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Burkina Faso On Path Towards A Better Business Environment

Areas of Work » Business Regulation » Business Regulation » Burkina Faso On Path Towards A Better Business Environment

© World Bank GroupSaturnin Zoetany is quickly establishing himself as one of Burkina Faso’s brightest entrepreneurs. Only 23 years old, Saturnin recently took advantage of Burkina Faso's new streamlined business procedures to register his company, Zoetanyande Distributing, which manufactures and sells yogurt to an expanding market, now including several large hotels.

“I started my first informal business when I was 12 years old, making yogurt and goat cheese in my aunt's kitchen,” says Saturnin. “I now employ six people and have a small farm where we raise goats and cattle to supply the milk for the yogurt.”

Entrepreneurs and small businesses across Burkina Faso are feeling the impact of reforms that have dramatically improved the business registration process. Costs have been reduced by more than 50 percent, and the time to open a company fell from 134 days in 2004 to 13 days in 2013—more than three weeks faster than the Sub-Saharan average. According to an external evaluation, these reforms have yielded $8 million private sector investments, the formalization of 1,000 new businesses and the establishment of about 2,400 new jobs within the past three years.

These reforms come as part of an investment climate program supported by the World Bank Group and the Swiss State Secretariat for Economic Affairs (SECO). Since 2006, investment climate teams have been working closely with the government of Burkina Faso to boost the country’s private sector and global economic standing.

Recognized as one of the top ten reformers by Doing Business in 2009, Burkina Faso has been building on its reform momentum.

"The need to foster the emergence of a vibrant private sector that will drive economic growth is at the heart of the government's agenda. We are committed to continuing the reform momentum," says Arthur Kafando Patiendé, Burkina Faso's Minister of Industry, Trade and Handicrafts.  

This momentum has delivered significant improvements in areas such as trading logistics, business licensing, construction permitting, and paying taxes.

© World Bank GroupTrading across borders is now easier following the automation of the rail transit process between Burkina Faso and Côte d’Ivoire and the elimination of the transit document for import and export. Traders moving goods from Burkina Faso to Togo have also benefitted from a newly interconnected customs clearance system that has doubled the volume of truck traffic between Lomé and Ouagadougou.

Licensing, a major constraint to doing business in Burkina Faso is on the path to being streamlined. In FY13, the program prepared an inventory of all business licenses in the country. More than 300 licenses were identified and recommendations were submitted to the government, which established a Secretariat to lead the licensing reform process in January 2013.

The number of procedures for obtaining construction permits has decreased from 32 to 15 following the establishment of a one stop shop for construction permits. Costs were halved, and the time needed to obtain the permit was reduced from 226 to 98 days. These reforms helped to increase the average annual number of acts of building permits from 180 in 2007 to about 800 in 2013.

Corporate taxes have been lowered through a consolidation of three separate taxes (BIC, IMFPIC, and IRF) and additional reforms have helped streamline procedures and tax burdens. These include the adoption of a book of tax procedures, a reduction in the amount of security required in case of a tax disputes (from 100 percent to 25 percent of the disputed amount), the option of payment by bank transfer, and the decline in tax dividends (from 15 percent to 12.5 percent). Combined, these reforms have lowered the overall tax rate of 48.3 percent to 43.6 percent.

Regional integration has played a key role in elevating Burkina Faso’s global standing as well. As a member of the Organization for the Harmonization of Business Law in Africa (OHADA), a unique organization that enacts common business laws for 17 member countries, Burkina Faso has recently endorsed a series of measures to significantly reduce costs and increase access to credit, and to encourage the development of economic activities.A number of training sessions were held in 2013 to raise awareness of the OHADA reforms in Ouagadougou and Bobo-Dioulasso for national stakeholders.

Through these reforms, Burkina Faso is on track to establishing a better business environment and more vibrant private sector.