Chapter

BURKINA FASO

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 1, 1996.
Exchange Arrangement
CurrencyThe currency of Burkina Faso is the CFA franc.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderThe CFA franc is pegged to the euro, the intervention currency, at the fixed rate of CFAF 100 per €0.8385. Exchange rates for other currencies are derived from the rate for the currency concerned in the Paris foreign exchange market and the fixed rate between the euro and the CFA franc.
Exchange taxThere is a proportional bank commission of 0.25% on transfers to all countries outside the WAEMU that must be surrendered in its entirety to the treasury. In addition, banks are allowed to charge an exchange commission of up to 2% on over-the-counter exchange for French francs.
Exchange subsidyNo.
Forward exchange marketEffective February 1, 1999, residents were authorized to contract forward exchange cover to cover payments related to imports and exports of goods and services.
Arrangements for Payments and Receipts
Prescription of currency requirementsBecause Burkina Faso is linked to the French Treasury through an Operations Account, settlements with France, Monaco, and other Operations Account countries (WAEMU and CAEMC members and the Comoros) are made in CFA francs, euros, or the currency of any other Operations Account country. Certain settlements are channeled through special accounts. Settlements with all other countries are usually effected through correspondent banks in France in the currencies of those countries or in euros through foreign accounts in euros.
Payment arrangements
Bilateral payment arrangements
InoperativeYes.
Regional arrangementsAn Operations Account is maintained with the French Treasury that links Operations Account countries. All purchases or sales of foreign currencies or euros against CFA francs are ultimately settled through a debit or credit to the Operations Account.
Clearing agreementsA multilateral clearing agreement exists within the framework of the WAMA between WAEMU members, Cape Verde, The Gambia, Ghana, Guinea, Liberia, Mauritania, Nigeria, and Sierra Leone.
Administration of controlExchange control is administered jointly by the MOF and the BCEAO. Since February 1, 1999, most of the authority to supervise foreign exchange transactions has been delegated to authorized banks, which are required to report these operations to the MOF. The only operations that continue to require prior approval from the MOF or the BCEAO involve residents’ investments abroad, domestic accounts in foreign exchange, and resident accounts abroad. The BCEAO is also authorized to collect—either directly or through banks, financial institutions, the Postal Administration, or judicial agents—any information necessary to compile balance of payments statistics.



Effective February 1, 1999, the amount of transfers authorized without supporting documentation was raised to CFAF 300,000 from CFAF 100,000.



The advertising or offering for sale of foreign or domestic securities in Burkina Faso requires RCPSFM authorization.
International security restrictionsNo.
Payment arrears
OfficialRestructuring of arrears to Libya and the countries of the FSU is in progress.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeImports of gold require prior MOF authorization. Exempt from this requirement are (1) imports by or on behalf of the Treasury or the BCEAO; (2) imports of manufactured articles containing minor quantities of gold (such as gold-filled or gold-plated articles); and (3) imports by travelers of gold objects up to a combined weight of 500 grams. Both licensed and exempt imports of gold are subject to customs declaration. Exports of gold are liberalized.
Controls on exports and imports of banknotes
On exports
Domestic currencyThe exportation of CFA franc banknotes by nonresident travelers is not prohibited. However, repurchases by the BCEAO of exported banknotes are still suspended. In addition, shipments of BCEAO banknotes among authorized intermediaries and their correspondents situated outside the WAEMU are officially prohibited.
Foreign currencyThe reexportation of foreign banknotes by nonresident travelers is allowed up to the equivalent of CFAF 500,000; the reexportation of foreign banknotes above this ceiling requires documentation demonstrating either the importation of the foreign banknotes or their purchase against other means of payment registered in the name of the traveler or through the use of nonresident deposits lodged in local banks.
On imports
Domestic currencyThere are no restrictions on the importation by resident or nonresident travelers of banknotes and coins issued by the BCEAO.
Foreign currencyResidents and nonresidents may bring in any amount of foreign banknotes and coins (except gold coins) of countries outside the Operations Account area. Residents bringing in foreign banknotes and foreign currency traveler’s checks exceeding the equivalent of CFAF 300,000 must declare them to customs upon entry and sell them to an authorized intermediary bank within eight days.
Resident Accounts
Foreign exchange accounts permittedEffective February 1, 1999, residents are allowed to open foreign exchange accounts with local banks or with banks abroad after obtaining authorization from the MOF, subsequent to the approval of the BCEAO.
Held domesticallyThe holding of these accounts is subject to prior approval by the MOF upon the recommendation of the BCEAO and in coordination with the Chairman of the Council of Ministers of the WAEMU.
Held abroadThe opening of accounts abroad by residents is subject to the prior authorization of the MOF, subsequent to the approval of the BCEAO.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedEffective February 1, 1999, authorization for these accounts is issued by the BCEAO.
Domestic currency accountsBecause the BCEAO has suspended the repurchase of banknotes circulating outside the WAEMU territories, nonresident accounts may not be credited or debited with BCEAO banknotes. These accounts may not be overdrawn without the prior authorization of the MOF, upon recommendation from the BCEAO. Transfers of funds between nonresident accounts are not restricted.
Convertible into foreign currencyForeign accounts denominated in CFA francs may be freely debited for the purpose of purchases by nonresidents of any foreign currencies on the official exchange market.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsAll import transactions exceeding CFAF 3 million must be domiciled with an authorized bank. The threshold was raised to CFAF 5 million on February 1, 1999.
Preshipment inspectionAn inspection is required for quality and price.
Import licenses and other nontariff measuresA technical import visa (certificat de conformité) is required for sugar, insecticides, wheat and cereal flour, tires and inner tubes for motorcycles, vegetable oil, milk, electrical batteries, food preserves, and rice. The Ministry of Industry, Commerce, and Crafts may, on the basis of criteria established by the MOF, waive the prescribed formalities for imports from countries with which Burkina Faso has concluded a customs union or free trade—area agreement.
Positive listImport licenses were eliminated and replaced with preimport declarations issued for all import operations valued at CFAF 500,000 and over.
Negative listImports of ivory and fishing nets with a mesh smaller than three square centimeters are restricted.
Import taxes and/or tariffsOn January 1, 2000, the WAEMU introduced a CET with four rates (zero, 5%, 10%, and 20%) for all member countries except Guinea-Bissau. Imports are further subject to a statistical tax of 1% and a community solidarity tax of 1%. A temporary protection tax of 15% (in other cases 7.5%) may be levied on products upon the authorization of the WAEMU commission, if the effective protection rate has declined by more than 50% (or more than 25%).



All imports from outside the ECOWAS are subject to a solidarity communal levy of 1%, and imports of certain goods that are also locally produced are subject to a protection tax ranging from 10% to 30%. Effective April 1, 1999, the new common tariff categorization for imported products adopted by the WAEMU was introduced.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsEffective February 1, 1999, exports between WAEMU countries are excluded from the repatriation requirement.
Surrender requirementsExport proceeds must be surrendered within one month of the date on which payments fall due. The authorized intermediary banks must then surrender such foreign exchange to the BCEAO via transfer through the bank of issue.
Financing requirementsNo.
Documentation requirements
DomiciliationAll export transactions of more than CFAF 5 million must be domiciled with an authorized intermediary bank, except for exports between WAEMU countries, which, effective February 1, 1999, need not be domiciled.
Export licensesExport licenses were eliminated and replaced with preexport declarations issued for exports valued at CFAF 500,000 and over. Exports of gold, diamonds, and all other precious metals are subject to MOF authorization. Exports of ivory are subject to special regulations.
Export taxesMost exports are subject to a customs stamp tax of 6% and a statistical duty of 3%.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersIn the case of transfers not exceeding CFAF 100,000, no supporting document is required. This threshold was increased to CFAF 300,000 on February 1, 1999. Residents are required to pay through a licensed intermediary. Effective February 1, 1999, payments and incomes of foreign ships in the WAEMU zone and WAEMU ships abroad are included under current operations.
Trade-related payments
Indicative limits/bona fide testYes.
Investment-related payments
Prior approvalPayments for the depreciation of direct investments require the approval of the MOF, since depreciation is not specifically mentioned in the regulations.
Indicative limits/bona fide testThere are no indicative limits or bona fide tests for the transfer of profits and dividends.
Payments for travel
Quantitative limitsEffective February 1, 1999, limits on foreign exchange allowances were eliminated.
Indicative limits/bona fide testAllowances in excess of the equivalent of CFAF 2 million in foreign banknotes must be exported in the form of traveler’s checks, bank drafts, or other means of payment.
Personal payments
Indicative limits/bona fide testPayments for medical costs and studies abroad are granted upon submission of supporting documentation to authorized banks.
Foreign workers’ wages
Indicative limits/bona fide testYes.
Other payments
Indicative limits/bona fide testYes.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsProceeds from invisible transactions with non-WAEMU member countries must be repatriated.
Surrender requirementsEffective February 1, 1999, all proceeds from invisible transactions with non-WAEMU member countries must be surrendered to an authorized dealer within one month of the due date. Resident travelers must declare to customs any foreign means of payment in excess of CFAF 50,000 that they bring in and must surrender these to an authorized bank within eight days of their return. This amount was raised to CFAF 300,000, effective February 1, 1999.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsTransfers of capital abroad by residents for investment purposes are subject to controls. Capital inflows to WAEMU countries are unrestricted with the exception of direct investment, which is subject to prior declaration, and certain borrowing operations, which require prior authorization of the MOF. If, however, the purchase of the securities has been authorized by the RCPSFM, MOF authorization is not required.



In line with the new direction of economic policy aimed at attracting foreign investment, new exchange laws currently being adopted by the WAEMU member states provide for the elimination of all controls on capital inflows.



In the implementation of the provisions indicated in this document, the term “foreigner” refers to countries that are not members of the franc zone. However, with respect to the local issue and offer for sale of foreign securities, the term “foreigner” refers to all the countries outside the territory of the member state concerned.



With the exception of the issue and sale in the country of foreign securities, operations in securities are not covered explicitly by specific laws. However, by their nature, these operations are still subject to the provisions governing foreign investment and lending.



Effective February 1, 1999, transfers by nonresidents related to the sale of an investment were allowed. The reinvestment abroad by a resident of proceeds from the sale of an investment is subject to the prior approval of the MOF. Foreign investment in WAEMU countries became unrestricted. Such operations are subject to reporting for statistical purposes. The prior authorization of the RCPSFM is required for the issuance and marketing of securities and capital assets of foreign entities, as well as for the advertising of investments abroad. Any investment by residents abroad requires the prior approval of the MOF.
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsEffective February 1, 1999, prior authorization is required from the RCPSFM. The issuance and sale of securities in Burkina Faso must be declared to the MOF for statistical purposes.
Purchase abroad by residentsThe purchase of foreign securities by residents and the transfer abroad of funds for this purpose are subject to the prior authorization of the MOF.
Sale or issue abroad by residentsYes.
Bonds or other debt securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On money market instruments
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
On collective investment securities
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Controls on derivatives and other instrumentsThese instruments, which are virtually nonexistent in Burkina Faso, are governed by the regulations generally applicable to securities and investments, except commodity and security call and put options, which, effective February 1, 1999, residents may purchase freely abroad.
Purchase locally by nonresidentsYes.
Sale or issue locally by nonresidentsYes.
Purchase abroad by residentsYes.
Sale or issue abroad by residentsYes.
Controls on credit operations
Commercial credits
By residents to nonresidentsThere are no controls on credits related to exports of goods, provided that the date on which payment falls due is not more than 120 days after the date of shipment. The transfer of funds abroad for this purpose is subject to prior MOF authorization.
To residents from nonresidentsThere are no controls, and repayments of commercial credits are generally approved, subject to the presentation of documents attesting to the validity of the commercial operation or of the services rendered, as well as the payment due date.
Financial credits
By residents to nonresidentsThese credits require prior approval from the MOF. Outward transfers necessary to service such facilities require an exchange authorization, subject to the approval of the BCEAO acting on behalf of the MOF and substantiated by documentation.
To residents from nonresidentsThere are no controls on these credits, but they must be reported for statistical purposes. The necessary funds must be transferred from abroad through an authorized agent. There are no controls on repayments of loans, provided that the authorized agent handling the settlement is provided with documentation attesting to the validity of the transaction.
Guarantees, sureties, and financial backup facilitiesThe same regulations apply as for financial credits.
By residents to nonresidentsYes.
To residents from nonresidentsThere are no controls on the granting of these facilities, and the funds involved must be transferred from abroad through an authorized intermediary.
Controls on direct investment
Outward direct investmentAll investment abroad by residents is subject to the prior authorization of the MOF. A maximum of 75% of such investments may be financed by foreign loans. Authorization is not required for purchases of foreign securities whose issuance or offering for sale in WAEMU member countries has been authorized by the RCPSFM.
Inward direct investmentInward investments must be reported for statistical purposes.
Controls on liquidation of direct investmentThe liquidation of investments abroad must be reported to the MOF for information purposes. Reinvestment of the proceeds from the liquidation is subject to prior MOF authorization. If reinvestment is not authorized, the proceeds from the liquidation must be repatriated within one month through an authorized intermediary. The sale of foreign investments in Burkina Faso is unrestricted but must be reported to the MOF for statistical purposes.
Controls on real estate transactions
Purchase abroad by residentsInvestments abroad by residents require prior authorization from the MOF. The investor must make the request in writing and designate the authorized intermediary that will execute the payment. Whether the payment is made by an outward transfer of funds or by deposit to a foreign account in francs, it cannot be executed until after the period agreed to by the parties.
Controls on personal capital movements
LoansThe same regulations apply as for securities and investments.
By residents to nonresidentsYes.
To residents from nonresidentsYes.
Gifts, endowments, inheritances, and legacies
By residents to nonresidentsIn general, inheritances and dowries are authorized; endowments require prior approval.
To residents from nonresidentsYes.
Settlement of debts abroad by immigrantsImmigrants who have acquired resident status must obtain prior approval from the MOF to settle debts incurred abroad when they were nonresidents.
Transfer of assets
Transfer abroad by emigrantsThese transfers are subject to the prior authorization of the MOF.
Transfer into the country by immigrantsThis requires authorization of the MOF.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutionsThe same regulations apply as for lending to nonresidents.
Borrowing abroadAuthorized agents are free to borrow from abroad.
Maintenance of accounts abroadBanks and financial institutions are authorized to open accounts with their correspondent banks for settling transactions for their own account or the account of their customers. However, banks are not authorized to hold amounts in these accounts that exceed their current requirements.
Lending to nonresidents (financial or commercial credits)There are no controls if these operations involve commercial credits. Prior authorization from the MOF is required for financial credits.
Lending locally in foreign exchangeThere are no regulations that apply specifically to these transactions. However, prior MOF approval is required.
Purchase of locally issued securities denominated in foreign exchangeThese purchases require the prior approval of the RCPSFM.
Differential treatment of deposit accounts in foreign exchange
Credit controlsYes.
Differential treatment of deposit accounts held by nonresidentsMonetary regulations make no distinction between resident deposit accounts, nonresident deposit accounts, and foreign deposit accounts.
Investment regulationsThe same regulations apply as for foreign investments.
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsThere are no prudential ratios. Open positions result from special dispensations.
Provisions specific to institutional investorsEffective February 1, 1999, controls are imposed by the Insurance Code of the Inter-African Conference on Insurance Markets.
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadn.r.
Limits (max.) on portfolio invested abroadn.r.
Limits (min.) on portfolio invested locallyn.r.
Currency-matching regulations on assets/liabilities compositionn.r.
Other controls imposed by securities lawsNo.
Changes During 1999
Exchange arrangementJanuary 1. The CFA franc peg to the French franc was replaced with one to the euro.



February 1. Residents were authorized to contract forward exchange cover to settle payments related to imports and exports of goods and services.
Arrangements for payments and receiptsFebruary 1. The amount that may be transferred without supporting documents was increased to CFAF 300,000.
Resident accountsFebruary 1. Residents were allowed to open foreign exchange accounts with local banks or with banks abroad after obtaining authorization from the MOF, with the approval of the BCEAO.
Nonresident accountsFebruary 1. Authorization to open foreign exchange accounts is now issued by the BCEAO.
Imports and import paymentsFebruary 1. The domiciliation threshold for import operations was raised to CFAF 5,000,000.



April 1. The new common tariff categorization for imported products adopted by the WAEMU was introduced.
Exports and export proceedsFebruary 1. Exports between WAEMU countries are no longer subject to domiciliation and repatriation requirements.
Payments for invisible transactions and current transfersFebruary 1. Limits on foreign exchange allowances for travel were abolished.



February 1. Payments and incomes of foreign ships in the WAEMU zone and WAEMU ships abroad, are included under current operations.
Proceeds from invisible transactions and current transfersFebruary 1. All proceeds must be surrendered to an authorized dealer within one month of the due date. The amount resident travelers must declare to customs and surrender to authorized dealers within eight days of their return was raised to CFAF 300,000.
Capital transactionsFebruary 1. Prior authorization of the RCPSFM was required for the issue and offer for sale of securities by foreign entities.
Controls on derivatives and other instrumentsFebruary 1. Transfers relating to option purchases were allowed.
Provisions specific to institutional investorsFebruary 1. Controls were imposed by the Insurance Code of the Inter-African Conference on Insurance Markets.
Changes During 2000
Imports and import paymentsJanuary 1. The customs duty rates are zero, 5%, 10%, and 20% plus taxes of 2%. A temporary protection tax may also be applied.

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