BURKINA FASO 2009 INVESTMENT CLIMATE STATEMENT

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SUBJECT: BURKINA FASO 2009 INVESTMENT CLIMATE STATEMENT

REF: 08 STATE 123907


1. In response to reftel, the following is the 2009 Investment
Climate Statement for Burkina Faso.

Table of Contents
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A.1. Openness to Foreign Investment

2. Conversion and Transfer Policies

3. Expropriation and Compensation

4. Dispute Settlement

5. Performances Requirements and Incentives

6. Right to Private Ownership and Establishment

7. Protection of Property Rights

8. Transparency of the Regulatory System

9. Efficient Capital markets and Portfolio
Investment

10. Political Violence

11. Corruption

12. Bilateral Investment Agreements

13. OPIC and Other Investment Insurance program

14. Labor

15. Foreign Trade Zones/Free Ports

16. Foreign Direct Investors in Burkina

17. Foreign Direct Investment Statistics



2. Investment Climate Statement

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A.1. Openness to Foreign Investment
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3. The Government of Burkina Faso (GOBF) wishes to attract more
Foreign Direct Investment (FDI) and has recently had success in
doing so, primarily in the mining sector. The GOBF overhauled its
investment code in 2004 with the hope that new FDI would boost Gross
Domestic Product (GDP) and help diversify its economy, which is
currently based heavily on subsistence agriculture and cotton
production for world markets.


4. The government has extended the responsibilities of its newly
developed Enterprise Registration Centers (Centres de Formalites des
Entreprises) by simplifying registration formalities and eliminating
obstacles to opening a business (such as eliminating the requirement
to provide copies of any criminal records or leasing contracts).
This one-stop shop for company registration cut registration time to
18 days. To further improve the business climate in Burkina Faso,
the government is working with the World Bank to reduce the time
needed to meet all formalities in bankruptcy cases. In the 2009
International Finance Corporation (IFC) report, Burkina Faso now
ranks 148 out 181 countries, up from 164 in 2008; this dramatic
improvement reflects the country's successful efforts to create an
environment conducive to business growth.


5. The 2004 Investment Code demonstrates the government's interest
in attracting FDI to create industries that produce export goods and
provide training and jobs for its domestic workforce. The Code
provides standardized guaranties to all legally established firms,
whether foreign or domestic, operating in Burkina Faso. It contains
six investment and operations preference schemes, which are equally
applicable to all Greenfield investments, mergers, and acquisitions.
Burkina Faso's regulations governing the establishment of
businesses include most forms of companies admissible under French
business law, including: public corporations, limited liability
companies, limited share partnerships, sole proprietorships,
subsidiaries, and affiliates of foreign enterprises. With each
scheme there is a corresponding set of related preferences, duty
exceptions, corporate tax exemptions, and operation-related taxes.


6. According to the 2004 Investment Code, all personal and legal
entities lawfully established in Burkina Faso, both local and
foreign, are entitled to the following rights: fixed property,
forest and industrial rights; concessions; administrative
authorizations; access to permits; and participation in state
contracts.


7. Burkina Faso also revised its mining code in 2004 to create a
more favorable climate for the mining industry. This new code
lowered the corporate tax rate from 35 to 25 percent, eliminated
preproduction taxes, and limited royalty fees to three percent.


8. Burkina Faso does not have a local stock exchange.


9. GOBF announcements for privatization bids are widely
distributed, targeting both local and foreign investors. Bids are
published in local papers, international magazines, mailed to
different diplomatic missions, e-mailed to interested foreign
investors, and published on the Internet on sites such as
www.tradepoint.bf or www.dgmarket.com. Foreign investors receive
the same treatment and timetable as local investors in the bidding
process. Bidding criteria, which are established and enforced by
the newly established Autorit de Regulation des Marches Publics
(ARMP) (Government Tenders Regulation Aothority),are clear, and the
process is transparent. Bid requirements are the same for all
bidders. Established in July 2008, ARMP advocates free access to
government tenders, equality in bidding process and transparency of
procedures.


10. There are no laws or regulations specifically authorizing
private firms to adopt articles of incorporation or association,
which limit or prohibit foreign investment, participation, or
control.


11. The World Bank's Doing Business 2009 report ranked Burkina Faso
among the top ten reformers for 2009.

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A.2 Conversion and Transfer Policies
--------------


12. Burkina Faso is a member of the West African Monetary and
Economic Union (WAEMU),whose currency is the CFA franc, or CFA.
The CFA is freely convertible into Euros at a fixed rate of 655.957
CFA to 1 EURO. Investors should consider the advantages offered by
the WAEMU, which allows CFA to be freely used between all member
countries. WAEMU countries include: Senegal, Togo, Cote d'Ivoire,
Mali, Benin, Guinea Bissau, Niger, and Burkina Faso.


13. Burkina Faso's Investment Code guarantees foreign investors the
right to the overseas transfer of any funds associated with an
investment, including dividends, receipts from liquidation, assets,
and salaries. Such transfers are authorized in the original
currency of the investment. Once the interested party presents the
request for transfer, accompanied by all relevant bank documents,
Burkinabe banks transfer the funds directly to the recipient banking
institution. The GOBF is not expected in the foreseeable future to
change its current remittance policy concerning purchasing foreign
currency in order to repatriate profits or other earnings. Foreign
exchange is readily available at all banks and most hotels in
Ouagadougou and Bobo Dioulasso, Burkina Faso's second largest city
and economic capital.

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A.3 Expropriation and Compensation
--------------


14. The Burkinabe constitution guarantees basic property rights.
These rights cannot be infringed upon except in the case of public
necessity, as defined by the government. This has rarely occurred.
Until 2007, all land belonged to the government, but could be leased
to interested parties. The government reserves the right to
expropriate land at any time for public use. In instances where
property is expropriated, the government must compensate the
property holder in advance, except in the event of an emergency. In
2007, Burkina Faso drafted a national land reform policy that
recognizes and protects the rights of all rural and urban
stakeholders to land and natural resources; clarifies the
institutional framework for conflict resolution at a local level;
establishes a viable institutional framework for land management; as
well as strengthens the general capacities of the government, local
communities and civil society on land issues. It is under review by
civil society, and the National Assembly is expected to adopt this
law very soon. In November 2008, the government held a validation
workshop with stakeholders in Ouagadougou before the Council of
Ministers approved the new policy.

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A.4 Dispute Settlement
--------------


15. Over the last several years, Burkina Faso has not been involved
in investment disputes with U.S. or any other foreign investors or
contractors.


16. The Civil Code provides legal language that works to protect
property and contractual rights. Government interference in the
court system occurs less frequently in Burkina Faso than in most
countries in Africa, and judgments from foreign courts are accepted
and enforcd by local courts. It should be noted, however, that the
World Bank ranked Burkina Faso as 144th in the world for its ability
to enforce contracts because fees, number of required procedures,
and the amount of time needed to resolve disputes are all abnormally
high.


17. Burkina Faso's 1995 Code of Commerce contains all applied
commercial law used by the Burkinabe business community. In 2007,
Burkina Faso opened the Arbitration and Commercial Dispute
Resolution Center (Centre d'Arbitrage et de Reglement des Litiges
Commerciaux) under the auspices of the Chamber of Commerce and
Industry.


19. In 2006, Burkina Faso introduced specialized commercial
chambers in the general courts and lowered enforcement costs by
cutting the related registration tax from 4 to 2 percent of the
judgment amount. In December 2007, IFC, Doing Business Better in
Burkina, and the government jointly held a workshop to discuss the
efficiency of the Burkinabe judicial system in settling commercial
disputes. Workshop attendees included judges, lawyers, university
teachers, donors, and private sector representatives. The goal of
the workshop was to raise the business community's confidence in the
Burkinabe judicial system and its capacity to implement decisions
relating to agreements and property, as well as to introduce the
idea of specialized courts to deal commercial matters.


20. Burkina Faso is a party to the Washington Convention of 1958 on
the Recognition and Enforcement of Foreign Arbitral Awards and
recommends arbitration procedures in its investment code. Burkinabe
courts accept international arbitration as a means for settling
investment disputes between private parties. Longstanding disputes
that remain unresolved after administrative jurisdictional hearings
are required to be submitted to arbitration. Burkinabe courts
recognize and enforce foreign arbitral awards.


21. In the event that an amicable settlement of a dispute between
the government and an investor cannot be reached, the Investment
Code requires that arbitration procedures be submitted to
international arbitration under the rules outlined by the 1965
Convention of the International Center for Settlement of Investment
Disputes (ICSID). In cases where the enterprise of a national does
not meet nationality conditions stipulated by article 25 of the
Convention, the Code specifies that the dispute be resolved in
accordance with the dispositions of the supplementary mechanisms
approved by ICSID in September 1978.

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A.5 Performance Requirements/Incentives
--------------


22. All investment specific incentives are outlined in the 2004
Investment Code. Additionally, all companies that use at least 50
percent locally supplied raw materials are exempted from trading
taxes and receive a 50 percent reduction in customs taxes in
addition to the elimination of other duties. These companies are
also eligible to waive excise duties on production equipment and
spare parts.


23. The GOBF does not require investors to purchase materials from
local sources or to export a certain percentage of output. Foreign
investors are not limited access to foreign exchange commensurate
with their level of exports. The GOBF does not impose "offset"
requirements, which dictate that major procurements are approved
only if the foreign supplier invests in Burkinabe manufacturing,
R&D, or service facilities in areas related to the items being
procured.


24. In 2007, Burkina Faso reduced property registration fees to
12.2 percent of the property value.


25. The government generally encourages companies to hire Burkinabe
employees. But this not required and citizens of ECOWAS countries
can legally work in Burkina Faso. Other nationalities require
employment visas/permits.

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A.6 Right to Private Ownership and Establishment
-------------- ---

26 The rights of foreign and domestic private entities to establish
and own enterprises, and engage in all forms of remunerative
activities, are guaranteed by the constitution and the investment
code. Businesses can be freely established and sold. Most public
enterprises have enjoyed a monopoly in their markets. With the
implementation of structural reforms, the government is liberalizing
most of the monopolies. Foreign investors are encouraged to
participate in the privatization of state-run enterprises.

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A.7 Protection of Property Rights
--------------


27. The government recognizes interests in property, both movable
and fixed, and has adopted international, regional, and local laws
that work to protect property. In practice, however, government
enforcement of intellectual property law is lax. Despite government
efforts, counterfeited goods can readily be found and purchased on
the street in Ouagadougou and Bobo-Dioulasso.


28. As a member of ECOWAS, Burkina Faso adheres to the Treaty on
the Harmonization of Business Law in Africa (OHADA). This 1993
treaty created an intergovernmental organization to encourage
foreign investment and economic development in the 16 member states
that have ratified it. The treaty creates institutions that
harmonize laws for contracts, businesses, securities, and
bankruptcies; it also established a Common Court of Justice and
Arbitrage based in Abidjan, Cote d'Ivoire. Since its inception it
has adopted several uniform acts including an act relating to
commercial law that entered into force in 1998.


29. Legal protection exists for intellectual property, patents,
copyrights, trademarks, trade secrets, and semiconductor chip design

37. The government of Burkina Faso has issued a number of decrees
to protect other forms of property. These decrees include:

Decree No 2000-577 on the collection and remuneration for
duplication of works set on graphic or similar supports; Decree No
2000-143 Creating the Bureau Burkinabe des Droits d'Auteur (BBDA);
Decree No 2001-259 setting up and organizing the National Committee
for the Fight against Piracy of Literacy and Artistic Works;
Decision No 01-052 Price Fixing for Works Protected in Burkina Faso;
Decision on the Collection of Remuneration for Private Copy;
Decision No 01-053 on the Collection of Rights Payment; Decision No
01-50 on Stamping Disks, Audio and Video Cassettes that contain
Literary and Artistic Works; Decision on Protection Modalities for
Delivering Import Visas on Literacy, Artistic Works, and Bank
Supports.


30. Burkina Faso has a legal system that protects and facilitates
acquisition and disposition of all property rights, including
intellectual property. Burkina Faso is a member of the World
Intellectual Property Organization (WIPO) and the African
Intellectual Property Organization (AIPO). The national investment
code guarantees foreign investors the same rights and protection as
Burkinabe enterprises for trademarks, patent rights, labels,
copyrights, and licenses.


31. In 1999, the government ratified both the WIPO Copyrights
Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT).
In 2002, Burkina Faso was one of 30 countries that put the WCT and
WPPT treaties into force. The government has also issued several
decrees and rules to implement the two treaties.

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A.8 Transparency and Regulatory System
--------------


32. The government of Burkina Faso uses transparent policies and
effective laws to foster competition. According to National
Assembly Law No 15-94 prices of products, goods, and services must
be established according to fair and sound competition. The
government believes that cartels, the abuse of a position of
superiority, restrictive practices, refusal to sell to consumers,
discriminatory practices, unauthorized sales, and selling at a loss
are practices that distort free competition.


33. The government is in the process of adopting more sophisticated
and transparent laws that foster competition. Although some price
controls have been lifted, the price of oil, essential generic
drugs, tobacco, cotton, school supplies, water, electricity, and
telecommunications are still regulated by the government.


34. The government does not use tax, labor, environmental, health
and safety standards, or other laws and policies to impede entrance
of foreign investors into the marketplace. However, Burkina's
complex tax schedule is currently under review. In Burkina Faso,
informal sector businesses and other small businesses with an annual
turnover of CFA 15 million or less (thus roughly less than USD
29,000) pay a unique tax called the "contribution du secteur
informel" or CSI. The maximum CSI tax is CFA 100,000 or roughly USD
194 per year. Businesses qualifying for CSI tax status are
prohibited from bidding on state tenders.


35. Individual enterprises and companies in Burkina Faso with an
annual turnover exceeding CFA 15 million (about USD 29,000) are
subject to a complex set of taxes. These include an annual tax on
industrial, commercial, agricultural profits (IBICA),set at 45
percent and a forfeit tax (IMPFIC),paid in advance each year.
There is also a 25 percent tax on interest income (the IRC) and a 25
percent tax on investment income (the IRVM). Businesses must also
pay an apprenticeship tax (TPA) on the salaries of all national and
foreign employees (4 and 6 percent respectively),and a licensing
tax, which has two components (a fixed amount based on gross
revenues and an 8 percent tax based on the rental value of company
buildings and the value of the production equipment). Upon
incorporating, companies must pay a registration tax equal to 3
percent of the company's capital. Since 1993, businesses have been
required to apply a 15 percent value-added tax to products.


36. Non-IBICA profits are taxed 5 to 35 percent. Private sector
employees and civil servants pay a tax (IUTS) on salaries and tips,
usually by payroll deduction.


37. Informal regulatory processes managed by non-governmental
organizations or private sector associations are rarely found.
Generally, an administrative committee comprised of experts, civil
society, and various government officials reviews drafts of laws
before the National Assembly adopts them or makes changes to
existing laws.


38. Burkina Faso's legal, regulatory, and accounting systems are
transparent and consistent with international norms. It adheres to
the West African Economic and Monetary Union's accounting system,
(Systeme Comptable Ouest Africain or SYSCOA). Introduced in 1998,
SYSCOA allows enterprises to use the same accounting system. SYSCOA
complies with international norms in force and is a source of
economic and financial data.

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A.9. Efficient Capital Markets & Portfolio Investment
-------------- --------------


39. The traditional banking sector is composed of eleven commercial
banks and three specialized credit institutions called,
Etablissements Financiers. They include: the Banque Internationale
pour le Commerce, l'Industrie et l'Agriculture du Burkina Faso
(BICIA-B),the Banque Internationale du Burkina (BIB),the Societe
Generale de Banques du Burkina (SGBB),the Banque Commerciale du
Burkina (Arabo-Libyan),(BCB),the Banque Agricole et Commerciale du
Burkina (BACB),Ecobank, Bank of Africa, Banque Sahelo-Sahelienne
pour l'Investissement et le Commerce (BSIC),Coris Banque
International, and Banque Atlantique.

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A.10 Political Violence
--------------


40. Burkina Faso continues to undergo a peaceful democratization
and decentralization process under the leadership of President
Blaise Compaore, who has been in office since 1987 and part of the
ruling group since 1984. The governing party, the CDP, claims
populist ideals but calls for free enterprise on the economic front.
Opposition to the CDP remains severely fragmented.


41. Burkina's commercial viability is closely linked to the
stability of its neighbors. The ports of Abidjan (Cote d'Ivoire)
and Lome (Togo) serve as key shipping points for Burkina's
imports/exports, with Lome growing in importance since the crisis in
Cote d'Ivoire erupted in 2002. City ports like Cotonou (Benin) and
Tema (Ghana) have also become increasingly important as alternative
transshipment points for Burkinabe goods.

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A.11 Corruption
--------------



42. Although Burkina Faso means "land of the honest men",
Transparency International's Corruption Perceptions Index indicates
that corruption is still a problem for this West African nation.
The main challenges the country currently faces are poor access to
information, a weak judiciary, limited enforcement powers of
anti-corruption institutions, misappropriation of public funds, and
lack of a separation of powers. Civil servants who most commonly
engage in corruption include: members of the police force and
gendarmerie, customs officials, political groups, justice officials,
healthcare workers, educators, tax collectors, and the media.


43. There are several anti-corruption groups, both governmental and
non-governmental that monitor corruption in Burkina Faso. In 2001,
the President established a National Ethics Committee whose main
task is to "bring morality" to public life. In 2002, the government
established the High Commission of Coordination for the Fight
Against Corruption (HCFAC). This government body evaluates the
performance of private and public sector administrations. Another
internal mechanism is the State General Inspection (SGI),which
closely monitors government management. Though SGI is not directly
linked to the National Gendarmerie, the two groups are known to
collaborate their anticorruption efforts. For example, it is not
uncommon for the National Gendarmerie to assist with the
investigation of corruption-related incidents brought to the
attention of SGI. These government-controlled structures lack
independent oversight and enforcement power, resulting in
anti-corruption laws which are largely ignored. In November 2007,
the National Assembly adopted a bill creating a new anti-corruption
structure called the Superior Authority of State Control (ASCE),an
entity that will be under the authority of the Prime Minister and
will merge most existing anti-corruption entities. In November
2008, the GOBF held a workshop in Ouagadougou to train ASCE members.
In January 2008, the government established a new 11-member Gold
Anti-fraud Squad (BNAF) and issued laws that allow BNAF to regulate
gold marketing and curb fraud cases. In April 2008, the GOBF created
the Autorit de Regulation des Marches Publics (ARMP),a regulatory
oversight body to ensure transparency in the bidding process by
monitoring the execution of all government contracts. The ARMP is
vested with the authority to impose sanctions, initiate lawsuits,
and publish the names of fraudulent or delinquent businesses. It
will also educate communities benefiting from public investment
monies to take a more active part in monitoring contractors.


44. Private Citizens have also established a non-governmental
organization (NGO) called Reseau National de Lutte contre la
Corruption (REN-LAC). This NGO looks broadly at the management of
private and public sector entities. It publishes reports on the
state of corruption in the country and has established a wide range
of anti-corruption initiatives and tools. African Parliamentarians'
Network against Corruption has a local chapter in Burkina Faso and
cooperates with REN-LAC.


45. Burkina Faso has taken steps to fully adopt regional and
international anti-corruption frameworks and the country is in the
process of ratifying the UN Convention against Corruption. As a
member of the West African Economic and Monetary Union (WAEMU),
Burkina Faso has agreed to enforce a regional law against money
laundering and has issued a national law against money laundering
and financial crimes.


46. While the government has identified corruption as an obstacle
to doing business, the World Bank ranked Burkina Faso as the fourth
best Sub-Saharan African country in the area of corruption control,
trailing only South Africa, Madagascar and Ghana. According to the
2008 Transparency International Corruption Perceptions Index,
Burkina Faso has reduced its perceived levels of corruption in the
public sector and improved its worldwide ranking from 105th in 2007
to 80th in 2008 and its regional ranking from 17th to 9th within
Sub-Saharan Africa.

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B. Bilateral Investment Agreements
--------------


47. In 1961, Burkina Faso signed a cooperation treaty with France
allowing funds to be transferred freely between the two countries.
A trade, investment protection, and technical cooperation agreement
was signed between Burkina Faso and Switzerland in 1969. This
agreement provides for free transfer of corporate earnings,
interests, dividends, etc., between the two countries. Burkina Faso
has also signed and ratified investment promotion and mutual
protection agreements with Germany, the Netherlands, Malaysia,
Belgium, Guinea, Ghana, Benin, and is in the process of signing one
with Italy.


48. The Burkinabe investment code provides the right to transfer
capital and revenues secured by alien personal and legal entities,
which invest in Burkina Faso in foreign currencies. Foreign
investors have the right, subject to foreign exchange regulations,
to transfer dividends, any returns on the capital invested, the
liquidating or conclusion proceeds of assets, in the same currency
used in the initial investment.


49. Burkina Faso has signed various multilateral investment
agreements including provisions in the Lome Convention and West
African Economic and Monetary Union (WAEMU).

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D. Labor
--------------


50. The Burkinabe labor code is effectively enforced by a labor
court. Unions are well organized and defend employee interests in
industrial disputes. Workers know their rights and do not hesitate
to seek redress of grievances. According to the World Bank, Burkina
Faso ranked 57 out of 181 countries for the ease of hiring and
firing workers in 2008.


51. The February 1, 1982 Commercial Sector Collective Agreement
divides employees (laborers, craftsmen, and senior staff) into eight
categories with minimum basic pay rates from 25,000 CFAF (about USD
50) per month. Conditions for the employment of workers by
enterprises are provided in Decree no. 98 of February 15, 1967. An
employer should ask job candidates for their job-seeker registration
card issued by the Office of Employment and Promotion, which is part
of the Ministry of Labor, Employment, and Youth.


52. It is the GOBF's policy to increase employment opportunities
for Burkinabe workers. Therefore, in professions where there are
too many registered and unemployed Burkinabe, a job-seeker card will
not be issued to non-nationals. When non-nationals are hired, the
Director of Labor authorizes their employment contract. According
to a February 15, 1967 decree, statements must be made to the
Regional Inspector of Work and Social Rules before the start up of
any new enterprise.


53. In the event of a reduction in personnel, the labor code
requires the employer to first dismiss employees with the least
training and seniority. The employer must advise employees of
termination at least 30 days in advance. Workers terminated in a
general workforce reduction have re-employment priority over other
applicants for a two-year period. Employees terminated for reasons
other than theft or flagrant neglect of duty have the right to
termination benefits. Burkinabe workers have a reputation as
hardworking and dedicated employees. There is a scarcity of skilled
workers, mainly in management, engineering and the electrical
trades.


54. To promote local employment, the government has established
three financing instruments targeted at firms interested in
obtaining start-up monies. These instruments include the Fonds
National d'Appui a la Promotion de l'Emploi" (Employment Promotion
Support Fund) (FONAPE),the "Fonds d'Appui au Secteur Informel"
(Informal Sector Support Fund) (FASI),and the "Fonds d'Appui aux
Activits Generatrices de Revenus des Femmes (Women's Income
Generating Activities Support Fund) (FAARF).


55. To date, Burkina Faso has approved and ratified a myriad of
conventions issued by the International Labor Organization. These
conventions include Freedom for Union and Protection of Rights to
Union, Abolition of Hard Labor, and the Worst Forms of Child Labor.


56. While unskilled labor is abundantly available in Burkina Faso,
skilled labor resources are limited. Construction, civil
engineering, mining, and manufacturing industries employ the
majority of the formal labor force.


57. Burkina Faso has undertaken the reform of the labor policy in
order to make to make the labor market more flexible and ensure
social justice including workers' safety and health. In May 2008,
the national Assembly adopted the new Labor Code to better protect
workers. In a press conference on October 3, the Minister of Labor
and Social Security, Jerome Bougouma, mentioned innovations in the
Labor Code that contributed in ranking Burkina Faso as one of the
best reformers in the world. According to Minister Bougouma, hiring
conditions and social liberties have been improved. Bougouma also
cited such examples as increased flexibility for labor agreements,
limitations on damages and interest, redefinition of strike
conditions, and retirement eligibility for all workers (including
day laborers). Social security services have now been extended to
include independent workers.

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E. Foreign-Trade Zones/Free Ports
--------------


58. There are no foreign trade zones or free ports in Burkina Faso.
The Burkinabe Investment Code prohibits discrimination against
foreigners. American firms not registered in Burkina Faso can
compete for contracts on projects financed by international sources
such as the World Bank, U.N. organizations, or the African
Development Bank.

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F. Foreign Direct Investment in Burkina
--------------


59. French, Indian, Canadian, Belgian, and American investors have
established greenfield firms and obtained enterprises through
acquisition. French investment in Burkina Faso accounts for about
70 percent of total foreign direct investment. Partially
French-owned firms include CFAO, DAGRIS, CASTEL, TOTAL, BOLORE,
SOUCOM, and SOUSICOM, which is the largest foreign investor in
Burkina Faso.


60. In 2000, Telecel International and Mobile System
International/Cellular Investments Holding BV invested about USD 19
million to operate mobile phone services in Burkina Faso. The
Ivorian group Atlantique Telecom currently operates Telecel
International.


61. In 2006, 51 percent of the shares of ONATEL telecommunications
company were sold to Maroc Telecom for USD 315 million; another 20
percent of the shares have been floated on the regional stock
exchange. Maroc Telecom plans to invest approximately USD 90 million
annually in ONATEL.


62. Celtel International has invested USD 57 million in Celtel
Burkina, taking 57 percent of the mobile phone market share.


63. In the mining sector, a Canadian company, High River Gold Mines
Ltd (HRG),with significant U.S. investment, through its local
subsidiary SOMITA SA opened Burkina Faso's only commercial gold mine
in October 2007. HRG's next project will be the Bissa gold mine in
the north-central Burkinabe province of Bam. HRG will also process
gold from nearby Bouroum. It is estimated that these two sites have
combined reserves of approximately 8.8 million tons of ore,
averaging 2.99 grams per ton, and an estimated gold production of
3.5 tons per year. Burkina Mining Company (BMC),a subsidiary of
the Canadian-owned Estrucan Resources Incorporated, opened the
second commercial gold mine in 2008 in Zabre, Boulgou province.
Total investment is approximately USD 71 million. The Canadian
company, Semafo, inaugurated Burkina Faso's third gold mine in June
in Mana, in Bale Province, 270 km northwest of Ouagadougou. Total
investment is estimated at $116 million. Burkina Faso expects these
new gold mines to attract USD 260 million in new investments.


64. Burkina Faso announced three more sites slated for development
in the next two years and it will soon welcome bids for the
reopening of the Poura gold mine. Poura opened in the southern
province of Mouhuon in the 1950's, but was forced to close in 1999
because of low gold prices. At its closure, it was estimated that
this mine still contained 450,000 tons of ore at a grade of 12 grams
of gold per ton.


65. Burkina Manganese, a company with significant U.S. investment,
opened Kiere mine in December 2008. The Kiere mine has estimated
reserves of at least 600,000 tons of manganese at grades of 44-45
percent.


66. Major Belgian-owned firms include Belcot (Louis Dreyfus
Belgique),and a cotton waste processing factory.


67. On February 2001, the Indian Consortium AKEDFD/IPS of the Aga
Khan network took control of the local airline, Air Burkina,
investing about USD 5.5 million to strengthen its air fleet. The
group also took control of other state-owned companies including the
parastatal sugar company, Sn-Sosuco, Sopal (the Alcohol Company),
and Fasoplast, a company which produces packaging, bags, and other
plastic products.


68. During the 1998 bidding process for CIMAT, a government
parastatal that made and distributed cement, an Indian investor won
the bid and acquired the company, paying nearly USD 13 million for
the acquisition. This company currently operates in Burkina Faso
under the name Diamond Cement.


69. In December 2007, 38 percent of shares of the most important
bank, Banque Internationale du Burkina, were sold to the Nigeria's
United Bank for Africa.


70. There are only two wholly-owned American firms in Burkina Faso:
AMERITEL, a telecommunications firm that sells transmission
equipment and maintenance services, and TRADE, an English language
service.


71. Foreign investment opportunities still exist in two big
projects: the development of the Zone d'Activits Commerciales et
Administratives (ZACA) (about USD 60 million),and the construction
of a new international airport and free trade zone in Ouagadougou
(about USD 218 million). The World Bank's International Finance
Corporation (IFC),however, in examining possible financing for the
new international airport, has expressed concern that the GOBF may
have overestimated future air traffic estimates.


72. The IFC's investment portfolio consists of an equity investment
totaling USD 617,000 in the local affiliate of Ecobank, and a
guaranty to a car/truck operator. IFC's strategy for Burkina Faso
currently focuses on improving the investment climate, building the
capacity of small and medium-sized enterprises, micro enterprises
and the institutions that support them. It also provides support to
project development in the financial, tourism, and mining sectors.
In 2005, it provided approximately USD 2.75 million for the
renovation of the Hotel Independence in Ouagadougou in order to
allow it to offer reasonably priced accommodations to business and
other travelers. This renovation is currently underway.


73. Burkina Faso has been a Multilateral Investment Guaranty Agency
(MIGA) member since 1988. In FY05, MIGA issued guarantees totaling
USD 38 million to Dagris for its investment in the Societe
Cotonniere du Gourma (SOCOMA). This project supports the
liberalization of the cotton sector.

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G. Foreign Direct Investment Statistics
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74. Burkina Faso currently has an estimated 7 percent of FDI stock
and 5 percent of FDI inflows as a percentage of GDP. Its major FDI
comes from the Multilateral Investment Guaranty Agency (MIGA). In
fiscal year 2005, MIGA has issued $38.3 million in guarantees
covering a 5.1 million equity investment and 12.3 million
shareholder loan from Dveloppement Agro-Industries Sud S.A.
(Dagris) of France to Socit Cotonnihre du Gourma (SOCOMA) in
Burkina Faso. The coverage also includes a 15.2 million loan
guaranty from Dagris to Banque Internationale pour le Commerce,
l'Industrie et l'Agriculture du Burkina for a loan of the same
amount to SOCOMA. Coverage is against the risks of expropriation,
war and civil disturbance, and breach of contract for a period of up
to 15 years for the equity, and up to eight years for the
shareholder loans and loan guaranty. In fiscal year 2006, MIGA
granted $6.1 million to Agro-Industries Sud SA (Dagris) of France to
support the acquisition of cotton assets of the former Societe des
Fibres Textiles (SOFITEX),in the eastern region of the country, the
modernization and expansion of the cotton ginning capacity in
eastern Burkina Faso, and the promotion of local entrepreneurship
through the financing of the acquisition of shares by local cotton
growers and Burkinabe investors. In fiscal year 2007, MIGA issued
two guarantees totaling $2.86 million to Socit Malienne de
Promotion Httelihre of Mali to cover its equity investment in
Socit Burkinab de Promotion Httelihre of Burkina Faso, as well as
its loan guarantee to IFC. The guarantees are for a period of eight
years against the risks of transfer restriction, expropriation, war,
and civil unrest. In fiscal year 2008, MIGA issued a guarantee to
cover an investment by Orezone Essakane Ltd. of the British Virgin
Islands in the Essakane Gold Project in Burkina Faso. Orezone
Essakane Ltd. is owned by Orezone Resources Inc. (Canada). The
investor applied for a MIGA guarantee of approximately $190 million
for a period of up to 10 years against the risks of transfer
restriction, expropriation, war, civil disturbance, and breach of
contract.

JACKSON