Burkina Faso. A. Definitions and sources of data

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1 Burkina Faso A. Definitions and sources of data The Investment Code of 1995 (Loi n 62/95/ADP du 14 Décembre 1995) of Burkina Faso provides a general definition of investment without specific concept of foreign direct investment (FDI). The Banque Centrale des États de l'afrique de l'ouest (BCEAO) provided the data on FDI in Burkina Faso. The International Monetary Fund also provides FDI data on the country in its balance-of-payments statistics. The Investment Code guarantees equal treatment of foreign investors. The Ministry of Industry, Commerce and Mines approves new foreign investments, based on the recommendations of the National Investment Commission. The commission's principal criterion is the investment's direct value added. The 1992 investment code established three incentive schedules. Schedule 'A' is for investments of less than FCFA 200 million and provides a company with an exemption from most taxes for the first five years of its existence. A tax credit is granted for the ensuing five-year period. Furthermore, companies in schedule "A" are permitted to stagger payment of Burkina Faso's registration tax over a fouryear period. The registration tax is equal to 3 per cent of the total capital invested. Schedule "B" is for investment over FCFA 200 million and provides a company with an eight-year tax exemption from most Burkinabe taxes. It also enables a company to spread the payment of the registration tax over a five-year period. In addition, all schedule "A" and "B" investments outside the country's two major cities Ouagadougou and Bobo-dioulassou receive the above benefits for five extra years. Schedule "'C' only applies to export companies and provides a permanent exemption from all Burkinabe taxes. In 2005, Burkina Faso halved the fee for registering new contracts and commercial agreements, and reduced the import tax on basic goods from 2% to 1% for formal-sector businesses. Burkina Faso is a member of several regional and international organizations and has fostered international investment agreements with both developing and developed countries. For instance, Burkina Faso is a member of the West African Monetary and Economic Union, BCEAO, Economic Community of West African States, New Partnership for Africa's Development and the African Union. It has a cooperation treaty with France, a trade, investment protection and technical cooperation agreement with Switzerland and subscribes to the Lomé Convention. Burkina Faso is a member of the World Intellectual Property Organization and eligible for the African Growth and Opportunity Act as well as the European Union's Everything But Arms market access initiative. Burkina Faso is a member of the World Trade Organization. Posting date: November 2006

2 B. Statistics on FDI and the operations of TNCs

3 UNCTAD WID Country Profile: BURKINA FASO Page 3 of 11 Table 1. Summary of FDI Variable Inward Outward 1. FDI flows, (annual average) FDI flows as a percentage of GFCF, (annual average) FDI stock, FDI stock as a percentage of GDP, Source: Based on tables 3a, 4a and UNCTAD, FDI/TNC database.

4 UNCTAD WID Country Profile: BURKINA FASO Page 4 of 11 Table 3a. FDI flows, by type of investment, Year Equity Inward investment Reinvested earnings Intracompany loans Total Equity Outward investment Intracompany Reinvested earnings loans Total Source : UNCTAD, FDI/TNC database. Note: FDI inflows: IMF for , OECD for and Banque Centrale de l'afrique de l'ouest (BCEAO) for FDI outflows: IMF , proxy for , estimate for and 2005, and BCEAO for Proxy is based on investments reported by the following economies: 1987 Belgium and Luxembourg, France.

5 UNCTAD WID Country Profile: BURKINA FASO Page 5 of 11 Table 4a. FDI stock, by type of investment, Year Inward Investment Equity/Reinvestecompany Intra- Total earnings loans Equity Outward Investment Intracompany Reinvested earnings loans Total Source : UNCTAD, FDI/TNC database. Note: FDI inward stock: Data prior to 1999 are estimated by accumulating inflows since are based on the IMF are based on Centrale de l'afrique de l'ouest (BCEAO) is estimated by adding flows to the 2004 stock. FDI outward stock: Estimated by accumulating outflows since 1974.

6 UNCTAD WID Country Profile: BURKINA FASO Page 6 of 11 Table 6. FDI flows in the host economy, by geographical origin, Economy Belgium / Luxembourg France Germany Portugal Sweden United States Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above. Table 9. FDI flows abroad, by geographical destination, Economy China France Portugal Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above. Table 12. FDI stock in the host economy, by geographical origin, Economy Canada Portugal United States Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above. Tables 23, 30, 45 and 50. The number, assets, sales and value added of affiliates of the United States TNCs in Burkina Faso, (Number and millions of dollars) Table no. Variable Number Assets Sales Value added a Source: UNCTAD, FDI/TNC database. Note: Data are based on information reported by the United States. a Majority-owned affiliates of United States TNCs.

7 UNCTAD WID Country Profile: BURKINA FASO Page 7 of 11 Table 88. Largest affiliates of foreign TNCs in the host economy, 2004 (Millions of dollars and number) Company Home economy Industry Sales Employees A. Industrial CFAO Burkina France Electrical and electronic equipment a Société Burkinabe Des Gaz Industriels France Diversified a Air Liquide France Mining and quarrying 2 20 a Société des Plastiques du Faso SA Côte d'ivoire Rubber and plastic products c Société Nouvelle Société Sucrière De La Comoe SA Côte d'ivoire Food products and beverages c Somita SA Canada Mining and quarrying c Compagnie Burkinabe pour la Transformation de Métaux SA Côte d'ivoire Metal and metal products c Sdv Burkina Faso France Rubber and plastic products.... Sobugaz France Petroleum.... B. Tertiary Celtel Burkina Faso SA Kuwait Telecommunications Diffusion Industrielle Automobile et Commerciale du Faso SA France Wholesale trade c Scac Delmas Vilejeux Burkina SA France Transport c CICA Burkina France Wholesale trade c Comptoir Burinkabe Senegal Construction.. 98 a Telecel Faso SA Côte d'ivoire Telecommunications.. 74 c Liptinfor France Wholesale trade.. 25 c Saphyto Japan Wholesale trade.. 44 a Vac-Burkina SA Netherlands Research and development.... Société Nationale de Transite de Burkina France Other services.... SNTB France Transport and storage.... Sifa France Wholesale trade.... Sade Burkina France Other services.... SONACEB France Other services.... Maersk Murkina Faso SA Denmark Other business activities.... C. Finance and Insurance Assets Employees Banque Internationale pour le Commerce, l'industrie et l'agriculture France Finance 0.2 b 300 c Sources:The Banker's Almanac, 2003 (London, Reed Information Services Ltd, 2003); Thomson Analytics ( Who Owns Whom database ( a b c Estimate.

8 UNCTAD WID Country Profile: BURKINA FASO Page 8 of 11 C. Legal framework for transnational corporations Burkina Faso had enacted a number of legal instruments at national, bilateral and multilateral levels to regulate the activities of foreign investors in the country. The key instruments that apply at these levels: I. National framework Loi n 62/95/ADP du 14 décembre 1995, portant code des investissements au Burkina Faso Source:La Découverte du Burkina Faso ( Ordinance No. 92/PRES of July 1992 on the Investment Code Source: Official Copy - Ministry of Industry-Commerce and Mines. Implementation Decree No /PRES/MICM, on the Implementation of the Ordinance concerning the Investment Code of Burkina Faso Source: Official Copy - Ministry of Industry-Commerce and Mines. Ordinance No. 93/PRES of March 1993 concerning the Mining Code of Burkina Faso Source: Official Copy - Ministry of Industry-Commerce and Mines. Ordinance No Authorising the Privatization of 12 Enterprises and creating a Privatization Commission of 17 July Source: World Bank, Technical Paper No. 186, "Divestiture of State Enterprises. An overview of the legal framework". Decree No setting forth the composition, Organisation and Operations of the Privatization Commission of 15 Sept Source: World Bank, Technical Paper No. 186, "Divestiture of State Enterprises. An overview of the legal framework". Bangui Agreement, March 1977 (Annex I). Source: WIPO ( Bangui Agreement, March 1977 (Annex III). Source: WIPO ( Bangui Agreement, March 1977 (Annexes II and IV). Source: WIPO ( Loi No. 032/99/AN du 22 Décembre 1999 portant protection de la propriété littéraire et artistique. Source: WIPO ( II. International Framework A. Burkin Faso is a party to the following multilateral and regional instruments: Paris Convention for the Protection of Industrial Property of 1883 (Revised at Brussels in 1900, Washington in 1911, The Hague in 1925, London in 1934, Lisbon in 1958 and Stockholm in 1967, and as amended in 1979). Signed in 1994.

9 UNCTAD WID Country Profile: BURKINA FASO Page 9 of 11 Convention on the Settlement of Investment Disputes between States and Nationals of other States of Entered into force on 14 October 1966 Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, which entered into force on 7th June Convention Establishing the Multilateral Investment Guarantee Agency of 1985, entered into force on 12 April Marrakesh Agreement Establishing the World Trade Organisation of 15 April Entered into force on 1 January Agreement on Trade-Related Investment Measures. General Agreement on Trade in Services. Agreement on Trade Related Aspects of Intellectual Property Rights. Revised Treaty of the Economic Community of West African States. ECOWAS West African Economic and Monetary Union (WAEMU), established in Agreement for the Promotion, Protection and Guarantee of Investment Among Member States of the Organization of Islamic Conference of l June 1981; entered into force on 23 September Articles of Agreement of the Islamic Corporation for the Insurance of Investment and Export Credit of 19 February 1991 En' into force on I August Partnership Agreement between the Members of The African, Caribbean and Pacific Group of States, of the one part and the European Community and its member states, of the other part signed in Cotonou, Benin on 23 June B. Bilateral treaties 1. Bilateral investment treaties for the protection and promotion of investments: Switzerland 1969, Tunisia 1993, Germany 1996, Malaysia 1998, Netherlands 2000, Belgium/Luxembourg 2001, Benin 2001, Chad 2001, Comoros 2001, Ghana 2001, Mauritania Bilateral treaties for the avoidance of double taxation: France 1965.

10 UNCTAD WID Country Profile: BURKINA FASO Page 10 of 11 D. Sources of information Official Banque Centrale des Etats de l'afrique de l'ouest ( Commission Nationale des Investissements ( Secondary Bennell, Paul (1997). "Foreign direct investment in Africa: rhetoric and reality", SAIS Review (Summer/Fall); pp (1997). "Privatization in Sub-Saharan Africa: progress and prospects during the 1990s", World Development, vol. 25, no. 11, pp Economist Intelligence Unit (EIU) (2002a). Country Profile: Burkina Faso (London: EIU Ltd.). (2002b). Country Report: Burkina Faso (London: EIU Ltd.), April. (2005a). Country Profile: Burkina Faso (London: EIU Ltd.). (2005b). Country Report: Burkina Faso (London: EIU Ltd.), April. International Monetary Fund (IMF) (2006). IMF's Sub-Saharan Africa Regional Economic Outlook, March 10, (Washington D.C.: IMF). Maatman, A. (2000). "Si le fleuve se tord, que le crocodile se torde." Une analyse des systemes agrarian de la region Nord-Ouest du Burkina Faso a l'aide des modeles de programmation mathematique (PhD Thesis, University of Gronnigen). Marches Tropicaux et Mediterraneens (1985). "Nouveau code d'investissements du Burkina-Faso", 41(2048), 8 February, pp Multilateral Investment Guarantee Agency (MIGA) (2002). Annual Report 2002 (Washington D.C.: MIGA), p. 9. Soderbom, M. and F. Teal (2004). "Size and Efficiency in Africa Manufacturing firms: Evidence from Firm-Level Panel Data." Journal of Development Economics, 73. pp United Nations Conference on Trade and Development (UNCTAD) (2003). FDI in landlocked developing countries at a glance (Geneva: UNCTAD/ITE/IIA/2003/5). (2005a). Investor-Disputes Arising from Investment Treaties: A Review. UNCTAD Series of International Investment Policies for Development (UNCTAD/ITE/IIT/2005/4). (2005b). A Survey of Support by Investment Promotion Agencies to Linkages, Advisory Studies No. 18 (UNCTAD/ITE/IPC/2005/12). (2005c). FDI in least developed countries at a glance: 2005/2006 (UNCTAD/ITE/IIA/2005/17).

11 UNCTAD WID Country Profile: BURKINA FASO Page 11 of 11 United States Trade Representative (2006) Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the Africa Growth and Opportunity Act: The Sixth of Eight Annual Reports, May (Washington D.C.: US Government). World Bank (2002). Global Economic Prospects and the Developing Countries 2003: Investing to Unlock Opportunities (Washington D.C.: World Bank). World Economic Forum (2000/2001). Africa competitiveness report (New York: Oxford University Press). Zeiger, L. and P. Michelini (1989). "Untapped mineral resources of West Africa offer opportunities for trade and investment in the 1990s", Business America, 110(24), December, pp