Burkina Faso risk report

Companies face high corruption risks when dealing with the judiciary. The institution is perceived to be highly corrupt and inefficient (HRR 2015). Companies report that it is very common to offer bribes and other irregular payments to obtain favorable court decisions (GCR 2014-2015). Furthermore, the courts' ability to settle disputes and challenge government regulations is poor (GCR 2014-2015). Despite that the courts have pursued some high-level officials who have previously been members of the Compaoré administration, the judiciary is still subject to political interference (FitW 2016, HRR 2015). More than one-third of citizens perceive judges and magistrates to be corrupt (TI Africa Survey 2015).

Burkinabé courts accept international arbitration as a means for settling investment disputes between private parties. Companies should note, however, that high fees, the high number of required procedures and the amount of time needed to resolve disputes render the enforcement of contracts very burdensome. It is less time consuming to enforce contracts in Burkina Faso compared to both the regional average and the OECD average (DB 2017). Burkina Faso is a member of the International Centre for Settlement of Investment Disputes (ICSID) and is a signatory to the New York Convention 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Companies contend with a moderate to high corruption risks in interactions with the Burkinabe police. The police and gendarmerie are perceived to be among the most corrupt institutions in Burkina Faso (ICS 2016). Investigations of corrupt practices and the abuse of the police are carried out by the gendarmerie, but results of these investigations are not always made public (HRR 2015). On a more positive note, however, only between 1-15% of households report having paid a bribe to the police (TI Africa Survey 2015). Companies perceive the reliability of the police to protect them from crime and to enforce an order to be low (GCR 2015-2014).

The public services administration carries a moderate to high corruption risk to companies. Businesses perceive bribes and irregular payments to be widespread when applying for public utilities (GCR 2014-2015). On the other hand, only one in every ten citizens surveyed report having paid a bribe to obtain a public service in the last 12 months (TI Africa Survey 2015). In general terms, public administrations are ineffective due to a lack of financial, human and technical resources, and suffer from practices of clientelism and corruption (BTI 2016).

Burkina Faso's regulatory system is perceived to be transparent and consistent with international standards (ICS 2016). The cost and time required to register a business in Burkina Faso are lower compared to the regional average (DB 2017). Furthermore, the government has eased the process of starting a business by reducing the paid-in minimum capital required to register a company (DB 2017).

Companies should note that despite property rights and acquisition of property being adequately defined under the law, weaknesses in the judicial system complicate or prevent their implementation (BTI 2016). Registering property in Burkina Faso only requires 4 procedures, yet takes 67 days; an average which is higher than in other neighboring countries (DB 2017).

The tax administration presents business with high corruption risks. Bribes and irregular payments are often exchanged in meetings with tax officials (GCR 2014-2015). Well over one-third of Burkina Faso's citizens perceive tax officials to be corrupt (TI Africa Survey 2015). Despite that the government offers a range of tax incentives and breaks to companies investing in the country; including exemptions from value-added tax on certain equipment, the tax system is considered to be complex and burdensome (ICS 2016).

Burkina Faso struggles with an informal sector. Despite that, the government has made strides to incorporate it into the formal economy by imposing a unique tax called the 'contribution du secteur informel' (CSI), on informal sector companies and other small companies with an annual turnover of XOF 15 million or less. The maximum CSI tax is XOF 100,000. Companies qualifying for CSI tax status are prohibited from bidding on state tenders (ICS 2016). Paying taxes is less time-consuming in Burkina Faso compared to the regional average (DB 2017).

Companies dealing with customs administration face high corruption risks. Transparency levels at the border are very low and bribes and irregular payments are widespread when exporting and importing (GETR 2014). In mid-2015, authorities sentenced former director of customs, Ousmane Guiro, to a two-year suspended prison term for his role in a corruption case involving USD 1.5 million (HRR 2015). Guiro was also fined USD 17,300 and his assets confiscated (HRR 2015).

Trading across borders is less costly and less time-consuming compared to the regional (DB 2017).

Businesses dealing with public procurement in Burkina Faso are faced with high corruption risks. Corruption in the form of facilitation payments, bribery and preferential treatment in procurement deals is common (GCR 2014-2015). The people of Burkina Faso rank procurement officials among the government staff whom commonly engage in corruption (ICS 2016). Procurement procedures are not always respected; in certain tenders, contract conditions are not clearly defined (GI 2016).

The Autorité de Régulation de la Commande Publique (ARCOP) is responsible for monitoring the execution of all government contracts and ensuring transparency and fairness of in the process (ICS 2016). ARCOP works closely with the media, which substantially increased the latter's ability to report on high-profile corruption cases (ICS 2016). Furthermore, reports suggest that several public contracts have been awarded without a tender, but merely through mutual agreement (GI 2016). The percentage of tenders awarded no tender increased from 14% in 2014 to 18,5% in 2015, indicating a decrease in the levels of transparency in public procurement (GI 2016). However, when tenders are publicized, private and state-owned companies compete on equal terms and conditions, yet public enterprises have a monopoly over the segment in which they are active (ICS 2016). Companies found guilty of violating procurement regulations are prohibited from participating in future bids (GI 2016).

Three former ministers, Arthur Kafado, Jerome Bougouma and Bertin Ouedraogo, were arrested and detained back in 2015 for embezzlement, illicit enrichment, and misappropriation of public funds (HRR 2015). There was no further information on the case at the time of review. Companies are recommended to use a specialized public procurement due diligence tool in order to mitigate the corruption risks associated with public procurement.

In their effort to fight corrupt practices, Burkina Faso has taken measures to enhance transparency and accountability within the sector by implementing international guidelines set by the Extractive Industries Transparency Initiative (EITI). Under the period of review, the country is in the candidacy stage of the process and is expected to assessed against the 2016 standard to gain status as a 'Compliant Country'.

Burkina has established a legal anti-corruption framework, however, implementation is lacking and anti-corruption agencies lack enforcement powers (HRR 2015, ICS 2016). The Penal Code (in French) criminalizes corruption, embezzlement, abuse of office, extortion and influence-peddling in the public sector. Facilitation payments are also criminalized under the Penal Code. Any public servants receiving a payment, gift or donation in return for performing a service, even if the service is due, is punished by two to five years imprisonments and fined twice the value received (GI 2016). Following regime change, with the end of the 30-year rule of Balaise Compaore, the National Transitional Council passed a new anti-corruption law in 2015; greatly broadening the range of officials required to submit financial asset declarations; including the president, prime minister, members of parliament, etc. (REN-LAC 2015). The law also requires all public institutions to adopt codes of conduct promoting integrity and transparency. All public officials are required under the new law to declare gifts, donations and other benefits received (REN-LAC 2015).

Burkina Faso is a member of the West African Economic and Monetary Union (WAEMU) as well as the Inter-Governmental Action Group Against Money Laundering in West Africa (GIABA), and has criminalized money laundering in accordance with these memberships by passing Law No. 26 Concerning the Fight Against Money Laundering. Moreover, Burkina Faso has both signed and ratified the African Union Convention on Preventing and Combating Corruption as well as the United Nations Convention against Corruption (UNCAC).

Freedom of the press is provided by the Constitution of Burkina Faso and is largely respected in practice. The media also witnessed several highlights during 2015; for instance, legislation passed during the year eliminated prison sentences for libel and other press offenses (FotP 2016). Generally, the media has experienced less political interference and restrictions since the regime transition in 2015, which has also, in turn, resulted in less self-censorship among journalists (FotP 2016). Furthermore, the 1998 assassination of investigative journalist and editor of the weekly newspaper L'Indépendant, Norbert Zongo, was finally solved and three former soldiers in Compaoré's presidential guard were charged with his killing (FotP 2016). Notwithstanding, press freedom is restricted in some perspective, such as through heavy financial penalties for libel and there have also been reports of physical attacks and intimidation of journalists during the attempted coup carried out in September 2015 (FotP 2016). The law provides for free access to government information, however many exceptions to the law — state secrets, ongoing investigations, etc. — limit these freedoms in practice (FotP 2016). The High Council for Communication CSC continuously monitors the media sector, including online outlets, to ensure compliance with its dictates (FotP 2016). Journalists often report on issues in return for financial compensation, thus jeopardizing the integrity of their work (FotP 2016). The media environment in Burkina Faso is described as 'partly free' (FotP 2016).

The law provides for freedom of assembly, yet the government did not fully respect these rights (HRR 2015). Several domestic and international civil society organizations operated without government restriction in Burkina Faso, and the government was generally responsive to their views (HRR 2015).

• World Bank & IFC: Doing Business 2017.
• Global Integrity: Africa Indicators - Burkina Faso 2016.
• Freedom House: Freedom of the Press - Burkina Faso 2016.
• Freedom House: Freedom in the World - Burkina Faso 2016.
• US Department of State: Investment Climate Statement - Burkina Faso 2016.
• US Department of State: Human Rights Practices Report - Burkina Faso 2016.
• Bertlesmann Foundation: Transformation Index - Burkina Faso 2016.
• Réseau National de Lutte Contre la Corruption (REN-LAC): Etat de la Corruption au Burkina Faso 2015.
• Transparency International: People and Corruption: Africa Survey 2015.
• World Economic Forum: Global Competitiveness Report 2014-2015.
• World Economic Forum: Global Enabling Trade Report 2014.