Angola is actively seeking FDI to diversify capital inflows, boost economic growth, and diversify the country’s economy. Angola has maintained its privatization program (PROPRIV), started in 2019, despite the difficulty attracting investment during the COVID-19 pandemic. PROPRIV offers investment opportunities for foreign investment in state-owned enterprises and other publicly owned assets as the government seeks to liquidate its stake in assets across sectors such as transportation, telecommunications, and banking. Angola has also modernized its tendering process to make it more transparent. Despite the increased openness and concerted effort to attract foreign investors, Angola passed local content regulations for the oil sector in October 2020 restricting the concept of “national company” to companies fully owned by Angolan citizens, as opposed to a companies with at least 51 percent ownership by Angolan entities. The regulation has three regimes determining the types of services that must be contracted with local entities and which can be contracted with foreign entities. The local content regulations apply to all companies providing goods and services to oil sector as well as oil companies.

Angola’s trade and investment promotion agency AIPEX  provides an online investment window platform for investors to register their investment proposals. AIPEX and the Institute of State Assets and Shares work together on roadshows to promote PROPRIV for foreign investors. AIPEX is also responsible for providing institutional support and monitoring investment project execution.

Foreign and domestic private entities can establish and own business enterprises with limitations on foreign entities holding the majority stake in companies in specific sectors. The 2018 Private Investment Law (PIL) establishes the general principles of private investment in Angola for domestic and foreign investors and applies to private investments of any value. Under the PIL, the acquisition of shares of an Angolan entity by a foreign investor is deemed to be a private investment operation. If the investor wishes to transfer funds abroad, the private investment project must be properly registered and executed, and appropriate taxes must be paid before transferring.

Majority foreign shareholding restrictions persist in specific industries such as the oil and gas sector (49 percent cap) and the maritime sector, specifically for shipping, due to their significance in the Angolan economy. Mining rights are granted to private investors by the national diamond company ENDIAMA. The PIL lifted restrictions on having Angolan partners for several strategic sectors such as he telecommunications, hospitality and tourism, transportation and logistics, and information technology.

At the government’s request, the last Investment Policy Review (IPR) of Angola’s business and economic environments was completed in 2019 by the United Nations Conference on Trade and Development (UNCTAD). The full report and policy recommendations are accessible at UNCTAD TPR . The WTO’s last IPR was more than five years ago; OECD has never conducted an IPR of Angola.

There are no recent policy recommendations by civil society organizations based on reviews of investment policy related concerns.

Presidential Decree No 167/20, of June 15, 2020, created the “ Single Investment Window ” (Janela Única de Investimento, or JUI), which is aimed at simplifying the contact between the investor and all the public entities involved in the approval of foreign investment projects.

To incorporate a company, investors must obtain a certificate of availability of the corporate name from the Ministry of Justice and Human Rights; deposit share capital and show proof of deposit to a notary; submit a draft incorporation deed, articles of association, and shareholder documents. The company must then register with the Commercial Registrar to register the company’s incorporation in the Angola’s Official Gazette (Diário da República).

Despite efforts to reduce the bureaucracy related to incorporating a business, it still takes around 30 days to incorporate. The business then must register with Tax Authority , the National Institute for Statistics , and the National Institute for Social Security . The business can then initiate licensing procedures.

Angola is also negotiating with the EU on a Sustainable Investment Facilitation Agreement , the EU’s first bilateral agreement on investment facilitation. The sides have had two rounds of negotiations in June and December 2021. The agreement intends to simplify procedures and encourage e-governance and public-private dialogue, while diversifying Angola’s economy and helping small and medium sized enterprises invest. Its goal is to support Angola’s ability to attract and retain investment by improving the investment climate for foreign and local investors.

The Angolan government does not promote or incentivize outward investment, nor does it restrict Angolans from investing abroad. Investors are free to invest in any foreign jurisdiction.

Domestic investors often prefer to invest in Portuguese-speaking countries, with few investing in neighboring countries in Sub-Saharan Africa. The bulk of investment is in real estate, fashion, fashion accessories, and domestic goods.

Due to foreign exchange constraints, there has been very limited investment abroad by domestic investors.

There is a general awareness of expectations of or standards for responsible business conduct (RBC) or obligation to conduct due diligence to ensure no harm with regards to environment, social and governance issues. Projects that could have an impact on the environment are subject to an environmental impact assessment (EIA) depending on their nature, size or location, on a case-by-case basis. Presidential Decree No 117/20 of April 22, 2021 establishes the:

• Rules and procedures for EIAs for public and private projects.
• Environmental licensing procedure for activities that are likely to cause significant environmental and social impacts.
• Applicable fees.
• Fines for non-compliance.

The government has few initiatives to promote responsible business conduct. In March 2019, the UNDP launched the National Network of Corporate Social Responsibility, “RARSE,” to create a platform to reconcile responsible business conduct with the needs of the population. The government, through the Ministry of Education, also held a campaign under the theme, “Countries that have a good education, that enforce laws, condemn corruption, privilege and practice citizenship, have as a consequence successful social and economic development” in 2020.

The government has enacted laws to prevent labor by children under 14 and forced labor, although resource limitations hinder adequate enforcement. In June 2018, the government passed a National Action Plan for the Eradication of Child Labor (PANETI) (2018-2022) to eradicate the worst forms of child labor. This plan was updated on March 17, 2022 and is implemented by the Multisectoral Commission for the Prevention and Eradication of Child Labor. The National Plan aims to eliminate child labor in Angola, by creating strategies, prevention policies, a favorable environment for the harmonious development of children, and creating institutional capacity to solve the problem of worst forms of child labor in the country.

With limitations, the laws protect the rights to form unions, collectively bargain, and strike. Government interference in some strikes has been reported. The Ministry of Public Administration, Employment, and Social Security has a hotline for workers who believe their rights have been infringed. Angola’s Chamber of Commerce and Industry established the Principles of Ethical Business in Angola.

The GRA does not fully meet the minimum standards for the elimination of trafficking in persons but is made significant efforts to do so, especially considering the impact of the COVID-19 pandemic on its anti-trafficking capacity. Those efforts led to Angola remain on Tier 2 in 2021. Some of the efforts taken by Angolan authorities include convicting multiple traffickers, including five complicit officials, and sentencing all to imprisonment; offering long-term protective services that incentivized victims to participate in trials against their traffickers; dedicating funds specifically for anti-trafficking efforts, including for implementation of the national action plan; and conducting public awareness campaigns against trafficking.

In 2015, Angola organized an interagency technical working group to explore Angola’s possible membership in the Voluntary Principles on Security and Human Rights (VPs) and the Extractive Industries Transparency Initiative (EITI). Angola formally announced its intention to join the EITI in September 2020 and in November 2021 announced its intention to formally present its candidacy in March 2022. Angola has been a member of the Kimberley Process (KP) since 2003 and chaired the KP in 2015. Angola is not a party to the WTO’s GPA and does not adhere to the OECD guidelines on corporate for SOEs.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions 

Department of Labor

• Findings on the Worst Forms of Child Labor Report ;
• List of Goods Produced by Child Labor or Forced Labor ;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World  and;
• Comply Chain .

According to Article 5 of Decree No. 51/04 of July 23, 2004, every project (private or public) must present an Environmental Impact Study to the Ministry of Environment for their approval.

Angola aims to address the impacts of climate change as stated in its National Development Plan . It includes the main goals and actions to tackle current and future impacts on important sectors for economic development and for environmental sustainability. In addition, the National Strategy for Climate Change (2018–2030) includes five pillars on mitigation, adaptation, capacity building, funding, and institutional coordination. In addition, the Government of Angola has ratified the UNFCCC and developed and submitted its National Adaptation Plans of Action (NAPAs).

Angola has not made firm commitments or introduced policies to reach net-zero carbon emissions by 2050. Angola prioritizes the implementation of adaptation measures in coastal zones, land use, forests, ecosystems and biodiversity, and water resources. On mitigation, Angola aims to reach 70 percent of installed renewable energy  by 2025 and to sequester 5 million tons of CO2e per year through reforestation by 2030. Angola, like many African countries, needs access to abundant, always available, and cost-effective power to support economic growth. As part of a path towards sustainable transition, Angola needs to reduce emissions from its existing fossil fuel facilities.

The Forest and Fauna law 06/17 of January 24, 2017, has significantly changed how natural forests are managed in the country, introducing the concept of forest concessions for the first time, allowing for a more rational use of forest resources. Recognizing the potential of the blue economy, the government has expanded the mandate of the Ministry of Fisheries to cover issues of the sea, launched a marine spatial plan to address conflicting uses of marine resources, and is planning to establish the first marine protected area in the country. In addition, the government has started the preparation of guidelines to regulate private concessions in protected areas, as an effort to attract private investments in nature-based tourism and has also established the Kavango Agency to ensure further multi-sectoral coordination in the management of the high-sensitive Kavango watershed.

The Strategic Plan for the Protected Areas System of 2018 (PESAP 2018) is the most recent policy document for protected areas. The plan focuses on measures to allow fundraising, train staff, and strengthen institutions such as the National Institute for Biodiversity and Protected Areas. It also emphasizes the importance of maintaining the socioeconomic and financial sustainability of conservation areas.

Corruption remains a strong impediment to doing business in Angola and has had a corrosive impact on international market investment opportunities and on the broader business climate. The Lourenço administration has developed a comprehensive anti-corruption and anti-money laundering legal framework, but implementation remains a challenge. Angola has made several arrests of former officials and family members of the former president who were accused of embezzling state funds and has made a concerted effort to recover assets it accuses those individuals of stealing.

Some of the recent anti-corruption legislation includes:

• The revised Criminal Law Code and Criminal Procedure Code, which both entered into force in February 2021: The updated laws include corporate criminal liability; harsh penalties for active and passive corruption by public officials, their family members, and political parties; criminalization of private sector corruption; and seizure of proceeds.
• The updated Public Procurement Law, which entered into force on December 23, 2020, emphasizes the management of potential conflicts of interest in awarding public contracts, including the requirement for foreign investors to have a local partner, which historically made procurement ripe for bribery and kickbacks.
• The Whistleblower Protection Law, which came into force on January 1, 2020, provides a protection system – including anonymity – for victims, witnesses, and the accused during judicial proceedings that involve corruption and/or money laundering allegations.

The government does not require the private sector to establish internal codes of conduct and does not provide a mechanism for reporting irregularities related to public officials.

U.S. firms in Angola are aware of cases of corruption in Angola despite efforts to combat the phenomenon and view it as a significant impediment to FDI. Corruption in Angola is pervasive in public institutions, government procurement customs and taxation. Foreign investors seeking to do business in Angola must remain mindful of the corruption risks and the extraterritorial reach of the U.S. FCPA.

Contact at the government agency or agencies that are responsible for combating corruption:

Hélder Pitta Grós
Procurador Geral da Republica (Attorney General of the Republic)
Procurador Geral da Republica (Attorney General’s Office)
Travessa Antonio Marques Monteiro 22, Maianga
Telephone: 244-222333 172

Sebastiao Domingos Gunza
Inspector General of State Administration
Office of the Inspector General of State Administration
Rua 17 de Setembro, Luanda, Angola
+244 993 666 338

Angola maintains a stable political environment, though demonstrations and workers strikes occur with regularity, particularly in the last two years due to increased socio-economic difficulty. Politically motivated violence is not a high risk, and incidents are rare. The Front for the Liberation of the Enclave of Cabinda—Military Position (FLEC MP) based in the northern province of Cabinda threatened Chinese workers in Cabinda in 2015 and claimed in 2016 that they would return to active armed struggle against the Angolan government forces. No attacks have since ensued and the FLEC has remained relatively inactive to date.

Local elections were anticipated to take place in 2020 but have not yet occurred due to the COVID-19 pandemic and the lack of key legislation governing the elections. General elections are scheduled to occur in August 2022. Young people take to the streets occasionally to protest economic hardship and what they view as unrealized political pledges. Large pockets of the population live in poverty without adequate access to basic services. Crimes of opportunity such as muggings, robberies and car-jackings occur across the country.

In the fourth quarter of 2021, the unemployment rate for economically active Angolans 15 years and older – who represent half of Angola’s 33 million people – was 32.9 percent. The labor market in Angola is largely characterized by high unemployment and a high level of informality. There is also a deficit of skilled and well-trained labor, especially in the industrial sector due to the low level of vocational training. The foreign/migrant labor force bridges the gap in specialized labor. The Angolan labor force also has limited technical skills, English language capabilities, and management training.

Companies in the construction and manufacturing sectors are significant sources of formal and informal mechanisms for workers to acquire skills and abilities particularly relevant to public and private construction works and manufacturing industry.

In the fourth quarter of 2021, the economically active population in Angola age 15 years and older was estimated to be approximately 16.2 million people (48.3 percent male and 51.7 female). Over 80 percent of the employed population in Angola was estimated to work in the informal sector as of the fourth quarter of 2021, equal to around 8.8 million people out of the 10.9 million people 15 years of age and older and employed in the same period. Informal employment was highest among Angolans aged 15-24 years and 65 years or older – reaching over 90 percent. The unemployment rate for women was also 90 percent for women and 71.5 percent for men.

There are gaps in compliance with international labor standards which may pose a reputational risk to investors. Children are sometimes employed in agriculture, construction, fishing, and coal industries. There have been reports of forced labor in agriculture, construction, artisanal diamond mining, and domestic work, each sometimes as a result of human trafficking. Additional information is available in the 2021 Trafficking in Persons Report, (https://www.state.gov/reports/2021-trafficking-in-persons-report/angola/), 2020 Country Report on Human Rights Practices (https://www.state.gov/reports/2021-country-reports-on-human-rights-practices/angola/), and 2020 Findings on the Worst Forms of Child Labor.

The General Labor Law 7 of September 15, 2015, governs all aspects of the employment relationship and provides guidelines on employment adjustments to respond to fluctuations in market or economic conditions. The law differentiates between layoffs and firing. However, there are unemployment insurance mechanisms in place or social safety net programs for workers laid off for economic reasons. All forms of termination must rely on Social Security contributions along the years of employment in due course as the benefits are not readily available at termination but only when the beneficiaries reach retirement age or become physically impaired to maintain employment status.

All employers and unions may enter into collective bargaining agreements under the Law on the Right to Collective Bargaining (20-A/92). Where there is no union representation, the employees may set up an ad hoc commission aimed at negotiating and concluding a collective bargaining agreement with the employer, subject to complex requirements. If more than one union represents an employer’s employees, the unions must set up a joint negotiation committee composed of representatives from each union in the same proportion as the employees are represented.

The negotiation process for a collective bargaining agreement must be finalized within 90 days of the employer receiving the union/employees’ initial proposal. If this process is unsuccessful, the Law on the Right to Collective Bargaining provides for alternative dispute resolution mechanisms to resolve collective labor conflicts – notably conciliation, mediation and arbitration. Unions/employees may call a strike if the negotiations are deadlocked when the deadline for reaching an agreement passes.

A collective bargaining agreement requires all the parties to maintain social peace while it is in force, rendering illegal any strike action or collective labor conflict during that period. Once the effective period has elapsed, the agreement shall continue to bind the parties until it is replaced by a new or amended collective bargaining agreement. Collective labor disputes are to be settled through compulsory arbitration by the Ministry of Labor, Public Administration and Social Security. The law does not prohibit employer retribution against strikers, but it does authorize the government to force workers back to work for “breaches of worker discipline” or participation in unauthorized strikes. The law prohibits anti-union discrimination and stipulates that worker complaints be adjudicated in the labor court. Under the law, employers are required to reinstate workers who have been dismissed for union activities.

The Beninese government encourages foreign investment, which it views as critical for economic development and successful implementation of the $20.6 billion PAG. In 2021 alone, the GOB raised €1.5 billion on the international Eurobond market. APIEX is dedicated to increasing Beninese exports and foreign direct investment and reducing 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 SEZs. The agency has significantly reduced processing times for registering new companies (from 15 days to one day) and issuing 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. Additional information on business startup is available at https://monentreprise.bj/  .

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.

In 2015, the Beninese government conducted the most recent 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 

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 other foreign nationals. 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

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. The GOB has announced that as of 2023 real personal property transactions cannot take place without producing a land title.

Benin Control 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, 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 in 2017. Under the PVI program, Benin Control scans between 30 and 45 randomly selected shipping containers per hour. Benin Control bills all containers exiting the Port– regardless of whether they are selected for scanning – at the rate of $60 (XOF 35,400) for a 20-foot container and $79 (XOF 47,200) for a 40-foot container (https://benincontrol.com/services/scanning).

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/. 

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

In general, government policies and public tenders are made public online and in the newspapers. Anti-corruption and human rights NGOs and activists are active in Benin, though their ability to report misconduct and violations of good governance has weakened under the Talon administration. The government-funded agencies in charge of monitoring business conduct include the High Commission for the Prevention of Corruption (HCPC), the Court of Accounts, the National Financial Information Processing Unit, and the National Commission on Systems and Freedom.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Benin has a 2016-2025 national climate change strategy. It is a cross-sectorial, thematic, short to medium-term strategy and responds to Benin’s dual needs to address the adverse effects of climate through the identification, adoption, dissemination, ownership of adaptation measures, and the reduction of greenhouse gas emissions. The vision of the strategy is “By 2025, Benin is a country of low carbon instensity and resilient to climate change.” This vision stems from Benin’s longer 25-year strategy, known locally as Alafia, which calls for “Benin by 2025 to be a flagship, well-governed, united and peaceful country that enjoys a prosperous and competitive economy.” Through its climate change strategy and Alafia, Benin seeks to contribute to sustainable development through the integration of climate considerations in strategic sectorial operational plans of the country. The strategy focuses on reducing emissions resulting from deforestation, reducing human activity-induced greenhouse gas emission, and increasing carbon capture. As part of this strategy, the GOB is offering incentives for private investment in the renewable energy sector. The second PAG’s public procurement policies include environmental and green growth considerations such as resource efficiency, pollution abatement, and climate resilience.

Benin has laws aimed at combatting corruption and has made progress combatting the most common forms of corruption, but work remains in rooting it out. The new HCPC is the lead government entity on corruption issues and has the authority to refer corruption cases to court. The HCPC has the authority to combat money laundering, electoral fraud, and economic fraud in the public and private sectors. Benin’s State Audit Office is also responsible for identifying and acting against corruption in the public sector. The CRIET processes cases related to economic crimes, which include corruption. In 2018, the National Assembly approved the lifting of parliamentary immunity of a small number of opposition parliamentarians accused of corruption or embezzlement during their past positions in former governments.

Bribery is illegal and subject to up to 10 years’ imprisonment, but enforcement remains inconsistent.

Beninese procurement law allows for open and closed bid processes. Contracts are often awarded based on government solicitations to short-listed companies with industry-specific expertise, often identified based on companies’ commercial activities conducted in other overseas markets. The government often uses sole sourcing for projects, including for PAG implementation, and in these cases does not publish procurement requests before selecting a vendor. Foreign companies have expressed concerns about unfair treatment, biased consideration, and improper practices specific to the process of selecting short-listed companies.

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

Government of Benin

Haut-Commissariat a la Prevention de la Corruption (HCPC)
01 BP 7060 Cotonou, Benin
+229 21 308 686
anlc.benin@yahoo.fr

Social Watch Benin

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

Benin transitioned to a democracy in 1990, enjoying a reputation for regular, peaceful, and, until recently, inclusive elections. In 2018, the National Assembly adopted, and the government implemented stringent rules for political parties to qualify to participate in legislative elections. In 2019 and 2021 the government held legislative and presidential elections, respectively, neither of which was fully competitive. The National Assembly is currently made up exclusively by two pro-government parties. Elections-related unrest in 2019 and 2021 resulted in several deaths. In April 2021, President Patrice Talon was re-elected for a second and final five-year term, pursuant to Benin’s constitution. The largest security issues facing Benin are the threat of terrorism spilling across its porous northern borders and piracy offshore in the Gulf of Guinea.

The government adheres to internationally recognized rights and labor standards. Benin’s constitution guarantees workers’ freedom to organize, assemble, and strike. Government authorities may declare strikes illegal if they are deemed a threat to public order or the economy and may require those on strike to maintain minimum services. In 2018, the Constitutional Court reinstated a law prohibiting public employees in the defense, health, justice, and security sectors from striking. A 2018 law limited strikes to a maximum of 10 days per year for private-sector workers and public employees not covered by the existing ban. Approximately 75 percent of salaried employees belong to unions. Unions are obliged to operate independently of government and political parties. Benin’s labor code, as revised in 2017, is favorable to employers.

The World Bank official unemployment rate for Benin in 2020 was 2.54 percent, though estimates of actual unemployment figures are significantly higher. Unskilled and skilled labor and qualified professionals are generally available. Nearly 90 percent of youth between the ages of 15 and 29 work in the informal sector. The standard legal workweek is 40 hours and payment of overtime is allowed.

In 2017, the government adopted a law enshrining the framework for private sector and government employment, termination of employment, and placement of labor in Benin.  The law sets a maximum limit of three to nine months’ salary (calculated using the last 12 months of salary) to be paid to an employee in case of abusive termination of employment or layoffs.  If fired for cause (not including a crime or crimes), an employee with a minimum of one year on the job is entitled to receive two months’ salary as severance pay.  The law also allows for multiple renewals of limited term contracts. Under the former law, private companies who dismissed employees for unsatisfactory performance were routinely sued.

Benin’s Ministry of Economy and Finance reported in 2012 (the most recent year available) that the informal sector contribution to the country’s annual GDP rangeds between 60 and 70 percent. Additionally, according to a 2020 International Labour Organization report, 95 percent of businesses operating in Benin are estimated to be in the informal economy.

* Source for Host Country Data: Recent GOB data not available

The GoB publicly emphasizes the importance of attracting Foreign Direct Investment (FDI) and drafted an investment facilitation law recommended by the 2014 Organization for Economic Co-operation and Development (OECD) Investment Review.  While the draft was completed in 2016 with technical assistance from UNCTAD, it was never enacted.  The draft is still under review and will be presented to Parliament for approval.  The GoB has launched initiatives to promote economic activity and foreign investment in specific areas, such as establishing a diamond hub which brought more value-added businesses (i.e., cutting and polishing) into the country.  Additional investment opportunities in Botswana include large water projects, electricity, transportation, telecommunication infrastructure projects, horticultural production, and agro processing. Economists have also noted Botswana’s considerable potential in the mining, mineral processing, beef, tourism, solar energy, and financial services sectors.  BITC assists foreign investors with projects intended to diversify export revenue, create employment, and transfer skills to the citizens of Botswana.  The High-Level Consultative Council (HLCC), chaired by the President, and an Exporter Roundtable organized by BITC and Botswana’s Exporters and Manufacturers Association (BEMA), are mechanisms employed by the GoB to focus on a healthy business environment for FDI.

Botswana’s 2003 Trade Act reserves licenses for citizens in 19 sectors, including general trading establishments, gas stations, liquor stores, supermarkets (excluding chain stores), bars (other than those associated with hotels), certain types of restaurants, boutiques, auctioneers, car washes, domestic cleaning services, curio shops, fresh produce vendors, funeral homes, hairdressers, various types of rental/hire services, laundromats, specific types of government construction projects under a certain dollar amount, certain activities related to road and railway construction and maintenance, and certain types of manufacturing activities including the production of furniture for schools, welding, and bricklaying.  The law allows foreigners to participate in these sectors as minority joint venture partners in medium-sized businesses.  Foreigners can hold the majority share if they obtain written approval from the trade minister.  Foreign companies have access to about 46 trading licenses in different categories.  It takes approximately five working days to obtain a license.

The Ministry of Investment, Trade, and Industry (MITI) administers the citizen participation initiative and takes an expansive interpretation of the term chain stores, so that it encompasses any store with more than one outlet.  This broad interpretation has resulted in the need to apply exemptions to certain supermarkets, simple specialty operations, and general trading stores.  These exceptions were generally granted prior to 2015 and many large general merchandise markets, restaurants, and grocery networks are owned by foreigners as a result.  Since 2015, the GoB has denied some exception requests, but reports they have approved some based on localization agreements directly negotiated between the ministry and the applying company.  These agreements reportedly include commitments to purchase supplies locally and capacity building for local workers and industry.  BITC conducts due diligence on companies that are looking to invest in the country and the Directorate of Intelligence Services (DIS) handles background checks for national security.

Botswana has been a World Trade Organization (WTO) member since 1995.  In 2016, the WTO conducted a trade policy review of the Southern African Customs Union to which Botswana belongs ( https://www.wto.org/english/tratop_e/tpr_e/tp322_e.htm ).

Botswana underwent an ICT Policy Review and e-Commerce strategy review with UNCTAD and the report was released in October 2021 (https://unctad.org/system/files/official-document/dtlstict2021d4_en.pdf).  Botswana sees this as a critical move to diversify the economy and position the country to be a bigger player in the global economy.

To operate a business in Botswana, one needs to register a company with the GoB’s CIPA through the OBRS at: https://www.cipa.co.bw/types-of-entities 

CIPA asserts that the company registration process can be completed in a day and is integrated with BURS which allows for a fast-tracked tax registration in 30 days.  Additional work is required to open bank accounts and obtain necessary licenses and permits.

BITC ( www.bitc.co.bw ), the GoB’s integrated investment and trade promotion authority, was designed to serve as a one-stop shop to assist investors in setting up a business and finding a location for operation.  BITC’s ability to streamline procedures varies based on GoB entity and bureaucratic requirements.  BITC assesses investment projects on their ability to diversify the economy away from its continued dependence on diamond mining, contribute towards export-led growth, and job creation for and skills transfer to Batswana citizens.  BITC also hosts the Botswana Trade Portal ( https://www.botswanatradeportal.org.bw ) that is designed to ease trade across borders.  It is a single point of contact for all information relating to import and export to and from Botswana and represents relevant ministries and parastatals.

Botswana has several incentives and preferences for both citizen-owned and locally based companies.  Foreign-owned companies can benefit from local procurement preferences which are usually required for government tenders.  MITI instituted a program in 2015 to give locally based small companies a 15 percent preferential price margin in GoB procurement, with mid-sized companies receiving a 10 percent margin, and large companies a five percent margin.  Under this policy, MITI defines small companies as having less than five million pula in annual revenue reflected in their financial statements, medium companies with five to 20 million pula in revenue, and large companies with revenues exceeding 20 million pula.  The directive applies to 27 categories of goods and services ranging from textiles, chemicals, and food, as well as a broad range of consultancy services.  The government can also offer up to 50 million pula in funding through the Citizen Entrepreneurial Development Agency (CEDA) to joint ventures between foreign and citizen owned companies.

For Companies Act registration purposes, enterprises are classified as:  Micro Enterprises – fewer than six employees including the owner and an annual revenue below 60 thousand pula; Small Enterprises – fewer than 25 employees and an annual revenue between 60 thousand and 1.5 million pula; Medium Enterprises – fewer than 100 employees and annual revenue between 1.5 and 5 million pula; Large Enterprises – over 100 employees and an annual revenue of at least 5 million pula.  This classification system permits foreigners to participate as minority shareholders in medium-sized enterprises in the 35 business sectors reserved for citizens.

The GoB neither promotes nor restricts outward investment.

The GoB, some foreign and local firms, and customers, recognized and embraced Responsible Business Conduct (RBC), although Botswana is not an adherent of the OECD’s RBC Guidelines for Multinational Enterprises and has not specified its definition of RBC.  Large companies in the mining, communications technology, food supply, and financial services sectors have established RBC programs, sponsor projects, and support local nonprofit concerns.  However, the ethos has not taken hold in many smaller firms.  The U.S. Embassy worked with the local chamber of commerce, Business Botswana, on the issue of corporate social responsibility and ethical compliance, to help enlist companies to sign onto a Corporate Code of Conduct that covers, among other things, conflicts of interest, bribery, political interference, political party funding, procurement and bidding, and issues surrounding residence and work permits.  To date more than 300 firms have signed the Code of Conduct.

The Companies Act also sets out the expectations of business conduct and governance for directors and shareholders for both private and public companies.  Botswana is not a member of the Extractive Industries Transparency Initiative.  Botswana’s Mines and Minerals Act and associated regulations govern mineral contracts and licenses.  Botswana’s laws and procedures for awarding mining contracts are fairly well developed.  Mining licenses are required to undergo a public comment period before they are awarded, and that rule is followed.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

The GoB is committed to reducing carbon emissions to 15 percent by 2030 and thus adopted a Climate Change Policy in April 2021.  The policy promotes access to carbon markets, climate finance, and clean technologies such as solar and wind energy.  Botswana has mobilized $30 million from the Green Climate Fund to implement agriculture related adaptation interventions for three districts (Ngamiland, Bobirwa, and Kgalagadi).  The GoB has also, in collaboration with the UNDP, been rolling out a Biogas Technology program that aims to deliver small scale digester plants to reduce greenhouse gas emissions by 1,650,000 million tons of carbon dioxide by 2023.  The gas is used for cooking, heating, and lighting.  231 units have been installed, mostly in the southern part of the country.  Standards have been developed to monitor emission concentrations in the country and the GoB has expanded its air monitoring network to cover more areas in the country.  The level of ambient air quality in the country is 95 percent.

Botswana’s Corruption Perception Index (CPI) has deteriorated significantly, eroding its previously held reputation as the ‘least corrupt country in Africa’.  Transparency International ranks Botswana at 45 out of 180 countries in 2021 falling from 35th place in 2020 with a score of 55 out of 100, a change of negative 5 from the previous year.  The Human Rights Report (HRR) 2020 for Botswana also notes increased media reports of government corruption, mostly related to COVID-19 projects.  The HRR also states that a poll conducted by Transparency International in 2019, indicated that 7 percent of those polled had paid bribes to government officials, jumping from only 1 percent in 2015.  Private sector representatives also note rising corruption levels in government tender procurements.

The major corruption investigation body is the Directorate on Corruption and Economic Crime (DCEC).  Anecdotal reports on the DCEC’s effectiveness vary.  The DCEC has embarked on an education campaign to raise public awareness about the cost of corruption and is also working with GoB departments to reform their accountability procedures.  Corruption is punishable by a prison term of up to 10 years, a fine of $50,000, or both.  The GoB has prosecuted high-level officials.  Corruption trials and investigations of some government officials on cases of money laundering, abuse of office, receiving bribes and embezzlement of funds continued during 2020 and are still on-going. Human rights issues reported in the HRR included restrictions on press and internet freedom of expression, interference with freedom of association, child labor including commercial sexual exploitation of children.  On a positive note, while such crimes exist, the GoB officials were reported to be cooperative and responsive to domestic NGO’s views on most subjects and placed no restrictions on domestic and international human rights groups nor did they interfere with their investigations and publishing findings on human rights cases.

The 2000 Proceeds of Serious Crime Act expanded the DCEC’s mandate to include combatting money laundering.  The 2009 Financial Intelligence Act provides a comprehensive legal framework to address money laundering and establishes a financial intelligence agency (FIA).  The FIA, which operates under the Ministry of Finance and Development Planning, cooperates with various institutions, such as Directorate of Public Prosecutions, Botswana Police Service, Bank of Botswana, the Non-Banking Financial Institutions Regulatory Authority, the DCEC, and foreign FIAs to uncover and investigate suspicious financial transactions.  Botswana is a member of the Eastern and Southern Africa Anti-Money Laundering Group, a regional standards-setting body for ensuring appropriate laws, policies, and practices to fight money laundering and the financing of terrorism.  In 2021, Botswana was removed from the FATF grey list on which it had been placed on in October 2018 and was subsequently removed from the EU blacklist.

Botswana is not a party to the OECD Anti-Bribery Convention, but it is a party to the 2005 United Nations Convention against Corruption.

Contacts for agencies responsible for combating corruption:

Mr. Tymon Katlholo
Director General
Directorate on Corruption and Economic Crime
Madirelo Extension 6, Gaborone, Botswana
+267 3914002/+267 3604200
dcec@gov.bw 

Ms. Tumelo Motsumi (Acting)
Executive Director
Public Procurement and Asset Disposal Board
Private Bag 0058, Gaborone, Botswana
+267 3602000
bmaster@ppadb.co.bw
tmotsumi@ppadb.co.bw 

Ms. Bopelokgale Soko
Director
Financial Intelligence Agency
Private Bag 0190, Gaborone, Botswana
+267 3998400
ethibe@gov.bw
kmosimanengaka@gov.bw 

Complainants can also reach out to ministers of the relevant ministries for a particular tender and provide a copy of the complaint to the Public Procurement and Asset Disposal Board (PPADB) Executive Chairperson.

The threat of political violence is low in Botswana.  Public demonstrations are rare and seldom turn violent.  The last large-scale strikes, which involved public sector employees, occurred April-June 2011 and were not violent.  In September 2015, roughly 200 people participated in a peaceful march organized by an opposition political party to protest water shortages in the capital.  In August 2016, police forcefully dispersed a small demonstration protesting unemployment outside the National Assembly.  In February and March 2017, some student-led protests occurred at tertiary institutions necessitating police deployment but were not overtly political.  There were multiple reports of police brutality, including the use of rubber whips and rubber bullets.  Another peaceful march against corruption was held in March 2018.  This followed allegations of embezzlement of the National Petroleum Fund by a company charged with the management of the funds together with some GoB officials.  In late 2019, following general election, the Umbrella for Democratic Change (UDC) held a peaceful march of no more than 200 people protesting the election results.

Botswana has a high unemployment rate and a constricted worker skills base.  In her 2022 budget speech, the Minister of Finance and Economic Development reported an unemployment rate of 26 percent, up from 20 percent reported by Statistics Botswana in 2019, showing the effects of the COVID-19 pandemic on the economy.  Employers can expect to engage in significant training efforts, depending on the industry, due to shortage of skills.  Retention of workers and absenteeism can pose problems.  In addition, managers often cite workforce productivity as a point of frustration.  The lack of trained local citizen professionals is generally addressed by contracting expatriates if they can secure work permits.  There is minimal labor strife in Botswana.  In 2015, there were a handful of small and peaceful strikes, the most notable of these was by a portion of BURS officials, but as with most unions across sectors, only a portion of BURS officials were unionized, allowing the GoB to maintain customs operations.

The Employment Act provides basic guidelines for employment in Botswana.  The legislation sets requirements for a minimum wage, length of the workweek, annual and maternity leave, hiring and termination.  Standards set by the Act are consistent with international best practice as described by International Labor Organization (ILO) model legislation and guidelines.

Employment-related litigation occurs and is both an example of trust in the court system and a cost to doing business in Botswana.  Employers avoid considerable expense and frustration if they observe the provisions of the Employment Act, relevant labor regulations, and prudence in advance of potential litigation.  Before a potential litigant goes to one of 11 labor courts, the parties must attempt mediation through the Department of Labor.  Court cases offering severance terms for employees laid off due to fluctuating market conditions are also common.  Section 25 of the Employment Act allows employers to terminate contracts for reducing the size of their work force, known as redundancy, using the first-in-last-out principle.  This method of terminating contracts is separate from firing for serious misconduct as specified by Section 26 of the Act. The GoB has social safety net programs in place to assist the unemployed and destitute.

Collective bargaining is common in government and the private sector, and the Labor Commissioner can grant collective bargaining authority upon request.  The largest unions are comprised of public sector workers.

In August 2016 Parliament passed a Trade Disputes Act with a list of services deemed “essential” and barred from striking that exceeds international labor standards.  The Ministry of Employment, Labor Productivity, and Skills Development is coordinating with the ILO and other partners to review labor laws to ensure they align with ILO standards.  The tri-partite labor law committee recommended that all services listed as essential be cancelled except aviation, health, electrical, water and sanitation, fire, and air traffic control services.

Following the 2020 reelection of former President Kabore for his second term, a new national socioeconomic development plan (PNDES-II, 2021-2025) was adopted to replace a previous plan (2016-2020). The plan covered four strategic goals: (1) the consolidation of resilience, security, social cohesion, and peace, (2) the deepening of institutional reforms and modernization of public administration, (3) improving sustainable human development, and (4) promoting high impact sectors of the economy and jobs. However, it remains unclear how PNDES II will be impacted by the January 24 coup d’état.

After overthrowing the government on January 24, 2022, LTC Paul-Henri Sandaogo Damiba met with the private sector on February 1 to allay the concerns of the business community and other investors. A Transitional legislative assembly, a transitional government and a transitional charter and agenda were adopted on March 1, 2022, for a 36-month transition that would lead to presidential and legislative elections. However, in an April 1 address to the nation, interim president LTC Damiba indicated that the 36-month transition timeline to democracy could be revised, should the security situation improve.

In a speech to the Transitional Legislative Assembly on April 04, 2022, Prime Minister (PM) Albert Ouedraogo laid out four major pillars or priorities for his government: (1) fighting terrorism and restoring territorial integrity, (2) Responding to the humanitarian crisis, (3) refoundation (or restoration) of the state and improving governance, (4) working towards national reconciliation and social cohesion. PM Ouedraogo indicated plans for a new development plan for the transition period that would incorporate major strategic projects from the PNDES II.

Article 8 of the investment code stipulates that there is to be no discrimination against foreign investors. For any foreign investor to benefit from the exemptions provided for by the investment code, it is required to submit a request to the General Directorate for the Promotion of the Private Sector.

Burkina Faso hosts a certain number of trade fairs and exhibitions to attract foreign investments. These initiatives encompass several sectors, including the bi-annual International Cotton and Textile Fair (SICOT), the annual West Africa Mining Activities Week (SAMAO), the bi-annual Ouagadougou International Arts and Crafts Fair (SIAO) and the bi-annual Panafrican Film and Television Festival of Ouagadougou (FESPACO). SICOT—which was supposed to place on January 27-29 but was postponed due to the coup d’état—convenes cotton sector actors to advance the cotton value chain in Burkina Faso, Africa and globally. SICOT aspires to be the international forum for promoting African cotton by marketing the sector to the world, promoting industrial processing, attracting investment, and boosting industrial cotton production. Burkina Faso is the third largest producer of cotton in Africa, producing 518,545 tons in the 2021-2022 harvest. Burkina Faso also organizes the Burkina Economic days (JEB) to engage potential investors and foster mutually beneficial partnership opportunities. Previous JEB events have been held in Ouagadougou and across the world, including Canada, Paris, Vienna, and Seoul, among others.

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, namely public corporations, limited liability companies, limited share partnerships, sole proprietorships, subsidiaries, and affiliates of foreign enterprises. Each kind of company has 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, 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 (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 other energy sources. 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. However, Burkina Faso has not yet 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—from approximately US$ 162,000 (100,000,000 FCFA) to $1.62 million (1,000,000,000 FCFA). This scheme provides significant tax benefits. U.S. investors are not specifically targeted regarding ownership or control mechanisms.

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 (CEFOREs). The CEFOREs are one-stop shops for company registration. On average, a company can register its business in nine days according to the 2019 Doing Business report. The CEFOREs are 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 2020 Doing Business report ranked Burkina Faso 151 of 190 in minority investor protection.

Other sites of interest:

• Chamber of Commerce business registration: http://cci.bf/?q=fr  
• Burkina Chamber of Mines: 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/ 

Among the 21 countries covered by the World Bank’s Investing across Sectors indicators in Sub-Saharan Africa, 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 the oil and gas sector, and the electricity transmission and distribution sectors, are characterized by monopolistic market structures.

The Burkinabe Government tries to promote inward 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.

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. To this end, the 2015 mining code stipulated the establishment of the Mining Fund for Local Development (FMDL). FMDL is a mechanism to decentralize national resources wealth. To fund the FMDL, the GOBF contributes 20% of the royalties it collects and the mining firms contribute about 1% of their gross revenues. FMDL entered into force in 2019 and has since distributed about US$ 129 million to 351 communes nationwide. 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. EITI declares Burkina Faso as a compliant country, recognizing the country’s “significant progress in the implementation of the 2016 EITI Standard, with considerable improvements,” including satisfactory scores on five of the six corrective measures assessed.

Department of State

• Country Reports on Human Rights Practices
• Trafficking in Persons Report
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities
• North Korea Sanctions & Enforcement Actions Advisory

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Burkina Faso is ranked 46 in the latest Bloomberg NEF’s Climatescope rankings. The country does not appear in the ITIF’s Global Energy Innovation Index, the Global Green Growth Index, or the Green Future Index. However, Burkina Faso is engaged internationally on climate issues. Burkina Faso sent a 60-person delegation to COP26 in Glasgow. Burkina Faso continues to align itself with the positions of the African Group (AGN), Least Developed Countries (LDC) and the G77+China Group. Burkina supports the implementation of the African Renewable Energy Initiative (AREI), the Adaptation of Agriculture in Africa (AAA Initiative), the Sahel Climate Commission, the Congo Basin Region Commission, and the Islamic States Commission. In Glasgow, Burkina Faso reiterated its supports for initiatives related to climate adaptation, finance, and mitigation, as well as those on technology transfer, capacity building, among others. Burkina Faso has called for the international community to do more to respond to climate change challenges.

Transparency International’s 2021 Corruption Perceptions Index indicates that Burkina Faso ranks 78 out of 180 countries. Nearly 82 percent of Burkinabe believe corruption is frequent or very frequent in their country, according to a report released November 2021by the National Network for Anti-corruption Fight (REN-LAC). The percentage of people who thought corruption was frequent or very frequent (82%) has risen steadily since 2019 (76%) and 2018 (67%). The Burkinabe public also believe that the fight against corruption is going in the wrong direction. The report also ranks the most corrupt public services as perceived by the public as (1) municipal police, (2) national police, (3) customs, (4) General-Directorate for Road and Maritime Transports (DGTTM), and (5) gendarmerie. 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. The minister of defense was jailed under corruption charges and provisionally released due to health conditions. The Burkinabe government continues to grant access within its own ministries to the non-governmental watchdog REN-LAC, which 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. In June 2021, 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.

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 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 Cour des Comptes (Court of Audit) is another institution that participates in the control of the execution of the annual budget. It draws up an annual report on the execution of the annual budget. Every year, it produces a public report, including the observations of all its audits, which is submitted to the President of Burkina Faso. It also draws up a general report for the President of Faso on the activity, management, and results of the companies it audits on a bi-annual basis.

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)’s annual state of corruption report has led to 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. To put an end to tax fraud, the government passed into law Article 17 of the November 21, 2013, Law No. 037-2013/AN of the 2014 Budget Law, which called for standardized invoices (Facture Normalisée) in commercial transactions. The Burkina Faso Chamber of Commerce will help facilitate its implementations. This provision however only became operational in early 2022.

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.

According to World Bank rating for control of corruption, Burkina Faso has improved steadily since 2013 and currently ranks above the regional average.

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

Rampant insecurity and the government’s inability to stem violent extremism contributed to the military overthrow of the democratically elected government of President Roch Marc Christian Kaboré on January 24, 2022. In 2021, Burkina Faso recorded the highest number of attacks during its five-plus year battle with violent extremism. The result has led to a crisis resulting in the closure of schools and the massive displacement of people from their homes and communities. President Roch Marc Christian Kabore had been reelected to a second and final term in November 2020. This was the first time a democratic handover of power occurred in Burkina Faso’s history since it gained independence in 1960. During the same period legislative elections were organized and results were accepted by all political parties.

However, Violent extremists remain very active in Burkina Faso. Both the Islamic State for the Greater Sahara and the Jama’ at Nasr Al Islam wal Muslimin (JNIM) coalition have expanded their operation footprints in recent years. Security incidents include violence using tactics such as, improvised explosive devices, kidnapping, attacks, and targeted killings in an expanding part of the country in the north, east, and south. Targets appeared to shift from military and gendarmerie units to civilians and volunteer defense groups. In May 2022, VEOs carried out 61 attacks against civilians and security forces, killing a total of 173 people and injuring 40 others, The number of terrorist incidents in Burkina Faso’s southwestern Boucle du Mouhoun region rose significantly in May compared to the numbers reported for the three previous months. Since October 2021, over 799 people died in terrorist incidents, and an additional 600 individuals sustained injuries during the same period. On June 4, 2021, VEOs killed 160 civilians in Solhan in the Sahel region near the border with Niger. This was the second deadliest terrorist attack globally in 2021, according to the 2022 Global Terrorism Index. The report also indicates that 732 people died from terrorist incidents in Burkina Faso in 2021. The African Center for Strategic Studies noted in its July 2021 report that most violent attacks in the Sahel in 2020 were carried out in Burkina Faso (516 versus 361 in Mali and 118 in Niger).

In April 2022, a U.S. citizen was reportedly abducted in Burkina’s Centre-Nord,. In 2018, an American citizen was abducted but was later discovered by French operatives during an unrelated mission to recover French nationals abducted by extremists. Three Europeans – two Spanish and one Irish – were killed in an attack on an anti-poaching patrol in eastern Burkina Faso on April 27, 2021. In 2021, attacks spiked in the southern part of Burkina Faso, contiguous to the north of Cote d’Ivoire. The Cascades region border area, which has suffered several attacks in the past, is seen by experts as a hide-out for armed terrorist groups and a threat for coastal countries. As of April 2022, terrorist attacks have generated around 1.9 million Internally Displaced Persons (IDPs) mostly in Burkina Faso’s Sahel, Centre-Nord, Nord, and Est regions. Since 2018, the Government of Burkina Faso has maintained a state of emergency due to insecurity in many parts of the country

As of May 2022, the U.S. State Department’s travel advisory to Burkina Faso is at Level 4: Do Not Travel due to terrorism, crime, and kidnapping.

Burkinabe workers have a reputation as hardworking and dedicated employees. While unskilled labor is abundantly available in Burkina Faso, skilled labor resources are limited. There is a scarcity of skilled workers, mainly in management, engineering, and the electrical trades. Construction, civil engineering, mining, and manufacturing industries employ the majority of the formal labor force. Burkinabe law allows workers, except for essential workers such as magistrates, police, military, and other security personnel, to form and join independent unions of their choice without previous authorization, and to bargain collectively. The law provides for the right to strike, but also limits this right with pre-strike requirements or restrictions (including notice submission and government’s requisition power to secure minimum service in essential services).

Public servants are also entitled to engage in bargaining. In recent years, a series of public sector unions have gone on strike to demand better living and working conditions. However, increasing labor demands across multiple ministries have begun to put stress on an already strained public finance system, and have affected the tax collection processes. Although President Kabore has announced the intention to present a comprehensive labor deal (as opposed to the piecemeal settlement of strikes in different sectors that has been the case until now), it is not clear that any progress is being made on this front. The Minister of Public Service has decided to establish for civil servants.

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

Burkina Faso has undertaken reforms of labor policy to make the labor market more flexible while ensuring workers’ rights, including workers’ safety and health. To promote local employment, the government has established several financing instruments targeted at firms interested in obtaining start-up monies. These instruments include Fonds National d’Appui à la Promotion de l’Emploi – FONAPE (Employment Promotion Support Fund), Fonds d’Appui au Secteur Informel – FASI (Informal Sector Support Fund), Fonds d’Appui aux Activités Génératrices de Revenus des Femmes – FAARF (Women’s Income Generating Activities Support Fund), Fonds d’Appui aux Initiatives des Jeunes – FAIJ (Youth Initiative Support Fund), and Fonds Burkinabe de Développement Economique et Social – FBDES (Burkinabe Fund for Social and Economic Development).

In the event of a reduction in personnel, the labor code requires the employer to first dismiss employees with the least training and seniority. The employer must advise employees of termination at least 30 days in advance. Workers terminated in a general workforce reduction have re-employment priority over other applicants for a two-year period. Employees terminated for reasons other than theft or flagrant neglect of duty have the right to termination benefits. In Burkina Faso, however, the informal sector is an important sector of the economy. A sizable part of the Burkinabe population earns a living in the informal economy, especially in agriculture and artisanal mining sectors. For instance, artisanal mining alone is estimated to employ one million to 1.3 million people directly. The value of gold extracted annually through artisanal mining is estimated at about US$1 billion, or about 20 tons of gold. However, they noted that much of Burkina Faso’s artisanal mining output is smuggled out through neighboring countries without royalties or tax revenue going to the state budget. In some regions of the country, over 90 percent of youth earn a living through artisanal mining, with some abandoning agriculture for the lure of gold mining. Nevertheless, there are no indications that the informal economy negatively impacts or crowds out investment across industries.

To date, Burkina Faso has approved and ratified 43 conventions of the International Labor Organization, including conventions on Freedom of Association and the Right to Organize, Abolition of Forced Labor, and the Worst Forms of Child Labor. The Ministry of Civil Service, Labor, and Social Security and a labor court enforce the labor code. Unions are well organized, independent from the government, and defend employee interests in industrial disputes. Workers know their rights and do not hesitate to seek redress of grievances.

Despite the government’s substantial efforts to reduce child labor in the past few years, 42 percent of children in Burkina Faso continue to engage in child labor, particularly in agriculture. The worst forms of child labor take place in mining. Cotton and gold are included on the U.S. government’s Executive Order 13126 List of Goods Produced by Forced and Indentured Child Labor.

The 1982 Commercial Sector Collective Agreement divides employees (laborers, artisans, and senior staff) into eight categories with minimum basic pay rates from 25,000 FCFA (about USD 45) per month. Conditions for the employment of workers by enterprises are provided in Decree no. 98 of 1967. An employer should ask job candidates for their job-seeker registration card issued by the Office of Employment Promotion, which is part of the Ministry of Civil Service, Labor, and Social Security.

Table 3: Sources and Destination of FDI
Data not available.

The Government of Burundi (GoB) is generally supportive of FDI and seeks investments to promote economic growth.  During the reporting period, the GoB implemented new laws and regulations, including a revised June 2021 investment code (last updated in 2008), and the first national industrialization policy and its accompanying implementation strategy.  These regulations offer the same advantages to both Burundian and foreign investors.  The regulations also raised the minimum investment amounts to be eligible for certain benefits in the investment code from $50,000 to $500,000 for all investors, with the stated purpose of attracting only quality investments that will create decent jobs.  Industry experts believe the new investment regulations will boost development of the industrial sector, which so far contributes only about 17 percent of GDP.  An overview of the legal framework for foreign investment can be found at: https://www.investburundi.bi/index.php/espace-medias1/publications/depliants-et-brochures

Along with the new investment code, the Burundi Development Agency (ADB) officially replaced the Investment Promotion Agency (API). The ADB has taken over all the missions of the API and is currently the only entry portal and interlocutor for all investors looking for business opportunities in Burundi.  The ADB is the government authority responsible for promoting investment, improving the business climate, and facilitating market entry for investors in Burundi.  ADB offers a range of services to potential investors, including assistance in acquiring the licenses, certificates, approvals, authorizations, and permits required by law to set up and operate a business enterprise in Burundi. ADB has set up a “one-stop shop” to facilitate and simplify business registration in Burundi, although investors must be physically present in country to register with ADB.  ADB is also tasked with providing investors with information on investment and export promotion, assisting them with legal formalities, including obtaining the required documents, and intervening when laws and regulations are not properly applied.  While ADB is the initial and primary point of entry for investors, relevant government ministries also regularly meet with private investors to discuss regulatory and legal issues.

Foreign and domestic companies have the same rights to establish and own businesses in the country and engage in all forms of activities.  However, there are restrictions on foreign investments in weaponry, ammunition, and any sort of military or para-military enterprises.  There are no other restrictions nor are there any other sectors in which foreign investors are denied the same treatment as domestic firms.  There are no general limits on foreign ownership or control.

Article 63 of the 2013 mining code stipulates that the GoB must own at least 10 percent of shares in any foreign company with an industrial mining license and state participation cannot be diluted in the event of an increase in the share capital.

Burundi does not maintain an investment screening mechanism for inbound foreign investment.

No investment policy review from a multilateral organization has taken place in the last three years.  The most recent review was performed in 2010 by UNCTAD.

In addition to fiscal advantages provided in the new investment code, Burundi has approved reforms designed to improve ease of doing business, including reinforcing the capabilities of the one-stop shop at ADB, simplifying tax procedures for small and medium enterprises, reducing the time and cost of registering a business (about four hours at the cost of approximately $21), launching an electronic single window for business transactions, and harmonizing commercial laws within the East African Community.  For more details and information on registration procedures, deadlines and costs, investors can visit the ADB at https://www.investburundi.bi/.

The ADB is also responsible for assisting investors in obtaining entry visas, work permits and operating licenses, connections to water and electricity, amicable resolution of disputes between investors and state-owned entities, as well as any other related appropriate assistance.

During the reporting period, the ADB indicates it assisted registering more than 4,000 Burundian companies, certified eight foreign investors with a capital of more than $25 million and granted 21 certificates of eligibility for the advantages provided in the 2021 investment code to investors with a combined capital of more than $170 million.  ADB reports the companies created and during the rating period have already invested more than $85 million in Burundi and have created more than 2,327 jobs.

There is no specific mechanism for ensuring equitable treatment of women and underrepresented minorities.

The host government does not have mechanisms for promoting or incentivizing outward investment.  The host government does not restrict domestic investors from investing abroad.

According to the investment code, any new enterprise is required to consider environmental issues and employee rights in its investment and business plan.  The government has taken no comprehensive measures to implement policies or international standards regarding responsible business practices.  The government routinely engages investors about including public and community benefits in investment projects, but has no clearly defined standards.

There have not been any high-profile or controversial instances of private sector impact on human rights violations in the recent past.  No reliable information is available on the maintenance and enforcement of domestic laws with respect to labor and employment rights, consumer protections, and environmental protections.  In January 2019, the BRB issued a regulation relating to the protection of consumers of financial products and services in view of the complexity and growing diversity of the range of the services and products offered in Burundi.

There are no corporate governance, accounting, or executive compensation standards in place to protect the interests of shareholders.  There are no organizations focused specifically on RBC in the country.

As a member of the International Conference on the Great Lakes Region (ICGLR), the government has acceded to the OECD due diligence mechanism and the regional system for certification and traceability of certain minerals extracted from national mines (tin, tantalum, and tungsten), as well as against conflict minerals that can be smuggled from the neighboring Democratic Republic of Congo (DRC).  However, some civil society organizations report a noticeable lack of transparency in the Burundian mining sector (including alleged involvement of GoB officials in the trafficking of gold from the DRC).

The government does not participate in the Extractive Industries Transparency Initiative.  There are no domestic transparency measures/policies that require the disclosure of payments made to the government.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Burundi first made commitments to contribute to the fight against climate change through its original Nationally Determined Contribution (NDC) in 2015 during the twenty-first Conference of the Parties (COP 21) of the United Nations Framework Convention on Climate Change (UNFCCC) held in Paris in 2015 and Burundi ratified the agreement in 2018.  During the reporting period, Burundi submitted an updated 2020 NDC to the UNFCCC’s Secretariat in November 2021 at the Climate Change Conference of the Parties (COP26) as well as an initial National Adaptation Plan (NAP).

The interim NDC evaluation report of March 2021 noted some achievements in the forestry sector, although there were few results on energy sector commitments.  The report found the GoB lacked adequate funding and technical capacity for implementation.  Burundi contributes less than 0.1 percent of global greenhouse gas emissions but remains vulnerable to global climate impacts.

Burundi’s NAP on climate change calls for a range of responses.  In agriculture, Burundi is planning to increase irrigation and diversify climate-resilient, high-yield food crop varieties.  For ecosystems and landscapes, efforts will focus on reforestation of degraded lands and floodplain protection.  Water priorities include expanding integrated watershed management and rainwater harvesting.  Health efforts highlight the collection of environmental health data and the development of a health sector NAP.  Energy efforts will center on hydroelectric and solar power, increasing biogas, and improved cooking stoves. Burundi’s infrastructure plans hope to improve waterways and structures around the Lake Tanganyika port area and rehabilitate existing road networks.

The government has an anti-corruption law as well as constitutional provisions on corruption, although these have not been implemented.  Cabinet members, parliamentarians, and officials appointed by presidential decree have immunity from prosecution on corruption charges, insulating them from accountability.  Laws designed to combat corruption do not extend to family members of officials or to political parties.

Article 60 of the April 2016 law “Bearing Measures for the Prevention and Punishment of Corruption and Related Offenses” regulates conflicts of interest, including in awarding government procurement.  Burundian legislation criminalizes bribery of public officials, but there is no specific requirement for private companies to establish internal codes of conduct.

Burundi is a signatory to the UN Anti-Corruption Convention and the OECD Convention on Combating Bribery.  Burundi has also been a member of the East African Anti-Corruption Authority since joining the EAC in 2007.  The country does not provide protections to NGOs involved in investigating corruption.

A number of U.S. firms have noted corruption is an obstacle to direct investment in Burundi.  Corruption is most pervasive in the award of licenses and concessions, which takes place in a non-transparent environment with frequent allegations of bribery and cronyism.  Many customs officials are also reportedly corrupt, regularly extorting bribes from exporters and importers.

In April 2021, the National Assembly approved a law disbanding the anti-corruption court and the anti-corruption police unit.  The anti-corruption court’s authorities were transferred to the office of the attorney general and courts of appeals and the anticorruption police unit’s authorities were delegated to the judicial police.

President Ndayishimiye continued with anti-corruption initiatives including dismissing high-level officials as well as hundreds of other low-level officials accused of malfeasance.  In May 2021, President Ndayishimiye fired the Minister of Trade, Transport, Industry and Tourism over acts that risked compromising the country’s economy and tarnishing its image, reportedly in connection with the improper disposition of state property.  He also fired the succeeding Minister of Trade, Transport, Industry and Tourism for tarnishing the image of the country after it came to light that she included family members and friends in official delegations abroad.

Contact at the government agency or agencies that are responsible for combating corruption:

Name: Roger Ndikumana
Title: Commissaire Général
Organization: Anti-Corruption Brigade
Address:  PO Box 890 Bujumbura
Telephone Number:  (+257) 22 25 62 37
Email Address:  brigadeanticorruption@yahoo.fr

Contact at a “watchdog” organization:

Name: Gabriel Rufyiri
Title: President
Organization:  OLUCOME
Address: 47, Chaussée Prince Louis Rwagasore, n°47, 1st Floor
Telephone Number: (+257) 79 30 82 97
Email Address: rufyiriga@gmail.com / olucome2003@gmail.com

Burundi has experienced cycles of ethnic and political violence since its independence in 1962.  Periods before and after national elections have often been marked by political violence and civil disturbance.  The May 2020 elections were largely peaceful, and the GoB has since consolidated power and security gains.  Political tensions between the ruling party and opposition remain.  The new administration has made efforts to reduce tensions with neighboring countries, including Rwanda, and to increase participation in regional security cooperation.

Unskilled local labor is widely available, while there are shortages for skilled workers in some sectors; no statistics are available on the shortage of specialized labor skills.  According to government policy, the hiring of nationals should be prioritized except in cases in which no local expertise is available.  Formal sector employment is limited, and official figures for unemployment are unreliable.  Youth unemployment is estimated at approximately 65 percent.

According to the investment code, any new enterprise is required to take into account environmental issues and employee rights in its investment and business plan.  The government has taken no comprehensive measures to implement policies or international standards regarding responsible business practices.  The government routinely engages investors about including public and community benefits in investment projects but has no clearly defined standards.

No reliable information is available on the maintenance and enforcement of domestic laws with respect to labor and employment rights, consumer protections, and environmental protections.  There are no known examples of labor laws being waived in order to attract or retain investment.

The labor code allows for employers to respond to fluctuating market conditions with layoffs of workers.  Labor laws do not differentiate between layoffs and firing for severance.  The government has a social insurance program that provides limited coverage to workers laid off for economic reasons.

Burundi is a member of the International Labor Organization (ILO) and its domestic labor law is in compliance with international labor standards.  Workers’ unions are legally authorized, and there are laws and regulations that prohibit child and forced labor and any kind of discrimination.  In practice, child labor occurs, and some union activity is restricted.  Burundi has ratified all of the ILO fundamental conventions protecting workers’ rights; however, protection of core labor rights continues to be inadequate. The Ministry of Labor conducts inspections both in response to complaints or allegations of labor law violations and conducts routine, planned inspections, primarily of large employers.  The Ministry of Justice has the ability to prosecute people who use children for work which, by their nature or the conditions in which they work, are likely to harm their health, safety and morals as provided by the law.  However, child labor is common in the informal sector and largely goes unnoticed there.  In the private sector, labor-management relations are usually conducted according to international standards that allow for collective bargaining.  Burundi’s Labor Inspectorate has the authority to settle disputes between workers and employers, which can also be managed through civil judicial procedures.  No strikes that posed an investment risk occurred during the past year.  In November 2020, the government adopted a new labor code, replacing the 1993 code, with the main objective of complying with the various conventions that the country has since ratified, and above all responding to criteria for regional and international integration.  This new code includes protections for employees and more flexibility and surety of contracts.

In order to advance anti-trafficking in persons (TIP) efforts, the Ministry of Foreign Affairs staffed its new Department for the Promotion of Safe Labor Migration, which is tasked with producing new and stronger labor recruitment regulations that are currently under review.  The government worked on bilateral agreements on migrant worker rights with four major destination countries, Oman, Qatar, Saudi Arabia and the United Arab Emirates, and to date has signed cooperation agreements with Saudi Arabia.  Agreements with the remaining three Gulf destination countries are ongoing.  The Ministry of Justice also increased the number of employees whose job is to monitor and report on TIP cases.

Cabo Verde seeks both domestic and foreign investment to drive economic recovery, diversification, and growth following the COVID-19 crisis. The government’s Ambition 2030 strategy emphasizes development of sustainable tourism, transformation of the country into a transportation and logistics platform, renewable energy, blue and digital economy, and export-oriented industries. The government promotes a market-oriented economic model under which all investors, regardless of nationality, have the same rights and are subject to the same duties and obligations under the law. Improving the business climate to attract investment remains an economic priority, as does reducing the state’s role in the economy, though the COVID-19 pandemic has pushed back plans to privatize state-owned enterprises.

In 2021, approved investment projects reached an all-time high of USD 1.9 billion, confirming continued investor confidence in Cabo Verde despite pandemic uncertainties. Foreign investment continues to be concentrated in tourism and light manufacturing. In 2021, over 98 percent of the approved investment projects were in the tourism sector.

Cabo Verdean law offers tax benefits and grants permanent residence to foreign citizens with an investment exceeding 180 million escudos (USD 2 million). In December 2021, the government approved creation of a permanent residence permit for foreigners who own second homes in Cabo Verde. The new law also allows for exemption from excise duties on assets. The legal framework establishes conditions for investment in the country by Cabo Verdean emigrants, including fiscal incentives.

Investment promotion agency Cabo Verde TradeInvest (CVTI) is a one-stop shop for all investors. Through CVTI, the government maintains dialogue with investors using personalized and virtual meetings, round tables, conferences, and workshops. CVTI offers investors a “One-Stop Shop for Investments” electronic platform and help in formalizing expressions of interest and monitoring the investment process. It also provides investors and exporters information about trade agreements and benefits (including those related to the U.S. African Growth and Opportunity Act (AGOA) and Cabo Verde’s membership in the Economic Community of West African States (ECOWAS)), market information, details on trade fairs and events, and contacts with other state institutions and potential partners. In addition, CVTI can assist with securing authorizations and licensing, tax and customs incentives, work permits for foreign workers, visas for company workers, social security registration for workers, and introductions to service providers, such as banks, lawyers, accountants, and real estate agents.

For investments of less than USD 500,000, government entities Pro-Empresa and the Casa do Cidadao (Commercial Registry Department) provide similar services.

The International Business Center (Centro Internacional de Negocios – CIN) provides tax and customs benefits for companies that do international business, with the aim of promoting, supporting, and strengthening the emergence of new industrial, commercial, and service provision activities in Cabo Verde.

The Investment Law applies to both foreign and domestic investors, and it enshrines the principle of freedom of investment regardless of nationality. However, sector-specific legislation requires that foreign operators have at least 51 percent participation from Cabo Verdean partners in the fisheries sector and at least 25 percent in interisland maritime transport. The Investment Law further protects against direct and indirect expropriation. Private property is protected from unilateral requisition and nationalization, except for public interest reasons, in accordance with the law and the principle of non-discrimination, subject to prompt, full, and fair compensation.

An approval process serves as a screening mechanism for inbound foreign investment. The process begins with submission of a formal expression of interest to investment promotion agency Cabo Verde TradeInvest in accordance with the Investment Law. Relevant government entities (depending on the sector and of the nature of the investment) then conduct an integrated review of the investment project and provide an opinion. If the opinion is favorable, Cabo Verde TradeInvest, in coordination with relevant agencies, approves the project and issues an investor certificate no later than 45 days from the submission of interest. Tourism-related projects can obtain tourism utility status in addition to the certificate, and for investments considered of special national interest based on the volume of investment and number of jobs created, the government may offer exceptional fiscal and other incentives.

During 2018, the United Nations Conference on Trade and Development (UNCTAD) conducted an Investment Policy Review (IPR) at the request of the Government of Cabo Verde. The report contains strategic analysis on how Cabo Verde can utilize foreign direct investment (FDI) in the tourism sector to advance sustainable development objectives. https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=2248 

In the last five years, civil society organizations have not conducted reviews of investment policy concerns.

Cabo Verde offers benefits to attract private-sector investment. Although equality of treatment and non-discrimination are granted to all investors, certain investment projects, given their nature or size, may receive special treatment and support from the government.

In an effort to reduce approval time for investment projects, the government has established a maximum period of 15 days for analysis and 30 days for approval of investment and export projects. In addition, Cabo Verde has adopted measures to facilitate and stimulate business activity, including lowering the maximum personal income tax (IRPS) one percentage point to 24 percent, eliminating double taxation, and waiving tax installment payments for taxpayers who had negative results or began their business activity in the previous year. Investments of at least 500 million escudos (USD 4.8 million) qualify for contractual benefits such as reduction of or exemption from customs and stamp duties, property taxes, and some other fiscal duties. Those investments that create a minimum number of jobs or expand into new strategic sectors qualify for a 50 percent investment credit, which can be deducted over 15 years.

The law commits the government to paying its bills within 45 days and interest on late payments to ensure predictability in the payment of the state’s obligations to companies. The 2021 budget prioritizes expenditures on assistance for families and support for companies and jobs in the context of the pandemic. It also includes benefits to attract private sector investments and improve the business environment.

Registering a company is straightforward. The Commercial Registry Department (Casa do Cidadao) is a one-stop shop where a company can be created and registered in less than a day. Information on business registration procedures is available at https://portondinosilhas.gov.cv/  and http://caboverde.eregulations.org/show-list.asp?l=pt&mid=1 . Step-by-step information on procedures, time, and cost involved in starting a company can be found at http://www.doingbusiness.org/data/exploreeconomies/cabo-verde/starting-a-business/ . The CVTI website also offers information on investing in Cabo Verde, including Cabo Verde’s Investment Law, the Code of Fiscal Benefits, and the Contractual Tax Benefits-Incentives: https://cvtradeinvest.com/ .

The government does not restrict domestic investors from investing abroad. There is no data available on outward investments.

The private sector, government, and regulators are increasingly aware of the importance of environmental and corporate social responsibility in Cabo Verde. The government encourages companies to engage in responsible business conduct. Many companies conduct campaigns to promote social awareness in areas such as health, environmental protection, and cultural preservation. Throughout the COVID-19 pandemic, private companies supported vulnerable populations with essential goods. Women represent 37.5 percent of elected parliamentarians, 33 percent of the government, and more than 30 percent of leadership in businesses.

Cabo Verde has signed and ratified the UN Convention against Corruption. In Transparency International’s 2021 Corruption Perception Index (CPI), Cabo Verde scored 58 points, ranked 39 in the world and second in the sub-Saharan Africa region. Under Cabo Verdean law, giving or accepting a bribe is a criminal act punishable by up to eight years in prison. The Penal Code details punishments for crimes committed by an official during the exercise of public duties. The Penal Code and the Electoral Code address corruption in the context of electoral crimes, particularly the offering of advantages to voters by political parties or other actors involved in elections.

Cabo Verde’s Public Procurement Code requires that public officials involved in a public procurement process provide written disclosure of any personal interest resulting from a special connection to a bidder or potential bidder and recuse themselves from participation in the process.

In 2020, the Cabo Verdean government provided for the creation of the Corruption Prevention Council, an administrative body that will lead corruption prevention efforts in the country. In early 2022, the Prime Minister announced that the government would soon form the Council. Other institutions active in combating corruption include the Judicial Police, the Prosecuting Counsel, and the courts.

Cabo Verde is a model of political stability with a tradition of peaceful transitions of power. There have been no political, social, or religious conflicts resulting in violence in recent years. Civil liberties are generally protected, but access to justice is impaired by an overburdened court system, and crime remains a concern.

Labor is widely available in Cabo Verde. Unskilled labor represents 30 to 40 percent of the total labor force. Technical, managerial, and professional talent with English and French language skills is more difficult to find. Unemployment, particularly youth unemployment, is a significant challenge, aggravated by the toll the COVID-19 pandemic has taken on the tourism sector and small business.

Migrants from China, Guinea-Bissau, Senegal, Nigeria, and Guinea may receive wages below minimum wage and work without contracts, creating vulnerabilities. The government continues efforts to reduce vulnerability to exploitation of migrants from West Africa employed in the construction and hospitality sectors and increase their integration into society. According to a 2020 International Labor Organization (ILO) study, although women represented more than 50 percent of qualified workers, they earned on average 7 percent less than men. According to data from the National Statistics Institute, the underemployment rate for women is of 27.2 percent (globally the underemployment rate is 21.7 percent).

Activity in the informal economy – mostly in urban areas in sectors such as small industry, commerce, informal sales, and other services – accounted for 12 percent of GDP. Women constitute a majority of informal economy workers. As part of its post-pandemic relaunch plan for the private sector, the government is assessing mechanisms to promote transition from the informal to formal economy and raise employer compliance with tax and social security obligations.

Cabo Verde has ratified all of the ILO’s eight fundamental conventions. Minimum wage is currently 13,000 escudos (USD 141) per month. The National Social Security Institute (INPS) manages unemployment benefits. The legal workweek is limited to 44 hours for adults, with 12 consecutive hours per week for rest and premium rates of pay for overtime mandatory. Larger employers generally respect this restriction, but agricultural and domestic laborers often work longer hours.

Labor strikes are generally peaceful. All workers except those in restricted sectors are free to form and join unions without interference from the government. The government respects workers’ right to strike, but the law allows the government to act in emergency situations or when essential services might be affected. Few companies have adopted collective bargaining, but the ILO has worked with local unions and government bodies to provide guidance on conducting dialogue between parties. The Directorate General for Labor (DGT) has a conciliation mechanism to promote dialogue. There have been no instances in which labor laws were waived in order to attract or retain investment.

The World Bank, International Monetary Fund (IMF), and African Development Bank (AfDB) consider the rigidity of labor laws and severance pay requirements to be an obstacle to industrial investment and development.

Creating a conducive business environment to attract foreign direct investments is a corner stone of Cameroon’s development strategy. Governance and strategic management of the state constitutes one of the four pillars of the 2020-2030 National Development Strategy 2030, which was launched November 2020. The Government of Cameroon acknowledges that the challenging nature of the domestic business climate remains a concern. To fight corruption, rebuild a weak legal system, and modernize an inefficient public service, the National Development Strategy has adopted a holistic approach to governance, which includes political and institutional governance, administrative governance, economic and financial governance, regional governance, and social and cultural governance.

Cameroon has put in place an arsenal of institutions and laws to improve governance. The government created the Special Crime Tribunal on corruption and economic crimes in 2012 to prosecute crimes related to the misappropriation of public funds of $100,000 or more. The Court specifically targets custodians of public funds as well as officials who have the authority to collect or spend money on behalf of the state. The Court reported it had tried 225 cases and recovered $323 million as of July 2020. Another institution, the Audit Bench of the Supreme Court, reports directly to the President and is charged with conducting audits and investigations of public funds. The National Anti-Corruption Commission also reports to the President and investigates corruption allegations. However, corruption and administrative mismanagement continue to hamper the business climate in Cameroon. Cameroon consistently ranks in the bottom half of the Transparency International’s Corruption Perceptions Index (144 of 180 in 2021). In 2020, Cameroon ranked 167 of 190 on the Ease of Doing Business index.

Despite the active presence of state-owned companies in important sectors of the economy, private entities – both domestic and foreign – can create and own businesses that engage in all forms of legal remunerative activities. They can also enter joint ventures and public-private partnerships with the government.

The Cameroon Investment Promotion Agency (CIPA) was created in 2010 and is a state-owned entity with a mission of attracting investment to Cameroon in collaboration with other state institutions. The agency seeks also to foster an enabling environment for investments in Cameroon. As of 2021, CIPA had signed 172 investment agreements and generated the creation of over 60,000 jobs.

CIPA offers investment incentives covering existing and emerging economic sectors. The agency also serves as a one-stop-shop facilitator through the assistance it provides to foreign and domestic investors. It processes application files for approval in compliance with its investment charter and assists in the alignment of projects with the general tax code. It can support potential foreign investors for visa applications. The agency also follows up to monitor the implementation of commitments made by approved companies.

CIPA’s sector coverage

Sources: National Institute of Statistics, IMF, estimates 2019-2020

The government maintains dialogue with business associations such as the Groupement Inter-Patronal du Cameroun (GICAM) and Enterprise Cameroon through the Cameroon Business Forum, which is sponsored by the World Bank. Over the past two years, GICAM has been critical of the government’s handling of the negative impacts of COVID-19 and global inflationary pressures on business.

There are no general economy-wide (statutory, de facto, or otherwise) limits on foreign ownership or control. Apart from the national defense and security areas, there are no sector-specific restrictions, limitations, or requirements applied to foreign ownership and control. Despite an active government presence in most sectors of the economy, private entities – both domestic and foreign – can create and own businesses that engage in all forms of legal remunerative activities. They can also enter joint ventures and public-private partnerships with the government.

Cameroon has no laws or regulations that expressly prohibit investment, equity caps, mandatory domestic joint venture partners, licensing restrictions, or mandatory intellectual property/technology transfer requirements. Cameroon has a screening process, which is applicable to all domestic and foreign investments.  This screening process ensures that investors meet the criteria, such as employment and export quantities, to qualify for private investment incentives.

The IMF approved a three-year, $689.5 million hybrid Extended Credit Facility-Extended Fund Facility arrangement in July 2021. The arrangements are built around five pillars: (i) mitigating the health, economic, and social consequences of the pandemic while ensuring domestic and external sustainability; (ii) reinforcing good governance and strengthening transparency and the anti-corruption framework; (iii) accelerating structural fiscal reforms to modernize tax and customs administrations, mobilize revenue, improve public financial management, increase public investment efficiency, and reduce fiscal risks from state-owned enterprises; (iv) strengthening debt management and reduce debt vulnerabilities; and (v) implementing structural reforms to accelerate economic diversification, boost financial sector resilience and inclusion, and promote gender equality and a greener economy. The IMF completed a First Review of the program on February 23, 2022 and found Cameroon’s overall program performance to be mixed. While macroeconomic performance is broadly satisfactory, and efforts to promote good governance and transparency are gaining momentum, progress on structural reforms is slow. Copies of the review can be found on the IMF website .

Civil society organizations and business associations have provided investment related policy recommendations. Following the introduction of an electronic payment tax, which includes mobile money, in the 2022 finance law, Cameroon’s largest business association GICAM noted “mobile money taxes can have a negative impact on excise tax receipts as consumers are pushed into non-traceable cash transactions, and on the size of remittances from abroad.” GICAM recommended the government enhance consumer purchasing power by reducing some taxes, reviewing remuneration policy, and amending its price regulation policies. Following reform proposals from the road transport syndicate on freight conditions on the Douala-Bangui Corridor, the government approved the construction of rest areas along the corridor as well as the reduction of police checkpoints in 2021.

Entrepreneurs obtain a unique tax identifying number when they open a company in Cameroon. Within 15 days after the registration for a new business, the Directorate General of Taxation issues a permanent taxpayer identification number, known as the Unique Identification Number (UIN).

According to the World Bank, it takes 14 procedures and 82 days to establish a foreign-owned limited liability company in Douala, Cameroon’s largest city and economic capital. This process is longer and more complex than regional and global averages. For foreign investors, a declaration of foreign investment to the Ministry of Finance is mandatory 30 days prior to the beginning of operations. In addition, if the company wants to engage in international trade, registration in the importers’ file is required to obtain an automated customs systems number (Système Douanier Automatisé, or “sydonia”). This number facilitates the entry and exit of goods produced by the company. The authentication of the parent company’s documentation abroad is required only to establish a subsidiary. Foreign-owned resident companies that wish to maintain foreign currency bank accounts must obtain prior approval. The Minister of Finance issues such authorization, which is subject to approval from the Bank of Central African States (BEAC) as per Section 24 of the exchange control regulations. This approval takes on average 38 days to obtain. There is a minimum paid-in capital requirement of CFA 1,000,000 (~$1,800) for establishing LLCs.

In Cameroon, business registration is most often manual, although the Ministry of Small and Medium-Sized Enterprises launched an electronic registration portal designed to automate the process at https://cameroun.eregistrations.org/ . Due to internet access challenges, the website is not always operational. To manually register, entrepreneurs must go to a Ministry of Small and Medium Sized Enterprises regional center for the creation of enterprises, which can complete the registration procedure within one week.

The Cameroonian government does not promote or incentivize outward investment, nor does it restrict domestic investors from investing abroad.

U.S. Embassy Yaoundé officials are unaware of a formal definition of responsible business conduct (RBC) within the Cameroonian government. It does not have a national ombudsman for stakeholders to get information or raise concerns about RBC.  The government has not conducted a national action plan on RBC nor does it factor RBC into its procurement decisions. U.S. Embassy Yaoundé officials are not aware of any recent high-profile instances of private sector impact on human rights. Cameroon does not have laws that regulate responsible business conduct. However, the government of Cameroon has enacted laws that cover issues related to what is locally considered corporate social responsibility. There are additional initiatives in the private sector to foster a corporate social responsibility culture.

All major infrastructure projects in Cameroon are compelled to conduct an Environmental and Social Impact Assessment (ESIA) to establish the impact of projects on people and nature. Cameroon’s ESIA law strives to follow World Bank standards. An August 1996 master law related to environmental management prescribes an environmental impact assessment for all projects that can cause environmental degradation.

The Cameroonian government struggles to enforce laws in relation to human rights, labor rights, consumer protection, and environmental protection. There is little corporate governance law in Cameroon, mostly since very few companies are open to portfolio investment. The Business Council for Good Governance, the American Chamber of Commerce, Rotary International, and Transparency International promote RBC in Cameroon, though their ability to monitor RBC is limited. U.S. Embassy Yaoundé officials are unaware of any government efforts to adhere to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas. Cameroon participates in the Extractive Industries Transparency Initiative. Domestic transparency measures requiring the disclosure of payments made to governments are lacking.

The economy of Cameroon is modernizing, but most sectors experience disruptions from informal activities. The informal sector provides crucial livelihoods to the most vulnerable in urban environments; however, labor conditions are generally precarious. In the agricultural sector, the government estimates that 70 percent of labor is informal with instances of child labor in subsistence agriculture. In other sectors, for example mining, allegations of human or labor rights abuses by Chinese mining companies have surfaced in the recent past. Indigenous forest communities also complain the government does not enforce logging concession laws.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;

Comply Chain.

Cameroon revised its nationally determined contributions in November 2021. Cameroon’s mitigation target is to reduce greenhouse gas emissions by 35 percent by 2035. Mitigation targets are focused on forest management, energy, agriculture, and waste. Cameroon developed a National Adaptation Plan in 2015. Cameroon’s adaptation strategies include integrating adaptation planning into national sectoral strategies and policies, reducing the vulnerability of major economic sectors and agro-ecological zones to climate change, and raising awareness among the population. Cameroon does not yet have a national climate strategy or strategy for monitoring its natural capital, although the U.S. government is supporting Cameroon to build capacity to collect, monitor, and analyze climate data. With U.S. government support, Cameroon published its first atlas of land coverage in 2021. Cameroon developed a National Biodiversity Strategy and Action Plan in 2012 to integrate the conservation and sustainable use of biological diversity into relevant sectoral or cross-sectoral plans, programs, and policies.

Cameroon does not have policies to achieve net-zero carbon emissions by 2050, but the government recognizes the huge role its forests, which are in the Congo Basin Forest region, will play as a carbon sink and focused mitigation targets on the forestry sector. Cameroon does not specify expectations on private sector contributions to achieving relevant climate targets. There are currently no climate-related regulatory incentives for private sector. All infrastructure projects are compelled to conduct an Environmental and Social Impact Assessment to establish the impact of projects on people and nature. The National Development Strategy has integrated environmental protection into its objectives.

Corruption is punishable under sections 134 and 134 (a) of the Pena1 Code of Cameroon. Despite these rules, corruption remains endemic in the country. In 2021, Cameroon ranked 144 of 180 in Transparency International’s Corruption Perception Index. Anti-corruption laws are applicable to all citizens and institutions throughout the national territory. Article 66 of the constitution requires civil servants and elected officials to declare their assets and property at the beginning and at the end of their tenure of office, but it has never been enforced, since the adoption of the constitution in 1996. Similarly, the Civil Service Statute contains provisions and the procedures to be followed in the event of a conflict of interest. These provisions are enshrined in Law No. 003/2006 of April 25, 2006, which also created the Commission for the declaration of property and assets. Other codes of conduct in different public institutions have created gift registers to prevent bribes, but they are not implemented. In terms of public contracts, Decree No. 2018/0001/PM of January 5, 2018 created a portal called Cameroon Online E-procurement System (Coleps) for the digitalization, including application processing, award, and monitoring and evaluation of all tenders. Since the launch of the portal, technical issues and disregard by civil servants have curbed its effectiveness, leading to the parallel continuation of the bribe-prone paper-based procurement system. U.S. firms indicate that corruption is most pervasive in government procurement, award of licenses or concessions, transfers, performance requirements, dispute settlement, regulatory system, customs, and taxation.

Since its inception in 2006 (Presidential Decree No. 2006/088 of March 11, 2006), the National Anti-Corruption Commission (CONAC) has encouraged private companies to establish internal codes of conduct and ethics committees to review practices. U.S. Embassy Yaoundé officials are unaware of how many companies have instituted either program. Bribery of government officials remains common. While some companies use internal controls to detect and prevent such bribery, U.S. Embassy Yaoundé officials are unaware of how widespread these internal controls are.

Cameroon is signatory to the United Nations and the African Union anti-corruption initiatives, but the international initiatives have limited practical effects on the enforcement of laws in the country. U.S. Embassy Yaoundé officials are unaware of any NGO’s involvement in investigating corruption. The government prefers the National Anti-Corruption Commission (CONAC) to investigate potential cases.  U.S. companies cite corruption as among the top obstacles to investing in Cameroon and report its being most pervasive in government procurement, the award of licenses and concessions, customs, and taxation.

Rev. Dieudonné  MASSI GAMS
Chairman
National Anti-Corruption Commission
B.P. 33200 Yaoundé Cameroon
(+237) 22 20 37 32
www.conac-cameroun.net
infos@conac-cameroun.net 

Transparency International Cameroon
Nouvelle route Bastos, rue 1.839, BP: 4562 Yaoundé
(+237) 22 68 23 30
ticameroon@yahoo.fr 
https://ti-cameroun.org/ 

Cameroon faces several security challenges. Violence by non-state armed groups against security forces and the local population is in its sixth year in the primarily English-speaking Southwest and Northwest Regions.  Boko Haram and ISIS-West Africa continue to attack civilians and security forces in the Far North Region. In the Adamoua and East Regions, a wave of kidnappings and the presence of refugees from the Central African Republic has led to increased military presence. Terrorists and separatists alike have targeted economic assets and public infrastructure to effect political change.

In the Northwest and Southwest regions, leaders of non-state armed groups have claimed responsibility on social media for the killing of government officials, arsons that destroyed hospitals, schools, bridges, roads, and the seizure of state-run utilities. Non-state armed groups have also posted videos on social media of executions and beheadings of security officers while also claiming responsibility for multiple kidnappings for ransom of persons perceived to be against their cause. Human rights organizations and local citizens have accused soldiers and separatists of grave human rights abuses. In the Far North of Cameroon, Boko Haram and ISIS-West Africa fighters have looted villages and cattle, kidnapped, and abused women. Consequently, several infrastructures projects have ground to a halt.

COVID-19 has had a significant impact on the labor market. Data from the National Institute of Statistics show that a large proportion of workers have seen a drastic reduction in wages (68 percent) and temporary job suspension (31.6 percent). Also, the unemployment rate reached 6.1 percent in 2021 according to the National Institute of Statistics.  Most of the youth who possess skills that could be used in the economy are under-employed in the informal sector. Under-employment, which is generally under-reported, has continued to hover around 75 percent for youth under 30. Most Cameroonians find occupation in the informal sector, where unskilled labor is prevalent, especially in the agricultural and service sectors, manufacturing, commerce, technical trades, and mid-management jobs.

Other structural problems in the labor market include the chronic shortage of technical trade skills, for example for maintenance and repair of industrial machinery, in every sector of the economy. Truck and automotive maintenance are widely practiced in the informal sector, while

rudimentary or artisanal agriculture, fishing, and textile manufacturing continue to hamper industrialization with unskilled labor.

The government of Cameroon does not require foreign companies to hire Cameroonian nationals. Foreign nationals are required, however, to obtain work permits prior to formal employment. While foreign nationals are automatically issued work permits for companies of the Industrial Free Zones regime, their number may not exceed 20 percent of the total work force of a company after the fifth year of operation in Cameroon.

Although union and contract agreements vary widely from sector to sector, in general, Cameroon functions as an “employment at will” economy, and labor laws differentiate between layoffs and firing. Layoffs are not caused by the fault of the employees and are often considered as alternative solutions to dismissing workers based on performance fault or economic grounds. There is no special treatment of labor in special economic zones, foreign trade zones, or free ports.

While the Labor Code applies to enterprises of the Industrial Free Zone regime, some matters are governed by special provisions under the 1990 law establishing Industrial Free Zones. These include the employer’s right to determine salaries according to productivity, free negotiation of work contracts, and automatic issuance of work permits for foreign workers. The Ministry of Labor and Social Security monitors labor abuses, health and safety standards, and other related issues, but enforcement is poor. Labor laws are waived within the framework of Industrial Free Zones to attract or retain investment. The waivers include the employer’s right to determine salaries according to productivity, free negotiation of work contracts, and automatic issuance of work permits for foreign nationals.

There are independent labor unions and others affiliated with the government that operate under existing laws and regulations. Over 100 trade unions and 12 union confederations are active in the country. However, the labor union movement is highly fractured and somewhat ineffective in promoting workers’ rights. Some union leaders accuse the government and company managers of promoting division within trade unions to weaken them, as well as protecting non-representative trade union leaders with whom they can negotiate more easily.

Cameroon’s labor dispute resolution mechanisms are outlined in the labor code. The procedure differs depending on whether the dispute is individual or collective. Individual disputes fall under the jurisdiction of the civil court dealing with labor matters in the place of employment or residence of the worker. The legal procedure is initiated after the labor inspector fails to settle the dispute amicably out of the court system. Settlement of collective labor disputes is subject to conciliation and arbitration, and any strike or lock-out started after the procedures have been exhausted and have failed is deemed legitimate. While the conciliation procedure is conducted by the labor inspector, arbitration of any collective dispute that has not been settled by conciliation is handled by an arbitration board, chaired by the competent judicial officer of the competent court of appeal. Workers who ignore procedures to conduct a legal strike can be dismissed or fined.

Strikes occur regularly and are generally repressed by the police, though they are often due to lack of payment by the employer (including when the employer is the government) and are resolved quickly. Recent strikes involved public sector employees. The National Potable Water Employee Union launched a strike in February 2022, citing management concerns of the state-owned water utility, CAMWATER. The union also cited concern about the absence of a plan for the construction of new water infrastructure, and a maintenance and rehabilitation plan for existing networks. In response, the Minister of Energy and Water Resources, who supervises CAMWATER, engaged the union directly in negotiations. In another public sector strike, teachers launched a broad, nation-wide strike in February 2022 to demand better working conditions and compensation for unpaid wages and benefits, totaling hundreds of millions of dollars. The government has called for dialogue and offered to pay a portion of the amount teachers demanded.

Cameroonian labor code lays down principles of labor laws regarding employment, dismissal, remedies for wrongful dismissal, compensation for industrial injuries, and trade unions.  But most jobs do not have binding contracts, and employers generally seem to have the upper hand in labor disputes. There is informality even in the formal sector, which is against the law. Because of this landscape, it is important for U.S. companies to ensure compliance with the local labor laws and to abide by international best practices. There were no new labor-related laws or regulations enacted during the last year.   U.S. Embassy Yaoundé officials are unaware of any pending draft bills.

The Cameroon National Institute of Statistics estimates that every sector has a level of informality. Likewise, the IMF estimates the informal economy contributes 20-30 percent to Cameroon’s GDP every year and provides jobs to 84 percent of the active working population. Additionally, informal employment comprises over 90 percent of the agricultural sector.

(Source: Cameroon Ministry of Finance, Finance laws 2016-2020)

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.

Chad has demonstrated few signs of prioritizing investment retention or maintaining an ongoing dialogue with investors, such as through a formal business roundtable or Ombudsman. The Presidential Council for Improving the Investment Climate has met only twice since its 2021 establishment and is still working to clarify its work plan.

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. In terms of investment screening mechanisms, the government reviews potential investment projects in a holistic and project-by-project way but has not made public any fixed criteria or standardized methodology.

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

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

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

Civil society groups have not shared useful reviews of investment policy-related concerns, though many Chadians at large have voiced concern about the negative effects of Chad’s onerous and lethargic tourist visa process as dissuading potential foreign investment, compared to other countries which boast inexpensive, hassle-free visas on arrival. To date, the government has shown little interest in addressing this common complaint. A Chamber of Commerce does exist, though has published little information regarding policy-related investment concerns.

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. An easy step to facilitate business (that the government has not taken) would be completing online business registration via the Global Enterprise Registration web site ( www.GER.co ) and the Business Facilitation Program ( www.businessfacilitation.org ). The World Bank estimated in 2019 that it took, on average, 58 days to start a business in Chad.

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. Frivolous lawsuits are expensive and difficult to resolve. 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.

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

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

Many foreign firms commit to extensive skill-building of local staff, purchasing local goods, and donating excess equipment to charities or local governments. Internet companies Airtel and Moov, as well as some banks, continue to engage in RBC focused on public awareness campaigns countering violent extremism and promoting social cohesion.

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

Chad joined the Extractive Industries Transparency Initiative (EITI) in 2010. While private security companies do operate within Chad, they typically employ unarmed guards at private residences and business premises.

Department of State

• Country Reports on Human Rights Practices ()
• Trafficking in Persons Report ()
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ()

Department of Labor

• Findings on the Worst Forms of Child Labor Report ( )
• List of Goods Produced by Child Labor or Forced Labor ()
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World ()
• Comply Chain ()

Foreign investors should be aware that corruption is endemic in Chad and constitutes a significant deterrent to nearly all economic activity, including foreign direct investment. Corruption is pervasive in many areas of government, including procurement, the awarding of licenses or concessions, dispute settlement, regulation enforcement, customs, and taxation.

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

There is an independent Court of Auditors (Cour des Comptes), equivalent to a supreme audit institution (SAI), to enhance independent oversight of government decisions, although its members are nominated by presidential decree. Concurrently, the GOC created a General Inspectorate for State Control within the Presidency to oversee government accountability. No reports have been published, however. In addition to these bodies, prior to the April 2021 dissolution of the National Assembly, its Finance Committee had carried out verifications of the GOC’s annual financial statement though typically did not make audits publicly available. The creation of the transitional legislature’s (CNT) Commission Controle Budget Automone is currently expected to carry out a similar responsibility, though, to date, they have not published any verifications of the GOC’s annual financial statement.

A February 2000 anti-corruption law stipulates penalties for corruption. The law does not single out family members and political parties. As in many other developing countries, weak institutional capacity, a widespread and largely accepted practice of rent seeking, low salaries for most civil servants, judicial employees, and law enforcement officials, have contributed to pervasive corruption in Chad. According to Freedom House’s Freedom in the World 2021 report, selective prosecutions of high-level officials were widely viewed as efforts to discredit those posing a threat to the former president or his allies. The report stated that security forces routinely stopped citizens on pretexts of minor traffic violations to extort money or confiscate goods.

To fight corruption and embezzlement, the Ministry of Finance and Budget set up a toll-free number (700), though it has not been working since 2018, after less than a full calendar year of connectivity. According to the Minister of Finance and Budget, the toll-free number 700 was designed to allow members of the public to alert the Inspectorate General of Finance to denounce any member of government who directly or indirectly solicits a bribe related their official duties, such as regarding administrative documents or tax payments. As of April 2022, the ministry confirms that they rely on postal mail for the lodging of these complaints and have no clear date for reestablishment of the compliant line. In addition to an unworking complaint line, there are no specific laws to counter conflict of interest, nor does the GOC require or encourage private companies to establish internal codes of conduct prohibiting bribery of public officials.

Local NGO Center for Studies and Research on Governance, Extractive Industries, and Sustainable Development (CERGIED), formerly GRAMP-TC (Groupe Alternatif de Recherche et de Monitoring de Petrole – Tchad), tracks government expenditures of oil revenue. There are no indications that anti-corruption laws are enforced differently for foreign investors than for Chadian citizens. There is no specific protection for NGOs involved in investigating corruption, which, to avoid repercussions, results in self-censorship of complaints about corrupt officials.

Chad enjoyed relative political stability from 2010 to April 2021, when armed groups entered from Libya and engaged in armed hostilities with Chadian government forces following the government’s announcement of former President Idriss Déby having won a sixth term. During this incursion, Deby, who had ruled the country since 1990, was killed. A group of 15 generals called the Transitional Military Council, with former President Deby’s son Mahamat Deby at the head, dissolved Chad’s constitution and legislative National Assembly in favor of a constitutional charter and interim legislature (Transitional National Council, CNT) based on an 18-month mandate. During these 18 months, set to end in October 2022, the government plans to hold a National Dialogue in May on a range of social, economic, political, and security issues pertinent to the country to inform the drafting of a new constitution to be adopted by referendum a possible pre-election census, and parliamentary and presidential elections to return to civilian-led government. Following the creation of the transitional government, Chad has entered a period of tenuous peace as the government engages in negotiations with armed political groups over their possible terms for participation in the May National Dialogue as well as disarmament, demobilization, and reintegration (DDR) into Chadian society. Cross-border intercommunal violence near neighboring Darfur threatens to hamstring the prospect of a lasting peace, as do widespread frustrations over poor socio-economic conditions and impunity for excessive use of force by government security forces.

Prior to July 2021, the government typically denied permits for demonstrations or suppressed them using tear gas while arresting participants and organizers. Since then, the transitional government has allowed limited protests in N’Djamena while insisting on rigid adherence to pre-approved routes with occasional use of tear gas to disperse protestors. On the other hand, state security forces outside N’Djamena repressed public demonstrations, including live ammunition that resulted in fatalities, to quell political dissent. In December 2021, in northern Chad’s city of Faya, government forces used live ammunition to disperse protestors frustrated with changes in customs procedures, reportedly resulting in one fatality. In January, in the eastern city of Abeche, government security forces violently confronted protestors frustrated with appointment of traditional official, leaving a reported 14 dead and 64 wounded. There were no reports of politically motivated damage to investment projects and/or installations in recent years, including during incursions by armed groups into Chad in 2008 and 2021.

While Chad, which depends on oil for nearly 80 percent of its export revenues, has faced the stresses of an extended period of reduced oil revenues, recent increases in oil prices have begun to alleviate this issue. The COVID-19 pandemic, despite a low estimated incidence rate in Chad, strains Chad’s limited medical infrastructure, disrupts trade routes with neighboring countries, and complicates international air travel.

Regional violent extremist organizations threaten regional stability and foreign investments along the Lake Chad Basin and. Armed non-governmental groups operate along the Libyan border in northern Chad. Violent attacks by Boko Haram have choked off vital trade routes with Nigeria and the road between N’Djamena and Douala, Cameroon, the principal port serving Chad. This has increased costs for imports and decreased exports.

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

For up-to-date information on political and security conditions in Chad, please refer to the Consular Affairs Bureau’s Travel Warning and Country Specific Information at http://www.travel.state.gov. The Embassy encourages all U.S. Citizens in Chad to enroll online with the Smart Traveler Enrollment (STEP) program or with the Embassy upon arrival to receive the latest safety and security updates via email.

Chad’s population demonstrates a significant youth bulge, leading to widespread youth unemployment.

While some government ministries and SOEs provide job-related training to their employees, Chad has a shortage of skilled labor in most sectors and, at best, a nascent pipeline of human resource development to address this need. Local universities produce a surplus of graduates able to fill entry-level management and administrative positions though jobs in Chad’s anemic formal sector remain scarce. Skilled workers even more rare. Thus, given rampant unemployment and underemployment, approximately 80 percent of the Chadian labor force survive in the informal sector, despite the economic output of these primarily subsistence activities of farming, herding, and fishing accounting for only roughly 35 percent of GDP.

The International Labor Organization (ILO) reports that Chad has managed, compared to its average share of non-agricultural informal economy employment average from 1990-1999, to reduce this average by nearly five percentage points compared to the 2010-2014 period.

As a result, unskilled and day laborers are readily available and motivated, but frequently uneducated; Chad’s literacy rate is approximately 22 percent. While few Chadians speak English, translators and interpreters are available. Chad has never been an attractive destination for regular labor migration given widespread poverty, poor infrastructure, and a weak economy, though northeastern gold mines have reportedly drawn some migrant workers, often en route to Libya or Europe from the Horn of Africa region.

Significant gender inequality exists in Chad, as social norms have historically limited most women to the home and early marriages are common. Access to modern family planning methods is scant, which contributes to a leaky pipeline of women into the workforce as expectations of child-rearing tasks following unplanned pregnancies often impel their exit from the labor force. This results in approximately 50 percent of women participating in Chad’s workforce in some way, compared to approximately 75 percent of men. The government has recognized this as an issue, and taken some minor steps to address it, such as mandating 30 percent women for the transitional government’s interim legislature (CNT).

Same-sex activity became illegal in Chad via a March 2017 update to its penal code #2017-01, whose. Article 354 stipulated penalties of three months to two years in prison plus 50,000 to 500,000 CFA. The lack of social protections and widespread homophobia result in widespread self-censorship of full expression of identity by underrepresented workers, such as lesbian, gay, bisexual, transgender, queer, and intersex (LGBTQI+) individuals. As a result, little data exists regarding their participation in the labor market. More broadly, given entrenched patronage networks and their obstruction of the development of a meritocratic, rather than a connections- or ethnic-based system of hiring, individuals not connected to the Zaghawa group of former president Deby are underrepresented in government and military positions, especially at senior levels.

Child labor remains a problem. Children were involved in the following sectors: street begging in urban centers, street work as hawkers and porters, carpentry, vehicle garages, gold mining in the north of the country, service industries such as waiters/waitresses, and as domestic workers. Child labor is common in the agriculture sector. Children are also involved in cattle-herding and charcoal production. In some regions, children are involved in catching, smoking, and selling fish. Chadian cattle are included on the U.S. Government’s List of Goods Produced by Child Labor or Forced Labor.

Chad has ratified all eight Fundamental Conventions of the International Labor Organization. International labor rights such as freedom of association, the elimination of forced labor, child labor, employment discrimination, minimum wage, occupational safety and health, and weekly work hours are recognized within the labor code. However, significant gaps remain in law and practice. Chadian labor law derives from French law and tends to provide strong protection for Chadian workers; priority is given to Chadian nationals; foreign investors cite these provisions as unproductive and wearisome, especially for termination of underperforming employees. Labor unions operate independently from the government and, in fact, often challenge the government. The two main labor federations, the Confederation Libre des Travailleurs du Tchad (CLTT) and the Union des Syndicats du Tchad (UST), to which most individual unions belong, are the most influential.

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

Labor unions practice collective bargaining, and the labor code monitors labor abuses, health, and safety standards in low-wage assembly operations. The enforcement of the code is not effectively conducted; most disputes are based on contract termination. The GOC did not pass any new labor laws in 2021.

The GOC may provide incentives for foreign businesses but does not waive laws to attract or retain investment. Companies report constant frustration with ambiguous and archaic French-based labor law and its outsized worker-based provisions making any reductions in their workforce extremely difficult and often quite expensive, even following in cases of well-documented flagrant misconduct or criminality, to say nothing of employers merely adjusting employment to respond to fluctuating market conditions. Companies are often forced to settle frivolous lawsuits out of pocket sometimes based, in part, on pressure by corrupt judicial officials looking to exploit legal technicalities for personal gain. The law mandates severance packages for all employees whose employment ends, and larger packages for those who are laid off for reasons out of their control than for those fired for cause. No unemployment insurance or other social safety net programs exist, nor has the public received notice about discussions having happened regarding the possible implementation in the future of such programs.

Beginning in summer, the national teacher’s union went on strike, demanding unpaid compensation and calling for an improved learning environment at different universities throughout the country, including the southern city of Moundou, the eastern city of Abeche, and in N’Djamena. They also called for payment of salaries, bonuses, and overtime arrears.

Throughout the latter half of 2021, workers at ExxonMobil’s Doba oilfield participated in a labor strike after the company announced it was in talks with Savannah Energy to sell its interests in the project. The workers demanded pre-sale compensation and their strike caused ExxonMobil to temporarily decrease production. ExxonMobil actively engaged in discussions with the workers and the government to resolve the dispute, which lasted for months.

The government actively encourages FDI and is committed to increasing it.  The preparation of the 2021-2025 PND was informed by a comprehensive review of the previous 2016-2020 PND to identify the main achievements, remaining challenges and additional strategic priorities.  The 2021-2025 PND process was collaborative, including consultations with civil society, private sector, local government, and development finance institutions (DFIs).  The government recognizes it cannot achieve its ambitious PND investment goals without increasing foreign investment and private investment to a target of 72 percent of total investment.  Prime Minister Achi’s March 2022 visit to the U.S. profiled CDI as an attractive trade and investment partner that offers a conducive environment to accommodate foreign companies.  Achi broadcast the government’s objective to use the private sector as a principal element of development, urging U.S. companies to invest in Côte d’Ivoire.  He highlighted CDI’s success in delivering peace and stability through its commitment to political dialogue.  Part of CDI’s vision by 2030 is to process domestically at least 50 percent of its raw export commodities.

Foreign companies are free to invest and list on the Regional Stock Exchange (BVRM – Bourse Régionale des Valeurs Mobilières), 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 (CREPMF – Conseil Régional de l’Épargne Publique et des Marchés Financiers), a West African securities regulatory body.  BRVM has only 46 companies, 34 of which are Ivorian.  Looking ahead, the market is slowly going digital, with online trading platforms.  Licensed stock broking companies already execute most investors’ trades through an automated trading system.  Nevertheless, investor and corporate sentiment remain low.  Companies are reluctant to list, and investors do not yet see the market as an alternative way to make profit.  There is a need to expand and deepen markets to support international trade, including forward and futures markets.

In most sectors, there are no laws that limit foreign investment.  There are restrictions, however, on foreign investment in the health sector, law and accounting firms, and travel agencies (see the section below).

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 and are 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/.  In 2019, the government added a Ministry of Investment Promotion and Private Sector Development, charged with investment promotion activities and development of industrial zones, including economic and free zones. The Ministry oversees the CEPICI and the Ivoirian Enterprise Institute (INIE – Institut Ivoirien de l’Entreprise), charged with programs targeting Small and Medium Enterprise (SME) development.  This overlaps with the mandate of the Ministry of SMEs (Ministère de la Promotion des PME, de l’artisanat et de la Transformation du Secteur informel).

Côte d’Ivoire maintains an ongoing dialogue with investors through various business networks and platforms, such as the CEPICI, the Ivoirian Chamber of Commerce (CCI-CI), the association of large enterprises (CGECI), and the bankers’ association.  CGECI regularly proposes reforms to be adopted by the government regarding private sector financing and investment.  CGECI workshops and conferences are venues to discuss issues ranging from tax to access to debt issues.

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 investor participation in state-owned firms that the government is privatizing, although in most cases of privatization 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.  Non-citizens and foreign entities can buy stocks listed on the regional stock exchange located in Abidjan.

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 has implemented local content requirement for companies in the oil and gas sectors.  Local content includes an obligation to employ local employees and to work with local SMEs.

The government does not have an official policy to screen investments; 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 CDI.  In some sectors, such as cocoa and cashew processing, the government gives preferential treatment to Ivoirian companies.  For instance, 20 percent of the national cocoa production is exclusively granted to local cocoa exporting companies.

Côte d’Ivoire has not conducted an investment policy review (IPR) through the OECD.  The WTO last conducted a Trade Policy Review in October 2017, which can be found at https://www.wto.org/english/tratop_e/tpr_e/tp462_e.htm.

UNCTAD published an Investment Policy Review for Côte d’Ivoire in February 2020, which can be found at https://unctad.org/webflyer/investment-policy-review-cote-divoire.

The Government of CDI provides information about sector policies and business opportunities in publicly available reports.  More information can be found at: https://www.cepici.gouv.ci/.  The National Development Plan 2021-2025 outlines the key sectors and priorities of the government regarding investment.

The CEPICI manages CDI’s online information portal containing all documents dedicated to business creation and registration (https://cotedivoire.eregulations.org/).  All the necessary documentation for registration is available online, however actual registration must be done in person. Further information on business registration is also available on CEPICI’s website (http://www.cepici.gouv.ci/).

Businesses can register at the CEPICI’s One-Stop Shop (Guichet Unique) in Abidjan.  The One-Stop Shop allows businesses to register with the commercial registrar (Registre du Commerce et du Crédit Immobilier), the tax authority (Direction Générale d’Impôts) and the social security institute (Caisse Nationale de Prévoyance Sociale).  The One-Stop Shop also publishes the legal notice of incorporation on CEPICI’s website.  All necessary documents for registration are also available on the website.  Registration takes between one and three days, while preparation of necessary documents can take more time.  The business licensing process, controlled by sector-specific governing bodies, is separate from the registration process.

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

International financial institutions are recommending that government authorities better and more transparently address concerns from the private sector in the following general areas:

1) enhancing the regulatory framework, reducing bureaucratic red tape, and improving the provision of public sector services, for example by simplifying and harmonizing the process for issuing business licenses and approvals;

2) promoting digitalization, both in the provision of public services and in public finance management;

3)  reducing labor market rigidities by broadening professional training programs;

4)  safeguarding property rights, particularly with respect to ownership and transfer of land;

5)  deepening financial inclusion and facilitating access to financial markets, also via mobile systems and digital platforms; and

6)  reducing uncertainty in the timing of government payments.

Government authorities are stepping up efforts to strengthen macroeconomic statistics. The National Strategy for the development of statistics aims to broaden the competencies of the National Institute of Statistics, reinforce its independence, and create a national fund for the development of statistics.

Côte d’Ivoire does not promote or incentivize outward investment.  However, the government does not restrict domestic investors from investing abroad.

The private sector, the government, NGOs, and local communities are becoming progressively aware of the importance of Responsible Business Conduct (RBC) regarding environmental, social, and governance issues in CDI.

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.  Under the new development plan and sustainable finance regime, government has laid down specific criteria to review, select, fund, and monitor private investment with the goal of channeling funds into priority sectors.  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.  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 are reports of children subjected to forced labor in agricultural work, particularly on cocoa farms.  In February 2021, several individuals from Mali sued major international chocolate companies, claiming that the cocoa they bought came from farms in Côte d’Ivoire where the plaintiffs were subjected to abuse.

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 other NGOs report misconduct and violations of good governance practices.

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/.

Côte d’Ivoire is not a signatory of the Montreux Document on Private Military and Security Companies.  Some private security companies operating in the country are participants of the International Code of Conduct for Private Security Service Providers Association (ICoCA).

This year, government took active measures against State Owned Enterprises not paying their local contractors, generally SMEs.  After the FER general manager was removed, the acting manager made immediate payments to concerned SMEs.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

In 2000, Conservation International designated the tropical Guinean forests of West Africa, an area which includes CDI’s forests, as one of 36 biodiversity hotspots – the most biologically rich, yet threatened terrestrial regions on Earth.  Half a century ago, tropical forest covered 16 million hectares in CDI.  Today, less than 2.9 million hectares of forest remain, mainly the result of land conversion for agricultural crops (primarily cocoa) and logging.

The government accords priority to investment that enhances environmental sustainability.  It has developed policies to combat forest degradation, namely the National Policy on Forest Preservation, Rehabilitation, and Expansion in 2018 and the new Forest Code in 2019.  These create an economically viable route to promote reforesting.  Further progress will require the government to define carbon rights in the Ivoirian legal code and address crucial legal issues such as time limits for the land certificate registration process, guidelines for lumber sales by legitimate owners, and how to relocate people who have settled illegally in the protected forests.

In 2021, the European Commission proposed to the European Parliament new legislation that would prohibit products that contributed to deforestation in their countries of origin from entering the EU market.  The proposed legislation would prohibit products associated with forested areas from entering the EU market unless they are certified “zero deforestation,” are in line with country-specific legislation, and meet additional due-diligence requirements laid out in the draft legislation.   According to the Ivoirian government’s analysis, CDI’s most affected products (cocoa, coffee, wood, palm oil) total about 76 percent of the value of Ivoirian exports to the EU.

Côte d’Ivoire is a signatory to the United Nations Framework Convention on Climate Change (UNFCC) Paris Agreement and has submitted its revised nationally determined contributions (NDCs), committing to action both on adaptation to climate change and reducing greenhouse gas emissions (30 percent by 2030).  Côte d’Ivoire is also involved in a multi-country effort coordinated by the World Bank to develop a national climate-smart agricultural investment plan (CSAIP).  The national plan prioritizes a set of 12 investments and actions needed to boost crop resilience and enhance yields.

Many companies cite corruption as the most significant obstacle to investment.  Corruption in many forms is deeply ingrained in public- and private-sector practices and remains a serious impediment to investment and economic growth in CDI.  It has the greatest impact on judicial proceedings, contract awards, customs, and tax issues.  Lack of transparency and the government’s failure to follow its own tendering 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.”  The demand for bribes can mean that containers stay at the Port of Abidjan for months, incurring substantial demurrage charges, despite companies having the proper paperwork.

In 2013, the Ivoirian government issued Executive Order number 2013-660 related to preventing and combatting corruption.  The High Authority for Good Governance serves as the government’s anti-corruption authority.  Its mandate includes raising awareness about corruption, investigating corruption in the public and private sectors, and collecting mandated asset disclosures from certain public officials (e.g., the president, ministers, and mayors) upon entering and leaving office.  The High Authority for Good Governance, however, does not have a mandate to prosecute; it must refer cases to the Attorney General who decides whether to take up those cases.  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 domestic business community generally assesses that these watchdog agencies lack the power and/or will to combat corruption effectively.  In April 2021, the government formally added Good Governance and Anti-Corruption to the title and portfolio of the Ministry of Capacity Building.

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.

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).  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.

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

Resources to Report Corruption

Inspector General of Finance
(Brigade de Lutte Contre la Corruption)
Mr. 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 Autorité pour la Bonne Gouvernance)
Mr. N’Golo Coulibaly
President
TELEPHONE: +225 272 2479 5000
FAX: +225 2247 8261
https://habg.ci/
Email: info@habg.ci

Police Anti-Racketeering Unit
(Unité de Lutte Contre le Racket –ULCR)
Mr. Alain Oura
Unit Commander
TELEPHONE: +225 272 244 9256
info@ulcr.ci

Social Justice
(Initiative pour la Justice Sociale, la Transparence et la Bonne Gouvernance en Côte d’Ivoire)
Ananeraie face pharmacie Mamie Adjoua
Abidjan
TELEPHONE:  +225 272 177 6373
socialjustice.ci@gmail.com

Following peaceful and inclusive legislative elections in March 2021, CDI entered a period of stability.  Major opposition parties participated and won a meaningful number of seats in elections internationally deemed credible.  The political leadership clearly recognizes that internal and regional security are prerequisites for sustained economic growth and longer-term stability.  All political parties participated in a structured Political Dialogue aimed at fostering reconciliation and strengthening democratic institutions, including dispute resolution mechanisms.  The fifth round of the Political Dialogue concluded in March 2022 and produced a consensus list of tangible recommendations to the President of the Republic.  The next presidential election is not due until 2025, so there is now a window of opportunity for the country’s political leaders to focus on difficult reforms.

The Ivoirian government has demonstrated a strong commitment to addressing insecurity in the region by strengthening its capacity to counter terrorism, strengthen social resilience, professionalize law enforcement, strengthen its justice system, and improve border security.  In June 2021, CDI and France inaugurated the International Academy for the Fight Against Terrorism (AILCT) near Jacqueville, west of Abidjan. The aim of this academy is to train relevant cadres (e.g., prosecutors, forensic investigators) and security forces from the African continent to strengthen capacity to prevail against self-styled jihadists within respect for law and human rights, thereby reinforcing ties between the population and the state.  This comes at a time of increased security challenges emanating from the Sahel and spilling over into CDI’s northern region.

The official unemployment rate is 3.5 percent, 5.5 percent in the 15-24 age group; however, unemployment is difficult to measure in the informal sector, which is estimated to account for as much as 80 percent of the Ivoirian economy.  Of the non-agricultural workforce, 47 percent is employed in the informal economy.  Official statistics fail to fully account for the large informal economy throughout the country, and do not accurately portray the general dearth of well-paying employment opportunities.  Despite the government’s efforts, child labor remained a widespread problem in rural and urban areas, notably on cocoa and coffee plantations, as well as in artisanal gold mining areas and in domestic work.

There are significant shortages of skilled labor in fields requiring higher education, including information technology, engineering, finance, management, health, and science.  The Ivoirian government is working with the Millennium Challenge Corporation (MCC) to build and develop four technical and vocational training centers as part of a six-year Compact valued at some $536 million that will end in August 2025. The Compact comprises two projects: road transportation and education.

Labor laws favor the employment of Ivoirians in private enterprises.  Any vacant position must be advertised for two months.  If after two months no qualified Ivoirian is found, the employer may recruit a foreigner provided it plans to recruit an Ivoirian to fill the position within the next two years.

There are no restrictions on employers adjusting employment in response to fluctuating market conditions.  Employees terminated for reasons other than theft or flagrant neglect of duty have the right to termination benefits.  Unemployment insurance and other social-safety programs exist for employees laid off for economic reasons.  For the roughly 60-80% percent of workers employed in the informal sector, unemployment insurance is not an option.  However, there are other social-safety-net programs that apply to informal economy workers, including monthly stipends and waiving of universal health care fees.

Labor laws are not waived to attract or retain investment.

Collective bargaining agreements are in effect in many major business enterprises and sectors of the civil service.  A prolonged teachers’ strike in 2019 was submitted for arbitration but due to the fractured nature of the teachers’ unions, not all parties agreed to the decision.

Labor disputes are submitted to the labor inspector for amicable settlement before engaging in any legal proceedings.  If this attempt to settle the dispute fails, then the labor court can be engaged to resolve the dispute.

No strike has posed an investment risk during the last year.

There are no gaps between Ivoirian and international labor standards in law or practice that pose a reputational risk to investors.

The government did not adopt any new labor-related laws or regulations in 2021.  In 2017, the government passed a law forbidding most forms of child labor for children under 12 and restricting it for minors aged 13 to 17.  The law’s passage put Ivoirian law on par with ILO standards for child labor.  The government established the National Surveillance Council (Conseil National de Surveillance, or CNS) and the Interministerial Committee (CIM – Conseil Interministériel). These agencies deal with child labor issues, especially in the cocoa sector.

The ascension of Felix Tshisekedi to the Presidency in January 2019 and his welcoming attitude toward foreign direct investment (FDI), particularly from the United States, have raised hopes that the GDRC can impose and monitor investor-friendly policies. FDI-friendly laws exist, but the judicial system is slow to protect investors’ rights and is susceptible to political pressure and corruption. Investors hope that Tshisekedi can create a more favorable environment by improving the rule of law and tackling corruption. The DRC’s rich endowment of natural resources, large population, and generally open trading system offer significant potential opportunities for U.S. investors. For more than a decade, the DRC has undertaken reforms related to investment in order to make its business environment competitive and attractive including reforms to the investment code, the mining code, the insurance code, the agricultural Act, the Act on the liberalization of electricity, and the telecommunications code. The GDRC has also promoted improvements in the tax, customs, parafiscal, non-tax and foreign exchange regimes, which are applicable to collaboration agreements and cooperation projects, as well as the decree on the strategic partnership on value chains, the Industrial Property Act, the Public-Private Partnership Act, the Competition Act, and the Special Economic Zones Act.

The main regulations governing FDI are found in the Investment Code Act (No. 004/2002 of February 21, 2002). Current regulations reserve the practice of small-scale commerce and retail commerce in DRC to nationals and prohibit majority ownership by foreigners of agricultural enterprises. The ordinance of “August 8, 1990” clearly states that “small business may only be carried out by Congolese”. Foreign investors must limit themselves to import trade and wholesale and semi-wholesale trade. Investors fear that the ban on foreign agricultural ownership will stifle any attempt to revive the agrarian sector.

The National Investment Promotion Agency (ANAPI) is the official investment agency, providing investment facilitation services for initial investments above $200,000. It is mandated to promote the positive image of the DRC and specific investment opportunities; advocate for the improvement of the business climate in the country; and provide administrative support to new foreign investors who decide to establish or expand their economic activities on the national territory. More information is available at https://www.investindrc.cd/ .

The GDRC maintains an ongoing dialogue with investors to hear their concerns. There are several public and private sector forums that address the government on the investment climate in specific sectors. In 2019, the GDRC created the Business Climate Unit (CCA) to monitor and improve the business enabling environment in the DRC, and to interface with the business community. In June 2020, the CCA presented a roadmap for reforms. In December 2021, the CCA developed a digital tool for monitoring and evaluating reforms and missions within the public administration, to allow the highest authorities, including the President of the Republic and the Prime Minister, to follow in real time the progress of the implementation of reforms by the various ministers. The Public-Private mining group Financial and Technical Partners (PTF) represents countries with significant mining investments in the DRC. On March 1, 2022, the GDRC created, by decree, the Agency for the Steering, Coordination and Monitoring of Cooperation Agreements between the DRC and its Private Partners (APCSC). This agency will oversee the implementation of cooperation agreements that the DRC has concluded with private companies, particularly in the areas of basic infrastructure and natural resources. The APCSC serves as an interface between the various parties and entities interested in projects resulting from collaboration or cooperation agreements in basic infrastructure and natural resources, including the GDRC, private companies and/or groups of companies, as well as any joint venture or monitoring structure created for the purpose of exploring, exploiting, or marketing natural resources and/or carrying out infrastructure work. The Federation of Congolese Enterprises (FEC), a private sector organization that partners with the government and workers’ unions, maintains a dialogue on business interests with the government.

The GDRC provides the right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity.

Foreign ownership or control is possible except in certain excepted sectors. The DRC law reserves small-scale commerce and retail trade to Congolese nationals and there is a foreign ownership limit of 49 percent for agricultural concerns, which limits agricultural investment. Many investors note that in practice the GDRC requires foreign investors to hire local agents and participate in joint ventures with the government or local partners. The new telecommunications law enacted in 2022 includes a 25 percent ownership requirement.

Some foreign investors in the mining sector note that the 2018 mining code raised royalty rates from two to ten percent, raising tax rates on “strategic” metals, and imposing a surcharge on the “super profits” of mining companies. The code also removed a stability clause that protected investors from any new taxes or duties for ten years. The Tshisekedi government has indicated that it is prepared to reopen discussions on the mining code.

The GDRC does not maintain an organization to screen inbound investment. The Presidency and the ministries serve this purpose de facto. In May 2021 President Tshisekedi announced his intention to review the content of and compliance with mining contracts signed under former President Kabila, a process that is still ongoing.

In the past five years, has the GDRC not been subject to a third-party investment policy review (IPR) through a multilateral organization such as the Organization for Economic Co-operation and Development (OECD), World Trade Organization (WTO), United Nations Conference on Trade and Development (UNCTAD) or the UN Working Group on Business and Human Rights. Cities with high custom clearance traffic use Sydonia  https://asycuda.org/wp-content/uploads/Etude-de-Cas-SYDONIA-Contr%C3%B4le-de-la-Valeur-RDC.pdf , which is an advanced software system for custom administrations in compliance with ASYCUDA WORLD. (ASYCUDA is a large technical assistance software program recommended by UNCTAD for custom clearance management.)

The international NGO The Sentry published a report in November 2021 on a multi-million-dollar embezzlement and bribery operation using money intended to support infrastructure development. The NGO Global Witness reported in 2019 that a DRC-based bank was involved in laundering money for Congolese officials.

The GDRC operates a “one-stop-shop” for Business Creation (GUCE) that brings together all the government entities involved in the registration of a company in the DRC with an electronic tracking system of the business creation file online. The goal is to permit the quick and simple registration of companies through one office in one location. In October 2020, President Tshisekedi instructed the government to restructure GUCE in order to ease its work with the various state organizations involved in its operation. More information is available at https://guichetunique.cd/ .

In December 2021, the GDRC attempted to make the GUCE more efficient for companies by implementing a system that allows for online business registration. Using the GUCE’s online portal, companies fill out a “single form,” which integrates all of the services involved in the process of creating a company including the Notary’s Office, the Registry of the Commerce and Personal Property Credit Register, the Administration of Tax Authority (DGI), a Center for Ordination of the General Directorate of Administrative, State, Judicial and Participation Revenues (DGRAD), the Administration of the National Economy, the National Fund of Social Security (CNSS), the Administration of the Environment, the National Office of Employment (ONEM), the National Institute of Professional Preparation (INPP), the General Inspection of Work; and a representation of Municipal Entities. Businesses may also need to obtain an operating permit as required by some city councils. The registration process should now take three days, but in practice it can take much longer. Some businesses have reported that the GUCE has significantly shortened and simplified the overall business registration process.

The GDRC does not promote or incentivize outward investment.

There are currently no government restrictions preventing domestic investors from investing abroad, and there is currently no blacklist of countries with which domestic investors are prevented from doing business.

The DRC has not defined Responsible Business Conduct (RBC) for most industries, but the Labor Code includes provisions to protect employees, and there are legal provisions that require companies to protect the environment. The Global Compact Network DRC, a public-private consortium affiliated with the United Nations, encourages companies operating locally to adopt sustainable and socially responsible policies.

The GDRC has taken actions of limited impact to support RBC by encouraging companies to develop and adhere to a code of ethics and respect for labor rights and the environment. However, the DRC does not possess a legal framework to protect the rights of consumers, and there are no existing domestic laws to protect individuals from adverse business impacts.

Reports of children working in the DRC’s artisanal mines has led to international pressure to find ways to ensure the DRC’s minerals supply chain is free of child labor. Concerns over the use of child labor in the artisanal mining of copper and cobalt have led to worries about the use of Congolese resources served to discourage potential purchasers. USG assistance programs to build capacity for labor inspections and enforcement are helping to address these concerns.

Development pressures have resulted in reports of violations of environmental rights. In one case, a prominent local businessman is seeking to develop a dam in a national park in the southeastern province of Haut Katanga. There is a case in eastern DRC of a local developer pressuring an environmental defender to end his activism.

There are no known high-profile and controversial cases of private sector entities having a negative impact on human rights.

With regard to human rights, labor rights, consumer protection, environmental protection, and other laws/regulations designed to protect individuals from the adverse effects of business, the GDRC faces many challenges in enforcing domestic laws effectively and fairly.

The GDRC has no known corporate governance, accounting, or executive compensation standards to protect shareholders.

There are independent NGOs, human rights organizations, environmental organizations, worker/trade union organizations, and business associations that promote or monitor RBC and report misconduct and violation of good governance practices. They monitor and/or defend RBC and are able to do their work freely.

The DRC has adopted OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas as defined by the United Nations Group of Experts, as well as various resolutions of the UN Security Council related to business and human rights in the Congolese mining sector. There are also existing domestic measures requiring supply chain due diligence for companies that source minerals that may originate from conflict-affected areas in DRC.

The DRC participates in the Extractive Industries Transparency Initiative (EITI), and the Voluntary Principles on Security and Human Rights. More information is available at https://www.itierdc.net/ . The DRC publishes reports on its revenue from natural resources. There are domestic transparency measures requiring disclosure of payments to governments and of RBC/Business and Human Rights policies or practices. The mining code provides domestic transparency measures requiring the disclosure of payments made to governments, though they appear to be infrequently enforced. PROMINES, a technical parastatal body financed by the GDRC and the World Bank, aims to improve the transparency of the artisanal mining sector. Amnesty International and Pact Inc. have also published reports related to RBC in the DRC mining sector.

The DRC has a private security industry but is not a party to the Montreux Document on Private Military and Security Companies. It does not support the International Code of Conduct or Private Security Service Providers, nor does it participate in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

The GDRC has a national climate strategy and/or a strategy for monitoring natural capital, such as biodiversity and ecosystem services. The GDRC has the following national climate change strategy documents: the National Policy, Strategy and Action Plan for Climate Change, the National Policy and Strategy Document on Climate Change in the DRC (2020-2024), the National Strategic Development Plan (PNSD), the Capacity Development Program for a Low Carbon Development Strategy, the Second National Communication to the Framework Convention on Climate Change, the National Strategy for Biodiversity Conservation in DRC Protected Areas, the National Biodiversity Strategy and Action Plan, and other key policy documents. The DRC’s vision in the fight against climate change is to promote a green, resilient, and low-carbon economy by rationally and sustainably managing its important natural resources in order to ensure ecological balance and the social, economic, cultural and environmental well-being of its population.

The GDRC has not introduced any policies to reach net-zero carbon emissions by 2050. The DRC ratified the United Nations Framework Convention on Climate Change (UNFCCC) in 1997, the Kyoto Protocol in 2005 and the Paris Agreement in 2017. To this end, the DRC is firmly committed to taking action to mitigate its greenhouse gas (GHG) emissions, to preserve the Congo Basin Rainforest, and to adapt to the effects of climate change, in accordance with Article 41 of the Paris Agreement. It has also submitted its first three National Communications on Climate Change to the UNFCCC for 2001, 2009, and 2015 respectively, and is currently preparing its fourth National Communication and finalizing its first Biennial Update Report (BUR).

Private sector organizations are key actors in the achievement of the Nationally Determined Contribution (NDC) and the implementation of climate change adaptation and mitigation activities, as they are also affected by climate change. Some examples of private sector organizations are COPEMECO (Confederation of Small and Medium Enterprises), FIB (Federation of Wood Manufacturers), FEC (Federation of Enterprises of Congo), SAFBOIS and SIFORCO, and agribusinesses. Their participation is required to make the implementation of the climate change policy and law possible, both for the implementation of mitigation and/or adaptation measures, and the realization of NDCs and the provision of data and information for the operation of the MRV and GHG inventories.

The government is hoping to benefit financially by establishing carbon credits to support the preservation of the rain forest. The GDRC is working on a comprehensive national forestry plan which will govern the use and protection its part of the Congo Basin Rainforest, the second largest rainforest in the world. The forestry sector is currently regulated in the DRC by the following legal provisions: Law No. 011/2002 of August 29, 2002, on the Forestry Code; Decree No. 05/116 of October 24, 2005, setting out the modalities for converting old forest titles into forest concession contracts and, extending the moratorium on granting forest exploitation titles; Decree No. 08/09 of April 8, 2008, setting out the procedure for allocating forest concessions. Decree No. 011/27 of May 20, 2011, setting the specific rules for the allocation of conservation forest concessions. In September 2021, GDRC decided, through a Council of Ministers, to lift the current moratorium on the granting of forest titles. After the international community protested, President Tshisekedi reinstated the moratorium in December 2021.

Under the DRC Public Procurement Act, environmental impact is one of the criteria for evaluating bidders’ offers.

The DRC constitution and legal code include laws intended to fight corruption and bribery by all citizens, including public officials. The Tshisekedi government has used public prosecutions of high-level officials and the creation of an anti-corruption unit (APLC) to improve the DRC’s anti-corruption enforcement. Prosecutions have led to jail terms but often subsequent early releases. The 2021 edition of Transparency International’s Corruption Perceptions Index (CPI) ranked the DRC 169th out of 180 countries, with a score of 19 out of 100, up from 18 out of 100 the previous year.

Anti-corruption laws extend to family members of officials and political parties. In March 2020, President Tshisekedi created the National Agency for the Prevention and Fight Against Corruption (APLC). Currently corruption investigations are ongoing for three Managing Directors of SOEs.

The country has laws or regulations to address conflicts of interest in the awarding of public contracts or procurement. Conflicts of interest committed in the context of a public contract and a delegation of public service are punishable by a fine of USD 12,500 to USD25,000.

The government through regulatory authorities encourages or requires private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials.

Law 017-2002 of 2002, establishes the code of conduct for public officials, which provides rules of conduct in terms of moral integrity and professional ethics and the fight against corruption in socio-professional environments. Private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials.

The DRC is a signatory to both the UN Convention against Corruption (UNCAC) and the African Union Convention on Preventing and Combating Corruption but has not fully ratified the latter. The DRC is not a signatory to the OECD Convention on Combating Bribery. The DRC ratified a protocol agreement with the Southern African Development Community (SADC) on fighting corruption.

NGOs such as the consortium “The Congo is Not for Sale,” have an important role in revealing corrupt practices, and the law protects NGOs in a whistleblower role. However, in 2021 whistleblowers from Afriland First Bank that alleged to the international NGO Global Witness interaction between sanctioned individual Dan Gertler and the bank were subjected to prosecution and, in a private proceeding, sentenced to death in absentia. Although the government worked with Global Witness to contest the case, it remained unresolved as of early 2022. NGOs report governmental or other hindrance to their efforts to publicize and/or address corruption. The Observatory of Public Expenditure (ODEP), which works with civil society organizations, raises awareness of the social impact of the execution of finance laws in order to improve transparency and accountability in the management of public finances; to participate in the fight against corruption; and to promote citizen involvement in each stage of the budget process.

U.S. firms see corruption and harassment by local security forces as one of the main hurdles to investment in the DRC, particularly in the awarding of concessions, government procurement, and taxation treatment.

Contact at the government agency or agencies that are responsible for combating corruption:

Chouna Lomponda
Director of Communications and Spokesperson
Agence de Prévention et de Lutte contre la Corruption (APLC)
Général Basuki, N°14C, Ngaliema,
Kinshasa, RDC
+243 89 33 02 819
communicationaplc@gmail.com 

Contact at a “watchdog” organization:

Ernest MPARARO
Executive Secretary
Ligue Congolaise de Lutte contre la Corruption (LICOCO)
Luango, N°14, Quartier 1, N’djili
Kinshasa RDC
+243 81 60 49 837 / +243 89 89 72 130
contact@licoco.org
https://licoco.org/ 

The DRC has a history of armed group activity, sometimes of a politicized nature and particularly in the east of the country, and of elections-related violence and civil unrest. The 2018 election, which took place after years of delay marked by protests that were in some instances violently repressed, was marred by irregularities, but most citizens accepted the announced result, and the election aftermath was calm. In January 2019, Felix Tshisekedi became President in the DRC’s first peaceful transition of power. Following President Felix Tshisekedi’s establishment of a new political alliance known as the “Sacred Union,” Tshisekedi appointed Jean-Michel Sama Lukonde as Prime Minister in April 2021.

The security situation continues to be a concern and the U.S. Embassy, through its travel advisories ( https://travel.state.gov/content/travel/en/international-travel/International-Travel-Country-Information-Pages/DemocraticRepublicoftheCongoDRC.html), keeps a list of areas where it does not recommend travel by U.S. citizens. The security situation in eastern DRC remains unstable. Some 15-20 significant armed groups are present and inter-communal violence can affect the political, security, and humanitarian situation. Several towns in eastern DRC continue to be reported to be under attack by armed groups or temporarily under their control.

The foreign terrorist organization-designated ISIS-DRC (aka the Allied Democratic Forces (ADF) rebel group) in eastern DRC is one of the country’s most notorious and intractable armed groups and its members have shown no interest in demobilizing. In May 2021, Tshisekedi declared a “state of siege” – effectively martial law – in North Kivu and Ituri provinces, installing military governors and ramping up Armed Forces of the Democratic Republic of the Congo (FARDC) operations against ISIS-DRC/ADF and other armed groups. The state of siege has been accompanied by problematic human rights practices; the United Nations Stabilization Mission in the Democratic Republic of the Congo (MONUSCO) has documented violations including extrajudicial killings by FARDC and police, while military governments have restricted civil society and political activists and prosecuted some for criticizing the state of siege.

US citizens and interests are not being specifically targeted by armed groups, but anyone can easily fall victim to violence or kidnapping by being in the wrong place at the wrong time. The Armed Conflict Location and Event Dataset tracks political violence in developing countries, including the DRC, https://acleddata.com/ . Kivu Security Tracker ( https://kivusecurity.org/ ) is another database for information on attacks in eastern DRC. The Department of State continues to advise U.S. citizen travelers to review the Embassy’s Travel Advisory and country information page ( https://travel.state.gov/content/travel/en/international-travel/International-Travel-Country-Information-Pages/DemocraticRepublicoftheCongoDRC.html) for the latest security information.

The DRC labor market has a large, low-skilled workforce with high youth unemployment. Women make up 47 percent of the labor force. Expatriates frequently work in jobs requiring technical training in the key mining sector. Approximately 85 percent of the nonagricultural labor force works in the informal sector. About 60 percent of the total labor force works in agriculture.

Informal employment dominates the labor market in the DRC. According to the World Bank, the DRC has one of the highest rates of informal work in the world, with about 80 percent of urban workers engaged in the informal economy. The Congolese trade union confederation estimates that the sector employs 97.5 percent of the country’s workforce. Informal workers in the artisanal mining sector have raised worries about the use of child labor in mining, forcing companies to go through an accreditation system to show they do not use child labor. It takes many forms and is characterized by the non-respect or non-application of labor standards related to minimum wage, working hours, safety and other social standards related to the social health system, retirement, etc. The informal sector’s share of GDP is estimated at nearly 55 percent. The EGI-ODD results show that slightly more than 91 percent of jobs in the non-agricultural sectors are informal, meaning that these workers do not have a contract, receive paid vacations, or family allowances. By gender, 94 percent of women’s jobs in the nonagricultural sector are informal, compared to 87.7 percent for men.

DRC labor law stipulates that for companies with more than 100 employees, ten percent of all employees must be local. If the general manager is a foreigner, his or her deputy or secretary general must be a Congolese national. The government may waive these provisions depending on the sector of activity and available expertise. There are no onerous conditionality, visa, residency, or work permit requirements that impede the mobility of foreign investors and their employees.

The DRC faces a shortage of skilled labor in all sectors. There are few formal vocational training programs, although Article 8 of the labor law requires all employers to provide training to their employees. To address the high unemployment rate, the GDRC has enacted a policy giving Congolese preference in hiring over expatriates. Laws prevent companies from laying off workers in most cases without compensation. These restrictions discouraged hiring and encouraged the use of temporary contracts instead of permanent employment. There is no government safety net to compensate laid-off workers.

There are no labor laws waived in order to attract or retain investment, nor are there additional/different labor law provisions in special economic zones, foreign trade zones, or free ports compared to the general economy. The law grants and guarantees equal treatment to all national and foreign investors.

Congolese law bans collective bargaining in some sectors, particularly by civil servants and public employees, and the law does not provide adequate protection against anti-union discrimination. While the right to strike is recognized, there are provisions which require unions to obtain authorization and to undergo lengthy mandatory arbitration and appeal procedures before going on strike. Unions often strike to obtain wage increases or payment of back wages and seek to make gains through negotiation with employers.

The DRC government has ratified all eight core International Labor Organization (ILO) conventions, but some Congolese laws continue to be inconsistent with the ILO Forced Labor Convention.

No strikes in the past year have posed an investment risk and government’s reaction.

According to some businesses, the government does not effectively enforce relevant employment laws. DRC law prohibits discrimination in employment and occupation based on race, gender, language, or social status. The law does not specifically protect against discrimination based on religion, age, political opinion, national origin, disability, pregnancy, sexual orientation, gender identity, or HIV-positive status. Additionally, no law specifically prohibits discrimination in the employment of career public service members.

Labor law defines different standard workweeks, ranging from 45 to 72 hours, for various jobs, and prescribes rest periods and premium pay for overtime. Employers in both the formal and informal sectors often do not respect these provisions. The law does not prohibit compulsory overtime.

The labor code specifies health and safety standards, but the government does not effectively enforce labor standards in the informal sector, and enforcement is uneven to non-existent in the formal sector. The Ministry of Labor employs 200 labor inspectors, but the Labor Inspector General reports that funding is not enough to facilitate the conduct of efficient labor inspections.

No new labor related laws or regulations have been enacted in the past year, and no bills are pending.

Djibouti’s laws encourage FDI, with the government as a driving force behind Djibouti’s economic growth. Faced with an unemployment rate of over 47%, FDI is expected to generate jobs. There are no laws, practices, or mechanisms that discriminate against foreign investors. Navigating the bureaucracy, however, can be complicated. FDI is encouraged by policy and foreign companies are often able to negotiate favorable tax terms on a case-by-case basis.

The government is gradually opening public sector entities, including state owned utilities, to private investment. In 2021 the government invited proposals for a strategic investor in the state-owned telecommunications monopoly. The energy sector remains open to competition through power purchase agreements; however, the state-owned electric utility retains all rights to the transmission and distribution of electricity. This liberalization of production has resulted in the private development of wind, solar, and waste to energy resources.

Djibouti’s National Investment Promotion Agency (NIPA), created in 2001, promotes private-sector investment, facilitates investment operations, and works to modernize the country’s regulatory framework. NIPA assists foreign and domestic investors by disseminating information and streamlining administrative procedures. Since 2017, NIPA’s one-stop-shop, which houses several agencies under one roof, has simplified business registration. NIPA has identified several priority sectors for investment, including infrastructure and renewable energy.

The Secretariat of State in charge of Investment and Private Sector Development, established in May 2021, is in charge of implementing the business climate policy, investment promotion and private sector development. This agency works in coordination with the Ministry of Economy and Finance. It ensures that the business environment is internationally competitive and conducive to private initiatives. It identifies administrative reforms that remove obstacles to the proper functioning of the private sector.

Foreign and domestic private entities have equal rights in establishing and owning business enterprises and engaging in all forms of remunerative activity. Furthermore, foreign investors are not required by law to have a local partner except in the insurance industry, and then, only if the company is registered as a local company and not as a branch of an existing foreign company. Nevertheless, some foreign companies choose to have a local partner to help them better navigate the local bureaucracy and cultural sensitivities. There is no established screening process for FDI.

The OECD, WTO, and the UNCTAD have not conducted an investment policy review (IPR) for Djibouti in the last five years. The Business and Human Rights Resource Center conducted a review in 2022 of Djibouti’s Doraleh Multipurpose Port (DMP) which focused on the DMP’s financing by China Eximbank.

The government of Djibouti has facilitated the registration of business by reducing the capital needed for investment, simplifying the formalities needed to register and simplifying certain tax procedures. The most important facilitation effort is the one-stop-shop, or Guichet Unique, managed by NIPA. The Guichet Unique (http://www.guichet-unique.dj ) brings together all the agencies with which a company must register.

Typically, a company registers with the following Djiboutian offices: Office of Intellectual Property, Tax office, and the Social Security office. Online registration is not possible; the normal registration process takes 14 days, according to the World Bank. In Djibouti, new businesses must have every document notarized to begin operations.

The government neither promotes nor restricts outward investment.

There is nascent but growing awareness among both companies and consumers in Djibouti of Responsible Business Conduct (RBC). Businesses which might harm the environment are, in general, obligated to conduct studies on the environmental impact before proceeding with their project. The government does not promote RBC in a systematic way, although it does acknowledge good corporate social responsibility and covers it favorably in state media. However, the government does not factor RBC policies or practices into its procurement decisions. There are no corporate governance, accounting, or executive compensation standards to protect stakeholders. The government does not adhere to OECD guidelines in RBC matters. There have been reports that the government does not effectively and fairly enforce domestic laws relating to labor rights, environmental protections, consumer protections, and human rights. There are no independent NGOs, investment funds, worker organizations, or associations that monitor RBC in Djibouti. Djibouti has a salt extraction industry, but it does not participate in the Extractive Industries Transparency Initiative or the Voluntary Principles on Security and Human Rights.

Additional Resources

Department of State

Country Reports on Human Rights Practices;

Trafficking in Persons Report;

Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;

U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;

Xinjiang Supply Chain Business Advisory 

Department of the Treasury

OFAC Recent Actions

Department of Labor

Findings on the Worst Forms of Child Labor Report;

List of Goods Produced by Child Labor or Forced Labor;

Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;

Comply Chain

The national climate strategy includes a number of actions to strengthen or build capacity in the field with a view of reducing the vulnerability of the coastal zone to climate change. Priority is on addressing extreme floods, inundations, and marine submersion.

Post is not aware of any government introduction of policies to reach net-zero carbon emissions by 2050.

There are government policies that establish marine protected areas in order to contribute to the conservation of Djibouti’s marine biodiversity and other desirable ecological benefits.

In order to support coastal populations affected by climate change, the government has put in place a program to improve their resilience and mitigate their vulnerability while adopting a co-management approach to protect marine resources.

Djibouti has several laws to combat corruption by public officials. These laws were either passed by the government or contained in the Penal Code. However, there have been no records of cases to combat corruption by public officials. Corruption laws are extended to all family members of officials and across political parties, but they have not been applied in a non-discriminatory manner. Djibouti ranked 128 of 180 countries on the 2021 Transparency International Corruption Perceptions Index. Djibouti does not have laws or regulations to counter conflict-of-interest in awarding contracts or government procurement.

Djibouti is a party to the UN Convention against Corruption. There are two government entities responsible for investigating corruption and enforcing the regulations. The State Inspector General (SGI) is tasked with ensuring human and material resources in the public sector are properly utilized. The Court of Auditors is mandated to verify and audit all public establishments for transparency and accountability, and to implement necessary legal sanctions. Both institutions are mandated to produce annual corruption reports. Despite the legal mandates, both institutions lack the authority to push for meaningful reform. The National Commission for Anti-Corruption is also mandated to enforce the laws on combatting corruption and provide safe haven for whistleblowers. This Commission launched a program in March 2018 to urge high-ranking government officials to publicly declare all of their assets, with little success. The contracting code and other laws passed by Djibouti contain provisions to counter conflict-of-interest contracts or government procurement.

According to a law passed in 2013, the government requires private and public companies to establish internal codes of conduct that prevent and prohibit bribery of public officials. However, these codes have not been implemented. Likewise, the government requirement that private companies use internal controls, ethics, and compliance to detect and prevent bribery of government officials is not enforced. Djibouti is not party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Djibouti is a signatory country of the UN Convention against Corruption.

U.S. firms have not specifically noted corruption as an obstacle to foreign direct investment in Djibouti, but there were allegations of foreign companies having to meet requirements such as renting houses owned by senior officials or hiring certain employees as a condition of receiving government procurement contracts. In addition, one company reported harassment of employees by local competitors. Prosecution and punishment for corruption is rare.

Resources to Report Corruption

Contact at government agency responsible for combating corruption is listed below:

Fatouma Mahamoud AbdillahiPresidentCommission Nationale Independante pour la Prevention et de Lutte Contre la CorruptionPlateau du Serpent+253 21 35 16 03 anticorruption@intnet.d j

No “watchdog” organizations are present in Djibouti.

Djibouti has seen only very limited episodes of political violence over the last two decades.  In the last ten years, there have been no known incidents of political violence leading to damage to foreign investments.  Both the ruling coalition party and the recognized opposition parties favor foreign direct investment into Djibouti and local attitudes towards foreigners are positive.

Djibouti held presidential elections April 9, 2021, with President Ismael Omar Guelleh winning a fifth consecutive term with 98% of the vote. His 22-year reign has contributed to stability and economic growth, but questions of succession and subsequent instability remain.

Djibouti was recently awarded the International Peace Award by the journal Jeune Afrique for its secure environment, despite being surrounded by countries facing instability.  According to data acquired by the Armed Conflict Location and Event Data Project, Djibouti’s instances of violence and disorder have significantly declined in the past three years.

Djibouti’s official unemployment rate is 47%. Youth unemployment, defined locally as the share of the labor force between age 15 and 24 without work but that is available and actively seeing employment, has remained between 11% and 12% in the past three decades. Estimates of a sizeable informal labor market of up to 75% exist in Djibouti, with a larger informal market outside of the capital city of Djibouti. The informal market consists mostly of individual operating units, is poorly structured, and is concentrated in trade, import-export, construction, various services and handicrafts. In Djibouti, women are largely predominant in the activities of the informal economy. The formal labor market is heavily service- or government-oriented with growing markets in construction, logistics, and transportation. Skilled Djiboutian workers, especially in high-demand trades such as construction, are in short supply.

Djibouti has complicated labor laws that favor the employee, especially in the areas of disputes and termination. Vocational and professional training facilities remain limited. The World Bank, the Ministry of Finance, USAID, and other entities are working on a variety of initiatives to address the shortage of workforce development programs. The government has promoted entrepreneurship as a means of stimulating the economy. The government, in partnership with the World Bank and European Union, opened the entrepreneurship and leadership center (CLE – Centre Leadership Entreprenariat ) to assist start-up companies.

Foreign workers are legally allowed to work in Djibouti only if their qualifications or expertise are not available among the nationals, as determined by the Ministry of Labor through the National Agency for Employment, Training, and Professional Integration (ANEFIP). This requirement is not strictly implemented. In January 2017, the cost for a work permit was reviewed and classified in three different categories based on the type of profession with respective annual fees of 50,000 Djibouti francs (USD 281), 100,000 Djibouti francs (USD 563) and Djibouti francs 200,000 (USD 1,125). ANEFIP maintains a database of Djiboutian job-seekers and issues work permits to foreign workers.

Employers have to abide by the Labor Code. Workers who are laid off get more compensation than employees who are fired. No unemployment insurance or other social safety net programs exist for workers laid off for economic reasons. Only those workers who contributed to the social insurance for 25 years and are sixty years of age are entitled to retirement benefits.

Minimum wage is DJF 45,000 (USD 254) per month. By law, all employers are obligated to make social security payments on behalf of their employees, through the National Council for Social Security. Two large labor unions exist in Djibouti, but only the Djiboutian Workers Union is recognized by international organizations.

Labor laws are not waived to attract investment, but the investment code and free zones have separate legal provisions to attract investment. By law, labor unions are independent of the government and employers. In practice they can be influenced by the government and/or employers. In case of labor disputes, the Labor Inspector will bring together the employer and the employee to settle the case acting as a mediator. If the mediation fails, then the case will be sent to the Court. The process is opaque and the results are not publicized.

In November 2020, the National Assembly amended the Labor Code to require companies employing 11 or more employees to report annually on the status of its workforce. This report aims to prevent companies from hiring foreigners illegally, not respecting legally allowed pregnancy leave, and/or illegally firing employees.

* Ministry of Finance and Economy

Table 3: Sources and Destination of FDI

Data not available.

The government recognizes the critical role foreign direct investment (FDI) in its hydrocarbon sector plays in Equatorial Guinea’s development. However, chronic corruption, patronage, highly centralized decision-making, and a lack of local regulatory capacity create a challenging environment for foreign investors.

Article 27 of the country’s fundamental law states “the State protects, guarantees, and controls the investment of foreign capital that contributes to the development of the country.” In Article 12 of Law No. 7/1992 on the Investment Regime, the government again commits to fair and equitable treatment for all investors. Law No. 7/1992 also creates an Investment Promotion Center (IPC) to advise the government on investment policies, promote investments, and support both domestic and international investors with information and in the resolution of conflicts. These laws also create a National Investment Commission (NIC). Neither the IPC nor the NIC are operational. In 2015, the government directed the Ministry of Commerce and Business Promotion to create an agency to promote, integrate, and coordinate a national strategy to attract FDI. The ministry has yet to establish this agency. Historically, the president has had de facto final approval on large contracts with foreign investors; however, since 2020, the vice president has largely taken over this role. Foreign-owned companies pay higher registration fees than local companies and are often subject to taxes that more informal local businesses avoid.

Equatorial Guinea’s six-year recession has motivated the government to focus on improving economic diversification and attracting new FDI. Led by the Ministry of Finance, Economy, and Planning, the government is promoting its National Economic Diversification Strategy, developed in 2019 to comply with IMF-required reforms to receive a three-year Extended Fund Facility (EFF) arrangement. One of the primary goals of the strategy is to reduce the country’s economic and fiscal dependence on the hydrocarbon sector. The government collaborates with the World Bank, IMF, UN Development Program (UNDP), and private consultants on its economic diversification strategy, including in attracting FDI, but implementation of recommendations remains mixed.

In general, the government focuses its efforts on recruiting investments in large capital projects over small ventures, as large-scale projects are more likely to create new employment opportunities for Equatorial Guinea’s largely unskilled workforce and provide greater fiscal benefits for the government under its underdeveloped and poorly implemented taxation system. The government is increasingly seeking South-South FDI from new partners in countries like Brazil, China, Egypt, India, Turkey, and Venezuela. The government sometimes focuses on recruiting new partners in lieu of maintaining existing partnerships, neglecting improvements to its operating environment, and damaging its prospects for longer term returns from investments.

Foreign investors are allowed to establish and own business enterprises and engage in all forms of remunerative activity in Equatorial Guinea. As part of its economic diversification strategy, in 2018 the government eliminated the requirement to have a domestic joint venture partner for investments in the non-oil sector. Under Equatorial Guinea’s Hydrocarbons Law No. 8/2006, however, the state-owned oil company (GE Petrol) or gas company (Sonagas) must hold a stake of at least 35 percent in foreign-owned hydrocarbon companies and must account for one third of the representatives on their Boards of Directors.

Under Law 4/2009 on the Land Ownership Regime, foreigners cannot own land but can lease property from the government for up to 99 years. To secure a lease, under Decree 140/2013, a foreign national must request approval through the Office of Property Registry, who then requests authorization from the president in the form of a presidential decree. The government does, however, recognize land owned by foreign nationals before the decree entered into force in 2013, if the land was properly registered.

Prior to approving an EFF in 2019, the IMF conducted several rounds of staff-monitored assessments of the governments’ structural, fiscal, and monetary reforms. The results of these assessments, which include investment policy recommendations, can be found on the IMF’s website: https://www.imf.org/en/Countries/GNQ . Beyond these IMF reviews, in the past five years, Equatorial Guinea has not undergone a third-party investment policy review (IPR) through a multilateral organization such as the OECD, WTO, UNCTAD, or UN Working Group on Business and Human Rights.

Civil society organizations in Equatorial Guinea remain weak, hampered by difficulties in registering for legalization through the Ministry of Interior and Local Corporations, and thus are unable to provide oversight of investment policy-related concerns.

In January 2019, the Ministry of Commerce launched its Single Business Window (abbreviated VUE for its Spanish name Ventanilla Unica Empresarial) at its headquarters in Malabo. The VUE reduced the time required to register a business from an average of 33 days to five. In July 2021, the ministry opened a second VUE office in the mainland city of Bata. Registration still must take place in person, however, as there is no online registration page nor a working VUE website. Individuals choosing to register their businesses without utilizing the VUE must complete the following steps through a variety of government agencies:

Although Equatoguinean citizens may legally invest outside the country, the government does not actively promote foreign investment. There are no known restrictions on foreign investment, but some individuals and companies have faced delays when transferring money overseas or converting local currency into foreign exchange, which has been exacerbated by new CEMAC rules on foreign currency reserves enacted in 2019. The National Bank of Equatorial Guinea (BANGE) – majority-owned by the government – launched two subsidiary offices in neighboring Cameroon.

The government does not have a clearly defined vision on responsible business conduct (RBC) for companies operating in the country. Rather, it encourages such practices through individual decrees and enforcement of laws and policies. The Ministry of Mines and Hydrocarbons, for example, mandates that international oil companies invest a percentage of their proceeds in local corporate social responsibility (CSR) projects. Under the local content rules added to the Hydrocarbon Law in 2014, a significant portion of these funds are used to support the National Technological Institute of Mines and Hydrocarbons, which trains local nationals to work in the extractive sector. Some funds are invested in environmental projects through local and U.S.-based NGOs, while others support social projects like a human trafficking awareness campaign. All CSR projects must be approved by the Ministry of Mines and Hydrocarbons, and the Ministry receives branding and credit for all CSR initiatives even it doesn’t contribute any funding. The Ministry oversees the entire CSR process through its Department of Local Content, including selecting the project, local implementing partner(s), and location(s).

While there are significant human rights concerns in Equatorial Guinea, including arbitrary detentions and restrictions on free speech and assembly, in general these are not directly related to the investment sector. There are no alleged instances of child labor in supply chains, major land tenure issues, forced evictions of indigenous peoples, or arrests of environmental defenders. There are some cases of alleged forced labor of third country nationals working for foreign companies and foreign state-owned enterprises, which are covered in more detail in the Department of State’s Trafficking in Humans Report linked below.

As a result of Equatorial Guinea’s underdeveloped and under-resourced judicial system, laws designed to protect human rights, workers, the environment, and consumers are not always effectively enforced. The absence of labor unions and weak civil society organizations result in little third-party oversight of or advocacy for improved government actions related to RBC. A high-profile case in early 2022 resulted in the arrest of six individuals accused of putting consumers at risk by falsifying the expiration dates on products at a prominent supermarket. In 2021, national police arrested multiple individuals for falsifying official signatures and documents to engage in illegal logging.

Equatorial Guinea applied to join the Extractive Industries Transparency Initiative (EITI) in 2010, but its application was delisted after the government missed the validation deadline. To comply with IMF recommendations, it reapplied in 2019, but it once again had to withdraw its application in 2020 for failure to meet all requirements. The government has been unable to identify a civil society organization to serve as part of an effective multi-stakeholder oversight mechanism, a key component of admission into the EITI. In late 2021, the Minister of Mines and Hydrocarbons stated that the government would be resubmitting its application in early 2022, but as of April, no progress toward reapplying had been made public.

Equatorial Guinea is not a signatory of the Montreux Document on Private Military and Security Companies, nor does it participate directly in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA), although several companies in the country are members.

Corruption at all levels of government remains a serious issue, although the government has taken some steps to combat it. The government ratified the UN Convention against Corruption in May 2018 and the African Union Convention on Preventing and Combating Corruption in October 2019. In July 2020, the President issued Decree-Law No. 1/2020 on the Prevention and Fight against Corruption to bring its existing anti-corruption laws up to international standards in compliance with requirements from the IMF. The decree requires public officials to disclose all assets and sources of income, sets new rules to prevent conflicts of interests, prohibits officials from receiving most types of gifts, establishes a National Commission on the Prevention and Fight Against Corruption, and establishes punishments for corruption offenses, as well as protections for whistleblowers.

As with the investment regulatory regime, however, anti-corruption enforcement remains weak. Some anti-corruption agencies, such as a Court of Accounts and a Commission on Ethics, have been created by law but have yet to be operationalized. Other offices, such as those of the anti-corruption prosecutor and the ombudsman, have been launched but remain weak and under-resourced. While some high-profile corruption cases against low- and mid-level officials were prosecuted in 2021, a culture of impunity remains among higher level leaders. Despite public disclosure of assets being included in both the anti-corruption law and the amended 2012 constitution, many public officials have yet to comply. Many high-level officials continue to have ownership of private sector businesses with no oversight of conflict of interest, contract negotiations, or anti-nepotism mechanisms.

Law No. 2/2014 on Civil Servants of the State sets forth responsibilities and prohibited actions of public workers, and some autonomous entities and SOEs have established their own codes of conduct. In 2019, the government called for the establishment of a Commission on Ethics to facilitate reporting by public officials of acts of corruption, but it is not yet operational.

Through harassment and intimidation, the government prevents civil society organizations from advocating on any issues that it considers to be political, and it does not offer protection for entities investigating corruption. NGOs of all kinds, but especially those engaging on issues of human rights and good governance, have difficulty obtaining legal registration through the Ministry of Interior and Local Corporations, some waiting for years without an official answer despite multiple attempts.

Corruption is reportedly present in many stages of the business cycle, including during procurement and awarding of licenses, as well as in regulatory enforcement and dispute settlement

Politically motivated arbitrary detentions do occur. Equatorial Guinea does not have a recent history of political violence or civil disturbance, due in part to significant government controls on political opposition and civil society. Over 50 percent of the population has official membership in the ruling Democratic Party of Equatorial Guinea (PDGE), which has maintained control of the legislative, executive, and, by extension, judicial branches since its founding in 1987. The Convergence for Social Democracy is the only legal, non-aligned opposition party, while 16 minor parties make up the “aligned opposition” and are closely affiliated with the PDGE. Legislative elections are expected to take place in 2022, with presidential elections anticipated in 2023. During its November 2021 national convention, the PDGE surprised many observers by not announcing whether President Teodoro Obiang Nguema Mbasogo, who has led the country since taking power in 1979, would run for his final constitutionally authorized term. If a new PDGE candidate is named for the 2023 presidential elections or following President Obiang’s final term, some observers predict in-fighting within the party and/or the ruling family that could lead to temporary political instability. In almost all official meetings and speeches, Equatorial Guinea’s top leaders warn of the many internal and external threats faced by the country. Some of these warnings results from thwarted coup attempts in 2004, 2009, and 2017, as well as increasing instability in West and Central Africa, but they may also be designed to solidify popular support for the PDGE and the Obiang family.

Maritime piracy remains a critical threat in the Gulf of Guinea (GoG). While reported attacks dropped from 81 in 2020 to 34 in 2021, all 57 of the global piracy-related kidnappings in 2021 occurred in the GoG. The year-to-year decrease in incidents was in part the result of several foreign governments sending vessels to patrol the waters of the GoG, including the Russian, Brazilian, and Danish navies. Following the 2019 hijacking of a supply vessel in transit to Exxon-Mobil’s offshore facility and the October 2020 on-land attack on an oil compound, the government required all ships operating in Equatorial Guinea’s water to have an armed security officer, provided by Equatorial Guinea’s military, on board. Some international oil companies are instead attempting to procure their own armed security vessels, although the government has yet to provide final approval. Despite these efforts, five high-profile attacks in and around Equatorial Guinea’s waters occurred in November and December 2021.

In December 2021, the Parliament passed General Labor Law No. 4/2021, updating the regulations governing Equatorial Guinea’s labor law. This new law was designed to strengthen workers’ rights and create streamlined procedures for arbitrating labor disputes. It also raised the retirement age from 60 to 65. While the government has not published the law’s text online, in March 2022 it organized a public session to provide information on the new regulations to private companies.

Labor disputes may be heard by the legislature or in the courts, and decisions often favor the employee. This can be especially true for foreign firms. Labor disputes involving companies are frequently resolved through legislative hearings, after which the company may be obligated to pay a substantial compensation to the local employee. Employers are required to make significant severance payments to separated employees, even when employment demands fluctuate due to market conditions. Currently, the government does not provide any unemployment insurance or other social safety net programs to assist laid-off workers.

Due to its small labor pool and underdeveloped education system, Equatorial Guinea has a consistent shortage of both skilled and unskilled local labor. Foreign laborers make up an important segment of all sectors of the economy, and dominate in highly skilled professions, including engineers, pilots, and doctors. Despite local skilled labor shortages, the National Content Law of Equatorial Guinea requires that 70 percent of foreign oil company’s staff consist of local nationals. Furthermore, before hiring an expatriate worker, these companies must demonstrate to the Ministry of Mines and Hydrocarbons that they have been unable to find a suitable local employee during a period of 30 days.

While official statistics are scarce, anecdotal evidence suggests that youth unemployment is widespread and that women remain under-represented in the formal economy. A study conducted by the Ministry of Finance in 2017 estimated that the informal sector is responsible for 32 percent of Equatorial Guinea’s GDP. This informal sector, which includes the provision of both goods and services, grew quickly following the start of an economic recession in 2015, which was further exacerbated by the COVID-19 pandemic.

Aside from a union of small farmers and the taxi association, the government has not recognized any labor unions, so collective bargaining is not common. The government allows small collectives and associations to register but does not permit them to engage in labor advocacy. There have not been any strikes during the last year that posed an investment risk, as the government typically restricts strikes or protests. There is no evidence of the government waiving labor laws to attractive foreign investments. Equatorial Guinea joined the International Labor Organization (ILO) in 1981 and has ratified the ILO’s Worst Forms of Child Labor Convention, the Abolition of Forced Labor Convention, and the Discrimination (Employment and Occupation) Convention.

The Eritrean government professes a desire for more and more diversified FDI.  However, strict governmental control of the economy, circulation of currency, access to foreign currency, and the means of production, and the lack of robust business and investment legal code makes private investment difficult, time-consuming, and financially risky.

The official 1994 Investment Proclamation No. 59/1994 states that all sectors (excluding domestic retail, domestic wholesale, import, and commission agency companies without a bilateral agreement of reciprocity) are open to any investors.  In practice, this law has been suspended and the ruling PFDJ determines those sectors in which – and defines the terms under which – private investment is accepted.

The Investment Center, established in 1998, operates directly under the Office of the President; it does not publish any information related to its activities. In the past, the Center conducted public outreach to encourage members of the Eritrean diaspora to invest in Eritrea.  The Center has not conducted a large public event since 2012; senior Center officials have stated that the time for investments is not appropriate because investment developments must follow political developments.

There is no business ombudsman in Eritrea or other mechanisms to prioritize retention or maintain dialogue with existing investors.

In practice, there is no fundamental “right” for either foreign or domestic private entities to establish or run business enterprises free from government interference.  All sectors of the economy are tightly controlled by the GSE, most large enterprises are either entirely or partially owned by the government or the PFDJ, and the government can order a business to close without explanation or legal recourse.

There are both statutory and de facto limits on foreign ownership and control of enterprises.  All foreign-owned mines must give a 10% stake to the Eritrean National Mining Corporation (ENAMCO), and ENAMCO has the option to buy another 30% equity in a project.  Regulations in other fields are not well established.

With some exceptions, such as mining, investment is de facto prohibited in most sectors of the economy.  The government has encouraged investment in the mining sector, and mining-specific regulations were adopted in 2011.  There are few other large foreign investments in the country.  The few foreign enterprises operating in Eritrea do so under non-public agreements negotiated directly between the companies or countries and a small group of officials from the GSE and the PFDJ.

There is no transparent GSE screening mechanism for approving inbound foreign investment.

The GSE has undergone no recent third-party investment policy review. No civil society organizations have provided useful reviews of investment policy-related concerns.

The government has made no known efforts to facilitate business in Eritrea although this may change for Chinese businesses following the November 2021 signing of a Memorandum of Understanding for China’s Belt Road Initiative.  The government does not have a business registration website.  Businesses are required to register with six government offices (the Business License Office, the Ministry of Information, the Inland Revenue Department, the Ministry of Trade and Industry, the Ministry of Labor and Social Welfare, and the local municipality), and the registration process usually takes 84 days, according to the World Bank’s Doing Business report. According to local experts, if an agreement is reached with the government and the PFDJ, this process can be expedited significantly for foreign businesses.

Given the low level of capital accumulation in the economy, Eritrea is not a likely provider of foreign capital.  As part of its efforts to direct capital towards development, the GSE’s laws strictly control capital flows (including payment for the importation of goods), currency exchange, and restricts domestic investors from making large investments abroad.  For example, per person monthly bank withdrawals are limited to 5,000 Nakfa ($333), and Eritreans are generally unable to withdraw dollars.

Most large enterprises in Eritrea are operated directly or jointly by the GSE or PJDF, and there is no general awareness of the concept of “responsible business conduct” (RBC).  However, on some issues, especially environmental protection, many businesses take great care to act responsibly.  Due to a lack of transparency, it is unknown if the GSE has taken any measures to encourage RBC; if it has, these efforts are not well publicized.

According to numerous reports from international NGOs (operating outside of Eritrea), the United Nations, and the U.S. Government, the GSE does not fairly and effectively enforce its domestic laws in relation to human rights, including labor rights. Any products created by state-owned or parastatal organizations is likely to involve forced labor through the government’s national service system. However, Eritrea has rather stringent safeguards for environmental protections.

There are no public capital markets inside of Eritrea and only a small number of publicly traded companies operate inside of Eritrea. Due to lack of transparency, it is impossible to determine if the GSE has established any standard of corporate governance, accounting and executive compensation to protect shareholders.

There are no independent NGOs, investment funds, worker organizations, unions or business associations in Eritrea.

Due to lack of transparency, it is impossible to determine if the GSE encourages adherence to OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas. Individual mining companies participate in programs such as the Voluntary Principles on Security and Human Rights, but this participation is not mandated by the GSE.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;

Comply Chain.

The government is developing a “National Adaptation Plan,” which includes improving water management, planting trees, and improving degraded land. There are no expectations on private business at this point; this is a government-led effort. However, it has no plan to reach net-zero carbon emissions.

Eritrean laws criminalize corruption by public officials and by any who claim influence over public officials, which would include family members and political parties.  Due to limited transparency within the government, it is unclear the extent to which the GSE applies these laws, though evidence suggests little corruption among high-level government officials but significant petty corruption at the local level.

There are no specific provisions concerning conflicts of interest.

There is no available information to suggest that the GSE requires private companies to establish internal codes that prohibit bribery of public officials, and it is unlikely that the government does so.  It is likely that some, but not all, of the large foreign private companies use internal controls, ethics or compliance programs to detect and prevent bribery.

Eritrea is not a signatory to the United Nations Convention Against Corruption or any other international anti-corruption initiatives.  There are no independent NGOs in Eritrea, including those that investigate corruption.  There are no U.S. firms in Eritrea to provide an opinion on corruption as an impediment to FDI, but it is unlikely to be a serious impediment.

There are no government agencies that operate independently of the Office of the President and the PFDJ to whom one can report corruption. There are also no independent “watchdog” organizations working within Eritrea.

There is no history of politically motivated violence or civil disturbance.

In 2015, there were public reports that a Canadian-operated mine in Eritrea was damaged by explosions caused by either bombs or mortars. The mine continued to operate and there were conflicting accounts of who was responsible for the explosion(s).  This one incident does not seem to have had a continuing impact on the investment environment.

Due to Eritrea’s single-party political system, it is difficult to know how politicized or secure the country is, as information on public opinion and security matters does not flow freely.  However, the level of politicization and security does not seem to have changed in recent years.

The most important factor influencing the labor market in Eritrea is the GSE’s National Service program, which, in practice, due (the GSE claims) to a long-standing state of emergency, subjects a large portion of the labor force to indefinite government service, working at very low wages across a large swath of the employment spectrum and unable to pursue alternative employment on penalty of imprisonment. All university graduates require a release from National Service before they can legally pursue other employment opportunities.

There is no reliable data on unemployment. Foreign labor is mostly unknown, aside from the small number of multinational companies. Migrant labor, in the sense of Eritreans moving from place to place for work, is mostly restricted to the agricultural sector, and even there it is a small part of the labor force given the dominance of subsistence farming in the agricultural sector. Female participation in the economy is high.

While there are shortages of specialized labor in many sectors of the economy, particularly in the areas of administration, the international mining facilities are largely able to find enough sufficiently skilled workers; in many cases these are National Service employees seconded from a relevant ministry.  Many small Eritrean companies blame National Service for the paucity of skilled employees available in the market.  Leaving a National Service position without authorized release can result in imprisonment.  Due to National Service, Eritrea is a Tier 3 country for Trafficking in Persons, which results in sanctions against the government.

The informal economy plays a significant role in the Eritrean economy, though there is no data to show how significant. Those who evade National Service are only able to work in the informal economy. Domestic work is completely unregulated.

According to the GSE’s stated policy, the large international mining facilities currently operating in Eritrea are required to hire Eritrean workers wherever possible and to offer training programs for Eritrean workers.

All workers have the right under Eritrean law to severance if removed from a job, regardless of the reason for removal (termination for cause, layoff, or resignation.)  The amount of severance depends on the salary and the length of accrued service.  Moreover, notice must be given any time an employment agreement ends, with some exception for malfeasance on either side, again determined by how long the employee has worked.  There are no known official safety nets for those laid off for economic reasons.  Officially, no labor laws have been waived in order to attract or retain investment, but as most large investments are completed through private negotiations between the government and/or PFDJ and the outside entity, it is impossible to know the exact nature of provisions of these agreements.

There is one legal labor union in Eritrea, the National Confederation of Eritrean Workers (NCEW).  The NCEW engages in collective bargaining for those workers who qualify, but as most workers are in National Service, very few benefit.  The NCEW also represents workers in labor dispute management.  Eritrea has a Labor Relations Board which hears disputes, made up of seven members of the NCEW, seven members of the employers’ association, and one government official.

There have been no labor protests or strikes during the past year.

The use of those serving in National Service for civilian jobs, and the indefinite nature of that service, continues to pose reputational risks for organizations doing work in Eritrea.  A Canadian company that used to run a mine in Eritrea was sued in Canadian court over accusations that it employed National Service workers; the case was settled confidentially out of court in 2020.  An EU development project has come under fire after accusations of forced labor.  There are a number of other areas (informal sector, child labor, minimum wage) where Eritrean law does not meet international standards.  No new laws have been introduced in the last year, nor are any new laws expected.

The Government of the Kingdom of Eswatini (GKoE) regards foreign direct investment (FDI) as one of the five pillars of its Sustainable Development and Inclusive Growth (SDIG) Program, and a means to drive the country’s economic growth, obtain access to foreign markets for its exports, and improve international competitiveness. While the government has strongly encouraged foreign investment over the past 15 years, it only recently adopted a formal strategy for achieving measurable progress. Eswatini does not have a unified policy on investment. Instead, individual ministries have their own investment facilitation policies, which include policies on Small and Medium Enterprises (SME), agriculture, energy, transportation, mining, education, and telecommunications. Calls for more concerted action on these policies have intensified in the last few years as Eswatini has suffered from drought, fiscal challenges, and general economic recession.

The Swati constitution states, generally, that non-citizens and/or companies with a majority of non-citizen shareholders may not own land unless they were vested in their ownership rights before the constitution entered into force in 2006. On the other hand, the constitution’s general prohibition “may not be used to undermine or frustrate an existing or new legitimate business undertaking of which land is a significant factor or base.” Furthermore, non-citizens and non-citizen majority-owned companies may hold long-term (up to 99 years) leases on Title and Swati Nation Land. Besides land ownership laws, there are no laws that discriminate against foreign investors. In 2019, the government listed some of its title deed land to make it available for long-term leasing for commercial purposes.

In practice, most successful foreign investors associate local partners to navigate Eswatini’s complex bureaucracy. Most of the country’s land is Swati Nation Land held by the king “in trust for the Swati Nation” and cannot be purchased by foreign investors. Foreign investors that require significant land for their enterprise must engage the Land Management Board to negotiate long-term leases.

The Eswatini Investment Promotion Authority (EIPA) is the state-owned enterprise (SOE) charged with designing and implementing strategies for attracting desired foreign investors.

Eswatini’s Investment Policy and policies that support the business environment are online at https://investeswatini.org.sz/legal-and-regulatory-framework/  (EIPA is currently functional and helpful, but it is not yet a one-stop-shop for foreign investors). EIPA services include:

• Attract and promote local and foreign direct investments
• Identify and disseminate trade and investment opportunities
• Provide investor facilitation and aftercare services
• Promote internal and external trade
• Undertake research and policy analysis
• Facilitate company registration and business licenses/permits
• Facilitate work permits and visas for investors
• Provide a one stop shop information and support facility for businesses
• Export product development
• Facilitation of participation in external trade fairs
• BuyerSeller Missions

The GKoE continues its attempts to improve the ease of doing business in the country through the Investor Roadmap Unit (IRU). The IRU engages with businesses and government to review and report on the progress and implementation of the investor roadmap reforms.

EIPA has an aftercare division for purposes of investment retention that serves as a direct avenue for investors to communicate concerns they may have. Most investors who stay beyond the initial period during which the GKoE offers investment incentives have opted to remain long-term.

Both foreign and domestic private entities have a right to establish businesses and acquire and dispose of interest in business enterprises. Foreign investors own several of Eswatini’s largest private businesses, either fully or with minority participation by Swati institutions.

There are no general limits on foreign ownership and control of companies, which can be 100 percent foreign owned and controlled. The only exceptions on foreign ownership and control are in the mining sector and in relation to land ownership. The Mines and Minerals Act of 2011 requires that the King (in trust for the Swati Nation) be granted a 25-percent equity stake in all mining ventures, with another 25 percent equity stake granted to the GKoE. There are also sector-specific trade exclusions that prohibit foreign control, which include business dealings in firearms, radioactive material, explosives, hazardous waste, and security printing.

Foreign investments are screened only through standard background and credit checks. Under the Money Laundering and Financing of Terrorism (Prevention) Act of 2011, investors must submit certain documents including proof of residence and source of income for deposits. EIPA also conducts general screening of FDI monies through credit bureau checks and Interpol. This screening is not a barrier to investing in Eswatini. There are no discriminatory mechanisms applied against US foreign direct investors.

There have been no investment policy reviews for Eswatini in the last 3 years. Through its membership in the Southern African Customs Union, its ratification of the African Continental Free Trade Agreement and its participation in the work of the WTO, Eswatini continues to pursue the importance of trade in development. In 2015, the WTO performed a Trade Policy Review of the Southern African Customs Union that included Namibia, Botswana, Eswatini, South Africa, and Lesotho. In 2016, the Trade Facilitation agreement was ratified, and Eswatini’s portion of that review is available online: https://www.wto.org/english/news_e/archive_e/country_arc_e.htm?country1=SWZ 

Eswatini does not have a single overarching business facilitation policy. Policies that address business facilitation are spread across the spectrum of relevant ministries. The Investors Road Map Unit (IRMU) is the public entity responsible for the review and monitoring of business environment reforms. EIPA facilitates foreign and domestic investment opportunities and has a fairly modern, up-to-date website: https://investeswatini.org.sz  / , and certain GKoE application forms are available online at the EIPA website. Recent developments in the business facilitation space include the online registration of companies via the link www.online.gov.sz . As of 2020 the final steps (payment of statutory fees and registration fee) are now available offline. According to the Doing Business Report, the process of registering a company in Eswatini takes approximately 10 days. In practice, the process can take much longer for foreign investors.

The main organization representing the private sector is Business Eswatini ( www.business-eswatini.co.sz ), which represents more than 80 percent of large businesses in Eswatini, works on a wide range of issues of interest to the private sector and seeks to build partnerships with the government to promote commercial development. Through Business Eswatini, the private sector is represented in a number of national working committees, including the National Trade Negotiations Team (NTNT).

Ethiopia needs significant inflows of FDI to meet its ambitious growth goals. Over the past year, to attract more foreign investment, the government passed a new investment law, acceded to the New York Convention on Arbitration, amended its 60-year-old commercial code, and digitized the commercial registration and business licensing processes. The government has also begun implementing the Public Private Partnership (PPP) Proclamation to allow for private investment in the power generation and road construction sectors.

The Ethiopian Investment Commission (EIC) has the mandate to promote and facilitate foreign investments in Ethiopia. To accomplish this task, the EIC is charged with 1) promoting the country’s investment opportunities to attract and retain investment; 2) issuing investment permits, business licenses, work permits, and construction permits; 3) issuing commercial registration certificates and renewals; 4) negotiating and signing bilateral investment agreements; and 5) registering technology transfer agreements. In addition, the EIC has the mandate to advise the government on policies to improve the investment climate and to hold regular and structured public-private dialogues with investors and their associations. At the local level, regional investment agencies facilitate regional investment.

The American Chamber of Commerce (AmCham) advances U.S. business interests in Ethiopia. AmCham provides a mechanism for coordination among American companies and facilitates regular meetings with government officials to discuss issues that hinder operations in Ethiopia. The Addis Ababa Chamber of Commerce organizes a monthly business forum that enables the business community to discuss issues related to the investment climate with government officials.

Foreign and domestic private entities have the right to establish, acquire, own, and dispose of most forms of business enterprises. The Investment Proclamation and associated regulations outline the areas of investment reserved for government and local investors. There is no private ownership of land in Ethiopia. All land is technically owned by the state but can be leased for up to 99 years. Small-scale rural landholders have indefinite use rights, but cannot lease out holdings for extended periods, except in the Amhara Region. The 2011 Urban Land Lease Proclamation allows the government to determine the value of land in transfers of leasehold rights to curb speculation by investors.

A foreign investor intending to buy an existing private enterprise or shares in an existing enterprise needs to obtain prior approval from the EIC. While foreign investors have complained about inconsistent interpretation of the regulations governing investment registration (particularly relating to accounting for in-kind investments), they generally do not face undue screening of FDI, unfavorable tax treatment, denial of licenses, discriminatory import or export policies, or inequitable tariff and non-tariff barriers.

Over the past three years, the government has not undertaken any third-party investment policy review by a multilateral or non-governmental organization. The government has worked closely with some international stakeholders, such as the International Finance Corporation, in its attempt to modernize and streamline its investment regulations.

The EIC has attempted to establish itself as a “one-stop shop” for foreign investors by acting as a centralized location where investors can obtain the visas, permits, and paperwork they need, thereby reducing the time and cost of investing and acquiring business licenses. The EIC has worked with international consultants to modernize its operations and has adopted a customer management system to build lasting relationships and provide post-investment assistance to investors. Despite progress, the EIC admits that many bureaucratic barriers to investment remain. U.S. investors report that the EIC, as a federal organization, has little influence at regional and local levels.

Currently, more than 95 percent of Ethiopia’s trade passes through the Port of Djibouti, with residual trade passing through the Somaliland Port of Berbera or Port Sudan. Ethiopia concluded an agreement in March of 2018 with the Somaliland Ports Authority and DP World to acquire a 19 percent stake in the joint venture developing the Port of Berbera. The agreement will help Ethiopia secure an additional logistical gateway for its increasing import and export trade.

The GOE is working to improve business facilitation services by making the licensing and registration of businesses easier and faster. In February 2021, the Ministry of Trade and Regional Integration (MOTRI) launched an eTrade platform ( etrade.gov.et ) for business registration licensing to enable individuals to register their companies and acquire business licenses online. The amended commercial registration and licensing law eliminates the requirement to publicize business registrations in local newspapers, allows business registration without a physical address, and reduces some other paperwork burdens associated with business registration. U.S. companies can obtain detailed information for the registration of their business in Ethiopia from an online investment guide to Ethiopia: ( https://www.theiguides.org/public-docs/guides/ethiopia ) and the EIC’s website: ( http://www.investethiopia.gov.et/index.php/investment-process/starting-a-business.html ). MOTRI has target timeframes for the registration of new businesses, but it often fails to meet its deadlines.

There is no officially recorded outward investment by domestic investors from Ethiopia as citizens/local investors are not allowed to hold foreign accounts.

Some larger international companies in Ethiopia have introduced corporate social responsibility (CSR) programs. Most Ethiopian companies, however, do not officially practice CSR, though individual entrepreneurs engage in charity, sometimes on a large scale. There are efforts to develop CSR programs by MOTRI in collaboration with the World Bank, U.S. Agency for International Development, and other institutions.

The government encourages CSR programs for both local and foreign direct investors but does not maintain specific guidelines for these programs, which are inconsistently applied and not controlled or monitored. The Addis Ababa Chamber of Commerce also has a corporate governance institute, which promotes responsible business conduct among private business enterprises.

The GOE does not publish data on the number of children who are victims of forced labor. The Ethiopian Central Statistics Agency’s 2015 National Child Labor Survey and 2021 Labor Force and Migration Survey did not assess forced labor.

On January 1, 2022, the U.S. Trade Representative (USTR) announced that due to human rights concerns related to the conflict in northern Ethiopia, Ethiopia no longer met the eligibility criteria for African Growth and Opportunity Act (AGOA) trade preferences. Ethiopia will continue to undergo AGOA’s annual review process and may regain eligibility once it meets the criteria.

The 2020 Investment Law requires all investors to give due regard to social and environmental sustainability values including environmental protection standards and social inclusion objectives. The 2002 Environmental Impact Assessment Proclamation number 299/2002 mandates any government agency issuing business licenses or permits for investment projects ensure that federal or relevant regional environmental agencies authorize the project’s implementation. In practice, environmental laws and regulations are not fully enforced due to limited capacity at government regulatory bodies.

In 2014, the Extractive Industry Transparency Initiative (EITI) admitted Ethiopia as a candidate-member. In 2019, EITI found Ethiopia made meaningful progress in implementing EITI standards. The Commercial Code requires extractive industries and other businesses to conduct statuary audits of their financial statements at the end of each financial year.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions 

Department of Labor

• Findings on the Worst Forms of Child Labor Report ;
• List of Goods Produced by Child Labor or Forced Labor ;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World  and;
• Comply Chain .

Ethiopia is a signatory of the Paris Agreement on Climate Change and endorsed the Climate Resilience and Green Economy Strategy (CRGE). Ethiopia has formulated climate resilient sectoral policies and strategies to carry out environmental interventions in areas such as agriculture, forestry, transport, health, urban development, and housing. According to its Nationally Determined Contribution (NDC) towards the Paris Agreement goals, Ethiopia aims to reduce its carbon emissions by 68 percent by 2030 (2018 base year). The GOE Green Legacy Initiative, launched in 2019, is a tree planting campaign aimed at curbing the impact of climate change and deforestation.

The 2002 Environment Impact Assessment law authorizes pertinent environmental regulatory offices to provide technical and financial incentives to projects focused on environmental rehabilitation or pollution prevention.

The Federal Ethics and Anticorruption Proclamation number 1236/2020 aims to combat corruption involving government officials and organizations, religious organizations, political parties, and international organizations. The Federal Ethics and Anti-Corruption Commission (FEACC) is accountable to parliament and charged with preventing corruption among government officials by providing ethics training and education. MOJ is responsible for investigating corruption crimes and prosecutions. The Office of the Ombudsman is responsible for ensuring good governance and preventing administrative abuses by public offices.

Transparency International’s 2022 Corruption Perceptions Index, which measures perceived levels of public sector corruption, rated Ethiopia’s corruption at 39 (the score indicates the perceived level of public sector corruption on a scale of zero to 100, with the former indicating highly corrupt and the latter indicating very clean). Its comparative rank in 2021 was 87 out of 180 countries, a seven-point improvement from its 2020 rank. In 2020 the American Chamber of Commerce in Ethiopia polled its members and asked what the leading business climate challenges were; transparency and governance ranked as the 4th leading business climate challenge, ahead of licensing and registration, and public procurement.

Ethiopian and foreign businesses routinely encounter corruption in tax collection, customs clearance, and land administration. Many past procurement deals for major government contracts, especially in the power generation, telecommunications, and construction sectors, were widely viewed as corrupt. Allegations of corruption in the allocation of urban land to private investors by government agencies are a major source of popular discontent in Ethiopia.

Ethiopia is not a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Ethiopia is a signatory to the African Union Convention on Preventing and Combating Corruption. Ethiopia is also member of the East African Association of Anti-Corruption Authorities. Ethiopia signed the UN Anticorruption Convention in 2003, which was eventually ratified in November 2007. It is a criminal offense to give or receive bribes, and bribes are not tax deductible.

Contacts at a government agency responsible for combating corruption:

Federal Police Commission
Addis Ababa
+251 11 861-9595

Advocacy and Legal Advice Center in Ethiopia
Hayahulem Mazoria, Addis Ababa
+251-11-551-0738 / +251-11-655-5508
https://www.transparencyethiopia.org 

Ethnic conflict – often sparked by historical grievances or resource competition, including land disputes – has resulted in varying levels of violence across Ethiopia. According to the 2022 Global Humanitarian Overview, there were an estimated 4.2 million Internally Displaced Persons (IDPs) in Ethiopia at the end of 2021, with high levels of need also identified among non-displaced people living in conflict-affected areas. The primary cause of displacements was conflict and insecurity, followed by drought and seasonal floods and flash flooding.

Most significantly, in early November 2020, a conflict broke out between a regional political party in the Tigray Region and the federal government. The conflict quickly enlarged, with Eritrean troops present in parts of Tigray Region, and Amhara Region forces controlling much of Western Tigray. The conflict in northern Ethiopia has led to many deaths, widespread displacements, extensive destruction of infrastructure, widespread gross human rights violations, gender-based violence, a vast reduction in public services, and widespread hunger.

Insecurity, often driven by ethnic tensions, persists in many other areas, notably in the southern and western Oromia Region; eastern Southern Nations, Nationalities, and People’s Region; and in the Hararges on the border of the Somali Region. In western Oromia, the Oromo Liberation Army-Shane and other unidentified armed groups have intensified attacks against public and local government officials; this violence has spilled over into other parts of Oromia. In far western Ethiopia, ethnic violence and clashes in Benishangul-Gumuz Region have continued throughout 2021 and into early 2022, leaving hundreds dead and hundreds of thousands displaced. Amhara has experienced altercations in 2022 between regional security forces and youth militias.

When Prime Minister Abiy came to power in 2018, political space opened significantly, although it has since regressed especially after the government declared a State of Emergency in November 2021. While the State of Emergency was lifted in February 2022, during its implementation thousands of people, mostly of Tigrayan ethnicity, were arbitrarily detained and freedom of the press was significantly curtailed. Constitutional rights, including freedoms of assembly and expression, are generally supported at the level of the federal government, though the protection of these rights remains uneven, especially at regional and local levels. While opposition parties mostly operate freely, authorities, especially at the sub-national level, have employed politically motivated procedural roadblocks to hinder opposition parties’ efforts to hold meetings or other party activities; this was especially true in the run-up to the June 2021 general election.

The space for media and civil society groups has generally become freer following reforms instituted by Prime Minister Abiy. Still, journalism in the country remains undeveloped, social media is often rife with unfounded rumors, and government officials occasionally react with heavy-handedness, especially to news they feel might spur social unrest, resulting in self-censorship. Civil society reforms have spurred an expansion of the sector, though many civil society groups continue to struggle with capacity and resource issues.

The national unemployment rate in February 2021 was 8 percent according to the 2021 Labor Force and Migration Survey. The unemployment rates for men and women were 5 and 11.7 percent, respectively. The law only gives refugees and asylum seekers the opportunity to work on a development project supported by the international community that economically benefits both refugees and citizens or to earn wages through self-employment. The law prohibits discrimination with respect to employment and occupations. However, there are legal restrictions on women’s employment, including limitations on occupations deemed dangerous and in industries, such as mining and agriculture. Women have fewer employment opportunities than men. Around 46.3 percent of people were working in the informal sector nationally according to the 2021 Labor Force and Migration Survey.

According to a 2020 International Labor Organization labor market assessment across all sectors, there was a generally higher demand for highly skilled workers, followed by medium-skilled workers; low-skilled workers had the lowest demand, especially in construction and manufacturing sectors. In terms of supply, there was generally an oversupply of low- and medium-skilled workers across major sectors such as agriculture, construction, and manufacturing. The Ministry of Labor and Skills, in collaboration with other international and national stakeholders, provides trainings for technical and vocational trainers.

The investment law gives employment priority for nationals and provides that any investor may employ duly qualified expatriate experts in the positions of “higher management, supervision, trainers and other technical professions” required for the operation of business only when it is ascertained that Ethiopians possessing similar qualifications or experiences are not available.

There is no restriction on employers adjusting employment to respond to fluctuating market conditions. The labor law allows employers to terminate employment contracts with notice when demand falls for the employer’s products or services and reduces the volume of work or profit. The law differentiates between firing and layoffs.

The national labor law recognizes the right to collective bargaining, but this right was severely restricted under the law. Negotiations aimed at amending or replacing a collectively bargained agreement must take place within three months of its expiration; otherwise, the prior provisions on wages and other benefits cease to apply. The constitution and the labor law recognize the right of association for workers.

Labor divisions are established at the federal and regional level. Employers and workers may also introduce social dialogue to prevent and resolve labor disputes amicably. The Ministry of Labor and Skills assigns councilors or arbitrators when a dispute is brought to the attention of the Ministry or the appropriate authority by either of the parties to the dispute.

*National Bank of Ethiopia and Ethiopian Investment Commission

**Ethiopian Fiscal Year 2020-21, which begins on July 8, 2020.

Table 3: Sources and Destination of FDI
Data regarding inward direct investment are not available for Ethiopia via the IMF’s Coordinated Direct Investment Survey (CDIS) site ( http://data.imf.org/CDIS ).

Gabon’s 1998 investment code conforms to the Central African Economic and Monetary Community’s (CEMAC) investment regulations and provides the same rights to foreign companies operating in Gabon as to domestic firms.

Gabon’s domestic and foreign investors are protected from expropriation or nationalization without appropriate compensation, as determined by an independent third party. Certain sectors, such as mining, forestry, petroleum, agriculture, and tourism, have specific investment codes, which encourage investment through customs and tax incentives.

Gabon established the Investment Promotion Agency (ANPI-Gabon) with the assistance of the World Bank in 2014. Its mission is to promote investment and exports, support SMEs, manage public-private partnerships (PPPs), and help companies establish themselves. It is designed to act as the gateway for investment into the country and to reduce administrative procedures, costs, and waiting periods.

Gabonese authorities have made efforts to prioritize investment. In 2017, the High Council for Investment was established to promote investment and boost the economy. This body provides a platform for dialogue between the public and private sectors, and its main objectives are to improve the economy and create jobs.

Foreign investors are largely treated in the same manner as their Gabonese counterparts regarding the purchase of real estate, negotiation of licenses, and entering into commercial agreements. There is no general requirement for local participation in investments (see local labor requirements below). Many businesses find it useful to have a local partner who can help navigate the subjective aspects of the business environment.

There are no limits on foreign ownership or control. However, the Government of Gabon automatically owns a 20 percent stake in all petroleum development in the nation, with Gabon Oil able to purchase up to an additional 15 percent. The standard practice is for the Gabonese President to review foreign investment contracts following the completion of ministerial-level negotiations.

The President has taken an active interest in meeting with investors. The lack of a standardized procedure for new entrants to negotiate deals with the government can lead to confusion and time-consuming negotiations. Moreover, the centralization of decision-making by a few senior officials who are exceedingly busy can delay the process. As a result, new entrants often find the process of finalizing deals time-consuming and difficult to navigate.

Gabon has been a World Trade Organization (WTO) member since 1995. In June 2013, Gabon conducted an investment policy review with the WTO. The government has not conducted any investment policy reviews through the Organization for Economic Co-operation and Development (OECD) or the United Nations Conference on Trade and Development (UNCTAD) since 2017.

The government encourages investments in those economic sectors that contribute the greatest share to Gross National Product (GNP), including oil and gas, mining, and wood harvesting and transformation through customs and tax incentives. For example, oil and mining companies are exempt from customs duties on imported machinery and equipment specific to their industries. The Tourism Investment Code, enacted in 2000, provides tax incentives to foreign tourism investors during the first eight years of operation. The SEZ at Nkok offers tax incentives to industrial investors; the government has mused on the possibility of increasing the number of SEZs in a move to attract further investment.

ANPI-Gabon covers more than 20 public and private agencies, including the Chamber of Commerce, National Social Security Fund (CNSS), and National Health Insurance and Social Security (CNAMGS). It aims to attract domestic and international investors through improved methods of approving and licensing new companies and to support public-private dialogue. It has a single window registration process that allows domestic and foreign investors to register their businesses in 48 hours. There are, however, no special mechanisms for equitable treatment of women and underrepresented minorities in Gabon.

ANPI-Gabon’s website address is: https://www.investingabon.ga/ 

One of ANPI-Gabon’s primary goals is to promote outward investments and exports. The Gabonese government does not restrict domestic investors from investing abroad.

There is a general awareness of responsible business conduct (RBC) among both producers and consumers; however, there are no formal rules or regulations pertaining to RBC in Gabon.

Gabon has several NGO’s working primarily in the environment, human rights, and mining sectors. The political labor unions in Gabon have taken the lead in promoting and monitoring RBC, and they are able to work freely. With a push from these labor unions, Gabon fairly enforces labor rights laws and regulations intended to protect individuals from adverse business impacts. However, Gabon has not effectively enforced consumer protection laws and regulations.

While Gabon is widely praised as a leader in environmental protection and has been praised as a positive example in Africa, pollution remains a problem and prosecution is weak and penalties lacking.

Gabon has not put in place corporate finance, accounting, and executive compensation standards to protect shareholders. There are no domestic measures requiring supply chain due diligence for companies that source minerals.

Gabonese authorities state that the government is committed to the Extractive Industries Transparency Initiative (EITI) principles. Gabon was a candidate for the EITI beginning in 2007. By December 2012, Gabon was required to have completed an EITI validation that demonstrated compliance with the initiative’s rules. However, due to the non-respect of deadlines and the non-performance of Gabon’s National EITI Committee, the International Council of the EITI voted on February 27, 2013, to exclude Gabon from the application process. Under the current IMF program, Gabon rejoined the EITI on October 2021.

There is no information on national legislation regarding private security companies. Gabon is not a signatory of The Montreux Document on Private Military and Security Companies. Little information is available on the private security industry in Gabon. An estimate from 2015 nevertheless indicated that the sector in Gabon employs around 7,000 PSC personnel, indicating that it is a significant actor in the Gabonese security landscape.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Gabon created a National Climate Council in 2010 and established a national climate strategy in 2012 that has helped the country to reduce deforestation (in a country where 85 percent of the land still remains tropical forests) and absorb some 100 million tons of carbon dioxide a year. Thus, Gabon’s rain forests, which form a part of the Congo Basin, are often called “the world’s second lung.” Gabon created 13 national parks in 2002, which cover 11.5 percent of the country, and that are supported by the U.S. government, including USAID, U.S. Forest Service, and U.S. Fish and Wildlife Service. It also created nine marine parks and 11 marine reserves in 2017.

Gabon is one of the few countries that is already net carbon positive. In fact, it took a leadership role among such countries (as well as Africa) in COP 26 in Glasgow, Scotland, and is expected to do the same at COP 27 in Egypt. In June 2021, Gabon also became the first African country to receive funding ($17 million from Norway) to continue to reduce its carbon emissions, rights of which can be sold to other countries. Note that Gabon, even with its favorable emissions status, has maintained its commitment to reducing greenhouse gas emissions by at least 50 percent by 2025.

Although already carbon positive, Gabon launched a program in 2009 to initiate a plan to diversify the economy away from energy to one that emphasizes even more the idea of sustainable economic development in areas such as forestry and agriculture. This move towards more sustainable development remains a major commitment of the government as next year’s expected presidential elections loom large even now in the country.

Gabon offers regulatory incentives in line with its climate plan. Gabon’s climate plan is a robust document that has been designed to diversify the country away from oil, which still accounts for 80 percent of exports, and more in the direction of sustainable economic development through, for example, the creation of a sovereign wealth fund, reduction of waste products flared during oil production, production of a carbon budget each year for all new projects and businesses, production of a national carbon budget every two years and production of 80 percent of energy from clean sources.

The Gabonese penal code criminalizes abuse of office, embezzlement, passive and active bribery, trading in influence, extortion, offering or accepting gifts, and other undue advantages in the public sector, yet enforcement remains limited and official impunity is a problem. Private sector corruption is criminalized whenever a given company is related to a public entity. Punishments for public officials found guilty of soliciting or accepting bribes include prison sentences ranging from two to 10 years, and a fine of CFA 5 million (USD $8,572). Corruption is rarely prosecuted in Gabon, except in limited high-profile cases. In 2020, Transparency International listed Gabon at 129 of 179 countries.

The government established the Commission to Combat Illicit Enrichment (CNLCEI) in 2004; however, in the summer of 2018, the CNLCEI’s five-year mandate was not renewed. Its regulations did not extend to the family members of civil servants or to political parties.

There are no known laws or regulations to counter conflicts of interest in awarding contracts or government procurement. There is no information about any action on the part of the government to encourage or require private companies to establish codes of conduct that prohibit the bribery of public officials. Some private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials.

Gabon is a signatory to the United Nations Convention against Corruption and is a member of the Task Force on Money Laundering in Central Africa (Groupe d’action contre le blanchiment d’argent en Afrique Centrale, or GABAC). However, no international or regional watchdog organizations operate in Gabon. Local civil society lacks the capacity to play a significant role in highlighting cases of corruption.

Companies reportedly contend with a high risk of corruption when dealing with the Gabonese extractive industries. Gabon has vast oil, manganese, and timber resources; however, contracting and licensing processes lack transparency.

National Financial Investigations Agency
Tel : +241 01176 1773
Agence Nationale d’Investigation Financière
Immeuble Arambo, Boulevard Triomphal
BP :189
Libreville, Gabon
contact@anif.ga 

Violence related to politics is relatively rare in Gabon. Elections, however, can lead to heightened tensions or violence.

While the 2018 legislative and local elections took place without major incident, violence did break out on August 31, 2016, after the National Electoral Commission announced that the incumbent ABO defeated his opponent Jean Ping in the presidential election by a margin of less than 2%. Protestors took to the streets, attempting to burn the National Assembly building. Non-governmental organizations stated the government’s use of excessive force to disperse demonstrators resulted in approximately 20 deaths and over 1000 arrests; the opposition claimed at least 50 people were killed.

The COVID-19 pandemic has had a major impact on Gabon’s economy since March 2020. Measures to contain cases included closing several economic sectors, which increased the unemployment rate, with around 12,500 Gabonese losing their jobs (Minister of Labor announcement, January 2021). The social tension was high in February 2021 when further restrictions were announced, including a 6PM to 5AM curfew; this led to peaceful protests, occasionally marked by riots, during which two people were killed in Libreville and Port-Gentil.

Gabon has a population of approximately 2.2 million; third country nationals (TCNs) make up roughly one-third of the population. Many young Gabonese are unable to acquire vocational skills and are thus excluded from the labor market. A report in October 2018 indicated that 60% of Gabonese under 30 are unemployed. This is due to the bad quality of the basic education system, insufficient output of technical and vocational training, and a lack of resources and effectiveness in the education sector.

Foreign firms report a shortage of highly skilled Gabonese labor. Chinese industrial companies, in particular, import the majority of their workers from China. Authorization from the Ministry of Labor is required to hire foreigners. Reforms adopted in 2010 in the education and research system represent a step towards developing service training and encouraging PPPs. For example, the Petroleum and Gas Institute, located in Port Gentil and supported by the Gabonese government and oil industry, has been training engineers specialized in oil-related technical areas since 2014.

The COVID 19 pandemic has put a spotlight on the devastating impact it has had on Gabon’s informal sector. According to the Directorate General of Taxes (DGI), a May 2017 International Monetary Fund (IMF) survey ranked Gabon as having the “most important” informal sector in Central Africa. It was ranked 33rd out of 37 countries with the informal sector representing between 40 and 50 percent of GDP. According to the results of surveys carried out in the field by DGI teams, of the 1,400 companies identified at the biggest African market of Libreville called Mont-Bouet market, 487 were operating in the informal sector. That meant that meant that none are registered by the Administration, nor do they pay taxes.

In 2011 the Gabonese Minister of Commerce estimated that 200,000 people work in the informal economy. The presence of the informal sector leads to losses of around 400 billion XAF on the state budget, he claimed.

When hiring workers, firms must give priority to Gabonese nationals. If no Gabonese worker with the appropriate qualifications can be found, a firm is expected to hire a Gabonese to work along with the foreigner and, within a reasonable time, the Gabonese worker should replace that foreigner.

Labor laws differentiate between layoffs and firing. There is no unemployment insurance or other social safety net program for workers laid off for economic reasons. However, the GSEZ is not subject to the same foreign labor restrictions as the rest of the country.

Collective bargaining is common in Gabon. Gabon’s French-inspired labor code recognizes the right of workers to form and join independent unions and bargain collectively, and prohibits antiunion discrimination. The government observes the resolution of labor disputes and takes an active interest in labor-management relations. Unions in each sector of the economy negotiate with employers overpay scales, working conditions, and benefits.

However, the right to strike is limited or restricted. Strikes may be called only after eight days’ advanced notice and only after arbitration fails. Public sector employees are not allowed to strike if public safety could be jeopardized. The law does not define essential services sectors in which workers are prohibited from striking. Nevertheless, public and private sector strikes are frequent and disruptive. From February-June 2018, Gabon court clerks were on strike, limiting the functions of the justice system. The civil servants in the financial authorities initiated strikes several times in the past few years, slowing customs processing and work done in the tax, custom, treasury, and hydrocarbons sectors.

The Gabonese government strictly enforces the labor code’s mandatory retirement age of 65.

Gabon has ratified most of the International Labor Organization (ILO) laws and conventions. There are no gaps in compliance in law or practice with international labor standards that may pose a reputational risk to investors.

A new Gabonese Labor Code is working its way through the legislative process. The draft reforms concern several key issues, including the strengthening of protections for workers’ rights, fighting against discrimination and eliminating gender inequalities, opening up the formal labor market to new categories of work and codifying telework. The new code should also improve the employability of young people and simplify work authorization procedures for large projects. It will affect trade union representative and other professional elections. It will also strengthen apprenticeship, which brings the world of vocational training closer to that of employment and promotes professional integration and retraining.

The Government of Ghana has made increasing FDI a priority and acknowledges the importance of having an enabling environment for the private sector to thrive.  Officials are implementing regulatory and other reforms such as automation and digitalization of government processes and enhancing GIPC’s own support services, to improve the ease of doing business and make investing in Ghana more attractive. The 2013 Ghana Investment Promotion Center (GIPC) Act requires the GIPC to register, monitor, and keep records of all business enterprises in Ghana.  Sector-specific laws further regulate investments in minerals and mining, oil and gas, industries within Free Zones, banking, non-bank financial institutions, insurance, fishing, securities, telecommunications, energy, and real estate.  Some sector-specific laws, such as in the oil and gas sector and the power sector, include local content requirements that could discourage international investment.  Foreign investors are required to satisfy the provisions of the GIPC Act as well as the provisions of sector-specific laws.  GIPC leadership has pledged to collaborate more closely with the private sector to address investor concerns, but there have been no significant changes to the laws.  More information on investing in Ghana can be obtained from GIPC’s website, www.gipc.gov.gh.

Most of Ghana’s major sectors are fully open to foreign capital participation. U.S. investors in Ghana are treated the same as other foreign investors.  All foreign investment projects must register with the GIPC.  Foreign investments are subject to the following minimum capital requirements: USD 200,000 for joint ventures with a Ghanaian partner, who should have at least 10 percent of the equity; USD 500,000 for enterprises wholly owned by a non-Ghanaian; and USD 1 million for trading companies (firms that buy or sell imported goods or services) wholly owned by non-Ghanaian entities.  The minimum capital requirement may be met in cash or capital goods relevant to the investment.  Trading companies are also required to employ at least 20 skilled Ghanaian nationals.

Ghana’s investment code excludes foreign investors from participating in eight economic sectors:  petty trading; the operation of taxi and car rental services with fleets of fewer than 25 vehicles; lotteries (excluding soccer pools); the operation of beauty salons and barber shops; printing of recharge scratch cards for subscribers to telecommunications services; production of exercise books and stationery; retail of finished pharmaceutical products; and the production, supply, and retail of drinking water in sealed pouches.  Sectors where foreign investors are allowed limited market access include: telecommunications, banking, fishing, mining, petroleum, and real estate.

Ghana has not conducted an investment policy review (IPR) through the OECD recently. UNCTAD last conducted an IPR in 2003.

The WTO last conducted a Trade Policy Review (TPR) in May 2014.  The next review is scheduled for May 4-6, 2022. The 2014 TPR concluded that the 2013 amendment to the investment law raised the minimum capital that foreigners must invest to levels above those specified in Ghana’s 1994 GATS horizontal commitments and excluded new activities from foreign competition.  However, it was determined that overall, this would have minimal impact on dissuading future foreign investment due to the size of the companies traditionally seeking to do business within the country.  An executive summary of the findings can be found at: https://www.wto.org/english/tratop_e/tpr_e/tp398_e.htm .

Although registering a business is a relatively easy procedure and can be done online through the Registrar General’s Department (RGD) at https://rgd.gov.gh/index.html , businesses have noted that the process involved in establishing a business is lengthy and complex, and requires compliance with regulations and procedures of at least four other government agencies, including GIPC, Ghana Revenue Authority (GRA), Ghana Immigration Service, and the Social Security and National Insurance Trust (SSNIT). In 2019, Ghana passed a new Companies Act, 2019 (Act 992), which among other things, created a new independent office called the Office of the Registrar of Companies, responsible for the registration and regulation of all businesses.  A new office is expected to be in place which would separate the registration process for companies from the Registrar General’s Department; the latter would continue to serve as the government’s registrar for non-business transactions such as marriages.  The new law also simplifies some registration processes by scrapping the issuance of a certificate to commence business and the requirement for a company to state business objectives, which limited the activities in which a company could engage.  The law also expands the role of the company secretary, which now requires educational qualifications with some background in company law practice and administration or having been trained under a company secretary for at least three years.  Foreign investors must obtain a certificate of capital importation, which can take 14 days.  The local authorized bank must confirm the import of capital with the Bank of Ghana, which confirms the transaction to GIPC for investment registration purposes.

Per the GIPC Act, all foreign companies are required to register with GIPC after incorporation with the RGD.  Registration can be completed online at www.gipc.gov.gh.  While the registration process is designed to be completed within five business days, but there are often bureaucratic delays.

The Ghanaian business environment is unique, and guidance can be extremely helpful.  In some cases, a foreign investment may enjoy certain tax benefits under the law or additional incentives if the project is deemed critical to the country’s development.  Most companies or individuals considering investing in Ghana or trading with Ghanaian counterparts find it useful to consult with a local attorney or business facilitation company.  The United States Embassy in Accra maintains a list of local attorneys, which is available through the U.S. Foreign Commercial Service ( https://www.trade.gov/ghana-contact-us ) or U.S. Citizen Services ( https://gh.usembassy.gov/u-s-citizen-services/attorneys/).

Specific information about setting up a business is available at the GIPC website:  https://gipc.gov.gh/4232-2/.   

Ghana Investment Promotion Centre
Post: P. O. Box M193, Accra-Ghana
Note: Omit the (0) after the country code when dialing from abroad.
Telephone: +233 (0) 302 665 125, +233 (0) 302 665 126, +233 (0) 302 665 127, +233 (0) 302 665 128, +233 (0) 302 665 129, +233 (0) 244 318 254/ +233 (0) 244 318 252
Email: info@gipc.gov.gh

Note that mining or oil/gas sector companies are required to obtain licensing/approval from the following relevant bodies:

Petroleum Commission Head Office
Plot No. 4A, George Bush Highway, Accra, Ghana
P.O. Box CT 228 Cantonments, Accra, Ghana
Telephone: +233 (0) 302 953 392 | +233 (0) 302 953 393
Website: http://www.petrocom.gov.gh/ 

Minerals Commission
Minerals House, No. 12 Switchback Road, Cantonments, Accra
P. O. Box M 248
Telephone: +233 (0) 302 772 783 /+233 (0) 302 772 786 /+233 (0) 302 773 053
Website: http://www.mincom.gov.gh/ 

Ghana has no specific outward investment policy.  It has entered into bilateral treaties, however, with a number of countries to promote and protect foreign investment on a reciprocal basis.  Some Ghanaian companies have established operations in other West African countries and there are a number of active Ghanaian investments in the United States in the food processing and personal care sectors.

There is no specific responsible business conduct (RBC) law in Ghana, and the government has no action plan regarding OECD RBC guidelines.

Ghana has been a member of the Extractive Industries Transparency Initiative since 2010.  The government also enrolled in the Voluntary Principles on Security and Human Rights in 2014.

Corporate social responsibility (CSR) is gaining more attention among Ghanaian companies.  The Ghana Club 100 is a ranking of the top performing companies, as determined by GIPC.  It is based on several criteria, with a 10 percent weight assigned to corporate social responsibility, including philanthropy.  Companies have noted that Ghanaian consumers are not generally interested in the CSR activities of private companies, with the exception of the extractive industries (whose CSR efforts seem to attract consumer, government, and media attention).  In particular, there is a widespread expectation that extractive sector companies will involve themselves in substantial philanthropic activities in the communities in which they have operations.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions 

Department of Labor

• Findings on the Worst Forms of Child Labor Report ;
• List of Goods Produced by Child Labor or Forced Labor ;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World  and;
• Comply Chain .

Ghana’s national climate strategy is contained in the Ghana National Climate Change Policy published in 2013 and Ghana’s Nationally Determined Contributions (NDCs). The revised NDCs, submitted to the United Nations Framework Convention on Climate Change (UNFCCC) in September 2021, outline Ghana’s strategies in various sectors regarding climate change. To reduce its carbon footprint and greenhouse gas emissions (GHG), Ghana aims to reduce carbon emissions by 64 MtCO2e through the adoption of 47 climate actions across 19 policy areas.

Although Ghana has not officially announced a policy to reach net-zero emission by 2050, policies are being designed to reduce energy and CO2 intensity driven by the transition to renewable and low-carbon energy sources. In December 2021, the government established the .National Energy Transition Committee to prescribe risk mitigation measures towards environmental sustainability. Policies introduced to reduce carbon emissions include the Liquefied Petroleum Gas (LPG) Promotion Policy, the Renewable Energy Master Plan, and improved charcoal stove distribution. Ghana has set a target of increasing the share of renewable energy (including hydropower capacity up to 100 MW) from 42.5 MW in 2015 to 1363.63 MW by 2030.

The government, however, does not include environmental and green growth considerations in public procurement policies for businesses aimed at preserving biodiversity, clean air, and other ecological benefits.

Corruption in Ghana is comparatively less prevalent than in most other countries in the region, according to Transparency International’s Perception of Corruption Index, but remains a serious problem, with Ghana scoring 45 on a scale of 100 and ranking 73 out of 180 countries in 2020.  The government has a relatively strong anti-corruption legal framework in place, but enforcement of existing laws is rare and inconsistent.  Corruption in government institutions is pervasive.  The Government of Ghana has vowed to combat corruption and has taken some steps to promote better transparency and accountability.  These include establishing an Office of the Special Prosecutor (OSP) in 2017 to investigate and prosecute corruption cases and passing a Right to Information Act, 2019 (Act 989) (similar to the U.S. Freedom of Information Act) to increase transparency.  The President named a new Special Prosecutor in 2021 but the OSP still has not prosecuted a significant anti-corruption case.  The Auditor-General, was appointed in an acting capacity in 2021 and was confirmed as the substantive Auditor-General in September 2021.

Businesses have noted that bribery is most pervasive in the judicial system and across public services.  Companies report that bribes are often exchanged in return for favorable judicial decisions.  Large corruption cases are prosecuted, but proceedings are lengthy and convictions are slow.  A 2015 exposé captured video of judges and other judicial officials extorting bribes from litigants to manipulate the justice system.  Thirty-four judges were implicated, and 25 were dismissed following the revelations, though none have been criminally prosecuted.

The Public Procurement (Amendment) Act, 2016 (Act 914) was passed to address the shortcomings identified over a decade of implementation of the original 2003 law aimed at harmonizing the many public procurement guidelines used in the country and to bring public procurement into conformity with WTO standards.  (Note: Ghana is a not a party to the plurilateral WTO Agreement on Government Procurement). Nevertheless, complete transparency is lacking in locally funded contracts.  There continue to be allegations of corruption in the tender process, and the government has in the past set aside international tender awards in the name of alleged national interest.  The Public Financial Management Act, 2016 (Act 921) provided for stiffer sanctions and penalties for breaches, but its effectiveness in stemming corruption has yet to be demonstrated.  In 2016, Ghana amended the company registration law (which has been retained in the new Companies Act, 2019 (Act 992)) to include the disclosure of beneficial owners.  In September 2020, Ghana deployed a Central Beneficial Ownership Register to collect and maintain a national database on beneficial owners for all companies operating in Ghana.  The law requires each person who creates a company in Ghana to report the identities of the company’s beneficial owners on the Beneficial Ownership Declaration form at the Registrar-General’s Department (RGD).  There are different thresholds for reporting beneficial owners, depending on the sector the company belongs to and who the beneficial owner is.  For the general threshold, a person who has direct or indirect interest of 10 percent or more in a company must be registered as a beneficial owner.  A Politically Exposed Person (PEP) in Ghana who has any shares or any form of control over a company in any sector must be registered as a beneficial owner, while for a foreign PEP, shares must be five percent or more.  For companies in the extractive industry, financial institutions, and businesses operating in sectors listed as high risk by the RGD, the threshold for reporting beneficial owners is five percent.  Failure to comply with the requirements may attract a fine of up to 6,000 cedis (USD 856) or two years in prison, or both.

The 1992 Constitution established the Commission for Human Rights and Administrative Justice (CHRAJ).  Among other things, CHRAJ is charged with investigating alleged and suspected corruption and the misappropriation of public funds by officials.  CHRAJ is also authorized to take appropriate steps, including providing reports to the Attorney General and the Auditor-General in response to such investigations.  The effectiveness of CHRAJ, however, is hampered by a lack of resources, as it conducts few investigations leading to prosecutions.  CHRAJ issued guidelines on conflict of interest to public sector workers in 2006 and issued a new Code of Conduct for Public Officers in Ghana with guidelines on conflicts of interest in 2009.  CHRAJ also developed a National Anti-Corruption Action Plan that Parliament approved in July 2014, but many of its provisions have not been implemented due to lack of resources.  In November 2015, then-President John Mahama fired the CHRAJ Commissioner after she was investigated for misappropriating public funds.

In 1998, the Government of Ghana also established an anti-corruption institution, called the Serious Fraud Office (SFO), to investigate corrupt practices involving both private and public institutions.  The SFO’s name became the Economic and Organized Crime Office (EOCO) in 2010, and its functions were expanded to include crimes such as money laundering and other organized crimes. EOCO is empowered to initiate prosecutions and to recover proceeds from criminal activities.  The government passed a “Whistle Blower” law in July 2006, intended to encourage Ghanaian citizens to volunteer information on corrupt practices to appropriate government agencies.

Like most other African countries, Ghana is not a signatory to the OECD Convention on Combating Bribery.

The most common commercial fraud scams are procurement offers tied to alleged Ghanaian government or, more frequently, ECOWAS programs.  U.S. companies frequently report being contacted by an unknown Ghanaian firm claiming to be an authorized agent of an official government procurement agency.  Foreign firms that express an interest in being included in potential procurements are lured into paying a series of fees to have their companies registered or products qualified for sale in Ghana or the West Africa region.  U.S. companies receiving offers from West Africa from unknown sources should contact the U.S. Commercial Service in Ghana ( Ghana (trade.gov) ), use extreme caution, and conduct significant due diligence prior to pursuing these offers.  American firms can request background checks on companies with whom they wish to do business by purchasing the U.S. Commercial Service’s International Company Profile (ICP).

Office of the Special Prosecutor
6 Haile Selassie Avenue
South Ridge, Accra, Ghana GA-079-096
Telephone: 233 (302) 668 517; 233 (302) 668 506
corruptionreports@osp.gov.gh; info@osp.gov.gh
www.osp.gov.gh 

The Commissioner
Commission on Human Rights and Administrative Justice (CHRAJ)
Old Parliament House, High Street, Accra
Omit the (0) after the area code when dialing from abroad: +233 (0) 242 211 53 info@chraj.gov.gh
http://www.chraj.gov.gh 

The Executive Director
Economic and Organized Crime Office (EOCO)
Behind Old Parliament House, High Street, Accra
Omit the (0) after the area code when dialing from abroad: +233 (0) 302 665559, +233 (0) 302 634 363
eoco@eoco.gov.gh
www.eoco.gov.gh 

George Amoh
An Advocacy and Legal Advice Centre (ALAC) Ghana – Transparency International
Abelenkpe Rd Accra, Accra
Omit the (0) after the area code when dialing from abroad: +233 (0)302 760 884
alacghana@yahoo.com
https://www.transparency.org/en/report-corruption/ghana 

Ghana offers a relatively stable and predictable political environment for American investors when compared to the broader region and has a solid democratic tradition.  In December 2020, Ghana completed its eighth consecutive peaceful presidential and parliamentary elections and transfer of power since 1992, with power transferred between the two main political parties three times during that period.  On December 7, 2020 New Patriotic Party (NPP) candidate (and incumbent) Nana Akufo-Addo was re-elected over the National Democratic Congress (NDC) candidate, former President John Mahama.  The NDC disputed the 2020 presidential election result.  The Supreme Court heard the case and ruled that Akufo-Addo had, indeed, won the election.  There were isolated cases of violence during the election but no widespread civil disturbances.  The next general elections are scheduled for December 7, 2024.

Ghana has a large pool of unskilled labor.  English is widely spoken, especially in urban areas. However, according to the Ghana Statistical Service, nationwide illiteracy remains high at 30 percent in 2021.  While the unemployment rate was 13.4 percent in 2021, 32.8 percent of Ghanaians aged 15 to 24 were unemployed.  About 77 percent of Ghana’s employed population are in the informal sector and contributed about a quarter of its GDP in 2020.  Labor regulations and policies are generally favorable to business.  Although labor-management relationships are generally positive, occasional labor disagreements stem from wage policies in Ghana’s inflationary environment.  Many employers find it advantageous to maintain open lines of communication on wage calculations and incentive packages.  A revised Labor Act of 2003 (Act 651) unified and modified the old labor laws to bring them into conformity with the core principles of the International Labor Convention, to which Ghana is a signatory.

Under the Labor Act, the Chief Labor Officer both registers trade unions and approves applications by unions for a collective bargaining certificate.  A collective bargaining certificate entitles the union to negotiate on behalf of a class of workers.  The Labor Act also created a National Labor Commission to resolve labor and industrial disputes, and a National Tripartite Committee to set the national daily minimum wage and provide policy guidance on employment and labor market issues.  The National Tripartite Committee includes representatives from government, employers’ organizations, and organized labor.  The Labor Act sets the maximum hours of work at eight hours per day or 40 hours per week but makes provision for overtime and rest periods.  Some categories of workers, including trades workers and domestic workers, are excluded from the eight hours per day or 40 hours per week maximum.

The Labor Act prohibits the “unfair termination” of workers for specific reasons outlined in the law, including participation in union activities; pregnancy; or based on a protected class, such as gender, race, color, ethnicity, origin, religion, creed, social, political or economic status, or disability.  The Labor Act also provides procedures companies are required to follow when laying off staff, including under certain situations providing severance pay, known locally as “redundancy pay.”  Disputes over redundancy pay can be referred to the National Labor Commission.  The Act’s provisions regarding fair and unfair termination of employment do not apply to some classes of contract, probationary, and casual workers.

There is no legal requirement for labor participation in management.  However, many businesses utilize joint consultative committees in which management and employees meet to discuss issues affecting business productivity and labor issues.

There are no statutory requirements for profit sharing, but fringe benefits in the form of year-end bonuses and retirement benefits are generally included in collective bargaining agreements. Child labor remains a problem.  Child labor is particularly severe in agriculture, including in cocoa and fishing.  In general, worker protection provisions in the Labor Act, including health and safety provisions, are weakly enforced.  Post recommends consulting a local attorney for detailed advice regarding labor issues.  The U.S. Embassy in Accra maintains a list of local attorneys, which is available through the U.S. Foreign Commercial Service (https://www.trade.gov/ghana) or U.S. Citizen Services ( https://gh.usembassy.gov/u-s-citizen-services/attorneys/). 

Ghana signed an agreement with the Overseas Private Investment Cooperation (OPIC), the predecessor agency to the U.S. International Development Finance Corporation (DFC).  DFC is active in Ghana, providing financing and insurance for a number of projects – particularly in the energy, housing, agriculture, and health sectors.  All OPIC activities have been assumed by the DFC.  The Multilateral Investment Guarantee Agency (MIGA), African Project Development Facility (APDF), African Trade Insurance Agency, and the African investment program of the International Finance Corporation are other sources of information.

* Source for Host Country Data: Ghana Statistical Service 

U.S. Embassy, Economic Section
No. 24 Fourth Circular Road, Cantonments, Accra, Ghana
Tel: +233 (0) 302 741 000 (Omit the (0) after the area code when dialing from abroad)
Email: AccraICS@state.gov

Former President Conde’s government had adopted a strong, positive attitude toward foreign direct investment (FDI), an approach that has been echoed by the transition government.  In the face of budget shortfalls and low commodity prices, both former President Conde’s government and the transition government have expressed hope FDI will help diversify the economy, spur GDP growth, and provide reliable employment.  To that end, former President Conde’s government reduced land transfer fees, and improved procedures for import and construction permits.  Guinea does not discriminate against foreign investors, with the exception of a prohibition on foreign media ownership.  One area of concern, mining companies have negotiated different taxation rates despite mining code requirements.  In some instances, short-term tax breaks end up being costly for the investor as they are then expected to “contribute” resources like electrical energy or roadbuilding as an informal quid pro quo for the lighter tax burden.  According to the 2021World Investment Report, FDI in Guinea increased from USD 44 million in 2019 to 325 million in 2020.  In late 2015, the U.S. Embassy facilitated the establishment of an informal international investors group to liaise with the government, although the group has not been very active since.  There is the Chambre des Mines (Chamber of Mines), a government-sanctioned advisory organization that includes Guinea’s major mining firms.  Guinea’s Agency for the Promotion of Private Investment (APIP) provides support in the following areas:

1. Create and register businesses
2. Facilitate access to incentives offered under the investment code
3. Provide information and resources to potential investors
4. Publish targeted sector studies and statistics
5. Provide training and technical assistance
6. Facilitate solutions for investors in Guinea’s interior

On March 13, 2021, a presidential decree changed the structure of APIP into a public agency under the technical supervision of the Ministry of Investments and Public Private Partnerships, and under the financial supervision of the Ministry of Economy and Finance.  Since the September 2021 coup d’etat, APIP falls under the Ministry of Commerce, Industry, and Small and Medium Enterprises.

More information about APIP can be found at: http://apip.gov.gn/

Investors can register under one of four categories of business in Guinea. More information on the four types of business registration is available at http://invest.gov.gn/page/create-your-company.  There are no general limits on foreign ownership or control, and 100 percent ownership by foreign firms is legal in most sectors.  Foreign ownership of print media, radio, and television stations is not permitted.  The 2013 Mining Code gives the government the right to a 15 percent interest in any major mining operation in Guinea (the government decides when an operation has become large enough to qualify).  Mining and media notwithstanding, there are no sector-specific restrictions that discriminate against market access for foreign investment.  Despite this lack of official discrimination, many enterprises have discovered the licensing process to be laden with bureaucratic delays that are usually dealt with by paying consultant fees to help expedite matters.  The U.S. Embassy may be able to advocate on behalf of American companies when it is aware of excessive delays.

According to the Investment Code, the National Investment Commission has a role in reviewing requests for approval of foreign investment and for monitoring companies’ efforts to comply with investment obligations.  The Ministry of Planning and Economic Development hosts the secretariat for this commission, which grants investment approvals.  The government gives approved companies, especially industrial firms, the use of the land necessary for their plant, with the duration and conditions of use set out in the terms of the approval.  The land and associated buildings belong to the State but can also be rented by or transferred to another firm with government approval.

There has been no investment policy review conducted by the UN Conference on Trade and Development or the Organization for Economic Cooperation and Development within the past several years.  The World Trade Organization (WTO) last conducted a review of Guinea in 2018.  The 2018 report can be viewed here: https://www.wto.org/english/tratop_e/tpr_e/tp470_e.htm.

APIP promotes investment, helps register businesses, assists with the expansion of local companies, and works to improve the local business climate.  APIP maintains an online guide for potential investors in Guinea (http://invest.gov.gn).  Business registration can be completed in person at APIP’s office in Conakry or through their online platform:  https://synergui.apipguinee.com/fr/utilisateurs/register/.  The only internationally accredited business facilitation organization that assesses Guinea is the Global Enterprise Registration (GER.co), which gives Guinea’s business creation/investment website a 6/10 rating for 2021.  It takes roughly seventy-two hours to register a business.  APIP’s services are available to both Guinean and foreign investors.  The “One Stop Shop” at APIP’s Conakry office can provide small and medium sized enterprises (SMEs) with requisite registration numbers, including tax administration numbers and social security numbers.  Notaries are required for the creation of any other type of enterprise.

An SME in Guinea is defined as a business with less than 50 employees and revenue less than 500 million Guinean francs (GNF) (around USD 50,000).  SMEs are taxed at a yearly fixed rate of GNF 15 million (USD 1,500).  Administrative modalities are simplified and funneled through the “One Stop Shop”.   In December 2019, the Prime Minister inaugurated the “Maison des PME,” (“The SME House”) a public-private partnership between the Societe Generale bank and APIP to help local SMEs expand and develop.

Guinea does not formally promote outward investment, though the government does not restrict domestic investors from investing abroad.

The 2013 Mining Code includes Guinea’s first legal framework outlining corporate social responsibility.  Under the provisions of the code, mining companies must submit social and environmental impact plans for approval before operations can begin and sign a code of good conduct, agreeing to refrain from corrupt activities and to follow the precepts of the Extractive Industry Transparency Initiative (EITI).  However, lack of capacity in the various ministries involved makes government monitoring and enforcement of corporate social responsibility requirements difficult, a gap that some non-governmental organizations (NGOs) are filling.  In February 2019, Guinea was found to have achieved meaningful progress in implementing EITI standards.  The EITI Board outlined eight corrective actions, including disclosing more information on infrastructure agreements, direct subnational payments, and quasi-fiscal expenditures.  The Board noted that the EITI should play a role in overseeing the new Local Economic Development Fund (FODEL).  Mining companies continue to note a lack of transparency in the expenditure of revenues by the National Agency for Mining Infrastructure (ANAIM).

The 2019 Environmental Code also has specific provisions regarding environmental and social due diligence on any development projects.  The Code requires each development project to conduct an environmental impact study which includes a list of mitigation measures for any negative impact.

Guinea has laws that protect the population from adverse business impacts however, these laws are not effectively enforced.  In the last few years, there were several cases of private enterprise having an adverse impact on human rights, especially in the mining and energy sectors.  The government is often reluctant to fully enforce legislation regarding responsible conduct and the mitigation of these impacts.  There are several local and international organizations that are promoting and monitoring the implementation of RBCs.  Guinea is not signatory of the Montreux document on Private Military and Security Companies.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Guinea ratified the United Nations Framework Convention on Climate Change (UNFCCC) in 1993 and the Kyoto Protocol in 2005.  Guinea prepared an Initial National Communication in 2001 to inventory greenhouse gases (GHG), based on emissions in 1994).  A second GHG inventory was completed in 2011, based on 2000 emissions.  Guinea prepared its National Adaptation Plan of Action (NAPA) in 2007 and undertook several projects to implement the plan.  Prior to COP 21 in Paris in December 2015, Guinea submitted an Intended National Contribution Determination in September 2015, committing to a 13 percent decrease in GHG emissions by 2030, as compared to 1994 emission levels.  In preparation for COP 26 in Edinburgh in November 2021, Guinea prepared a Nationally Determined Contribution in July 2021, making a commitment to a 17 percent reduction target across sectors, potentially reaching a 49 percent reduction by 2030 by including land-use and forestry.  Guinea has not yet prepared a National Adaptation Plan.

As of April 2022, Guinea does not offer any regulatory incentives to achieve policy outcomes that preserve climate change benefits, nor do public procurement policies include environmental and green growth considerations.

According to Transparency International’s 2021 Corruption Perception Index, Guinea lost 13 points and was ranked 150 out of 180 countries listed.

Guinea passed an Anti-Corruption Law in 2017, and in April 2019, a former director of the Guinean Office of Advertising was sentenced to five years in prison for embezzling GNF 39 billion (approximately USD four million), though in June 2019, he was acquitted by the Appeals Court and was elected a member of the National Assembly in March 2020.  It is not clear whether the Anti-Corruption Law was used to prosecute the case.  According to a 2019 Afrobarometer survey, at least 40 percent of Guineans reported having given a government official a bribe, while a 2016 World Bank Enterprise Survey reported that of 150 firms surveyed, 48.7 percent reported that they were expected to give “gifts” to public officials to get things done, but only 7.9 percent reported having paid a bribe.

The business and political culture, coupled with low salaries, have historically combined to promote and encourage corruption.  Requests for bribes are a common occurrence.  Though it is illegal to pay bribes in Guinea, there is little enforcement of these laws.  In practice, it is difficult and time-consuming to conduct business without giving “gifts” in Guinea, leaving U.S. companies, who must comply with the Foreign Corrupt Practices Act, at a disadvantage.

Although the law provides criminal penalties for corruption, the law does not extend to family members of government officials. It does include provisions for political parties.  According to the World Bank’s 2018 Worldwide Governance Indicators, corruption continues to remain a severe problem, and Guinea is in the 13th percentile, down from being in the 15th percentile in 2012.  Public funds have been diverted for private use or for illegitimate public uses, such as buying vehicles for government workers.  Land sales and business contracts generally lack transparency.

Guinea’s Anti-Corruption Agency (ANLC) is an autonomous agency established by presidential decree in 2004.  The ANLC reports directly to the President and is currently the only state agency focused solely on fighting corruption, though it has been largely ineffective in its role with no successful convictions.  The ANLC’s Bureau of Complaint Reception fields anonymous tips forwarded to the ANLC. Investigations and cases must then be prosecuted through criminal courts.  According to the ANLC, during the past year there were no prosecutions as a result of tips.  The agency is underfunded, understaffed, and lacks computers and vehicles.  The ANLC is comprised of 52 employees in seven field offices, with a budget of USD 1.1 million in 2018.

Former President Conde’s administration named corruption in both the governmental and commercial spheres as one of its top agenda items.  In November 2019, Ibrahim Magu, the acting Chairman of the Economic and Financial Crimes Commission of Nigeria, and President Alpha Conde reached an agreement through which the Commission will assist Guinea to establish an anti-corruption agency; however, it is not clear if that meant reforming the existing anti-corruption agency or establishing a new anti-corruption agency.

In January 2021, Beny Steinmetz, an Israeli businessman and billionaire was sentenced to five years in jail in Geneva for bribing the wife of Guinea’s late President Lansana Conté to gain the rights to one of the world’s richest iron-ore deposits.  He was also ordered to pay a 50 million Swiss franc (USD 56 million) fine.  Steinmetz has long claimed to be a victim of a vast international conspiracy to deprive him of the rights to the Simandou project.  He plans to appeal his case.

Transition President COL Doumbouya created the Court to Repress Economic and Financial Crimes (CRIEF) to handle cases involving embezzlement, corruption, and misuse of public funds over one billion GNF (approximately $110,000) in December 2021.  As of April 2022, the court has focused on collecting evidence for corruption cases against businesses tied to and officials that served in former President Conde’s government.

A 2016 survey by the ANLC, the Open Society Initiative-West Africa (OSIWA), and Transparency International found that among private households, 61 percent of the respondents stated they were asked to pay a bribe for national services and 24 percent for local services.  Furthermore, 24 percent claimed to have paid traffic-related bribes to police, 24 percent for better medical treatment, 19 percent for better water or electricity services, and 8 percent for better judicial treatment.

Guinea is a party to the UN Anticorruption Convention.  http://www.unodc.org/unodc/en/treaties/CAC/signatories.html

Guinea is not a party to the OECD Convention on Combatting Bribery.  http://www.oecd.org/daf/anti-bribery/countryreportsontheimplementationoftheoecdanti-briberyconvention.htm

Since 2012, Guinea has had a Code for Public Procurement (Code de Marches Publics et Delegations de Service Public) that provides regulations for countering conflicts of interest in awarding contracts or in government procurements.  In 2016, the government issued a Transparency and Ethics charter for public procurement that provides the main do’s and don’ts in public procurement, highlighting avoidance of conflict of interest as a priority.  The charter also includes a template letter that companies must sign when bidding for public contracts stating that they will comply with local legislation and public procurement provisions, including practices to prevent corruption.

Since April 2020, Government of Guinea officials and family must complete the asset declaration form which is available on the Court of Audit website.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

National Agency to Fight Corruption (ANLC)
Cite des Nations, Villa 20, Conakry, Guinea
Korak Bailo Sow, Permanent Secretary
+224 622 411 796
ddiallo556@gmail.com
+224 620 647 878
cc@anlcgn.org

Contact at a “watchdog” organization:

Transparency International
Dakar, Senegal
+221-33-842-40-44
forumcivil@orange.sn  

Guinea Association for Transparency
Oumar Kanah Diallo, President
+224 622 404 142
okandiallo77@gmail.com
agtguinee224@gmail.com 

Guinea has had a long history of political repression, with more recent episodes of politically-motivated violence around elections.  The country suffered under authoritarian rule from independence in 1958 until its first democratic presidential election in 2010.  It has seen continued political violence associated with national and local elections since 2010, culminating in the most recent September 2021 coup d’etat.

On September 5, 2021 Colonel Mamadi Doumbouya and Guinean military special forces seized power and detained former President Alpha Conde through a coup d’état.  COL Doumbouya declared himself Guinea’s head of state, dissolved the government and National Assembly and suspended the constitution.  Guinea is currently governed by the National Committee for Reunification and Development (CNRD), which is led by COL Doumbouya and comprised primarily of military officials.  On September 27, 2021 COL Doumbouya released the Transitional Charter which supersedes the constitution until a new Constitution is promulgated; Guinea’s penal and civil codes remains in force.  On October 1, 2021 the Supreme Court Justice installed COL Doumbouya as Head of State, Transition President, CNRD President, and Commander-in-Chief of Security Forces.  On January 22, 2022 the National Transition Council, the transition government’s legislative body, was installed but no timeline for future elections or return to civilian rule was provided as of April 2022.

In March 2020, the former Conde administration amended the constitution through a referendum that allowed former President Conde to seek a third term in office.  Observers noted the process was not transparent, inclusive, or consultative.  Major opposition parties boycotted the referendum and accompanying legislative elections.  This resulted in resetting presidential term limits and the ruling party, the Rally for the Guinean People, gaining a super majority in the National Assembly.  Domestic and international observers raised concerns regarding widespread violence and voting irregularities in the legislative elections, including closed and ransacked polling stations.

In October 2020 President Alpha Conde ran for reelection for a third term under the new constitution.  International and domestic observers raised concerns about widespread electoral violence, restrictions on freedom of assembly, the lack of transparency in vote tabulation, and inconsistencies between the announced results and tally sheet results from polling stations.  Violent protests during both elections closed businesses in major population centers, resulted in about 150 deaths, and the arbitrary detention of hundreds of people including several prominent opposition figures.  Political intimidation and arbitrary detention of opposition members continued for several months after the election.

The local populace in Boke, Bel-Air, and Sangaredi disrupted road and/or railroad traffic on at least three occasions in 2017 and at least twice in 2018, in response to grievances over employment, lack of services, and other issues.  Although none of these events targeted American or foreign investors, they were disruptive to business in general and eroded confidence in the security situation under which investors must operate in Guinea.  Street violence is difficult to predict or avoid, but generally does not target westerners.

Presidential elections in 2015 sparked violent protests in Conakry, but clashes between police and demonstrators were largely contained.  In addition to political violence, sporadic and generally peaceful protests over fuel prices, lack of electricity, labor disputes, and other issues have occurred in the capital and sometimes beyond since 2013.  In February 2017, seven civilians died in confrontations with security services during large protests against education reforms.  After two days of violent protests in March 2018, teachers’ unions and the government agreed to a raise of 40 percent.  These protests over teacher union pay became intermingled with political protests over voting irregularities in the February 4 local elections.  The political opposition claims the government is responsible for the deaths of over 90 people during political protests over the past eight years.

Other instances of violence occurred in 2014 and 2015 during the Ebola epidemic when local citizens attacked the vehicles and facilities of aid workers.  The Red Cross, MSF (Doctors Without Borders) and the World Health Organization (WHO) also reported cases of property damage (destroyed vehicles, ransacked warehouses, etc.).  On September 16, 2014, in the Forest Region village of Womei, eight people were killed by a mob when they visited the village as part of an Ebola education campaign. The casualties included radio journalists, local officials, and Guinean health care workers.

The small mining town of Zogota, located in Guinea’s Forest Region, saw the deaths of five villagers, including the village chief, during August 2012 clashes with security forces over claims that the Brazilian iron-mining company Vale was not hiring enough local employees and was instead bringing workers from other regions of Guinea.  The ensuing instability led to Vale evacuating all expatriate personnel from the town.

Following the death of President Lansana Conte on December 22, 2008, a military junta calling themselves the National Council for Democracy and Development (CNDD) took power in a bloodless coup.  Immediately following the coup, the U.S. government suspended all but humanitarian and election assistance to Guinea.  The African Union (AU) and ECOWAS suspended Guinea’s membership pending democratic elections and a relinquishment of power by the military junta.  In September 2009, junta security forces attacked a political rally in a stadium in Conakry, killing 150 people, and raping over a hundred women.

The state had persecuted political dissidents and opposition parties for decades.  The Sekou Toure regime (1958-1984) and the Lansana Conte regime (1984-2008) were marked by political violence and human rights abuses.

Guinea has a young population and a high unemployment rate.  Potential employees often lack specialized skills.  The country has a poor educational system and lacks professionals in all sectors of the economy. Guinea has deficits in specialized skills needed for large-scale projects of any kind.

According to a 2019 World Bank report on “Employment, productivity and inclusion of youth”, in 2017 Guinea’s economy was based on services (49 percent of GDP), mining and industry (37 percent) and agriculture (10 percent).  The tendencies show that employment in Guinea is like other countries in the region, with a high level of employment in the informal sector.  According to the 2018 World Bank Development Indicators, approximately 65 percent of Guineans above 15 years old, (56 percent males and 44 percent females) were employed in the formal or informal sectors.  Of those employed, 52 percent were working in agricultural sector, 34 percent in commerce, and 14 percent in industry and manufacturing.

In March 2020, the National Assembly revised the Children’s Code to increase protections and rights afforded to minors.  The new code provides increased penalties for offenses that expose children to violence, sexuality, the display or dissemination of obscene images, and messages not intended for children.  The new code also increases penalties relating to child labor, sexual abuse, sexual exploitation of children and the fight against child pornography.  Under the new code children between the ages of 12 and 14 can perform light work, which does not meet international standards, as it applies to children under age 13.  In addition, the new code does not prescribe the number of hours per week permitted for light work, nor does it specify the conditions under which light work may be done. Moreover, these laws only apply to workers with written employment contracts, leaving self-employed children and children working outside of formal employment relationships vulnerable to exploitation.

Guinea’s National Assembly adopted a new labor code in February 2014 which protects the rights of employees and is enforced by the Ministry of Technical Education, Vocational Training, Employment and Labor.  The Labor Code sets forth guidelines in various sectors, the most stringent being the mining sector.  Guidelines cover wages, holidays, work schedules, overtime pay, vacation, and sick leave.  The Labor Code also outlaws all discrimination in hiring, including on the basis of sex, disability, and ethnicity.  It also prohibits all forms of workplace harassment, including sexual harassment.  However, the law does not provide antidiscrimination protections for persons based on sexual orientation and/or gender identity.

Although the law provides for the rights of workers to organize and join independent unions, engage in strikes, and bargain collectively, the law also places restrictions on the free exercise of these rights.  The Labor Code requires unions to obtain the support of 20 percent of the workers in a company, region, or trade that the union claims to represent.  The code mandates that unions provide ten days’ notice to the labor ministry before striking, but the code does allow work slowdowns. Strikes are only permitted for professional claims.  The Labor Code does not apply to government workers or members of the armed forces.  While the Labor Code protects union officials from anti-union discrimination, it does not extend that same protection to other workers.

The law prohibits child labor in the formal sector and sets forth penalties of three to ten years imprisonment and confiscation of resulting profits.  The law does not protect children in the informal sector.  The minimum age for employment is 16.  Exceptions allow children to work at age twelve as apprentices for light work in such sectors as domestic service and agriculture, and at 14 for other work.  A new child code was adopted at the National Assembly in December 2019, though it was never enacted by former President Conde.  The new child code provides more severe sentences for violations related to child labor.

The Labor Code allows the government to set a minimum monthly wage through the Consultative Commission for Labor and Social Laws.  The minimum wage for all sectors was established in 2013 at 440,000 GNF (approximately USD 50).  There is no known official poverty income level established by the government.

The law mandates that regular work should not exceed ten-hour days or 48-hour weeks, and it mandates a period of at least 24 consecutive hours of rest each week, usually on Sunday.  Every salaried worker has the legal right to an annual paid vacation, accumulated at the rate of at least two workdays per month of work.  There also are provisions in the law for overtime and night wages, which are a fixed percentage of the regular wage.  The law stipulates a maximum of 100 hours of compulsory overtime a year.

The law contains general provisions regarding occupational safety and health, but neither former President Conde’s government nor the transition government have established a set of practical workplace health and safety standards.  Moreover, no orders have been issued laying out the specific safety requirements for certain occupations or for certain methods of work called for in the Labor Code.  All workers, foreign and migrant included, have the right to refuse to work in unsafe conditions without penalty.

Authorities rarely monitor work practices or enforced the workweek standards and the overtime rules.  Teachers’ wages are low, and teachers sometimes have gone for months without pay.  When salary arrears are not paid, some teachers live in abject poverty.  From 2016-2018, teachers conducted regular strikes and as a result and were promised a 40 percent increase in pay.  Initially they received only ten percent, but in March 2018, the government began to pay the remaining 30 percent.  In February 2019, the teacher’s union accepted the government proposal at the time and returned to work.  In January 2020, the teachers started an indefinite strike demanding higher wages and the re-running of a census of currently employed teachers.  As of end of March 2020, the teachers’ strike was put on hold due to the COVID-19 pandemic.

Despite legal protection against working in unsafe conditions, many workers feared retaliation and did not exercise their right to refuse to work under unsafe conditions.  Accidents in unsafe working conditions remain common.  The government banned artisanal mining during the rainy season to prevent deaths from mudslides, but the practice continues.

Pursuant to the Labor Code, any person is considered a worker, regardless of gender or nationality, who is engaged in any occupational activity in return for remuneration, under the direction and authority of another individual or entity, whether public or private, secular, or religious.  In accordance with this code, forced or compulsory labor means any work or services extracted from an individual under threat of a penalty and for which the individual concerned has not offered himself willingly.

A contract of employment is a contract under which a person agrees to be at the disposal and under the direction of another person in return for remuneration.  The contract may be agreed upon for an indefinite or a fixed term and may only be agreed upon by individuals of at least 16 years of age, although minors under the age of 16 may be contracted only with the authorization of the minor’s parent or guardian.  An unjustified dismissal provides the employee the right to receive compensation from the employer in an amount equal to at least six months’ salary with the last gross wage paid to the employee being used as the basis for calculating the compensation due.

The Investment Code obliges new companies to prioritize hiring local employees and provide capacity training and promotion opportunities for Guineans, a sentiment echoed by public remarks from Transition President COL Doumbouya and other members of the transition government.

Kenya has enjoyed a steadily improving environment for FDI.  Foreign investors seeking to establish a presence in Kenya generally receive the same treatment as local investors, and multinational companies make up a large percentage of Kenya’s industrial sector.  The government’s export promotion programs do not distinguish between goods produced by local or foreign-owned firms.  The primary regulations governing FDI are found in the Investment Promotion Act (2004).  Other important documents that provide the legal framework for FDI include the 2010 Constitution of Kenya, the Companies Ordinance, the Private Public Partnership Act (2013), the Foreign Investment Protection Act (1990), and the Companies Act (2015).  GOK membership in the World Bank’s Multilateral Investment Guarantee Agency (MIGA) provides an opportunity to insure FDI against non-commercial risk.  In November 2019, the Kenya Investment Authority (KenInvest), the country’s official investment promotion agency, launched the Kenya Investment Policy (KIP) and the County Investment Handbook (CIH) (http://www.invest.go.ke/publications/) which aim to increase inflow of FDI in the country.  The KIP intends to guide laws being drafted to promote and facilitate investments in Kenya.

KenInvest’s (http://www.invest.go.ke/) mandate is to promote and facilitate investment by helping investors understand and navigate local Kenya’s bureaucracy and regulations.  KenInvest helps investors obtain necessary licenses and developed eRegulations, an online database, to provide businesses with user-friendly access to Kenya’s investment-related regulations and procedures (https://eregulations.invest.go.ke/?l=en).

KenInvest prioritizes investment retention and maintains an ongoing dialogue with investors.  All proposed legislation must pass through a period of public consultation, which includes an opportunity for investors to offer feedback.  Private sector representatives can serve as board members on Kenya’s state-owned enterprises.  Since 2013, the Kenya Private Sector Alliance (KEPSA), the country’s primary alliance of private sector business associations, has had bi-annual round table meetings with President Kenyatta and his cabinet.  President Kenyatta also chairs a cabinet-level committee focused on improving the business environment.  The American Chamber of Commerce has also increasingly engaged the GOK on issues regarding Kenya’s business environment.

The government provides the right for foreign and domestic private entities to establish and own business enterprises and engage in all forms of remunerative activity.  To encourage foreign investment, in 2015, the GOK repealed regulations that imposed a 75 percent foreign ownership limit for firms listed on the Nairobi Securities Exchange, allowing such firms to be 100 percent foreign owned.  However, also in 2015, the government established regulations requiring Kenyan ownership of at least 15 percent of the share capital of derivative exchanges, through which derivatives, such as options and futures, can be traded.

Kenya’s National Information and Communications Technology (ICT) policy guidelines, published in August 2020, adjusted the requirement for Kenyan ownership in foreign ICT companies from 20 to 30 percent, and broadened its applicability within the telecommunications, postal, courier, and broadcasting industries.  Affected companies have 3 years to comply with the new requirement.  The Mining Act (2016) reserves mineral acquisition rights to companies registered and established in Kenya, whether local or foreign owned.  Mineral dealership licenses are only issued to Kenyan citizens or to corporations where at least 60 percent shareholding is held by Kenyan citizens.  The Private Security Regulations Act (2016) restricts foreign participation in the private security sector by requiring at least 25 percent Kenyan ownership of private security firms.  The National Construction Authority Act (2011) and the 2014 National Construction Authority regulations impose local content restrictions on “foreign contractors,” defined as companies incorporated outside Kenya or with more than 50 percent ownership by non-Kenyan citizens.  The definition excludes companies owned by foreigners but incorporated in Kenya.  The act requires foreign contractors enter subcontracts or joint ventures assuring that at least 30 percent of the contract work is done by local firms and locally unavailable skills transferred to a local person.  The Kenya Insurance Act (2010) limits foreign capital investment in insurance companies to two-thirds, with no single person holding more than a 25 percent ownership share.

In 2019, the World Trade Organization conducted a trade policy review for the East Africa Community (EAC), of which Kenya is a member (https://www.wto.org/english/tratop_e/tpr_e/tp484_e.htm).

In 2011, the GOK established KenTrade to address trading partners’ concerns regarding the complexity of trade regulations and procedures.  KenTrade’s mandate is to facilitate cross-border trade and to implement the National Electronic Single Window System.  In 2017, KenTrade launched InfoTrade Kenya (infotrade.gov.ke), which provides a host of investment products and services to prospective investors.  The site documents the process of exporting and importing by product, by steps, by paperwork, and by individuals, including contact information for officials responsible for relevant permits or approvals.

In February 2019, Kenya implemented a new Integrated Customs Management System (iCMS) that includes automated valuation benchmarking, release of green-channel cargo, importer validation and declaration, and linkage with iTax.  The iCMS enables customs officers to efficiently manage revenue and security related risks for imports, exports and goods on transit and transshipment.

The Movable Property Security Rights Bill (2017) enhanced the ability of individuals to secure financing through movable assets, including using intellectual property rights as collateral.  The Nairobi International Financial Centre (NIFC) Act (2017) seeks to provide a legal framework to facilitate and support the development of an efficient and competitive financial services sector in Kenya.  The act created the Nairobi International Financial Centre Authority to establish and maintain an efficient financial services sector to attract and retain FID.  The Kenya Trade Remedies Act (2017) provides the legal and institutional framework for Kenya’s application of trade remedies consistent with World Trade Organization (WTO) law, which requires a domestic institution to receive complaints and undertake investigations in line with WTO Agreements.  To date, however, Kenya has implemented only 7.5 percent of its commitments under the WTO Trade Facilitation Agreement, which it ratified in 2015.  In 2020, Kenya launched the Kenya Trade Remedies Agency to investigate and enforce anti-dumping, countervailing duty, and trade safeguards, to protect domestic industries from unfair trade practices.

The Companies (Amendment) Act (2017) clarified ambiguities in the original act and ensures compliance with global trends and best practices.  The act amended provisions on the extent of directors’ liabilities and disclosures and strengthens investor protections.  The amendment eliminated the requirements for small enterprises to hire secretaries, have lawyers register their firms, and to hold annual general meetings, reducing regulatory compliance and operational costs.

The Business Registration Services (BRS) Act (2015) established the Business Registration Service, a state corporation, to ensure effective administration of laws related to the incorporation, registration, operation, and management, of companies, partnerships, and firms.  The BRS also devolves certain business registration services to county governments, such as registration of business names and promoting local business ideas/legal entities- reducing registration costs.  The Companies Act (2015) covers the registration and management of both public and private corporations.

In 2014, the GOK established a Business Environment Delivery Unit to address investors’ concerns.  The unit focuses on reducing the bureaucratic steps required to establish and do business.  Its website (http://www.businesslicense.or.ke/) offers online business registration and provides detailed information regarding business licenses and permits, including requirements, fees, application forms, and contact details for the respective regulatory agencies.  In 2013, the GOK initiated the Access to Government Procurement Opportunities program, requiring all public procurement entities to set aside a minimum of 30 percent of their annual procurement spending facilitate the participation of youth, women, and persons with disabilities (https://agpo.go.ke/).

Kenya’s iGuide, an investment guide to Kenya (http://www.theiguides.org/public-docs/guides/kenya/about#, developed by UNCTAD and the International Chamber of Commerce, provides investors with up-to-date information on business costs, licensing requirements, opportunities, and conditions in developing countries.  Kenya is a member of UNCTAD’s international network of transparent investment procedures.

The GOK does not promote or incentivize outward investment.  Despite this, Kenya is evolving into an outward investor in tourism, manufacturing, retail, finance, education, and media. Kenya’s outward investment has primarily been in the EAC, due to the preferential access afforded to member countries, and in a select few central African countries.  The EAC allows free movement of capital among its six member states – Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda.

The Environmental Management and Coordination Act (1999) establishes a legal and institutional framework for responsible environment management, while the Factories Act (1951) safeguards labor rights in industries.  The Mining Act (2016) directs holders of mineral rights to develop comprehensive community development agreements that ensure socially responsible investment and resource extraction and establish preferential hiring standards for residents of nearby communities.  The legal system, however, has remained slow to prosecute violations of these policies.

The GOK is not a signatory to the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, and it is not yet an Extractive Industry Transparency Initiative (EITI) implementing country or a Voluntary Principles Initiative signatory.  Nonetheless, good examples of corporate social responsibility (CSR) abound as major foreign enterprises drive CSR efforts by applying international standards relating to human rights, business ethics, environmental policies, community development, and corporate governance.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Kenya has a 2010 Kenya National Climate Change Response Strategy (NCCRS) that focuses on integrating adaptation and mitigation measures in all government planning, budgeting, and development objectives, and a collaborative and joint action with all stakeholders.  The NCCRS also proposes Kenya’s participation in carbon markets including the UN’s Clean Development Mechanism carbon offset scheme.  In 2020, Kenya submitted its second Nationally Determined Contribution committing to reduce its already low total greenhouse gas emissions an additional 32 percent by 2030.  Kenya develops five-year periodic National Climate Change Action Plans (NCCAP).  The current NCCAP (2018-2022) seeks to further sustainable development and create an environment to pursue low-carbon climate resilient development.  In 2016, Kenya published its Green Economy Strategy and Implementation Plan (2016-2030) which prioritizes investments and development pathways with higher green growth, cleaner environment, and higher productivity.  Kenya’s 2018 National Climate Finance Policy supports a Green Climate Fund and the tracking of climate related activities in the Integrated Financial Management Information System (IFMIS) through budget coding and tagging.

Kenyan government strategies involve a multi-stakeholder approach to climate change response.  This includes the national government, county government, non-governmental organizations, and private sector.  The National Environment Management Authority (NEMA) assesses all projects for compliance with set environmental and sustainability standards.  Projects cannot commence until meeting set criteria for environmental impact assessment and being cleared by NEMA.

Kenya’s climate policies are ranked favorably in global climate related indices, including: ClimateScope, the Green Growth Index, and The Green Future Index.  The rankings measure the degree to which economies are pivoting toward clean energy, industry, agriculture, and society through investment in renewables, innovation and green finance, which market is the most attractive for energy transition investment, and performance in achieving sustainability targets including the UN Sustainable Development Goals.  (https://global-climatescope.org/results/, https://greengrowthindex.gggi.org/wp-content/uploads/2021/01/2020-Green-Growth-Index.pdf, https://www.technologyreview.com/2021/01/25/1016648/green-future-index/)

Corruption is pervasive and entrenched in Kenya and international corruption rankings reflect its modest progress over the last decade.  The Transparency International (TI) 2021 Global Corruption Perception Index ranked Kenya 128 out of 180 countries, its second-best ranking, and a marked improvement from its 2011 rank of 145 out of 176.  Kenya’s score of 30, however, remained below the global average of 43 and below the sub-Saharan Africa average of 33.  TI cited lack of political will, limited progress in prosecuting corruption cases, and the slow pace of reform in key sectors as the primary drivers of Kenya’s relatively low ranking.  Corruption has been an impediment to FDI, with local media reporting allegations of high-level corruption related to health, energy, ICT, and infrastructure contracts.  Numerous reports have alleged that corruption influenced the outcome of government tenders, and some U.S. firms assert that compliance with the Foreign Corrupt Practices Act significantly undermines their chances of winning public procurements.

In 2018, President Kenyatta began a public campaign against corruption.  While GOK agencies mandated to fight corruption have been inconsistent in coordinating activities, particularly regarding cases against senior officials, cabinet, and other senior-level arrests in 2019 and 2020 suggested a renewed commitment by the GOK to fight corruption.  In 2020, the judiciary convicted a member of parliament to 67 years in jail or a fine of KES 707 million (approximately USD 7 million) for defrauding the government of KES 297 million (approximately USD 2.9 million).  The Ethics and Anti-Corruption Commission (EACC), in 2019, secured 44 corruption-related convictions, the highest number of convictions in a single year in Kenya’s history.  The EACC also recovered assets totaling more than USD 28 million in 2019 – more than the previous five years combined.  Despite these efforts, much work remains to battle corruption in Kenya.

Relevant legislation and regulations include the Anti-Corruption and Economic Crimes Act (2003), the Public Officers Ethics Act (2003), the Code of Ethics Act for Public Servants (2004), the Public Procurement and Disposal Act (2010), the Leadership and Integrity Act (2012), and the Bribery Act (2016).  The Access to Information Act (2016) also provides mechanisms through which private citizens can obtain information on government activities; however, government agencies’ compliance with this act remains inconsistent.  The EACC monitors and enforces compliance with the above legislation.

The Leadership and Integrity Act (2012) requires public officers to register potential conflicts of interest with the relevant commissions.  The law identifies interests that public officials must register, including directorships in public or private companies, remunerated employment, securities holdings, and contracts for supply of goods or services, among others.  The law requires candidates seeking appointment to non-elective public offices to declare their wealth, political affiliations, and relationships with other senior public officers.  This requirement is in addition to background screening on education, tax compliance, leadership, and integrity.

The law requires that all public officials, and their spouses and dependent children under age 18, declare their income, assets, and liabilities every two years.  Information contained in these declarations is not publicly available, and requests to obtain and publish this information must be approved by the relevant commission.  Any person who publishes or makes public information contained in a public officer’s declarations without permission may be subject to fine or imprisonment.

The Access to Information Act (2016) requires government entities, and private entities doing business with the government, to proactively disclose certain information, such as government contracts, and comply with citizens’ requests for government information.  The act also provides a mechanism to request a review of the government’s failure to disclose requested information, along with penalties for failures to disclose.  The act exempts certain information from disclosure on grounds of national security.  However, the GOK has yet to issue the act’s implementing regulations and compliance remains inconsistent.

The private sector-supported Bribery Act (2016) stiffened penalties for corruption in public tendering and requires private firms participating in such tenders to sign a code of ethics and develop measures to prevent bribery.  Both the constitution and the Access to Information Act (2016) provide protections to NGOs, investigative journalism, and individuals involved in investigating corruption.  The Witness Protection Act (2006) establishes protections for witnesses in criminal cases and created an independent Witness Protection Agency.  A draft Whistleblowers Protection Bill has been stalled in Parliament since 2016.

President Kenyatta directed government ministries, departments, and agencies to publish all information related to government procurement to enhance transparency and combat corruption.  While compliance is improving, it is not yet universal.  The information is published online (https://tenders.go.ke/website/contracts/Index).

Kenya is a signatory to the UN Convention Against Corruption (UNCAC) and in 2016 published the results of a peer review process on UNCAC compliance:  (https://www.unodc.org/documents/treaties/UNCAC/CountryVisitFinalReports/2015_09_28_Kenya_Final_Country_Report.pdf).  Kenya is also a signatory to the UN Anticorruption Convention and the OECD Convention on Combatting Bribery, and a member of the Open Government Partnership.  Kenya is not a signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.  Kenya is also a signatory to the East African Community’s Protocol on Preventing and Combating Corruption.

Contact at government agency or agencies are responsible for combating corruption:

Rev. Eliud Wabukala (Ret.)
Chairperson and Commissioner
Ethics and Anti-Corruption Commission
P.O.  Box 61130 00200 Nairobi, Kenya
Phones:  +254 (0)20-271-7318, (0)20-310-722, (0)729-888-881/2/3
Report corruption online:  https://eacc.go.ke/default/report-corruption/

Contact at “watchdog” organization:

Sheila Masinde
Executive Director
Transparency International Kenya
Phone:  +254 (0)722-296-589
Report corruption online:  https://www.tikenya.org/

Kenya’s 2017 national election was marred by violence, which claimed the lives of nearly 100 Kenyans, a contentious political atmosphere, which pitted the ruling Jubilee Party against the opposition National Super Alliance (NASA), as well as political interference and attacks on key institutions by both sides.  In November 2017, the Kenyan Supreme Court unanimously upheld the October 2017 repeat presidential election results and President Uhuru Kenyatta’s win in an election boycotted by NASA leader Raila Odinga.  In March 2018, President Kenyatta and Odinga publicly shook hands and pledged to work together to heal the political, social, and economic divides highlighted by the election.  The GOK, civil society actors, private sector, and religious leaders are implementing a number of initiatives to promote peace in advance of the next national election in August 2022.

The United States’ Travel Advisory for Kenya advises U.S. citizens to exercise increased caution due to the threat of crime and terrorism, and not to travel to counties bordering Somalia and to certain coastal areas due to terrorism.  Due to the high risk of crime, it is common for private businesses and residences to have 24-hour guard services and well-fortified property perimeters.

Instability in Somalia has heightened concerns of terrorist attacks, leading businesses and public institutions nationwide to increase their security measures.  Tensions flare occasionally within and between ethnic communities in Kenya.  Regional conflict, most notably in Ethiopia, Somalia, and South Sudan, sometimes have spill-over effects in Kenya.  There could be an increase in refugees entering Kenya due to drought and instability in neighboring countries, adding to the already large refugee population in the country.

Kenya and its neighbors are working together to mitigate threats of terrorism and insecurity through African-led initiatives such as the African Union Mission in Somalia (AMISOM) and the Eastern African Standby Force (EASF).  Despite attacks against Kenyan forces in Kenya and Somalia, the Government of Kenya has maintained its commitment to promoting peace and stability in Somalia.

In 2021, Kenya’s employed labor force was recorded at 17.4 million.  Kenya’s informal economy is estimated to employ about 80 percent of the work force and to contribute 34 percent to Kenya’s gross domestic product.  Informal enterprises are mainly run by women, have low levels of innovation, lack social security coverage, job security, and low levels of unionization.  Kenya’s constitution mandates that no gender hold more than two-thirds of any positions in all elective or appointive bodies.  Gender balance and regional inclusivity are key facets of public appointments.  The Government of Kenya has not, however, ensured regional inclusivity in its appointments and public service human capital reports show dominant regional communities in appointments.  The gender mandate is not mandatory for private sector companies.  The private sector, however, has been instrumental in advancing gender balance in its work force composition.  NSE-listed companies have 36 percent female board representations.

The Government of Kenya mandates local employment in the category of unskilled labor.  The Kenyan government regularly issues permit for key senior managers and personnel with special skills not available locally.  For other skilled labor, any enterprise, whether local or foreign, may recruit from outside if the required skills are not available in Kenya.  However, firms seeking to hire expatriates must demonstrate that they conducted an exhaustive search to find persons with the requisite skills in Kenya and were unable to find any such persons.  The Ministry of EAC and Regional Development, however, has noted plans to replace this requirement with an official inventory of skills that are not available in Kenya.  A work permit can cost up to KES 400,000 (approximately USD 4,000).

Kenya has one of the highest literacy rates in the region at 90 percent.  Investors have access to a large pool of highly qualified professionals in diverse sectors from a working population of over 47.5 percent out of a population of 47.6 million people.  Expatriates are permitted to work in Kenya provided they have a work (entry) permit issued under the Kenya Citizenship and Immigration Act (2011).  In December 2018, the Ministry of Interior and Coordination of National Government Cabinet Secretary issued a directive requiring foreign nationals to apply for their work permits prior to entering Kenya and to confirm that the skill they will provide is unavailable in Kenyan via the Ministry of Labor and Social Protection’s Kenya Labor Market Information System (KLMIS).  KLMIS provides information regarding demand, supply, and skills available in Kenya’s labor market (https://www.labourmarket.go.ke/labour/supply/).  Work permits are usually granted to foreign enterprises approved to operate in Kenya as long as the applicants are key personnel.  In 2015, the Directorate of Immigration Services (DIS) expanded the list of requirements to qualify for work permits and special passes.  Issuance of a work permit now requires an assured income of at least USD 24,000 annually or documented proof of capital of a minimum of USD 100,000 for investors.  Exemptions are available, however, for firms in agriculture, mining, manufacturing, or consulting sectors with a special permit.  International companies have complained that the visa and work permit approval process is slow, and some officials request bribes to speed the process.  Since 2018, the DIS has more stringently applied regulations regarding the issuance of work permits.  As a result, delayed or rejected work permit applications have become one of the most significant challenges for foreign companies in Kenya.

A company holding an investment certificate granted by registering with KenInvest and passing health, safety, and environmental inspections becomes automatically eligible for three class D work (entry) permits for management or technical staff and three class G, I, or J work permits for owners, shareholders, or partners.  More information on permit classes can be found at https://kenya.eregulations.org/menu/61?l=en.

According to the Kenya National Bureau of Statistics (KNBS), in 2019, the formal sector, excluding agriculture, employed 18.1 million people, with nominal average earnings of KES 778,248 (USD 7,780) per person per annum.  Kenya has the highest rate of youth joblessness in East Africa.  According to the 2019 census data, 5,341,182 or 38.9 percent of the 13,777,600 youths eligible to work are jobless.  Employment in Kenya’s formal sector was 2.9 million in 2019 up from 2.8 million in 2018.  The government is the largest employer in the formal sector, with an estimated 865,200 government workers in 2019.  In the private sector, agriculture, forestry, and fishing employed 296,700 workers while manufacturing employed 329,000 workers.  However, Kenya’s large informal sector – consisting of approximately 80 percent of the labor force – makes accurate labor reporting difficult.

The GOK has instituted different programs to link and create employment opportunities for the youth, published weekly in GOK’s “MyGov” newspaper insert.  Other measures include the establishment of the National Employment Authority which hosts the National Employment Authority Integrated Management System website that provides public employment service by listing vacancies ( https://neaims.go.ke/).  The Kenya Labour Market Information System (KLMIS) portal (https://www.labourmarket.go.ke/), run by the Ministry of Labour and Social Protection in collaboration with the labor stakeholders, is a one-stop shop for labor information in the country.  The site seeks to help address the challenge of inadequate supply of crucial employment statistics in Kenya by providing an interactive platform for prospective employers and job seekers.  Both local and foreign employers are required to register with National Industrial Training Authority (NITA) within 30 days of operating.  There are no known material compliance gaps in either law or practice with international labor standards that would be expected to pose a reputational risk to investors.  The International Labor Organization has not identified any material gaps in Kenya’s labor law or practice with international labor standards.  Kenya’s labor laws comply, for the most part, with internationally recognized standards and conventions, and the Ministry of Labor and Social Protection is currently reviewing and ensuring that Kenya’s labor laws are consistent with the constitution.  The Labor Relations Act (2007) provides that workers, including those in export processing zones, are free to form and join unions of their choice.

Collective bargaining is common in the formal sector but there is no data on the percentage of the economy covered by collective bargaining agreements (CBA).  However, in 2019 263 CBAs were registered in the labor relations court with the Wholesale and Retail trade sector recording the most, at 88.  The law permits workers in collective bargaining disputes to strike but requires the exhaustion of formal conciliation procedures and seven days’ notice to both the government and the employer.  Anti-union discrimination is prohibited, and the government does not have a history of retaliating against striking workers.  The law provides for equal pay for equal work.  Regulation of wages is part of the Labor Institutions Act (2014), and the government has established basic minimum wages by occupation and location.

The GOK has a growing trade relationship with the United States under the AGOA framework which requires compliance with labor standards.  The Ministry of Labor is reviewing its labor laws to align with international standards as labor is also a chapter in the Free Trade Agreement negotiations with the U.S.  In 2019, the government continued efforts with dozens of partner agencies to implement a range of programs for the elimination of child and forced labor.  However, low salaries, insufficient resources, and attrition from retirement of labor inspectors are significant challenges to effective enforcement.  Employers in all sectors routinely bribe labor inspectors to prevent them from reporting infractions, especially regarding child labor violations.

*Host Country Statistical Source: Central Bank of Kenya, Foreign Investment Survey 2020  

Table 3: Sources and Destination of FDI
Data not available.

Table 4: Sources of Portfolio Investment
Data not available.

The Government of Lesotho (GOKL) is generally open to FDI and successive governments have tried to attract FDI as a key component of national development. However, recent years have seen increasing critiques in Lesotho’s press and politics of foreign investors who repatriate their profits rather than reinvesting in Lesotho. This has resulted in a series of populist polices and policy proposals intended to protect opportunities for local investors and entrepreneurs, but which may inadvertently dampen Lesotho’s attractiveness as a destination for foreign investment. Lesotho follows World Trade Organization (WTO) laws and regulations, but local law makes some distinctions between local and foreign investors in some industries (see “Limits on Foreign Control and Right to Private Ownership and Establishment”).

Lesotho’s investment promotion agency, the Lesotho National Development Corporation (LNDC), is responsible for the initiation, facilitation, and promotion of Lesotho as an attractive investment destination.  LNDC also undertakes investment project appraisals, provides pre-investment and after-care services, risk management, trade and investment research, and strategic planning.  It also ensures investors’ compliance with the country’s legal frameworks.  Through LNDC, the government actively encourages investment in manufacturing, mining, and agriculture sectors. LNDC also implements the country’s industrial development policies.

LNDC provides the support services described above to foreign investors and regularly publishes information on investment opportunities and the services it offers to foreign investors.  Furthermore, LNCDC offers incentives such as long-term loans, tax incentives, factory space at discounted rental rates, assistance with work permits and licenses, and logistical support for relocation.  LNDC maintains an ongoing dialogue with foreign and domestic investors by attending annual trade and investment forums both locally and internationally. In August 2020 to March 2021, the government launched the LNDC COVID-19 Partial Guarantee Scheme. To date, USD 2.1 million were approved to assist businesses to mitigate the impacts of COVID-19. For, more information on LNDC, please visit:  http://www.lndc.org.ls  . 

Lesotho is open to foreign investment and there are no economy-wide restrictions applied to foreign ownership and control. However, GOKL has passed laws and regulations intended to limit foreign ownership to large scale businesses in complex sectors while reserving small scale businesses in designated sectors exclusively for the indigenous citizens of Lesotho (“Basotho”). The Trading Enterprises Regulations of 2011 (TER 2011) and the Business Licensing and Registration Regulations of 2020 (BLRR 2020) reserve certain businesses for Basotho and limit foreign investors to operating these businesses as minority shareholders with a maximum of 49 percent shareholding. The reserved 47 businesses include acting as an agent of a foreign firm, barber, butcher, snack-bar operator, domestic fuel dealer, dairy shop proprietor, general café or dealer, greengrocer, broker, mini supermarket (floor area < 250m2), and hair and beauty salon.  Most businesses affected by these regulations are micro or small enterprises, but some mid-sized foreign owned firms will be affected. In 2021, the government amended the BLRR 2020 to allow foreign investors to continue to operate in the used motor dealership sector following a low number of Lesotho citizens willing to venture into the sector which requires high capital.

The Business Licensing and Registration Act 2019 (BLRA 2019) requires foreign investors to provide a capital of $123,152 or provide proof of investment of $123,152 during registration or renewal of their traders’ licenses or to have deposited $123,152 with a local institution. However, the Central Bank of Lesotho Act of 2000 stipulates a foreign investment minimum threshold of $250,000.  While pleased that the new law indicates a reduction in the minimum sum that they must invest, many foreign investors are concerned that this discrepancy was not clarified in the BLRA 2019 legislation.

BLRA 2019 requires foreign investors to renew their business identification card annually while locals are only required to renew their business identification cards after three years. Some foreign entrepreneurs operating in Lesotho have complained that the process of renewing their business identification cards annually is extremely onerous. BLRA 2019 also requires foreign investors to transfer technology and business expertise to local investors. Many foreign entrepreneurs operating in Lesotho complain that this requirement is poorly articulated and arbitrarily enforced.

The Mines and Minerals Act No.4 of 2005 restricts mineral permits for small-scale mining operations on less than 100m2 to local ownership.  Diamond mining, regardless of the size of the operation, is subject to the large-scale mines licensing regime, which has no restrictions on foreign ownership; however, GOKL reserves the right to acquire at least 20-35 percent ownership in any large-scale mine.  By law, the Ministry of Trade and Industry is instructed to screen foreign investments in a routine, nondiscriminatory manner to ensure consistency with national interests.

Cabinet approved Lesotho’s investment policy and it became law in early 2016.  The United Nations Conference on Trade and Development assisted with the development of the policy. (UNCTAD)   http://unctad.org/en/pages/PublicationArchive.aspx?publicationid=503  

The government has undertaken investment policy reviews in 2020 with the assistance of UNCTAD.

In 2016, the government launched a “One Stop Business Facilitation Centre” (OBFC), to make it easier to do business and facilitate FDI. OBFC places all services required for the issuance of licenses, permits, and imports and exports clearances under one roof.  The portal provides transparency and predictability to trade transactions and reduces the time and cost of trading across borders. The OBFC web site is  http://www.obfc.org.ls/business/default.php  . 

The process of company registration includes: a work permit application with the Ministry of Labor and Employment, a visa application and resident permit with the Ministry of Home Affairs, a trader’s license with the Ministry of Trade and Industry, tax clearance with Lesotho Revenue Authority, a police clearance with the Ministry of Police and Public Safety, the Certificate of Occupancy with Maseru City Council and a medical clearance with the Ministry of Health.

In November 2020, the OBFC held a twin launch of e-Regulations and e-Licensing. The e-Regulations provides a clear step by step process to register a business. This also stipulates requirements, costs, time and contact details for registering a business. The e-Licensing allows foreign investors to apply online for obtaining a business license. This initiative has reduced instances of fraud and manipulation. It takes a maximum of 3 days to issue both industrial and traders licenses. For more information on e -licenses, please visit: www.Lesotho.elicenses.org . For more information on e-regulations please visit: http://www.lesotho.eregulations.org  .

Lesotho provides incentives to investors who export outside the country. Export manufacturers obtain a full rebate of customs duty paid on their inputs imported to produce for markets outside Southern African Customs Union (SACU). The government does not restrict domestic investors from investing abroad.

The government facilitates quality standard processes and export permits for outward investment.  For AGOA exports, the Ministry of Trade and Industry, LNDC, and Lesotho Revenue Authority provide support including on export requirements.  Other agencies such as the U.S. Agency for International Development Southern Africa Trade Hub provide capacity to the government for the implementation of AGOA.  The government has assigned Lesotho Standards Authority to assist investors who export to the Republic of South Africa (RSA).

In Lesotho, responsible business conduct (RBC) is understood as technical business culture which adheres to environmental, social and governance principles that improve the ease of doing business, levels the playing field and manages risk to attract and keep investors. There is a general awareness of RBC and corporate social responsibility among both producers and consumers.  The government maintains and enforces domestic laws with respect to labor and employment rights, consumer protections, and environmental protections.  Labor laws and regulations are rarely waived in order to attract investment, and the government does not compromise on environmental laws.

The Government of Lesotho through the LNDC (which is the Government of Lesotho’s Investment Promotion Agency) subscribes and implements globally accepted due diligence standards as prescribed by the OECD as well as UNCTAD. The government through the assistance of UNCTAD reviewed Lesotho Investment Policy of 2003 and has developed the Investment Policy of 2016. Foreign and local enterprises tend to follow generally accepted corporate social responsibility principles such as those contained in OECD Guidelines for Multinational Enterprises and the United Nations’ Guiding Principles on Business and Human Rights.  Firms that pursue CSR are viewed favorably by society, but CSR does not necessarily provide any advantages in dealing with the government.

The country has limited tools to protect human rights, labor rights, consumer rights and the environment. The Labor Court has been established to address labor issues. The Consumer Protection Unit is established under the Ministry of Trade and Industry. However, the offices of this unit are only available in one district. The country is yet to establish Human Rights Commission and the Tribunal on Environment matters.

The Lesotho Companies Act of 2011 provides for standard and adaptable requirements for incorporation, organization, operation, and liquidation of companies to encourage efficient and responsible management of companies to protect shareholders and other key stakeholders. Furthermore, the government has assisted the Lesotho Institute of Directors (IoD) in the development of the Mohlomi Corporate Governance Code sponsored by the African Development Bank (ADB). The code was launched in September 2021. This code will provide universal best practices guidance for good corporate governance for Lesotho.

The IoD promotes and monitors responsible business conduct. The local NGO, the Transformation Resource Centre (TRC), also monitors and advocates for responsible business conduct.

Although Lesotho has an extractive/mining industry, it does not participate in the Extractive Industries Transparency Initiative (EITI), since it does not extract/produce any of the minerals supported through the initiative.

Additional Resources

Department of State

Country Reports on Human Rights Practices;

Trafficking in Persons Report;

Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;

U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;

Xinjiang Supply Chain Business Advisory

Department of the Treasury

OFAC Recent Actions

Department of Labor

Findings on the Worst Forms of Child Labor Report;

List of Goods Produced by Child Labor or Forced Labor;

Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;

Comply Chain

Climate Issues

The Government of the Kingdom of Lesotho (GOKL) has a climate Change Strategy. In 2018, the governemnt prepared the Nationally Determined Contribution (NDC) which sets a 35 % reduction target in Green House Gases (GHG) emission by 2030. The private sector is expected to reduce net GHG emissions by 10% by 2030. The GOKL developed its National Climate Change Policy (NCCP) 2017-2027 to preserve biodiversity. Lesotho’s procurement policies do not include environmental or green growth considerations.

Lesotho’s Directorate on Corruption and Economic Offences (DCEO) is mandated to prevent and to combat corruption.  The country has laws, regulations, and penalties to combat corruption of public officials.  Parliament passed anticorruption legislation in 1999 that provides criminal penalties for official corruption.  The DCEO is the primary anticorruption organ and investigates corruption complaints against public sector officials.  The Amendment of Prevention of Corruption and Economic Offences Act of 2006 enacted the first financial disclosure laws for public officials.  On February 5, 2016, the government issued regulations to initiate implementation of the financial disclosure laws for public officials who must file their declarations annually by April 30.  The law may also be applied to private citizens if deemed necessary by the DCEO.  The law prohibits direct or indirect bribery of public officials, including payments to family members of officials and political parties.  On June 25, 2020, the parliament passed the amendment on Prevention of Corruption and Economic Offences Act of 2006, which will allow the DCEO to investigate money laundering issues beyond national boundaries. This amendment provides the DCEO with the power to work together with similar institutions from other countries in combating corruption.

The Money Laundering and Proceeds of Crime Act of 2008 (amended in 2017) and Public Financial Management and Accountability Act of 2011 serve as additional anti-corruption laws.  The Prevention of Corruption and Economic Offences Act (section 14 (1)) and Public Procurement Regulations of 2007 have provisions that address conflicts-of-interest in awarding government procurement contracts.  Section 6 (g) (h) (i) of the Prevention of Corruption and Economic Offences Act of 1999 encourages private companies to develop internal controls to prevent corruption.  Corruption is most pervasive in government procurement, awarding licenses, and customs fraud.

While the GOKL has made significant efforts to implement its laws, many officials continue to engage in corruption with impunity.  The DCEO claims it cannot effectively undertake its mission because it lacks adequate resources. The country does not have instruments to protect NGOs investigating corruption. Corruption is pervasive in government procurement, provision of licenses, work permits, and residence permits. The 2020 Afrobarometer survey reflected increasing perceptions of government official corruption from 28% in 2017 to 46% in 2020. The study also showed increasing perception of members of parliament corruption increasing from 22% in 2017 to 45% in 2020.

To prevent corruption and economic offences, the DCEO encourages companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials.  Many companies have effective internal controls, ethics, and programs to detect and prevent bribery.

No U.S. firms have identified corruption as an obstacle to foreign direct investment in Lesotho.  Giving or accepting a bribe is a criminal act under the Prevention of Corruption and Economic Offences Act of 2006, the penalty for which is a minimum of 10,000 maloti (USD 667) or 10 years imprisonment.  Local companies cannot deduct a bribe to a foreign official from taxes.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Lesotho acceded to the UN Anticorruption Convention in 2005, but it is not yet a signatory to the OECD Convention on Combating Bribery.  Lesotho acceded to the African Union Convention on Preventing and Combating Corruption in 2003.  The country is also a member of the Southern African Development Community Protocol against corruption, the Southern African Forum against corruption, the African Peer Review Mechanism (APRM), and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG).

Contacts at government agency or agencies that are responsible for combating corruption:

Sefako Seema
Prosecutor
DCEO

or

Mamello Mafelesi
Prosecutor
DCEO

P.O.  Box 16060, Maseru
100 Lesotho +266
2231-3713  info@dceo.org.ls 

Since 2012, Lesotho has been governed through coalition governments which did not last beyond three years resulting in snap elections.  In April 2020, the National Assembly passed the Ninth Amendment to the Constitution which curtailed the Prime Minister’s power to call snap elections. (Note: The constitution states that elections should be held every five years and the next elections are scheduled for October 2022. End Note.) The impulsion of the main political party in the current coalition has left the National Assembly increasingly polarized, and the political environment is very unpredictable.

On May 14, 2021, textiles factory workers country-wide engaged on a massive violent protest which claimed two lives. They blocked roads and vandalized the buildings to put pressure on the government to publish 2020 and 2021 gazettes. The workers requested wages to be increased by 20 percent while employers offered to provide an increase between 3 and 5 percent. On June 7, the workers ended their three weeks protest following Lesotho Textile Exporter’s Association (LTEA) letter of June 4 to the trade unions which warned workers would be dismissed for participating in an illegal protest. On June 16, the government published a gazette on minimum wage increase reflecting 14 percent increment for the textiles workers and 9 percent for other private sector workers for the 2021/22 financial year. The increment was implemented with effect on July 1.

Lesotho’s 2019 Labor Force Survey reflected official unemployment rate as 22.5 percent and youth unemployment at 29.1 percent. The report reflected the formal sector represented 41.1 percent of the of the total employment while the informal sector and household sector represented 40.5 percent and 18.4 percent, respectively. Males constituted 52.8 percent of those employed while females constituted 47.2 percent. About 77.3 percent of international migrant workers were females working in elementary occupations. The report reflected most international migrants were from South Africa, followed by Zimbabwe and China.

Lesotho has embarked on its first Critical Skills Assessment survey to determine skills surplus and shortage. The results of the survey will be released in June. The data from the Ministry of Labor and Employment reflected engineers, doctors, and academia represented scarce skills while lawyers, teachers, nurses, and business administrators are considered to be surplus skills.

The IMF estimated the informal economy comprises of 30 percent of the Gross Domestic Product (GDP). Informal sector constitutes companies that are not registered and do not pay taxes. The informal economy is characterized by labor standards deficits. There are no employment contracts or formal relationships. The government has not enforced the formal registration of these businesses.

Collective bargaining is not yet a commonly practiced phenomenon. In the private sector, there are very few trade unions and even where they exist the law does not require that collective bargaining agreements should be registered. The majority of active unions are in the textile and manufacturing sector however, they do not have the capacity to bargain with employers.

To address this shortfall, the Ministry has included legal provisions relating to the establishment of bargaining councils in the Labor Code Draft Bill section 135.

During the reporting period the textiles factory workers and nurses embarked on strikes. Issues of gender-based violence and harassment (GBVH) were reported in one textile factory. The Ministry of Labor together with social partners have decided to ratify the International Labor Organization (ILO) Convention 190 on gender-based violence and harassment as a first step towards ensuring that frameworks are reviewed to adequately address GBV in the workplace.

The International Labor Organization has identified gaps in the following international labor standards:

ILO Freedom of Association and Protection of the Right to Organize Convention No. 87: the ILO requested the Public Service Act to be amended to ensure public officers can establish and join federations and confederations and affiliate with international organizations.

ILO Convention on Minimum Age No. 132 requires member states to set completion of free and compulsory primary education at 15 years in line with the minimum age into employment to close the gap between minimum age of employment and completion of primary education. In Lesotho, the completion of primary education is at 13 years of age.

The Labor Code Order of 1992 and the Constitution of 1993 require hiring of citizens; however, non-citizens can be hired with a work permit. The Labor Code No. 24 of 1992 Section 79 (2) only puts a restriction on employees who have been fairly dismissed for misconduct that they are not entitled to claim for payment of severance upon termination of their contract of employment. Furthermore, the Labor Code (Code of Good Practice) Notice, 2003 provides for fair dismissals and grounds that may warrant for dismissals and layoffs.

In Lesotho there are currently no economic zones; however, the law permits waivers in order to attract investment. The law provides for freedom of association and the right to bargain collectively.

The country has various labor dispute resolution mechanisms in place.  This includes both formal and informal mechanisms.  LNDC is one key institution that deals with labor disputes.  For example, LNDC intervenes in strikes and tries to reconcile workers and employers.  When this informal process fails, the more formal process of the Directorate of Dispute Prevention & Resolution (DDPR) can be engaged which can consist of conciliation and arbitration.  The Labor Code Amendment Act of 2000 established the DDPR, which serves as a semi-autonomous labor tribunal independent of the government, political parties, trade unions, and employers and employer organizations.  The Labor Court and the Labor Court of Appeal are the key judiciary entities dealing with labor disputes. The Labor Court reviews the decisions of the DDPR while the Labor Appeal Court reviews the decisions of the Labor Court.

* Source for Host Country Data: Central Bank of Lesotho

Table 3: Sources and Destination of FDI

Data not available.

The Government of Liberia describes the country as “open for business” and supports programs and initiatives to foster commerce, including an ad hoc Business Climate Working Group (BCWG)  to improve the investment climate. During Liberia’s National Judicial Conference  in June 2021, President George Weah  called on the Judiciary to partner with agencies on reforms to improve the investment climate. The BCWG, chaired by the Minister of Finance and Development Planning, collaborates with the Ministry of Commerce and Industry , Liberia Business Registry (LBR) , National Investment Commission (NIC) , and Liberia Revenue Authority (LRA) . The National Investment Commission (NIC) is Liberia’s investment promotion agency. It develops investment strategies, policies, and programs to attract foreign investment and negotiates investment contracts and concessions. The NIC oversees the implementation of Liberia’s 2010 Investment Act and chairs an ad hoc Inter-Ministerial Concession Committee (IMCC). In 2021, the NIC became a member of the World Association of Investment Promotion Agencies (WAIPA)  See link ( https://waipa.org/members/ ). It also participates in the African Investment Promotion Agencies (IPAs)  Forum.

In practice, however, the government does much to discourage investors and investment. Some business leaders report it is difficult even to meet with government representatives to discuss new investment or policies damaging to the business climate. A weak legal and regulatory framework, lack of transparency in contract awards, and widespread corruption inhibit foreign direct investment. Investors are often treated as opportunities for graft, and government decisions affecting the business sector are driven more by political cronyism than investment climate considerations. Many businesses find it easy to operate illegally if the right political interests are being paid, whereas those that try to follow the rules receive little if any assistance from government agencies. The Investment Act restricts market access for foreign investors, including U.S. investors, in certain economic sectors or industries. See “Limits on Foreign Control and Right to Foreign Ownership and Establishment” below for more detail.

Foreign and domestic private entities may own and establish business enterprises in many sectors. The Liberian constitution restricts land ownership to citizens, but non-Liberians may hold long-term leases to land. Examples are rubber, oil palm, and logging concessions that cover a quarter of Liberia’s total land mass. See Real Property, below, for further details.

The National Investment Commission is the oversight agency to screen and monitor investments. The Investment Act and Revenue Code mandate that only Liberian citizens may operate businesses in the following sectors and industries, but it is not clear to what degree this mandate is enforced:

1. Supply of sand
2. Block making
3. Peddling
4. Travel agencies
5. Retail sale of rice and cement
6. Ice making and sale of ice
7. Tire repair shops
8. Auto repair shops with an investment of less than USD 550,000
9. Shoe repair shops
10. Retail sale of timber and planks
11. Operation of gas stations
12. Video clubs
13. Operation of taxis
14. Importation or sale of second-hand or used clothing
15. Distribution in Liberia of locally manufactured products
16. Importation and sale of used cars (except authorized dealerships, which may deal in certified used vehicles of their make)

The Investment Act also sets minimum capital investment thresholds for foreign investors in other business activities, industries, and enterprises. (See Section 16 of the Act: http://www.moci.gov.lr/doc/TheInvestmentActof2010(1).pdf .) For enterprises owned exclusively by non-Liberians, the Act requires at least USD 500,000 in investment capital. For foreign investors partnering with Liberians, the Act requires at least USD 300,000 in total capital investment and at least 25 percent aggregate Liberian ownership.

All businesses must register with the  Liberia Business Registry (LBR)  to conduct business or provide services in Liberia.

Investment contracts, such as concessions, are reviewed by the Inter-Ministerial Concessions Committee (IMCC). Concessions are ratified by the national legislature and approved by the president. Businesses register with the Liberia Revenue Authority (LRA) for taxes and the National Social Security and Welfare Corporation (NASSCORP) for social security.

It is possible for foreign companies to obtain investment incentives through the National Investment Commission. In 2021, two companies, Mano Manufacturing Company and Jetty Rubber LLC, received long-term investment incentives, according to NIC’s 2021 Annual Report. Foreign companies must use local counsel when establishing a subsidiary. If the subsidiary will engage in manufacturing and international trade, it must obtain a trade license from the LBR. For more information about investment laws, bilateral investment treaties, and other treaties with investment provisions, see:  https://investmentpolicy.unctad.org/country-navigator/121/liberia .

Liberia is a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting and a party to the Inclusive Framework’s October 2021 deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax.

The government neither promotes nor incentivizes outward investment but it does not restrict Liberian citizens from investing abroad.

Liberian authorities have not clearly defined responsible business conduct (RBC). The Liberian Environmental Protection Agency (EPA), however, includes RBC requirements in policies such as the National Disaster Risk Reduction and Resilience Strategy (2020-2030), the National Climate Change Response Strategy (2018), and the National Adaptation Plan (2020-2030).   Foreign companies are encouraged, but not required, to publicly disclose their policies, procedures, and practices to highlight their RBC practices.

Some non-governmental organizations (NGOs), civil society organizations (CSOs), and workers organizations/unions promote or monitor foreign company RBC policies and practices. However, NGOs and CSOs monitoring or advocating for RBC do not conduct their activities in a structured and coordinated manner, nor do they tend to monitor locally owned companies.

Most Liberians are generally unaware of RBC standards.  Generally, the government expects foreign investors to offer social services to local communities and contribute to a government-controlled social development fund for the area in which the enterprise conducts its business. Some communities complain that these contributions to social development funds do not reach them.  The government frequently includes clauses in concession agreements that oblige investors to provide social services such as educational facilities, health care, and other services which other governments typically provide. Foreign investors have reported that some local communities expect benefits in addition to those outlined in formal concession agreements.

Liberia is a member of the Extractive Industries Transparency Initiative (EITI). The National Bureau of Concessions monitors and evaluates concession company compliance with concession agreements, but it does not design policies to promote and encourage RBC. Some NGOs report that several concessions have violated human or labor rights, including child labor and environmental pollution. Liberia has several private security companies, but the country is not a signatory to the Montreux Document on Private and Security Companies. Private security companies are regulated by the Ministry of Justice, and they perform a range of tasks such as providing security or surveillance to large businesses, international organizations, diplomatic missions, and some private homes.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Liberia ratified the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol in 2002. In 2018, Liberia ratified the Paris Agreement and adopted the Liberia National Policy and Response Strategy on Climate Change. Liberia released its revised Nationally Determined Contribution in 2021, when it committed to reducing economy-wide greenhouse gas emissions by 64 percent below business-as-usual levels by 2030. The revised NDC targets nine sectors: Agriculture, Forests, Coastal zones, Fisheries, Health, Transport, Industry, Energy, and Waste. Liberia’s Environmental Protection Agency (EPA) maintains a director of climate finance instruments eligible for Liberia that can be used for public or private sector projects. Liberia has been working with national and international development partners since 2008 to reform its forestry sector and is currently implementing Reducing Emissions from Deforestation and Forest Degradation (REDD+) readiness activities, which include a National Forest Inventory, and institutionalizing its National Forest Monitoring System. In 2019, Liberia set up its Safeguard Information System , a free public web-based platform hosted by the EPA to provide information on how social and environmental safeguards are being addressed. However, the site does not appear to be updated regularly.

Liberia has laws against economic sabotage, mismanagement of funds, bribery, and other corruption-related acts, including conflicts of interest. However, Liberia suffers from corruption in both the public and private sectors. The government does not implement its laws effectively and consistently, and there have been numerous reports of corruption by public officials, including some in positions of responsibility for fighting corrupt practices. On December 9, 2021, the United States Treasury Department sanctioned Nimba County Senator Prince Yormie Johnson under the Global Magnitsky Act for personally enriching himself through pay-for-play funding schemes with government ministries and organizations. In 2021, Liberia ranked 136 out of 180 countries on Transparency International’s Corruption Perception Index . See http://www.transparency.org/research/cpi/overview .

The  Liberia Anti-Corruption Commission     (LACC) currently cannot directly prosecute corruption cases without first referring cases to the  Ministry of Justice     (MOJ) for prosecution. If the MOJ does not prosecute within 90 days, the LACC may then take those cases to court, although it has not exercised this right to date. The LACC continues to seek public support for the establishment of a specialized court to exclusively try corruption cases.

In October 2021 the Liberia Anti-Corruption Commission (LACC), with the Swedish International Development Cooperation Agency (SIDA) and the United Nations Development Program (UNDP), launched “The Anti-Corruption Innovation Initiative Project.” LACC will hire at least 15 officers around the country who will report on corruption to the LACC. LACC is also developing a national digital platform for the public to report corruption.

Foreign investors generally report that corruption is most pervasive in government procurement, contract and concession awards, customs and taxation systems, regulatory systems, performance requirements, and government payments systems.  Multinational firms often report paying fees not stipulated in investment agreements. Private companies do not have generally agreed and structured internal controls, ethics, or compliance programs to detect and prevent bribery of public officials. No laws explicitly protect NGOs that investigate corruption.

Liberia is signatory to the Economic Community of West African States (ECOWAS) Protocol on the Fight against Corruption, the African Union Convention on Preventing and Combating Corruption (AUCPCC), and the UN Convention against Corruption (UNCAC), but Liberia’s association with these conventions has done little to reduce rampant government corruption.

Contact at government agencies responsible for combating corruption:

Baba Borkai, Chief Investigator
Liberia Anti-Corruption Commission (LACC), Monrovia,  http://lacc.gov.lr/   bborkai@lacc.gov.lr
Tel: (+231) 777-313131
Email:  bborkai@lacc.gov.lr 

Contact at a “watchdog” organization (local or nongovernmental organization operating in Liberia that monitors corruption):

Anderson Miamen, Executive Director
Center for Transparency and Accountability in Liberia (CENTAL)
Tel: (+231) 886-818855
Email:  admiamen@gmail.com 

President Weah’s inauguration in January 2018 marked the first peaceful transfer of power in Liberia from one democratically elected president to another since 1944. International and domestic observers have said midterm senatorial and special elections since then have been largely peaceful, although there were reported instances of vote tempering, election violence, intimidation, and harassment of female candidates. Liberia’s relatively free media landscape has led to vigorous pursuit of civil liberties, resulting in active, often acrimonious political debates, and organized, non-violent demonstrations. Liberia adopted a press freedom law in 2019, but there have been reports and instances of violence and harassment against the media and journalists. Numerous radio stations and newspapers distribute news throughout the country. The government has identified land disputes and high rates of youth and urban unemployment as potential threats to security, peace, and political stability.

The United Nations Mission in Liberia (UNMIL), a peacekeeping force, withdrew from Liberia in March 2018 and turned over responsibility for security to the government. Protests and demonstrations may occur with little warning. The Armed Forces of Liberia and law enforcement agencies, including the Liberia National Police (LNP) , Liberia Immigration Service (LIS) , and Liberia Drug Enforcement Agency (LDEA) , maintain security in the country. There are also many private security firms. Most security personnel are in the capital city Monrovia and other urban areas. The effectiveness of soldiers and police is limited by lack of money and poor infrastructure.

With a literacy rate of just under 50 percent, much of the Liberian labor force is unskilled.  Most Liberians, particularly those in rural areas, lack basic vocational or computer skills.  Liberia has no reliable data on labor force statistics, such as unemployment rates.  Government workers comprise the majority of formally employed Liberians.

An estimated four out of five Liberian workers engage in “vulnerable” or “informal” employment. Many work in difficult and dangerous conditions that undermine their basic rights.  The Ministry of Labor (MOL) largely attributes high levels of vulnerable and informal employment to the private sector’s inability to create employment.  There is an acute shortage of specialized labor skills, particularly in medicine, information and communication technology, and science, technology, engineering, and mathematics (STEM). Migrant workers are employed throughout the country, particularly in service industries, artisanal diamond and gold mining, timber, and fisheries.

The predominantly female workers who sell in markets and on the streets face significant challenges, including a lack of access to credit and banking services, limited financial literacy and business training, few social protections or childcare options, harassment from citizens and local authorities, and poor sanitation within marketplaces. Through the Bureau of Small Business Administration (SBA) at the Ministry of Commerce and Industry, businesses owned by female informal workers are being formalized using a “one-stop shop” registration mechanism. Development partners are also designing programs aimed at empowering women businesses and entrepreneurs.

Liberia’s labor law, the 2015 Decent Work Act, gives preference to employing Liberian citizens, and most investment contracts require companies to employ a defined percentage of Liberians, including in top management positions. In 2021, the Ministry of Labor issued an order that restricts certain employment opportunities in commercial business establishments with branches in Monrovia and other parts of the country to Liberians. The order was the result of a memorandum of understanding between the Ministry of Labor and the Liberia Chamber of Commerce  calling for the creation of five hundred jobs for new college and university graduates.

Foreign companies often report difficulty finding local skilled labor. Child labor is a problem, particularly in extractive industries. The Decent Work Act guarantees freedom of association and gives employees the right to establish labor unions. Employees can become members of organizations of their own choosing without prior authorization. Workers, except for civil servants and employees of state-owned enterprises, are covered by the Act.  The Act allows workers’ unions to conduct activities without interference by employers. It also prohibits employers from discriminating against employees because of membership in or affiliation with a labor organization. Unions are independent from the government and political parties.  Employees, through their associations or unions, often demand and sometimes strike for better compensation. When company ownership changes, workers sometimes seek payment of obligations owed by previous owners or employers.

The Decent Work Act provides that labor organizations, including trade or employees’ associations, have the right to draw up constitutions and rules regarding electing representatives, organizing activities, and formulating programs.

There were no major labor union-related negotiations affecting workers or the labor market during 2021.

While the law prohibits anti-union discrimination and provides for the reinstatement of workers dismissed because of union activities, it allows for dismissal without cause provided the company pays statutory severance packages. The Decent Work Act sets out fundamental rights of workers and contains provisions on employment and termination of employment, minimum conditions of work, occupational safety and health, workers’ compensation, industrial relations, and employment agencies.  It also provides for periodic reviews of the labor market as well as adjustments in wages as the labor conditions dictate. The government does not waive labor laws to attract or retain investment, but the National Investment Commissions (NIC) provides investment incentives based on economic sectors and geographic areas (see Investment Incentives in section 4 above).

The MOL does not have an adequate or effective inspection system to identify and remedy labor violations and hold violators accountable. It lacks the capacity to effectively investigate and prosecute unfair labor practices, such as harassment or dismissal of union members or instances of forced labor, child labor, and human trafficking.

The Libyan government’s efforts to attract FDI, primarily through the PIB and NOC, are relatively recent. Until the 1990s, FDI was only permitted in the oil sector through sovereign contracts to which the state was a party. A number of foreign investment laws were passed in subsequent years to encourage and regulate FDI, culminating in “Law No. 9 of the year 1378 PD (2010) Regarding Investment Promotion” (known as the 2010 Investment Law). Though promulgated prior to Libya’s 2011 revolution, the law remains in effect. This new law lifted many FDI restrictions and provided a series of incentives to qualifying investments, such as tax and customs exemptions on equipment, a five-year income tax exemption, a tax exemption on reinvested profits and exemptions on production tax expert fees for goods produced for export markets. It also allowed for investors to transfer net profits overseas, defer losses to future years, import necessary goods, and hire foreign labor if local labor was unavailable. Foreign workers may acquire residency permits and entry reentry visas for five years and transfer earnings overseas.

The law regulates the establishment of foreign-owned companies and the setting up of branches in representative offices. Branches are allowed to be opened in a large number of sectors, including: construction for contracts over LYD 50 million; electricity works; oil exploration; drilling and installation projects; telecommunications construction and installation; industry; surveying and planning; installation and maintenance of medical machines and equipment; and hospital management. However, the investment law restricts full foreign ownership of investment projects to projects worth over LYD 5 million, except in the case of limited liability companies, and requires 30 percent of workers to be Libyan nationals and to receive training. Foreign investors are prevented from owning land or property in Libya and are allowed only the temporary leasing of real estate. Investment in “strategic industries” – in particular, Libya’s upstream oil and gas sector, which is controlled by the NOC – requires a foreign entity to enter into a joint venture with a Libyan firm that will retain a majority stake in the enterprise. It is not clearly defined which industries other than upstream oil and gas may be considered strategic.

The most important investment promotion institution Libya is the PIB, established in 2009 to assume responsibility for the Libyan privatization program and oversee and regulate FDI activities. The PIB’s screening process for incoming FDI to Libya is not clearly defined; the bidding criteria and process for investment are not published or transparent, and it is therefore not clear whether foreign investors have faced discrimination. The PIB states that it reviews bids or proposals for general consistency with Libya’s national security, sovereignty, and economic interest. The Minister of Economy must give final approval to all FDI projects, at the recommendation of the PIB. There is no information available on the timeline of the approval process or any potential outcomes of the process other than an affirmative or negative decision by the PIB or Minister of Economy. The PIB maintains that it keeps all company information confidential. U.S. firms have repeatedly expressed frustration about the slow pace by which the Libyan government makes business-related decisions. Despite these complaints, some U.S. firms have successfully invested in Libya, particularly in the country’s oil and gas sector.

The ownership of real estate in Libya is restricted to Libyan nationals and wholly-owned Libyan companies. The 2010 Investment Law permits the ownership of real estate in Libya by locally established project vehicles of foreign investors. However, such ownership is limited to leasehold ownership only. Foreign investors are allowed lease property from public holdings and private Libyan citizens, according to Article 17 of the 2010 Investment Law. There is considerable ambiguity in both the public and private rental markets; many aspects of these arrangements are left to local officials.

Libya has not undergone any recent investment policy reviews by the OECD, UNCTAD, WTO, or any other international body. Civil society groups have not expressed nor provided any useful reviews of investment policy-related concerns. However, in July 2021, the UN-sponsored audit of the CBL was released to the stakeholders; the audit did include a number of top-level recommendations such as. Please refer to Section 6: Financial Sector – Money and Banking System for more details. Moreover, the Libya Investment Authority is currently being audited by an international accounting firm.

Business registration procedures in Libya are lengthy and complex. The Ministry of Economy is the main institution for processing business registration requirements. The Libyan government does not maintain an online information portal on regulations for new business registration or online registration functionality for registering a new business. There are multiple corporate structures based on the type of business undertaken (e.g. limited liability, joint venture, branch office) and each has specific registration requirements. Some requirements apply to all businesses, including: obtaining a Commercial Register certificate, registering with the Chamber of Commerce and the tax and labor departments, and obtaining a working license. If a company will be importing items, a statistical code will be required. If the company will be obtaining letters of credit in Libya, a Central Bank code will be required. A specialized agent must complete these tasks on behalf of the registering company. For the simplest corporate structure (limited liability with no Central Bank code) the process can take two to three months if the registration agent is familiar with the procedures.

Libya is a member of the Islamic Corporation for the Insurance of Investment and Export Credit, which provides investment and export credit insurance for entities in member states. FDI outflows in 2020 were USD 205 million, compared to USD 2.7 billion in 2010. The Libyan government does not formally promote or incentivize outward investment. Stress in the banking sector has reduced liquidity, and this has negatively affected the ability of Libyan citizens to acquire the hard currency to invest abroad. The advent of a unified exchange rate in January 2021 has, however, facilitated international flow to a certain degree.

There is not a general awareness of, expectation of, or standards for responsible business conduct (RBC) in Libya, nor of businesses’ obligation to proactively conduct due diligence to ensure they are doing no harm (including with regards to environmental, social, and governance issues). The Libyan government has not taken measures to define or encourage RBC, such as promoting the OECD or UN Guiding Principles on Business and Human Rights or establishing a national contact point or ombudsman for stakeholders to get information or raise concerns about RBC. As far as domestic laws exist in relation to human rights, labor rights, consumer protection, environmental protections, and other laws/regulations intended to protect individuals from adverse business impacts, the capacity of the government to enforce these laws is very limited.

Libya is not a signatory of the Montreux Document on Private Military and Security Companies, and is not a participant in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Libya does not have a well-defined national climate strategy. The government has not yet introduced any meaningful policies to reach net-zero carbon emissions by 2050. Moreover, Libya has not yet announced its Nationally Determined Contribution to the UN relevant authority. Libya scores in the bottom three of 148 countries as to efficient and sustainable resource use according to the Global Green Growth Institute.

Although Libya is a signatory to the Paris Climate Accords, it has not yet ratified the accord. Libya also signed the Global Methane Pledge during the COP26 in the United Kingdom. Libya recently reactivated the Renewable Energy Authority of Libya (REAL), which has communicated its plan to include renewable energy sources to contribute 22 percent of power generation by 2030; renewable energy sources currently contribute zero percent of power generation.

Foreign firms have identified corruption as an obstacle to FDI; corruption is pervasive in virtually all sectors of the economy, especially in government procurement. Officials frequently engage with impunity in corrupt practices such as graft, bribery, nepotism, money laundering, human smuggling, and other criminal activities. Although Libyan law provides some criminal penalties for corruption by officials, the government does not enforce the law effectively. Internal conflict and the weakness of public institutions further undermine enforcement. No financial disclosure laws, regulations, or codes of conduct require income and asset disclosure by appointed or elected officials.

The Libyan Audit Bureau, the highest financial regulatory authority in the country, has made minimal efforts to improve transparency. The Audit Bureau has investigated mismanagement at the General Electricity Company of Libya that had lowered production and led to acute power cuts. Other economic institutions such as the Ministry of Finance and the Central Bank published some economic data during the year.

Libya has signed and ratified the UN Anticorruption Convention. It is not party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Akram Bannur
General Secretary
National Anti-Corruption Commission of Libya
+218 91 335 8583
Bannurakram@outlook.com  

Contact at a “watchdog” organization (international, regional, local or nongovernmental organization operating in the country/economy that monitors corruption, such as Transparency International):

Ibrahim Ali
Chairman
Libyan Transparency International
+218916344442
info@transparency-libya.org  

There is a significant recent history of politically-motivated damage and seizure by force of economic infrastructure and installations, particularly in the oil and gas industry. Most recently, forces allied with Libyan National Army Commander Haftar forced the near-total shutdown of Libya’s energy sector in January 2020, which was eventually lifted in September 2020. The October 2020 ceasefire and the peaceful transfer of power in March 2021 to a unity government has markedly reduced the civil disturbances that had been a daily occurrence. However, militias also shut down Libya’s largest oil field in December 2021. Moreover, due to the postponement of elections (scheduled for December 2021), the political scene is further complicated by questions regarding the tenure of the current interim prime minister, as the House of Representatives nominated a new interim prime minister in February 2022, who to date has not been able to take power. As a result of this instability, rival armed groups have continued to jockey for control over the country’s political institutions and economic resources, which means that insecurity and instability remains a cause for concern.

Libya’s labor market is characterized by a dominant public sector that employs 85 percent of the active labor force in the Libyan economy, according to the World Bank. Just four percent of the labor force works for private firms. The Libyan labor market has many skilled workers with high levels of education, but high public sector wages and benefits result in outsized expectations among job seekers, particularly among the highly-skilled. The World Bank has estimated Libya’s unemployment rate to be around 20 percent, and youth unemployment to be around 50 percent – numbers that, given the already bloated public sector, indicate a lack of private sector jobs for skilled and unskilled Libyans. The World Bank also noted significant “mismatches” between the skills Libyan degree holders possess and those demanded by foreign and domestic employers in Libya. The 2010 Investment Law permits investors to hire foreign workers when national substitutes are not available.

The law does not provide the right for workers to form and join independent unions. Formal sector workers are automatically members of the General Trade Union Federation of Workers but can opt out on request. Foreign workers are not permitted to organize. Workers are permitted to bargain collectively, but the law stipulates that cooperative agreements must conform to the “national economic interest,” thus significantly limiting collective bargaining. The government has the right to set and cut salaries without consulting workers. According to Freedom House, some trade unions formed after the 2011 revolution, but they remain in their infancy, and collective-bargaining activity was severely limited due to the ongoing hostilities and weak rule of law. There is no data available about the prevalence of collective bargaining, or about the effectiveness of labor dispute or arbitration services.

Workers may call strikes only after exhausting all conciliation and arbitration procedures. Over the past year, employees organized spontaneous strikes, boycotts, and sit-ins in a number of workplaces. The government or one of the parties has the right to demand compulsory arbitration, though state penalties for noncompliance were not sufficient to deter violations.

The law does not criminalize all forms of forced or compulsory labor.  Article 425 of the penal code criminalized slavery and prescribed penalties of five to 15 years’ imprisonment. Article 426 criminalized the buying and selling of slaves and prescribed penalties of up to 10 years’ imprisonment.  However, other forms of forced labor were not criminalized.  The government did not effectively enforce these laws, and the resources, inspections, and penalties for violations were not commensurate with those prescribed for other serious crimes such as kidnapping. There have been numerous anecdotal reports of migrants and IDPs being subjected to forced labor by human traffickers. The informal economy, largely composed of migrants, is concentrated in the agricultural, construction, and domestic help sectors. Private employers have sometimes used detained migrants from prisons and detention centers as forced labor on farms or construction sites; when the work was completed or the employers no longer required the migrants’ labor, employers returned them to detention facilities.

The law prohibits children younger than 18 from being employed except in a form of apprenticeship. It was unclear whether child labor occurred, and no information was available concerning whether the law limits working hours or sets occupational health and safety restrictions for children. It was not clear whether the government had the capacity to enforce compulsory or child labor laws, nor was it clear whether non-enforcement of these laws posed a commercial risk to investors.

Malawi is open to foreign and domestic investment. Foreign investors may invest in most sectors of the economy and may access government investment incentives. There are no restrictions on ownership, size of investment, source of funds, investment sector, or whether the products are destined for export or for domestic markets. An investor can disinvest 100%, make international payments, and cannot be forced into local partnerships. The Malawi Stock Exchange limits an individual foreign investor to 10% of any company’s initial public offering (IPO) and limits foreign investment to 49% of total shares in the company.

The Cabinet Committee on Public Private Partnership was established in 2020 to boost private sector growth. The government utilizes the Malawi Investment and Trade Center ( MITC ), Ministry of Trade and Industry, Malawi Revenue Authority, Reserve Bank of Malawi, and the Public Private Partnership Commission to interface with foreign investors. The Malawi Confederation of Chambers of Commerce and Industry ( MCCCI ) represents all sectors of the economy and has successfully lobbied the government on various private sector issues in the past. The Malawi Investment Forum serves as a platform for marketing the country, fostering partnerships, and bringing in foreign direct investment.

The government does not impose restrictions on the ownership or location of investments. Foreign investment is permitted in all sectors of the economy except those that are deemed to pose a danger to health, the environment, or national security. There are no restrictions on funding sources, destinations, or final product. All companies are required to have at least two Malawian residents as directors, and there are limitations on foreign ownership of land. The 2022 session of Parliament is expected to review the current Land Act of 2016. The act states that neither Malawians nor foreigners can acquire freehold land. Foreigners can secure lease-hold land for up to 50 years and may renew the leasehold in most instances. Foreigners can only secure private land when no Malawian citizen has made an equal offer for the same land. The 2022 land act reform is expected to place additional restrictions on ownership and land acquisition by foreigners.

Malawian nationals receive preferential treatment during the privatization of government assets; this can include discounted share prices and subsidized credit. The 2017 amendment to the Public Procurement and Disposal of Assets (PPDA) Act calls for “the prioritization of all bids submitted to give 60% preference to indigenous black Malawians.” In 2020, the government drafted Indigenous Black Malawian (IBM) Preference regulations. These were approved by Parliament but failed to be gazetted due to pressure from non-indigenous populations. There is a high likelihood that the regulations will be gazetted in 2022. The Micro Small and Medium Enterprises (MSMEs) Participation Order restricts government ministries, departments, and agencies (MDAs) to allocate procurements below certain thresholds to MSMEs ( PPDA Legal Instruments ).

Prior to establishing or conducting business in Malawi, all foreign investors are required to obtain an investment certificate from MITC . As part of the certification process, investors must register with the Registrar General’s office  and RBM  and have a minimum of $50,000 to invest ( MITC Investment Procedures ). MITC announced plans to revise the threshold for capital requirements in 2019 but provided no concrete timeline for completion. The proposed thresholds will differ by sectors and may go as high as $500,000, if implemented. Registration of borrowed invested funds allows investors to externalize profits to pay back loans contracted abroad and repatriate funds when disinvesting. ( MITC Malawi ).

The last Trade Policy Review of Malawi was conducted by the WTO in April 2016. The full report is available at WTO TPR . The OECD and UNCTAD have not conducted investment policy reviews for Malawi.

There are no recent policy recommendations by civil society organizations based on reviews of investment policy related concerns.

The MITC offers business facilitation services to any foreign or domestic investor through their One Stop Center. The center houses representatives from Registrar General , Malawi Revenue Authority , Department of Immigration , and Ministry of Lands, Housing and Urban Development.   Information can also be found on MITC’s main website, the iGuides , and its online trade portal www.trade.mitc.mw ; and http://www.malawitradeportal.gov.mw/ .

To operate in Malawi, a business must register with the Registrar General, the Malawi Revenue Authority and the Ministry or regulatory body overseeing their particular sector. Businesses can register online through the Registrar General; however, the online process can be cumbersome and inefficient due to technical constraints. Registering in person is preferred and generally less time consuming. Businesses must also obtain business licenses from the city assembly, register the worksite with the Ministry of Labor, and allow health officials to carry out periodic inspections of the company premises ( https://mitc.mw/invest/index.php  ).

Malawi does not incentivize or promote outward investment. The Pension Act of 2010 and accompanying regulations prohibit domestic investors from investing pension funds or umbrella funds in foreign schemes. There are no other prohibitions on domestic investors investing abroad.

MITC is responsible for the promotion and facilitation of trade and investment. MITC offers services to both local and foreign investors, for both inward and outward facing investments. In practice, most MITC services are for domestic investing and business development.

Corporate entities in Malawi have a well-developed sense of responsible business conduct (RBC) and incorporate corporate social responsibility (CSR) into their business practices. Corporate entities make a point to publicize their CSR activities in the local media. There are no established laws or regulations governing RBC or CSR. As a candidate to the Extractives Industry Transparency Initiative (EITI), the government is promoting RBC in the mining sector.

There are a variety of laws and regulations to protect the environment and on waste disposal for producers and consumers. All foreign and domestic enterprises are expected to adhere to the national and local laws and regulations regarding employment and compensation, the work environment, industrial safety, age limits, and minimum wages. However, there is a lack of resources for meaningful enforcement of laws and regulations and no comprehensive reporting mechanism to track violations.

There is no history of any laws or regulations being waived to attract investment, nor of the government factoring in RBC practices into its procurement decisions. There are no verified reports of high profile or controversial instances of any private sector entity impacting human rights or related resolutions. In the recent past, the media reported on complaints by indigenous communities against government MDAs related to land or natural resource allocations. Most land allocation complaints are related to development projects and are decided by the courts or in mediation. There is a general lack of government enforcement and reporting on human rights, labor rights, environment protections because of budget and capacity constraints.

The private sector is required to adhere to international accounting standards. Executive compensation requirements are not defined. The law requires all Malawi Stock Exchange (MSE) listed companies to publish their annual audited accounts in local newspapers. Listed companies are also required to publicly declare profits, dividends, planned takeovers, major portfolio investments, and all relevant information for shareholders to make informed decisions.

The Institute for Policy Interaction (IPI), the Catholic Commission for Justice and Peace (CCJP), the Centre for Environmental Policy and Advocacy, Institute for Sustainable Development, Consumers Association of Malawi, Malawi Economic Justice Network (MEJN), and Natural Resources Justice Network are civil society organizations that monitor and advocate freely for CSR and RBC in Malawi. Malawi does not adhere to OECD Guidelines for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas. There are no domestic requirements for due diligence by companies engaged in the supply chain of minerals that may originate from conflict-affected areas.

The EITI Board approved Malawi as a candidate country in 2015. Malawi’s Validation was completed in 2018, and the EITI Board concluded that Malawi has made meaningful progress overall in implementing the EITI Standards. The Board determined Malawi must carry out corrective actions regarding the findings of the initial assessment. Due to the COVID-19 pandemic, the final assessment has been delayed until sometime in 2022. Failure to achieve meaningful progress on the second validation will result in suspension in accordance with the EITI Standard.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;

Comply Chain.

Malawi is vulnerable to climate change impacts due to deep-rooted poverty, over-dependence on rainfed agriculture, overexploitation of natural resources, and rapid population growth. The government offers incentives in several sectors as part of an overall effort to address climate resilience and adaptation. The Environmental Management Act provides details on adherence to environmental requirements for MDAs and general business investors, including foreigners. Climate related issues are integrated throughout public service and national development plans, adherence and enforcement suffer from a lack of funding and capacity. The government submitted its first nationally determined contribution (NDC) to the UN Framework Convention on Climate Change (UNFCCC) in 2015, which provides strategic goals and objectives for Malawi through 2040 and updated the document in 2021. The update includes an unconditional target of six percent carbon emission reductions and a combined conditional and unconditional reduction of 51 percent carbon emission reductions by 2040—contingent upon additional external support and full NDC implementation.

The Department of Environmental Affairs  in the Ministry of Natural Resources and Climate Change is the secretariat of all climate change related issues in the country. Several documents and strategies govern the country’s climate adaption and mitigation activities. The Nationally Appropriate Mitigation Actions (NAMAs), National Climate Change Response Framework (NCCRF), and National Adaptation Plan (NAP) provide details on the government’s commitment to addressing climate change. The 2016 National Climate Change Management Policy (NCCMP) provides an overview of the country’s climate change intervention priorities. The National REDD+ Strategy, National Charcoal Strategy, and National Forest Landscape Restoration Strategy provide guidelines and strategies to manage emissions from forestry and land-use sectors. National strategies, Malawi 2063, Malawi Growth and Development Strategy, the National Meteorological policy, the National Climate Change Investment Plan, the National Climate Change Resilience Strategy, and the Malawi Strategy on Climate Change Learning provide long term development and growth strategies. Despite these well-articulated documents, implementation is stymied by budget and resource constraints.

Corruption remains a major challenge for firms operating in Malawi. Corruption, fraud, bribery of public officials, illicit payments, misuse of funds, and conflicts of interest are not uncommon. A number of high-profile government scandals have occurred during all recent presidential administrations. President Lazarus Chakwera dissolved his cabinet in January 2022 over a corruption scandal. Corruption in all forms is illegal in Malawi. However, enforcement is insufficient and slow. The Corrupt Practices Act established the independent Anti-Corruption Bureau (ACB) which works with other anti-corruption bureaus in the region but is consistently under-staffed and under-resourced. The Act widened the definition of corruption to include offences for abuse of office and possession of unexplained wealth. The Act also provides protection for whistleblowers. The ACB encourages private sector companies and institutions to develop and implement corruption prevention policies as a way of mainstreaming anti-corruption initiatives into their operations. The business sector may join forces to collectively engage in the fight against corruption, but no formal mechanism currently exists. Some companies employ their own fraud controls, but to date fraud identified through internal controls has failed to result in any high-level prosecutions.

Malawian law requires all public officials from all levels of government to declare their assets and business interests. However, access to view or obtaining copies of the declarations is difficult at best. However, the law does not extend to family members. The Political Parties Act requires all political parties to disclose source of funds. If corruption evidence implicates family members or members of a political party the ACB has the power to build a case against accomplices and bring them to court. All public officials are required to disclose any conflict of interest and to recuse themselves from any deliberation or decision-making process in relation to the conflict. However, there is no clear definition of what constitutes conflict of interest. Despite have the legal framework in place, in practice the requirements for public asset declarations, political party financial reporting, and conflict of interest disclosures are rarely enforced, and noncompliance is high.

Malawi is party to the UN Convention Against Corruption and the African Union Convention on Preventing and Combating Corruption. According to Malawi law, citizens have a right to form NGOs focused on anti-corruption or good governance and these NGOs are free to accept funding from any domestic or foreign sources. Malawi’s civil society and the media play an important and visible role in fighting corruption, investigating, and uncovering cases of corruption. Specific firms with U.S. affiliations have noted irregularities in tender processes and mining licensing but have nonetheless continued to pursue business opportunities. Although some progress has been made, corruption remains a major obstacle to businesses in Malawi.

Director General, Anti-Corruption Bureau (ACB)
Mulanje House, P.O Box 2437, Lilongwe, Malawi
Tel: +(265) 1 770 166 / +265 (0) 888 208 963
E-mail: reportcentre-ll@acbmw.org
Website: https://acbmw.org/ 

National Coordinator
The Integrity Platform
Area 47, Sector 5, Private Bag 382, Lilongwe, Malawi
Telephone: +265 1 775 786/691
Email: info@integrityplatformmw.org
Website: www.integrityplatformmw.org 

The Chairperson
National Anti-Corruption Alliance (NACA)
Phone Numbers: 0881 02 22 12 and 099 86 57 18
Email Address: mosesmkandawire@yahoo.co.uk 

Malawi continues to enjoy a stable and democratic government. Since the end of one-party rule in 1994, the country has had 7 peaceful presidential and 6 parliamentary elections. In 2020, Malawians voted for a new government in a court sanctioned presidential re-run ousting the then ruling party. Although political divisions exist, Malawi has no significant tribal, religious, regional, ethnic, or racial tensions that might lead to widespread violence. Incidents of labor unrest occasionally occur but are usually non-violent. Despite instances of political uncertainty there are no nascent insurrections or politically motivated activities of major concern to investors. Democratic processes in Malawi are well established, and destabilizing unrest is unlikely.

Most working-age individuals in Malawi live in rural areas and are involved in the informal sector and subsistence agriculture. The informal economy covers 89 percent of the labor force. Informal employment is primarily small-scale, minimally capitalized, and relies on household members for labor. Across all age groups, more males are employed than females. Informal employment is usually easier to get, is less stable, and usually pays far less than minimum wage. The COVID-19 pandemic significantly and adversely affected the informal sector.

Child labor remains a problem. A 2015 Child Labor Survey found 38% of children aged 5-17 are active in child labor. In November 2019, the U.S. Customs and Border Protection Agency issued a Withhold Release Order against tobacco from Malawi due to child and forced labor concerns. As of February 2022, three companies were granted waivers enabling them to export tobacco to the U.S.

Due to capital requirements, all foreign investors are categorized in the formal sector. Labor laws cut across all sectors and the courts may get involved in any labor dispute.

Skilled and semi-skilled labor is scarce and skilled employment opportunities are extremely limited. Despite the Gender Equality Act in 2013, discrimination against women is pervasive, and women still have lower literacy and education levels and less access to employment opportunities. Occupational categories with skills shortages include accountants, economists, engineers, lawyers, IT, and medical/health personnel. Malawi has six public universities that provide bachelor’s, and master’s degrees in several fields including accountancy, economics, engineering, medicine, education, agriculture, and administration. In response to a need for skilled tradesmen, the government is expanding its network of vocational schools. The University of Malawi and the privately owned Catholic University are accredited to offer law degrees. There are few PhD programs that usually enroll few candidates.

Employment, immigration laws, and regulations require that any local or foreign investor prioritize hiring of nationals except in cases where the needed skills are not available locally. There are no restrictions on employers adjusting employment to respond to fluctuating market conditions so long as such adjustments comply with employment laws and regulations. There are also no social safety net programs for workers laid off due to economic reasons nor are employers required to have employment insurance for their employees. There are no provisions for labor laws to be waived to attract or retain investment in Malawi nor are there additional or different labor law provisions in Export Processing and Special Economic zones for purpose of promoting exports.

Aside from military or police personnel, all workers are legally permitted to form and join trade unions without previous authorization or excessive requirements. Unions must register with Registrar of Trade Unions and Employers’ Organizations in the Ministry of Labor. Most unions are affiliated with the Malawi Congress of Trade Unions (MCTU) with a membership of approximately 300,000 workers. Despite the membership size, the MCTU Unions power is limited and weak. The government is a signatory to the ILO Convention protecting worker rights, ratified all eight of the fundamental International Labor Conventions, and the Forced Labor Protocol to fast-track implementation of Target 8.7, but enforcement is weak due to a serious labor inspector shortage and resource constraints. The Occupation Safety, Health and Welfare Act of 1997 is scheduled for review in 2022. Government designated labor officers, police officers and immigration officers also serve as trafficking in persons (TIP) enforcement officers.

The Industrial Relations Court (IRC) has jurisdiction over labor disputes and other issues relating to employment. An aggrieved party may appeal the decision of the IRC to the High Court of Malawi but only on matters of law or jurisdiction, the IRC decision is final and binding on all other matters. The Labor Relations Act (LRA) governs labor-relations management in Malawi’s formal sector. Employers, labor unions, and the government lack sophistication regarding labor relations/disputes. There have not been any major strikes that posed any serious investment risk since 2012. In October 2021, government amended LRA and the Employment Act. The LRA amendment allows an employer to deduct wages from an employee who strikes for more than three days per annum and authorizes the Minister of Labor to designate categories of workers as essential, thereby prohibiting them from striking or lockdowns. The LRA removed the requirement of employer and employee panelists in the IRC, thereby loosening the bottleneck at the IRC. Amendments to the Employment Act prohibits forced and tenancy labor, provides special working conditions for pregnant and breastfeeding female employees, provides for paternity leave, and makes provisions for deduction of wages for the period an employee is absent from work due to participation in a strike.

The Government of the Islamic Republic of Mauritania (GIRM) has been proactive in attracting more Foreign Direct Investment (FDI) and has signed several MOU’s with international firms mainly from the Gulf and Turkey Mauritania is rich in minerals, has one of Africa’s richest fishing grounds and excessive potential in renewable energy, natural gas, and agriculture. Mauritania’s geographical position makes it a potential hub between Europe, North Africa, and Sub-Saharan Africa.

The GIRM promotes international investment through the Agency for the Promotion of Investment in Mauritania (APIM), which was launched in 2021. APIM aims to attract FDI to accelerate the government economic development plan. Through APIM, the government hopes to make Mauritania the new investment frontier for the Sahel by improving the investment code and providing a stable business environment. In addition to APIM, the Economic Governance and Investment Management Support Project (PA2GI) — an African Development Bank project active from 2021-2024 – will prioritize public and private investment in strategic sectors of the President’s Economic Recovery Plan (ProPEP). It is an institutional support project intended to assist Mauritania in its efforts to ensure robust, sustainable and job-creating economic growth. It involves striving to ensure public investment optimization, private investment promotion and the strengthening of tax and land governance in support of Mauritania’s Strategy for Accelerated Growth and Shared Prosperity (SCAPP) and President Ghazouani’s Economic Recovery Plan (ProPEP).

There is no law prohibiting or limiting foreign investment in any sector of the economy. There are no laws or regulations specifically authorizing private firms to adopt articles of incorporation or association, which limit or prohibit foreign investment, participation, or control. There are no other practices by private firms to restrict foreign investment. The government continues to prioritize foreign investment in all sectors of the economy and is working closely with the International Monetary Fund (IMF), the World Bank, and the international donor community to improve basic infrastructure and to update laws and regulations.

Both domestic and foreign entities can engage in all forms of remunerative activities, except activities involving selling pork meat or alcohol. There are no limits on the transfer of profit or repatriation of capital, royalties, or service fees, provided the investments were authorized and made through official channels. The government performs mandatory screening of foreign investments. These screening mechanisms are routine and non-discriminatory. The “Guichet Unique” created in 2020 is a one-stop shop that takes care of all administrative needs related to registering a company. The Guichet Unique provides the administrative review for all sectors, except for the petroleum and mining sectors, which require approval from a cabinet meeting led by the president.

The latest investment policy review occurred in February 2008. The United Nations Conference on Trade and Development (UNCTAD) review is available online, in French, at: http://unctad.org/en/Docs/iteipc20085_fr.pdf . The report recommended that Mauritania diversify its economy, improve its investment potential through increasing revenue generated by the exploitation of natural resources, accelerate required reforms, and enhance the business and investment climate. On November 2021, Mauritania joined the Inclusive Framework on BEPS and participates in the agreement to address the tax challenges arising from the digitalization of the economy. By joining this framework, the GIRM joins the international efforts against tax evasion.

In May 2018, Mauritania underwent its third World Trade Organization (WTO) trade policy review. The report is available online at https://www.wto.org/english/tratop_e/tpr_e/tp471_e.htm . The report states that, since its second Trade Policy Review (TPR) in 2011, Mauritania has had five years of products (chiefly iron ore) and massive public investment in the new airport, the extension of the port of Nouakchott, and road infrastructure. In addition, the report indicates that Mauritania’s goods imports and export mechanism has been modernized and simplified since 2011.

There are no civil society organization within Mauritania and neighboring counties that have provided reviews of investment policy-related concerns. Sporadically, Members of Parliament will request reviews of existing contracts (mainly in the fishing sector), but thus far, no formal results have been shared.

The GIRM continues to amend its laws and regulations to facilitate business registration. Under the Ministry of Economy, the Public Private Partnership Unit is responsible for providing technical support and expertise to the inter-ministerial committee during the process of identification, preparation, development, and execution of PPP projects in Mauritania. Created in February 2020, this inter-ministerial committee consists of the Prime Minister, Minister of Commerce, Minister of Economy, Minister of Finance, and the Private Sector Association. The committee is chaired by the Prime Minister and is charged with improving the business climate and driving investment.

In March 2021, the government created the Agency for Promotion of Investment in Mauritania to facilitate the administrative work of foreign investors. APIM helps investors navigate the business permit process, various administrative procedures, and the rules and regulations concerning foreign workforces.

To further expedite the business registration process, the government moved the one-stop shop Guichet Unique from the Nouadhibou Free Trade Zone Authority ( http://www.ndbfreezone.mr/ ) to become a stand-alone unit ( https://www.guichetunique-mr.info/ ) that is mandated to help set up companies and complete all business registration. This one-stop shop has started digitizing the business registration process which has led to the reduction of the standard registration time from seven days to 48 hours. The government is hoping this move to create an independent one- stop shop will serve to further encourage FDI.

Government incentives toward promoting outward investment remain limited. Mauritania’s major exports are iron ore (46 percent), non-fillet frozen fish (16 percent), and gold (11 percent). There are no investment restrictions on domestic investors from investing abroad.

Mauritius actively seeks foreign investment. According to several surveys and metrics, Mauritius is among the freest and most business-friendly countries in Africa. Mauritius outperforms all other African countries on the Human Development Index where, in 2020, it ranked 66 out of 189 countries. The 2022 Index of Economic Freedom, published by the Heritage Foundation, ranked Mauritius first among 47 countries in the Sub-Saharan Africa region and 30th globally, compared to being 13th in 2021. This decline in the ranking is due to a drop in the country’s fiscal health score. The index also highlighted that while property rights and judicial effectiveness are strong, government integrity is relatively weak.

The Economic Development Board (EDB) is the single gateway government agency responsible for promoting investment in Mauritius and helping guide investors through the country’s legal and regulatory requirements. In terms of investor retention policy, the EDB provides aftercare services that consider future business environment requirements for survival and/or expansion. The EDB has a customer service unit that receives investor suggestions and complaints, and it organizes workshops and roundtable sessions to inform investors about changes in investment policies. In 2021, the EDB also set up a Business Support Facility that provides facilitation and advisory services to all businesses in Mauritius: https://business-support-portal.edbmauritius.org/business-support-facility/ .

A non-citizen can hold, purchase, or acquire real property under the Non-Citizens (Property Restriction) Act (NCPRA), subject to government approval. The NCPRA can be accessed on this link: https://dha.govmu.org/Pages/Services/PRA.aspx . A non-citizen is eligible for a residence permit upon purchasing residential property under the government-regulated Property Development Scheme (PDS), Integrated Resort Scheme (IRS), and Real Estate Scheme (RES) as long as the investment exceeds $375,000 or its equivalent in any freely convertible foreign currency.

No government approval is required in certain situations provided under the NCPRA, namely: (i) holding of immoveable property for commercial purposes under a lease agreement not exceeding 20 years; (ii) holding of shares in companies that do not own immoveable property; (iii) holding of immoveable property by inheritance or effect of marriage to a citizen under the “régime legal de communauté”; (iv) holding of shares in companies listed on the Stock Exchange of Mauritius; and (v) through a unit trust scheme or any collective investment vehicle as defined in the Securities Act.

Regarding business activities, the GoM generally does not discriminate between local and foreign investment. There are, however, some business activities where foreign involvement is restricted. These include television broadcasting, sugar production, newspaper and magazine publishing, and certain operations in the tourism sector.

In 2019, the Independent Broadcasting Authority (IBA) Act was amended to increase the allowable equity participation of a foreign company investing in broadcasting to 49.9 percent from 20 percent. Control by foreign nationals in broadcasting was likewise capped at 49.9 percent. The IBA Act can be accessed via http://www.iba.mu/legal.htm .

In the sugar sector, no foreign investor is allowed to make an investment that would result in 15 percent or more of the voting capital of a Mauritian sugar company being held by foreign investors. However, foreign investors may be exempt from this rule subject to authorization by the Financial Services Commission. Further details can be accessed on the following link: https://www.stockexchangeofmauritius.com/media/2124/securities-investment-by-foreign-investors-rules-2013.pdf .

In the tourism sector, there are conditions on investment by non-citizens in the following activities: (i) guesthouse/tourist accommodation; (ii) pleasure craft; (iii) diving; and (iv) tour operators. Generally, the conditions include a minimum investment amount, number of rooms, or a maximum equity participation, depending on the business activity.

In the construction sector, foreign consultants or contractors are required to register with the Construction Industry Development Board (CIDB). Details on registration procedures are available at http://cidb.govmu.org/English/Consultants-Contractors/Pages/default.aspx .

The Investment Office of the EDB screens foreign investment proposals and provides a range of services to potential investors. The EDB is a useful resource for investors exploring business opportunities in Mauritius and assists with occupation permits, licenses, and clearances by coordinating with relevant local authorities. In 2021, the U.S. Embassy in Port Louis did not receive negative comments from U.S. businesses regarding the fairness of the government’s investment screening mechanisms.

The Investment Office of the EDB reviews proposals for economic benefit, environmental impact, and national security concerns. The EDB then advises potential investors on specific permits or licenses required, depending on the nature of the business. Foreign investors may apply through the EDB for necessary permits; alternately, investors may apply directly to the relevant authorities. In the event an investment fails the review process, the prospective investor may appeal the decision within the EDB or with the relevant government ministry.

In response to the COVID-19 crisis, the GoM relaxed investment terms and conditions for foreign investors in 2020. For instance, the minimum investment for obtaining an occupation permit was halved to $50,000. The GoM also removed the minimum turnover and minimum amount invested for the Innovator Occupation Permit. Professionals with an occupation permit and foreign retirees with a residence permit were able to invest in other ventures without any shareholding restrictions. The permanent residence permit validity was doubled to 20 years. Non-citizens who had a residence permit under the various real estate schemes were no longer required to hold an occupation or work permit to invest and work in Mauritius. Additionally, the GoM introduced a 10-year Family Occupation Permit, which allows foreign families to invest and reside in Mauritius for a period of 10 years in exchange for a minimum contribution of $250,000 to the COVID-19 Projects Development Fund. More information is available at https://residency.mu/ .

In 2020, the Non-Citizens (Employment Restriction) Act was amended to enable the following categories of individuals to engage in any occupation without a permit: (a) the holder of an occupation permit issued under the Immigration Act; (b) the holder of a residence permit issued under the Immigration Act; (c) a non-citizen who has been granted a permanent resident permit under the Immigration Act; and (d) a member of the Mauritian diaspora under the Mauritian Diaspora Scheme. In 2021, the GoM also introduced the premium investor certificate, which allows companies investing at least $11 million, as well as companies involved in the manufacture of pharmaceuticals and medical devices, to benefit from incentives.

In 2018, the United Nations Conference on Trade and Development (UNCTAD) published its 2017 Report on the Implementation of the Investment Policy Review (IPR) for Mauritius.

UNCTAD worked with the GoM on the Industrial Policy and Strategic Plan, launched in December 2020, found here: https://unctad.org/system/files/official-document/gdsinf2020d5_en.pdf .

In November 2021, Mauritius concluded its fifth trade policy review with the World Trade Organization. The review concluded that Mauritius’ openness to trade and its stable and robust democratic system have contributed to its economic success in recent years. The review also highlighted that, after two decades of liberalizing reforms, Mauritius has transformed into an almost duty-free economy, with the notable exception of sugar, on which Most Favored Nation tariff rates reach 100 percent. The trade policy review is available at https://www.wto.org/english/tratop_e/tpr_e/s417_e.pdf .

After the GoM put in place new measures to improve its anti-money laundering/combating the financing of terrorism (AML/CFT) regime, in October 2021, the Financial Action Task Force (FATF) removed Mauritius from the list of jurisdictions under increased monitoring concerning AML/CFT. In January 2022, the European Union Commission likewise removed Mauritius from its list of high-risk third countries.

The GoM recognizes the importance of a good business environment to attract investment and achieve a higher growth rate. In 2019, the Business Facilitation (Miscellaneous Provisions) Act entered into force. The main reforms brought about by this legislation were expediting trade fee payments, reviewing procedures for construction permits, reviewing fire safety compliance requirements, streamlining of business licenses, and implementing numerous trade facilitation measures.

The incorporation of companies and registration of business activities falls under the provisions of the Companies Act of 2001 and the Business Registration Act of 2002. All businesses must register with the Corporate and Business Registration Department (CBRD); the registration can be completed online at https://companies.govmu.org/Pages/default.aspx . In 2020, the Business Registration Act was amended so that the CBRD became the central repository of business licenses and information. According to the amendment, all government agencies must electronically forward a copy of any permit, license, authorization, or clearance to the registrar for publication in the Companies and Businesses Registration Integrated System (“CBRIS”). As a general rule, a company incorporated in Mauritius can be 100 percent foreign owned with no minimum capital.

Upon completion of the registration process, the CBRD issues a certificate of incorporation. The company can subsequently apply for occupation permits (work and residence permits) and incentives offered to investors. EDB’s investment facilitation services are available to all investors, domestic and foreign. To this end, a Business Support Facility was established at the EDB in 2021. For more information, see https://business-support-portal.edbmauritius.org/ .

In partnership with the Corporate and Business Registration Department, the Mauritius Network Services (MNS) has implemented the Companies and Business Registration Integrated System, a web-based portal that allows electronic submission for incorporation of companies and application for the Business Registration Number, file statutory returns, pay yearly fees, register businesses, and search for business information.

In March 2019, the National Electronic Licensing System (NELS), which is co-financed by the European Union, was officially launched. NELS is a single point of entry for the processing of permits and licenses needed to start and operate a business. Through NELS, the submission of business licensing (including the Building and Land Use Permit, Environmental Impact Assessment, Occupation Certificate, Land Conversion Certificate, etc.) can now be done electronically.

In 2020, the Economic Development Board Act was amended to allow companies to log any obstacles relating to obtaining licenses, permits, authorizations, or other clearances; to enquire about any issue and make recommendations to government agencies; and to publish any actions taken to resolve the reported obstacles.

Mauritius also implemented the e-Registry System, where a national register of real estate properties and statistics on land dispute resolutions are now publicly available. An independent mechanism for filing of complaints was also implemented. The e-Registry System features an electronic dashboard for registry searches, submission of documents, online payment of registration fees, and electronic copies of registered documents.

The GoM imposes no restrictions on capital outflows.  Due to the small size of the Mauritian economy, the government encourages Mauritian entrepreneurs to invest overseas, particularly in Africa, to expand and grow their businesses.  As part of its Africa Strategy, the government established the Mauritius Africa Fund, a public company with a budget of $13.8 million to support Mauritian investment in Africa.  Through the Fund, the government participates as an equity partner for up to 10 percent of the seed capital invested by Mauritian investors in projects targeted towards Africa.  The government has signed agreements with Senegal, Madagascar, and Ghana to establish and manage Special Economic Zones (SEZ) in these countries. The GoM and has invited local and international firms to set up operations in the SEZs.  As per the 2018 Finance Act, Mauritian companies collaborating with the Mauritius Africa Fund for development of infrastructure in the SEZs benefit from a five-year tax holiday.  To further facilitate investment, Mauritius has also signed Investment Promotion and Protection Agreements and Double Taxation Avoidance Agreements with African states.

Additionally, since 2012, the Board of Investment (now restructured as the Investment Office of the EDB) has been operating an Africa Center of Excellence, a special office dedicated to facilitating investment from Mauritius into Africa.  This office also acts as a repository of business information for Mauritian entrepreneurs about investment opportunities in different sectors in Africa.

According to the most recent figures available from the Bank of Mauritius, in 2020, gross direct investment flows abroad (excluding the offshore sector) amounted to $68 million.  The top three sectors for outward investment were accommodation and food service activities (32 percent), manufacturing (12 percent), and real estate activities (9 percent).  Investment abroad was focused mainly on developing countries, particularly in Africa, which received $31 million.  Seychelles was the top recipient country, receiving $22 million.

The National Committee for Corporate Governance (NCCG) was established under Section 63 of the Financial Reporting Act (2004) and is the coordinating body responsible for all matters pertaining to corporate governance in Mauritius. The NCCG was attached to the Ministry of Financial Services and Good Governance until 2021, when it was recognized as a corporate body following an amendment to the Financial Reporting Act. The purpose of the Committee is to: (i) establish principles and practices of corporate governance; (ii) promote the highest standards of corporate governance; (iii) promote public awareness about corporate governance principles and practices; and (iv) act as the national coordinating body responsible for all matters pertaining to corporate governance. The latest Code of Corporate Governance for Mauritius (2016) was launched on February 13, 2017 and can be accessed at https://nccg.mu/full-code. In 2021, the NCCG also launched a Corporate Governance Scorecard to introduce an objective and quantitative element for companies to report on compliance. The Financial Reporting Council (FRC), also set up under the Financial Reporting Act (2004), aims to advocate for the provision of high-quality reporting of financial and non-financial information by public interest entities and to improve the quality of accountancy and audit service. Mauritius does not have a dedicated center for research on corporate governance.

The Ministry of Financial Services and Good Governance was established following the December 2014 elections. Its mandate is to provide guidance and support for enforcement of good governance and the eradication of corruption. In 2015, the Financial Services Commission introduced a Code of Business Conduct as part of its Fair Market Conduct Program. The Financial Services Commission has also introduced several measures in 2020 and 2021 to comply with recommendations made by the Financial Action ask Force for enhancing anti-money laundering and combatting terrorism financing standards.

The Mauritius Institute of Directors (MIoD) is an independent, private sector-led organization that also promotes high standards and best practices of corporate governance, with additional information available at http://www.miod.mu .

In 2017, the government set up a National Corporate Social Responsibility (CSR) Foundation, which operated under the Ministry of Social Integration and Economic Empowerment. In 2019, this foundation became the National Social Inclusion Foundation (NSIF). The NSIF is managed by a council consisting of members from the private and public sectors, civil society, and academia. Under the 2016 Finance Act, every company registered in Mauritius must set up a CSR fund and annually contribute the equivalent of 2 percent of its taxable income from of the previous year. In 2017 and 2018, companies were required to remit at least 50 percent of their CSR funds to tax authorities for the National CSR Foundation. The required contribution increased in 2019 to 75 percent for CSR funds set up on or after January 1, 2019. The NSIF is supposed to channel the money to NGO projects in priority areas identified by the government. These priority areas are poverty alleviation, educational support, social housing, family protection, people with severe disabilities, and victims of substance abuse. Further details can be found on the NSIF and MRA websites: https://www.nsif.mu  and https://www.mra.mu/download/CSRGuide.pdf .

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Mauritius is highly vulnerable to climate change and its impacts on socio-economic development. The Climate Change Act, which took effect in 2021, created an inter-ministerial council on climate change chaired by the prime minister to set national targets and objectives. The cabinet must approve all decisions that fall under this law. This act also provided for the creation of a Department on Climate Change under the Ministry of Environment, which is now operational.

In November 2021, at the Conference of Parties 26 (COP 26), the GoM pledged to reduce its greenhouse gas emissions to 40 percent of the business-as-usual scenario 2030 figures. To achieve this target, the government plans to undertake major reforms in its energy, transport, waste, refrigeration and air-conditioning, agriculture, and conservation sectors. Details on the reforms for each of the six sectors will be available in the Nationally Determined Contributions (NDCs) action plan, which is scheduled for publication in April 2022.  The Ministry of Environment is also working on policies to reach net-zero carbon emissions by 2070, and on a national mitigation strategy and action plan. The latter includes the development of an online NDC registry, which will serve as a monitoring, reporting, and verification tool to track biodiversity and ecosystem services to implement Mauritius’ NDC.  The registry will record data on Mauritius’ adaptation and mitigation actions as well as financial and technological support required and received.

The current NDC indicates that the government plans to finance part of the $6.5 billion required to implement the NDC targets through private sector contributions. The private sector in Mauritius has indicated interest in investing in solar, hydro, and biomass renewable energy technologies.

Regulatory incentives that preserve clean air and biodiversity include: (i) exemption on excise duty applied for the purchase of a 180-kw electric car; (ii) 50 percent excise duty applied for the purchase of a hybrid car; (iii) 50 percent of registration fee applied for the purchase of both a 180-kw electric car and a hybrid car; (iv) excise duty on PET plastic bottles; (v) a petroleum levy on petroleum products; (vi) an environmental protection fee for battery and tyres upon purchase of an electric or hybrid car, (vii) a carbon levy upon purchase of a conventional motor car; and (viii) a permit fee for companies operating in a marine protected area.

The government also offers tax incentives to companies who make clean energy investments through provisions in the Income Tax Act 1995, the Customs Act, and the Value Added Tax Act.  The tax incentives for a company include (i) double deduction of the expenditure of a fast charger for an electric car; (ii) an annual allowance of 100 percent on the capital expenditure for the acquisition of a solar energy unit; (iii) an annual allowance of 50 percent (straight line) on the capital expenditure for the acquisition of green technology equipment; (iv) tax exemption on interest perceived by a company that invests in renewable energy projects through debentures and bonds; (v) eight-year tax holiday for companies that use deep ocean water for providing air conditioning services; (vi) customs duty and value added tax exemptions on any purchases of photovoltaic systems and chargers for electric vehicles.

The tax incentives government provided on solar energy equipment encouraged investments in power production from solar energy. Statistics indicate that solar energy power production increased by 3.5 percent from 2018 to 2020.

The European Union is currently providing technical assistance to the government to improve its public procurement policies under the ‘Switch to Green’ facility. The objective of the project is to encourage public organizations to make their activities more environmentally friendly through the adoption of sustainable consumption practices with respect to energy and water conservation, waste minimization, paperless work, and adoption of sustainable technology and business practices to improve service delivery.

The prevalence of corruption in Mauritius is low by regional standards, but graft and nepotism nevertheless remain concerns and are increasingly a source of public frustration. Several high-profile cases involving corruption have reinforced the perception that corruption exists at the highest political levels, despite the fact that Mauritian law provides for criminal penalties for corruption by officials. According to Transparency Mauritius, the absence of a law regulating the financing of political parties fuels corruption. A former prime minister was arrested in 2015 on allegations of money laundering, though courts have since dismissed all charges. The state prosecutors appealed the last dismissal in late 2019 and court proceedings are ongoing, with the latest hearing held in February 2022. A minister in the previous government stepped down in 2016 after allegations of bribery. In March 2017, allegations surfaced concerning possible political interference in the Financial Services Commission’s issuance of an investment banking license to Angolan billionaire Alvaro Sobrinho, who is being investigated for alleged corruption in Portugal. In March 2018, the president of Mauritius resigned after press reported that she bought apparel, jewelry, and a laptop computer with a credit card provided by an NGO financed by the same Angolan businessman. In June 2020, the prime minister dismissed his deputy prime minister following allegations of bribery and corruption in a public energy contract. In February 2021, the minister of commerce stepped down amid allegations of corruption and abuse of power.

Investors should know that while the constitution and law require arrest warrants to be based on sufficient evidence and issued by a magistrate, police may detain an individual for up to 21 days under a “provisional charge” based on a reasonable suspicion, with the concurrence of a magistrate. Two French businessmen claimed that, in February 2015, authorities held them against their will. A U.S. investor has been unable to leave Mauritius since February 1, 2020, without charges filed against him.

In 2002, the government adopted the Prevention of Corruption Act, which led to the establishment of an Independent Commission Against Corruption (ICAC). ICAC has the power to investigate corruption and money laundering offenses and can also seize the proceeds of corruption and money laundering. The director and board members of ICAC are nominated by the prime minister. The Good Governance and Integrity Reporting Act of 2015 was announced as a measure to recover “unexplained wealth” and came into force in early 2016. Critics of the act dislike its presumption of guilt, which requires the accused to demonstrate a lawful source of questionable assets, as well as the application of the law retroactively for seven years. The 2018 Declaration of Assets Act (DoA) entered into force in June 2019 and defines which public officials are required to declare assets and liabilities to the ICAC. These public officials include members of the National Assembly, mayors, chairpersons and chief executive officers of state-owned enterprises and statutory bodies, among others. This declaration is published on the website of ICAC: https://www.icac.mu/declaration-of-assets/disclosure-of-declarations/ .

Mauritius’ rating by the Corruption Perceptions Index of Transparency International improved in 2021. The country was rated the 49th least-corrupt nation out of 180 countries, compared to 52nd in 2020 and 56th in 2019. However, Mauritius retained its first rank in overall governance in Africa for the 10th consecutive year, according to the 2020 Ibrahim Index of African Governance.

U.S. investors, in conversations with embassy personnel, have not identified corruption as an obstacle to investment in the country. They have, however, encountered attempts for bribery.

Although the country lacks laws on political party financing, Mauritius has legislation to combat corruption by public officials. These include laws dealing with the declaration of assets, asset recovery, prevention of corruption, anti-money laundering, and criminal offenses related to abuse of office by public officials.

However, legal loopholes exist, and enforcement is weak. Allegations of corruption and misallocation of government contracts by public entities occurred in 2020, namely the use of emergency procurement procedures during the pandemic to allegedly enrich friends and family of those in power.

According to Transparency Mauritius, more companies have introduced control and risk management protocols and adopted code of ethics and good business conduct, even if these do no target government officials. The Prevention of Corruption Act targets mainly the public sector, but there is no whistleblower protection law.

Mauritius has ratified the UNCAC, but has not yet adopted all the recommendations, such as the criminalization of corruption in the private sector. According to Transparency Mauritius, NGOs involved in fighting corruption are not given enough protection and funding.

Navin Beekharry
Director-General
Independent Commission Against Corruption
Reduit Triangle, Moka, Mauritius
+230 402 6600
icacoffice@intnet.mu

Rajen Bablee
Director
Transparency Mauritius
4th Floor, Fon Sing Building, 12 Edith Cavell Street, Port Louis, Mauritius
+ 230 213 0796
transparency.mauritius@gmail.com

Mauritius has a long tradition of political and social stability. Civil unrest and political violence are uncommon. Free and fair national elections are held every five years with the last general elections held in November 2019. Those most recent elections took place without incident. The current prime minister, Pravind Jugnauth previously served as finance minister, and was appointed prime minister 2017 after his father resigned (in accordance with the constitution). Jugnauth won reelection in 2019. In August 2020 and February 2021, civilians engaged in mass protests following allegations of corruption and mismanagement by the government. The protests were orderly and without incident.

Crime rates are low, but petty and violent crime can occur. Visitors should keep track of their belongings at all times due to the potential for pickpocketing and purse-snatching, especially in crowded and tourist areas. Visitors should also avoid walking alone, particularly on isolated beaches and at night, and should avoid demonstrations.

According to the GoM, employment of Mauritians stood at 476,100 in September 2021 (289,100 males and 187,000 females), a decrease from 507,100 in 2020, and 591,000 in 2019. The number of unemployed stood at 49,800 in September 2021, a decrease from 52,200 in 2020. In 2019, the number of unemployed was estimated at 39,700. The unemployment rate for the third quarter of 2021 was estimated at 9.5 percent, compared to 10.5 percent in the second quarter of 2021 and 10.4 percent in the third quarter of 2020. Employment in large establishments (employing 10 or more persons) as of March 2021 was estimated at 305,532 (186,227 male and 119, 305 female) out of which 30, 013 were foreign workers (23,961 males and 6,052 females).

The labor market remains restricted by rising unemployment among graduates and low-skilled workers, and a high number of unemployed women. It is further characterized by a persistent mismatch between qualifications of the unemployed and the skills required in an increasingly services-oriented economy. Government labor market programs aimed at building human capital have been extended, with policies to develop skills of the unemployed focusing on apprenticeships and placements. In November 2016, the government introduced the National Skills Development Program (NSDP), a fully-funded technical training program for youth, which was still running as of April 2020. The NSDP is managed by the Human Resource Development Council (HRDC), which operates under the Ministry of Education and is responsible for promoting the development of the labor force in Mauritius. The HRDC, with technical and financial support from the French development agency, is also devising a National Skills Development Strategy (NSDS) for 2020-2024. The aim of the NSDS is to improve the effectiveness and efficiency of skills development programs. The HRDC, in collaboration with the Economic Development Board (EDB), has also established a Skills Development Support Scheme for Foreign Direct Investment to support foreign investors in training their employees. Through this scheme, the HRDC provides eligible employers up to 80 percent of the total amount disbursed on training; the remaining 20 percent is incurred by the employer. The objective is to develop technical expertise and specialization, and likewise boost the skills base for attracting FDI.

In 2018, the government introduced the SME Employment Scheme, which allows SMEs to employ recent graduates, whose monthly stipends are paid by the government for one year. In 2019, the government expanded the program to diploma holders.

In 2017, the National Assembly passed the National Employment Act. This act repealed the Employment and Training Act and introduced a modern legislative framework. The act provides the labor market with information on supply and demand of skills, job seekers, and training institutions; promotes placement and training of job seekers, including young persons and persons with disabilities; and promotes labor migration and home-based work.

In November 2017, the Equal Opportunities Act was amended to protect prospective employees with criminal records from discrimination when being considered for recruitment or promotion.

In 2018, the government introduced a minimum monthly wage of 9,000 Mauritian rupees (approximately $209) for all workers, which impacted over 100,000 low-paid workers. In November 2019, the cabinet, following a recommendation from the National Wage Consultative Council, increased the minimum wage again to 10,200 rupees ($237), effective January 2020. The minimum wage was further increased to 10,575 rupees ($246) in January 2022.

Workers’ rights are protected under the 2019 Workers’ Rights Act. The legislation provides, among others: a portable retirement gratuity fund; fair compensation in case of termination; harmonization of working conditions in different sectors; the flexibility to request the right to work from home either on a full- or part-time basis; and equal remuneration for equal work. The act also expands the Equal Opportunities Act through several measures against discrimination in employment and occupation.

Trade unions are independent of the government and employers. Mauritius has an active trade union movement that about 25 percent of the workforce, and labor-management relations are generally positive. The last major strike affecting the economy took place in 1979. The government generally seeks to avoid strikes through a system that promotes settlement through negotiation or arbitration. Disputes are resolved at the Conciliation and Mediation Section of the Ministry of Labor or at the Commission for Conciliation and Mediation. If the matter is not resolved, it is referred to the Employment Relations Tribunal. Mauritius participates actively in the annual International Labor Organization (ILO) conference in Geneva, Switzerland, and adheres to ILO core conventions protecting workers’ rights.

Morocco actively encourages foreign investment through macro-economic policies, trade liberalization, structural reforms, infrastructure improvements, and incentives for investors.  The Investment Charter, Law 18-95 of October 1995, is the current foundational Moroccan text governing investment and applies to both domestic and foreign investment (direct and portfolio). An updated Investment Charter is under development and is expected to significantly expand incentives for foreign investment. The new charter aims to increase the private investment by two-thirds of total investment by 2035, includes additional incentives to draw investment to promising sectors and less favored regions, and provide additional support for the development of strategic industries such as defense and pharmaceuticals. The Ministry of Industry is executing its second Industrial Acceleration Plan (PAI), running from 2021-2025, which aims to build on the progress made in the previous 2014-2020 PAI and expand industrial development throughout all Moroccan regions. The PAI is based on establishing “ecosystems” that integrate value chains and supplier relationships between large companies and small- and medium-sized enterprises. Moroccan legislation governing FDI applies equally to Moroccan and foreign legal entities, except for certain protected sectors.

Morocco’s Investment and Export Development Agency (AMDIE) is the national agency responsible for the development and promotion of investments and exports. Following the reform to law  47-18 governing the country’s Regional Investment Centers (CRIs) in 2019, each of the 12 regions is empowered to lead their own investment promotion efforts. Each of the CRI’s websites aggregate relevant information for interested investors and include investment maps, priority sectors, procedures for creating a business, production costs, applicable laws and regulations, and general business climate information, among other investment services. The websites vary by region, with some functioning better than others. AMDIE and the 12 CRIs work together throughout the phases of investment at the national and regional level. For example, AMDIE and the CRIs coordinate contact between investors and partners. Regional investment commissions examine investment applications and send recommendations to AMDIE. The inter-ministerial investment committee, for which AMDIE acts as the secretariat, approves any investment agreement or contract which requires financial contribution from the government. The CRIs also provide an “after care” service to support investments and assist in resolving issues that may arise.

Over the last year, AMDIE made a significant push to promote international investment into Morocco under its “Morocco Now” branded campaign. Further information about Morocco’s investment laws and procedures is available on AMDIE’s “Morocco Now” website  or through the individual websites of each of the CRIs. For information on agricultural investments, visit the Agricultural Development Agency  website   or the National Agency for the Development of Aquaculture  website .

When Morocco acceded to the OECD Declaration on International Investment and Multinational Enterprises in November 2009, it guaranteed national treatment of foreign investors. The only exception to this national treatment of foreign investors is in those sectors closed to foreign investment (noted below), which Morocco delineated upon accession to the Declaration. The National Contact Point for Responsible Business Conduct (NCP), whose presidency and secretariat are held by AMDIE, is the lead agency responsible for the adherence to this declaration.

Foreign and domestic private entities may establish and own business enterprises, barring certain restrictions by sector. While the U.S. Mission is unaware of any economy-wide limits on foreign ownership, Morocco places a 49 percent cap on foreign investment in air and maritime transport companies and maritime fisheries. Foreigners from cannot own agricultural land, though they can lease it for up to 99 years; however, a new law opening agricultural land to foreign ownership has passed into law and its implementing text is forthcoming. The Moroccan government holds a monopoly on phosphate extraction through the 95 percent state-owned Office Cherifien des Phosphates (OCP). The Moroccan state also has a discretionary right to limit all foreign majority stakes in the capital of large national banks but apparently has never exercised that right. The Moroccan Central Bank (Bank Al-Maghrib) may use regulatory discretion in issuing authorizations for the establishment of domestic and foreign-owned banks. In the oil and gas sector, the National Agency for Hydrocarbons and Mines (ONHYM) retains a compulsory share of 25 percent of any exploration license or development permit. As part of   law  47-18 governing the country’s Regional Investment Centers, a reform mandated the various approval authorities for investment projects be consolidated into one “Unified Regional Commission” which has since turned an approval process which averaged 180 days into a process which takes 30 days or less, and sometimes as little as one business day. The U.S. Mission is not aware of instances in which the Moroccan government refused foreign investors for national security, economic, or other national policy reasons, nor is it aware of any U.S. investors disadvantaged or singled out by ownership or control mechanisms, sector restrictions, or investment screening mechanisms, relative to other foreign investors.

The last third-party investment policy review of Morocco was the  World Trade Organization (WTO) 2016 Trade Policy Review   (TPR), which found that the trade reforms implemented since the prior TPR in 2009 contributed to the economy’s continued growth by stimulating competition in domestic markets, encouraging innovation, creating new jobs, and contributing to growth diversification. Although some civil society organizations have been critical of certain development projects/initiatives, particularly those with environmental or social impacts, Post is unaware of a comprehensive review focused on investment policy concerns.

Prior to its discontinuation of the Doing Business Report, in 2020 the World Bank ranked Morocco 53 out of 190 economies, rising seven places since from the previous report in 2019 and climbing 75 places during the last decade from 128 in 2010. Since 2012, Morocco has implemented reforms that facilitate business registration, such as eliminating the need to file a declaration of business incorporation with the Ministry of Labor, reducing company registration fees, and eliminating minimum capital requirements for limited liability companies. Each of the 12 Regional Investment Centers (CRI) maintains a website which guides investors through the registration process.

Foreign companies may use the online business registration mechanism. Foreign companies, except for French companies, are required to provide an apostilled Arabic translated copy of their articles of association and an extract of the registry of commerce in their country of origin. Moreover, foreign companies must report the incorporation of the subsidiary a posteriori to the Foreign Exchange Office (Office de Changes) to facilitate repatriation of funds abroad such as profits and dividends. According to the World Bank, registering a business in Morocco takes an average of nine days, significantly less than the Middle East and North Africa regional average of 20 days. Morocco does not require that the business owner deposit any paid-in minimum capital.

Following the passing of electronic creation of businesses law  18-17 , the new system went live in 2021, allowing for the creation of businesses online via an electronic platform managed by the Moroccan Office of Industrial and Commercial Property (OMPIC). All procedures related to the creation, registration, and publication of company data can be carried out via this platform. A new national commission will monitor the implementation of the procedures. The Simplification of Administrative Procedures Law 55-19, passed in 2020, aims to streamline administrative processes by identifying and standardizing document requirements, eliminating unnecessary steps, and making the process fully digital via the National Administration Portal , the site launched in 2021 but is currently only available in Arabic.

The business facilitation mechanisms provide for equitable treatment of women and underrepresented minorities in the economy. Notably, according to the World Bank, the procedure, length of time, and cost to register a new business is equal for men and women in Morocco. The U.S. Mission is unaware of any official assistance provided to women and underrepresented minorities through the business registration mechanisms. In cooperation with the Moroccan government, civil society, and the private sector, there have been several initiatives aimed at improving gender equality in the workplace and access to the workplace for foreign migrants, particularly those from sub-Saharan Africa.

The Government of Morocco prioritizes investment in Africa as part of its strategy to expand its commercial and trade connections throughout the continent and secure its self-proclaimed title of “Gateway to Africa”. The African Development Bank ranks Morocco as the second biggest African investor in Sub-Saharan Africa, after South Africa, and the largest African investor in West Africa. OCP Africa, a subsidiary of Morocco’s state-owned phosphate giant OCP, has presence in 16 African countries and continues to invest in infrastructure supporting its phosphate exports. According to Morocco’s Office of Exchange, under the supervision of Minister of Economy and Finance, $808 million, or 43 percent of Morocco’s total outward FDI, was invested in the African continent in 2021. The U.S. Mission is not aware of a standalone outward investment promotion agency, although AMDIE’s mission includes supporting Moroccans seeking to invest outside of the country for the purpose of boosting Moroccan exports. Nor is the U.S. Mission aware of any restrictions for domestic investors attempting to invest abroad. However, under the Moroccan investment code, repatriation of funds is limited to “convertible” Moroccan Dirham accounts. Morocco’s Foreign Exchange Office (“Office des Changes,” OC) implemented several changes for 2022 that liberalize the country’s foreign exchange regulations. Moroccans going abroad for tourism can now exchange up to $10,000 in foreign currency per year, with the possibility to attain further allowances indexed at 30 percent of income tax filings with a maximum cap of $30,000. Business travelers can also obtain larger amounts of foreign currency, provided their company has properly filed and paid corporate income taxes. Another new provision permits banks to use foreign currency accounts to finance investments in Morocco’s Industrial Acceleration Zones.

Responsible business conduct (RBC) has gained strength in the broader business community in tandem with Morocco’s economic expansion and stability. The Moroccan government does not have any regulations requiring companies to practice RBC nor does it give any preference to such companies. However, companies generally inform Moroccan authorities of their planned RBC involvement. Morocco joined the UN Global Compact network in 2006 and in 2022 counts 24 private company as signatories, including the Confederation General des Entreprises du Maroc (CGEM), Morocco’s largest private sector lobbying group that represents more than 90,000 private companies. The Compact provides support to companies that affirm their commitment to social responsibility. While there is no legislation mandating specific levels of RBC, foreign firms and some local enterprises follow generally accepted principles, such as the OECD RBC guidelines for multinational companies. NGOs and Morocco’s active civil society are also taking an increasingly active role in monitoring corporations’ RBC performance. In 2017 a non-governmental National Observatory for RBC (ORSEM) was created with the objective of promoting responsible business practices, and in 2021, in collaboration with AtlantaSanad Assurance, a Moroccan insurance company, published its first corporate social responsibility guide. Morocco does not currently participate in the Extractive Industries Transparency Initiative (EITI) or the Voluntary Principles on Security and Human Rights, though it has held some consultations aimed at eventually joining EITI. No domestic transparency measures exist that require disclosure of payments made to governments. There have not been any cases of high-profile instances of private sector impact on human rights in the recent past. Morocco is not a signatory of the Montreux Document on Private Military and Security Companies, and Post is unaware of any private military companies operating in the country.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain

As part of its development strategy, outlined within the New Development Model, the Kingdom of Morocco seeks to ensure that new economic initiatives consider any environmental, economic, or social impacts and strengthen the sustainable management of natural resources and generally promote environmentally friendly economic activities. Following its commitments at past international environmental conventions, Morocco progressed in this area by implementing political, economic, and legal reforms. At the UN Climate Change Conference in Glasgow in 2021 (COP26), Morocco signed on to several climate-change commitments, including the U.S.-led Global Methane Pledge to reduce overall methane emissions by 30 percent (from 2020 levels) by 2030. Morocco has also signed on to the Global Green Growth Initiative (GGGI), which supports the Moroccan government’s commitment to transition to a green economy, one of the pillars of the country’s National Sustainable Development Strategy (NSDS). In June 2021, Morocco was one of the few countries in the world that submitted a revised Nationally Defined Contribution (NDC) to greenhouse gas reductions, strengthening the Kingdom’s 2030 target by revising overall 2030 emissions targets to be more ambitious, from 17 percent to 18.3 percent. Morocco has tied economic development planning to climate action. As part of the New Development Model announced in 2021, environmental protection, the development of green economies and industries, and the preservation and more rigorous management of its limited water sources are given utmost importance, constituting two of the Model’s five pillars.

Through Morocco’s 2008 Plan Vert and subsequent Green Generation 2020-2030 national strategies, the government committed to increasing energy production using renewables, removing subsidies on fossil fuels, expanding employment in sustainable industries, and improving the management of its water and ocean resources. Through numerous solar and wind renewable energy projects, Morocco is pursuing an ambitious goal to generate 64 percent of its electricity needs from renewables and is expected to meet that goal by 2030. Ranking as the 22nd most water-scarce country in 2019 by the World Resource Institute, the Moroccan Government directed significant resources over the past five years to managing the country’s water resources, earmarking $12 billion in 2020 for a seven-year program that will focus on building dams to increase water storage capacity, improving water consumption, preserving water resources, and increasing water supply in rural areas. Morocco ranked 26 out of 76 leading countries in MIT’s Green Future Index, and 2nd in Global Green Growth Institute’s Global Green Growth Index for the African region.

In 2021 Morocco launched a “Green Economy War Room” in its capital city, Rabat, as a collaboration between the Moroccan Agency for Energy Efficiency (AMEE) and the Ministry of Industry, Trade, and the Digital and Green Economy. The creation of the center intends to support over 150 different investment projects to maintain and boost Morocco’s pivot toward a model of a sustainable green economy.

A law proposed by the National Regulatory Authority for Electricity (ANRE), which builds off of Morocco’s Renewable Energy law 13-09, is currently undergoing public comment. The law will allow ANRE to monitor and control access to the national transmission and distribution grid, with the ultimate purpose of authorizing independent power producers to inject renewable energy into the national grid. The law is an important step forward, paving the way for increased uptake and use of low-carbon renewable energies within the Moroccan electricity grid. The law will also allow the Moroccan regulator the ability to oversee the national grid’s interconnections with foreign transmission grids, thereby allowing Morocco the ability to support other countries’ transition to lower carbon energy solutions. This law will be instrumental in the future development of the Moroccan renewable energy sector and further increase its attractiveness for private investors, support Morocco’s ambitions of greater regional integration, and provide a platform for other low carbon initiatives, such as electric vehicles and smart grid systems, to build from.

To further reduce emissions, Morocco aspires to be a global leader in the future industrial production, domestic consumption, and export of green hydrogen fuel. Morocco’s aspirations are tied to its renewable energy potential and proximity to existing energy connections with Europe and Africa. The Ministry of Energy Transition has accelerated the “ National Strategy for Green Hydrogen,” originally announced in August 2021, with a goal to capture up to four percent of the global green hydrogen market through 2050. In 2022, the Ministry launched a “GreenH2 Morocco” initiative to bring together public and private sector players in the field to prepare an appropriate regulatory framework. The International Renewable Energy Agency (IRENA) signed an agreement with the Government of Morocco in 2021 to advance technical research and development (R&D) in green hydrogen and build a suitable regulatory development. Prospects for the green hydrogen sector in Morocco are promising as the initial source of manufacturing energy, solar and wind, are plentiful, and the country already has extensive export connections for green products with Europe – a significant buyer of green energy. While several national initiatives are in the works to set the stage for Morocco to become a global leader in green hydrogen, success remains dependent on future engineering innovations, market maturity, and the establishment of an international business and regulatory environment capable of facilitating trade and developing necessary investment.”

In February 2021, Morocco was placed on the Financial Action Task Force’s (FATF’s) “grey list” of countries of concern regarding money laundering and terrorist financing. Following the grey list designation, Morocco made a high-level commitment to work with the FATF and Middle East and North Africa FATF to strengthen the effectiveness of its Anti-Money Laundering (AML) and Combating Financing of Terrorism (CFT) regime. Morocco has taken steps towards improving its AML/CFT regime, including passing new AML legislation, but significant challenges remain.

In Transparency International’s 2021 Corruption Perceptions Index  , Morocco’s score dropped by one point causing its ranking to fall one additional position to 87th out of 180 countries. According to the State Department’s 2020 Country Report on Human Rights Practices, Moroccan law provides criminal penalties for corruption by officials, but the government generally did not implement the law effectively. Officials sometimes engaged in corrupt practices with impunity. There were reports of government corruption in the executive, judicial, and legislative branches during the year.

According to the Global Corruption Barometer Africa 2019 report published in July 2019, 53 percent of Moroccans surveyed think corruption increased in the previous 12 months, 31 percent of public services users paid a bribe in the previous 12 months, and 74 percent believe the government is doing a bad job in tackling corruption.

The 2011 constitution mandated the creation of a national anti-corruption entity. Morocco formally established the National Authority for Probity, Prevention, and Fighting Corruption (INPLCC) but it did not become operational until 2018 when its board was appointed by the king. The INPLCC is tasked with initiating, coordinating, and overseeing the implementation of policies for the prevention and fight against corruption, as well as gathering and disseminating information on the issue. In 2021 parliment passed Law No 19-46 to strengthen INPPLC’s effectiveness in its fight against corruption, creating an integrated framework aimed at improving cooperation and coordination, criminalizing corruption, and improving prevention efforts. Additionally, Morocco’s anti-corruption efforts include enhancing the transparency of public tenders and implementation of a requirement that senior government officials submit financial disclosure statements at the start and end of their government service, although their family members are not required to make such disclosures. Few public officials submitted such disclosures, and there are no effective penalties for failing to comply. Morocco does not have conflict of interest legislation. In 2018, thanks to the passage of an Access to Information (AI) law, Morocco joined the Open Government Partnership, a multilateral effort to make governments more transparent. As part of its 2021-2023 Open Government National Action Plan, Morocco launched a national portal for open government , to share its various commitments and allow its citizens to monitor progress and submit their suggestions and concerns. Although the Moroccan government does not require that private companies establish internal codes of conduct, the Moroccan Institute of Directors (IMA) was established in June 2009 with the goal of bringing together individuals, companies, and institutions willing to promote corporate governance and conduct. IMA published the four Moroccan Codes of Good Corporate Governance Practices. Some private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials. Morocco signed the UN Convention against Corruption in 2007 and hosted the States Parties to the Convention’s Fourth Session in 2011. However, Morocco does not provide any formal protections to NGOs involved in investigating corruption. For more information on corruption issues, please view the Human Rights Report. Although the U.S. Mission is not aware of cases involving corruption regarding customs or taxation issues, American businesses report encountering unexpected delays and requests for documentation that is not required under the FTA or standardized shipping norms.

Resources to Report Corruption

National Authority for Probity, Prevention, and Fighting Corruption (INPPLC)

Avenue Annakhil, Immeuble High Tech, Hall B, 3eme etage, Hay Ryad-Rabat
+212-5 37 57 86 60
Contact@inpplc.ma

Transparency International National Chapter 
24 Boulevard de Khouribga, Casablanca 20250
Telephone number: +212-22-542 699
Contact@transparencymaroc.ma

Morocco enjoys political stability. There has not been any recent damage to commercial facilities and/or installations with a continued impact on the investment environment. Demonstrations occur in Morocco and usually center on economic, social, or labor issues. Demonstrations can attract hundreds to thousands of people in major city centers. Participants are typically, but not always, non-violent and the demonstrations are peaceful and orderly.

Morocco has historically experienced terrorist attacks. Travelers should generally exercise increased caution due to terrorism as terrorist groups continue plotting possible attacks in Morocco. Terrorists may attack with little or no warning, targeting tourist locations, transportation hubs, markets/shopping malls, and local government facilities. Visitors are encouraged to consult the Department of State’s Morocco Travel Advisory for the most current information.

In the Moroccan labor market, many Moroccan university graduates cannot find jobs commensurate with their education and training, and employers report insufficient skilled candidates. The educational system does not prioritize STEM literacy and industrial skills and many graduates are unprepared to meet contemporary job market demands. In 2011, the Moroccan government restructured its employment promotion agency, the National Agency for Promotion of Employment and Skills (ANAPEC), to assist new university graduates prepare for and find work in the private sector that requires specialized skills. The government also is pursuing a strategy to increase the number of students in vocational and professional training programs. The Bureau of Professional Training and Job Promotion (OFPPT), Morocco’s main public provider for professional training, has made several large-scale investments to address the country’s skills gap, counting more than 390 training centers with a capacity to attend 500,000 individuals annually. According to official government figures, unemployment stood at slightly above pre-pandemic levels at 11.8 percent in early 2022, with youth (ages 15-24) unemployment spiking at over 26 percent in 2020. The female labor participation rate remains extremely low at 21.6 percent, ranking 180 out of 189 countries surveyed in a 2018 World Bank survey. Of the female population in the work force, unemployment remains higher than average at 13.2 percent. The World Bank and other international institutions estimate that actual unemployment – and underemployment – rates may be higher. According to a study by Morocco’s central bank, Morocco made considerable progress incorporating its informal economy, which now hovers slightly below 30 percent of GDP. In 2021 newly elected Head of Government Aziz Akhannouch announced an aggressive plan to create 1 million jobs in the private and public sector over his government’s five-year mandate, which in part will be accomplished by increasing government positions, encouraging growth and hiring in the private sector, and further legitimizing Morocco’s informal sector.

Pursuing a forward-leaning migration policy, the Moroccan government has regularized the status of over 50,000 sub-Saharans migrants since 2014. Regularization provides these migrants with legal access to employment, employment services, and education and vocation training. The majority of sub-Saharan migrants who benefitted from the regularization program work in call centers and education institutes, if they have strong French or English skills, or domestic work and construction.

Under Moroccan Labor Code, Law Number 65-99, there are two types of employment contracts: fixed-term and permanent. Under a fixed-term labor contract, the duration of employment ends on a defined date and early termination initiated by the employer will result in damages equivalent to the amount of corresponding wages for the remainder of the contract. A permanent employment contract can be terminated at any time through the implementation of a well-defined dismissal procedure. The law prohibits the dismissal of an employee without a valid reason and failure to follow these very strict procedure would likely result in the Labor Court ruling the dismissal to be unfair and result in damages being awarded to the dismissed employee. In the case of economic or structural layoffs, the employer must notify the employee’s union presentative and seek permission from the provincial governor prior to conducting any layoffs. In the case of dismissal for misconduct, the bar of proving gross misconduct is typically high and it is common for labor courts to rule in the favor of the dismissed employee – even those who commit a blatant act of gross misconduct – if the employer does not follow the dismissal procedure properly.

Dismissals deemed as unfair carry heavy financial penalties to employers. In the case of a dismissal determined to be unfair of an employee who has worked six months or more in the same company, the Labor Code dictates the employer must compensate the dismissed employee including pay-in-lieu of notice, indemnity, damages, and other miscellaneous costs. These costs balloon as the seniority and base salary of the dismissed employee increases. Cases where employers and employees go to court are rare, as both sides typically opt for an amicable resolution settled out of court which allows employers to negotiate reduced compensation payments and quicker payouts to the employee. Businesses have the added incentive to settle outside of court since Labor Courts have a reputation of siding with the employee on wrongful dismissal lawsuits. Labor law is applicable in all sectors of employment; there are no specific labor laws to foreign trade zones or other sectors. More information is available from the Moroccan Ministry of Foreign Affairs Economic Diplomacy unit.

Morocco has roughly 20 collective bargaining agreements in the following sectors: Telecommunications, automotive industry, refining industry, road transport, fish canning industry, aircraft cable factories, collection of domestic waste, ceramics, naval construction and repair, paper industry, communication and information technology, land transport, and banks. The sectoral agreements that exist to date are in the banking, energy, printing, chemicals, ports, and agricultural sectors.

According to the State Department’s Country Report on Human Rights Practices, the Moroccan constitution grants workers the right to form and join unions, strike, and bargain collectively, with some restrictions (S 396-429 Labor Code Act 1999, 65-99). The law prohibits certain categories of government employees, including members of the armed forces, police, and some members of the judiciary, from forming or joining unions and from conducting strikes. The law allows several independent unions to exist but requires 35 percent of the total employee base to be associated with a union for the union to be representative and engage in collective bargaining. The government generally respected freedom of association and the right to collective bargaining. Employers limited the scope of collective bargaining, frequently setting wages unilaterally for the majority of unionized and nonunionized workers. Domestic NGOs reported that employers often used temporary contracts to discourage employees from affiliating with or organizing unions. Legally, unions can negotiate with the government on national-level labor issues.

Labor disputes (S 549-581 Labor Code Act 1999, 65-99) are common, and in some cases result in employers failing to implement collective bargaining agreements and withholding wages. Trade unions complain that the government sometimes uses Article 288 of the penal code to prosecute workers for striking and to suppress strikes. Labor inspectors are tasked with mediation of labor disputes. In general, strikes occur in heavily unionized sectors such as education and government services, and such strikes can lead to disruptions in government services but usually remain peaceful.

In response to the widespread difficulties caused by the COVID-19 pandemic, Morocco’s Special Commission for the Development Model presented King Mohammed VI the New Development Model in May 2021. This model will serve as a roadmap for Moroccan development with a special focus on decreasing poverty, improving social services and expanding social security protections.

Chapter 16 of the U.S.-Morocco Free Trade Agreement (FTA) addresses labor issues and commits both parties to respecting international labor standards.

The GRM welcomes foreign investment and sees it as a critical driver of economic growth and job creation. Except for a few sectors related to national security, all business sectors are open to foreign investment. Mozambique’s 1993 Investment Law (no. 3/93) and a 2009 decree (no. 43/2009) govern foreign investments. Many observers perceive the Investment Law as obsolete, although the GRM has not yet taken steps to revise it.

In general, large investors receive more support from the GRM than small and medium-sized investors.  GRM authorities must approve all foreign and domestic investment, including guarantees and incentives.  Regulations for the 2009 Code of Fiscal Benefits law (no. 4/2009), were established under a 2009 Decree (no. 56/2009).

The Agency for Promotion of Investments and Exports (APIEX, Agencia para a Promocao de Investimentos e Exportacoes) is the primary investor contact within the GRM, operating under the Ministry of Industry and Commerce (MIC), with the objective of promoting and facilitating private and public investment.  APIEX also oversees the promotion of national exports and assists investors with administrative, financial, and property issues.  Through APIEX, investors can receive exemptions from some customs and value-added tax (VAT) duties when importing “Class K” equipment, which includes capital investments.

Contact information for APIEX is:

Agency for Promotion of Investments and Exports
http://www.apiex.gov.mz/
Rua da Imprensa, 332 (ground floor)
Tel: (+258) 21313310

Ahmed Sekou Touré Ave., 2539 Maputo
Telephone: (+258) 21 321291
Mobile: (+258) 823056432

GRM dialogue with the private sector is primarily coordinated by Mozambique’s Ministry of Industry and Commerce (MIC). Most businesses in Mozambique interact with the GRM via the country’s largest business association, the Confederation of Economic Associations (CTA, Confederação das Associações Económicas de Moçambique). CTA was formed in 1996 and continues to be the most influential business association in Mozambique. CTA hosts an annual conference for private sector dialogue with the GRM (Conferencia Annual do Sector Privado; CASP), which is usually attended by the President of Mozambique and senior cabinet officials.

With some exceptions, Mozambique’s Investment Law and its regulations generally do not distinguish between investor origin or limit foreign ownership or control of companies.  The 2011 “Mega-Projects Law” (no. 15/2011) stipulates that 5 – 20 percent of the equity capital of public-private partnerships, large-scale ventures, and major business concessions be owned by Mozambicans.

The Petroleum Law (no. 14/2014) states that the GRM regulates the exploration, research, production, transportation, trade, refinery, and transformation of liquid hydrocarbons and their by-products, including petrochemical activities.  Article 4.6 of this law establishes the state-owned oil company, the National Hydrocarbon Company (Empresa National das Hidrocarbonetos; ENH) as the GRM’s exclusive representative for investment and participation in oil and gas projects.  ENH typically owns up to 15 percent of shares in oil and gas projects in the country.

Depending on the size of the investment, the GRM approves both domestic and foreign investments at the provincial or national level, but there is no other formal investment screening process.

In March 2022, CTA published a report entitled “ Accelerating actions for economic recovery in Mozambique’s Private Sector.” The report lists seven key recommendations announced at the March 30-31 CASP conference: 1) Reduce the number of days required to obtain a business license; 2) reduce the cost of finance; 3) apply incentives to increase industrialization; 4) increase the number of products certified at international standards; 5) strengthen small and medium enterprises through legal reforms and payment of all government debts to companies; 6) increase agricultural productivity through fiscal reform; and 7) increase influx of international tourists to Mozambique by facilitating visas and lowering value added taxes paid by tourists.

Starting a business in Mozambique is a lengthy, bureaucratic, and complex process that has contributed to Mozambique’s relatively low score on the World Bank’s Doing Business Report. In the 2020 report (the most recent available), Mozambique ranked 176 out of 190 economies worldwide for ease of starting a new business, scoring well below the regional average for sub-Saharan Africa. Its low rank is due in part to the relatively high cost of registering a business and number of procedures required to complete the process.

Registering a business typically involves many steps including reserving a name, signing an incorporation contract, paying registration fees, publishing the company’s name and statutes in the national gazette, registering with the tax authority, and notifying relevant agencies of the start of activity. According to the World Bank, this process takes approximately seventeen days. There is not a business registration website; however, APIEX maintains a guide  to starting a business with some resources. In 2020, the City of Maputo consolidated some of the steps by establishing a “one stop shop” (balcão de atendimento unico; BAU), reducing the number of days required to register a new company to eleven.

The GRM has initiated several projects to promote competitiveness within the private sector. The MIC collaborated with CTA to create an action plan for improving the business environment (Plano de Acção para Melhorar a Ambiente de Negocios; PAMAN) in the 2019-2021 period, although the GRM achieved only 38.6 percent of the proposed reforms. In 2020, the GRM partnered with CTA to launch the Programa Nacional de Certificação Empresarial (PRONACER) to support small and medium enterprises.

The GRM does not promote or incentivize outward investment.  It also does not restrict domestic investors from investing abroad.  However, Mozambique does require domestic investors to remit investment income from overseas, except for amounts required to pay debts, taxes, or other expenses abroad.

Larger companies and foreign investors in Mozambique tend to follow their own responsible business conduct (RBC) standards.  For some large investment projects, RBC-related issues are negotiated directly with the GRM.  RBC is an increasingly high-profile issue in Mozambique, especially in the extractive industries, where some projects require resettlement of communities.

The GRM joined the Extractive Industries Transparency Initiative (EITI) in May 2009.  The EITI Governing Board labeled Mozambique as a compliant country in 2012, and Mozambique continues to make meaningful progress towards implementing the EITI standards.

Following the emergence of a violent extremist insurgency in northern Mozambique in 2017, the GRM turned to private military companies (PMCs) to provide logistical and tactical support to Mozambican military and police forces in 2020 and 2021. In March 2021, Amnesty International accused one PMC operating in Mozambique of carrying out indiscriminate attacks on civilians. The GRM’s contract with this PMC ended on April 6, 2021. Mozambique is not a signatory of the Montreaux Document on Private Military and Security Companies, does not support the International Code of Conduct for Private Security Service Providers, and does not participate as a government in the International Code of Conduct for Private Security Service Providers’ Association. In March 2021, officials from the Ministries of Defense and Justice and the semi-independent Human Rights Commission participated in a series of workshops organized by the Center for Democracy and Development on the Voluntary Principles of Security and Human Rights in Cabo Delgado Province.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

In response to climate-related challenges, in November 2012 the GRM approved The National Climate Change Adaptation and Mitigation Strategy (NCCAMS), covering the 2013-2025 period. The NCCAMS aims to reduce climate risk, both at the community and national level, while promoting low-carbon development and the green economy. To mitigate climate change risk, the GRM revised its Nationally Determined Contribution (NDC) and announced its increased climate change ambitions during COP26. The Government of Mozambique committed to reducing their greenhouse gas (GHG) emissions by 40.48 Metric tons of CO2 equivalent (MtCO2EQ) between 2020 and 2025, totaling 99.22 MtCO2EQ by 2030.

While these GHG reductions represent a slight increase in mitigation goals, its revised NDC primarily focuses on increasing its ambitions to increase climate adaptation and limit the impact of climate change-related droughts and natural disasters. In addition, the National Directorate for Climate Change under the Ministry of Land and Environment leads the GRM’s climate change policy development and coordinates adaptation and resilience activities with other ministries. Mozambique has developed district-level climate adaptation plans for about 75 percent of its districts; however, funding has not yet been secured to implement many of the activities defined in the plans.

The GRM also plans to increase climate resilience by promoting flood-resilient solutions for water, sanitation and hygiene in rural areas, increasing efforts to combat vector-borne diseases associated with climate change, improving management and conservation of land and marine biodiversity, reducing deforestation, and improving fire management programs. In 2021, Mozambique became the first country to receive a results-based payment for reduced emissions from deforestation and forest degradation (REDD+) for its Forest Carbon Partnership Facility program in Zambezia province, which could serve as a model for reforestation as a mechanism for funding conservation. Other legislation the Government of Mozambique is implementing includes:

• The National Action Program for Climate Change Adaptation (NAPA- 2008)
• The Country has ratified the UN Action Plan approved in 2003
• The Convention to Combat Desertification (CDD)
• The Framework Convention on Climate Change (UNFCCC)
• Sustainable Resilience and Sanitation Water Services
• The Mozambique Strategic Programme for Climate Resilience
• The Country is also a signatory of the Paris Declaration Agreement for Sendai Framework for Disaster Risk Reduction 2015-2030 and is committed to the 17SDGs

While corruption remains a major concern in Mozambique, the GRM has undertaken some steps to address the problem. Working with the IMF, it published the July 2019 Diagnostic Report on Transparency, Governance and Corruption , which identifies 29 anti-corruption reform measures. The March 2022 IMF agreement intends to use these measures as benchmarks for subsequent reforms.

The Mozambican judicial system conducted a trial for 19 defendants in the “hidden debts” case, hearing from more than 70 witnesses. The trial was aired publicly in a positive step to counter the perception that senior Mozambican government officials can commit crimes with impunity. The Maputo City Court has set sentences for August 1, 2022; the court has announced it is considering seizing assets of the accused to partially compensate the nation for the over $2 billion in fraudulent state-backed loans.

Mozambique’s civil society and journalists remain vocal on corruption-related issues.  Action related to the “hidden debts” scandal is being led by a civil society umbrella organization known as the Budget Monitoring Forum (Forum de Monitoria de Orcamento, FMO) that brings together around 20 different organizations for collective action on transparency and corruption issues.  A civil society organization that participates in the FMO, the Center for Public Integrity (CIP), also continues to publicly pressure the GRM to act against corrupt practices.  CIP finds that many local businesses are closely linked to the GRM and have little incentive to promote transparency.

Contact at the government agency or agencies that are responsible for combating corruption:

Ana Maria Gemo
Central Anti-Corruption Office (Gabinete Central de Combate a Corrupção)
Avenida 10 de Novembro, 193
+258 82 3034576
gabinetecorrupção@yahoo.com.br 

Contact at a “watchdog” organization:

Borges Nhamirre
Project Coordinator Extractive Industries
Center for Public Integrity (CIP, Centro de Integridade Publica)
Rua Fernão Melo e Castro, 124
+258 84 8866440
borgesfaduco@gmail.com 

In July 2021, Mozambican security forces deployed to Cabo Delgado Province were joined by Rwandan and SADC military contingents. Since that time, the combined forces have made security gains against the Islamic State in Mozambique (ISIS-M). However, the ongoing insurgency continues to deter investment in northern Mozambique. Sporadic terrorist attacks continue to occur, mainly against civilians, in the northern provinces. As of mid-2022, TotalEnergies had yet to resume construction of its Area 1 LNG facility following suspension of its operations and declaration of force majeure in April 2021.

The United States designated ISIS-M as a Foreign Terrorist Organization and Specially Designated Global Terrorist Group in March 2021. ISIS provides support to combatants in northern Mozambique and occasionally claims credit for their attacks. Since 2017, the ISIS affiliate carried out more than 500 deliberate attacks against unarmed civilians, causing an estimated 3,100 deaths and up to 800,000 internally displaced persons (IDPs). As of April 2022, the GRM had begun implementing plans to stabilize the region with support from the international donor community and encouraging IDPs to return to their homes.

Following the ceasefire and peace agreement signed in August 2019, Mozambique’s disarmament, demobilization, and re-integration (DDR) of ex-combatants from political opposition group Renamo is nearing conclusion. The October 2021 death of Mariano Nhongo, leader of the Renamo Military Junta splinter group, corresponded with a drop in the number of attacks along major highways in Manica and Sofala provinces.

According to the International Labor Organization (ILO), an estimated six million Mozambicans, or 80 percent of the economically active population in Mozambique, work in the informal sector. Mozambique’s Ministry of Labor generally had not effectively enforced minimum wage, hour of work, and occupational safety and health standards in the informal economy; labor law is only enforced in the formal sector.

There is an acute shortage of skilled labor in Mozambique.  As a result, many employers hire foreign employees who have required skills.  The GRM limits the number of expatriates a business can employ in relation to the number of Mozambican citizens it employs.  The GRM passed labor regulations in 2016 strengthening the requirement for employers to devise skills transfer programs to train Mozambican nationals to eventually replace the foreign workers.

The constitution and law provide that workers, with limited exceptions, may form and join independent trade unions, conduct legal strikes, and bargain collectively, although unions must be approved by the government.  The GRM takes 45 days to register employers’ or workers’ organizations, a delay the ILO has deemed excessive. Approximately three percent of the labor force is affiliated with trade unions.  An employee fired with cause does not have a right to severance, while employees terminated without cause do.  Unemployment insurance does not exist and there is not a social safety net program for workers laid off for economic reasons. The law does not allow workers to strike until a complex mediation and arbitration process has been conducted, which typically takes two to three weeks. The law also provides for voluntary arbitration for “essential services” personnel monitoring the weather and fuel supply, postal service workers, export-processing-zone workers, and those loading and unloading animals and perishable foodstuffs.

With support from international donors, the GRM is reviewing its Labor Law to align with international conventions related to forced labor, health and safety issues in mining, and the worst forms of child labor.  The proposed revisions would extend the maternity leave period from 60 to 90 days; address sexual harassment; incorporate special conditions in the fisheries sector; provide for telework and intermittent work; address suspension of contracts in cases of force majeure or for technological, structural or market reasons; address private employment agencies; and provide for recruitment of retired persons. CTA and donors are applying pressure for the draft law to be reviewed by the Labor Consultative Commission (CCT) then sent to the Council of Ministers and the Parliament for approval.

The Namibian government welcomes increased foreign investment to help develop the national economy and benefit its population. The Foreign Investment Act of 1993 (FIA) currently governs Foreign Direct Investment (FDI) in Namibia and guarantees equal treatment for foreign investors and Namibian firms, including the possibility of fair compensation in the event of expropriation, international arbitration of disputes between investors and the government, the right to remit profits, and access to foreign exchange. Investment and tax incentives are also available for the manufacturing sector. The government prioritizes investment retention and maintains ongoing dialogue with investors, including through investment conferences, international events such as the Dubai Expo, and high-level meetings with investors. The government is cognizant that some of its bureaucratic processes (such as the time it takes to get a business visa) impede the ease of doing business and is working to address such challenges. The Namibian Investment Promotion Act, which would replace the FIA, has been under review since 2016.

The Namibia Investment Promotion and Development Board (NIPDB) housed in the Office of the President, serves as Namibia’s official investment promotion and facilitation office. Established in 2020, the NIPDB is tasked with assisting investors in minimizing bureaucratic red tape, including obtaining work visas for foreign investors, by coordinating with government ministries as well as regulatory bodies. The NIPDB is the first point of contact for potential investors and offers comprehensive services from the initial inquiry stage through to operational stages. The NIPDB also provides general information packages, coordinates trade delegations, and assists with advice on investment opportunities, incentives, and procedures. The NIPDB is headed by a highly regarded chartered accountant, and analysts agree that it is doing a better job at facilitating investment compared to past investment promotion mechanisms. The NIPDB website is https://nipdb.com/ .

Under the FIA, foreign and domestic entities may establish and own business enterprises and engage in all forms of remunerative activities. The Ministry of Home Affairs, Immigration, Safety, and Security grants renewable and non-renewable temporary employment permits for a period of up to 12 months for skills not locally or readily available. However, work permits and long-term residence permits are subject to bureaucratic hurdles and are hard to obtain for jobs that could be performed by a Namibian. Complaints about delays in renewing visas and work permits are common.

Foreigners must pay a 10 percent non-resident shareholder tax on dividends. There are no capital gains or marketable securities taxes, although certain capital gains are taxed as normal income. As a member of the Common Monetary Area, the Namibian dollar (NAD) is pegged at parity with the South African rand.

There are no general mandatory limits on foreign ownership, but some sectors have a mandatory joint ownership between a local firm and foreign firm, such as in the natural resources sector. Government procurements usually also require a variable percentage of local ownership.

Post is not aware of any investment screening mechanism recently introduced by Namibia.

Namibia has not undergone any third-party investment policy reviews in the last five years by the OECD, WTO, or UNCTAD. The Southern Africa Customs Union (SACU), of which Namibia is a member and host, was last reviewed by the WTO in 2015.

In the past five years, several think tanks – such as the highly regarded Institute of Public Policy Research (IPPR) and the Economic Policy Research Association (EPRA) – have provided reviews of investment policy-related concerns, including on the draft Namibia Investment Promotion and Facilitation Bill, which prompted the government to reconsidering the bill’s passage. Links to some examples: https://ippr.org.na/wp-content/uploads/2019/04/IPPR-Improving-the-Business_WEB.pdf ; https://www.epra.cc/wp-content/uploads/2022/01/EPRA-report-on-2021-INVESTMENT-BILL-FINAL.pdf

Foreign and domestic investors may conduct business in the form of a public or private company, branch of a foreign company, closed corporation, partnership, joint venture, or sole trader. Companies are regulated under the 2004 Companies Act, which covers both domestic companies and those incorporated outside Namibia but traded through local branches. To operate in Namibia, businesses must also register with the relevant local authorities, the Workmen’s Compensation Commission, and the Social Security Commission.

Most investors find it helpful to have a local presence or a local partner in order to do business in Namibia, although this is not currently a legal requirement, except in sectors that require a joint venture partner. Companies usually establish business relationships before tender opportunities are announced. Some accounting and law firms provide business registration services.

The Business and Intellectual Property Authority (BIPA) is the primary institution which serves the business community and ensures effective administration of business and intellectual property rights (IPRs) registration. BIPA serves as a one-stop-center for all business and IPR registrations and related matters. It also provides general advisory services and information on business registration and IPRs. Website: http://www.bipa.gov.na/. 

Namibia provides incentives for outward investment mainly aimed at stimulating manufacturing, attracting foreign investment to Namibia, and promoting exports. To take advantage of the incentives, companies must be registered with MIT and the Ministry of Finance. Tax and non-tax incentives are accessible to both existing and new manufacturers. The list of Namibia’s investment incentives can be found online at: https://www.namibweb.com/tin.htm . Namibia is in the process of creating Special Economic Zones (SEZs) to offer favorable conditions for companies wishing to manufacture and export products. The planned SEZs would replace the old Export Processing Zone regime.

Most large firms, including SOEs, have well defined (and publicized) social responsibility programs that provide assistance in areas such as education, health, environmental management, sports, and small and mid-sized enterprise (SME) development. Many firms include Black Economic Empowerment (BEE) programs within their larger Corporate Social Responsibility (CSR) programs. Firms operating in the mining sector – Namibia’s most lucrative industry – generally have visible CSR programs that focus on education, community resource management, environmental sustainability, health, and BEE. Many Namibian firms have HIV/AIDS workplace programs to educate their employees about how to prevent contracting and spreading the virus/disease. Some firms also provide anti-retroviral treatment programs beyond what may be covered through government and private insurance systems.

Namibia’s mining sector is considered a leader in the region for its sound mining policy and responsible business conduct. Namibia ranked as the best jurisdiction in Africa on its mining policy in a 2019 Fraser Institute survey. The Namibian Chamber of Mines ( https://chamberofmines.org.na ) is an independent association of mining businesses that monitors and encourages responsible business practices and corporate social responsibility from its members and the mining industry at large. Namibia is also a member of the U.S. Department of State’s Energy Resource Governance Initiative (ERGI), which seeks to promote sound mining governance and resilient energy mineral supply chains. Namibia is not a member of the Extractive Industries Transparency Initiative (EITI).

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions 

Department of Labor

• Findings on the Worst Forms of Child Labor Report ;
• List of Goods Produced by Child Labor or Forced Labor ;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World  and;
• Comply Chain .

Namibia is particularly vulnerable to the impacts of climate change. Already one of the most arid countries on the planet, Namibia has been experiencing extensive drought in the past decade. Namibia’s Harambee Prosperity Plan II (2021-2025) and Fifth National Development Plan (2017-2022) as well as its 2021 updated Nationally Determined Contribution (NDC) are the guiding documents for Namibia’s climate adaptation strategy. In the near-term Namibia’s adaptation activities are focused on prevention and repair of infrastructure and systems. Namibia is in the process of creating an overarching National Adaptation Plan, which will supply further detail for national adaptation priorities and implementation of long-term strategies.

Namibia has committed to reducing its overall greenhouse gas (GHG) emissions by 92 percent by 2030 from the business-as-usual baseline level. Namibia aims to achieve this goal mainly through reducing deforestation and restoring grasslands and forest, with additional contributions coming from updating old industrial equipment and using cleaner energy fuels. Namibia has declared it aims to be the first African country to achieve net-zero emissions by 2050. Namibia does not yet have official regulatory or other government policy incentives to help it achieve its climate policy outcomes.

With the second highest solar radiation in the world, plentiful wind resources, and ample land, Namibia is well placed to develop a renewable energy industry. Namibia is looking to use its renewable resources to transition from its current dependency on coal generated electricity from South Africa to becoming a net energy renewable energy exporter to the region. Namibia also has bold plans to become a world green hydrogen leader and in 2021 awarded its first international tender for development of a green hydrogen plant that could begin production for international export in 2026. Namibia plans to form partnerships with private sector international firms to continue rolling out its green hydrogen industry over the next several years. The government has also created a website devoted to its green hydrogen plans: gh2namibia.com

The Anti-Corruption Act of 2003 created an Anti-Corruption Commission (ACC), which began operations in 2006. The ACC attempts to complement civil society’s anti-corruption programs and support existing institutions such as the Ombudsman’s Office and the Office of the Attorney

General. Anti-corruption legislation is in place to combat public corruption, but often is not well-implemented due to budgetary constraints. In a nationwide survey commissioned by the ACC and released in 2016, corruption was listed at the third-most important development challenge facing Namibia (6 percent, after unemployment at 37 percent and poverty at 30 percent). 78 percent of survey respondents rated corruption as “very high” in Namibia. The highest result comes from those in rural areas. Namibia’s 2021 rating by Transparency International’s Corruption Perceptions Index worsened to 58 out of 180 from a score of 57 in 2020. Afrobarometer has also reported a downward trend regarding perception of corruption in Namibia over the past decade.

In 2019, Namibia was embroiled in a fishing industry corruption scandal in which government ministers and business leaders were charged and imprisoned for allegedly co-opting the national fishing quota system for personal gain. The scandal allegedly cost Namibia billions of U.S. dollars and has tarnished the reputation of the ruling political party. The accused are in prison awaiting trial. The scandal has resulted in Namibia and its ACC taking a closer look at other industries susceptible to corruption, but many Namibians criticize the government for not doing enough to combat corruption

Namibia has signed and ratified the UN Convention against Corruption and the African Union’s African Convention on Preventing and Combating Corruption. Namibia has also signed the Southern African Development Community’s Protocol against Corruption.

Paulus Noa
Director
Namibia Anti-Corruption Commission
Corner of Montblanc & Groot Tiras Street, Windhoek
+264-61-370-600
anticorruption@accnamibia.org

Contact at a “watchdog” organization:Graham Hopwood

Director
Namibia Institute for Public Policy Research (IPPR)
70-72 Frans Indongo Street, Windhoek
+264-61-240-514
info@ippr.org.na

National anti-corruption network Integrity Namibia operated by IPPR hosts an online Whistleblower reporting portal: info@integritynamibia.org

Namibia has been a stable multiparty and multiracial democracy since becoming independent in 1990. The protection of human rights is enshrined in the Namibian Constitution, and the government generally respects those rights. Political violence is rare and damage to commercial projects and/or installations as a result of political violence is unlikely. The State Department’s Country Report on Human Rights for Namibia provides additional information.

Namibian law allows for the formation of independent trade unions to protect workers’ rights and to promote sound labor relations and fair employment practices. The law provides for the right to form and join independent unions, conduct legal strikes, and bargain collectively on specific issues; however, the law prohibits workers in certain sectors, such as the police, military, and correctional facilities, from joining unions. Except for workers in services designated as essential, such as public health and safety, workers may strike once mandatory conciliation procedures are exhausted and 48 hours’ notice is given to the employer and labor commissioner. Workers may take strike actions only in disputes involving specific worker interests, such as pay raises.

Namibia has ratified all of the International Labor Organization’s fundamental conventions. Businesses operating within export processing zones are required to adhere to the Labor Act. The 2007 Labor Act contained a provision that prohibited the hiring of temporary or contract workers (“labor hire”), but the provision was ruled unconstitutional by the Supreme Court. The Labor Amendment Act of 2012 introduced strict regulations with respect to the use of temporary workers, according to which temporary workers must generally receive equal compensation and benefits as non-temporary workers.

Child labor in Namibia occurs in certain sectors, such as domestic and agricultural work, and its occurrence and prevalence are difficult to verify. Although Namibia has ratified all key international conventions concerning child labor, there continue to be gaps in Namibia’s domestic legal framework.

There is a shortage of specialized skilled labor in Namibia. Employers often cite labor productivity and the shortage of skilled labor as the biggest obstacles to business growth. The most recent Global Competitiveness Report (2019) ranked Namibia 94th out of 141 economies. An inadequately educated workforce, access to financing, and low innovation capability are listed in the report as the most problematic factors for doing business.

The government offers manufacturing companies special tax deductions of up to 25 percent if they provide technical training to employees. The government will also reimburse companies for costs directly related to employee training under approved conditions.

As of April 1, 2014, the Namibian government implemented a Vocational Education and Training (VET) levy to facilitate and encourage vocational education and training. The levy, which is payable to the Namibia Training Authority (NTA), is imposed on every employer with an annual payroll of at least NAD 1,000,000 (approximately USD 54,000), at the rate of one percent of the employer’s total annual payroll. The NTA will collect and administer the levy and will use the funds to provide financial and technical assistance to employers, vocational training providers, employees, students, and other bodies to promote vocational education and training. In addition, companies can get a rebate from NTA of up to 50 percent of training costs for their employees.

The role of the informal economy in Namibia cannot be underestimated, as it provides integral support to more formal business activities. According to the most recent Namibian Labour Force Survey (2018), the informal economy employs more than half of employed Namibians. Informal economic activity includes small-scale entrepreneurs, traders, and service providers such as cleaners, cooks, and laborers. Informal economic activity is the primary employment means of women in rural areas. Namibian economic analysts posit that informal sector activities contribute to around 70 percent of GDP in any given year.

* Source for Host Country Data: Namibia Statistics Agency and Bank of Namibia

A glaring omission from the International Monetary Foundation’s (IMF) report on inward direct investment to Namibia is China’s contribution, which the Bank of Namibia reports as 42.4% of the total in 2021 and 39.5% in 2020. China is included in the Bank of Namibia’s report but is omitted from the IMF reports. The Embassy assesses that China’s investment in Namibia is increasing not decreasing. Notorious tax haven British Virgin Islands is a notable top destination for inward direct investment sources into Namibia. There are some other discrepancies between the information reported in the IMF report and the Bank of Namibia’s report, such as the inclusion of Botswana in 2020.

Source: IMF Coordinated Direct Investment Survey (CDIS) https://data.imf.org/?sk=40313609-F037-48C1-84B1-E1F1CE54D6D5&sId=1482331048410  and the Bank of Namibia’s 2021 Annual Report .

The GoN is committed to attracting FDI and has repeatedly pledged to take whatever steps necessary to encourage the development of 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. A Public-Private Partnership law was adopted in 2018, transparency has improved, and customs and taxation procedures have been simplified and computirized. There are no laws that specifically discriminate against foreign and/or U.S. investors. The GoN has demonstrated a willingness to negotiate with prospective foreign investors on matters of taxation and customs, despite some difficulties recently observed on the introduction of an electronic system for VAT.

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 processing. The code allows free transfer of profits and free convertibility of currencies.

The Public-Private Partnership law adopted in 2018 and implemented since then gives projects of the public private partnership type for their operations in the design and /or implementation phase, total exemption from duties and taxes collected by the State, including VAT, on the provision of services, works and services directly contributing to the realization of the project. However, parts and spare parts, and raw materials intended for projects benefit from a duty exemption and customs taxes only when not available in Niger. In the design and /or production phase, private public partnership type benefit from free registration agreements and all acts entered into by the contracting authority and the contracting partner within the framework of the project. There are no laws or practices that discriminate against foreign investors including U.S. investors.

The High Council for Investment of Niger (HCIN) reports directly to the President of the Republic. HCIN is the platform of public-private dialogue with a view to increasing Foreign Direct Investments, improving Niger’s business environment, and defining private sector priorities to possible investors. In 2018, the GoN added by Presidential Decree a Nigerien Agency for the Promotion of Private Investment and Strategic Projects (ANPIPS). This new agency reports to the HCIN and implements the lead agencies policy initiatives.

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

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

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

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

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

An investment screening mechanism does not exist under the Investment Code. The Office of the President, however, will review investment proposals for administration approval prior to further negotiation.

In the past five 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.

Niger’s one-stop shop, the Maison de l’Entreprise (Enterprise House) 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 $190) to 17,500 CFA (about $33), including reducing the time to get construction permits and the cost of getting access to the water and electricity networks. Further reforms have included the creation of an e-regulations website (https://niger.eregulations.org/procedure/2/1?l=fr ), which allows for a clear and complete registration process. Foreign companies may use this website. The website lists government agencies, with which a business must register. The business registration process is about 3 days.

Company registration can be done at the Centre de Formalités des Entreprises (CFE), at the Maison de l’Entreprise. 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 CNSS at the same location.

Professional activity carried out in Niger is governed by the General Tax Code. Commercial activities are subject to income tax and the general VAT regime unless specific investment clauses have been codified. Granted exemptions normally only concern activities in line with the object of the institution and a specific investment clause (humanitarian activities, health, education, etc.). Companies with a turnover excluding tax of more than 50 million CFA per calendar year($80,000) are subject to Value Added Tax. Companies with a lower turnover are not subject to VAT. As such, they cannot charge VAT, nor deduct that which has been paid upstream (suppliers). From January 1, 2021, any taxable person who delivers goods or provides services for the needs of another taxable person or an ordinary consumer is required to issue them an electronic invoice.

The Investment Code offers VAT-inclusive tax exemptions depending on the size of the business.

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

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.

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

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

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

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

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

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

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

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

Niger was officially readmitted to the Extractive Industry Transparency Initiative in February 2020 after a three-year absence. The constitution mandates full disclosure of all payments from foreign government stemming from mining operations, as well as publication of all new exploration and exploitation contracts in the mining sector. However, in practice, payments from foreign countries to GoN officials have at times been controversial due to non-reporting of such payments.

Additional Resources

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain

The GoN does have a strategy to meet National Determined Contributions (NDC) to reduce greenhouse gas (GHG) contributions by 23 percent by 2030. This strategy relies principly on foreign donors to assist Niger in creating cleaner energy generation and agricultural efficiency. Niger is one of the most vulnerable nations to the impacts of climate change in the world, and forsees reductions in water and arable land resources in coming years. Conversely, Niger has one of the lowest GHG per capita levels in the world. The GoN encourages private investors to practice environmentally friendly and sustainable practices, but does not require GHG limits or environmental restrictions that exceed national or ECOWAS limits.

The constitution, adopted in 2010, contains provisions for greater transparency in government reporting of revenues from the extractive industries, as well as the declaration of personal assets by government officials, including the President. On April 6th, 2021 President Bazoum Mohamed submitted a written sworn statement of his assest to the National Court of Auditors and made the fight against corruption central to his five-year term program.

The High Authority for the Fight against Corruption and Related Offenses (HALCIA) has the authority to investigate corruption charges within all government agencies. HALCIA is limited by a lack of resources and a regulatory process that is still developing. Despite the limitations, HALCIA was able to conduct a number of successful investigations during 2020-2021. Laws related to anti-corruption measures are in place and apply to government officials, their family members, and all political parties.

Legislation on Prevention and Repression of Corruption was passed into law in January 2018; a strategy for implementation was still pending in 2022. Niger has laws in place designed to counter conflict of interest in awarding contracts and/or government procurements. Bribery of public officials by private companies is officially illegal, but occurs regularly despite GoN denunciations of such conduct.

Law number 2017-10 of March 31, 2017, prohibits bribery of public officials, international administrators, and foreign agents, bribes within the private sector, illicit enrichment and abuse of function by public authorities. The High Authority Against Corruption and Relating Crimes (HALCIA) is further tasked with working with private companies on internal anti-corruption efforts. Bribery of public officials, however, occurs on a regular basis. Though most companies officially discourage such behavior, internal controls are rare except among the largest (mostly foreign) enterprises. The government/authority encourages or requires private companies to establish internal codes of conduct that, among other things, prohibit bribery of public officials. Some private companies use internal controls, ethics, and compliance programs to detect and prevent bribery of government officials.

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

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

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

As of April 2022, there is only one large U.S. telecommunications firm invested in Niger, although it gained its assets through acquisition of a U.K. company. This low number is due to reasons that include, but are not limited to, the perception of corruption. Cases of suspected corruption occasionally appear in media reports concerning GoN procurement, the award of licenses and concessions and customs.

Resources to Report Corruption

Maï Moussa Elhadji Basshir, President
High Authority to Combat Corruption and Related Infractions (HALCIA)
BP 550 Niamey – Niger
(227) 20 35 20 94/ 95/ 96/ 97
contact@halcia.ne 

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

Niger has been politically stable since 2010, when the most recent of Niger’s coup d’états (there have been four since 1990) concluded within less than a year in a return to democratic governance. The most recent general elections were held in in December 2020, with a presidential run-off in February 2021. President Bazoum Mohamed was elected in the first democratic transfer of executive power in Niger’s history. Although Niger’s politics are often contentious and antagonistic, political violence is rare. Most parties agree that national security and peaceful cohabitation among Niger’s ethnicities are the government’s principal priority. However, protests and strikes about non-payment of salaries for public employees, lack of funding for education, and general dissatisfaction with social conditions remain a concern.

Public protest over issues like poverty, corruption, and unemployment can also sometimes turn violent. In 2020, police arrested several protesters engaged in burning tires and vandalizing property in protest of embezzlement at the Ministry of National Defense. Protests also followed the government’s announcement of social lockdown procedures in March 2020 to respond to COVID-19.

Niger experiences security threats on three distinct border areas. Niger is a founding member of the G5 Sahel fighting terrorism in the Sahel while integrating the poverty reduction dimension to mitigate the effects of youth underemployment and violent extremism. The collapse of the Libyan state to the north has resulted in a flow of weapons and extremists throughout the Sahel region. Boko Haram and ISIS-West Africa terrorists regularly launch attacks in the Diffa Region in Niger’s southeast. Jama’at al Nusrat al-Islam wa al-Muslimin (JNIM), which is a loose affiliation of al-Qaeda in the Islamic Maghreb (AQIM), the Macina Liberation Front (MLF), Ansar Dine, and al-Mourabitoun; along with ISIS-Greater Sahara (ISIS-GS), threaten Niger’s northern and northwestern borders. Terrorists regularly crossed the Mali border to attack civilian and security sites in the Tillaberi and Tahoua regions. Niger has a history of western residents and aid workers being kidnapped by terrorist groups or kidnapping for ransom gangs, as recently as October 2020. So far, more than 40 out of the 266 communes in Niger are in a state of emergency. The State Department’s Travel Advisory for Niger from April 2022 advises travels to be aware that violent crimes including robbery are common and terrorism is a threat.

Niger has an abundance of available labor, primarily unskilled. One of the most pressing concerns within the Ministry of Labor is the lack of jobs available to recent high school and university graduates, who often face long spells of unemployment or underemployment. There is very high unemployment among young workers, many of whom are uneducated and illiterate. Migration from the rural areas to the cities is a problem, as the majority of recently-arrived workers are unskilled. Such workers most often turn up in the informal economy. While informal activities are generally not reported, the World Bank estimates from 2021 stated that between 70 and 80 percent of the non-agricultural workforce is in the informal economy. Niger, as part of the Economic Community of West African States (ECOWAS) must accept laborers from neighboring ECOWAS states. While such laborers do exist within the Nigerien economy, this phenomenon is not common enough to cause friction and/or widespread resentment among local laborers.

The informal economy in Niger is vast and employs a majority of the nation’s population not involved in subsistence farming. In cities, most workers in the non-government sector are employed in an informal manner, including domestic services, markets and vending, and construction and maintenance. U.S. companies are encouraged to avoid informal employment arrangements as it presents a liability to Ministry of Labor inspectors.

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

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

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

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

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

Niger’s labor code, adopted in September 2012, and its decree No. 2017-682/PRN/MET/PS of August 2017 regulates employment, vocational training, remuneration, collective bargaining, labor representation, and labor disputes. The code also establishes the Consultative Commission for Labor and Employment, the Labor Court and regulates the Technical Consultative Committee for Occupational Safety and Health. The Labor Code lays out clear procedures for dispute resolution mechanisms in its Title VII on labor disputes. Labor hearings are public except at the reconciliation stage.

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

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

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