1. Business Development
The vision of development in Burkina Faso
The vision of development as defined in the prospective study “Burkina 2025” is to make Burkina Faso, a solidarity nation integrating progress and justice and which is respected internationally.
By 2010, the ambition of the President of Burkina Faso, His Excellency Mr. Blaise Compaoré, as reflected in his political program “Continued Progress for a Society of Hope”, is the construction of a consolidated economy in a democratic society a harbinger of creativity, inventiveness and entrepreunial dynamism.
Strategic Orientations
In 2000, the Government developed the Strategic Framework for the Fight Against Poverty (CSLP) that has been reread in 2003. This framework reference has its vision foundations mentioned above and registered with a view to achieving the Millennium Development Goals (MDGs) by 2015. Its follows the following key quantitative objectives:
- Increase per capita gross domestic product (GDP) by at least 4% from 2004;
- To reduce poverty to less than 35% by 2015;
- Increase life expectancy to at least 60 years by 2015.
At the strategic level, it confirms the Government's option to achieve a liberal and competitive economy making the private sector an engine of quality growth, generating jobs and income. The pursuit of economic and structural reforms undertaken since 1991 to improve the competitiveness of the private sector, is the main channel of success of the CSLP.
Operational Strategies
Strategies to operationalize the strategic framework for the fight against Poverty cover several key areas. They are:
- The Rural Development Strategy (RDS);
- Decennial Plan for Development of Basic Education (PDDEB);
- National Plan for Sanitary Development (PNDS);
- The strategic framework for the fight against HIV / AIDS and STIs;
- The national policy of good governance;
- The national policy against corruption;
- The national strategy for strengthening public finances;
- The National Action Plan for Justice Reforms;
- The declaration of mining policy to be reread in 2009.
With particular regard to the private sector, we must remember:
- The Policy letter for development of the private sector;
- The industrial development strategy;
- The development strategy of handicrafts;
- The strategy for development of the private sector.
2. Environment of Business
THE ENVIRONMENT OF BUSINESS: MAJOR REFORMS
In recent years Burkina Faso has initiated tremendous reforms to facilitate the growth of business.These reforms have been mainly legislative and regulatory as well as institutional.
The legislative and regulatory reforms were:
- Tax policy more pro-trade, under the customs union of WAEMU;
- The investment code with six privileged regime and one special regime for exporting companies;
- The mining code to make it more attractive;
- A more flexible labor code that is better adapted to the economic realities of enterprises;
- Public Markets to ensure more transparency in the competition.
Institutional measures The main reforms were:
- The restructuring of the National Foreign Trade Office (ONAC), the Chamber of Commerce and Industry of Burkina Faso (CCI-BF), the Burkinabe Chargers Council(CBC) to enable them to fully play their role of coach to the private sector.
- The establishment of the annual Government - Private Sector meeting preceded by proximity sectoral meetings.
- The establishment of a Center of single desks in charge of streamlining, simplifying and accelerating all formalities for setting up an enterprise, trade and investment.
- The creation of a Trade Point in the framework of trade efficiency implemented by UNCTAD.
- Capacity building of the Enterprise House to allow it to improve its offer of assistance to private enterprise by grouping within it a critical mass of services of council-support, information.
- The creation of Centers of Business Formalities and a Facilitation Center for the Construction Acts thus simplifying the various administrative procedures.
- The creation of a Center for Arbitration, Mediation and Conciliation in Ouagadougou for the settlement of conflicts related to trade.
- The establishment of a Regulatory Authority of Public Works to ensure greater transparency in the execution of public contracts.
- The establishment of a Presidential Council for Investment to boost investment in order to strengthen the dialogue between the Government, resident community of business men and supported by a non-resident businessmen community.
- The creation of the Chartered Management Centers in Ouagadougou and Bobo-Dioulasso to assist SMEs in managing their enterprises by way of accounting support.
- The creation of a national agency for promoting investments whose main objectives among others are to improve the competitiveness of SME/SMI and promote entrepreneurial dynamics by offering financial and non financial products tailored to the needs of the private sector.
3. Privatisation of Enterprises in Burkina Faso
A Lucrative Investment Opportunity
Since 1991, the Government of Burkina Faso has embarked on economic reforms to restore the major macroeconomic balances. The privatization program is one important aspect of these reforms. The program began in 1991 as an option for the State to liberalize the national economy on the one hand, promoting the private sector and on the other hand, boosting economic growth. This liberalization took place by the disengagement of the state from productive and competitive sectors in favor of private companies, thus giving birth to a privatization program.
For the implementation of this program, a Privatization Commission has been set up. This commission is responsible for defining privatisation strategies and implementing them after approval by the Government. The monitoring of contractual commitments made by the investors in the context of transactions is provided by the tracking service of privatised enterprises hosted by the Inspectorate of public and parapublic enterprises (Ministry of Commerce, and Promotion of Enterprise and Craft).
STATUS OF IMPLEMENTATION OF PRIVATIZATION IN BURKINA FASO
Portfolio Executed
The first wave of privatizations carried out in Burkina Faso (from 1991 to 2000) has focused on small and medium enterprises of agro-industrial products and services.
Since then, investment opportunities offered by privatization have resulted in the transfer of thirty-one (31) companies authorised for privatization to the private sector through the four modes of privatization: sale of shares, increase of capital, transfer of assets and privatization of management.
The thirty-one (31) companies that were privatised are: SIFA, SONAR SBMC, SBCP SOBBRA, Brakina, PUB ZAMA, FASO-PLAST, SOBCA, GMB, CIMAT, SONAPHARM, SCFB, RNTC-X9, FLEX FASO, BURKINA and Shell-SHSB CITEC, FASO TOURS SOSUCO, SOPAL, SNTB, INB, SLM, Air Burkina, SHG, SOCOGIB, Hotel Independence, CGP, CBMP, CENATRIN, SONACIB.
Residual Portfolio
The program currently in execution has a very attractive residual portfolio.It consists of seven (07) enterprises undergoing privatization including the most important of public service enterprises that are ONATEL {(Office National des Telecommunications) National Telecommunications Office}, SONABEL {(Société National d?Electricité du Burkina) National Burkina Electricity Company} the SONABHY {(Société National des Hydrocarbures) National Hydrocarbon Company}.
These companies uncontestably, are among the most representative of the business fabric of Burkina and, in many respects serve as locomotives of the socio-economic development of Burkina Faso because of their impact on the competitivity of the national economy.
Others relate to companies operating in various sectors (mining, hotels, automobile control).
They are mainly: BUMIGEB{(Bureau des Mines et de la Géologie du Burkina) The Burkina Departmrnt of Mines and Geology}, Hotel SILMANDE, CCVA {(Centre de Contrôle des Vehicules Automobiles) Automobile Vehicle Control Centre}.
CONCLUSION
The sound character of all the undertakings concerned is a guarantee for the optimal develpment of the national economy.
The privatisation process is a major step in the opening of a big door for private entrepreneurs to invest in Burkina Faso. It is important to note that Burkina Faso has a very stable political situation and has a very stimulating investment code. It is well known in Africa as the member to have initiated the best reforms.
For any additional information please contact :
The Embassy of BurkinaFaso in New Delhi
F 3/1 Vasant Vihar
New Delhi 110057
Email : embassy@burkinafasoindia.org
Ministry of Commerce and Promotion of Enterprise and Handicrafts Tel :
50 32 47 86 - 99
4. Mining Sector
INTRODUCTION
In 1991 Liberalisation of the Economy based on the principles of free enterprise led to a very attractive proposition for investors in the mining sector.
The mineral potential
• Substances of mines
Gold: All over the national territory
Diamond: Indices in alluvium and ultra basic rocks
Zinc: massive Sulphur deposit at Perkoa, 6 million tonnes of ore at 18% Zn and 20 g/t Ag;
Manganese: deposit at Tambao, 19 million tonnes of ore at more than 52% of Mn;
• Other substances: nickel, copper, phosphates, lead, antimony.
• Quarry Substances: Syenite, gabbro, pink granite, kaolin, limestone, silica sand, etc.
• Geological information
- Existence of 13 geological maps at 1/200,000 and another geological and mining map at 1/1,000,000 of the country;
- Existence of an active geological and mining documentation center and a
computerized mining cadastre.
• Legislation and Regulation
- Adoption of a new mining code in May 2003
- Application texts of the adopted mining code
Benefits of the mining act
1. Favorable tax treatment for research, preparatory work, exploitation;
2. Tax on Trade and Industry Profits (BIC) of mining sector that is indexed on Common law reduced by ten points: 20% and exempt in the research phase or preparatory work;
3. Tax on income from securities (IRVM) is indexed on common law reduced by half: at 6.25% and is exempt in the research phase and preparatory work;
4. Custom Law: single rate calculated for all imports for research and mining fell from 11.5% to 7.5% and during the period of preparatory work to 2.5%;
5. Extension of benefits granted to mining companies and to their sub - contractors (on presentation of contract).
Mines in Production
| GOLD DEPOSITS | COMPANY | EXPECTED PRODUCTION | INVESTMENT
(IN MILLIONS) | OFFICIAL PRODUCTION DATE |
TAPARKO/BOUROUM
(Namentenga) | Somita (HRG) | 35 tons of gold metal | FCFA-60,000 Euro-89.28 | 8th October 2007 |
YOUGA
(Boulgou) | Burkina Mining Company
(ETRUSCAN) | 25 tons of gold metal | FCFA-46,000 Euro- 68.45 | 16th May 2008 |
WONA-FOBIRIMANA
(Balé) | SEMAFO-BF
(SEMAFO) | 35 tons of gold metal | FCFA-60,000
Euro-89.28 | 16th May 2008 |
KALSAKA
| KALSAKA | 20 tons of gold metal | FCFA-626,000 Euro-931.54 | 30th October 2008 |
Mines under construction
DEPOSITS | SUBSTANCES | COMPANIES | EXPECTED PRODUCTION/ INVESTMENT (IN MILLIONS) | STARTING DATE |
PERKOA
(Sanguie) | Zinc | Nantou Mining (AIM RESOURCES) | 6 Million tons 14.5% Zinc/ FCFA-75,000 | 26th March 2007 |
INATA
(Soum) | Gold | SMB-SA
(WEGA Mining) | 22.5 tons of gold metal/ FCFA-60,000 | 28th April 2008 |
Mines on the point of construction
DEPOSITS | SUBSTANCES | COMPANIES | EXPECTED PRODUCTION/ INVESTMENT
(IN MILLIONS) | START OF CONSTRUCTION |
GUIRO-BAYILDIAGA | Gold | Stremco-SA | 1.26 tons of gold metal/ FCFA-1,000 | During 2008 |
KIERE
(Tuy) | Manganese | Burkina Manganese Sarl | 600, 000 tons/ FCFA-1,393 | During 2008 |
ESSAKANE
(Oudalan) | Gold | Essakane-SA
(OREZONE) | 90 tons of gold metal/ FCFA-175,000 | During 2008 |
Advanced Projects
DEPOSITS | SUBSTANCES | COMPANIES | EXPECTED PRODUCTION | FEASABILITY STUDIES |
TAMBAO
(Oudalan) | Manganese |
| 19 million tons | Underway |
BISSA-ZANDKOM
(Bam) | Gold | High River Gold | 75 tons of gold metal | Starts during 2008 |
KIAKA
(Zoundwego) | Gold | Randgold Resources | 65 tons of gold metal | Starts during 2008 |
Exploitation of Artisanal mining
1. More than 300 sites across the country
2. More than 200, 000 persons occupied
3. 16,872 tons of gold handicraft products between 1086 and 2007
4. 82 billion FCFA injected in the economy of the country during the same period
Membership of Burkina Faso to the Initiative on Transparence in Extractive Industry (ITEI) Burkina Faso awaits you in the mining sector!
5. Energy Sector
The government faces a challenge to meet the growing demands for energy services and to improve the services in this sector . It is trying to reduce the cost of energy and to expand the energy services to the rural and sub-urban population. Efforts are also on to introduce alternation fuel alternative In households and reduce the reliance on wood. The Major Reforms in the Electricity sub sector
1. Opening up of the generation of electricity to the private sector through competitive bidding
2. Liberalization of distribution in the areas that are still without electricity
3. Creating an electricity development fund to accelerate electrification of the country
4. Privatization of SONABEL (Leasing)
Reforms in the Hydrocarbon sub-sector are:
1. Partial disengagement of the state from the National Burkinabè Hydrocarbons Company
(SONABHY) by opening its capital to the private sector;
2. Liberalization of the distribution of hydrocarbons to allow the entry of new "marketers" and the establishment of stations on the market .
Major Electricity Projects are :
1. Interconnection with Ivory Coast | 50 billion underway |
2. Interconnection with Ghana in 2012 | 20 billion |
3. Interconnection with Nigeria in 2016 | 52 billion |
4. Interconnection with Mali in 2017 | 42 billion |
5. Development of a target network to expedite rural electrification 2008 to 2010 | 29 billion |
6. Priority program of rural electrification 2008 to 2015 | 35 billion |
7. Implementation of Ouagadougou master plan 2007 to 2010 | 26 billion |
Major hydrocarbon projects are:
1.Construction of a pipeline between Ghana and Burkina Faso (Bolgatenga-Bingo) | 18 billion |
2.Construction of a new depot at Bobo -Dioulasso | 15 billion |
Major projects of Renewable Energy
1. Setting up an assembly unit of photovoltaic modules;
2. Completion of hydroelectric dam at Noumbiel
3. Pre-electrification of villages by solar photovoltaic systems
