Geneva, 23 June 2009 - Burkina Faso should accelerate legal and institutional reforms to further tap the developmental benefits of foreign direct investment (FDI), an UNCTAD Investment Policy Review (IPR) of the country recommends.
The legal and institutional recommendations of the IPR -- UNCTAD´s latest in a series now covering 25 countries and regions -- were presented before Government and business representatives this afternoon and discussed by them.
"I have little doubt that Burkina Faso will succeed in attracting significantly higher inflows of beneficial FDI in the future if it stays the course of the structural reforms it initiated in the 1990s," UNCTAD Deputy Secretary-General Petko Draganov told the gathering.
Key areas identified by UNCTAD as deserving further reform include corporate taxation, customs, administrative procedures, governance, regional integration, and competition laws and policies.
The IPR also encourages Burkina Faso to build upon the development opportunities generated by recent foreign investment in the mining sector.
It encourages Burkina Faso to proceed with the establishment of an investment promotion agency and a Presidential Council for Investment, and offers detailed and concrete proposals on how these two institutions might function and how they could fit into the existing institutional landscape of Burkina Faso.
The Government of Burkina Faso endorsed many of the recommendations. Speaking at the presentation, Mamadou Sanou, Burkina Faso´s Minister of Commerce, Enterprise Promotion and Handicraft, highlighted "the political will to make the private sector the engine for growth and economic development" and "the need for investors to have a transparent and stable regulatory framework". Moreover, the Government stressed the need to improve infrastructures (including electricity and transport), and its commitment to fight corruption and improve the corporate tax regime by gradually lowering rates and simplifying procedures.
Deputy Secretary-General Draganov said UNCTAD is committed to supporting Burkina Faso in implementing the IPR´s recommendations. He also called upon the international community to support Burkina Faso in these efforts.
Senior business executives expressed their satisfaction with their investments in Burkina Faso. They said they appreciate the country´s political stability, social peace and the open dialogue that is possible with Governmental authorities at all levels. They also commended the efforts the Government is making to improve its institutional and regulatory framework, in particular the implementation of a new labour code. However, they pointed out that there is a low level of infrastructure, in particular electricity, high tax rates, and a need to improve the judicial system.
Before the presentation, the visiting delegation of Government and business representatives from Burkina Faso had an opportunity to network with senior international business executives during an informal lunch hosted and organized by UNCTAD. Among the topics discussed were opportunities in Burkina Faso and possible future projects.
UNCTAD carries out Investment Policy Reviews at the request of developing-country Governments. The reviews provide an objective evaluation of the policy, regulatory, and institutional frameworks for FDI in beneficiary countries, with the objective of attracting increased FDI and maximizing the benefits from it. A follow-up review is performed five years after an IPR is completed to assess how recommendations have been implemented and to determine the impact of new policies on FDI flows.
