An official website of the United States Government Here's how you know

Official websites use .gov

A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS

A lock ( ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

Benin

Executive Summary

Benin has been a democracy since 1990, enjoying until recently a reputation for regular, peaceful elections.  In 2018, the National Assembly adopted and the government implemented stringent rules for political parties to qualify to participate in legislative elections.  In February 2019, the independent election commission announced that no opposition party had met the new rules, leaving only two, pro-government parties on the April 2019 legislative election ballot.  The 2019 legislative elections were neither fully competitive nor inclusive.

Months after taking office in 2016, President (and former businessman) Patrice Talon launched an ambitious USD 15 billion five-year Government Action Plan (“Programme d’Actions du Gouvernement” or PAG).  The PAG lays out a development plan structured around 45 major projects, 95 sector-based projects, and 19 institutional reforms.  With the goals of strengthening the administration of justice, fostering a structural transformation of the economy, and improving living conditions, the projects are concentrated in infrastructure, agriculture and agribusiness, tourism, health, and education.  The government claims the PAG will create 500,000 jobs, though the President’s critics see plenty of room in the PAG for sole-source contracts profiting administration insiders.  The Talon administration’s revocations of certain high-dollar contracts signed under the previous administration in favor of new ones with Talon-allied companies have fed this latter perception.

Benin’s overall macroeconomic conditions were positive in 2017 and 2018, with an increase in GDP growth in 2018 due to a well performing agricultural sector led by cotton production, while economic recovery in neighboring Nigeria, on which Benin’s economy heavily depends, also contributed to growth.  The cotton industry, the Port of Cotonou, telecommunications, agriculture, energy, the cement industry, and housing are the main economic drivers or prospects for investment. The country’s GDP is roughly 71 percent services, 21 percent agriculture, and 8 percent manufacturing.

Benin continues its efforts to attract private investment in support of economic growth – a link the government sees as central to boosting Benin’s development prospects.  Since 2015, it has had a one-stop business startup, investment promotion, and foreign trade promotion center, the Investment and Exports Promotion Agency (APIEX). The Talon government has pinned significant hopes on mobilizing private sector funding for major infrastructure development projects through public-private partnerships (PPPs).  A new law to facilitate PPPs was enacted in 2017 with an eye toward attracting additional Foreign Direct Investment (FDI). The government updated the country’s investment and public procurement codes in 2018 in compliance with the PPP law.

In June 2017, a five-year, USD 375 million Millennium Challenge Corporation (MCC) compact with Benin entered into force.  The Benin Power Compact is advancing policy reforms to bolster financing for the electricity sector, attract private capital into power generation, and strengthen regulation and utility management.  Infrastructure funded by the compact includes 46 megawatts of power generation capacity, modernization of the Cotonou and regional distribution grid, and expansion of minigrids. As two thirds of Benin’s population does not have access to electricity, the compact also includes a significant off-grid electrification project via its clean energy grant facility.  This follows Benin’s 2006-2011 compact, which modernized the country’s port – the principal source of government revenue – and improved land administration, the justice sector, and access to credit.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2018 85 of 180 http://www.transparency.org/research/cpi/overview
World Bank’s Doing Business Report “Ease of Doing Business” 2018 153 of 190 https://www.doingbusiness.org/rankings 
Global Innovation Index 2018 121 of 127 https://www.globalinnovationindex.org/content/page/data-analysis 
U.S. FDI in partner country ($M USD, stock positions) 2017 $2.0  http://www.bea.gov/international/factsheet/ 
World Bank GNI per capita 2017 $800 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

1. Openness To, and Restrictions Upon, Foreign Investment

Policies toward Foreign Direct Investment

The Government of Benin actively encourages foreign investment.  The creation of APIEX in 2015 resulted in a dialogue between the Government and investors to implement reforms and improve Benin’s business environment.  The APIEX mission is to reduce and, where possible, eliminate administrative barriers to doing business and to attracting additional foreign direct investment.  The agency has significantly reduced processing times for registration of new companies (from 15 days to one day) and construction permits (from 90 to 30 days). In July 2016, Benin passed a law establishing a commercial tribunal of first instance and a commercial appellate court, a move that is expected to expedite the settlement of business-related disputes.  The full-service office that expedites customs clearances, reduces the cost of clearances, and minimizes processing barriers to clearing cargo at the Port of Cotonou makes it possible to obtain cargo clearance within 48 hours of the date of its off-loading at the Port of Cotonou, though in practice this tends to take somewhat longer. The reinstitution of the cargo inspection and scanning program known as PVI (le programme de vérification des importations), first tried in 2012 resumed operations at the Port of Cotonou in 2017.  Under the PVI program, private company Benin Control scans 10 percent of all imports, with containers selected randomly for scanning. Benin Control bills all containers exiting the Port of Cotonou – regardless of whether they are selected for scanning – at the rate of 35,000 FCFA (USD 68) for a 20-foot container, and 45,000 FCFA (USD 78) for a 40-foot container.

Limits on Foreign Control and Right to Private Ownership and Establishment

Beninese law guarantees the right to own and transfer private property.  The court system enforces contracts, but the judicial process is often inefficient and plagued by corruption.  Enforcement of rulings is problematic. Most firms entering the market work with an established local partner and retain a competent Beninese attorney.  A list of English-speaking lawyers and legal counselors is available on the Embassy’s website https://bj.usembassy.gov/u-s-citizen-services/attorneys/.

Other Investment Policy Reviews

In 2015, the Beninese government conducted an investment policy review (IPR) jointly through the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), and the United Nations Conference on Trade and Development (UNCTAD).  Further to a 2016 fact-finding mission, the UNCTAD Report on the Implementation of the IPR of Benin assesses progress in implementing the original recommendations of the IPR, and highlights a few more policy issues to be addressed in the investment climate. The full report may be found at http://investmentpolicyhub.unctad.org/Upload/BeninIR2016.pdf .

Business Facilitation

In an effort to attract Foreign Direct Investment (FDI) and tourism revenue, Benin has instituted a visa-free system for African nationals.  Those traveling on non-African passports can obtain e-visas through an online process for short stays at https://evisa.gouv.bj/en  /.  The country is also planning to open four new trade offices abroad to enhance Benin’s international business opportunities.  One is already underway in Shenzhen, China; others will be located in Europe, the United States, and the Middle East.

Benin made property registration simpler and less expensive in order to boost the real estate market and improve access to credit.  The measures apply to real personal property, estate and mortgage taxes, and property purchase receipts, with the aim of reducing corruption in the property registration process.  In order to register property, individuals and businesses must present a taxpayer identification number (registration for which is now free). Land registration and property purchase certifications are free, but there is a fee for obtaining a property title.  In a related measure, the government issued 2,513 titles free of charge in 2016 for owners of land that had been registered with the financial and technical assistance of the Millennium Challenge Corporation’s first compact with Benin.

It should take roughly 24 hours to register a business, and there is no need for a notary’s assistance.  APIEX serves as the single investment promotion center and conduit of information between the foreign investor and the Beninese government.

Benin defines:

  • Micro-enterprises as having less than five employees;
  • Small and medium size enterprises (SMEs) as having between five and 99 employees.  SMEs may be a subsidiary of an international firm.

A full-service office – run by a private company under the supervision of the Ministry of Infrastructure and Transport – is charged with expediting customs clearances and minimizes processing barriers to clearing cargo at the Port of Cotonou.  This office makes it possible to obtain cargo clearance within as little as 48 hours after its off-loading at the Port of Cotonou, though in practice this tends to take somewhat longer.

Outward Investment

The Beninese government has no policies or incentives in place to encourage the country’s businessmen to invest abroad.  The Beninese government does not restrict domestic investors from investing abroad.

2. Bilateral Investment Agreements and Taxation Treaties

Benin has bilateral investment agreements with the United States, Burkina Faso, Canada, Chad, China, France, Germany, Ghana, Guinea-Conakry, Mali, Mauritius, the Netherlands, Portugal, Switzerland, and the United Kingdom.  Benin is listed as a member country to International Investment Agreements with the Economic Community of West African States (ECOWAS), the African Union, and the West African Economic and Monetary Union. Benin does not have a bilateral taxation treaty with the United States, though it is eligible under the African Growth and Opportunity Act (AGOA) to export certain items duty-free to the United States.

3. Legal Regime

Transparency of the Regulatory System

Benin is a member of UNCTAD’s international network of transparent investment procedures.  Foreign and domestic investors can find detailed information on administrative procedures applicable to investment and income generating operations at http://benin.eregulations.org/  , including the number of steps, name and contact details of the entities and persons in charge of procedures, required documents and conditions, costs, processing time, and legal bases justifying the procedures.  There is no rule to prevent a monopoly over a particular business sector. The Benin Private Investment Council (CIPB) is the only business-related think-tank or body that advocates for investors, http://www.cipb.bj/  .  Generally, draft bills are not available for public comment.  However, individuals (including non-citizens) have the option to file appeals about or challenge passed or enacted bills with the country’s Constitutional Court.

International Regulatory Considerations

Benin is a member of the Organization for the Harmonization of African Business Law, known by its French acronym OHADA, and has adopted OHADA’s Universal Commercial Code (codified law) to manage commercial disputes and bankruptcies within French-speaking African member countries.  Benin is also a member of OHADA’s Common Court of Justice and Arbitration and the International Center for the Settlement of Investment Disputes (ICSID). OHADA provisions govern bankruptcy. Debtors may file for reorganization only, and the creditor may file for liquidation only.

Legal System and Judicial Independence

The preamble of the Beninese Constitution, adopted on December 11, 1990, highlights the attachment of the Beninese people “to principles of democracy and human rights as they have been defined by the Charter of the United Nations of 1945 and the Universal Declaration of Human Rights of 1948, the African Charter on Human and Peoples’ Rights adopted in 1981 by the Organization of African Unity and ratified by Benin on 20 January 1986 and whose provisions form an integral part of this present Constitution and of Beninese law and have a value superior to the internal law.”

Benin’s domestic law includes various legislative and regulatory texts covering family law, land law, labor law, criminal law, criminal procedure, and civil, commercial, social, and administrative proceedings.  The commercial court, created in 2017, enforces commercial related issues. Benin created an anti-terrorism, drugs, and economic crimes court (CRIET) in 2018. The CRIET has made several controversial decisions, including in cases of corruption charges against individuals who are among President Talon’s detractors.  In general, court cases tend to proceed slowly and there may be challenges in the enforcement of court decisions. Magistrates and judges, though appointed by the Executive, are by law independent. Benin’s courts enforce rulings of foreign courts and international arbitration.

Laws and Regulations on Foreign Direct Investment

The APIEX one-stop-shop website, http://benin.eregulations.org/  , provides information on regulations and procedures for investment in Benin.  Benin is a member of OHADA’s Common Court of Justice and Arbitration (CCJA) and the International Center for the Settlement of Investment Disputes (ICSID).  Investors may include arbitration provisions in their contracts in order to avoid prolonged entanglements in the Beninese courts. The United Nations’ investment guide for Benin (https://www.theiguides.org/public-docs/guides/benin/  ) details investment procedures in Benin.

Competition and Anti-Trust Laws

There is no existing agency that reviews transactions for competition-related concerns.  Only the local court or international arbitration courts may address these concerns filed with them.  There are no recent or existing competition cases to highlight.

Expropriation and Compensation

Based on a 1992 privatization law, the Government is forbidden from nationalizing private enterprises operating in Benin.

In conformity with World Bank structural reform commitments, the government opened the cotton sector and its related components (namely ginning and inputs) to the private sector in the 1990s, and in 2008 divested the ginning industry part of its agricultural parastatal SONAPRA (Société Nationale pour la Promotion Agricole) moving the ginning assets and regulatory control functions to SODECO (Societe de Developpement du Coton).  SODECO is a public-private joint venture: 35 percent government, 45 percent private (controlled by Societe Commune de Participation-SCP of now-President Patrice Talon), and the remainder split between stock market, local communities, cotton growers, and staff members but run by SCP. According to the founding convention, the GOB was to cede by 2013 its share to SCP.  With no publicly available on current SODECO ownership nobody would argue that SCP fully controls it.  In October 2012, prompted by concerns over performance and mismanagement, the government reassumed control of cotton production and ginning holdings under SONAPRA.  In 2014, OHADA’s CCJA judged that the Beninese government had illegally seized SODECO’s ginning assets, and similarly had illegally revoked the Port of Cotonou cargo inspection contract with the private company Benin Control.  The CCJA ordered payment of USD 267 million in compensation to the two companies owned or largely controlled by then-cotton tycoon, and current Head of State, Patrice Talon (see http://www.ohada.org/index.php/fr/ohada-au-quotidien/role-des-audiences-publiques-de-la-cour-ccja  ).  Under President Talon’s administration, in 2016 SODECO took back control of its ginning facilities and SONAPRA was dissolved.

In 2006, the government took over the management of previously privatized oil company SONACOP on the grounds that the company was in financial disarray, lacked funds for its operations, and was unable to supply gas stations throughout the country.  SONACOP is still a state-owned enterprise charged with import and distribution of petroleum products.

In February 2017, the Council of Ministers announced that the government was terminating concessions for the management of four state-owned hotels (two in Cotonou and two in northern Benin), and instructed the Minister of Justice to file reparations claims against the concessionaires on the grounds that they had not fulfilled their concession agreements.

In 2012, the government took control of the private bank Banque Internationale du Benin (BIBE) stating that poor management risked leading the bank to bankruptcy and possible systemic risk to the banking sector.  BIBE is still in government hands.

Dispute Settlement

ICSID Convention and New York Convention

Benin is a member of the International Center for the Settlement of Investment Disputes (ICSID) and New York Convention.

Investor-State Dispute Settlement

Post has no reports of government interference in judicial handling of investment disputes.

All three known past investment disputes between U.S. investors and the Beninese government were resolved in favor of the U.S. investors.  However, in 2016, the government revoked the contract of U.S.-based company SECURIPORT for the provision of civil aviation and immigration security services in the favor of Morpho-Dys, a company based in Cote d’Ivoire; this dispute remains unresolved.  The local courts recognize and enforce foreign arbitral awards issued against the government. In 2010, Benin’s civil society challenged a contract awarded by the government in the communications sector and the award decision was reversed.

There is an investment incentive agreement between the Government of the United States of America and the Government of Benin.

International Commercial Arbitration and Foreign Courts

Benin is a member of the Organization for the Harmonization of African Business Law, known by its French acronym OHADA, and has adopted OHADA’s Universal Commercial Code (codified law) to manage commercial disputes and bankruptcies.  Benin is also a member of OHADA’s Common Court of Justice and Arbitration and the International Center for the Settlement of Investment Disputes (ICSID) and as such enforces foreign arbitral awards as well as foreign court rulings. Post is unaware of any investment dispute resolution made in favor of a state-owned enterprise by domestic courts.

Bankruptcy Regulations

OHADA provisions govern bankruptcy.  Debtors may file for reorganization only, and creditors may file for liquidation only.

Benin ranked 110 in the “Resolving Insolvency” category of the World Bank Group’s 2019 Doing Business report.  While this may seem a downgrade from 2018’s score of 105, it actually reflects a very modest improvement even as its relative score to other countries places it lower on the list.

4. Industrial Policies

Investment Incentives

Depending on the size of the investment, investors may benefit from reduced tax liability on profits or imported industrial equipment for up to one year from the date of business registration.  Investors must meet several criteria including employing a minimum number of Beninese nationals, safeguarding the environment, and meeting nationally accepted accounting standards. The Investment Control Commission monitors companies that receive these incentives to ensure compliance.

Foreign Trade Zones/Free Ports/Trade Facilitation

The 2008 Investment Code allows for the creation of Free Trade Zones and establishes incentives such as tax reductions for investors.  There are currently three Free Trade Zones in Benin, but the only active one is located in southeastern Benin near the Nigerian border.  Depending on the size of the investment, free trade zone investors may benefit from reduced tax liability on profits, and duty free on imported inputs including raw material and equipment, exported finished products, or imported industrial equipment for up to one year from the date of business registration.  Investors must meet several criteria including employing a minimum number of Beninese nationals, safeguarding the environment, and meeting nationally accepted accounting standards. A local entity and a foreign investor enjoy the same opportunities. The Investment Control Commission monitors companies that receive these incentives to ensure compliance.

Performance and Data Localization Requirements

According to Benin’s 2008 Investment Code, investors must meet certain criteria, including employment of a minimum number of Beninese nationals, in order to qualify for tax reductions and other incentives.  These criteria are not rigorously applied to senior management. Union leader participation is required in Board of Directors’ meetings.

There are no government-imposed conditions on permission to invest and there is no “forced localization” policy pertaining to the use of domestic content in goods or technology.  There are no requirements in place for foreign IT providers to turn over source code and/or provide access to encryption.

The Benin Post and Communications Regulatory Authority, ARCEP, ensures the confidentiality of the content of all communications by the service provider or operator, whether this is information or other data the service provider obtains in the course of providing the services offered.  No information may be disclosed without the written consent of ARCEP or a signed order of the competent judicial authority.  Additional information may be found at www.arcep.bj  .

5. Protection of Property Rights

Real Property

Benin’s Land Act, enacted on August 24, 2013, and amended in 2017, codifies real property rights.  Land ownership disputes account for 80 percent of the cases seen by Beninese tribunals. The Land Act is designed to ensure fair access to land and protect ownership rights.  It stipulates that unoccupied acquired land cannot be reverted to other or previous owners (though there still exists the risk of squatters). The Land Act establishes a transparent legal procedure for obtaining and documenting ownership, reduces property speculation in urban and rural areas, and encourages land development.  In an effort to identify property owners and register land titles, the government declared that the land registration process would be free of charge until further notice.

The Land Act stipulates that development projects financed by international or multinational agencies cannot involve or lead to forced evictions.  The state is obligated to do everything possible at each stage of development project implementation to ensure due respect of economic, social and cultural rights recognized by international conventions and covenants and guarantees by the Beninese constitution.

Secured interests in real and personal property are recognized and enforced.  Benin’s legal system protects and facilitates acquisition and disposition of property, land, buildings, and mortgages.  Secured interests in property are registered with the Land Office of the Ministry of Finance. However, it is recommended that foreign and non-resident investors buy land with title deeds and the intervention of a notary public in order to help avoid any land disputes that may result from the acquisition process.  Large land leases for investment in rural areas are enforced by local city halls in conformity with the Land Act. Additional information regarding the acquisition of property may be found at the Beninese Land Agency’s website at http://www.beninfoncier.bj/?page_id=173  .

Intellectual Property Rights

Benin is a signatory to both World Intellectual Property Organization Internet treaties.  As a member of the World Trade Organization, Benin is party to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  However, enforcement of intellectual property rights is constrained by Benin’s limited capacity.

In July 2016, Benin’s Director of Pharmacies announced the seizure of 2.4 tons of counterfeit solid and injectable medication from a private residence in Cotonou and the arrest of a suspect.  In February 2017, the government seized another 80 tons of counterfeit drugs in Cotonou and the court found 12 individuals guilty of illegally acting as pharmacists.

Benin is not included in the U.S. Trade Representative’s 2019 Special 301 Report or Notorious Markets List.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en  .

6. Financial Sector

Capital Markets and Portfolio Investment

Government policy supports free financial markets, subject to oversight by the Ministry of Finance and Economy and the Central Bank of West African States (BCEAO).  Thirteen commercial banks operate in Benin, where the access rate to banking services is estimated at 12 percent. Foreign investors may seek credit from Benin’s private financial institutions and the West Africa Economic and Monetary Union (WAEMU) Regional Stock Exchange (Bureau Regional des Valeurs Mobilieres – BRVM) headquartered in Abidjan, Cote d’Ivoire with local branches in each WAEMU member country.

There are no restrictions for foreign investors to establish a bank account in Benin and get loans on the local market.  However, proof of residency or evidence of company registration is required to open a bank account.

Money and Banking System

The banking sector has been generally reliable.  Thirteen private commercial banks operate in Benin in addition to the regional central bank (BCEAO) and a planned subsidiary of the African Development Bank.  Only 12 percent of the Beninese population uses banking services. If microfinance institutions are taken into account, banking access may be as high as 18 percent.  In recent years, non-performing loans have been growing; fifteen percent of total banking sector assets are estimated to be non-performing. Benin is part of WAEMU. The BCEAO regulates the banks in Benin and is present in all member states including Benin.

Foreign banks are required to obtain a banking license before operating branches in Benin.  They are subject to the same prudential regulations as local or regional banks. Benin has lost no correspondent banking relationships during the last three years.  There is no known current correspondent banking relationship in jeopardy. Foreigners are required to present proof of residency to open bank accounts.

Foreign Exchange and Remittances

Foreign Exchange

All funds entering the country from abroad for investment purposes require reporting and registration with the Ministry of Economy and Finance at the time of arrival of funds.  Evidence of registration is required to justify remittances of investment capital, earnings, loan/lease repayments, or royalties. Such remittances are allowed without restrictions.

Funds entering the country from abroad for investment purposes must be converted into local currency.  For the purposes of repatriating such funds, either the invested funds or the interest/earnings or royalties can be converted into any world currency.

The currency of Benin is BCEAO-CFA Franc (international code: XOF).  XOF has a fixed parity with the Euro and fluctuates against all other currencies based on this parity.  This parity was established at the time of the Euro’s creation (January 1, 1999) and has not changed since then.  The parity stands at XOF 655.957= €1.00, guaranteed by the French government under an arrangement between the Treasury of France and the European Union.

Remittance Policies

There have been no recent plans to change investment remittance policies.  Banks require documents to justify remittances related to investments. The waiting time to remit investment returns does not exceed 60 days in practice.

Sovereign Wealth Funds

Benin has no Sovereign Wealth Fund.

7. State-Owned Enterprises

There are several wholly owned SOEs operating in the country, including mainly public utilities (electricity and water), fixed and mobile telecommunications, postal services, port and airport management, gas distribution, pension funds, agricultural production, and hotel and convention center management.  There are also a number of partially owned SOEs in Benin. Some of these receive subsidies and assistance from the government. There are no available statistics regarding the number of individuals employed by SOEs.

With the exception of public utilities (including electricity and water), pension funds, and landline telephone service for which the public telephone company retains a monopoly, many private enterprises compete with public enterprises on equal terms.

SOE senior management may report directly to a government ministry, a parent agency, or a board of directors comprised of senior government officials along with representatives of civil society and other parastatal constituencies.  SOEs are required by law to publish annual reports and hold regular meetings of their boards of directors. Financial statements of SOEs are reviewed by certified accountants, private auditors, and the government’s Bureau of Analysis and Investigation (BAI).  Though the government audit institution has the authority to conduct a review of SOE financial statements, it has yet to do so.

SOEs are established pursuant to presidential decrees, which define their mission and responsibilities.  The government appoints senior management and members of the Board of Directors. SOEs are generally run like private entities and are subject to the same tax policies as the private sector.  The courts independently process disputes between SOEs and private companies or organizations without government interference.

Benin is not a member of OECD.

Privatization Program

The government has elected to support targeted divestiture programs rather than total privatization of State-Owned Enterprises.  The state-owned telecommunications company, Benin Telecom Infrastructure, is targeted for either a divestiture program or dissolution by 2021.  The state-owned electricity utility, Société Béninoise d’Energie Electrique (SBEE) will soon be managed privately through a management contract, even though the government will retain full ownership.  Through the second MCC compact on power there will be increased opportunities for Independent Power Producers (IPP) to participate in solar power generation.

Foreign investors may participate in privatization programs.  In March 2015, the governments of Benin and Niger jointly signed a document that would dissolve the Benin-Niger Railway Organization (OCBN) parastatal and assign its concession to foreign private investors.

In December 2017, the government authorized the Minister of Infrastructure and Transport to sign a three-year renewable management contract for the Port of Cotonou with the Belgian firm Port of Antwerp International (PAI).  PAI accordingly took over management of the port in May 2018.  The move is intended in part to attract foreign investors to fund updates to and expansion of the port.

The government procurement process is specified by the Beninese procurement code (Code des Marchés Publiques:  http://www.finances.bj/spip.php?article804  ).  Tenders from the central government are announced in major publications, newspapers, and posted on the website of the Ministry of Finance and Economy at www.finances.bj  However, in practice the government frequently uses sole sourcing for PAG implementation, and in these cases does not publish procurement requests before selecting a vendor.  Published tenders often include local investor participation requirements.

Beninese procurement law allows for open and closed bid processes.  Contracts are often awarded based on government solicitations to short-listed companies with industry-specific expertise, often identified based on companies’ commercial activities conducted in other overseas markets.  The public procurement process is not always deemed non-discriminatory. Foreign companies have expressed concerns about unfair treatment, biased consideration, and improper practices specific to the process of selecting short-listed companies.

8. Responsible Business Conduct

In general, government policies and public tenders are made public online and in the newspapers.  Anti-corruption, human rights, environmental protection, and consumer NGOs and activists are active in Benin and report misconduct and violations of good governance practices.  There are also government-funded agencies in charge of monitoring business conduct. They include the Post and Communication Regulation Agency (ARCEP), the Anti-Money Laundering Agency, the National Commission on Systems and Freedom, and the National Anti-Corruption Authority (ANLC).

Benin does not currently have a significant extractives/ mining industry, though small-scale or artisanal mining activities do take place in some parts of the country.

9. Corruption

Benin has laws aimed at combatting corruption.  The government has demonstrated the political will to reduce corruption and has imposed administrative sanctions and removals from office against high profile, allegedly corrupt officials.  In early- and mid-2018, the government requested, and the National Assembly approved, the lifting of parliamentary immunity of a small number of opposition parliamentarians accused of corruption or embezzlement during former government roles.  No current or former high-level government official has yet faced prosecution in Beninese courts, leaving the effectiveness of anti-corruption efforts unproven. Corruption remains a recurring problem in areas including public administration, government procurement, customs and taxation, and the judiciary.

Bribery is illegal and subject to up to ten years’ imprisonment, but enforcement of this is subject to the same capacity constraints that hamper many rule of law issues in Benin.  Private companies establish their own code of conduct to avoid conflicts of interest in line with the country’s laws. The government has identified the fight against corruption as a national priority.  Efforts reflecting government focus on fighting corruption include the 2013 creation of the National Anti-Corruption Authority (ANLC) in charge of referring corruption cases to court. By law, the ANLC has the ability to combat money laundering, electoral fraud, economic fraud, and corruption in the public and private sectors.  Benin’s State Audit Office is also responsible for identifying and acting against corruption in the public sector. A new court, the CRIET, was set up in 2018 and was conceived in part to help the administration fight corruption.

Benin is a signatory of UN Anticorruption Convention and the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.

Resources to Report Corruption

Contact at government agency or agencies responsible for combating corruption:

Jean-Baptiste Elias
President
ANLC
01 BP 7060 Cotonou, Benin
+229 21 308 686
anlc.benin@yahoo.fr

Ms. Blanche Sonon
President
Social Watch
02 BP 937, Cotonou, Benin
+229 21042012 – 229 95961644
swbenin@socialwatch-benin.org

10. Political and Security Environment

There were incidents of post-election protests in May and June 2019 that resulted in the destruction of public and private property and several civilian deaths.  In June 2019, clashes occurred between protesters and government security forces in central Benin after the police arrested two people suspected of violence during the April 2019 legislative elections.  In May 2019, protests in Cotonou related to the government’s placement of former President Boni Yayi under de facto house arrest turned violent and there were unconfirmed reports of gunfire exchanged between security forces and protesters.

11. Labor Policies and Practices

The government adheres to internationally recognized rights and labor standards.  Benin’s constitution guarantees workers’ freedom to organize, assemble, and strike.  Government authorities may declare strikes illegal if they are deemed a threat to public order or the economy and may require those on strike to maintain minimum services.  Approximately 75 percent of salaried employees belong to unions. There are several union confederations. Unions are obliged to operate independently of government and political parties, but in practice often act to further political aims.  Benin’s labor code, as revised in 2017, is favorable to employers. Most of Benin’s working population is engaged in agriculture or other primary-sector activities. The official unemployment rate in Benin in 2014 was 14.3 percent, though estimates of actual unemployment figures are much higher.  Unskilled and skilled labor and qualified professionals are generally available. Nearly 90 percent of youth between the ages of 15 and 29 work in the informal sector. The standard legal workweek is 40 hours and payment of overtime is allowed.

In August 2017, President Talon signed a new law on the framework for private sector and government employment, termination of employment, and placement of labor in Benin.  The new law sets a maximum limit of three to nine months’ salary (calculated using the last 12 months of salary) to be paid to an employee in case of abusive termination of employment or layoffs.  If fired on legitimate grounds, but short of being caught red-handed doing something unlawful, an employee with a minimum of one year on the job is entitled to receive two months’ salary as severance pay.  Under the former law, private companies who dismissed employees for unsatisfactory performance were routinely sued.  The law also allows for multiple renewals of limited time contracts; previously, a limited duration contract could only be renewed twice, and upon a third renewal was considered an employment contract with indefinite duration.  Many of Benin’s labor laws were holdovers from the Marxist era and had served as impediments to private enterprise, despite a revamping of the labor code in 1998.

Civil courts and the Directorate of Labor deal with labor dispute resolution, and collective bargaining is common in line with the labor law.

12. OPIC and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) offers financial underwriting for companies wishing to invest in Benin.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Benin/Economy

Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2015 $8,291 2017 $9,247 www.worldbank.org/en/country   
Foreign Direct Investment Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) N/A N/A 2017 $2.0 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data  
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2017 $0.0 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data  
Total inbound stock of FDI as % host GDP N/A N/A 2017 22.3% UNCTAD data available at https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx  

* Source for Host Country Data: Institut National de la Statistique et de l’Analyse Économique


Table 3: Sources and Destination of FDI

Direct Investment From/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward $2,528 100% Total Outward $370 100%
France $1,284 49.76% France $142 38.37%
Cote d’Ivoire $289 11.43% Senegal $72 19.45%
Senegal $196 7.75% Kenya $38 10.27%
Morocco $192 7.19% Cote d’Ivoire $33 8.91%
China $81 3.20% Mali $24 6.48%
“0” reflects amounts rounded to +/- USD 500,000.


Table 4: Sources of Portfolio Investment

Data not available.

14. Contact for More Information

Political and Economic Section
U.S. Embassy, Boulevard de la Marina, Cotonou
00229-21300650
BeninCommercial@state.gov

Chad

Executive Summary

Chad is one of Africa’s largest countries, with a land area of 1,284,000 square kilometers that encompasses three agro-climatic zones.  Chad is a landlocked country bordering Libya to the north, Sudan to the east, Central African Republic (CAR) to the south, and Cameroon, Niger, and Nigeria on the west (with which it shares Lake Chad).  The nearest port, Douala, Cameroon, is 1,700 km from the capital, N’Djamena. Chad is one of six countries that constitute the Central African Economic and Monetary Community (CEMAC), a common market.

Chad’s human development is one of the lowest in the world according to the UN Human Development Index (HDI), and poverty continues to afflict a large proportion of the population.  Since oil production began in 2003, the petroleum sector has dominated economic activity and has been the largest target of foreign investment. However, agriculture and livestock breeding are important economic activities that employ the majority of the population, and the government has prioritized these sectors in an effort to diversify the economy and to maximize non-petroleum tax receipts in the wake of the drop in global oil prices.

The Government of Chad (GOC) has focused on improving internal economic and social conditions, although its efforts have been constrained by regional instability arising from the continued terrorist threat, an influx of refugees along the Chad-Sudan-Central African Republic (CAR) border, and low oil revenues (which account for over 70 percent of government revenue) due to the fall in global oil prices.

According to the IMF, after three consecutive years of contraction, non-oil economic activity has stabilized and pressures on the government fiscal position have eased. Nonetheless, the social, economic, and financial situation remains fragile. While oil production rebounded strongly in 2018, growth in the non-oil sector was estimated at only 0.5 percent. Economic recovery continues to be held back by the domestic debt overhang and underlying structural fragilities. Average inflation picked up to 4 percent in 2018, pulled largely by a 90 percent increase in the administered price of fresh water in May 2018. 

The GOC is favorably disposed to foreign investment, with a particular goal of attracting North American companies.  There are opportunities for foreign investment in Agribusiness; Agricultural, Construction, Building & Heavy Equipment; Architecture & Engineering; Automotive & Ground Transportation; Education; Energy & Mining; Environmental Technologies; Food Processing & Packaging; Health Technologies; Industrial Equipment & Supplies; Information & Communication; and Services.

Chad’s business and investment climate remains challenging.  Private sector development is hindered by poor transport infrastructure, lack of skilled labor, unreliable energy, weak contract enforcement, corruption, and high tax burdens on private enterprises. 

Table 1: Key Metrics and Rankings

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2018 165 of 175 http://www.transparency.org/research/cpi/overview 
World Bank’s Doing Business Report 2019 181 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index 2018 N/A https://www.globalinnovationindex.org/analysis-indicator 
U.S. FDI in partner country ($M USD, stock positions) 2018 N/A http://www.bea.gov/international/factsheet/ 
World Bank GNI per capita 2017 $640 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The GOC’s policies towards foreign direct investment (FDI) are generally positive.  There are few formal restrictions on foreign trade and investment. 

Chad’s laws and regulations encourage FDI.  The National Investment Charter of 2008, a set of guidelines promulgated by the National Agency for Investment and Exports (ANIE, Agence Nationale des Investissements et des Exports), an agency of the Ministry of Industrial and Commercial Development & Private Sector Promotion, offers incentives to foreign companies establishing operations in Chad, including up to five years of tax-exempt status.  Under Chadian law, foreign and domestic entities may establish and own business enterprises. The National Investment Charter permits full foreign ownership of companies in Chad. The only limit on foreign control is on ownership of companies deemed related to national security.  The National Investment Charter guarantees both foreign companies and individuals equal standing with Chadian companies and individuals in the privatization process. In principle, tenders for foreign investment in state-owned enterprises (SOEs) and for government contracts are conducted through open international bid procedures.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no limits on foreign ownership or control.  There are no sector-specific restrictions that discriminate against market access for U.S. or other foreign investors, and no de facto anti-foreign discriminatory practices.

Other Investment Policy Reviews

The World Trade Organization (WTO) last published a trade policy review for Chad, Cameroon, Republic of Congo, Gabon, and Central African Republic in July 2013. 

Neither the Organization for Economic Cooperation and Development (OECD) nor the United Nations Committee on Trade and Development (UNCTAD) has published any investment policy reviews (IPR) of Chad.

Business Facilitation

Foreign businesses interested in investing in or establishing an office in Chad should contact ANIE, which offers a one-stop shop for filing the legal forms needed to start a business.  The process officially takes 72 hours and is the only legal requirement for investment. ANIE’s website (www.anie-tchad.com  ) provides additional information.  Online business registration is not yet available via the Global Enterprise Registration web site (www.GER.co  ) or the Business Facilitation Program (www.businessfacilitation.org  ). 

In 2018, the World Bank ranked Chad 180 out of 190 countries for ease of starting a business, which included factors beyond the registration, to include permitting, access to resources like space and energy, and access to capital.

Contracts are tailored to each investment and often include additional incentives and concessions, such as permissions to import labor or agreements to work with specific local suppliers.  Some contracts are confidential. Occasionally, government ministries attempt to change the terms of contracts or apply new laws broadly, even to companies that have pre-existing agreements that exempt them.  Chad’s judicial system is weak, and rulings, including those relating to contract disputes, are susceptible to government interference. There is limited capacity within the judiciary to address commercial issues, including contract disputes.  Parties usually settle disputes directly or through arbitration provided by the Chamber of Commerce, Industry, Agriculture, Mining, and Crafts (CCIAMA) or through an outside entity, such as the International Chamber of Commerce (ICC) in Paris. 

Outward Investment

The GOC does not offer any programs or incentives encouraging outward investment, although there are no restrictions on domestic investors who might have the means and the interest in investing abroad.

The GOC does not restrict domestic investors from investing abroad.

2. Bilateral Investment Agreements and Taxation Treaties

Chad does not have a bilateral investment treaty (BIT) with the United States.  Chad has signed bilateral investment treaties with Benin, Burkina Faso, China, Egypt, Germany, Guinea, Italy, Lebanon, Mali, Mauritius, Morocco, Qatar, and Switzerland.

Chad does not have a Free Trade Agreement (FTA) with the United States but is eligible for tariff exemptions under the African Growth and Opportunity Act (AGOA).  The bulk of Chad’s total exports under AGOA is crude oil. Chad is eligible for the Special Rule for Apparel.

Chad does not have a bilateral taxation treaty with the United States.

3. Legal Regime

Transparency of the Regulatory System

Chad is currently implementing laws to foster competition and establish clear rules based on Uniform Acts produced by the Organization for the Harmonization of Business Law in Africa (OHADA, Organisation pour l’Harmonisation en Afrique du Droit des Affaires, www.ohada.com  ).  However, until full implementation of new laws is complete, certain Chadian and foreign companies may encounter difficulties from well-established companies with a corner on the market that discourages competition. 

Regulations and financial policies generally do not impede competition in the financial sector.  Legal, regulatory, and accounting systems pertaining to banking are transparent and consistent with international norms.  Chad began using OHADA’s accounting system in 2002, bringing its national standards into harmony with accounting systems throughout the region.  Several international accounting firms have offices in Chad. However, while accounting, legal, and regulatory procedures are consistent with international norms, some local firms do not use generally accepted standards and procedures in their business practices.

There are no informal regulatory processes managed by nongovernmental organizations or private sector associations.  The Government has posted its draft Finance Law on the Ministry of Finance and Budget’s website the past two years; other proposed laws and regulations are not published in draft form for public comment. (Note: the Ministry of Finance and Budget’s website was funded by a USG grant in 2014. End Note.)  The GOC occasionally provides opportunities for local associations, such as the National Council of Employers (CNPT, Conseil National du Patronat Tchadien) or the CCIAMA to comment on proposed laws and regulations pertaining to investment.  All contracts and practices are subject to legal review, which can be weak. In 2018, the Ministry of Public Health closed some pharmacies operating without licenses and initiated a law regulating pharmacies.

The GOC publishes all budget information including on its website. The GOC also established an Observatory on Public Finance (OFiP) in 2018 to implement projects and publish information contributing to transparency in the management of public finances. OTFiP is a dedicated online framework for the dissemination of public finance data and the operationalization of the Code of Transparency and Good Governance. This code is an implementation of one of the six CEMAC Directives on the new harmonized framework for public financial management. 

Chad is still not listed on www.businessfacilitation.org  

International Regulatory Considerations

Chad has been a member of the WTO since 19 October 1996 and a member of GATT since 12 July 1963. Chad is a member of OHADA, and also a member of the Central African Economic and Monetary Community (CEMAC, Communaute Economique et Financiere de l’Afrique Centrale, www.cemac.int  ) and OHADA.  Since 2017, Chad is gradually implementing business and economic laws and regulations based on CEMAC standards and OHADA Uniform Acts.  Chad’s banking sector is regulated by COBAC (Commission Bancaire de l’Afrique Centrale), a regional agency. 

Legal System and Judicial Independence

Chad’s legal system and commercial law are based on the French Civil Code.  The constitution recognizes customary and traditional law if it does not interfere with public order or constitutional rights.  Chad’s judicial system rules on commercial disputes in a limited technical capacity. The Chadian President appoints judges without National Assembly confirmation, and thus the judiciary may be subject to executive influence.  Courts normally award monetary judgments in local currency, although it may designate awards in foreign currencies based on the circumstances of the disputed transaction. 

Chad’s commercial laws are based on standards promulgated by CEMAC, OHADA, and the Economic Community of Central African States (CEEAC, Communaute Economique des Etats de l’Afrique Centrale, http://www.ceeac-eccas.org  ).  The Government and National Assembly are currently in the process of adopting legislation to comply fully with all these provisions. 

Specialized commercial tribunal courts were authorized in 1998 and became operational in 2004.  These tribunals exist in five major cities but lack adequate technical capacity to perform their duties.  Firms not satisfied with judgments in these tribunals may appeal to OHADA’s regional court in Abidjan, Ivory Coast that ensures uniformity and consistent legal interpretations across its member countries and several Chadian companies have done so.  OHADA also allows foreign companies to utilize tribunals outside of Chad, generally in Paris, France, to adjudicate business disputes. Finally, CEMAC established a regional court in N’Djamena in 2001 to hear business disputes, but this body is not widely used.

Contracts and investment agreements can stipulate arbitration procedures and jurisdictions for settlement of disputes.  If both parties agree and settlements do not violate Chadian law, Chadian courts will respect the decisions of courts in the nations where particular agreements were signed, including the United States.  This principle also applies to disputes between foreign companies and the Chadian Government. Such disputes can be arbitrated by the International Chamber of Commerce (ICC). Foreign companies frequently choose to include clauses in their contract to mandate ICC arbitration. 

Bilateral judicial cooperation is in effect between Chad and certain nations.  Chad signed the Antananarivo Convention in 1970, covering the discharge of judicial decisions and serving of legal documents, with eleven other former French colonies (Benin, Burkina Faso, Cameroon, CAR, Congo-Brazzaville, Gabon, Cote d’Ivoire, Madagascar, Mauritania, Niger, and Senegal).  Chad has similar arrangements in place with France, Nigeria, and Sudan. 

Laws and Regulations on Foreign Direct Investment

The National Investment Charter encourages foreign direct investment.  Chad is a member of the Central African Economic and Monetary Community (CEMAC, Communaute Economique et Financiere de l’Afrique Centrale, www.cemac.int  ) and the Organization for the Harmonization of Business Law in Africa (OHADA, Organisation pour l’Harmonisation en Afrique du Droit des Affaires, www.ohada.com  ). Since 2017, Chad is gradually implementing business and economic laws and regulations based on CEMAC standards and OHADA Uniform Acts. 

Foreign investors using the court system are not generally subject to executive interference.  In addition, the OHADA Treaty allows foreign companies to utilize tribunals outside of Chad, e.g., the ICC in Paris, France, to adjudicate any disputes.  Companies may also access the OHADA’s court located in Abidjan, Côte d’Ivoire.

Foreign businesses interested in investing in or establishing an office in Chad should contact ANIE, which offers a one-stop shop for filing the legal forms needed to start a business.  The process officially takes 72 hours and is the only legal requirement for investment. ANIE’s website (www.anie-tchad.com  ) provides additional information.

Competition and Anti-Trust Laws

Regulation of competition is covered by the OHADA Uniform Acts that form the basis for Chadian business and economic laws and regulations.  The Office of Competition in Chad’s Ministry of Industrial and Commercial Development & Private Sector Promotion reviews transactions for competition-related concerns. 

Expropriation and Compensation

Chadian law protects businesses from nationalization and expropriation, except in cases where expropriation is in the public interest.  There were no government expropriations of foreign-owned property in 2018. There are no indications that the GOC intends to expropriate foreign property in the near future.

Chad’s Fourth Republic Constitution adopted in May 2018 prohibits seizure of private property except in cases of urgent public need, of which there are no known cases.  A 1967 Land Law prohibits deprivation of ownership without due process, stipulating that the state may not take possession of expropriated properties until 15 days after the payment of compensation.  The government continues to work on reform of the 1967 law. A draft law encourages foreign companies to own property instead of leasing.

Dispute Settlement

ICSID Convention and New York Convention

Chad has been a signatory and contracting state of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Convention”) since 1966. 

Chad is not a contracting state of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Arbitration Convention”).

Investor-State Dispute Settlement

Chad is signatory to an investment agreement among the member states of CEMAC, CEEAC, and OHADA.  The OHADA Investment Arrangement, with provisions for securities, arbitration, dispute settlement, bankruptcy, recovery, and other aspects of commercial regulation, has defined the commercial rights of several economic stakeholders, e.g., the Chadian Treasury,   and provides for the enforcement of foreign arbitral awards. Chad has no Bilateral Investment Treaty (BIT) or Free Trade Agreement (FTA) with an investment chapter with the United States.

There is no formal record of the government’s handling of investment disputes.  Some U.S. and other foreign investors have been involved in disputes with the GOC, particularly over issues regarding taxes and duties, though there are no official statistics. Investment disputes involving foreign investors are frequently arbitrated by an independent body.

International Commercial Arbitration and Foreign Courts

In addition to independent courts, such as the ICC, Chad’s constitution recognizes customary and traditional law as long as it does not interfere with public order or constitutional rights.  As most businesses operate in the informal sector, customary and traditional law function as alternative dispute resolution (ADR) mechanisms when parties are from the same tribe or clan and express their desire to settle outside of the formal court.

Specialized commercial tribunal courts were authorized in 1998 and became operational in 2004.  These tribunals exist in five major cities, but lack adequate capacity to perform their duties. The N’Djamena Commercial Tribunal  has heard disputes involving foreign companies.

Foreign investors using the court system are not generally subject to executive interference.  In addition, the OHADA Treaty allows foreign companies to utilize tribunals outside of Chad, e.g., the ICC in Paris, France, to adjudicate any disputes.  Companies may also access the OHADA’s court located in Abidjan, Côte d’Ivoire.

Bankruptcy Regulations

Chad’s bankruptcy laws are based on OHADA Uniform Acts.  According to Section 3, Articles 234 – 239 of OHADA’s Uniform Insolvency Act, creditors and equity shareholders may designate trustees to lodge complaints or claims to the commercial court collectively or individually.  These laws criminalize bankruptcy and the OHADA provisions grant Chad the discretion to apply its own sentences.

The World Bank’s 2018 Doing Business Report ranks Chad’s ease of resolving insolvency at 150 of 190.  This is a decrease of four positions from 2017. The report is available at http://www.doingbusiness.org/data/exploreeconomies/chad/#resolving-insolvency  

4. Industrial Policies

Investment Incentives

The Chadian tax code (CGI, Code General des Impôts) offers incentives to new business start-ups, new activities, or substantial extensions of existing activities.  Eligible economic activities are limited to the industrial, mining, agricultural, forestry, and real estate sectors, and may not compete with existing enterprises already operating in a satisfactory manner (Articles 16 and 118 of the National Investment Charter). 

Foreign investors may ask the GOC for other incentives through investment-specific negotiations.  Large companies usually sign separate agreements with the government, which contain negotiated incentives and obligations.  The possibility of special tax exemptions exists for some public procurement contracts, and a preferential tax regime applies to contractors and sub-contractors for major oil projects.  The government occasionally offers lower license fees in addition to ad hoc tax exemptions. Incentives tend to increase with the size of a given investment, its potential for job creation, and the location of the investment, with rural development being a GOC priority.  Investors may address inquiries about possible incentives directly to the Ministry of Industrial and Commercial Development & Private Sector Promotion, or the Ministry of Petroleum and Energy.

The GOC does not issue guarantees but jointly finances some foreign direct investments.

Foreign Trade Zones/Free Ports/Trade Facilitation

There are currently no foreign trade zones in Chad.  The Chadian Agency for Investment and Exportation (ANIE) is examining the possibility of creating a duty-free zone.

Performance and Data Localization Requirements

Chad does not follow forced localization, the policy in which foreign investors must use domestic content in goods or technology. 

Foreign companies are legally required to employ Chadian nationals for 98 percent of their staff.  Firms can formally apply for permission from the Labor Promotion Office (ONAPE) to employ more than two percent expatriates if they can demonstrate that skilled local workers are not available.  Most foreign firms operating in Chad have obtained these permissions. Foreign workers require work permits in Chad, renewable annually. Companies must present personnel files of local candidates not hired to the GOC for comparison against the profiles of foreign workers.  Multinational companies and international non-governmental organizations routinely protest these measures. 

There are no requirements for foreign IT providers to turn over source code and/or provide access to surveillance (backdoors into hardware and software or turn over keys for encryption).  There are no rules on maintaining a certain amount of data storage within Chad. The GOC has enacted four laws covering cybersecurity and cyber-criminality.

5. Protection of Property Rights

Real Property

The Chadian Civil Code protects real property rights.  Since 2013, landowners may register land titles with the One-Stop Land Titling Office (Guichet Unique pour les Affaires Foncieres).  However, enforcement of these rights is difficult because a majority of land owners do not have a title or a deed for their property.

The office of Domain and Registration (Direction de Domaine et Enregistrement) in the Ministry of Finance and Budget is responsible for recording property deeds and mortgages.  In practice, this office asserts authority only in urban areas; rural property titles are managed by traditional leaders who apply customary law.  Chadian courts frequently deal with cases of multiple or conflicting titles to the same property. In cases of multiple titles, the earliest title issued usually has precedence.  Fraud is common in property transactions. By law, all land for which no title exists is owned by the government, and can only be given to a separate entity by Presidential decree.  There have been incidents in which the government has reclaimed land for which individuals held titles, which government officials granted to other individuals without the backing of Presidential decrees. 

The GOC does not provide clear definitions and protections of traditional use rights of indigenous peoples, tribes, or farmers.

The World Bank’s 2018 Doing Business Report ranks Chad 159of 190 in ease of registering property.  The report cites the high cost of property valuation plus other associated costs for registering property as the major impediment.  Time required and number of procedures are on par with the rest of Sub-Saharan Africa.

Intellectual Property Rights

Chad is a member of the African Intellectual Property Organization (OAPI) and the World Intellectual Property Organization (WIPO).  Chad ratified the revised Bangui Agreement (1999) in 2000 and the Berne Convention in 1971. The GOC adheres to OAPI rules within the constraints of its administrative capacity.

Within the Ministry responsible for trade, the Department of Industrial Property and Technology addresses intellectual property rights (IPR) issues.  This department is the National Liaison Unit (SNL) within the OAPI, and is the designated point of contact under Article 69 of the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). 

Counterfeit pharmaceuticals and artistic works, including music and videos, are common in Chad.  Counterfeit watches, sports clothing, footwear, jeans, cosmetics, perfumes, and other goods are also readily available on the Chadian market.  These products are not produced locally, and are generally imported through informal channels. Despite limited resources, Chadian customs officials make occasional efforts to enforce copyright laws, normally by seizing and burning counterfeit medicines, CDs, and mobile phones.

Chad does not regularly track and report on seizures of counterfeit goods.  Occasionally, Chadian authorities will announce such a seizure in the local press.  Customs officers have the authority to seize and destroy counterfeit goods ex officio.  The Government pays for storage and destruction of such goods.

Chad is not listed on the United States Trade Representative (USTR) Special 301 Report or Notorious Markets List.  For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/  

6. Financial Sector

Capital Markets and Portfolio Investment

Chad’s financial system is underdeveloped.  There are no capital markets or money markets in Chad.  A limited number of financial instruments are available to the private sector, including letters of credit, short- and medium-term loans, foreign exchange services, and long-term savings instruments.

Commercial banks offer credit on market terms, often at rates of 12 to 25 percent for short-term loans.  Medium-term loans are difficult to obtain, as lending criteria are rigid. Most large businesses maintain accounts with foreign banks and borrow money outside of Chad.  There are ATMs in some major hotels, N’Djamena airport, and in some neighborhoods of N’Djamena.

Chad does not have a stock market and has no effective regulatory system to encourage or facilitate portfolio investments.  A small regional stock exchange, known as the Central African Stock Exchange, in Libreville, Gabon, was established by CEMAC countries in 2006.  Cameroon, a CEMAC member, launched its own market in 2005. Both exchanges are poorly capitalized.

The GOC does not restrict payments and transfers for current international transactions. Access to credit is available, but is prohibitively expensive for most Chadians in the private sector.

Money and Banking System

Chad’s banking sector is small and continues to streamline lending practices and reduce the volume of bad debt. The Chadian banking rate is even lower than the average rate in the CEMAC, sub-region estimated at 12%, due to the lack of means to afford a bank account and the lack of culture aimed at popularizing the banking system. Chad’s four largest banks have been privatized. The former Banque Internationale pour l’Afrique au Tchad (BIAT) became a part of Togo-based Ecobank; the former Banque Tchadienne de Credit et de Depôt was re-organized as the Societe Generale Tchad; the former Financial Bank became part of Togo-based Orabank; and the former Banque de Developpement du Tchad (BDT) was reorganized as Commercial Bank Tchad (CBT), in partnership with Cameroon-based Commercial Bank of Cameroon.  There are two Libyan banks in Chad, BCC (formerly Banque Libyenne) and Banque Sahelo-Saharienne pour l’Investissement et le Commerce (BSCIC), along with one Nigerian bank (UBA, United Bank for Africa). In 2018, the GoC funded a new bank Banque de l’Habitat du Tchad (BHT) with the GoC as majority shareholder with 50 percent of the shares and two public companies, the National Social Insurance Fund (CNPS) and the Chadian Petroleum Company (SHT), each holding 25 percent.

 Chad, as a CEMAC member, shares a central bank with Cameroon, Central African Republic, Republic of Congo, Equatorial Guinea, and Gabon – the Central African Economic Bank (BEAC, Banque des Etats de l’Afrique Centrale), headquartered in Yaounde, Cameroon.   

Foreigners must establish legal residency in order to establish a bank account.

Foreign Exchange and Remittances

Foreign Exchange

The government does not restrict converting funds associated with an investment (including remittances of investment capital, earnings, loan repayments, lease payments, royalties) into a freely usable currency at legal market-clearing rates.  There are no restrictions on repatriating these funds, although there are some limits associated with transferring funds. Individuals transferring funds exceeding USD 1,000 must document the source and purpose of the transfer with the local sending bank.  Companies and individuals transferring more than USD 800,000 out of Chad need BEAC authorization to do so. Authorization may take up to three working days. To request authorization for a transfer, companies and individuals must submit contact information for the sender and recipient, a delivery timetable, and proof of the sender’s identity.  There were no reports of other capital outflow restrictions in 2017. Businesses can obtain advance approval for regular money transfers.

Chad is a member of the African Financial Community (CFA) and uses the Central African CFA Franc (FCFA) as its currency.  The FCFA is pegged to the Euro at a fixed rate of one Euro to 655.957 FCFA exactly (100 FCFA = 0.152449 Euro). In 2018, the CFA/USD exchange rate fluctuated between 565 and 625 FCFA as a function of the performance of the USD against the Euro.  There are no restrictions on obtaining foreign exchange.

Remittance Policies

There are no recent changes to or plans to change investment remittance policies.  There are no time limitations on remittances, dividends, returns on investment, interest, and principal on private foreign debt, lease payments, royalties, or management fees. 

Chad does not engage in currency manipulation.

Chad is a member state of the Action Group against Money Laundering in Central Africa (GABAC), which is in the process of becoming a Financial Action Task Force (FATF)-style regional body.  On the national level, the National Financial Investigation Agency (ANIF) has implemented GABAC recommendations to prevent money laundering and terrorist financing.

Sovereign Wealth Funds

The GOC does not currently maintain a Sovereign Wealth Fund. 

7. State-Owned Enterprises

All Chadian SOEs operate under the umbrella of government ministries.  SOE senior management reports to the minister responsible for the relevant sector, as well as a board of directors and an executive board.  The President of the Republic appoints SOE boards of directors, executive boards, and CEOs. The boards of directors give general directives over the year, while the executive boards manage general guidelines set by the boards of directors.  Some executive directors consult with their respective ministries before making business decisions.

The GOC operates SOEs in a number of sectors, including Energy and Mining; Agriculture, Construction, Building and Heavy Equipment, Information and Communication, in water supply and cement production.  The percentage SOEs allocate to research and development (R&D) is unknown.

There were no reports of discriminatory action taken by SOEs against the interests of foreign investors in 2018, and some foreign companies operated in direct competition with SOEs.  Chad’s Public Tender Code (PTC) provides preferential treatment for domestic competitors, including SOEs. 

SOEs are not subject to the same tax burden and tax rebate policies as their private sector competitors, and are often afforded material advantages such as preferential access to land and raw materials.  SOEs receive government subsidies under the national budget; however, in practice they do not respect the budget. State and company funds are often commingled. 

Chad is not a party to the Agreement on Government Procurement within the framework of the WTO.  Chadian practices are not consistent with the OECD Guidelines on Corporate Governance for SOEs. 

The GOC privatized two SOEs  in 2018, but wishes to remain a major player in extractive industries.

Privatization Program

Foreign investors are permitted and encouraged to participate in the privatization process.  There is a public, non-discriminatory bidding process. Having a local contact in Chad to assist with the bidding process is important.  To combat corruption, the GOC has recently hired private international companies to oversee the bidding process for government tenders. Despite the GOC’s willingness to privatize loss-making SOEs, there remain several obstacles to privatization. 

 The Chamber of Commerce submitted a ‘white paper’ (livre blanc) in fall 2018 with recommendations for the Government to facilitate and simplify private sector operations, including establishing a Business Observatory and a Presidential Council, which would implement the over 70 recommendations to improve the investment climate in Chad.

In April 2018, the GoC sold 60% of its stake in the cotton producer CotonTchad Societe Nouvelle (CotonTchad SN) to the Singaporean Olam International.

In October 2018 the GoC launched a new airline, Tchadia airlines, a joint venture owned 51 percent by the GoC and 49 percent by Ethiopian Airlines.

Chad is considering privatization in the following sectors:

  • Information & Communication (SOTEL Tchad)
  • Food Processing & Packaging (juice, meat processing)

The GOC has not published a timeline for these privatizations.

8. Responsible Business Conduct

There is a general awareness of Responsible Business Conduct (RBC) among firms in Chad.  Most Western firms operating in Chad engage in RBC, particularly those in the petroleum and telecommunications sectors.  For example, Esso Exploration and Production Chad, Inc. (EEPCI), the main oil producer, has implemented Environmental Management Plans (EMP), a rigorous program that espouses, inter alia, prioritizing hiring local residents and local purchase of goods and services, establishing international safety standards, and protecting biodiversity.  A critical part of EMP has been the Land Use Management Action Plan (LUMAP) that compensates individuals and communities for land used by the project. To date, LUMAP has distributed approximately $1.7 million in cash, in-kind goods, and training. EMP’s efforts are complemented by the ExxonMobil Foundation, which supports projects to improve girls’ education and fight malaria.

Many foreign firms commit to extensive local staff training efforts, purchase local goods, and donate excess equipment to charities or local governments. Internet companies Airtel and Tigo, as well as some banks, continue to engage in RBC focused on public awareness campaigns countering violent extremism and promoting social cohesion.

While work safety and environmental protection regulations exist, the government does not always enforce them and companies do not always adhere to them.  There are a number of local NGOs, particularly in the southern oil-producing regions, which monitor safety and environmental protection in the oil sector, and which have held government and private companies publically accountable. EEPCI adheres to U.S. Occupational Safety and Health Administration (OSHA) guidelines for recording accidents and injuries, and implements a rigorous program of safety procedures and protocols.

9. Corruption

Foreign investors should also be aware that corruption remains common in Chad.  Corruption in Chad remains a significant deterrent to U.S. investment. Corruption is most pervasive in government procurement, award of licenses or concessions, dispute settlement, regulation enforcement, customs, and taxation.

Chad is not a signatory country of the UN Convention Against Corruption (UNCAC).  Chad is not a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“the OECD Anti-Bribery Convention”).

There is an independent Court of Auditors (Cour des Comptes), equivalent to a supreme audit institution (SAI), to enhance independent oversight of government decisions, although its members are nominated by Presidential decree.  Concurrently, the GOC created a General Inspectorate for State Control within the Presidency to oversee government accountability. No reports have been published, however.    In addition to these bodies, the National Assembly’s Finance Committee carries out verifications of the GOC’s annual financial statement. No audits have been made publicly available during the reporting period.

A February 2000 anti-corruption law stipulates penalties for corrupt practices. The law does not single out family members and political parties.  As in other developing countries, low salaries for most civil servants, judicial employees and law enforcement officials, coupled with a weak state system and a culture of rent seeking, have contributed to corruption. 

The Ministry of Finance and Budget set up a toll-free number (700) to fight corruption and embezzlement. According to the Minister of Finance and Budget the toll-free number 700 allows each economic operator or any other individual to alert the Inspectorate General of Finance to denounce any unscrupulous agent who seeks to be corrupted in the context of the issue of administrative paper or the payment of a tax. There are no specific laws to counter conflict of interest. The GOC does not require private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials.

A prominent local NGO, the Center for Studies and Research on Governance, Extractive Industries and Sustainable Development (CERGIED), formerly GRAMP-TC (Groupe Alternatif de Recherche et de Monitoring de Petrole – Tchad), tracks government expenditures of oil revenue.  There are no indications that anti-corruption laws are enforced differently on foreign investors than on Chadian citizens. There is no specific protection for NGOs involved in investigating corruption.

Corruption is an obstacle to FDI.  It is most pervasive in government procurement, award of licenses or concessions, transfers, performance requirements, dispute settlement, regulatory system and customs or taxation.

Resources to Report Corruption

Government agency contact responsible for combating corruption:

Inspection Generale d’Etat
Ministry of Finance and Budget toll free number 700 (inside Chad)
Presidence de la Republique
Ndjamena, Chad
+235 22 51 51 39 / 22 51 44 37

Contact at watchdog organizations:

Gilbert Maoundonodji
Coordinator
CERGIED (formerly GRAMP –TC)
BP 4021, N’Djamena, Chad
+235 6058 2016 / 9317 7678
infos@cergied.org / secretariat@cergied.org / https://cergied.org/  

10. Political and Security Environment

Chad has enjoyed political stability since 2008. There have been no reported incidents in recent years involving politically-motivated damage to projects and/or installations.  The latest Presidential election was held in April 2016 and parliamentary elections are planned for late 2019. In May 2018, President Deby promulgated a new constitution establishing a Fourth Republic that consolidates power in the Presidency. Socio-economic conditions occasionally spark demonstrations and protests against the Government.  In most cases, the government either denied permits for demonstrations, or suppressed them using tear gas, arresting participants and organizers.

Regional violent extremist organizations continue to threaten Chadian and Western interests. Boko Haram’s violence has choked off vital trade routes with Nigeria and the road between N’Djamena and Douala, Cameroon, the principal port serving Chad.  This has increased costs for imports and decreased exports due to border closures.

For up-to-date information on political and security conditions in Chad, please refer to the Consular Affairs Bureau’s Travel Warning and Country Specific Information at http://www.travel.state.gov.  The Embassy encourages all U.S. Citizens visiting Chad to register with the Embassy upon arrival or online via the STEP program.

U.S. businesses and organizations in Chad are welcome to inquire at the Embassy about joining the Overseas Security Advisory Committee (OSAC).

11. Labor Policies and Practices

Chad has a shortage of skilled labor in most sectors.  Although there is an increasing pool of university graduates able to fill entry-level management and administrative positions, skilled workers still represent a very small percentage of the total labor pool.  Eighty percent of the Chadian labor force is estimated to be engaged in subsistence activities including farming, herding and fishing. Unskilled and day laborers are readily available. Few Chadians speak English.  Acceptable translators and interpreters are available. Some government ministries and SOEs provide job-related training to their employees.

Chad has ratified all eight Fundamental Conventions of the International Labor Organization.  International labor rights such as freedom of association, the elimination of forced labor, child labor, employment discrimination, minimum wage, occupational safety and health, and weekly work hours are recognized within the labor code.  However, gaps remain in law and practice. Chadian labor law derives from French law and tends to provide strong protection for Chadian workers; priority is given to Chadian nationals. Labor unions operate independently from the government and, in fact, often challenge the government.  The two main labor federations, the Confederation Libre des Travailleurs du Tchad (CLTT) and the Union des Syndicats Tchadiens (UST), to which most individual unions belong, are the most influential, and have been instrumental in persuading the GOC to engage in social dialogue regarding the government’s 2016 to 2017 austerity measures.  A deal reached in October 2018, implemented in January 2019, ended strikes as salaries were partially restored after major cuts.

The labor court is the labor dispute mechanism in Chad.  In case of a dispute, the aggrieved party contacts a labor inspector directly or through the labor union to settle the dispute or lodge a complaint with the labor court.

Labor unions practice collective bargaining, and the labor code monitors labor abuses, health, and safety standards in low-wage assembly operations.  The enforcement of the code is not effectively conducted; most disputes are based on contract termination. Child labor remains a problem. Approximately 53 percent of children in Chad are engaged in child labor, particularly in domestic service, cattle herding, and agriculture.  Chadian cattle are included on the U.S. Government’s List of Goods Produced by Child Labor or Forced Labor.

The GOC may provide incentives for foreign businesses, but does not waive laws to attract or retain investment, as the Chadian labor law strongly supports workers.

12. OPIC and Other Investment Insurance Programs

Chad is a member of the Multilateral Investment Guarantee Agency (MIGA).  The U.S. Overseas Private Investment Corporation (OPIC) has provided political risk investment insurance to U.S. companies in Chad.  The French investment guarantee agency Compagnie Française d’Assurance pour le Commerce Exterieur (COFACE) has also guaranteed a number of investments in Chad.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) N/A N/A 2017 $9,871  www.worldbank.org/en/country   
Foreign Direct Investment Host Country Statistical Source USG or International Statistical Source USG or international Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) N/A N/A N/A N/A BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data  
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A N/A N/A BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data  
Total inbound stock of FDI as % host GDP N/A N/A 2017 47.75% UNCTAD data available at

https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx    


Table 3: Sources and Destination of FDI

Data not available.

 

Table 4: Sources of Portfolio Investment

Data not available.

14. Contact for More Information

Economic and Commercial Officer
U.S. Embassy N’Djamena,
Rond Point Chagoua BP 413
N’Djamena  Chad
+235 2251-5017 Ext 24408
NDjamena-Commercial@state.gov

Niger

Executive Summary

Niger is eager to attract foreign investment and has taken steps to improve its business climate, including making reforms to liberalize the economy, encourage privatizations, and increase imports and exports.

In March 2016, President Issoufou was elected for a second five-year term. During his inauguration speech, he laid out his Renaissance II vision for Niger’s development, highlighting plans to further develop the nation’s mining, petroleum, and industrial sectors, while scaling up the country’s transport infrastructure. He further promised a sustained 7 percent annual GDP growth rate throughout his term in office, with it actually hovering around 5 percent. Issoufou’s vision incorporates the need for external investment and the Government of Niger (GoN) continues to seek foreign investment – U.S. or otherwise. During official visits to New York, Paris, Beijing and elsewhere since 2016, President Issoufou regularly reiterates the need for FDI. The GoN’s Chamber of Commerce has a special unit dedicated to assisting both foreign and Nigerien investors, and the GoN highlights the benefits of doing business in Niger: political stability, economic freedom, an active Chamber of Commerce, and a waiting time of no more than three days to start a business. In 2017, the GoN created the High Council for Investment, which is an organization tasked with supporting and promoting foreign direct investments in Niger. The Permanent Secretary of the High Council reports directly to the President. GoN focus areas for investment include the mining sector, infrastructure and construction (including in preparation for Niamey hosting the 2019 African Union Summit), transportation, and agribusiness.

U.S. investment in the country is very small; many U.S. firms see risk due to the country’s limited transport and energy infrastructure, the perception of political instability and terrorist threats, and a climate that is dry and very hot. Foreign investment dominates key sectors: the mining, transportation and telecommunications sectors are dominated by French firms, while Chinese investment is paramount and expanding in the oil and large-scale construction sectors. One major project that had its ground breaking in March 2019 is the Kandadji Dam, which will rely on international assistance to fund construction. Much of the country’s retail stores, particularly those related to food, dry goods and clothing are operated by Lebanese and Moroccan entrepreneurs. There are currently no major U.S. firms operating in Niger.

Table 1: Key Metrics and Rankings

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2018 114 of 180 http://www.transparency.org/research/cpi/overview 
World Bank’s Doing Business Report 2019 143 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index 2018 122 of 126 https://www.globalinnovationindex.org/analysis-indicator 
U.S. FDI in partner country ($M USD, stock positions) 2018 N/A http://www.bea.gov/international/factsheet/ 
World Bank GNI per capita 2017 $360.00 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The government of Niger is committed to attracting FDI and has repeatedly pledged to take whatever steps necessary to encourage privatization and increase trade. The country offers numerous investment opportunities, particularly in agriculture, livestock, energy, industry, infrastructure, hydrocarbons, services and mining. In the past several years, new investor codes have been implemented (the most recent being in 2014), transparency has improved, and customs and taxation procedures have been simplified. There are no laws that specifically discriminate against foreign and/or U.S. investors. The government of Niger has demonstrated a willingness to negotiate with prospective foreign investors on matters of taxation and customs.

The Investment Code adopted in 2014 guarantees the reception and protection of foreign direct investment, as well as tax advantages available for investment projects. The Investment Code allows tax exemptions for a certain period and according to the location and amount of projects to be negotiated on a case-by-case basis with the Ministry of Commerce. The code guarantees fair treatment of investors regardless of their origin. The code also offers tax incentives for sectors that the government deems to be priorities and strategic, including energy production, agriculture, fishing, social housing, health, education, crafts, hotels, transportation and the agro-food industry. The code allows free transfer of profits and free convertibility of currencies.

There are no laws or practices that discriminate against foreign investors including U.S. investors.

The High Council for Investment of Niger (HCIN), created in 2017, reports directly to the President of the Republic. HCIN is the platform of public-private dialogue with a view to increasing Foreign Direct Investments, improving Niger’s business environment, and defining private sector priorities to possible investors.

In 2018, Niger’s government reviewed the HCIN’s mission as related to international best practices on attracting FDI. Accordingly, the GoN added by Presidential Decree a Nigerien Agency for the Promotion of Private Investment and Strategic Projects (ANPIPS). This new agency reports to the HCIN and implements the lead agencies policy initiatives.

The government put in place an Institutional Framework for Improving Business Climate Indicators office (Dispositif Institutionnel d’Amélioration et de Suivi du Climat des Affaires), within the Ministry of Commerce, focused on improving business climate indicators. Its goal is to create a framework that permits the implementation of sustainable reforms.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own business enterprises. Energy, mineral resources, and national security related sectors restrict foreign ownership and control; otherwise, there are no limitations on ownership or control. In the extractive industries, any company to which the GoN grants a mining permit must give the GoN a minimum 10 percent share of the company. This law applies to both foreign and domestic operations. The GoN also reserves the right to require companies exploiting mineral resources to give the GoN up to a 33 percent stake in their Nigerien operations. Although Ministry of Planning authorization is required, foreign ownership of land is permitted. In 2015, under the auspices of the Ministry of Commerce, the GoN validated a new Competition and Consumer Protection Law, replacing a 1992 law that was never operational. Niger adheres to the Community Competition Law of the West African Economic and Monetary Union (WAEMU) and directives of the Economic Community of West African States (ECOWAS) as well as those offered to investors by the Multilateral Investment Guarantee Agency (MIGA) all of which provide benefits and guarantees to private companies.

Foreign and domestic private entities have the right to establish and own business enterprises. A legal Investment Code governs most activities except accounting, which the Organization for the Harmonization of Business Law in Africa (OHADA) governs. The Mining Code governs the mining sector and the Petroleum Code governs the petroleum sector, with regulations enforced through their respective ministries. The investment code guarantees equal treatment of investors regardless of nationality. Companies are protected against nationalization, expropriation or requisitioning throughout the national territory, except for reasons of public utility.

The state remains the owner of water resources through the Niger Water Infrastructure Corporation (SPEN), created in 2001 and is responsible for the management of the state’s hydraulic infrastructure in urban and semi-urban areas, of its development, and project management. Concessions for the use of water and for the exploitation of works and hydraulic installations may be granted to legal persons governed by private law, generally by presidential decree.

An investment screening mechanism does not exist under the Investment Code.

Other Investment Policy Reviews

In the past three years, the government has not undergone any third-party investment policy reviews through a multi-lateral organization. Neither the United Nations Conference on Trade and Development (UNCTAD), nor the Organization for Economic Cooperation and Development (OECD) has carried out a policy review for Niger.

https://docs.wto.org/dol2fe/Pages/FE_Search/ExportFile.aspx?Id=243443&filename=q/WT/TPR/S362R1-07.pdf 

http://unctad.org/en/Pages/DIAE/Investment percent20Policy percent20Reviews/Investment-Policy-Reviews.aspx  

Business Facilitation

Niger’s one-stop shop, the Maison de l’Entreprise is mandated to enhance business facilitation by mainstreaming and simplifying the procedures required to start a business within a single window registration process.

From 2016 to 2018, the cost and time needed to register businesses dropped from 100,000 CFA (about USD190) to 17,500 CFA (about USD33). Further reforms have included the creation of an e-regulations website (https://niger.eregulations.org/procedure/2/1?l=fr  ), which allows for a clear and complete registration process. Foreign companies may use this website. The website lists government agencies, with which a business must register. The business registration process is about 3 days, down from over 14 days in 2016.

Company registration can be done at the Centre de Formalités des Entreprises (CFE), at the Maison de l’Entreprise, which is designed as a one-stop-shop for registration. Applicants must file the documents with the Commercial Registry (Registre du Commerce et du Crédit Mobilier – RCCM), which has a representative at the one-stop shop.

At the same location, a company can register for taxes, obtain a tax identification number (Numéro d’Identification Fiscale – NIF), register with social security (Caisse nationale de Sécurité Sociale – CNSS), and with the employment agency (Agence Nationale pour la Promotion de l’Emploi – ANPE). Employees can be registered with social security at the same location.

At the moment of company registration, the applicant may also request for the publication of a notice of company incorporation on the Maison de l’Entreprise website: http://mde.ne/spip.php?rubrique10  . The notice of company incorporation can alternatively be published in an official newspaper (journal d’annonces légales).

Outward Investment

The government does not promote outward investment. The government’s policy objectives, as specified in the second Nigerien Renaissance Program (section 1.2), is the development of international markets, especially that of ECOWAS, for Nigerien exports rather than investment.

The GON does not restrict domestic investors from investing abroad.  

2. Bilateral Investment Agreements and Taxation Treaties

Niger currently has active Bilateral Investment Treaties (BITs) with Germany and Switzerland. BITs were signed with Algeria, Tunisia and Egypt, but are not in force. Niger is eligible to export virtually all marketable goods duty-free in to the U.S. market via the African Growth and Opportunity Act (AGOA) system of trade preferences.

Niger does not have a bilateral taxation treaty with the United States. However, the United States signed a Trade and Investment Framework Agreement (TIFA) with WAEMU signed in 2014, which includes Niger. There is no ongoing systemic tax dispute between the government and foreign investors.

3. Legal Regime

Transparency of the Regulatory System

The GoN possesses transparent policies and requisite laws to foster competition on a non-discriminatory basis, but does not enforce them equally, in large part due to corruption and weak governmental systems. Legal, regulatory, and accounting systems are generally transparent and consistent with international norms. The Legal Regime – related to the Investment Code, Labor Code and Commercial Acts – applies the provisions of the Organization for the Harmonization of Business Law in Africa (OHADA). It also offers free access to public procurement and with a moderate transparency in the procedures for awarding contract.

Niger does not have any regulatory processes managed by nongovernmental organizations or private sector associations. A company in Niger must be entered in the Register of Companies, must obtain a Tax Identification Number (TIN), be registered with the National Social Security Fund (CNSS), and with the National Employment Promotion Agency (ANPE).

There, however, is a large informal sector that does not submit to any of the legal provisions and is not formally regulated.

Rule-making and regulatory authorities exist in telecommunication, public procurement and energy, all of which are relevant for foreign businesses, and are exercised at the national level. The law No 2015-58 established the Energy Sector Regulatory Agency, an independent administrative authority, to regulate the energy sector at the national level, but effectively only in major cities. The December 2012 law No 2012-70 created the Telecommunications and Post Office Regulatory Authority (ARTP). ARTP regulates all aspects of telecommunications operators.Legal, regulatory, and accounting systems are generally transparent and consistent with international norms. The Legal Regime – related to the Investment Code, Mining Code, Petroleum Code, Labor Code and Commercial Acts – applies the provisions of the Organization for the Harmonization of Business Law in Africa OHADA. It also offers free access to public procurement and transparency in the procedures for awarding contracts.

GoN officials have confirmed their intent to comply with international norms in its legal, regulatory, and accounting systems, but frequently fall short. Clear procedures are frequently not available. Draft bills are not always available for public comment, although some organizations, such as the Chamber of Commerce, are invited to offer suggestions during the drafting process.

Niger does not have a centralized online location where key regulatory actions are published, but does have a Directorate of National Archives where Key regulatory actions are kept in print; this direction is under the Ministry Secretary of Government.

Foreign and national investors, however, can find detailed information on administrative procedures applicable to investment at the following site: http://niger.eregulations.org/  . The site includes information on income generating operations including the number of steps, name and contact details of the entities and persons in charge of procedures, required documents and conditions, costs, processing time, and legal basis justifying the procedures.

A General Inspectorate of Administrative Governance and the Regional Directorates of Archives are in place to oversee administrative processes. Their efforts are reinforced by incentives for state employees, unannounced inspections in public administrations, and an introduction of a sign-in system and exchange meetings.

Niger does not have a centralized online location where key regulatory actions are published, but does have a Directorate of National Archives where Key regulatory actions are kept in print; this direction is under the Ministry Secretary of Government.

No major regulatory system and/or enforcement reforms were announced in 2018.

Regulations are developed via a system of ministerial collaborations and discussions, consultation with the State Council, selection of the text and passage by the Council of Ministers. This is followed by discussions in Parliament, approval by the Constitutional Council and finally approved by the President for publication and distribution to interested stakeholders.

Based on the Constitution of 2011, the regulatory power belongs to the President of the Republic and the Prime Minister who can issue regulations for the whole of the national territory. Other administrative authorities also have regulatory power, such as ministers, governors, or prefects and mayors, who have the power of enforcement at the local level.

Ministries or regulatory agencies do not conduct impact assessments of proposed regulations. However, ministries or regulatory agencies solicit comments on proposed regulations from the general public through public meetings and targeted outreach to stakeholders, such as business associations or other groups. Public comments are generally not published.

International Regulatory Considerations

Niger is a part of the Economic Community of West African States (ECOWAS), a 15-member West African trade block. National policy generally adheres to ECOWAS guidelines concerning business regulations.

Niger is a member of the U.N. Conference on Trade and Development’s international network of transparent investment procedures: http://niger.eregulations.org/   (French language only).

Niger is a member of the WTO, but as a lower income member, is exempt from Trade-Related Investment Measures (TRIMs) obligations. The GoN does not notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT). Niger ratified a Trade Facilitation Agreement (TFA) in August 2015. The country has reported some progress on implementing the TFA requirements.

Legal System and Judicial Independence

Niger’s legal system is a legacy of the French colonial system. The legal infrastructure is insufficient, making it difficult to use the courts to enforce ownership of property or contracts. While Niger’s laws protect property and commercial rights, the administration of justice can be slow and unequal.

Niger has a written commercial law that is heavily based on the Organization for the Harmonization of Business Law in Africa (OHADA). Niger has been a member of OHADA since 1995. OHADA aims to harmonize business laws in 16 African countries by adopting common rules adapted to their economies, setting up appropriate judicial procedures, and encouraging arbitration for the settlement of contractual disputes. OHADA regulations on business and commercial law include definition and classification of legal persons engaged in trade, procedures for credit and recovery of debts, means of enforcement, bankruptcy, receivership, and arbitration. As of 2015, Niger established Commercial Court.

In 2015, Niger set up a Commercial Court in Niamey. No statistics are available on the activities of the Commercial Court.

Article 116 of the constitution clearly states that the judicial system is independent of the executive and legislative branches. However, the personnel management process for assignments and promotions is through politically appointed personnel in the Ministry of Justice, seriously weakening the independence of the judiciary and raising questions about the fairness and reliability of the judicial process.

Regulations or enforcement actions are appealable and adjudicated in the court system. However, it is extremely rare for individuals or corporations to challenge government regulations or enforcement actions in court due to costs and administrative obstacles.

For example, in 2018, the government initiated tax cases against the telecommunication companies of Orange, Airtel, Moov and Nigertelecom (the state-owned entreprise). Moov, Nigertelecom and Airtel negotiated a settlement. Orange, a French owned multi-national corporation that provides cell phone and Internet service in Niger challenged the government order through the commerce tribunal and later in the constitutional court. To begin the process, Orange had to submit 75 percent of the claimed tax discrepancy. As part of the Constitutional Court’s determination on one aspect of the case, it determined that if an appeal is successful the government must repay the funds, thus the 75 percent charge is not an obstacle to gaining access to the courts.

Laws and Regulations on Foreign Direct Investment

Niger offers guarantees to foreign direct investors pertaining to security of capital and investment, compensation for expropriation, and equality of treatment. Foreign investors may be permitted to transfer income derived from invested capital and from liquidated investments, provided the original investment is made in convertible currencies.

Law 2015-08 from 2015 established a specialized Commercial Court in Niamey. This is a mixed court with professional magistrates, who are lawyers by training, who work in tandem with lay-judges, and who generally come from the commercial sector.  The concept was to have commercial disputes resolved by a panel of judges with legal training, combined with judges who have experience in the commercial sector. The Commercial Court has 26 judges, who make up five chambers. Unlike U.S. trial courts, where cases are handled by a single judge, in Niger, cases are adjudicated by a panel of judges. After passage of the law in 2015, the Commercial Court began operations in 2016. Judicial decisions that have come out in the past years can be found on the Commerce tribunal of Niamey website: http://www.tribunalcommerceniamey.org/index.php  .

Niger does not have a dedicated one-stop shop website for investment, but the Chamber of Commerce and Industry houses a specialized institution, known as the Investment Promotion Center (CPI) which supports domestic and foreign investors in terms of business creation, extension and rehabilitation.

Competition and Anti-Trust Laws

Under the auspices of the Ministry of Trade, the GoN in 2015 validated a new Competition and Consumer Protection Law, replacing a 1992 law that was never fully operational. Niger also adheres to the Community Competition Law of the West African Economic and Monetary Union (WAEMU).

Expropriation and Compensation

The Investment Code guarantees that no business will be subject to nationalization or expropriation except when deemed “in the public interest” as prescribed by the law. The code requires that the government compensate any expropriated business with just and equitable payment. There have been a number of expropriations of commercial and personal property, most of which were not conducted in a manner consistent with Nigerien law requiring “just and prior compensation.” It is in fact rare for property owners to be compensated by the government after expropriations of property.

With the planned construction of the Kandaji Dam in 2019, the government offered the resettlement of 38,000 individuals and additional animals to new sites. The government created an agency to conduct all resettlement related activities upstream and downstream of the dam construction. The agency conducted a census to determine who would be impacted, and public consultations to meet the populations and collect their complaints at each step of the process. The process is ongoing, with some individuals expressing concern about the value of compensation and the ability to farm where they are being resettled.

In cases of expropriation carried out by the GoN, claimants and community leaders have alleged a lack of due process. These complaints are currently limited to community forums and press coverage. Many of the families impacted lack the knowledge and ability to exercise their rights under the law. High rates of illiteracy, complexity of the legal system, and lack of resources to retain competent legal counsel present insurmountable barriers to legal remedies for people whose property has been expropriated. Even in situations where educated and wealthy business owners have had their property expropriated, legal challenges to expropriation are not lodged.

Dispute Settlement

ICSID Convention and New York Convention

Niger is a contracting state of both the ICSID Convention and the New York Convention of 1958.

There is no domestic legislation providing for enforcement of awards under the 1958 New York Convention and/or under the ICSID Convention.

Investor-State Dispute Settlement

The Investment Code offers the possibility for foreign nationals to seek remedy through the International Center for the Settlement of Investment Disputes.

Niger does not have a BIT or FTA with the United States that would provide dispute settlement processes.

Over the past 10 years, there were no investment disputes that involved a U.S. person.

Local courts are generally reluctant to recognize foreign arbitral awards issued against the GoN.

Niger does not have a record of extrajudicial actions against foreign investors.

International Commercial Arbitration and Foreign Courts

Niger has an operational center for mediation and arbitration of business disputes. The center’s stated aim is to maintain investor confidence by eliminating long and expensive procedures traditionally involved in the resolution of business disputes.

The Investment Code provides for settlement of disputes by arbitration or by recourse to the World Bank’s International Center for Settlement of Disputes on Investment. However, investment dispute mechanisms in contracts are not always respected and exercising due diligence is extremely important.

There was no publicly available information in 2018 on foreign arbitral award enforcement in Niger.

Procedures are in place but are often not adhered to because of a lack of resources and corruption in the judicial system. The Investment Code offers the possibility for foreign nationals to seek remedy through the International Center for the Settlement of Investment Disputes.

Bankruptcy Regulations

Niger has laws related to insolvency and/or bankruptcy. Creditors have the right to object to decisions accepting or rejecting a creditor’s claims, and may vote on debtors’ bankruptcy reorganization plans. However, the creditors’ rights are limited: creditors do not have the right to receive from a reorganized firm as much as they may have received from one that had been liquidated. Likewise, the law does not require that creditors be consulted on matters pertaining to an insolvency framework following the declaration of bankruptcy. Bankruptcy is not criminalized.

According to data collected by the World Bank’s Doing Business survey, resolving insolvency takes five years on average and costs 18 percent of the debtor’s total assets. Globally, Niger stands at 114 in the 2018 ranking of 190 economies on the ease of resolving insolvency. Niger strength of insolvency framework index (0–16) is 9.

4. Industrial Policies

Investment Incentives

Niger offers incentives that are dependent on the size of the investment and number of jobs that will be created. The Investment Code offers VAT-inclusive tax exemptions depending on the size of the business. Potential tax exemptions include start-up costs, property, industrial and commercial profits, services and materials required for production, and energy use. Exemption periods range from ten to fifteen years and include waivers of duties and license fees. There are no restrictions on foreign companies opening a local office in Niger, though they must obtain a business certificate from the Ministry of Trade.

The Investment Code has established three different tiers of incentives for investors, based on minimum investment amounts, listed below:

  • Tier 1: Promotional tier, for investments of 25 million CFA francs (about USD40,000) or above.
  • Tier 2: Priority tier, for investments of 50 million CFA francs (about USD81,000) or above.
  • Tier 3: Conventional tier, for large businesses with investments of at least 2 billion CFA (about USD3.25 million)

During the investment phase, the approved investments are exempt from import duties and taxes on material and equipment needed for the project that are not available locally. The advantages provided during the operational phase include exemption from profit tax (35 percent). Apart from these regimes, two additional incentive schemes are part of the investment code. These apply to companies operating in remote regions, energy, agro-industry, and low-cost housing sectors.

Foreign Trade Zones/Free Ports/Trade Facilitation

In 2016, the GON approved a new Customs Code to replace the current one which had been in place for 55 years. The new code is supposed to reflect the aspirations of actors within the international supply chain and is in conformity with the requirements of Community Customs Codes of the West African Economic and Monetary Union (WAEMU) and the Economic Community of West African States (ECOWAS).

In 2017, the GON modernized the customs procedures with the electronic payment tax which is efficient in Niamey and will be expanded to regions of Niger in 2018. In 2016, internal customs procedures migrated to SYDONIAWORLD, a system designed to improve efficiency and permit centralized oversight and control. In 2015, Niger was the first Least Developed Country (LDC) to ratify the World Trade Organization’s Trade Facilitation Agreement (TFA). The country seeks to implement the trade policy of the West African Economic and Monetary Union (WAEMU) and has joined the Generalized System of Preferences (GSP) of the European Union.

Niger is landlocked, has no free trade zones, and relies on the ports of Cotonou in Benin and Lomé in Togo as its primary seaports. Importers also use the ports of Tema, in Ghana and sometimes Lagos, Nigeria. Delivery can take months due to delays at borders and internal control points along the route. The relatively low number of commercial flights to Niger means that transport costs are high. The country’s main trade partners are Nigeria, the European Union, the United States, China, Cote d’Ivoire, and Algeria.

In 2018, Niger has deposited the instrument of ratification of the African Continental Free Trade Area (ZLECAF) draft flagship of AU Agenda 2063. The treaty is supposed to come into force in 2019 with its ratification by a corium of 22 signatory countries.

Performance and Data Localization Requirements

While Niger does require that companies attempt to hire a Nigerien before applying for a work visa for a foreign national, in practice the rule is not enforced. In addition, it allows for a company to appeal to the Ministry of Labor, if a foreigner is refused a work visa.

There are also no localization requirements for senior management or boards of directors.

There are no excessively onerous visa, residence, work permit, or similar requirements inhibiting mobility of foreign investors and their employees.

In principal, there are no government/authority imposed conditions restricting investments beyond limited sectors for national security as cited in the section on “Limits on Foreign Control.”

There are no forced localization policies requiring investors to use domestic goods in content.

Performance requirements are not imposed as a condition for establishing, maintaining, or expanding foreign direct investments.

Niger has no regulations regarding data storage. Niger does not require foreign IT providers to turn over source code and/or provide access to surveillance.

5. Protection of Property Rights

Real Property

Interests in property are enforced when the landholder is known, but property disputes are common, particularly involving community-owned land or land in rural areas where customary land titles are still common. Mortgages are relatively new instruments; Bank Atlantique introduced the first mortgages in 2014. The bank retains the title to the property until the loan is repaid.

Foreign ownership of land is permitted but requires authorization from the Ministry of Planning. The 2018 Finance Law changed tax policies on foreign ownership, but was not yet in force at year’s end.

Traditional use rights are at the core of land disputes between Nigerien farmers and traditional nomadic herders. According to data collected by the World Bank’s 2019 Doing Business survey conducted in 2018, registering property in Niger requires four procedures, takes 13 days and costs 7.6 percent of the property value. Globally, Niger stands at 111 in the ranking of 190 economies on the ease of registering property. In 2014, Niger made transferring property easier by reducing registration fees.

Intellectual Property Rights

As a signatory to the 1983 Paris Convention for the Protection of Industrial Property, Niger provides national protection under Nigerien patent and trademark laws to foreign businesses. Niger is also a member of the World Intellectual Property Organization (WIPO) and a signatory to the Universal Copyright Convention.

No new IP laws or regulations have been enacted in the past year

Niger does not regularly track and report on seizures of counterfeit goods. There is no specific information about working conditions in the production or sale of counterfeit goods. While there have been some cases of seizure, government statistics are not available.

Niger is not included in the United States Trade Representative (USTR)  Special 301 Report or the Notorious Markets List.

6. Financial Sector

Capital Markets and Portfolio Investment

Niger’s government welcomes foreign portfolio investment where possible.

Niger’s capital markets are extremely underdeveloped and there is no stock market. Although an effective regulatory system exists, and policies in fact encourage portfolio investment, there is little market liquidity and hence little opportunity for such investment. The agency UMOA-Titres (AUT), a regional agency to support public securities issuance and management in the WAEMU (bonds market), is dedicated to helping member states use capital markets to raise the resources they need to fund their economic development policies at reasonable cost.

There are no limits on the free flow of financial resources.

The government works closely with the IMF to ensure that payments and transfers overseas occur without undue restrictions. Credit is allocated on market terms and foreigners do not face discrimination.

Credit is allocated on market terms through large corporations. Although foreign investors are generally able to get credit on the local market, limited domestic availability tends to drive investors to international markets. To access a variety of credit instruments, the private sector often looks to multinational institutions in Niger or international sources for credit. Private actors in the agriculture, livestock, forestry, and fisheries sectors (which account for more than 40 percent of GDP) receive less than one percent of total bank credit.

Money and Banking System

Less than three percent of Nigeriens have a bank account and the debt rate of the financial sector, measured by the ratio money supply, is at 24.1 percent in 2012 (the average for the sub-region is 32 percent).The banking sector in Niger is generally healthy and well capitalized.

As of December 31, 2017, the resources mobilized by the banking system amounted to 1096.5 billion CFA (1.9 billion USD), an increase of 63.1 billion cfaf (112.5 million USD) or 6.1 percent compared to the same period of 2016. This evolution mainly explained by the increase in net capital of banks by 34.9 billion cfaf (62.3 million USD) or 27.3 percent and the increase of borrowing deposits by 16.3 billion CFA (29 million USD) or 2.0 percent. Demand deposits represent more than half of the total resources of the sector throughout the period under review. Foreign banks control about 80 percent of the sector’s assets, with SONIBANK, BIA Niger, Ecobank and Bank of Africa (BOA) being the largest banks operating in the country.

The Central Bank of West African States governs Niger’s banking institutions and sets minimum reserve requirements through its national Central Bank representation.

There are no restrictions on a foreigner’s ability to establish a bank account, and foreign banks and their subsidiaries operate within the economy without undue restrictions. Niger is a part of the West African Economic and Monetary Union (WAEMU), which utilizes the CFA, pegged to the Euro at 655.61 CFA per euro.

Foreign Exchange and Remittances

Foreign Exchange

There are no restrictions or limitations placed on foreign investors in converting, transferring, or repatriating funds associated with an investment, including remittances.

Funds are freely convertible into any world currency. However, the government must approve currency conversions above 2 million CFA (approximately 3,413 USD).

The exchange rate is determined via the euro’s fluctuations on the international currency market. The CFA is pegged to the euro.

Remittance Policies

Niger’s Investment Code offers the possibility to transfer income of any kind, including capital investment and the proceeds of investment liquidation, regardless of the destination.

There are no limitations or waiting periods on remittances, though the Ministry of Finance must approve currency conversions above 2 million CFA (approximately 3,250 USD).

Sovereign Wealth Funds

Niger does not maintain a Sovereign Wealth Fund (SWF), and does not subscribe to the Santiago Principles. The government has plans for a build-up of reserves at the Central Bank of West African States (BCEAO) using oil revenues.

7. State-Owned Enterprises

State-Owned Enterprises (SOEs) in Niger are defined as companies in which the GoN is the majority stakeholder. They play a major role in Niger’s economy and dominate or heavily influence a number of key sectors, including energy (NIGELEC), telecommunications (Niger Telecom), and water resources (SEEN and SPEN), construction and retail markets (SOCOGEM); petroleum products distribution (SONIDEP); mining (SOPAMIN, SOMAIR, COMINAK, SONICHAR); oil refinery (SORAZ), textile (SOTEX) and hotels (SPEG).

SOEs do not receive non-market based advantages from the host government. According to the 2016 Public Expenditures and Financial Accountability (PEFA) draft document, there are eight wholly-owned SOEs, and six SOEs majority-owned by the state. State-Owned enterprises are answerable to their supervisory ministry and send certified accounting records to the supervisory ministries and to the Public Enterprises and State Portfolio Directorate (DEP/ PE). SOE record-keeping is expected to comply with SYSCOHADA accounting system standards.

There are no laws or rules that offer preferential treatment to SOEs. They are subject to the same tax rules and burdens (although many remain in tax arrears) as the private sector, and are subject to budget constraints. Niger is not a member of the OECD and does not adhere to its guidelines.

Privatization Program

Most sectors of the economy, with the exception of SOEs, have been privatized. The state-owned oil-distribution company (SONIDEP) no longer has a monopoly over oil exportation; exportation authority is now equally shared between SONIDEP and the Chinese National Petroleum Corporation (CNPC). Likewise, although the national electricity company (NIGELEC) continues to hold a virtual monopoly on electricity distribution, steps were taken in 2016 to allow third party access to the country’s electricity grid. This should pave the way for future privatization. Competition in the mobile telecommunication sector forced the GoN to combine state-owned fixed line telecommunications provider SONITEL with the state-owned mobile provider Sahelcom to form a new parastatal, known as Niger Telecom. Although the state continues to hold a monopoly on fixed-line telephony, mobile communications is open to competition.

Foreign investors are welcome to participate in the country’s privatization program. Privatization operations are conducted under the technical direction of the ministry that currently controls the company. After a detailed analysis of business operations conducted by an internationally known independent audit firm, the government issues a call for bids.

When privatization occurs, there is a process for public bidding. Depending on the ministry responsible, there may be no electronic bidding. Rather tenders may be announced only in local media.

8. Responsible Business Conduct

There is a general awareness of expectations regarding RBC, as well as business’ obligations to proactively conduct due diligence and do no harm.

For example, in the extractive industries sector, the GoN has focused on ensuring existing obligations are met and that communities benefit from investments. Nigerien law states that 15 percent of revenues derived from extractive industries must be returned to the municipality affected by the project. However, such payments are difficult to track and the GoN is not active or engaged in follow-up.

Ordinance No. 97-001 of 10 January 1997 on the Institutionalization of Environmental Impact Assessments, Article 4 of which states: “Activities, projects or programs of development which, by the importance of their size or their impact on the natural and human environments, may affect the latter are subject to prior authorization from the Minister of the Environment. This authorization is granted on the basis of an assessment of the consequences of the project activities or the program updated by an environmental impact study prepared by the promoter.”

In 2018, Niger began the process to return in the Extractive Industry Transparency Initiative (EITI), which ensures transparency and accountability on how a country’s natural resources are governed. RBCs are also incorporated into Niger’s Mining Code.

There have been no high-profile instances of private sector impact on human rights in the recent past.

The GoN attempts to enforce domestic laws related to human rights, labor rights, consumer protection, and environmental protections. However, a lack of resources makes such enforcement difficult and only somewhat effective.

The government has not put in place corporate governance, accounting, and executive compensation standards.

There is limited NGO focus on responsible business practices. Those looking at transparency in contracts and business practices are generally able to work freely regarding engagement with businesses.

Niger is not a member of the OECD and does not adhere to OECD guidelines, including those related to supply chains of minerals from conflict-affected and high-risk areas. There are no Nigerien-owned companies that deal exclusively with minerals, including those that may originate from conflict-affected areas.

The GoN was a member of EITI since 2007, but the country withdrew following the Board’s decision in October 2017 to suspend Niger on the basis of inadequate progress. In 2018, the government began the process to rejoin EITI and reformulated its EITI offices to meet the organization’s standards. The constitution mandates full disclosure of all payments from foreign government stemming from mining operations, as well as publication of all new exploration and exploitation contracts in the mining sector. However, in practice, payments from foreign countries to GoN officials have at times been controversial due to non-reporting of such payments.

9. Corruption

The constitution, adopted in 2010, contains provisions for greater transparency in government reporting of revenues from the extractive industries, as well as the declaration of personal assets by government officials, including the President. Since his re-election in February 2016, President Issoufou has made combatting corruption within the GON one of the focus points of his presidency.

The High Authority for the Fight against Corruption and Related Offenses (HALCIA) has the authority to investigate corruption charges within all government agencies. HALCIA is limited by a lack of resources and a regulatory process that is still developing. Despite the limitations, HALCIA was able to conduct a number of  successful investigations during 2018.

Legislation on Prevention and Repression of Corruption was passed into law in January 2018; a strategy for implementation was still pending at year’s end.

Laws related to anti-corruption measures are in place and apply to government officials, their family members, and all political parties.

Niger has laws in place designed to counter conflict of interest in awarding contracts and/or government procurements. Bribery of public officials by private companies is officially illegal, but occurs regularly despite GON denunciations of such conduct.

Law number 2017-10 of March 31, 2017, prohibits bribery of public officials, international administrators, and foreign agents, bribes within the private sector, illicit enrichment and abuse of function by public authorities. The High Authority Against Corruption and Relating Crimes (HALCIA) is further tasked with working with private companies on internal anti-corruption efforts.

Bribery of public officials occurs on a regular basis. Though most companies officially discourage such behavior, internal controls are rare except among the largest (mostly foreign) enterprises.

The government/authority encourages or requires private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials. Some private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials.

Niger has joined several international and regional anti-corruption initiatives including the UN Convention against Corruption in 2008, the African Union Convention on Preventing and Combating Corruption in 2005, and the Protocol on Combating Corruption of the economic community of the states of West Africa (ECOWAS) in 2006. Niger is also member state of the GIABA, which is an institution of the Economic Community of West African States (ECOWAS) responsible for facilitating the adoption and implementation of Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) in West Africa.

The government does not provide any additional protections to NGOs involved in investigating corruption.

Niger is ranked 114 out of 180 in Transparency International’s 2018 Corruption Perceptions Index; compared to last year the country lost 2 points in the ranking but gain 1 point in the score index. However, despite recent fluctuations there has been improvement since 2011 in the ranking, when the country was ranked at 134, but the score index has not change significantly over that period.

As of April 2018, there are no U.S. firms invested in Niger, for reasons which include – but are not limited to – the perception of corruption. Cases of suspected corruption occasionally appear in media reports concerning GON procurement, the award of licenses and concessions and customs.

Corruption hinders economic growth and discourages direct investment.

In a recent study conducted by the Nigerien High Authority to Combat Corruption and Related Infractions (HALCIA), it stated that the public sector is the most corrupted, then political organizations, civil society organizations, then traditional chiefs and the private sector is the least corrupted. In the public sector, the most corrupted is customs.

Resources to Report Corruption

Gousmane Abdourahamane
President
High Authority to Combat Corruption and Related Infractions (HALCIA)
BP 550 Niamey – Niger
(227) 20 35 20 96
issoufbour@gmail.com

Wada Maman
President
Transparency International Niger (TI-N)
BP 10423, Niamey – Niger
(227) 20 32 00 96 / 96 28 79 69
anlcti@yahoo.fr

10. Political and Security Environment

Niger has been politically stable since 2010, when the most recent of Niger’s coup d’états (there have been four since 1990) concluded within less than a year in a return to democratic governance. The most recent general elections were held in in February 2016, with a presidential run-off in March 2016. President Issoufou Mahamadou was re-elected for a second mandate by a considerable majority. Tensions over the preparation of the elections and election logistics widened divisions between opposition activists and supporters of the incumbent president and his ruling Nigerien Party for Democracy and Socialism (PNDS) and coalition. However, the election proceeded without violence.

Although Niger’s politics are often contentious and antagonistic, political violence is rare. Most parties agree that national security and peaceful cohabitation among Niger’s ethnicities are the government’s principal priority. However, protests and strikes about non-payment of salaries for public employees, lack of funding for education, and general dissatisfaction with social conditions remain a concern.

Public protest over issues like poverty, corruption, and unemployment can also sometimes turn violent. In October 2017, police arrested several protesters engaged in burning tires and vandalizing property in protest of a proposed finance law. After the passage of the law, protests continued on a bi-weekly and then weekly basis through at least April 2018. In March and April 2018, police began to intervene and several people were arrested, including important civil society leaders. By the end of 2018, the number of protests dropped significantly and remained peaceful throughout the remaining of the reporting period.

Nigerien students regularly participate in peaceful protests, and on occasion, these become violent. In April 2017, one student in Niamey was killed at a protest, hit in the head by a teargas canister.

Nigeriens are generally welcoming to foreigners and foreign investment is welcomed by all elements of society. One rare exception to acceptance of foreigners occurred in January 2015 after President Issoufou was perceived to be too forgiving of anti-Muslim satire that had been published on the cover of the French magazine, Charlie Hebdo. In three days of riots throughout the country, at least ten people killed and dozens of Christian churches, market stalls, French-owned businesses, some political-party linked buildings, two private homes, and a Christian school were attacked.

Niger experiences security threats on three distinct border areas. Niger is a founding member of the G5 Sahel fighting terrorism in the Sahel while integrating the poverty reduction dimension to mitigate the effects of youth underemployment and violent extremism. The collapse of the Libyan state to the north has resulted in a flow of weapons and extremists throughout the Sahel region. Boko Haram and ISIS-West Africa terrorists regularly launch attacks in the Diffa Region in Niger’s southeast, leading to numerous civilian and security forces deaths. Jama’at al Nusrat al-Islam wa al-Muslimin (JNIM), which is a loose affiliation of al-Qaeda in the Islamic Maghreb (AQIM), the Macina Liberation Front (MLF), Ansar Dine, and al-Mourabitoun; along with ISIS-Greater Sahara (ISIS-GS), threaten Niger’s northern and northwestern borders. Terrorists regularly crossed the Mali border to attack civilian and security sites in the Tillaberi and Tahoua regions. A German aid worker was kidnapped in Tillaberi in April 2018, an American aid worker was kidnapped in Tahoua in October 2016, and an Italian Pastor was kidnapped in Torodi in September 2018.. So far, more than 15 out of the 266 communes in Niger are in a state of emergency. The State Department’s Travel Advisory for Niger from April 2017 advises travels to be aware that violent crimes including robbery are common and terrorism is a threat.

11. Labor Policies and Practices

Niger has an abundance of available labor, primarily unskilled. One of the most pressing concerns within the Ministry of Labor is the lack of jobs available to recent high school and university graduates, who often face long spells of unemployment or underemployment. There is very high unemployment among young workers, many of whom are uneducated and illiterate. Migration from the rural areas to the cities is a problem, as the majority of recently-arrived workers are unskilled. Such workers most often turn up in the informal economy. While informal activities are generally not reported, Ministry of Finance estimates from 2012 stated that between 80 and 90 percent of the non-agricultural workforce is in the informal economy. Niger, as part of the Economic Community of West African States (ECOWAS) must accept laborers from neighboring ECOWAS states. While such laborers do exist within the Nigerien economy, this phenomenon is not common enough to cause friction and/or widespread resentment among local laborers.

Given both the need for foreign direct investment and the abundance of available labor within the country, labor laws are mostly modified, rather than waived to accommodate foreign firms. Many large foreign firms, including Orano (previously Areva), Orange and CNPC, are allowed to bring workers into the country provided that Nigerien laborers make up a substantial percentage of the overall workforce. As a member of ECOWAS, Niger routinely accepts labor, as obligated, from other member states.

According to Article 9 of Niger’s 2010 Labor Code, firms must hire Nigerien nationals via direct recruitment or through public or private hiring agencies.

There are no restrictions on employers regarding hiring or laying off employees to respond to fluctuating market conditions. However, before making the decision, the employer must consult with the Inspector of Labor. An employee laid off for economic reasons receives, in addition to severance pay, a non-taxable allowance paid by the employer equal to one month’s gross salary.

Given both the need for foreign direct investment and the abundance of available labor within the country, labor laws are mostly modified, rather than waived to accommodate foreign firms. Currently there are no special economic zones in Niger.

Freedom of association and the right to collective bargaining are generally respected and workers routinely exercise them. Unions have exercised the right to bargain collectively for wages above the legal minimum in the formal sectors and to improve working conditions.

Niger’s labor code, adopted in September 2012 and its decree N° 2017-682/PRN/MET/PS of august 10, 2017, regulates employment, vocational training, remuneration, collective bargaining, labor representation, and labor disputes. The code also establishes the Consultative Commission for Labor and Employment, the Labor Court and regulates the Technical Consultative Committee for Occupational Safety and Health. The Labor Code lays out clear procedures for dispute resolution mechanisms in its Title VII on labor disputes. Labor hearings are public except at the reconciliation stage.

Although strikes are routine and common, most stem from non-payment of salaries and unsatisfactory working conditions existing within the public sector. Such strikes do not pose an investment risk.

Although Niger has ratified the International Labor Organization (ILO) Convention 182 on the Worst Forms of Child Labor and the ILO Convention 138 on the minimum age for employment, traditional caste-based servitude is still practiced in some parts of the country. In addition, child labor remains a problem particularly in the agricultural sector and the commercial and artisanal mining sectors. Gender discrimination is quite common within all workplaces.

There were no labor related laws or regulation enacted during the last year. The Labor Code adopted in September 2012 and its decree N° 2017-682/PRN/MET/PS of august 10, 2017 with regulatory part of the Labor Code remains the most recent legislation related to labor.

12. OPIC and Other Investment Insurance Programs

Interest for OPIC programs exist in a broad swath of possible investments including, pipeline construction, airport reconstruction, mining sector, agro-food and livestock processing plants, clothing and shoe industries, and production plant for electric cables and batteries.

Niger is eligible for OPIC coverage and signed with USA a bilateral agreement on investment guaranties, which entered in force on April 26, 1962, but to date, OPIC has not been involved in any bilateral investments in Niger.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2017 $8,079 2017 $8,119.7 www.worldbank.org/en/country   
Foreign Direct Investment Host Country Statistical Source* USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) N/A N/A N/A N/A BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data  
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A N/A N/A BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data  
Total inbound stock of FDI as % host GDP N/A N/A 2017 83% UNCTAD data available at

https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx   

* Source for Host Country Data:http://www.stat-niger.org/statistique/file/Annuaires_Statistiques/Annuaire_Statistique_2013-2017.pdf 


Table 3: Sources and Destination of FDI

Data not available.

Table 4: Sources of Portfolio Investment

Data not available.

14. Contact for More Information

Carl-Heinz Jason Wemhoener-Cuite
Economic Officer
US Embassy, Niamey
+227 20-72-26-61/2/3 extension 4229
+227 99-49-90-40
Wemhoener-CuiteCJ@State.gov

Boubacar Gaoh Mohamed
Economic and Commercial Assistant
BP 11201, Niamey, Niger
+227-20-72-26-61 extension 4443
+227 99-49-90-76
BoubacarGaohM@State.gov

Investment Climate Statements
Edit Your Custom Report

01 / Select A Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future