Policies Towards Foreign Direct Investment

In his policy statement delivered on February 18, 2019 at the National Assembly, the newly appointed Prime minister Christophe Dabire focused on the resolution of Burkina Faso’s economic difficulties and offered six measures to boost economic activity and improve the business and investment climate.  He also promised that the government would strengthen reforms, including those contained in the minimum matrix of business climate reform, in order to improve Burkina Faso’s Doing Business ranking and foster the development of the private sector.

The World Bank’s 2019 Doing Business Report (DB/2019) announced a slight drop for Burkina Faso in its ranking for “ease of doing business for small and medium-sized businesses” from 148th place out of 190 in 2018 to 151st in 2019.

The government of Burkina Faso adopted the National Program for Economic and Social Development (PNDES) with the aim to structurally transform the Burkinabe economy in order to generate strong, sustainable, resilient, and inclusive growth and thus create decent jobs for all and improve social well-being.  The total amount of funding required for the implementation of the PNDES is CFAF 15,395.4 billion, or about USD 27 billion.  Of this sum, it is expected that 63.8 percent (CFAF 9,825.2 billion or USD 17 billion) of the amount be mobilized by Burkina’s own resources, namely the mobilization of taxes. The other 36.2 percent (CFAF 5,570.2 billion or USD 10 billion) represents the need for funding from Public Private Partnership (PPP) projects, the mobilization of funds from the Burkinabe diaspora and technical and financial partners, and  voluntary contributions.

Article 8 of the investment code stipulates there is to be no discrimination against US foreign investors.  However, in order for any foreign investor to benefit from the exemptions provided for by the investment code, they are required to submit a request to the General Directorate for the Promotion of the Private Sector.

Limits on Foreign Control and Right to Private Ownership and Establishment

Burkina Faso is a member of the Organization for the Harmonization of Corporate Law in Africa (OHCLA).  All the Uniform Acts enacted by this organization are applicable in the country. Regarding business structures, OHCLA allows most forms of companies admissible under French business law, including: public corporations, limited liability companies, limited share partnerships, sole proprietorships, subsidiaries, and affiliates of foreign enterprises.  With each scheme, there is a corresponding set of related preferences, duty exceptions, corporate tax exemptions, and operation-related taxes.

From 1995 to 2018, Law 062-95, which was amended several times, governed investments in Burkina Faso.  However, in order to adapt this code to the new exigencies of the world economy and to respond to the fierce competition between states to attract foreign investment, the National Assembly adopted a new Investment Code by Law 038 on October 30, 2018.  It replaces Law 062-95 of December 14, 1995, which had several shortcomings, including the non-coverage of investments in renewable energies and hydraulics.  According to Article 5 of the Investment Code, certain sectors of activity may be subject to restrictions on foreign direct investment. Foreign companies wishing to invest in these sectors must follow a specific procedure specified by decree.  Burkina Faso has not established a procedure to scrutinize foreign direct investment.  Under the investment code, all personal and legal entities lawfully established in Burkina Faso, both local and foreign, are entitled to the following rights: fixed property; forest and industrial rights; concessions; administrative authorizations; access to permits; and participation in government procurement process.

The investment code establishes a special tax and customs regime for investment agreements signed by the state with large investors (between 100,000,000 FCFA and 1,000,000,000 FCFA).  This scheme provides significant tax benefits.  U.S. investors are not specifically targeted regarding ownership or control mechanisms.

Other Investment Policy Reviews

In March 2013, the GoBF created the Burkina Faso Investment Promotion Agency (API-BF).  The establishment of the Presidential Council fulfilled recommendations of a 2009 UNCTAD Investment Policy Review.  The website is www.investburkina.com .

To simplify the registration process for companies wishing to establish a presence in Burkina Faso, the government created eight enterprise registration centers called Centres de Formalités des Entreprises, known by their French acronym as CEFOREs.  The CEFOREs are one-stop shops for company registration.  On average, a company can register its business in nine days according to the Doing Business report 2019.  The CEFOREs are located in Ouagadougou, Bobo-Dioulasso, Ouahigouya, Tenkodogo, Koudougou, Fada N’Gourma, Kaya, Dedougou and Gaoua.

In 2018, Burkina Faso strengthened protections for minority investors by enhancing access to shareholder actions and by increasing disclosure requirements on related-party transactions.  The 2019 Doing Business report ranked Burkina Faso 149th of 190 in minority investor protection.

Other sites of interest:

Chamber of Commerce business registration: http://cci.bf/?q=fr/creation-dentreprise 

Mining Chamber of Commerce: http://chambredesmines.bf/ 

Investment Promotion Agency of Burkina Faso or l’Agence de Promotion des Investissements du Burkina Faso (API-BF): http://www.investburkina.com 

Tax and administrative procedures: https://burkinafaso.eregulations.org/ 

World Bank Investing Across Borders: http://iab.worldbank.org/data/exploreeconomies/burkina-faso 

Among the 21 countries covered by the World Bank’s Investing across Sectors indicators in the Sub-Saharan Africa region, Burkina Faso is one of the more open economies to foreign equity ownership.  Most of its sectors are fully open to foreign capital participation, although the law requires companies providing mobile or wireless communication services to have at least one domestic shareholder.  Furthermore, the state automatically owns 10 percent of the shares of all companies active in the mining sector.  The government is entitled to nominate one member of the board of directors for such companies.  Select additional strategic sectors are characterized by monopolistic market structures.  In particular, the oil and gas sector, and the electricity transmission and distribution sectors.

Outward Investment

The Burkinabe Government tries to promote outward investment via the Investment Promotion Agency of Burkina Faso or l’Agence de Promotion des Investissements du Burkina Faso (API-BF), which sits under the Presidential Council for Investment (Conseil Presidentiel pour l’Investissement).  The API-BF’s mission is to promote the economic potential of Burkina Faso to attract investment and spur economic development.

Burkina Faso currently imposes no restrictions for investors interested in investing abroad, within the framework of the Economic Community of West African States (ECOWAS) and West African Economic and Monetary Union (WAEMU) regional markets.

Transparency of the Regulatory System

The government of Burkina Faso aims for transparency in law and policy to foster competition.  By law, prices of goods and services must be established according to fair and sound competition.  The government believes that cartels, the abuse of dominant position, restrictive practices, refusal to sell to consumers, discriminatory practices, unauthorized sales, and selling at a loss are practices that distort free competition.

At the same time, the price of some staple goods and services are still regulated by the government, including fuel, essential generic drugs, tobacco, cotton, school supplies, water, electricity, and telecommunications.

There are regulatory authorities for government procurement, for electronic communication and posts, for electricity, and for quality standards.

Provinces and municipalities have the power to regulate in their jurisdiction, but that regulation has a minimal effect on business entities.  There are several regulatory bodies at the national level and they usually internalize regulations enacted by international organizations.  Regulations exist at the supra-national level mostly through WAEMU and ECOWAS.

Burkina Faso’s legal, regulatory, and accounting systems are transparent and consistent with international norms.  Since January 2018, Burkina Faso as an Organization for the Harmonization of Corporate Law in Africa (OHCLA) member state adopted the revised version of the OHCLA accounting system.  It is composed of the Uniform Act on Accounting and Financial Law (AUDCIF); the OHADA General Accounting Plan (PCGO); the SYSCOHADA application guide, and the International Financial Reporting Standards (IFRS) application guide. The OHCLA accounting system complies with the IFRS norms.

There is no online Regulatory Disclosure. However, the regulations of the parliament allow the various commissions to hear civil society organizations wishing to share information to inform parliamentarians when they are examining bills.

International Regulatory Considerations

Burkina Faso is a member of the West African Economic Monetary Union (WAEMU) and the Economic Community of West African States.  There is a supranational relationship between these organizations and their state members.  Burkina Faso is also a member of the Organization for the Harmonization of Corporate Law in Africa (OHCLA).  As such, Uniform Laws adopted by the OHCLA are automatically part of the national legal system.

The Government of Burkina Faso regularly notifies all the draft technical barriers to the relevant WTO Committee.  In the October 2017 Trade Policy Review, the WTO congratulated WAEMU countries for their continued efforts to improve their international trading environment, especially through the implementation of the Trade Facilitation Agreement (TFA).  Burkina Faso has begun the ratification process of the TFA, but it has not yet completed it.  However, WAEMU and ECOWAS members already implement many of the TFA provisions.

Legal System and Judicial Independence

The legal system of Burkina Faso is the civil law. Contracts must always be performed in good faith. Burkina Faso has commercial courts that judge commercial cases. Commercial law is constituted by the uniform acts of the OHADA. The Commercial Code governs all matters that are not covered by the OHADA law.

The Burkinabe judiciary is independent despite press reports of cases of corruption of judges.  The Disciplinary Commission of the Judiciary has sanctioned corrupt judges. There are three degrees of jurisdiction in Burkina Faso allowing the loser to appeal a decision rendered in first instance.  In the event of a dispute over the execution of a contract, the plaintiff must first abstain a judgment from a court first and if the loser does not execute, the winner can retain a bailiff.

Laws and Regulations on Foreign Direct Investment

The investment code adopted by law 038-2018 demonstrates the government’s interest in attracting FDI to create industries that produce export goods and provide training and jobs for its domestic workforce.  The code provides standardized guarantees to all legally established firms operating in Burkina Faso, whether foreign or domestic.  It contains four investment and operations preference schemes, which are equally applicable to all investments, mergers, and acquisitions.

Burkina Faso’s regulations governing the establishment of businesses include most forms of companies admissible under French business law, including public corporations, limited liability companies, limited share partnerships, sole proprietorships, subsidiaries, and affiliates of foreign enterprises.  With each scheme, there is a corresponding set of related preferences, duty exceptions, corporate tax exemptions, and operation-related taxes.

Under the investment code, all personal and legal entities lawfully established in Burkina Faso, both local and foreign, are entitled to the following rights: fixed property, forest and industrial rights, concessions, administrative authorizations, access to permits, and participation in state contracts.

Competition and Anti-Trust Laws

The National Commission for Competition and Consumption (Commission Nationale pour la Concurrence et la Consommation) reviews competition matters.  Some competition matters are under the aegis of the West African Economic and Monetary Union (WAEMU).  Law No. 016-2017/AN of 27 April 2017 on organizing competition in Burkina Faso governs the competition sector.  This law is intended to create a free and transparent market, a guarantee of the development of a market economy driven by competitive and wealth-creating businesses.

Expropriation and Compensation

The Burkinabe constitution guarantees basic property rights.  These rights cannot be infringed upon except in the case of public necessity, as defined by the government.  This has rarely occurred.  Until 2007, all land belonged to the government but could be leased to interested parties.  The government reserves the right to expropriate land at any time for public use.  In instances where property is expropriated, the government must compensate the property holder in advance, except in the event of an emergency.

In 2007, Burkina Faso drafted a national land reform policy that recognizes and protects the rights of all rural and urban stakeholders to land and natural resources.  It also clarifies the institutional framework for conflict resolution at a local level, establishes a viable institutional framework for land management, and strengthens the general capacities of the government, local communities and civil society on land issues.

A 2009 rural land management law provides for equitable access to rural lands in order to promote agricultural productivity, manage natural resources, encourage investment, and reduce poverty.  It enables legal recognition of rights legitimated by traditional rules and practices.  In rural areas, traditional land tenure rules have long governed land transactions and allocations.  The 2009 law reinforces the decentralization and devolution of authority over land matters and provides for formalization of individual and collective use rights and the possibility of transforming these rights into private titles.

In 2012, the government revised the 2009 law, marking the end of exclusive authority of the state over all land.  It includes provisions to recognize local land use practices.  The new law provides conciliation committees to resolve conflicts between parties prior to any legal action.  There are several property rights recognition and protection acts, such as land charters, individual or collective land ownership certificates, and loan agreements that govern the nature, duration and counterparties for transfer rights between a landowner and a third party.

The first (2010-2014) Millennium Challenge Corporation (MCC) compact supported the establishment of local authorities and the issuance of titles as part of the land tenure reform process.

Dispute Settlement

ICSID Convention and New York Convention

The ICSID Convention entered into force for Burkina Faso on October 14, 1966.  In the event that an amicable settlement of a dispute between the government and an investor cannot be reached, the investment code requires that arbitration procedures be submitted to international arbitration under the rules outlined by the 1965 Convention of the International Center for Settlement of Investment Disputes (ICSID), of which Burkina Faso is a member.  When the ownership of a company does not meet the nationality requirements laid out by Article 25 of the Convention, the code specifies that the dispute be resolved in accordance with the dispositions of the supplementary mechanisms approved by ICSID in September 1978.

Burkina Faso has been a member of the New York Convention since March 23, 1987.

Investor-State Dispute Settlement

Burkina Faso is a party to the Washington Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards and outlines arbitration procedures in its investment code as a means of solving investment disputes.  BITs signed by Burkina Faso provide for international arbitration.  Burkinabe courts accept international arbitration as a means for settling investment disputes between private parties.  Longstanding disputes that remain unresolved after administrative jurisdictional hearings may be submitted to arbitration.  Burkinabe courts recognize and enforce foreign arbitral awards. The United States has not signed a BIT with Burkina Faso.

International Commercial Arbitration and Foreign Courts

Mediation and conciliation are available and encouraged in Burkina Faso.  In 2006, Burkina Faso introduced specialized commercial chambers in the general courts and in 2007 opened the Arbitration, Mediation and Resolution Center (Centre d’Arbitrage, de Mediation et de Conciliation de Ouagadougou (CAMCO)) under the auspices of the Chamber of Commerce and Industry.  (http://www.camco.bf/ ).  If a dispute is not settled by the CAMCO, the case can be referred to international bodies such as the International Chamber of Commerce of Paris.

The parliament adopted the Law number 047-2017 laying down modalities for intervention by the state jurisdictions on arbitration in Burkina Faso.  Burkina Faso is not a member of the Apostille Convention.  Consequently, any arbitral award rendered abroad should receive an exequatur before enforcement.

In 2016, a foreign mining company addressed an arbitration request to the International Chamber of Commerce’s International Court of Arbitration. The complaint stems from a dispute over the Tambao deposit in the northeastern corner of Burkina Faso. Prior to requesting arbitration in the Paris-based international court, the disputing parties seized the CAMCO.

Bankruptcy Regulations

Since Burkina Faso is a member of the OHADA, the Uniform Act on Bankruptcy is applicable.

There is no credit bureau in Burkina Faso.  The World Bank’s 2019 “Doing Business” report ranked Burkina Faso 107 out of 190 countries for Resolving Insolvency.

Investment Incentives

The 2018 investment code demonstrates the government’s interest in attracting FDI to create industries that produce export goods and provide training and jobs for its domestic workforce.  The code provides standardized guarantees to all legally established firms operating in Burkina Faso, whether foreign or domestic.  It contains five investment and operations preference schemes, which are equally applicable to all investments, mergers, and acquisitions.

Burkina Faso’s regulations governing the establishment of businesses include most forms of companies admissible under French business law, including: public corporations, limited liability companies, limited share partnerships, sole proprietorships, subsidiaries, and affiliates of foreign enterprises.  With each scheme, there is a corresponding set of related preferences, duty exceptions, corporate tax exemptions, and operation-related taxes.

Under the investment code, all personal and legal entities lawfully established in Burkina Faso, both local and foreign, are entitled to the following rights: fixed property, forest and industrial rights, concessions, administrative authorizations, access to permits, and participation in state contracts.

Foreign Trade Zones/Free Ports/Trade Facilitation

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

The African Continental Free Trade Area (AfCFTA) refers to a continental geographic zone where goods and services move among member states of the AU with no restrictions. The AfCFTA aims to boost intra-African trade by providing a comprehensive and mutually beneficial trade agreement among the member states, covering trade in goods and services, investment, intellectual property rights and competition policy. To date, 30 countries have both signed and approved ratification of the AfCFTA Agreement. Of the 55 AU member states, only Eritrea has yet to sign. The operational phase of the AfCFTA was subsequently launched during the 12th Extraordinary Session of the Assembly of the African Union in Niamey, Niger on July 7, 2019. The AfCFTA will be governed by five operational instruments:  the Rules of Origin; the online negotiating forum; the monitoring and elimination of non-tariff barriers; a digital payments system and the African Trade Observatory.  A digital payments system was supposed to start on July 1, 2020, but as a result of the COVID-19 global pandemic, this start date has been  postponed (a new date is yet to be confirmed by the African Union Commission).

Performance and Data Localization Requirements

The GoBF does not mandate local employment, but in recent years has encouraged investors to promote local employment and support local economies.  The GoBF does not require investors to purchase materials from local sources or to export a certain percentage of output.  However, regarding the mining sector, according to the article 101 of the mining code, “Holders of mining title or authorization and their subcontractors give preference to Burkinabe enterprises for any contract of provision of services or supplies of goods in equivalence of price, quality and time.” The GoBF does not impose “offset” requirements, which dictate that major procurements be approved only if the foreign supplier invests in Burkinabe manufacturing, research and development, or service facilities in areas related to the items being procured.  Burkina Faso does not have “forced localization” policies.

There is a general awareness of corporate social responsibility among both producers and consumers.  The GoBF requires mining companies to invest in social infrastructure, such as health centers and schools, and other projects to benefit the local populations in the areas of their mining operations.  A common practice for many companies is to provide food supplies, typically rice or millet, to their workers often at the end of the year.  Larger private businesses, such as civil engineering firms, sponsor sport events like the Tour du Faso and donate sporting equipment to disadvantaged communities.  SOEs such as SONABHY and LONAB frequently undertake social projects.

Burkina Faso is a member of the Extractive Industries Transparency Initiative (EITI) since 2008.  In 2013, it was declared an EITI compliant country, and has continued to show progress in each evaluation.

Transparency International’s 2019 Corruption Perceptions Index indicates that Burkina Faso ranks 85 out of 180 countries.  The State Supreme Audit Authority (ASCE-LC) is the leading government anti-corruption body that publishes an annual report documenting financial irregularities, embezzlement, and improper use of public funds in various ministries, government agencies, and state-run companies.  In 2018, the ASCE-LC opened at least two high profile corruption investigations against the Ministers of Defense and Infrastructure, still under review. The Burkinabe government continues to grant access within its own ministries to the non-governmental watchdog National Network to Fight against Corruption (REN-LAC) that examines the management of private and public-sector entities and publishes annual reports on corruption levels within the country.

Legislation requires government officials, including the president, lawmakers, ministers, ambassadors, members of the military leadership, judges, and anyone charged with managing state funds, to declare their assets as well as any gifts or donations received while in office.  Infractions are punishable by a maximum jail term of 20 years and fines of up to USD 41,670. In May 2020, former Minister of Defense, Jean-Claude Bouda, was arrested on “money laundering” and “illicit enrichment” charges following a complaint by the National Anti-Corruption Network.  On June 18, State Prosecutor Harouna Yoda announced that the Deputy Director General of Customs, William Alassane Kaboré, was placed under “judicial control,” for acts of illicit enrichment and money laundering amounting to 1.3 billion CFA (USD 2.2 million).  Additionally, investigations are underway on the mayor of Ouagadougou and some magistrates who allegedly tried to bury this case.

According to public perception, civil servants who most commonly engage in corruption include customs officials, members of the police force and gendarmerie, justice officials, healthcare workers, educators, tax collectors, and civil servants working in government procurement.

One of the main governmental bodies for fighting official corruption is the Superior Authority of State Control (ASCE), an entity under the authority of the Prime Minister.  ASCE has the authority to investigate ethics violations and mismanagement of public funds in the public sector, including state civil service employees, local and public authorities, state-owned companies, and all national organizations involved with public service missions.  ASCE publishes an annual report of activities, which provides details on its investigations and issues recommendations on how to resolve them.  Many of its findings are followed by judicial action.

The Autorité de Régulation de la Commande Publique (ARCOP), established in July 2008, is the regulatory oversight body that ensures fairness in the procurement process by monitoring the execution of all government contracts.  ARCOP may impose sanctions, initiate lawsuits, and publish the names of fraudulent or delinquent businesses.  It also educates communities benefiting from public investment monies to take a more active part in monitoring contractors.  ARCOP works with the media to strengthen journalists’ capacity to investigate suspected fraud cases.  Since 2012, the media has noticeably increased its coverage of high-profile corruption cases.

The Reseau National de Lutte Contre la Corruption (REN-LAC) publishes an annual report on the state of corruption in the country, and has established a wide range of anti-corruption initiatives and tools.  REN-LAC has a 24-hour hotline that allows it to gather information on alleged corrupt practices anonymously reported by citizens. African Parliamentarians’ Network against Corruption also has a local chapter in Burkina Faso and cooperates with REN-LAC.

As a member of the West African Economic and Monetary Union (WAEMU), Burkina Faso has agreed to enforce a regional law against money laundering and has issued a national law against money laundering and financial crimes.

Burkina Faso has taken steps to fully adopt regional and international anti-corruption frameworks, and the country ratified the UN Convention against Corruption in October 2006.

However, the World Bank rating for control of corruption for Burkina Faso has declined since 2003 from the 56th percentile to the 33rd percentile.  This means that while Burkina Faso was once rated much more favorably than its regional peers for limiting corruption, it is now close to the average for sub-Saharan African countries.

Resources to Report Corruption

REN-LAC hotline: (+226) 8000 1122

Or contact:

Sagado NACANABO
Executive Secretary
REN-LAC
Telephone: +226 25 36 32 15

Luc Marius Ibriga
Contrôleur Général d’Etat
Autorité Supérieure de Contrôle d’Etat et de la Lutte contre la Corruption (ASCE-LC)
Telephone: +226 25 30 10 91 or +226 25 33 60 39

Violent extremist elements remain active in Burkina Faso and throughout the region. They have specifically targeted Westerners in attacks and kidnappings. Terrorists may conduct attacks anywhere with no warning. Targets include hotels, restaurants, police stations, customs offices, military posts, and schools. There have been over 550 terrorist incidents in Burkina Faso since 2015, including ambushes of security forces and improvised explosive device (IED) attacks. VEOS have also targeted civilians and worshippers including Christians and Muslims. In addition to attacking police stations, customs offices, military posts, and schools, extremists have attacked Ouagadougou three times since January 2016.  On March 2, 2018, extremists attacked the French Embassy and Burkina Faso’s military headquarters in downtown Ouagadougou. Eight security force personnel, including soldiers and police officers, were killed, and over 80 others were injured. In August 2017, a small group of armed men attacked the Aziz Istanbul Café, a restaurant in downtown Ouagadougou, and killed approximately 19 people. Extremists attacked the Cappuccino café and Splendid Hotel in the heart of Ouagadougou’s downtown on January 15, 2016.  The Government of Burkina Faso has declared a state of emergency due to insecurity in parts of 6 out of 135 administrative regions.

Since 2015, 680 events including 261 battles, 81 riots, and 322 violent incidents against civilians  resulted in 2,772 fatalities, according to the Armed Conflict Location and Event Data project (Acled).  Some of these attacks target local and foreign companies, including attacks against security forces escorting convoys of mining company employees, as well as hijackings of company vehicles and kidnappings of company personnel.

In the past 13 months, Post has upgraded the public travel advisory three times to reflect deteriorating security in various regions of the country. Burkina Faso is rated as “Level 3: Reconsider Travel” with areas of “Level 4: Do Not Travel”. The “Level 4” areas have increased from just a portion of the northern Sahel Region in early 2018, to include the Est Region (except Gnagna Province) in September 2018, and again in January 2019 to include all of the Est Region, Sahel Region, and portions of the Centre-Est Region and regions in western Burkina Faso bordering Mali.

Table 4: Sources of Portfolio Investment
Data not available.

Policies Towards Foreign Direct Investment

The government actively encourages Foreign Direct Investment (FDI) and is committed to doubling it over the next several years.  Foreign companies are free to invest and list on the regional stock exchange Bourse Regionale des Valeurs Mobilieres (BRVM), which is based in Abidjan and covers the eight countries of the West African Economic and Monetary Union (WAEMU).  WAEMU members are part of the Regional Council for Savings and Investment, a regional securities regulatory body.

In most sectors, there are no laws that limit foreign investment.  There are restrictions on foreign investment in the health sector, law and accounting firms, and travel agencies.  There are regulations designed to control land speculation in urban areas, but they do not prevent foreigners from owning land.  Freehold land tenure in rural areas is difficult to negotiate, however, and can inhibit foreign investment.  Land tenure disputes exist all over the country owing to the lack of formal private land ownership in most areas.  Companies that wish to purchase land must have the property surveyed before obtaining title.  Surveying is tightly controlled by a small oligopoly of companies and can often cost more than the value of the parcel of land.  Most businesses, including agribusinesses and forestry companies, circumvent the complicated land purchase process by acquiring long-term leases instead.

The Ivoirian government’s investment promotion agency, the Center for the Promotion of Investment in Côte d’Ivoire (CEPICI), promotes and attracts national and foreign investment.  Its services are available to all investors, provided through a one-stop shop intended to facilitate business creation, operation, and expansion.  CEPICI ensures that investors receive incentives outlined in the investment code, and facilitates access to industrial land.  More information is available at http://www.cepici.gouv.ci/ .

Côte d’Ivoire maintains an ongoing dialogue with investors through various business networks and platforms, such as CEPICI, the Ivoirian Chamber of Commerce (CCI-CI), the association of large enterprises (CGECI), and the bankers’ association.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign investors generally have access to all forms of remunerative activity on terms equal to those enjoyed by Ivoirians.  The government encourages foreign investment, including state-owned and public firms that the government is privatizing, although in most cases the state reserves an equity stake in the new company.

There are no general, economy-wide limits on foreign ownership or control, and few sector-specific restrictions.  There are no laws specifically directing private firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation, or control in those firms, and no such practices have been reported.

Banks and insurance companies are subject to licensing requirements, but there are no restrictions designed to limit foreign ownership or to limit establishment of subsidiaries of foreign companies in this sector.  Investments in health, law and accounting, and travel agencies are subject to prior approval and require appropriate licenses and association with an Ivoirian partner.  The Ivoirian government has, on a case-by-case basis, mandated using local providers, hiring local employees, or arranging for eventual transfer to local control.

The government does not have an official policy to screen investments and its overall economic and industrial strategy does not discriminate against foreign-owned firms.  There are indications in some instances of preferential treatment for firms from countries with longstanding commercial ties to Côte d’Ivoire.

Other Investment Policy Reviews

Côte d’Ivoire has not conducted an investment policy review (IPR) through the OECD.  The WTO last conducted a Trade Policy Review in July 2012 and it can be found at https://www.wto.org/english/tratop_e/tpr_e/tp366_e.htm .

UNCTAD does not provide an IPR report for Côte d’Ivoire, though there are statistics on FDI in the UNCTAD country profile at https://unctadstat.unctad.org/countryprofile/generalprofile/en-gb/384/index.html .

The Government of Côte d’Ivoire provides information about sector policies and business opportunities in publicly available reports.  More information can be found at: http://www.cepici.gouv.ci/en/  or at: www.gcpnd.gouv.ci/ .

Business Facilitation

To improve the business environment, and as part of its successful efforts to secure a Compact with the Millennium Challenge Corporation, the government completed a series of reforms using the World Bank’s Ease of Doing Business Index as a reference.  These included:  accelerating the business creation process to 24 hours and issuing construction permits within 26 days, establishing a one-stop shop for external trade, and establishing a single tax-declaration form.  In 2019, Côte d’Ivoire improved its Doing Business ranking from 122^nd  to 110^th place.

Côte d’Ivoire’s online information portal containing all documents dedicated to business creation and registration (https://cotedivoire.eregulations.org/ ) is managed by CEPICI.  All the necessary documentation for registration is available online.  The one-stop shop for business registration takes 24 hours and has all the agencies under a single roof, giving a simplified approach to business creation.  Foreign investors have noted the one-stop shop has been very successful in speeding up registration.

Women have equal access to the registration process, and there have not been any reports of discrimination in that regard.

Outward Investment

Côte d’Ivoire does not promote or incentivize outward investment.  

The government does not restrict domestic investors from investing abroad.

Transparency of the Regulatory System

The government has taken steps to encourage a more transparent and competitive economic environment.  The IMF, World Bank, EU, and other large donors continue to urge the government to make further reforms.  The government aims for transparency in law and policy to foster competition and provide clear rules of the game and a level playing field for domestic and foreign investors.  Transparency of the Ivoirian regulatory system, however, is a concern as both foreign and Ivoirian companies complain that new regulations are issued with little warning and without a period for public comment.

There are no informal regulatory processes managed by non-governmental organizations or private sector associations.

Regulatory authority and decision-making exist only at the national level.  Sub-national jurisdictions do not regulate business.  For most industries or sectors, regulations are developed through the ministry responsible for that sector.  In the telecommunications, electricity, cocoa, coffee, cotton, and cashew sectors, the government has established control boards or independent agencies to regulate the sector and pricing.  Companies have complained that rules for buying prices determined by the agriculture commodity regulatory agencies tend to be opaque and prices are arbitrarily set without reference to world prices.

Côte d’Ivoire’s accounting, legal, and regulatory procedures are consistent with international norms, though both foreign and Ivoirian businesses often complain about the system’s lack of clarity and the government’s poor communication.  Côte d’Ivoire is a member of the Organization for the Harmonization of African Business Law (OHADA), which is common to 16 countries and adheres to the WAEMU accounting system.  In accounting, companies use the WAEMU system, which complies with international norms and is a source of economic and financial data.

Draft legislation and regulations are not published or made available for public comment.  The government, however, often holds public seminars and workshops to discuss proposed plans with trade and industry associations.

Regulatory actions are published in the Journal Officiel de la Republique de Côte d’Ivoire (Official Journal of the Republic of Côte d’Ivoire), which is available for purchase at newsstands, and by subscription on the Journal’s website http://www.sgg.gouv.ci/jo.php  and at https://abidjan.net/ .

The Autorité Nationale de Régulation des Marchés Publics (National Regulatory Authority for Public Procurement; ANRMP), polices transparency in public procurement and private sector compliance with public procurement rules.  Consumers, trade associations, private companies, and individuals have the right to file complaints with ANRMP to hold the government to its own administrative processes.

The U.S. government does not have any knowledge of recent regulatory system reforms, including enforcement reforms, that have been announced since the last ICS report.  The government has fully implemented regulatory reforms announced in prior years, with the goal to create an enabling business environment, foster competition, and build investor confidence in the economy.

Public and private institutions tasked with controlling and regulating various sectors make regulatory enforcement mechanisms available to the public.

Regulatory bodies regularly publish and promote access to their data for the business community and development partners, , allowing for scientific and data-driven reviews and assessments.  Quantitative analysis and public comments are made available.

The Ivoirian government promotes transparency of public finances and debt obligations (including explicit and contingent liabilities) with the publication of this information through the following websites:

http://budget.gouv.ci/main/index 

https://www.tresor.gouv.ci/tres/fr_FR/rapport-de-la-dette-publique/ 

International Regulatory Considerations

The Ivoirian government incorporates WAEMU directives into its public procurement bidding policy, processes, and auditing.  Recent changes include separating auditing and regulating functions, transitioning from a national to a regional system of procurement for intellectual services, and increasing advance payment for the initial procurement of goods and services from 25 to 30 percent.  The ANRMP regulates public procurement with a view to improving governance and transparency.  It has the authority to sanction entities that do not comply with public procurement regulations.

Ivoirian laws, codes, professional association standards, and regional body membership obligations are incorporated in the country’s regulatory system.  The private sector often follows European norms, to take advantage of the Ivoirian trade agreement with the EU, one of Côte d’Ivoire’s largest markets.

Côte d’Ivoire has been a WTO member since 1995 but has not notified all draft technical regulations to the WTO Committee on Technical Barriers to Trade.  Côte d’Ivoire signed the Trade Facilitation Agreement (TFA) in December 2013 and ratified it in December 2015.  The government has made efforts to implement the TFA requirements.  The government established the National TFA Committee (NTFC) to coordinate TFA implementation.  The USAID trade facilitation program has strengthened the capacity of the NTFC.

Legal System and Judicial Independence

The Ivoirian legal system is based on the French civil law model.  The law guarantees to all the right to own and transfer private property.  Rural land, however, is governed by a separate set of laws which make ownership and transfer very difficult.  The court system enforces contracts.

Côte d’Ivoire is a signatory to OHADA, which provides common corporate law and arbitration procedures for the 16 member states.  The Commercial Court of Abidjan adjudicates corporate law cases and contract disputes.  Mediation is also available through the Ivoirian legal framework in addition to the Commercial Court and the Arbitration Tribunal.  Following the recommendations of business associations and commercial law experts, in August 2017, the government established the Court of Appeals of the Commercial Court of Abidjan.  The IMF recommended the creation of other commercial juridical bodies in the interior of the country, though these have not yet been established and the Commercial Court of Abidjan retains jurisdiction for the entire country.

The Ivoirian judicial system is ostensibly independent, but magistrates are sometimes subject to political or financial influence.  Judges sometimes fail to prove that their decisions are based on the legal or contractual merits of a case and are often seen to rule against foreign investors in favor of entrenched interests.  The greatest complaint from investors is the slow dispute resolution process.  Cases are often postponed and appealed without a reasonable explanation, moving from court to court for years or even decades.  Regulations or enforcement actions are appealable and adjudicated through the national court system.

Laws and Regulations on Foreign Direct Investment

The 2018 Investment Code is the primary law governing investment conduct.  The code does not restrict foreign investment or the repatriation of funds.  The code offers a mix of fiscal incentives, combining tax exoneration and tax credits to encourage investment.  The government also offers incentives to promote small businesses and entrepreneurship, low-cost housing construction, factories, and infrastructure development, which the government considers key to the country’s economic development.  Some sectors have additional laws which govern investment activity in those sectors.  In mining, for example, the Mining Code allows a period for holding permits for ten years with a possibility to extend for two more years on a limited permit area of 400 square kilometers.

The CEPICI provides a one-stop shop website to assist investors.  More information on Côte d’Ivoire’s laws, rules, procedures, and reporting requirements can be found at:

www.apex-ci.org/

www.cepici.gouv.ci/

Competition and Anti-Trust Laws

The Ministry of Commerce, Industry and Small Business Promotion, through the Commission on Anti-Competition Practices, is responsible for reviewing competition–related concerns under the 1991 competition law, which was updated in 2013.  ANRMP is responsible for reviewing the awarding of contracts.

No significant competition cases were reported over the past year.

Expropriation and Compensation

Private expropriation to force settlement of contractual or investment disputes continues to be a problem.  Local individuals or local companies, using what appear to be spurious court decisions, have challenged the ownership of some foreign companies in recent years.  On occasion, the government has blocked the bank accounts of U.S. and other foreign companies because of ownership and tax disputes.

There is no history of public expropriations.

In cases of illegal expropriations, Ivoirian law affords claimants due process.  Even so, perceived corruption and lack of capacity in the judicial and security services have resulted in poor enforcement of private property rights, particularly when the entity in question is foreign and the plaintiff is Ivoirian or a long-established foreign resident.

Dispute Settlement

ICSID Convention and New York Convention

Côte d’Ivoire is a signatory to the International Center for Settlement of Investment Disputes (ICSID) and a signatory to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

In cases where the firm does not meet the nationality conditions stipulated by Article 25 of the Convention, the code stipulates that the dispute be resolved within the provisions of the supplementary mechanisms approved by the ICSID.

Investor-State Dispute Settlement

Côte d’Ivoire is a signatory to investment agreements subject to binding international arbitration of investment disputes.  Côte d’Ivoire recognizes and has been known to enforce foreign arbitral awards, but enforcement is inconsistent.

Côte d’Ivoire does not have a Bilateral Investment Treaty (BIT) or a Free Trade Agreement (FTA) with the United States.

In the past 10 years, foreign investors have had investment disputes, which often have been resolved through arbitration or amicable settlement.  There have been no reported disputes involving U.S. firms in the past 10 years.  As Côte d’Ivoire is a signatory to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards, local courts are obliged to enforce foreign arbitral awards.

The U.S. government is not aware of any history of extrajudicial action against foreign investors, including U.S. firms.

International Commercial Arbitration and Foreign Courts

The Abidjan-based regional Joint Court of Justice and Arbitration (CCJA) provides a means of solving contractual disputes.  The arbitration tribunal has the ability to enforce awards more quickly, but the use of the tribunal in lieu of the court system has been limited.

Côte d’Ivoire is a member of OHADA, whose provisions adopted in 1999 have replaced domestic law on arbitration.  The unified law is based on the UNICITRAL model law.

Judgments of foreign courts are recognized but difficult to enforce in local courts.  To avoid working through the Ivoirian legal system, some investors stipulate in contracts that disputes must be settled through international commercial arbitration.  Yet, even if stipulated in the contract, decisions reached through OHADA are sometimes not honored by local courts.

The U.S. government is not aware of cases in which Côte d’Ivoire’s domestic courts have shown preferential treatment for state-owned enterprises involved in investment disputes.

Bankruptcy Regulations

As a member of OHADA, Côte d’Ivoire has both commercial and bankruptcy laws that address the liquidation of business liabilities.  OHADA is a regional system of uniform laws on bankruptcy, debt collection, and rules governing business transactions.  OHADA permits three different types of bankruptcy liquidation:  an ordered suspension of payment to permit a negotiated settlement; an ordered suspension of payment to permit restructuring of the company, similar to Chapter 11; and the complete liquidation of assets, similar to Chapter 7.  Creditors’ rights, irrespective of nationality, are protected equally by the Act.  Bankruptcy is not criminalized.  Court-ordered monetary settlements resulting from declarations of bankruptcy are usually paid out in local currency.  Côte d’Ivoire is ranked 85 out of 190 countries for ease of resolving insolvency, according to the World Bank’s Doing Business Report.

The joint venture Credit Info – Volo West Africa manages regional credit bureaus in the WAEMU.

Investment Incentives

The 2018 Investment Code offers a mix of fiscal incentives, combining tax exoneration and tax credits focusing on agriculture, agro-business, tourism, health, and education.  These include a full exoneration of customs duties or suspended VAT, and tax exemptions to business operations in some remote areas, with incentives based on the type of investment, phase of operation, local content, and participation.  There are also incentives to promote small businesses and entrepreneurship, low-cost housing construction, factories, and infrastructure development, which the government considers key to the country’s economic development.  The Investment Code, the Petroleum Code, and the Mining Code delineate incentives available to new investors in Côte d’Ivoire.

The government occasionally guarantees loans or jointly finances foreign direct investment projects.  This is not a common practice.

Foreign Trade Zones/Free Ports/Trade Facilitation

Created in 2008, the Ivoirian free trade zone (FTZ) for information technology and biotechnology (VITIB) is located in the town of Grand Bassam.  In 2014, VITIB established the Mahatma Gandhi Technology Park at Grand Bassam.  Bonded warehouses do exist, and bonded zones within factories are allowed.  High port costs and maritime freight rates have inhibited the development of in-bond manufacturing or processing, and there are consequently no general foreign trade zones.

An FTZ also exists at the Port of Abidjan specifically for fish processing.  In force since December 2005, this FTZ is reserved for companies which earn at least 90% of their turnover from exports.  Eligible companies are exempt from all duties and taxes, including on imported and exported goods and services.  They also enjoy preferential rates for water, electricity, telephone, and fuel supplied by public or semi-public establishments.   A fee applies to FTZ companies, the amount of which is fixed by decree.

Performance and Data Localization Requirements

The government strongly encourages investors and firms to hire Ivoirian employees, but this is not a requirement.

The 2018 Investment Code guarantees the freedom to designate senior management and board members.

Citizens of Economic Community of West African States (ECOWAS) countries can legally work in Côte d’Ivoire without additional permissions and do not need a residency permit.  For other nationalities, visas, work, and residency permits are required.  The investment promotion agency CEPICI facilitates the visa and permit process.  The process is not onerous and does not inhibit the ability of foreign investors and their employees to enter and exit the country.

There are no government-imposed conditions on permission to invest, including tariff and non-tariff barriers.

The government does occasionally place conditions on location, local content, equity ownership, import substitution, export requirements, host country employment, and technology.  For example, the Ivoirian government required that one U.S. fast food franchise use locally-sourced key ingredients, which it is able to do.  The government also makes use of a number of tax exemptions and customs exonerations to incentivize companies to do more value-added processing in Côte d’Ivoire.

There are no performance requirements for investments.

Cellular telephone companies must meet technology performance requirements to maintain their licenses.  The U.S. government does not know of any requirements that Côte d’Ivoire imposes on foreign information technology firms to give the government source code or provide access to encryption.

There are no requirements that prevent or unduly impede companies from freely transmitting customer or other business related data.  Data transmission or transfer is subject to prior authorization of the telecom regulatory board Autorité de Régulation des Télécommunications (Telecommunications Regulatory Authority of Côte d’Ivoire; ART-CI).

Côte d’Ivoire’s law on data protection requests prior declaration or authorization by ART-CI for any data processing.  ART-CI is responsible for the oversight of local data storage.

The private sector, the government, NGOs, and local communities are becoming progressively aware of the importance of Responsible Business Conduct (RBC) with regard to environmental, social, and governance issues in Côte d’Ivoire.

Investors seeking to implement projects in energy, infrastructure, agriculture, forestry, waste management, and extractive industries are required by decree to provide an environmental impact study prior to approval.  Foreign businesses, particularly in mining, energy, and agriculture, often provide social infrastructure, including schools and health care clinics, to communities close to their sites of operation, often at the request of the government.  Some companies complain that these requests can be quite numerous.  Companies are not required under Ivoirian law to disclose information relating to RBC, although many companies, especially in the cocoa sector, publicize their work.  Cocoa companies publicize efforts to improve sustainability and combat the worst forms of child labor.  As a part of public procurement reform, the Ministry of Budget plans to include social needs in public procurement contracts to support job creation, fair trade, decent working conditions, social inclusion and compliance with social standards.  On the environment, suggested reforms include the selection of goods and services that have a smaller impact on the environment.

There have not been high profile instances of a private sector impact on human rights or the resolution of such cases in the past year.

The government, through the Ministry of Employment and Social Protection, sets workplace health and safety standards and is responsible for enforcing labor laws.

The OHADA outlines corporate governance standards that protect shareholders.

There are government-funded agencies in charge of monitoring business conduct.  Human rights, environmental protection, and consumer NGOs report misconduct and violations of good governance practices.

While international firms are aware of OECD guidelines and international best practices in RBC, most local firms have limited familiarity with international standards.

Côte d’Ivoire participates in the Extractive Industries Transparency Initiative (EITI) and discloses revenues and payments in the oil, gas, and mineral sectors.  More information can be found at: www.cnitie.ci/ .

Corruption is a concern for businesses.  In 2013, the Ivoirian government issued Executive Order number 2013-660 related to the prevention and the fight against corruption.  The High Authority for Good Governance covers corruption issues and requires that all public officials submit asset declarations at the beginning and end of their tenures in office.  The country’s financial intelligence office, CENTIF, has broad authority to investigate suspicious financial transactions, including those of government officials.  Despite the establishment of these bodies and credible allegations of widespread corruption, there have been few charges filed, and few prosecutions and judgments against prominent people for corruption.  The former Prime Minister Guillaume Soro, now an opposition presidential candidate, was convicted of embezzlement and sentenced to 20 years in prison on April 28, 2020.  The domestic business community generally assesses that these watchdog agencies lack the power and/or will to actively combat corruption.

Anti-corruption laws extend to family members of officials and to political parties.

The country’s Code of Public Procurement No. 259 and the associated WAEMU directives cover conflicts-of-interest in awarding contracts or government procurement.

Under the Ivoirian Penal Code, a bribe by a local company to a foreign official is a criminal act.

Some private companies use compliance programs or measures to prevent bribery of government officials.  U.S. firms underscore to their Ivoirian counterparts that they are subject to the Foreign Corrupt Practices Act (FCPA).

Côte d’Ivoire ratified the UN Anti-Corruption Convention, but the country is not a signatory to the OECD Anti-Bribery Convention (which is open to non-OECD members).  In 2016, Côte d’Ivoire joined the Partnership on Illicit Finance, which obliges it to develop an action plan to combat corruption.

There are no special protections for NGOs involved in investigating corruption.

Corruption in many forms is deeply ingrained in public and private sector practices and remains a serious impediment to investment and economic growth in Côte d’Ivoire.  Many companies cite corruption as the most significant obstacle to investment in Côte d’Ivoire.  It has the greatest impact on judicial proceedings, contract awards, customs, and tax issues.  Lack of transparency and failure to follow the government’s own tender procedures in the awarding of contracts lead businesses to conclude bribery was involved.  Businesses have reported encountering corruption at every level of the civil service, with some judges appearing to base their decisions on bribes.  Clearance of goods at the ports often requires substantial “commissions,” and the Embassy has heard anecdotal accounts of customs agents rescinding valuations that were declared by other customs colleagues in an effort to extract bribes from customers.  The demand for bribes can mean that containers stay at the Port of Abidjan for months, incurring substantial demurrage charges, despite having the paperwork in order.

No local industry or non-profit groups offer services for vetting potential local investment partners.

Resources to Report Corruption

These contacts at agencies are responsible for combating corruption:

Inspector General of Finance
(Brigade de Lutte Contre la Corruption)
Lassina Sylla
Inspector General
TELEPHONE: +225 20212000/2252 9797
FAX: +225 20211082/2252 9798
HOTLINE: +225 8000 0380
http://www.igf.finances.gouv.ci/ 
info@igf.finances.gouv.ci

High Authority for Good Governance
(Haute Autorite pour la Bonne Gouvernance)
N’Golo Coulibaly
President
TELEPHONE: +225 22479 5000
FAX: +225 2247 8261

Police Anti-Racketeering Unit
(Unite de Lutte Contre le Racket –ULCR)
Alain Oura
Unit Commander
TELEPHONE: +225 2244 9256
info@ulcr.ci

President Alassane Ouattara was elected to a second term in 2015.  In 2016, the country adopted a new constitution, creating the position of Vice-President, and a Senate, which first convened in April 2018.  During and/or after recent elections, such as in 2010 and 2018, demonstrations and protests by political parties were common and occasionally led to vandalism and clashes with security forces.  Unions also engage in protests that sometimes become violent.  The lack of consensus on the composition of the country’s independent electoral commission, the contentious reform of its electoral code, and the exclusion of key opposition figures from the presidential race have aggravated political divides within the country.

Côte d’Ivoire’s security situation has significantly improved since its 2010-2011 post-electoral violence.  In early 2017, some Ivoirian soldiers mutinied, demanding payment of bonuses.  The government responded by largely acceding to their demands and pledging to improve living and working conditions for armed and security forces, which it has steadily done over the ensuing years.  Côte d’Ivoire suffered a terrorist attack in March 2016 in the popular tourist town of Grand Bassam.  Al-Qaeda in the Islamic Maghreb claimed responsibility for the attack and continues to pose a major terrorism risk to the region.  Côte d’Ivoire continues to improve its domestic security approach and international cooperation to combat the increasing terrorism/extremist threat emanating from the Sahel over the past years.

Table 4: Sources of Portfolio Investment
Data not available.

Policies Toward Foreign Direct Investment

The Government of Senegal welcomes foreign investment. The investment code provides for equitable treatment of foreign and local firms. There is no restriction on ownership of businesses by foreign investors in most sectors. Foreign firms generally can invest in Senegal free from systematic discrimination in favor of local firms. Nevertheless, some U.S. and other foreign firms have noted that, in practice, Senegal’s investment environment favors incumbents and insiders – often other foreign firms – at the expense of new market entrants. Common complaints include excessive and inconsistently applied bureaucratic processes, nontransparent judicial processes, and an opaque decision-making process for public tenders and contracts. Financial and capital markets are open, attracting domestic, regional, and international capital.

The government conducts ongoing dialogue with the private sector through the Conseil Presidentiel de l’Investissement (Presidential Council on Investment, or “CPI”). Among other activities, the CPI sponsors an annual forum at which investors comment on the government’s policies and actions. Details are available at cpi-senegal.com. Another important venue for dialog is the annual Assises de l’Entreprises sponsored by the Conseil National du Patronat, the national employers’ association. More information can be found at www.cnp.sn. Senegal does not have a business ombudsman or other official charged with coordinating complaints about the business climate. In practice, investors must often engage directly at the minister level to resolve business climate concerns.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no barriers to ownership of businesses by foreign investors in most sectors. There are some exceptions for strategic sectors such as water, electricity distribution, and port services where the government and state-owned companies maintain responsibility for most physical infrastructure but allow private companies to provide services. Senegal allows foreign investors equal access to ownership of property and does not impose any general limits on foreign control of investments. Senegal’s Investment Code includes guarantees for equal treatment of foreign investors including the right to acquire and dispose of property.

The Government of Senegal does some screening of proposed investments, primarily to verify compatibility with the country’s overall development goals and compliance with environmental regulations. The Ministry of Finance and Budget reviews project financing arrangements for projects implicating public funds to ensure compatibility with budget and debt policies. Senegal’s Investment Promotion Agency (APIX) can facilitate government review of investment proposals and the project approval process.

Other Investment Policy Reviews

On January 10, 2020, the Executive Board of the International Monetary Fund (IMF) approved a new three-year Policy Coordination Instrument (PCI) for Senegal. For more information, see: https://www.imf.org/en/News/Articles/2020/01/10/pr206-senegal-imf-executive-board-approves-three-year-policy-coordination-instrument 

Business Facilitation

The point of entry for business registration is Senegal’s Investment Promotion Agency (APIX), www.investinsenegal.com , which provides a range of administrative services to foreign investors. Since 2007, APIX has significantly reduced the average number of days it takes to start a business. While the government claims the average for starting a business is two days, the World Bank Doing Business 2020 estimates it takes six days to register a firm. In addition to other bureaucratic and documentary requirements, registering a business requires certification of certain documents by a public notary registered in Senegal. Senegalese law provides special preferences to facilitate investment and business operations by medium and small enterprises including reduced interest rates for Senegalese-owned companies. The government continues to expand its “single window” system offering one-stop government services for businesses, opening a new service centers in various locations and projecting to have at least one service center in each of the country’s 45 regional departments by 2021. Property owners can apply for construction permits online.  In 2019, the GOS made tax information and some payment options available online. With the support of UNCTAD and the government of Luxembourg, APIX recently launched an online portal, https://senegal.eregulations.org/ , containing extensive information regarding regulations applicable to businesses and investments in Senegal.

Despite these efforts, business climate challenges remain. Because the informal sector dominates Senegal’s economy, legitimate companies bear a relatively heavy tax burden.  Some U.S. companies complain about delays in the project development process due to excessive red tape and uncertainty over rules and processes.

Senegal’s Agency for the Development and Supervision of Small and Medium-sized Enterprises (ADEPME) has launched initiatives to support small and medium-sized enterprises (defined in Senegal as companies with fewer than 50 employees and annual revenues of less than 5 billion CFA (about $9 million). These include tax incentives, grants for capacity building and for feasibility studies, and technical assistance to help firms operating in the informal sector formalize and register. ADEPME has also launched a program to certify the creditworthiness of SMEs, making them eligible for loans at preferential rates.

Outward Investment

The government neither promotes nor restricts outward investment.

Transparency of the Regulatory System

Senegal has made some progress towards developing independent regulatory institutions, including regulators for the energy, telecommunications, and financial sectors. While Senegal lacks established procedures for a public comment process for proposed laws and regulations, the government frequently holds public hearings and workshops to discuss proposed initiatives. Proposed regulations are not always made available to the public in a timely way, however. Although Senegalese law requires proposed legislation to be published in advance in the government’s official gazette, the government does not consistently update the gazette’s website.

Authority to make rules and regulate rests with the relevant government ministry unless there is a separate regulatory authority for a particular industry. However, in some instances, a ministry or the president will exert authority over regulatory matters—e.g., determining electricity tariffs. Local government bodies do not have a decisive role in regulatory decisions.

The Commission de Regulation du Secteur de l’Electricite (CRSE) was established in 1998 to regulates the electricity sector and set electricity tariffs.  Although the CRSE is, by law, an independent agency, observers note that the government frequently exercises influence over its decisions. Under the Millennium Challenge Corporation (MCC) Compact focused on the power sector, the government has committed to reforms in the sector, including enacting a new electricity code and strengthening the CRSE’s capacity and independence. As part of these efforts, the MCC Compact, will fund technical assistance and capacity building for CRSE and other key stakeholders who govern the power sector.

The Autorite de Regulation des Telecommunications et des Postes is responsible for licensing and regulating telecommunications and postal services in Senegal. The Dakar-based regional Central Bank of West African States (known by its French acronym BCEAO) regulates the banking sector.

There is no legal requirement to conduct impact assessments of proposed regulations, and regulatory agencies rarely do so. There is no specialized government body tasked with reviewing and monitoring regulatory impacts. Legal, regulatory, and accounting systems closely follow French models. Financial statements must be prepared in accordance with the SYSCOA system, based on Generally Accepted Accounting Principles in France.

Senegal’s budget and information on debt obligations are widely and easily accessible to the public, including online.  The budget was substantially complete and considered generally reliable.  Senegal’s supreme audit institution reviewed the government’s accounts and has published its audit reports for Senegal’s budgets through 2017 online. Senegal is the first Francophone country in sub-Saharan Africa to submit to a fiscal transparency evaluation (FTE) by the IMF. In its January 30, 2019 FTE, the IMF rated Senegal “average” overall for countries of similar income and institutional capacity. Senegal was rated “advanced” or “good” on fiscal forecasting, budgeting, and fiscal reporting. It was rated “basic” on monitoring risks triggered by subnational governments. Senegal’s fiscal transparency would be improved by the supreme audit authority making its reports on the budget available in a timely manner.

The process for allocating licenses and contracts for natural resource extraction was outlined in law and appeared to be followed in practice.  In 2019, Senegal approved a new Petroleum Code, clarifying investment terms and local content requirements for foreign investment in the sector.  Senegal is currently offering new offshore exploration blocks through an open tender conducted in accordance with international standards. In February 2020, Senegal finalized a new Gas Code to govern development of a mid-stream gas distribution network that will be the subject of a competitive tender. Basic information on natural resource extraction awards was publicly available, and the government participated actively in the Extractive Industries Transparency Initiative (EITI).

International Regulatory Considerations

As a member of the Economic Community of West African States (ECOWAS), Senegal generally adheres to regional requirements concerning the movement of people and goods. Similarly, fiscal policy directives of WAEMU are enforced in Senegal, as are regulations issued by the BCEAO. Senegal is a member of the World Trade Organization (WTO) and generally notifies draft regulations to the WTO Committee on Technical Barriers to Trade. However, since 2005 Senegal has banned imports of uncooked poultry and poultry products without notifying the WTO.

Legal System and Judicial Independence

Senegal has well-developed commercial and investment laws. Although settlement of commercial disputes has historically been cumbersome and slow, in February 2018 Senegal launched a new commercial court system with jurisdiction over commercial matters and a mandate to resolve cases within three months.  The business community has welcomed the move, and in the past two years, the court has heard 11,054 cases involving disputes with a combined total value of nearly $500 million.  Companies may nevertheless encounter challenges in executing court decisions and enforcing their contractual rights.

While Senegal’s constitution mandates that the judiciary operate independently of the legislature and executive, the executive frequently exerts influence, particularly in high-profile criminal cases. This type of influence is rare in strictly commercial matters. Some foreign investors, however, report discriminatory treatment by local courts. Investors may consider including provisions for binding arbitration in their contracts to avoid prolonged and unpredictable entanglements in Senegalese courts.

Companies may seek judicial redress against regulatory decisions. Regulatory appeals are heard in administrative tribunals that specialize in adjudicating claims against the state.

Senegal is a member of the World Intellectual Property Organization and the Bern Copyright Convention, and in June 2019 hosted a regional workshop on protecting intellectual property in the pharmaceutical and pesticide industries that gathered prosecutors, customs, and law enforcement officers. Nevertheless, the country has insufficient capacity to reliably protect intellectual property rights.

Laws and Regulations on Foreign Direct Investment

Senegal’s 2004 Investment Code provides basic guarantees for equal treatment of foreign investors and repatriation of profit and capital. It also specifies tax and customs exemptions according to the investment volume, company size and location, with investments outside of Dakar eligible for longer tax exemptions. A law to enhance transparency in public procurement and public tenders entered into force in 2008, establishing a public procurement regulatory body, the Autorité de Régulation des Marchés Publics (ARMP), which publishes annual reviews of public procurement. Procedures for challenging tender awards are available. The government enacted a law on public-private partnerships in 2014 to facilitate expedited approval of projects that include a minimum share of domestic investment. As of July 2020, the GOS was in the process of revising the public-private partnership law.

Regulations of the Central Bank of West African States (known by its French acronym BCEAO) proscribe the use of offshore accounts in project finance transactions within the WAEMU except where approved by the Ministry of Finance and Budget, with the express consent (“avis conforme”) of the BCEAO. According to the BCEAO, these restrictions allow visibility over international transactions, deter money laundering, and help the BCEAO maintain adequate foreign currency reserves. The BCEAO emphasizes the importance of these rules in enabling it to fulfill its mandate of maintaining the stability of the franc CFA’s peg to the euro.

Since 2018, the BCEAO and Senegalese Ministry of Finance Budget have tightened their approach to the approvals of offshore accounts. Although there is no strict “maximum” number of accounts that will be permitted, informal guidelines suggest that transactions using one to three such accounts have the greatest chance of being approved. According the BCEAO, the intent is to encourage the minimum number of such accounts necessary to legitimately conduct the transaction. Project managers and lenders should raise the subject of offshore accounts with the Ministry of Finance as early in the process as possible and should be prepared to submit a functional justification for each requested account. All offshore accounts must be “reauthorized” on an annual basis.

More information on Senegal’s legal and regulatory environment, including texts of the Investment Code, the Mining Code, a new Petroleum Code finalized in February 2019, can be found at the following:

• Investment Code:
• Mining Code:
• Petroleum Code:

Competition and Anti-Trust Laws

Senegal’s national competition commission, the Commission Nationale de la Concurrence, is responsible for reviewing transactions for competition-related concerns.

Expropriation and Compensation

Senegal’s Investment Code includes protection against expropriation or nationalization of private property with exceptions for “reasons of public utility” that would involve “just compensation” in advance. In general, Senegal has no history of expropriation or creeping expropriation against private companies. The government may sometimes use eminent domain justifications to procure land for public infrastructure projects with compensation provided to landowners. Senegal’s Bilateral Investment Treaty with the U.S. also specifies that international legal standards are applicable to any cases of expropriation of investment and the payment of compensation.

Dispute Settlement

ICSID Convention and New York Convention

Senegal is a member of the International Convention for the Settlement of Investment Disputes (ICSID) and a signatory of the Convention on the Recognition and Enforcement of Arbitral Awards (the New York Convention). Senegalese law recognizes the Cour d’Appel (Appeals Court) as the competent authority for the recognition and enforcement of awards rendered pursuant to ICSID. Senegal is also a signatory to the Organization for the Harmonization of Corporate Law in Africa Treaty (OHADA). This agreement supports enforcement of awards under the New York Convention. The Autorité de Régulation des Marchés Publics (ARMP) manages a dispute resolution mechanism for public tenders.

Investor-State Dispute Settlement

Senegal has growing experience in using international arbitration for resolution of investment disputes with foreign companies, including some cases involving tax disputes with U.S. firms. The government has also prevailed in some arbitration cases, including a 2013 arbitration decision in a high-profile case with a multinational company over an integrated mining/railway/port project, fostering greater confidence within the government to the arbitration process. Senegal’s bilateral investment treaty with the United States includes provisions to facilitate the referral of investment disputes to binding arbitration.

International firms have pursued a variety of investment disputes during the last decade, including at least two U.S. firms involved in tax and customs disputes. Other foreign companies in the mining and telecommunications sectors have pursued commercial disputes over licensing. These disputes have often been resolved through arbitration or an amicable settlement.

Senegal has no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

The government has initiated several programs to establish commercial courts and use alternative dispute resolution mechanisms to reduce the time required for resolving business disputes. Under the OHADA treaty, Senegal recognizes the corporate law and arbitration procedures common to the 16 member states in western and central Africa. Senegalese courts routinely recognize arbitration clauses in contracts and agreements. It is not unusual for courts to rule against state-owned enterprises in disputes involving private enterprises.

Bankruptcy Regulations

Senegal has commercial and bankruptcy laws that address liquidation of business liabilities. Foreign creditors receive equal treatment under Senegalese bankruptcy law in making claims against liquidated assets. Monetary judgments are normally in local currency. As a member of OHADA, Senegal permits three different types of bankruptcy liquidation through a negotiated settlement, company restructuring, or complete liquidation of assets. Senegal ranked 96th out of 190 countries on the “Resolving Insolvency” indicator in the 2020 World Bank Doing Business Index. According to the index, it takes an average of 36 months to complete liquidation proceedings in Senegal. Secured creditors recover an average of 30 cents per every dollar owed in such proceedings, compared to an average of 20.5 for sub-Saharan Africa and 70.2 for OECD high income countries.

Investment Incentives

Senegal’s Investment Code provides for investment incentives, including temporary exemption from customs duties and income taxes, for investment projects. Eligibility for investment incentives depends upon a firm’s size and the type of activity, amount of the potential investment, and location of the project. To qualify for significant investment incentives, firms must invest above CFA 100 million (approximately $165,000) or in activities that lead to an increase of 25 percent or more in productive capacity. Investors may also deduct up to 40 percent of retained investment over five years. However, for companies engaged strictly in “trading activities,” investment incentives may not be available.

Eligible sectors for investment incentives include agriculture and agro-processing, fishing, livestock and related industries, manufacturing, tourism, mineral exploration and mining, banking, and others. All qualifying investments benefit from the “Common Regime,” which includes two years of exoneration from duties on imports of goods not produced locally for small and medium sized firms, and three years for all others. Also included is exoneration from direct and indirect taxes for the same period.

Exoneration from the Minimum Personal Income Tax and from the Business License Tax can be granted to investors who use local resources for at least 65 percent of their total inputs within a fiscal year. Enterprises that locate in less industrialized areas of Senegal may benefit from exemption of the lump-sum payroll tax of three percent, with the exoneration running from five to 12 years, depending on the location of the investment. The investment code provides for exemption from income tax, duties, and other taxes, phased out progressively over the last three years of the exoneration period. Most incentives are automatically granted to investment projects meeting the above criteria. The new tax code was published December 31, 2012 (law # 2012-31 of December 2012 published in journal # 6706 of 31/12/2012).

An existing firm requesting an extension of such incentives must be at least 20 percent self-financed. To qualify for these benefits, firms are required to create at least 150 full-time positions for Senegalese nationals, to contribute the hard currency equivalent of at least 100 million CFA ($165,000 USD), and keep regular accounts that conform to Senegalese (European accounting system) standards. In addition, firms must provide APIX with details on company products, production, employment, and consumption of raw materials.

Foreign Trade Zones/Free Ports/Trade Facilitation

In 2017, Senegal passed legislation to create Special Economic Zones (SEZ) regime. Enterprises approved under the SEZ regime may be granted tax and customs concessions for up to 25 years. Benefits may include: exemptions from duties and taxes on imports of goods, raw materials and equipment (except for community levies); application of a reduced 15 percent corporate tax rate; and exemption from certain taxes and charges such as the business tax and property taxes. To qualify for these benefits, companies must represent a minimum investment of CFA 100 million ($165,000), create at least 150 direct jobs during their first year of operation, and generate at least 60 percent of their revenue from exports. In November 2018, President Sall inaugurated the country’s first SEZ, the Integrated Industrial Platform of Diamniadio, a suburb of Dakar. The platform is now operational with seven companies established. It is expected to create approximately 20,000 jobs by 2023. The government has launched two additional SEZ, one in Sandiara, 80 kilometers from the capital city Dakar, and the other in Ndiass, in the vicinity of Dakar’s International Airport. With growing interest in economic zones, there is a need for more clarity and coherence in the incentives offered by the government.

Performance and Data Localization Requirements

Except in the petroleum sector (discussed below), the government does not currently impose, by statute, specific requirements for including local content, input, or employment in investment activities. However, the government has announced that it favors local content, and the current administration is pursing legislation that would require some level of local content in new investment projects. The government also negotiates with potential investors on a case-by-case basis to support local employment or ensure incentives for investors to meet their contractual commitments. The U.S. Bilateral Investment Treaty with Senegal includes provisions for companies to engage freely professional, technical, and managerial assistance necessary for planning and operation of investments. Nevertheless, foreign firms often find that voluntarily including local content in their projects makes their proposals more competitive.

Senegal approved a new Petroleum Code in February 2019. The new law updated Senegal’s oil and gas legal framework, which was initially adopted two decades ago when the country sought to attract initial investments for largely untested resources.  Senegal’s recent string of major offshore petroleum discoveries, however, has attracted major international players and led the government to adjust the legislation to preserve a greater share of the profits for Senegal. The revised law guarantees more favorable terms to the national oil company Petrosen, including a minimum of 10 percent interest in projects in the exploration phase and up to 30 percent interest when projects reach the development and exploitation stages.  Although oil and gas blocks will still be awarded through open international tenders, the new law will require foreign oil companies to source a portion of labor and materials locally and contribute to a training fund for local workers.

Acquiring work permits for expatriate staff is typically straightforward. Citizens from WAEMU member countries may work freely in Senegal.

Following the lead of foreign companies, some Senegalese firms have begun adopting corporate social responsibility programs and responsible business conduct standards. However, this movement is not yet widespread.

The criteria and procedures by which the government awards natural resource extraction contracts or licenses are specified in Senegal’s 2016 Mining Code. The new code requires mining companies to participate in transparency reporting, following the guidelines of the Extractive Industries Transparency Initiative (EITI). The government appeared to follow the Mining Code and its implementing regulations in practice, although unregulated artisanal mining is common in some areas. Basic information on awards was publicly available online through the government’s official journal, and included details regarding geographic areas, resources under development, companies involved, and the duration of contracts. In January 2019, the government adopted a new Petroleum Code, in response to major offshore hydrocarbon discoveries since 2014. The new code clarifies mechanisms for reserving revenues from oil and gas projects to the government. Senegal has been an active member of the Extractive Industries Transparency Initiative (EITI) since 2013. In May 2018, the EITI Board declared Senegal the first country in Africa to have made “satisfactory progress” in implementing EITI standards. In October, Senegal hosted the 41st quarterly meeting of the EITI Board, along with a conference on EITI implementation in Africa. The government’s EITI committee reports directly to the president.

Senegalese law provides criminal penalties for corruption. The National Anti-Corruption Commission (OFNAC) has a mandate to enforce anti-corruption laws. In January 2020, OFNAC released long overdue reports on its activities for 2017 and 2018 and swore in six new executive-level officials, bringing its managing board to a full complement for the first time in several years. A 2014 law requires the president, cabinet ministers, speaker and chief financial officer of the National Assembly, and managers of public funds in excess of one billion CFA francs (approximately $1.8 million) to disclose their assets to OFNAC.

The government has made some limited progress in improving its anti-corruption efforts. The current administration has mounted corruption investigations against several public officials (primarily the president’s political rivals) and has secured several convictions. In July 2020, President Sall launched an initiative to enforce a requirement that cabinet members and other high-level officials disclose their assets, and issued a report disclosing his own personal assets. The government of Senegal has also taken steps to increase budget transparency in line with regional standards. Senegal ranked 66 out of 180 countries, in Transparency International’s 2019 Corruption Perception Index (CPI), representing a substantial improvement over Senegal’s ranking of 94 in 2012.

Notwithstanding Senegal’s positive reputation for corruption relative to regional peers, the government often did not enforce the law effectively, and officials continued to engage in corrupt practices with impunity. Reports of corruption ranged from rent-seeking by bureaucrats involved in public approvals, to opaque public procurement, to corruption in the police and judiciary. Some high-level officials in President Sall’s administration are rumored to be involved in corrupt dealings.

Senegal’s financial intelligence unit, Cellule Nationale de Traitement des Informations Financières (CENTIF) is responsible for investigating money laundering and terrorist financing. CENTIF has broad authority to investigate suspicious financial transactions, including those of government officials. In February 2019, the regional FATF body, GIABA, issued a Mutual Evaluation Report of Senegal’s anti-money laundering and countering terrorist financing (AML/CTF) performance, measured by FATF standards. Although GIABA found the GOS’s understanding of AML/CTF standards and risks adequate, it gave Senegal non-compliant or partially compliant ratings on 26 of FATF’s 40 recommendations concerning the AML/CTF legal framework (“technical compliance”). Senegal also received ten low ratings and one moderate rating on the FATF’s 11 indicators measuring Senegal’s practical efforts to combat money laundering, terrorist financing, and weapons of mass destruction proliferation financing. Key weaknesses included: failure to domesticate relevant BCEAO AML/CTF directives; inadequate monitoring of nonprofits and non-bank professions, such as lawyers and accountants, who engage in financial transactions; inadequate inspections and sanctions of financial institutions; weak interagency cooperation; and low levels of AML/CTF capacity among judicial and customs authorities.

It is important for U.S. companies to assess corruption risks and develop an effective compliance program or measures to prevent and detect corruption, including foreign bribery. U.S. firms operating in Senegal can underscore to interlocutors in Senegal that they are subject to the Foreign Corrupt Practices Act (FCPA) in the U.S. and may consider seeking legal counsel to ensure compliance with anti-corruption laws in the U.S. and Senegal. The U.S. Government seeks to level the global playing field for U.S. businesses by encouraging other countries to take steps to criminalize all acts of corruption, including bribery of foreign public officials, and requiring them to uphold their obligations under relevant international conventions. A U.S. firm that believes a competitor is seeking to use bribery of a foreign public official to secure a contract may bring this to the attention of appropriate U.S. agencies.

Senegal is a signatory of the United Nations Convention Against Corruption but it is not a signatory of the OECD Convention on Combatting Bribery.

Resources to Report Corruption

Mrs. Seynabou Ndiaye Diakhaté, President
Office National de Lutte Contre La Fraude et la Corruption (OFNAC)
Lot 72-73, Cité Keur Gorgui à Mermoz-Pyrotechnie
Telephone: 800 000 900 / +221 33 889 98 38
www.ofnac.sn

Birahim Seck
President
Forum Civil
40 Avenue Malick Sy (1er étage) – B.P. 28 554 – Dakar
Telephone: +221 33 842 40 44
forumcivil@orange.sn / http://www.forumcivil.sn/ 

Senegal has long been regarded as an anchor of stability in the West Africa region that is vulnerable to political unrest. It is the only mainland West African country that has never had a coup d’état since gaining independence in 1960. Senegal experienced sporadic incidents of political violence during the lead up to national elections in March 2012 due to strong opposition to former President Wade’s decision to seek reelection for a third term. However, the 2012 presidential election reinforced Senegal’s reputation as the strongest democracy in West Africa. International observers assessed the February 2019 presidential election, in which President Sall easily won a second term, as free and fair, despite some isolated systemic issues and a few instances of campaign violence. Public protests occasionally spawn isolated incidents of violence when unions, opposition parties, merchants, or students demand better salaries, working conditions or other benefits. Sporadic incidents of violence as result of petty banditry continue in the Casamance region, which has suffered from a three-decade-old conflict ignited by a local rebel movement seeking independence for the region, but the level of violence has declined in recent years as the government and rebel groups have engaged in negotiations to resolve the conflict.

Security is a top priority for the government, which increased its defense and security budget by 92 percent between 2012 and 2017.

“0” reflects amounts rounded to +/- USD 500,000.

Table 4: Sources of Portfolio Investment
Data not available.