ambitions for its activities in Burkina Faso. After acquiring the Karma mine from another Canadian mining company, True Gold Mining, in March, Endeavour Mining Corporation is investing 200 billion CFA francs in the huge 23 km² Houndé project. Owned 90% by Endeavour and 10% by the state, as stipulated in the mining code, the gold mine will produce 190,000 ounces of gold annually over 10 years. It is expected to generate $109 billion in public revenues and create 1,800 jobs.

The arrival of Endeavour coincides with the government’s desire to attract new investors and, to this end, it has undertaken a review of the mining code.

Reorganisation Currently engaged in the reorganisation of its operations, Endeavour acquired the Karma mine for C$226 million, an attractive price justified by the the speed at which it was able to go into production. Approximately 110,000 to 120,000 ounces of gold per year will be produced during the first five years of a total operating life of eight

56

years. This acquisition was accompanied

by Endeavour’s share of the sale of its Youga mine to MNG Gold for $20 million, while production for the current year is expected to reach 45,000 ounces of gold, compared to 68,407 ounces in 2015.

Great ambitions for Burkina Faso The first gold bar from the Houndé mine is expected to be cast by the end of 2017.

“We want to gradually increase production to between 6 and 8 tons of gold per year.

The objective is to be the biggest producer in Burkina,” explained Sébastien de Montessus, CEO of Endeavour. This ambition is welcomed by President Kaboré who sees it as a sign of the attractiveness that Burkina has succeeded in creating for its mining sector. With operations in Mali, Côte d’Ivoire and Ghana, Endeavour Mining expects to produce between 530,000 and 560,000 ounces of gold in 2016. Over the past decade, Burkina Faso has attracted over 1,200 billion CFA francs worth of investment in the sector, generating at least 10,000 direct jobs.

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MANUFACTURING: COMPETITIVENESS MUST IMPROVE

From the beginning of the 1990s, there was a structural break in the composition of exports from Burkina Faso. Manufactured goods gave way to cotton, while the devaluation of the CFA franc in 1994 failed to improve the competitiveness of domestic industries. Their share of total exports of goods fell from 32.7% in 1993 to 28.6% in 1994, to end up at 8% in 1997. This reflects the turning point in Burkina Faso’s economy to focusing on primary products (cotton and non-monetary gold), to the detriment of industry with a high multiplier effect on local economies in terms of jobs and diversification of the productive fabric.

Investments in support infrastructure In 2015, the industrial sector, of which the main industries are agribusiness, beverages, textiles and hides and skins, contributed 20.1% of GDP. In response to the decline in the share of value added in the manufacturing sector, reforms were initiated to restructure firms in difficulty

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and improve the business environment.

These efforts were unsuccessful, due to the many constraints related to the costs of production factors such as electricity, transport, telecommunications, credit and labour.

The infrastructure necessary to support production is also poorly developed. Existing industrial zones are almost saturated, indicating the existence of a demand, but they are mainly located in Ouagadougou and Bobo-Dioulasso, to the detriment of the other regional capitals. This is why the Investment Code proposes incentives to create new economic zones and growth centres outside the economic capitals. In addition, the existing zones are not serviced and require extensive rehabilitation work.

Measures to kickstart industry With an open economy, Burkina Faso is dependent on the outside world for certain products, sometimes even those that

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SYLVIE stops fraudulent imports

are locally available. Several measures and incentives should reverse this trend in the medium term. The government made a “precautionary and temporary” request, in January 2017, to public administration institutions to consume only local food products in order to overcome the cyclical difficulties in selling stocks. Institutions must “give priority to products of local origin before purchasing any similar imported product”. This concerns rice, oil, sugar, tomatoes, onions, milk, leather and meat.

Communication campaigns along these lines have been recommended. Some were launched last October, in collaboration with the Chamber of Commerce and Industry Business Centre, like the one to promote the rice grown in Bagré, around the eponymous dam located in the central part of the country. For the past year the government has also been aiding and reforming several industries weakened by the transition and which are now required to regain complete autonomy.

In addition to these short-term measures, the government has stepped up initiatives to help local producers, in particular industrial producers, overcome the difficulties.

One of these measures is the pre-customs electronic document collection platform, called the Virtual Liaison System for Import and Export Operations (SYLVIE). This means that import processing times are reduced from 35 days to 7 days and those for exports from 20 to 3 days.

Most importantly, it means commercial documents can be digitally processed and tracked, without physical intervention, drastically reducing the risk of corruption.

Burkina Faso’s oil and sugar producers have greatly benefited from this new measure at it has helped put a stop to fraudulent imports that have been undermining their sales for years. Electronic invoicing, introduced in February 2017, also aims to reduce fraud and combat the underground economy that is unfair competition for local manufacturers. It will also improve taxation, as SYLVIE has already succeeded in doing.

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INDUSTRY: MORE INCLUSIVE MINING GROWTH

PNDES industrial sector objectives

This is why the construction of the industrial zones envisaged in growth centres development plan (see box) will be paramount to relaunching the manufacturing industry. In order to achieve the objectives of the PNDES, public action will also focus on designing an industrialisation strategy, restarting industries in difficulty and developing agribusiness SMIs as well as the equipment manufacturing and primary sector input production industries. More broadly, the Government will have to meet the challenge of electricity and telecommunications supply and costs, carry out major works to open up Burkina Faso, and improve access to medium- and longterm financing.

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The specific objectives of the PNDES are to increase the secondary sector share of GDP from 20.1% in 2015 to 24% by 2020 and that of manufacturing from 6.6% to 12%. At the same time, the agricultural product processing rate will have to be increased from 12 to 25%. Indirectly linked to the development of growth centres, these opportunities include: - processing of agricultural and livestock products and by-products - production of human and animal health products - treatment and recovery of waste - manufacture and assembly of equipment related to agricultural mechanisation (tractors, power tillers, etc.)

- production of natural phosphate mineral fertilisers - manufacturing of packaging - traditional cotton spinning - installation of solar equipment

A production line in a cement plant

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GROWTH CENTRES

FOCUS

To transform the economy, the government is focusing on the development of growth centres or growth poles. The approach consists of identifying areas with high economic potential and then defining a nationwide network strategy, so that each local growth centre, connected with the others, becomes an economic engine.

For each growth centre, the aim is to strengthen institutional capacities (quality control, training, etc.) and to develop infrastructure (water and agro-pastoral, etc.) as well as essential business services (banks, telecom, shops, etc.). The opportunities for investment are numerous and varied and could be undertaken as partnerships with the State.

The objective is to increase growth and competitiveness poles’ share of GDP to 3% by 2020 and the combined number of local jobs created by growth and competitiveness from 35,000 in 2015 to 45,000 by 2020.

Different types of growth centres (industrial parks, special economic zones, business clusters, niche products, etc.) have been taken into account, each with its own approach and objectives : > Bagré Growth Pole Launched in 2011, close to the Bagré Dam (1.7 billion m3), the Bagré Growth Pole is the biggest growth centre, and is an agricultural park. Located in the central part of the country, in a rice-growing area, it offers approximately 12,000 hectares of developed land, with possibilities of extension, in an environment conducive to the development of agribusiness activities. > The Samendéni and Sourou Agropoles These two agricultural centres, located in the Hauts-Bassins region, have to meet

the demand for land that the Bagré growth pole is unable to meet, estimated at more than 60,000 ha. The construction of the Samendéni Dam, which is due to be filled in October 2017, will be suitable for the construction of an agribusiness park. > A growth centre in the Sahel This growth centre will optimise mining profits and enhance the expansion potential of other growth sectors, especially livestock, to build a structured and viable economic fabric that goes beyond mining. > A tourism growth centre in the east With the aim of building an attractive and original tourism industry, this growth centre will focus on hunting and game tourism. > Special Economic Zones (SEZ) in Ouagadougou and Bobo-Dioulasso These two Special Economic Zones will be dedicated to strengthening the country’s export capacity. > Three business clusters – oil mills in Bobo-Dioulasso, hotels and culture in Ouagadougou > Public-Private Partnerships for industrial parks on the outskirts of Ouagadougou, Bobo-Dioulasso and other regional capitals of Burkina Faso > A strategy of developing a market for niche products is currently being devised

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FOCUS

BAGRÉ: A PILOT PROJECT TO SHOW THE WAY FORWARD FOR RAW MATERIALS PROCESSING Burkina Faso’s strategic agro-industrial development project, the Bagré Growth Centre, is located near the dam of the same name, which has water reservoirs with a total capacity of 1,700 billion cubic metres. The plan is to develop 20,000 ha for intensive agriculture, help family farmers become businesses, and encourage agribusinesses to process the growth centre production.

A 3,300 metre network of gravity-fed surface canals irrigates 3,380 hectares on the left bank of the Nakambé River. In 2017, two companies began digging and constructing 21 km of new canals that will be delivered by the end of the year. They will allow for the priority cultivation of 15,000 hectares, of which nearly 5,000 are currently programmed. The World Bank funded the first phase with $100m in 2011, joined by the AfDB in 2014, with the State contributing its share.

Compelling results over the last four years It is still too to tell if family farmers have transitioned into efficient agro-investors,

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but the PAPCB (Bagré Support ) has recorded increased yields. Since 2011, the institution has guaranteed loans for farmers so they can buy more, better quality inputs. From 2013 to 2016, loans to farmers reached unprecedented four billion CFA francs. Rice yields increased from 4.5 tons/ha 7 tons/ha and PAPCB helped improve husking facilities.

There have been similar results with other crops, like maize and production flow has improved. Problems include the storage of perishables from the growing number of market gardens and better marketing, like the rice campaign run by the Maison de l’Entreprise last October. Around 100 projects will be implemented to help alleviate this situation.

108 projects already selected Based on innovation and use of water resources, the PAPCB selected 108 projects for the cultivation of the highlands, with pump systems. The lowlands are reserved for small producers. The PAPCB is banking on bigger producers buying small farm production and bulk buying inputs.

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100 billion in registered investment intentions About a third of the 108 projects are run by small producers, working 10 to 25 ha.

Agro-investors from around the world share an average of 100 ha per project, although some want over 1,000 ha, like Olam who have asked for 10,000 ha or more. India’s UTTAM has 20,000 ha and is investing tens of billions of CFA francs. Over 100 billion CFA francs in investment intentions were registered exceeding the expected 10 billion, and 36,000 jobs could be created instead of the envisaged 30,000. The focus is on rice, vegetables, livestock, dairy and the Moringa tree.

Construction of the Bagré irrigation canal underway

Vital services An industrial zone will be built on 160 hectares to boost production. Vital services like agricultural equipment maintenance, Internet providers and financial services are being set up. A produce storage warehouse is under construction, as well as input wholesalers, fuel suppliers, food shops and hotels, etc.

Rice paddies in Bagré

SOUROU AND SAMENDENI The planned growth centres in these two agricultural areas, not far from BoboDioulasso, the agribusiness capital of Burkina Faso, must be able to draw all the necessary lessons from the Bagré experience. However, an original aspect of these growth centres is the search for an experienced partner, which has had a huge response from big companies offering their services. The 30,000 hectares of land to be made available will be divided into three sections, one of which will be granted to this partner, who will supervise and advise family farmers, whilst buying some of their production.

A third section would go to selected agro-entrepreneurs, as was done at the Bagré growth centre.

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4

Whether energy, road, digital or real estate, the infrastructure that Burkina Faso has to improve is not only an opportunity for investors, it is an essential element of the country’s sustainable development. It will be a catalyst for growth in all other sectors of activity.

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TRANSPORT: A WEST AFRICAN CROSSROADS As a landlocked country, Burkina Faso has maintained a focus on the development of transport infrastructure. In recent years, efforts have been made to adapt some of the road network to the increased traffic, and this has resulted in strong growth in the sector. All roads linking Burkina Faso to neighbouring countries (Benin, Togo, Ghana, Côte d’Ivoire, Mali, and Niger) are tarred. The railway connects Abidjan to Kaya via Bobo-Dioulasso and Ouagadougou for a distance of 1,262 kilometres.

Flights from Ouagadougou International Airport to main European cities and those of neighbouring countries are provided by several international airlines.

Major projects underway However, significant challenges, which are also opportunities, still need to be addressed. With regard to road transport, there is a lack of guarantees in terms of safety, comfort, time and profitability. The sector is still fragmented and is operated

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by inadequately trained people in old vehicles. Conditions for urban and rural mobility need to be improved, as must access to industrial and production zones, tourist centres and basic social services centres.

Large projects are planned or underway in this sector, in railways, air transport – with the huge Ouagadougou-Donsin Airport project, and in the construction, tarring and rehabilitation of numerous roads, for example the building of the Ouagadougou-Yamoussoukro highway. The PNDES provides for a budget of 16 billion CFA to re-register the bus fleet. A budget of 8.55 billion CFA francs has been aside for the purchase of the required 150 buses to create an efficient urban transport network.

Unlocking the land and spurring trade Four of the Government’s priority projects were launched in 2017 in order to qualify the partner companies and propose financial solutions within the framework

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of PPPs. Eligible projects are selected by a national PPP commission according to Burkina Faso’s priorities and debt capacities. Major French, Spanish, Turkish, Chinese and African (Senegal, Togo) multinational groups are in the running for the following four projects: - The first 70 km-long section of the Ouagadougou-Côte d’Ivoire-border highway, from the capital to the town of Koudougou - The Ouagadougou bypass, which is urgent because the capital is a sub-regional road hub for several Sahel and coastal countries - The Bobo-Dioulasso bypass - The Boulsa-Sapaga Road, including the Pouyitenga corridor, to link up with the RN4 and Koupela Four non-PPP projects will also get underway in 2017.These are road construction and tarring projects, carried out in collaboration with institutional donors and aimed at facilitating access to Burkina Faso’s areas with high economic potential, especially agricultural and pastoral zones:

INFRASTRUCTURE: BUILDING BURKINA’S ROADS TO DEVELOPMENT

- Koupela-Gounghin (34 km), along the RN4 towards Niger, with the European Union, the African Development Bank and Japanese cooperation - Kantchari-Diapaga-Benin border (145 km), with the Islamic Development Bank (IDB) - Manga-Zabré (79 km, RN 29), in the south central part of the country, with the World Bank - Guiba-Garango (72 km), also in the south central region, with the IDB Many projects in northern Burkina Faso are being given increasing priority due to the prevailing insecurity in the region. This is the case in the area between Dori and Gorom-Gorom as well as that between Djibo and Arbinda.

With the ongoing objective of opening up even the most remote areas, the presidential project of achieving 5,000 km of rural tracks in 5 years has advanced well, with the 1,375 km achieved in 2016 exceeding the planned 1,000 km.

Ouagadougou interchange

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WATER: PROGRESS TO BE CONTINUED

The period 2011-2015 was marked by significant progress in sustainable water management at a national level and in urban sanitation. The rate of access to water in rural areas increased from 58.5% in 2011 to 65% in 2015. In urban areas, it was 89.9% in 2015, 10% more than in 2011. The rate of access to sanitation in rural areas, which is still low, increased from 0.8% in 2011 to 12% in 2015, compared with 34% in 2015 in urban areas, against 24% four years earlier.

Improved administrative management

The interventions planned under the PNDES consist of increasing the access rate to drinking water from 71% in 2015 to 79% by 2020 and improving sanitation, raising its rate from 18% in 2015 to 34% by 2020.

The water resources mobilisation capacity will also be boosted by increasing the nu-

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In 2015, Burkina Faso had 1,018 dams and 790 other surface water reservoirs.

It should be noted that more than 95% of these dams are small structures under ten metres high and 80% have a capacity of less than a million cubic metres. The integrated management of these water resources has been greatly improved by strengthening the institutional and legal framework, the coming into operation of five water agencies, two master plans for water development and management (SDAGE), the setting up of local water committees and the recovery of the financial contribution.

mber of new dams built from two in 2015 to fourteen by 2020 and the number of dams rehabilitated from two to eighteen. In terms of integrated water resources management, all dedicated agencies will have a master plan. The cost recovery rate for water will have to reach 100% by 2020. Achieving these projected effects will require the protection of the existing ecosystems and the preservation of quality of life and the environment.

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ENERGY: AN AMBITIOUS PLAN TO IMPROVE SUPPLY AND LOWER COSTS 63% thermal energy

In 2015, the electrification rate was 59.88% in urban areas and 3.06% in rural areas while the national average was 18.83%.

Electric power supplied by the Société Nationale d’Électricité du Burkina Faso (SONABEL) comes from twenty-eight thermal power plants and four hydroelectric power stations (two large ones in Kompienga and Bagré, two medium-sized in Niofola and Tourni).

Electricity supply, comprising 6.4% renewable energy, 62.9% thermal and 30.7% imported energy, is insufficient to meet the ever increasing demand from households and businesses. Priced at 75 CFA francs per kilowatt hour in 2015 for high voltage, it is also particularly expensive, compared to other West African countries. The proportion of households using electricity as their main source of lighting rose from 14.9% in 2009 to 24.4% in 2014. Similarly, the high cost and volatility of hydrocarbon prices are a major constraint, although a slight decline has been observed in recent years.

Bagré hydroelectric dam

Ziga dam

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PNDES objectives: opportunities to meet demand To improve supply, the government will need to increase the share of renewable energy in the energy mix, promote energy autonomy and efficiency, and create more services related to this sector. The calculated objective of the PNDES targets an increase in the national electricity coverage rate from 33.32% in 2015 to 80% by 2020 by ramping up thermal production, while the country will have to produce five times more renewable energy to reach 30% by 2020. An electricity code could be developed with this in mind, as well as a Renewable Energy and Energy Efficiency Agency.

Several projects launched in 2017 As of 2017, several calls for tender are being made for the improvement of the electrification of Burkina Faso, with: - the Bolgatanga-Ouagadougou oil pipeline - the completion of the upstream Bagré hydroelectric power plant - the recruitment of eight independent producers, when the new law is passed, to build eight solar power plants (two x 5 MW, three x 10 MW, two x 15 MW and one x 30 MW) - the installation of 100 MW of thermal power, for which six companies have been

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pre-selected - the supply and installation of solar kits and lamps in rural areas - the construction of 100 mini power stations in 100 villages Some major rural electrification projects have been completed. In 2016, 58 rural communities were electrified and, by the year 2020, another 700 and 800 will be running on electricity, substantially improving the rural electrification rate which, in 2015, stood at only 4%. Many communities offer attractive investment conditions due to their thriving economic activities.

In terms of solar power: several engineering consultants are currently being selected for the sizing of solar power generation systems in schools and healthcare infrastructure, the installation of equipment in public buildings, the construction of photovoltaic generation and storage systems in 50 medical centres and the supply of a million LED lamps, as lighting accounts for 4% of the country’s total consumption.

The setting up of a technology park in 2017, as a PPP, equipped with a solar material testing centre, two assembly plants and a business centre, as well as the establishment of a renewable energy institute, will support these efforts.

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SOLAR ENERGY IN SMES

"Promote energy autonomy and efficiency."

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A survey by the Chamber of Commerce and Industry of Burkina Faso (CCI-BF) shows that 8% of Burkina Faso SMEs surveyed use solar energy to supplement Sonabel’s sometimes insufficient supply. Of these, 12% use only solar energy and do not use generators. In turn, 92% invested in their own solar kits, which means that this figure could grow if access to bank loans was easier. Amongst all respondents, 36% take energy consumption into account when buying new appliances and 34% use energy-saving light bulbs.

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FOCUS

NEW LAW OPENS SECTOR TO PRIVATE INVESTMENT

In March 2004 the government had already adopted a plan which included the partial disengagement of the State for the benefit of private investors. This plan already favoured the adoption of legislation enabling private ownership of energy infrastructure as a public-private partnership or directly in the case of rural electrification. An absolute top priority is the new law on the regulation of Burkina Faso’s energy sector that was being approved as we were going to press. The previous law has been amended, redefining the tasks and mandate of Sonabel, the state electricity company, and making way for the implementation of PPPs. The most important points to remember are: - Sonabel is the single purchaser of the supplied energy, making it a monopsony with the ever-present risk that it may not be able to meet the needs of all its customers, for example, an industrial company which only has recourse to energy supplied by Sonabel. Independent producers were obliged to sell all the electricity they produced to the public enterprise, which itself was often forced to call on the competition to supply an industrial customer.

- Potential independent producers were

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unable, until now, to obtain licenses in areas where Sonabel was not itself present, particularly in certain rural areas, but this is now changing.

- The new law also stipulates regular audits to measure energy efficiency, whereas previously there was no provision for positive or negative sanctioning of operators (producers, customers, transporters, etc.).

- It defines conditions for taking advantage of the substantial opportunities in renewable energy.

- An appropriate law enforcement framework has been adopted to reduce fraud-related crimes (illegal connections, equipment theft).

- In order to improve the transmission network while at the same time ramping up production capacity, Sonabel’s production, transmission and distribution activities have been separated. The transmission network will remain a monopoly of the public enterprise, which will levy royalties on this activity to contribute to improving the national electrification rate. Production and distribution activities will be opened to the private sector (cooperatives, other independent distributors, etc.).

- In order to respect the rights and duties of all sector players (Sonabel, private companies, customers, etc.), the tasks and powers of the regulating authority will be strengthened.

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HOUSING: 40,000 DWELLINGS TO BE BUILT housing units, in regular, low-density developments.

In terms of housing, just over seven out of ten households lived in undeveloped areas and had low access to sanitation in 2014.

Of these, 39.5% resided in urban areas and 92% in rural areas. However, there is a positive trend in sanitation, with the access rate increasing from 4.7% in 2007 to 8.1% in 2014, with significant regional disparities.

Burkina Faso is experiencing rapid urbanisation, characterised by an increasing concentration of people in the cities. The urbanisation rate rose from 6.4% in 1975 to 12.7% in 1985, 15.5% in 1996 and 22.7% in 2006. It is estimated at 31.5% in 2016 and could reach 39.6% by 2025. The Government’s objective is therefore to succeed in making its developing cities true centres of economic growth.

Real estate developments with the private sector To ensure real estate development with the involvement of the private sector, the law relating to this sector aims at the development of new sites and infrastructure (housing, business centres, administrative, social and university infrastructure, green spaces, etc.) while at the same time increasing the number of families with access to decent housing from 4,572 in 2015 to 35,000 by 2020. Ouagadougou has 406,379 plots of which almost a third are yet to be developed. This represents a construction potential of nearly 160,000

With the already high housing demand expected to grow even more in the coming years, particularly in the capital and Bobo-Dioulasso, the State is implementing a National Housing Programme (PNCL) that targets all socio-economic segments.

It covers the whole country: Ouagadougou and Bobo-Dioulasso, the 11 other regional capitals, 36 provincial capitals and urban municipalities, the administrative centres of 302 rural settlements and thriving economic communities, such as agricultural, mining and border areas, as well as growth clusters.

The PNCL aims to build 40,000 homes through the setting up of appropriate mechanisms, according to the targeted population: - Public sector employees, whose numbers rose from 93,360 in 2008 to 138,149 in 2014 and whose incomes are secure and regular, but low - Formal private sector employees, working either in big companies or in the rapidly growing number of SME/SMIs - Informal sector workers – shopkeepers, garage owners, carpenters, taxi drivers, bricklayers, etc. They make up the largest portion of the demand, but have unequal and insecure incomes, and few have bank accounts. The government is determined to find financing solutions for them.

- Primary sector workers, in smaller towns and rural communities - The large Burkina Faso diaspora

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FINANCING SOLUTIONS FOR EACH SOCIO-ECONOMIC SEGMENT

Intermediate and high

Average

Low

Very low

Annual income

1 800 000

900 000

600 000

Under 600 000

% households

14,5

19,1

16,1

50,3

Depending on the supply and demand of the planned housing, the PNCL should enable: - Informal sector workers to organise themselves into housing cooperatives.

The State contracts and transfers concessional loans (30 billion CFA francs) to the Centre de Gestion des Cités (CEGECI) to buy 5,000 social housing units from the real estate developers and market them to informal workers as lease-to-own or rental homes.

The Banque de l’Habitat du Burkina Faso (BHBF – housing bank) is also developing a specific housing loan product guaranteed by the Fonds de Logement Social (FOLOS - Social Housing Fund). The way it works is that interested persons save 50,000 CFA francs a month for two years and benefit from a mortgage on the same terms as social housing. A similar experiment in Senegal made it possible to monitor informal workers’ bank account activity for two years before granting them a loan guaranteed by a land mortgage.

The State will have to strengthen the FOLOS with additional funds estimated at 8 billion CFA francs to improve the current interest rates and open the fund to all banks into which salaries are paid.

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> To assist low-income households with self-build homes. Most of the households concerned already have plots that they can’t afford to build on. This component of the PNCL aims to implement a technical and financial mechanism that will assist 10,000 self-builders, including: - 5,000 homes through housing cooperatives - 3,000 homes through individual assistance - 2,000 homes through assistance for the building of privately-owned rentals > to improve the supply of turnkey housing, instead of plots that dangerously fuel land speculation without contributing to solving the housing problem: - 10,000 housing units are planned as housing estates throughout the country, excluding Ouagadougou and Bobo-Dioulasso, in collaboration with the local authorities, building owners and the CEGECI - The construction of housing estates (15,000 housing units) on the outskirts of Ouagadougou and Bobo-Dioulasso as PPPs. The private partner benefits acquires 30 to 60 hectare blocks developed for residential buildings combining 40% social, 30% economic and 30% upmarket housing.

- The construction of apartment buildings (5,000), primarily in the two main cities, mainly for young households and the diaspora.

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INFRASTRUCTURE: BUILDING BURKINA’S ROADS TO DEVELOPMENT

« Cité Force Vive », in Bobo Dioulasso

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The State as guarantor for foreign investors

What Burkina Faso expects from its partners

The financing of the PNCL is estimated at 436.228 billion CFA francs. In the case of PPPs, the State ensures the availability of land and its development for a maximum of 80 billion CFA francs (in partnership with state property developer SONATUR, for which the State will contract loans), while private property developers and banks will provide financing of up to 356 billion CFA francs.

In order to achieve the ambitions of the PNCL, the State needs partners that can contribute to the mobilisation of the required financial resources for housing production and construction:

The State will support local property developers by strengthening bank resources, making it mandatory for approved PNCL clients to open a Housing Savings Plan to set aside the amount required for the deposit. The State will directly contract concessional loans which it will transfer to the BHBF housing bank to finance PNCL projects; resources that can be used for a revolving loan facility to finance a maximum of building phases. In terms of a PPP, it will provide guarantees – sovereign or banking – to foreign investors, in response to concerns raised by the latter.

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- For self-builds, it expects the expertise of companies that have developed construction technologies and materials to facilitate the delivery of turnkey value-for-money housing.

- For PPP construction of mixed housing estates, it expects effective real estate developers who have the capacity to mobilise appropriate housing financing and build housing using economies of scale and equalisation.

- To implement housing cooperatives, it requires social engineering skills to encourage the combined efforts of the people in the demand for access to housing.

The government draws on the successful experience of other countries that it has adapted to Burkina Faso’s own context.

These include:

Social housing in Bassinko, Ouagadougou

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- the principle of improving the buyers’ loan interest rate using the plan and the technical assistance of the Banque de l’Habitat de Tunisie - the principle of the Public Private Partnership set up in the Malian plan - the aspects of housing cooperatives, the bank financing scheme, the inclusion of the diaspora and the land mobilisation strategy, through new urban centres, are inspired by the Senegalese experience Opportunities that have already been snapped up There has been enormous interest, with offers on a national level as well as from various international quarters. More than 200 authorisations for property developers have been delivered. Enquiries and offers from foreign investors (USA, France, Turkey, India, China, Romania and Italy, etc.) are received almost daily. On the basis of their proposals, a pre-qualification for property developers is foreseen in order to establish public-private partnerships. In deciding to carry out the PNCL on a PPP basis, the State has chosen the option of sharing the risks with the private sector. The Ministry of Habitat is securing and registering the necessary land which will be given the partner as a guarantee, in order to raise the financing.

Emphyteutic leases will then be granted to the selected developers. Risks will have been substantially reduced through a planned registration campaign for housing applicants that will ensure that the number of homes produced correlates with registered applicants, all of whom will have been approved by the banks before the loans are granted. Discussions with the financy ministry will make it possible to define other types of guarantees, if necessary.

A NATIONAL HOUSING STRATEGY AND A SOCIAL HOUSING FRAMEWORK LAW TO STREAMLINE THE MARKET Through the implementation of the huge 40,000-unit housing programme, the government is developing a relevant and sustainable strategy for access to decent housing for all socioeconomic segments. This strategy, along with a social housing framework law, forms the first component of the National Housing Programme. This system offers the advantage of focusing on “research/action”, which will allow the State to adjust its strategy to the realities on the ground and ensure that the programme leads to a realistic and effective strategy.

For these reasons, the programme aims to set up housing production mechanisms instead of just housing production. The same framework law will allow for a clear and precise combining of the real estate development act and a series of implementing texts.

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The government’s ambition is to promote trade and the expansion of high value-added service industries to support growth in the primary and secondary sectors. Strong measures will have to be taken to formalise the sector, improve access to credit and boost ICT performance. A budget of 577.87 billion CFA francs over five years is foreseen under the PNDES.

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TRADE: IN NEED OF REDEFINITION

The informal sector now contributes to tax revenues through the payment of “patents”

(taxes), but its share in taxes paid to the state remains low. To ensure a better tertiary sector contribution to national development, the government must find solutions to the challenges of training, facilitating access to credit – which concerns both formal SMEs and rural sector activities – and the best ways to formalise businesses, an issue for which 50 billion CFA francs have been allocated in the PNDES (2016-2020). Two SME-SMI and agricultural finance banks could be set up, as well as incubators. A guideline law for the promotion of SMEs could be drawn up (budget of 5 billion CFA francs under the PNDES).

PNDES objectives for a formalised services sector that creates jobs

the banked population rate from 30.1% in 2015 to 35% in 2020

The main issue is that the services sector supports other sectors.

The PNDES also plans to strengthen the domestic marketing of local products by improving marketing channels and defining quality standards.

The contribution of market services to the tertiary sector was 60% on average over the 1996-2015 period. However, the analysis of their development shows a reduction in their contribution within the formal framework (from 22.7% of GDP over the 1996-2000 period to 14.3% between 2011 and 2015), a result of the “informalisation” of the tertiary sector in commerce, transport, catering and other services, almost exclusively oriented towards the domestic market.

The objectives are to: - reduce the informal sector’s share of value-added in the tertiary sector from 20.7% in 2015 to 15% by 2020 - increase the average number of formal jobs created in the market services sector per year from 12,100 in 2015 to 20,000 by 2020 - accelerate the growth of value-added in services from 6.6% in 2015 to 8% by 2020 - increase the rate of credit to the economy from 29% in 2015 to 35% in 2020 and

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It plans to: - increase the share of the two main export products from 85% in 2015 to 65% by 2020 - increase the share of manufactured goods in goods exports from 10.6% in 2014 to 20% by 2020 - reduce the share of consumer food products in goods imports from 10.1% in 2015 to 6% by 2020 - increase the quantity of meat exported from 88 tons in 2015 to 2,000 tons by 2020

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TERTIARY: SERVICES WITH A FUTURE

A BOOMING BANKING SECTOR Despite relatively low banked population levels, banks in Burkina Faso recorded sustained growth.

Ouagadougou’s financial centre is made up of 18 banks and financial institutions whose revenues are constantly increasing, especially in terms of retail banking. Last year, deposits reached 3,000 billion CFA francs – a spectacular leap which shows that the sector has been spared the shocks of the 2014-2015 political transition. A report by the Central Bank of West African States highlights an increase in assets in the order of 24.5%. Another sign of the sector’s vitality is the arrival of a newcomer in 2015: the Banque de l’Union.

This subsidiary of the Malian group, which achieved results of over 50 billion CFA francs in 2016, is keeping a close eye on the flourishing real estate market.

A market reconstituted in 10 years The vitality of the financial sector has been evident for the past decade, with significant activity such as the arrival of new brands, the founding and buying out of banks, and the setting up of new branches in the markets and villages in the interior of the country, etc. There has been a phase of reconfiguration and repositioning. Following the 2008 acquisition of the Banque Commerciale et Agricole du Burkina (BACB – Commercial and Agricultural Bank) by the pan African Ecobank group which, at the time, was the country’s leading financial institution, the Banque Internationale du Burkina (BIB – International Bank) was ab-

sorbed by Nigeria’s United Bank for Africa (UBA). At the same time, the Financière du Burkina became Coris Bank International.

In 2011, the arrival of Moroccan giant Attijariwafa Bank strengthened national competitiveness. Today, the banks support the economy well, having injected more than 1,881 billion CFA francs last year. Remarkably, in a decade, the number of banks and financial institutions almost doubled, from 8 to 17, a process that is not yet over, as Afriland is planning on opening a branch before the end of 2017.

Local bank is market leader In an increasingly competitive market, Coris Bank, with its forty branches and more than 225,000 customers, has become the country’s leading bank, with 713 billion CFA francs in assets, ahead of Bank of Africa, a subsidiary of Morocco’s BMCE (673 billion) and pan African group Ecobank (668 billion). The only downside is that the banked population rate remains weak (less than 7%), as it is in most countries in the sub-region. This situation is likely to persist as most banks prefer to confine their activities to the capital. The Professional Association of Banks and Financial Institutions believes that there would be more branches opening throughout the country if, at the same time, the Central Bank opened auxiliary branches in secondary cities like Fada Ngourma, Ouahigouya, Koupela, etc. The phenomenal progress of mobile money and mobile banking services in the country, as in the rest of the continent, will be one of the answers to this problem.

"There are 17 financial establishments in Burkina Faso, against eight 10 years ago."

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A DROP IN PRICES COULD SIGNAL A MORE COMPETITIVE ICT INDUSTRY Burkina Faso has fully liberalised the ICT sector and set up an Electronic Communications and Postal Regulatory Authority (ARCEP). While 3G coverage increased the number of Internet users from 1% in 2009 to 9.4% in 2015, general supply remains insufficient, irregular and costly, while demand continues to grow amongst a population with the money to spend. The deployment of fibre optic is slow and ICT infrastructure lacks a high capacity national backbone network.

BREAKDOWN OF THE SHARE OF MOBILE PHONE USERS (Source : Arcep) 2015 –T3

2015–T4

Prepaid

14 079 340

14 434 351

Postpaid

12 293

12 546

14 091 633

14 446 897

Contracts

Total users

MOBILE PHONE OPERATOR FINANCIAL DATA (Source : Arcep)

2015 –T3

2015–T4

Turnover excl. tax

70 199

70 975

Investments

11 196

7 059

Taxes & duties (incl. VAT)

2 474

4 962

Amount in millions of CFA francs

A vital catalyst for development Burkina Faso, with its young population, democratic renewal and economic growth, cannot do without or skimp on an efficient ICT sector, as it is a vital catalyst for development. To achieve the necessary level, the country will need to train computer specialists and other digital professionals, develop infrastructure and improve ICT governance.

Private investors will be offered the possibility of getting involved directly or in partnership with the State in numerous 82

As a result, only 4.1% of businesses used the Internet for their activities in 2009.

This figure is even lower for SMEs and companies located outside Ouagadougou and Bobo-Dioulasso. Given the low number of telecom operators, two for mobile Internet and three for home Internet and mobile telephony, the opening of the market to new operators and investments in infrastructure upgrades are planned.

projects, whether in infrastructure (fibre optic network), in the building and equipping of technopoles (industrial or universitybased) and technology parks and growth centres, the e-government project or the creation of digital spaces (virtual university).

The PNDES aims to increase the postal and telecommunications service’s contribution to GDP from 2.4% in 2015 to 4% by 2020. The proportion of businesses using the Internet must increase from 4.1% in 2009 to 18% by 2020, when the use of computers is expected to reach 35% by 2020 (7.9% in 2009).

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INTERVIEW

TERTIARY: SERVICES WITH A FUTURE

BANK RATES AND REQUIREMENTS ARE EXCESSIVE Mamadou Traoré CEO of Bakou Logistics Mamadou Traoré heads up Bakou Logistics, a young company that provides services in West Africa. One of its activities is the transport of packaged goods, a service that has a customer base of cotton companies (Sofitex, Faso Coton, Socoma), mining companies (Pan African Minerals) and the construction industry; bulk transport (granulates and powders, chemical and food products, minerals and waste), fleet management and logistics services, with partial or total management of customer flows. Bakou Logistics, elected the best transport company in 2013 by Total Burkina, also has specific expertise in the transport of jet fuel, diesel, heating fuel and other hazardous products. Its CEO talks to us about the business environment in Burkina and the necessity of facilitating bank loans to SMEs. How did you start your company?

Bakou Logistics came about in 2004 with the main objective of creating jobs for young people in Bobo-Dioulasso, through the purchase of trucks. Our total investment was 3.825 billion CFA francs. For 2016, we’re expecting turnover of 2.106 billion CFA francs.

What are your financial needs or technical partnerships?

We’ve assessed our current financing needs at 8.5 billion CFA francs. These resources must enable us to acquire at least a hundred trucks to meet the needs of our customers and improve the quality of our services.

What is your view of the improved investment climate in Burkina Faso?

The macroeconomic environment in Burkina Faso is slowly recovering from socio-political changes and the subsequent wave of insecurity. However, access to finance remains a major challenge. Banks still lend at rates much higher than those in northern countries with excessive collateral requirements. The lack of road infrastructure is an impediment to our business. Although efforts are being made, corruption and the administrative burden are still a problem and penalise business.

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TOURISM: A JEWEL TO BE POLISHED

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Tourism, which contributes 4.2% of GDP, is booming, with an average growth of 5.8% per year. Government action under the PNDES will include the promotion of public and private investment in hotels and restaurants. In addition to its legendary reputation for hospitality, the country can rely on four major geographical areas :

- The Sahel zone attracts tourists eager for out-of-the-ordinary experiences, with sand dunes and caravans.

- The Eastern area is excellent for wildlife tourism with huge game reserves and natural parks (Arly, Pama, W National Park, etc.).

- Ouagadougou is the focal point of business, conference tourism and major international events (Pan African Film Festival, International Crafts Fair, etc.).

- The Western area is leisure tourism country, with its scenic natural sites around Bobo-Dioulasso and Banfora and its waterfalls.

- the construction of hotel infrastructure and the development of cultural and tourist spaces - the redevelopment of tourist sites and the construction of new sites - the development of tour operator activities - hunting concession management - the development of wildlife tourism hubs

Investment opportunities exist in:

Banfora waterfalls

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Laongo sculpture park

TERTIARY: SERVICES WITH A FUTURE

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TERTIARY: SERVICES WITH A FUTURE

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Dance troupe during Culture Week (2014 edition)

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Tour du Faso cycling race (2015 edition)

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TERTIARY: SERVICES WITH A FUTURE

CULTURE, CRAFTS AND SPORT: TALENT TO BE NURTURED The crafts sub-sector is marked by numerous management structures which do not necessarily make the most of the actions implemented in the sector. Problems that undermine its development and confine it to an informal environment are the inadequacy of the laws regulating the sector and their inability to adapt to change, as well as the lack of homogeneous organisation of stakeholders at national level.

Craft products and services suffer from lack of competitiveness, making it difficult for them to get to national and international markets, as well as unfair competition that negatively affects their sales. Despite existing mechanisms, craftspeople and artists encounter enormous difficulties in accessing credit.

Improving competitiveness and access to public procurement The PNDES aims to increase the average growth rate of handicraft productivity to 25% by 2020. To achieve this, the Government will have to strengthen the technical

capacities of craft workers, improve the protection of their works and above all their access to public procurement opportunities. A budget of 75 billion CFA francs is set aside for the construction of quality training centres. A more suitable regulatory framework could also be developed.

A budget of 10.5 billion CFA francs is allocated to the setting up and equipping of commercial infrastructure such as the Bobo-Dioulasso Arts & Crafts Village and the National Centre for Artisanal Cotton Processing. The PNDES also provides for a 40.8 billion CFA francs budget for the construction of cultural and tourist infrastructure (2017 to 2019).

The sports industry also has its place in the National Plan, which aims to increase the industry share of GDP by 10% by 2020.

In addition, the number of local sports and recreation centres built will have to increase from 0 in 2015 to 26 by 2020 (for a budget of 8 billion CFA francs from 2017 to 2020) and the growth rate of cultural and tourism jobs from under 5% in 2015 to 7% by 2020.

Tiébélé village in the Pô region

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88

6

HUMAN RESOURCES: A SOLID FOUNDATION FOR DEVELOPING BURKINA FASO

The population of Burkina Faso was estimated at 19 million people in 2016, of which 67% are under 25 years of age. This large young population is a long-term asset, but to benefit from this “demographic dividend�, it is necessary to ensure good healthcare, education and integration into a productive economy. However, the level of allocation of resources to the social sectors remains too low to raise the human capital development level.

Household vulnerability causes food insecurity in over 20% of the population, while child malnutrition, although declining, remains high. Previous poverty alleviation programmes have been badly coordinated, resulting in waste and ineffectiveness, poor targeting of populations and lack of monitoring and evaluation. These are all points that the government is determined to correct through its PNDES and has budgeted 2.208 billion CFA francs to do this.

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HUMAN RESOURCES: A SOLID FOUNDATION FOR DEVELOPING BURKINA FASO

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HEALTHCARE: A MAJOR CHALLENGE The public health indicators are cause for concern. Maternal, neonatal and infant mortality indicators of 330, 23 and 43 per 100,000 new births, respectively, are way higher than international levels and priority targets of the UN Millennium Development Goals (MDGs). The death of one child in two is still linked to malnutrition, in a context of chronic malnutrition (30.2% in 2015) and acute malnutrition (10.4% in 2015).

against 80% in 2015, whereas it will be cured in 100% of cases, compared with 93.8% in 2015. The third challenge is to accelerate the demographic transition.

Interventions will be directed towards reducing the total fertility rate of 5.4 children per woman of childbearing age by 2015 to 4.7 children by 2020. Population growth should be controlled at a rate of 2.7 % by 2020.

The national development plan identifies three health challenges. The first is to improve healthcare. Among its many quantified objectives, it aims to reduce the fatality rate of severe malaria in children under 5 from 1.4% in 2015 to less than 1% by 2020 and the intra-hospital mortality rate per 1,000 births from 63.1 in 2015 to less than 50 by 2020. The maternal mortality rate per 100,000 births should be decreased from 330 to 242 within the same timeframe.

The PNDES provides for a raft of investments, amounting to 501 billion CFA francs, for the building of hospitals, hundreds of health and social welfare centres, in particular in the regions, the equipment of hospitals, the purchase of hundreds of ambulances and the enactment of the Universal Health Insurance Act.

The nutritional status of the population, especially women and children, will also need to be improved. The proportion of severe acute malnutrition being managed is expected to be 95% in four years, as

To meet these objectives, the Government’s main challenges are to strengthen the health information system, prevent and improve the management of malnutrition, develop research and improve the governance of healthcare institutions. The government should also ensure universal and free access to quality family planning services.

"The third challange is to accelerate the demographic transition."

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HUMAN RESOURCES: A SOLID FOUNDATION FOR DEVELOPING BURKINA FASO

Scanner at the hospital in Koudougou

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HUMAN RESOURCES: A SOLID FOUNDATION FOR DEVELOPING BURKINA FASO

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THE NEED FOR TRAINING YOUNG PEOPLE As it stands, the education system in Burkina Faso is generalist, with little vocational content, and therefore does not meet the needs of the labour market. Moreover, technical vocational education and training (TVET) remain qualitatively and quantitatively low. Gender disparities, as well as regional disparities, are still too prevalent.

There are 27 public vocational training centres in Burkina Faso: 13 regional, 11 provincial, the Ziniaré Vocational Training Centre, the Ouagadougou Vocational Training and Assessment Centre and the BoboDioulasso Industrial Vocational Training Centre. These centres have about 3,000 students. There are an estimated 353 private and certified professional training centres in the country. There were 10,941 students in 2014 and 2015.

Predominantly tertiary sector training The type of education provided by these training centres focuses on careers in the tertiary sector (administration, accounting, sales, etc.), which account for 54.8% of the total offer, to the detriment of sectors that are lacking in skilled workers, like construction (1.8%). The educational offer is limited in certain qualifications due to lack of teachers or insufficient investment, which is the case in small-scale mining and tourism.

While the education system has for a long time shown a distinct mismatch between the training provided and the needs of the labour market, this trend is showing a decline. Improvements have recently been made, with a gradual shift to a demand-side rather than supply-side approach, the training of teachers in the agribusiness sector and the certification 92

of teacher training. However this is still not adequate. The needs are significant in practically all the country’s sectors of activity: agriculture, fishing, agribusiness, livestock, public works, culture, tourism and hospitality, events, mining, energy, environment, ICT, transport and crafts.

There is a strong regional disparity in the distribution of the educational offer, with 51% concentrated in Ouagadougou, and 20% in Bobo-Dioulasso.

26 new centres to be built by 2020 Of the 26 training centres provided for in the PNDES, architectural surveys for five have been included in the 2017 budget, with the building slated to start in 2018, at which time the designing of another five centres will commence. These will be managed primarily by the State but, depending on the location and the training courses selected, some could be built and managed under PPPs. With a view to diversifying the offer of the Ministry of Youth, Training and Workforce Integration (MJFIP), provision has also been made in 2017 for: - the construction of the Bagré agricultural training centre, specialising in agricultural machinery, agribusiness, irrigated farming and fish farming - adoption of the skills-based approach, with a strong professional involvement in the identification of needs and in the certification process – a public-private charter covering this aspect is in the process of being signed - the adoption of 15 training and certification standards in the agro-silvo-pastoral professions

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HUMAN RESOURCES: A SOLID FOUNDATION FOR DEVELOPING BURKINA FASO

PNDES education and training objectives The PNDES aims to provide a quality education system for all, suited to the transformation of the economy. The primary school completion rate is expected to increase from 58.5% in 2015 to 75.6% by 2020 and from 24.2% to 38.2% in post-primary education. The share of the TVET beneficiary workforce in the agro-pastoral processing sector will have to reach 15% by 2020 (1.1% in 2015) and that of the working age population trained in the agro-pastoral trades must reach 7 % (0.2% in 2015). A planned 26 training centres will have to be built for an amount of about ten billion CFA francs.

The government has similar ambitions for higher education where the proportion of students who have completed a cycle will have to rise from 28% in 2015 to 60% by 2020. The proportion of students enrolled in vocational courses will be increased from 8% to 30% during the four years, while these streams will themselves increase (from 10% to 30%). This will improve access to quality higher education, increase the capacity of universities and improve the governance of education.

RESEARCH AND INNOVATION : PREPARING THE TRANSFORMATION OF THE ECONOMY The number of technologies generated to improve production will need to be doubled to 600 by 2020.

Institutional governance of research will be improved, technical capacity of human resources strengthened, land secured and research centres given full autonomy. Research will be directed towards development objectives. A budget of 820 billion CFA francs will be allocated to this objective, mainly for the construction of one university per region, research laboratories, innovation parks in growth centres and three technopoles dedicated to pharmacy, agribusiness and energy.

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HUMAN RESOURCES: A SOLID FOUNDATION FOR DEVELOPING BURKINA FASO

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EMPLOYMENT: MOST JOBS IN THE INFORMAL SECTOR

In 2014, the unemployment rate was estimated at 6.6% of which 9.3% were women and 4% were men. Unemployment is higher in urban areas (7.1%) than in rural areas, where it is 6.4%. The problem is that the majority of rural jobs only keep the worker busy for 50% of the time, especially in agriculture, where the rate of underemployment is 64%. In general, employment remains dominated by the informal sector, with only 6.4% of the workforce working in the modern sector.

By 2015, the number of formal jobs was estimated at 685,625 of which 22.6% were civil servants and 24.2% were women.

94

The PNDES aims to provide decent work and social protection for all. To achieve this it must: - Increase the share of formal private employment in total employment from 6.6% in 2014 to 15% in 2020 - Cut the unemployment rate by half to reach 3% - Decrease the underemployment rate in the agricultural sector from 64% in 2014 to 30% by 2020 - Increase to 100% by 2020 the proportion of workers affiliated to national social security (CNSS) and the civil servant pension fund (CARFO) - Ensure 25% of the population benefits from the universal health insurance scheme (RAMU) by 2020

Solar lamp assembly plant in Koudougou

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HUMAN RESOURCES: A SOLID FOUNDATION FOR DEVELOPING BURKINA FASO

IST AIMS TO BECOME A CENTRE OF EXCELLENCE In a country where university education offers predominantly generalist courses, the Higher Institute of Technology (IST – Institut Superieur de Technologies) advocates another solution : training technicians and engineers in fields at the cutting edge of innovation.

Opened in 2000 with 64 students, the Higher Institute of Technology (IST) crossed the 1,000 mark this year and is aiming at 2,000 students by 2020. The school owes this breakthrough to its training model which is oriented towards the new sectors : mining and industrial engineering, agribusiness, energy and construction.

Founded by Issa Compaoré, the school has developed partnerships with national and foreign public universities and has two departments: science and technology and management sciences. Of its 1,000 plus students, 10% come from Gabon, Rwanda, Mali, Niger and Chad. “We train in sectors where training is lacking,” says Compaoré.

An Arts and Trades University More than 400 million CFA francs have been invested in equipment and property acquisitions. In order to increase its student capacity and improve the quality of teaching, the Institute has developed a strategic plan to establish a “Central University of Arts

FOCUS / COMPANY

and Trades” (UCAM – Université Centrale des Arts et Métiers). The planned 7,500 m² campus will house IST, a Business School, an Islamic Finance Training, Research and Services Department, a Technopole and a Foreign Language Centre.

The project will mobilise nearly 1.5 billion CFA francs. Mr. Compaoré will carry out this work in stages. “To date, we have an investment requirement of $500 million to build classrooms, develop digital infrastructure and acquire the necessary laboratory equipment for mechanical engineering, electronics and agribusiness,” says the 46-year-old industrial engineer, who is looking for technical and financial partners. Starting with the IST Label and then UCAM, the goal is to develop a franchise network and set up partner company business consulting services.

Supporting the PNDES IST is anticipating the skills needs that will be generated by the implementation of the presidential programme. “The National Plan for Economic and Social Development (PNDES) will launch a lot of projects in infrastructure, solar energy, transport, healthcare centres and agricultural development. These projects will require qualified human resources and our Institute is positioned to meet this need.”

95

INDEX

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INDEX

THE INSTITUTIONS IN CHARGE OF INVESTMENT FACILITATION IN BURKINA FASO The institutional framework for the promotion and facilitation of investments consists of the following structures: The Presidential Council for Investment (CPI) www.cp-investburkina.bf Chaired by the Head of State, the CPI is an advisory body set up in 2007 to give impetus to the formulation and implementation of the most appropriate policies to stimulate investment through its ideas and recommendations.

Operational structures These structures are responsible for the targeting of investors (companies, countries, geographical areas, etc.), their reception, facilitating their investment (administrative procedures, licenses and authorisations) and monitoring their activities in order to better advise them.

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Faso. It plays the role of a single interlocutor for investors.

The Agency for the Promotion of Exports (APEX) www.apexb.bf The mission of APEX is to promote Burkina Faso exports. As such, it is responsible for promoting Burkinabe products and services in national, regional and international markets, providing technical assistance to exporters in carrying out their trade transactions, contributing to the assessment of national supply of exportable products and services, and to carrying out monitoring and economic intelligence on behalf of the country.

The Chamber of Commerce and Industry of Burkina Faso (CCI-BF) www.cci.bf

The Investment Promotion Agency of Burkina (API-BF) www.investburkina.com

The main tasks of the Chamber of Commerce and Industry of Burkina Faso are to defend the interests of the business community. Given the importance of its missions, the CCI-BF has created specific structures for facilitating and securing investment :

The founding of API-BF in 2013 responds to the desire to streamline and consolidate the missions and the functioning of the different investment promotion structures.

API-BF’s main mission is to promote foreign direct investment and high-volume domestic investments and maximise their positive impact on the economic, social and sustainable development of Burkina

La Maison de l’Entreprise du Burkina Faso (MEBF) www.me.bf Established in 2002, the MEBF contributes to the development of a strong and competitive private sector by providing a critical and coordinated mass of services to businesses and professional associations.

In order to carry out its tasks, the MEBF has itself set up specific structures.

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THE INSTITUTIONS IN CHARGE OF INVESTMENT FACILITATION IN BURKINA FASO The Directorate for Single Windows for Trade and Investment (DGU-CI) Business Formalities Centres (CEFORE) have reduced the time and cost of starting or closing a company, a sole proprietorship or a subsidiary in Burkina Faso. This reduction in costs results from the fact that there is a single contact and a single form for the starting, expansion and closure of companies in Burkina Faso. The deadline for the starting, expansion and closure has been reduced to three days since CEFORE became operational.

The Centre for Facilitation of Building Acts (CEFAC) is to facilitate and simplify the formalities for obtaining a planning certificate, building permit, certificate of compliance, and demolition permit, all in one place and on the same document.

98

The DGU-CI ensures the facilitation and simplification of non-customs administrative procedures for starting a business, trade and investment. In particular, it is responsible for facilitating trade and investment operations, centralising and streamlining all formalities, non-customs procedures and operations in the field of trade and industry and informing economic operators on procedures and legislation.

The Single Window for Property (GUF) Created in 2008, the GUF aims to facilitate and simplify land and property formalities by enabling users to carry out related procedures one place.

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INDEX

SECTORAL INVESTMENT LAWS IN BURKINA FASO

A new mining code for more inclusive growth The 2003 mining code was replaced by a new code, promulgated in June 2015, to make the mining industry more involved in the development of the country. Some tax and customs provisions were modified, while maintaining an incentive framework for companies. Here is a summary of the main measures carried by the new code, pending its implementing regulation: - Reiterating certain recommendations from the African Union’s 2009 “African Mining Vision”, it incorporates provisions to allow better interaction between the gold industry and other sectors.

- It reaffirms Burkina Faso’s implementation of the Extractive Industries Transparency Initiative (EITI) and mandates the publication of all agreements and mining contracts concluded with mining companies in the Official Gazette (Article 6).

- It provides for the establishment of a mining fund for local development which will finance communal and regional development plans, primarily in the social sectors, and which will be subject to State control.

- The local authorities bordering on the mining sites continue to benefit from a redistribution of 20% of the amount of the superficial tax levied by the State (Article 145).

Fiscal measures - Operating permit holders will pay 1% of

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their monthly gross turnover (or the value of the extracted products) to the local development fund.

- It maintains the 10% free equity State participation in mining companies with an industrial company which is now extended to companies with small mine permits (Article 43).

- A 20% capital gains tax on the transfer of mining titles rather than by a reference to the general tax code.

- It eliminates the statutory language that provided for a 10 point tax reduction on mining profits during the exploitation phase.

Instead, license holders will now incur a fixed corporate income tax of 17.5% and a tax of 6.25% on income derived from investments. While these figures resemble those in the previous code, they differ in that the rates are now fixed. All other mining taxes and royalties will be determined by implementing regulations (Article 160).

Priority to locals - The code introduces several obligations in support of local business and employees.

It requires, for example, that mining companies give preference to qualified local employees, businesses and contractors (Article 101).

- Mining companies are required to provide professional training to local managers. Quotas for these obligations will be established in forthcoming implementing regulation (Article 102).

- All applications for an operating permit must be approved by the Minister of the Environment (Article 41).

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An investment code specially for rural areas A recent study has shown that the general investment code makes it difficult to ensure adequate development of the agriculture sector, in particular as envisaged by the National Programme for the Rural Sector and the PNDES. This is why the Government has drawn up an Agro-Forestry-Pastoral, Fisheries and Wildlife Investment Code (CIASPHF). Currently in draft form, it must inspire investor confidence in the profitability and security of investing in this sector. It takes into account various issues, ranging from research, training, socio-professional integration of young people and women to terms of access to land, financing or the rights and responsibilities of investors. It also covers environmental and social management and, of course, the processing, preservation and marketing of products.

100

to the design of facilities, equipment, financing, maintenance or operation. All PPP projects are subject to prior assessment and periodic reports to the Department of Finance.

- The public authority may grant subsidies, public loans, loan guarantees, sovereign guarantees, assignments or acquisitions to the private partner.

- The PPP Act specifies that private partners are to be selected following a fair, competitive and transparent call for tenders but the award of a public-private partnership contract may bypass the call for tender process in certain situations of an urgent nature, where a service can only be provided by a unique partner (for intellectual property reasons for example) or where a pre-qualification or call for tender failed to identify a potential bidder and launching a new call for tender is impractical.

A law to promote public-private partnerships

Revised investment code (2010)

In September 2011, the Government adopted the Public Private Partnership (PPP) Strategy and, on 23 May 2013, the Law on the Legal Regime of the PPP Partnership.

The latter supplements the public service delegation mechanism provided for in the 2008 decree regulating markets (modified in 2012 and 2013).

- The PPP framework construed under the PPP Act generally applies, with some exceptions, to projects specifically identified in the PPP programme adopted by the Council of Ministers as well as with other divisions of the State. Projects may relate

The main tax incentives proposed are laid down by Law No 62/95/ADP of 14 December 1995 of the Investment Code. It has been revised many times, in 1997, 2009 and 2010, which significantly modified and simplified its incentive schemes. Replacing the previous six schemes, which were based on the investment amount, number of jobs created and sector of activity, the Revised Code provides for four schemes, three of which are based solely on the investment amount and job creation, across all sectors, and one specifically for export enterprises.

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INDEX

in the previous scheme (between 20 million and 10 million CFA francs) in order to target firms big enough to make a real impact on the economy and employment.

Favouring agriculture and decentralisation However, the 2010 law provides that “for companies in the agriculture, forestry, livestock and fish farming sectors, threshold criteria for investment and job creation are reduced to a quarter�. The investment threshold of 1 million CFA francs needed to benefit from the first preferential scheme was set at a higher level than

In order to promote decentralisation, investments in activities more than fifty kilometres from Ouagadougou and Bobo-Dioulasso will see their advantages extended for three years. Companies in the agriculture, forestry, livestock and fish farming sectors enjoy equivalent benefits.

MAIN TAX BENEFITS OF INCENTIVE PLANS (IN CFA FRANCS) (Source : UNCTAD)

CONDITIONS Investment

Plan A

Plan B

Plan C

Plan D

100 to 150 million

500 million to 2

5At least 2

At least 1

billion

billion

billion

At least 20

At least 30

At least 40

At least 30

/

/

/

At least

amount Jobs created Production

80%

for export BENEFITS Customs duties

Operating equipment imports benefit from the Category 1 rate of 5%

VAT Profit tax

Exemption on operating equipment Deferral of past losses on taxable income for 2 additional years

Deferral of past losses on taxable income for 3 additional years

Deferral of past losses on taxable income for 4 additional years

Deduction of up to 50% of investment amount from taxable profit, up to 50% of profit tax Patents

Exemption from

Exemption from

proportional duty for proportional duty for TPA

Exemption from proportional duty for

5 years

6 years

7 years

Exemption for

Exemption for

Exemption for

5 years

6 years

7 years

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INDEX

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A LIST OF STRUCTURING PROJECTS NATIONAL PLAN FOR ECONOMIC AND SOCIAL DEVELOPMENT (PNDES) 2016-2020 AND SOCIAL DEVELOPMENT (PNDES) 2016-2020 A LIST OF STRUCTURING PROJECTS NATIONAL PLAN FOR ECONOMIC N°

1 2 3 4 5 6 7 8 9 10

Project title

Line ministry

Energy infrastructure Project for the construction of an oil pipeline and storage Ministry of Energy, Mines and 478 500 000 000 deposit Quarries Project to build two thermal power stations with combined MEMC 265 000 000 000 capacity of 265 MW Project for the construction of 5 photovoltaic solar power MEMC 114 500 000 000 plants with a combined capacity of 80 MWp Project to set up an assembly unit for solar equipment in MEMC 70 100 000 000 collaboration with international firms Construction of the Bagré-Downstream Hydroelectric MEMC 66 700 000 000 Generating Station Project to build mini hydropower plants in Folonzo, MEMC 63 720 000 000 Bontioli and Gongourou Project to build 3 photovoltaic solar power stations with a MEMC 23 460 000 000 combined capacity of 20 MWp Project for electrification of school and health facilities, installation of solar pumps in rural areas and installation of MEMC 21 050 000 000 solar street lights in Ouagadougou and Bobo-Dioulasso Project for development and extension of domestic MEMC 15 360 000 000 biodigester technology for urban and rural households Road, Communication and Housing Infrastructures Five-year programme to build 40,000 social and economic Ministry of town Planning and 479 892 250 000 housing units Housing (MUH)

and construction and asphalting of N° Research project, controlProject title Line ministry 11 the Ouagadougou-Yamoussoukro highway (Ouagadougou- Ministry of Infrastructure (MI) Koudougou section) Development works and asphalting of 220 km of urban 12 MI roads in 40 cities in 36 provinces of Burkina Faso

Ministry of Development, Digital 13 National telecommunications backbone project (PBNT) Economy and Posts (MDENP) Project for construction and asphalting of the Orodara14 MI Banfora-border of Côte d’Ivoire road (365 km) Development works and asphalting of Ouagadougou bypass 15 MI roads (130 km) Rehabilitation and strengthening of the Pa-Dano-Gaoua16 MI border of Côte d’Ivoire road Project for construction and asphalting of the Taparko17 MI Manni- Bogandé-Bilanga-Fada N'Gourma road (198 km) Building and asphalting of county road N°108 (RD 108) 18 Koudougou Mossi-Sanaba (34 km) and regional road N° MI 24 Sanaba-Solenzo-Koundougou (113 km) 19 Rebuilding of toll plazas throughout the road network MI Building and asphalting of the Dandé-Kourouma20 MI N'Dorola-Temetemesso-Mali border road (120 km)

Building and asphalting of Tenkodogo-Ouargaye-Togo MI border road (110 km) Building and asphalting of the Tougan-Ouahigouya road 22 MI (96 km) Development of 8 km of urban roads and interchange in 23 MI Bobo-Dioulasso Agri-sylvo-pastoral production 21

Project for the creation of a Central Supply of Agricultural 24 Inputs and Equipment N° Project title 25

Cost in FCFA Cost in euros

Project to develop 35,000 ha of lowlands

102

403 989 896

PPP

174 554 125

PPP

106 866 761

PPP

101 683 494

PPP

97 140 514

PPP

35 764 539

PPP

32 090 518

PTF

Not Available

23 416 169

PTF

Not Available

Not Available Not Available Not Available Available Not Available Not Available

PTF

Available 1

PTF

Available

109 500 000 000 166 931 674

PTF

Available

75 781 000 000 115 527 390

PPP

Available

70 000 000 000 106 714 312

PTF

Not Available

59 400 000 000

90 554 716

PTF

Available

44 620 000 000

68 022 751

PTF

Available

38 000 000 000

57 930 627

PPP

36 550 000 000

55 720 116

PTF

Available Not Available

33 452 000 000

50 997 245

PTF

Available

30 500 000 000

46 496 950

PTF

Available

26 500 000 000

41 161 235

PPP

Not Available

Ministry of Agriculture and Water Supply 263 500 000 000 401 703 160 Line ministry Cost in FCFA Cost in euros

Availabil PPP Available Type of ity of partnership feasibilit y study Ministry of Agriculture and Water 80 000 000 000 121 959 214 PTF Not Supply Available 2

Ministry of Economy, Finance and 50 000 000 000 Development

Agricultural Mechanization and Hydraulic Support Ministry of Agriculture and Water 49 105 418 100 Development Project Phase 2 Supply 2,000 ha hydro-agricultural development project in Ministry of Agriculture and Water 32 Dangoumana 39 060 422 625 Supply Project to develop 1,812 hectares of irrigated areas in Sono

Available

129 000 000 000 196 659 232

Ministry of Agriculture and Water 28 Project for the creation of specialised agricultural middle 55 000 000 000 Supply schools per region Project to set up an agricultural and food risk management Ministry of Agriculture and Water 29 mechanism 50 000 000 000 Supply

31

PPP

144 810 164 000 220 761 672

Ministry of Agriculture and Water 26 phase II (PDIS II): components of irrigation schemes and 59 591 000 000 Supply recalibration of the Mouhoun Office of the Prime Minister 27 58 000 000 000 Bagré Growth Pole Project

30

729 468 547

731 591 019 PPP, PTF Available Availabil Type of ity of Cost in FCFA Cost in euros feasibilit 200 000 000 000 304 898 034 partnership PPP Available y study

Integrated development program of the Samendeni valley

Support Project to Promote Growth Poles and Regional Productive Systems in Burkina Faso

Availabil Type of ity of partnership feasibilit y study

90 845 894 88 420 430 83 846 959 76 224 509

76 224 509 74 860 727 59 547 230

PTF PTF, PPP PTF PTF, PPP

PTF PPP PPP, PTF

Available Available Not Available Available Not Available Available Available

Ministry of Agriculture and Water 28 Project for the creation of specialised agricultural middle 55 000 000 000 Supply schools per region Project to set up an agricultural and food risk management Ministry of Agriculture and Water 29 mechanism 50 000 000 000 INVEST IN BURKINA FASO Supply 30

Support Project to Promote Growth Poles and Regional Productive Systems in Burkina Faso

Ministry of Economy, Finance and 50 000 000 000 Development

Agricultural Mechanization and Hydraulic Support Ministry of Agriculture and Water 49 105 418 100 Development Project Phase 2 Supply 2,000 ha hydro-agricultural development project in Ministry of Agriculture and Water 32 Dangoumana 39 060 422 625 Supply 31

Project to develop 1,812 hectares of irrigated areas in Sono Ministry of Agriculture and Water 33 Kouri 37 176 720 000 Supply

83 846 959 76 224 509

76 224 509 74 860 727 59 547 230 56 675 544

Ministry of Agriculture and Water 25 011 063 000 38 129 120 Supply Project to rehabilitate 3,818 hectares of irrigated areas in the Ministry of Agriculture and Water 35 Sourou valley 17 124 806 051 26 106 599 N° Project title LineSupply ministry Cost in FCFA Cost in euros 34

1,500 ha hydro-agricultural development project in Bissan

36 Project to develop 2,000 ha of hydro-agricultural areas for Ministry of Agriculture and Water 17 006 000 000 the cultivation of wheat Supply

Ministry of Animal and Fish Project to create a vaccine production unit at the 37 Resources 10 000 000 000 Ouagadougou National Livestock Laboratory

41

15 244 902

Project to create a multimodal dry port in the agglomeration of Ouagadougou Ministry of Commerce, Industry 77 735 611 800 118 507 176 and Handicraft Project to set up a classic spinning mill in Bobo-Dioulasso

Ministry of Commerce, Industry and Handicraft

24 250 000 000

36 968 887

Support Project for the Creation and Development of Small Ministry of Commerce, Industry 42 and Medium Enterprises and Small and Medium Industries 19 684 500 000 and Handicraft

30 008 827

Ministry of Agriculture and Water 19 000 000 000 Supply Project to develop the new industrial zone of BoboMinistry of Commerce, Industry 44 Dioulasso 14 500 000 000 and Handicraft 43

Natural Phosphate Mineral Fertilizer Production Project

45 Bobo-Dioulasso Refrigerated Abattoir Construction Project

Ministry of Animal and Fish Resources

Project to install slaughterhouses in 5 main cities of Burkina N° Project title 46 Faso

Ministry of Animal and Fish Line ministry Resources

Project to build a dairy in the Bobo-Dioulasso dairy basin

Ministry of Animal and Fish Resources

47

49

Project to create an agriculture financing bank

28 965 313 22 105 107

10 000 000 000

15 244 902

10 000 000 000

15 244 902

3 000 000 000

4 573 471

Ministry of Economy, Finance and 15 000 000 000 Development

22 867 353

Construction and equipment of the National Cotton Ministry of Commerce, Industry 48 Processing Support Center in Bobo-Dioulasso and Handicraft Financial services

Construction of Phase II of the Ouessa Hydroelectric and Ministry of Water and Sanitation 357 000 000 000 544 242 992 Irrigation Dam

Project for the construction of Phase II of the Bougouriba 51 hydro-electric and irrigation dam Ministry of Water and Sanitation

PTF PPP PPP, PTF

Available

PPP

Available

PPP PPP

PTF, PPP

PPP PPP PTF PPP PTF, PPP

3

Not Available Available

Available

Available

Available Available Available Available

PPP

220 000 000 000 335 387 838

PPP PTF

PTF, PPP

PPP, PTF

PPP, PTF

53

Project to build 10 376 new boreholes and rehabilitation of Ministry of Water and Sanitation 90 000 000 000 137 204 116 3020 boreholes

PTF, PPP

Project to create 2000 eco-villages

PTF, PPP

Available

Not Available

Construction of 611 and upgrading of 225 drinking water Ministry of Water and Sanitation 133 500 000 000 203 519 438 supply pipes

Ministry of Environment, Green Economy and Climate Change Project for putting into operation urban waste treatment and Ministry of Environment, Green 55 recovery units Economy and Climate Change Health Project to build and equip 240 new health and social care 56 Ministry of Health centers and 11 medical centers with surgical units

INDEX

Not Available

PPP

52

54

Available

Available Availabil Type of ity of Cost in FCFA Cost in euros PPP Not 10 000 000 000 15 244 902 partnership feasibilit Available y study

Environment, water and sanitation 50

PTF, PPP

Not Available

Availabil PTF Type of Available ity of partnership feasibilit 25 925 480 PTF Available y study

Project to set up a Central Veterinary Drug Purchasing Ministry of Animal and Fish 38 2 606 800 000 3 974 041 Center in Burkina Faso Resources Industrial and Artisanal Transformations Project to create two Special Economic Zones in Ministry of Commerce, Industry 39 Ouagadougou and Bobo-Dioulasso and Handicraft 100 000 000 000 152 449 017

40

PTF

72 000 000 000 109 763 292 15 000 000 000

22 867 353

80 000 000 000 121 959 214

4

Available Not Available Not Available Not Available Available

PTF, PPP Available

PTF

PTF

Available Not Available Not Available Available 5

103

INDEX

INVEST IN BURKINA FASO

N° 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 N° 72 73

74 75 76 77 78 79 80 81 82 83

Availabil Type of ity of partnership feasibilit y study Project to build and equip a University Hospital Not Ministry of Health 78 417 548 000 119 546 781 PPP, PTF in Bobo-Dioulasso Available Project to build and equip a 500-bed University Hospital in Not Ministry of Health 60 000 000 000 91 469 410 PPP, PTF Bassinko Available Project to build a 500-bed Army Training Hospital in Department of National Defense Not 49 200 000 000 75 004 916 PTF Ouagadougou and Veterans Affairs Available Project to build and equip regional hospitals in Dedougou, Ministry of Health 47 389 018 560 72 244 093 PPP, PTF Available Fada N’gourma, and Gaoua Projects to convert health and social care centers to medical Ministry of Health 37 771 109 706 57 581 686 PPP, PTF Available centers in main rural towns Project to put into operation free family planning Ministry of Health 27 000 000 000 41 161 235 PTF Available Project to build and equip the Boulmiougou District Not Ministry of Health 25 500 000 000 38 874 499 PPP, PTF Hospital Available Project to convert the Ouahigouya Regional Hospital to a Not Ministry of Health 20 500 000 000 31 252 049 PPP, PTF University Hospital Available Project to build and equip a specialized high-level Ministry of Health 15 837 632 937 24 144 316 PPP, PTF Available neurosurgery care center in Ouagadougou Project to acquire 300 new ambulances Ministry of Health 12 000 000 000 18 293 882 PPP, PTF Available Burkina Faso e-Health Development Project Ministry of Health 6 603 895 000 10 067 573 PTF Available Project to build and equip two geriatric centers in Not Ministry of Health 4 800 000 000 7 317 553 PPP, PTF Ouagadougou and Bobo-Dioulasso Available Project to build and equip the two hemodialysis centers in Not Ministry of Health 3 200 000 000 4 878 369 PPP, PTF Bobo-Dioulasso and Ouahigouya Available Education and Training Construction of teaching buildings and amphitheaters in Ministry of Higher Education, Not 107 721 356 000 164 220 149 PTF universities Scientific Research and Innovation Available Ministry of Higher Education, Not Project to create three technopoles 105 100 000 000 160 223 917 PPP, PTF Availabil Scientific Research and Innovation Type of Available ity of Project title Line ministry Cost in FCFA Cost in euros Ministry of Youth, Training and Not partnership feasibilit Professional Training Development Project 81 000 000 000 123 483 704 PTF Integration Available y study Project for construction and equipment of university Ministry of Higher Education, 58 407 896 060 89 042 264 PTF, PPP Available 6 housing Scientific Research and Innovation Ministry of Higher Education, Project to make the Ouaga II University operational 57 728 221 628 88 006 107 PTF Available Scientific Research and Innovation Project for the construction and equipment of two technical Ministry of Higher Education, Not 50 150 000 000 76 453 182 PTF platforms Scientific Research and Innovation Available Project for the creation of the Virtual University of Burkina Ministry of Higher Education, Not 30 000 000 000 45 734 705 PTF Faso and 16 digital spaces Scientific Research and Innovation Available Project to build 45 technical and professional training Ministry of National Education Not 23 400 000 000 35 673 070 PTF, PPP centers and Literacy Available Ministry of National Education Not Project to build 13 scientific high schools in the 13 regions 19 175 000 000 29 232 099 PTF, PPP and Literacy Available Ministry of National Education Not Solar powering of Burkina Faso's public teaching facilities 10 548 557 000 16 081 171 PTF, PPP and Literacy Available Employment and social protection Program to strengthen the social protection of vulnerable Ministry of Women, National 250 600 000 000 382 037 237 PTF Available and disadvantaged groups Solidarity and the Family Support programme for the employability and Ministry of National Education Not 104 460 139 992 159 248 457 PTF socioprofessional integration of young people and women and Literacy Available Integrated Program for the Empowerment of Women in Ministry of National Education 23 828 972 000 36 327 034 PTF Available Burkina Faso and Literacy Administrative Governance Ministry of National Education Not State real estate program and its dismemberment 926 000 000 000 1 411 677 900 PPP, PTF and Literacy Available Project title

Line ministry

Cost in FCFA Cost in euros

*PPP= Private Public Partnership *PTC= Technical and financial partnership

104

7

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