Policies Towards Foreign Direct Investment

The Beninese government actively encourages foreign investment, which it views as critical for economic development and successful implementation of the $15 billion PAG. APIEX, situated in the Presidency, aims to promote foreign direct investment and reduce administrative barriers to doing business. APIEX serves as the single investment promotion center and conduit of information between foreign investors and the Beninese government. It is the technical body responsible for reviewing applications for approval under the Investment Code and the administrative authority for special economic zones (SEZs). The agency has significantly reduced stated processing times for registration of new companies (from 15 days to one day) and construction permits (from 90 to 30 days). In practice, APIEX faces capacity constraints, processing times can be longer than stated, and its website is often out of date and lacks information on the latest regulations and laws. The Investment Code, amended in 2020, establishes conditions, advantages, and rules applicable to domestic and foreign direct investment.

Limits on Foreign Control and Right to Private Ownership and Establishment

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

Other Investment Policy Reviews

In 2015, the Beninese government conducted a joint investment policy review (IPR) with the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), and the United Nations Conference on Trade and Development (UNCTAD). Further to a 2016 fact-finding mission, the UNCTAD Report on the Implementation of the IPR of Benin assesses progress in implementing the original recommendations of the IPR and highlights policy issues to be addressed in the investment climate. The full report may be found at: https://investmentpolicy.unctad.org/investment-policy-review/23/benin 

Business Facilitation

Benin ranked 149 out of 190 countries on the 2020 World Bank Doing Business rankings, rising five spots from 2019. APIEX is responsible for facilitating business startups and reducing administrative barriers for investors and businesses. APIEX states that new businesses can be opened online through its website in as little as 24 hours (https://monentreprise.bj/ ).

In an effort to facilitate business travel and tourism, Benin implements a visa-free system for African nationals and an online e-visa system for holders of other passports (). The country is working to open four new trade offices abroad to enhance Benin’s international business opportunities. One is already underway in Shenzhen, China; others are planned for Europe, the United States, and the Middle East.

Benin’s 2017 Property Code made property registration simpler and less expensive in order to boost the real estate market, improve access to credit, and reduce corruption in the registration process. The measures apply to real personal property, estate and mortgage taxes, and property purchase receipts. In order to register property, individuals and businesses must present a taxpayer identification number (registration for which is free). Land registration and property purchase certifications are free, but there is a fee for obtaining a property title.

Benin Control – a private company operating under the supervision of the Ministry of Infrastructure and Transport – is charged with expediting customs clearances and minimizing processing barriers to clearing cargo at the Port of Cotonou. Benin Control makes it possible to obtain cargo clearance within as little as 48 hours after its off-loading at the Port of Cotonou, though in practice this can take longer. The reinstitution of the cargo inspection and scanning program known as PVI, first tried in 2012, resumed operations at the Port of Cotonou in 2017. Under the PVI program, Benin Control scans 10 percent of all imports, with containers selected randomly for scanning. Benin Control bills all containers exiting the Port of Cotonou – regardless of whether they are selected for scanning – at the rate of 35,000 FCFA ($68) for a 20-foot container, and 45,000 FCFA ($78) for a 40-foot container.

The government, through the state-owned Benin Water Company (SONEB) and Beninese Electric Energy Company (SBEE), provides service connections to potable water and electricity free of charge to Small and Medium Size Enterprises and Industries.  Eligible companies are responsible for paying the water and electricity meter installation fees.  Online application is available at https://www.soneb.bj/soneb15/pme-pmi-raccordement-gratuit and https://www.sbee.bj/site/demande-de-raccordement-des-pme-pmi-conditions/

Outward Investment

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

Capital Markets and Portfolio Investment

Government policy supports free financial markets, subject to oversight by the Ministry of Finance and the West African States Central Bank (BCEAO). Foreign investors may seek credit from Benin’s private financial institutions and the WAEMU Regional Stock Exchange (Bureau Regional des Valeurs Mobilieres – BRVM) headquartered in Abidjan, Cote d’Ivoire with local branches in each WAEMU member country. There are no restrictions for foreign investors to establish a bank account in Benin and obtain loans on the local market. However, proof of residency or evidence of company registration is required to open a bank account

Money and Banking System

The banking sector is generally reliable. Thirteen private commercial banks operate in Benin in addition to the BCEAO and a planned subsidiary of the African Development Bank. Taking into account microfinance institutions, 22.5 percent of the population had access to banking services in 2018. In recent years, non-performing loans have been growing; 15 percent of total banking sector assets are estimated to be non-performing. The BCEAO regulates Beninese banks. Foreign banks are required to obtain a banking license before operating branches in Benin. They are subject to the same prudential regulations as local or regional banks. Benin has lost no correspondent banking relationships during the last three years. There is no known current correspondent banking relationship in jeopardy. Foreigners are required to present proof of residency to open bank accounts.

Foreign Exchange and Remittances

Foreign Exchange

All funds entering the country from abroad for investment purposes require reporting and registration with the Ministry of Finance at the time of arrival of funds. Evidence of registration is required to justify remittances of investment capital, earnings, loan/lease repayments, or royalties. Such remittances are allowed without restrictions. Funds entering the country from abroad for investment purposes must be converted into local currency. For the purposes of repatriating such funds, either the invested funds or the interest/earnings or royalties can be converted into any world currency.

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

Remittance Policies

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

Sovereign Wealth Funds

Benin does not have a sovereign wealth fund.

Policies Towards Foreign Direct Investment

The GOC’s policies towards foreign direct investment (FDI) are generally positive. Chad’s laws and regulations encourage FDI, and there are few formal restrictions on foreign trade and investment. Under Chadian law, foreign and domestic entities may establish and own business enterprises.

The National Investment Charter of 2008 permits full foreign ownership of companies in Chad. The only limit on foreign control is on ownership of companies deemed related to national security. The National Investment Charter guarantees both foreign companies and individuals equal standing with Chadian companies and individuals in the privatization process. In principle, tenders for foreign investment in state-owned enterprises (SOEs) and for government contracts are conducted through open international bid procedures. The National Investment Charter also offers incentives to certain foreign companies establishing significant operations in Chad, including up to five years of tax-exempt status.

Chad’s National Agency for Investment and Exports (ANIE, Agence Nationale des Investissements et des Exports), an agency of the Ministry of Industrial and Commercial Development & Private Sector Promotion, facilitates foreign investment. ANIE’s mandate is to contribute to the creation of a business environment that meets international standing, promote investment and exports, support the development of SMEs, and inform GOC decision makers about economic policy. ANIE acts as a one-stop shop for new investors.

Limits on Foreign Control and Right to Private Ownership and Establishment

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

Other Investment Policy Reviews

UNCTAD published a French-language Investment Policy Review https://investmentpolicy.unctad.org/publications/1212/investment-policy-review-of-chad  on Chad in July 2019.

The World Trade Organization (WTO) published a joint trade policy review (https://www.wto.org/english/tratop_e/tpr_e/tp385_e.htm  ) for Chad, Cameroon, Republic of Congo, Gabon, and Central African Republic in 2013, and a standalone trade policy review (https://www.wto.org/english/tratop_e/tpr_e/tp275_e.htm  ) for Chad in 2007.

The OECD has not published any investment policy reviews of Chad.

Business Facilitation

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

In 2019, the World Bank ranked Chad 182 out of 190 countries for ease of starting a business, which included factors beyond registration such as permitting and access to office space, energy, and capital. Article 31 of the 2020 Finance Law requires companies to provide a reimbursable deposit of up to 0.5 percent of expected annual revenue to the GOC to complete registration.

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

Outward Investment

The GOC does not offer any programs or incentives encouraging outward investment. The GOC does not restrict domestic investors from investing abroad.

Capital Markets and Portfolio Investment

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

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

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

Money and Banking System

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

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

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

Foreign Exchange and Remittances

Foreign Exchange

The government does not restrict converting funds associated with an investment (including remittances of investment capital, earnings, loan repayments, lease payments, royalties) into a freely usable currency at legal market-clearing rates. There are currently no restrictions on repatriating these funds, although there are some limits associated with transferring funds. BEAC proposals for currency export restrictions to improve current account balances and reduce corruption opportunities remain under discussion, with foreign investors requiring large capital expenditures requesting exemptions from new regulations. Individuals transferring funds exceeding 1,000 USD must document the source and purpose of the transfer with the local sending bank. Transactions of 10,000 USD or more for individuals and 50,000 USD or more for companies are automatically notified to the COBAC. Companies and individuals transferring more than 800,000 USD out of Chad need BEAC authorization to do so. Authorization may take up to three working days. To request authorization for a transfer, companies and individuals must submit contact information for the sender and recipient, a delivery timetable, and proof of the sender’s identity. Approvals are routine, although the Central Bank has occasionally temporarily restricted capital outflows. There were no reports of other capital outflow restrictions in 2019. Businesses can obtain advance approval for regular money transfers.

Chad is a member of the African Financial Community (CFA) and uses the Central African CFA Franc (FCFA) as its currency. The FCFA is pegged to the Euro at a fixed rate of one Euro to 655.957 FCFA exactly (100 FCFA = 0.152449 Euro). In 2019, the CFA/USD exchange rate fluctuated between 571 and 602 FCFA as a function of the performance of the USD against the Euro. There are no restrictions on obtaining foreign exchange.

Remittance Policies

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

Chad does not engage in currency manipulation.

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

Sovereign Wealth Funds

The GOC does not currently maintain a Sovereign Wealth Fund.

Policies Towards Foreign Direct Investment

The Government of Niger is committed to attracting FDI and has repeatedly pledged to take whatever steps necessary to encourage the development of its private sector and increase trade.  The country offers numerous investment opportunities, particularly in agriculture, livestock, energy, telecommunication, industry, infrastructure, hydrocarbons, services, and mining.  In the past several years, new investor codes have been implemented (the most recent being in 2014), the Public-Private Partnership law was adopted in 2018 and subsequently implemented.  Transparency has improved, and customs and taxation procedures have been simplified.  There are no laws that specifically discriminate against foreign and/or U.S. investors.  The government of Niger has demonstrated a willingness to negotiate with prospective foreign investors on matters of taxation and customs.

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

The Public-Private Partnership law adopted in 2018 gives such projects total exemption from duties and taxes, including Value Added Tax (VAT), on the provision of services , works and services directly contributing to the realization of the project in the design and/or implementation phase.  Parts, spare parts, and raw materials intended for projects do not benefit from a duty exemption and customs taxes unless they are not available at Niger.  In the design and/or production phase, private public partnerships benefit from free registration of agreements and all acts entered by the contracting authority and the contracting partner within the framework of the project.

Despite having regulations in place to invite FDI, Niger’s enforcement of its tax code is not always even.  In 2018 and 2019, at least two notable foreign investors complained of unfair tax enforcement or policies.

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

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

In 2018, Niger’s government reviewed the HCIN’s mission as related to international best practices on attracting FDI.  Subsequently the GoN added, by Presidential Decree, a Nigerien Agency for the Promotion of Private Investment and Strategic Projects (ANPIPS).  It reports to the HCIN and is the implementing agency of HCIN’s policy initiatives.  To date the two agencies have successfully completed a number of investment agreements, notably with Chinese and Turkish firms.  In 2018, it assisted representatives from an American firm in gaining access to Niger and arranging meetings with appropriate government officials.

To improve business climate indicators, the GoN created an Institutional Framework for Improving Business Climate Indicators Office (Dispositif Institutionnel d’Amélioration et de Suivi du Climat des Affaires), within the Ministry of Commerce.  Its stated goal is to create a regulatory framework that permits the implementation of sustainable reforms.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own business enterprises.  Energy, mineral resources, and national security related sectors restrict foreign ownership and control; otherwise, there are no limitations on ownership or control.  In the extractive industries, any company to which the GoN grants a mining permit must give the GoN a minimum 10 percent share of the company.  This law applies to both foreign and domestic operations.

The GoN reserves the right to require companies exploiting mineral resources to give the GoN up to a 33 percent stake in their Nigerien operations.  Although Ministry of Planning authorization is required, foreign ownership of land is permitted.  In 2015, under the auspices of the Ministry of Commerce, the GoN validated a new Competition and Consumer Protection Law, replacing a 1992 law that was never operational.  Niger also adheres to the Community Competition Law of the West African Economic and Monetary Union (WAEMU) and directives of the Economic Community of West African States (ECOWAS) as well as those offered to investors by the Multilateral Investment Guarantee Agency (MIGA) all of which provide benefits and guarantees to private companies.

The Government of Niger is an active proponent of the African Continental Free Trade Agreement, which President Issoufou stated will encourage international investments and ease trade for international investors.

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

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

An investment screening mechanism does not exist under the Investment Code.  The HCIN is a de facto advisory council to the government on any large scale investment.  The HCIN would support investor engagement with appropriate government offices and facilitate meeting any regulatory requirements.

Other Investment Policy Reviews

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

The World Bank, however, cohosted a roundtable discussion in 2019 with government, civil society, and business representatives to review Niger’s business climate including its investment policies.

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

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

Business Facilitation

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

From 2016 to 2019, the cost and time needed to register businesses dropped from 100,000 CFA (about USD190) to 17,500 CFA (about USD33).  Furthermore, the time to obtain construction permits dropped, as well as the cost of access to water and electricity networks.  The GoN also created an e-regulations website (https://niger.eregulations.org/procedure/2/1?l=fr ), which allows for a clear and complete registration process.  Foreign companies may use this website, which lists government agencies with which businesses must register.  The business registration process was down to about 3 days by 2019, from over 14 days in 2016.

The Government maintains a policy of working with international organizations in finding ways to improve its business registration process, which is reflected in its year-over-year improvements in Niger’s Ease of Doing Business Score as measured by the World Bank.  In the 2020 doing business, Niger score 56.8 and ranked at 132 out of 190 economies.

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

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

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

Outward Investment

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

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

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

Capital Markets and Portfolio Investment

Niger’s government welcomes foreign portfolio investment.

Niger’s capital markets are extremely underdeveloped, and the country does not have its own stock market. However, the country shares a regional stock market The Bourse Régionale des Valeurs Mobilières (BRVM) with the eight (8) Member States in the West African Economic and Monetary Union (WAEMU), namely: Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo. This is the only stock market in the world shared by several countries, run totally in digital format and integrated in a perfect manner.

Although an effective regulatory system exists, and policies encourage portfolio investment, there is little market liquidity and hence little opportunity for such investment. The agency UMOA-Titres (AUT), a regional agency to support public securities issuance and management in the WAEMU (bonds market), is dedicated to helping member states use capital markets to raise the resources they need to fund their economic development policies at reasonable cost.

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

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

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

Money and Banking System

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

The banking sector is generally healthy and well capitalized.

Not applicable, as the banking sector is generally healthy.

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

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

Foreign banks are permitted to establish operations in Niger and regulations are in place.  Niger has not lost any correspondent banking in the last three years.

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

Foreign Exchange and Remittances

Foreign Exchange

There are no restrictions or limitations placed on foreign investors in converting, transferring, or repatriating funds associated with an investment, including remittances.  Funds are freely convertible into any world currency. However, the government must approve currency conversions above 2 million CFA (approximately 3,413 USD).  The exchange rate is determined via the euro’s fluctuations on the international currency market. The CFA is pegged to the euro.

Remittance Policies

Niger’s Investment Code offers the possibility to transfer income of any kind, including capital investment and the proceeds of investment liquidation, regardless of the destination.  There are no limitations or waiting periods on remittances, though the Ministry of Finance must approve currency conversions above 2 million CFA (approximately 3,250 USD).

Sovereign Wealth Funds

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

Policies Towards Foreign Direct Investment

The Federal Government of Somalia (FGS) at the federal and regional level has a positive attitude towards foreign direct investment (FDI). However, insecurity driven by terrorist groups, lack of transparency, and widespread corruption in sectors of government make Somalia present considerable barriers to foreign direct investment at the moment.

The country passed an Investment Law in 2015 on the promotion and protection of foreign investments. According to the Somali Chamber of Commerce and Industry, the law aims to offer favorable incentives to foreign investors, such as tax advantages and guarantees against expropriations. Under the law, priority is given to foreign investments in the areas of agriculture, livestock, fishing, mineral resources, and industrial activities.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are no laws in place currently that deal with the right to private ownership and limits on foreign control.

Other Investment Policy Reviews

There has not been a third-party investment review undertaken in Somalia.

The FGS is not a member of World Trade Organization (WTO) or the Organization for Economic Cooperation and Development. In August 2017, Somalia communicated its intent to join the WTO and in May 2020 after working through the accession stages, Somalia submitted its Memorandum on the Foreign Trade Regime.

The FGS rejoined the Common Market for Eastern and Southern Africa(COMESA) community in July 2018. As a member, Somalia is required to undertake several institutional, policy, and regulatory reforms to meet COMESA free trade protocols and to trade with its member countries.

The FGS has also applied for East African Community (EAC) membership and is now awaiting the submission of the verification report by the EAC Secretariat before the next Heads of State Summit, scheduled in early 2020, for a decision. It is highly likely the EAC will approve Somalia to be the seventh member, and this will open up the opportunity for Somalia to formalize trade with its neighbors and allow easy movement of Somali citizens to other EAC member states through acquisition of the common EAC passport.

Somalia has also indicated its support for and intention to participate in negotiations on the African Continent Free Trade Agreement.

Business Facilitation

In 2019 Ministry of Commerce and Industry launched a “one-stop shop” business registration website. The aim of the portal is to reduce time and costs for registering a business in Somalia. However, due to some technical hitches, the online registration website was never operationalized. The World Bank is currently providing technical support to the ministry to operationalize the site. In 2019, both houses of the parliament passed legislation formalizing the legal requirements for company formation and registration and the President Mohamed Abdullahi Mohamed “Farmaajo” signed the legislation in to law.

The World Bank ranked Somalia 190 out of 190 in its 2019 Ease of Doing Business survey.

Outward Investment

The Somali government does not have a policy that promotes or incentivizes outward investment.

Capital Markets and Portfolio Investment

Somalia has no structured financial system. It also does not have any form of portfolio investment financial products in the market. The country has no government bonds or corporate bonds. There is one private stock exchange operating in Somalia (http://www.somalistockexchange.so/ ) but the government lacks the authority to regulate the trade in stocks and securities.

Money and Banking System

The Central Bank of Somalia (CBS) was reestablished in 2009 and is slowly developing the capacity to oversee the licensing and supervision of money-transfer businesses and commercial banks. The CBS has registered seven hawalas and 11 banks to provide financial services. Nine of these banks are operational whereas the other two have yet to be operationalized.

Most Somalis do not have access to formal banking services due to the lack of available branches in many parts of the country, as well as the difficulty of obtaining acceptable forms of identification to open bank accounts. There is limited data or information regarding the operations and assets of these privately-owned banks and the CBS has no capacity or competency to regulate them to required standards. At this time, no foreign banks or any branch of a foreign bank operate in Somalia. The Central Bank licensed an Egyptian bank in April 2019 but it is not operational.

Somalia’s financial risk profile remains high due to legitimate concerns about money laundering and terrorism financing. The financial system is stymied by the lack of any national identification, creating challenges for banks and money transfer services to verify client identity. In 2019 the government finalized anti-money laundering/countering terrorism financing (AML/CFT) regulations that will require banks to implement stricter know your customer (KYC) controls. As of September 2019, all licensed banks were providing suspicious transaction reports to the government’s Financial Reporting Center (FRC).

Foreign Exchange and Remittances

Foreign Exchange

While the official currency for Somalia is the Somali shilling, there is very limited use of the currency in the country’s dollarized economy. In addition, a significant portion of day to day transactions are conducted through phone-based mobile money managed by the telecommunications sector. According to the IMF, almost all the current shilling notes in Somalia are counterfeit, illegally printed by individual businesses and regional administrations since the CBS has not issued any new notes since 1991. There is no restriction or limitation on converting or repatriating funds associated with outside investment. The shilling is volatile and fluctuates rapidly against the dollar. Since there is no government agency that determines monetary policy at this time, the exchange rate is set by several currency traders located in Mogadishu’s Bakarat market. The government is planning to print a new currency.

Remittance Policies

For two decades, there was no functioning banking system in Somalia. Instead, informal money transfer systems known as hawalas allowed for the transfer of money to, from, and within Somalia. Somalis in the diaspora remit over $1 billion annually, making up between 20% and 40% of Somalia’s GDP. While the impacts of the COVID-19 pandemic on Somalia’s financial sector are still uncertain, the country is already seeing a drop in remittances. In 2019 the government finalized AML/CFT regulations that require money transfer businesses to implement stricter know your customer (KYC) controls and report suspicious transactions to the government.

Sovereign Wealth Funds

There are no sovereign wealth funds or any other state-owned investment fund.