Chapter

BURKINA FASO

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of December 31, 2003)
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 655.957 per €1. Exchange rates for other currencies are derived from the rate for the currency concerned in the Paris foreign exchange market vis-à-vis the euro.
Exchange taxA symmetrical bank commission of 0.25% applies to transfers to all countries outside the WAEMU; this 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 euros.
Exchange subsidyNo.
Forward exchange marketResidents are authorized to contract forward exchange cover to effect payments related to imports and exports of goods and services.
Arrangements for Payments and Receipts
Prescription of currency requirementsBurkina Faso is linked to the French Treasury through an Operations Account; therefore, 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.
Use of foreign exchange among residentsResidents must surrender all foreign exchange earned abroad or domestically to an authorized intermediary bank within eight days of receipt.
Payments arrangements
Bilateral payments 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 between the WAEMU members and 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. Most of the authority to supervise foreign exchange transactions is delegated to authorized banks, which are required to report these operations to the MOF. The only operations that 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.
No supporting documents are required for transfers of up to the equivalent of CFAF 300,000.
International security restrictionsNo.
Payments arrears
OfficialRestructuring of arrears to Libya is in progress. Arrears owed to FSU countries were restructured in 1999.
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 have been 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 deposit accounts 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. Nonresident travelers must declare to customs foreign currency exceeding the equivalent of CFAF 1 million upon entry and exit.
Resident Accounts
Foreign exchange accounts permittedResidents 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 domesticallyThese accounts may be held domestically, but prior approval is required.
Held abroadResident travelers may open bank accounts abroad to deposit foreign exchange or income acquired during their stay abroad. However, funds held in these accounts must be repatriated within 30 days of a traveler’s return.
Approval requiredThe 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 held abroadNo.
Accounts in domestic currency convertible into foreign currencyNo.
Nonresident Accounts
Foreign exchange accounts permittedNonresidents are allowed to open these accounts, but BCEAO authorization is required.
Approval requiredYes.
Domestic currency accountsYes.
Convertible into foreign currencyNonresidents are free to debit accounts denominated in CFA francs for the purchase of foreign currency in the official 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 from outside of the CFA franc zone exceeding CFAF 5 million must be effected through an authorized bank.
Preshipment inspectionAll imports valued at CFAF 3 million or more are subject to inspection for verification of quality and value.
Import licenses and other nontariff measures
Positive listImport licenses were eliminated and replaced with preimport declarations issued for all import operations valued at CFAF 500,000 and above.
Negative listImports of asbestos, fireworks, or explosive toys for entertainment purposes, fishing nets with a mesh smaller than 3 cm2, and ivory are restricted.
Other nontariff measuresA technical import visa (certificat de conformité) is required for the following products: reinforcing steel; sheet metal; adhesives for cold vulcanization (dissolution); carbide; electrical batteries; polyethylene and polypropylene bags for packing; mopeds; motorcycles having an engine capacity of less than 125 cm2; tires and inner tubes for cycles; aerosol insecticides; coils for mosquitoes; pesticides; bleach; cosmetic products and perfume; gas cylinders; pharmaceutical alcohol; butter and margarine; cooking salt; edible vegetable oils; food pastes; granulated sugar or sugar cubes; mayonnaise; mustard; seasoning cubes and flavoring; vinegar; wheat and cereal flour; yeast and additives for bread making; canned food; cookies; rice; beer; liquor; milk; tea and coffee; sodas; wine; and cigarettes and tobacco of any kind.
Import taxes and/or tariffsThe CET of the WAEMU consists of four rates (zero, 5%, 10%, and 20%). Imports are also subject to a statistical fee of 1% and a community solidarity levy of 1%. The WAEMU commission has authorized a temporary protection tax of 5% to be levied on certain products from January 2004 to December 2005.
All imports from outside the ECOWAS are subject to a community levy of 0.5%.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsProceeds from exports to 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, except those between WAEMU countries, must be domiciled with an authorized intermediary bank.
Export licensesExports of gold, diamonds, and all other precious metals are subject to MOF authorization. Exports of ivory are subject to special authorization by the Ministry of Foreign Trade.
Export taxes
Other 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 transfersTransfers not exceeding CFAF 300,000 do not require supporting documents. Residents are required to transfer through a licensed intermediary.
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 limitsAllowance exceeding the equivalent of CFAF 2 million in foreign banknotes must be in the form of traveler’s checks, bank drafts, or other means of payment.
Indicative limits/bona fide testTo obtain foreign exchange, resident travelers must present a ticket and current passport or identity card to the authorized intermediary (authorized intermediary bank or exchange house).
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 requirementsAll 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 300,000 that they bring in and must surrender these to an authorized bank within eight days of their return.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsAll investments abroad by residents require prior MOF authorization, and at least 75% of the financing of such investments must originate from borrowing abroad. Authorization is not required to buy securities issued in WAEMU member states under RCPSFM authorization.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsThese transactions require the prior authorization of 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 securitiesControls apply on all these transactions except for purchase locally by nonresidents.
On money market instrumentsThe regulations governing bonds or other debt securities apply.
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. Residents are free to purchase commodity and security call and put options abroad.
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 furnished with documentation attesting to the validity of the transaction.
Guarantees, sureties, and financial backup facilitiesThe regulations governing financial credits apply.
By residents to nonresidentsYes.
To residents from nonresidentsThere are no controls on the granting of these facilities; however, 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 prior MOF authorization. At least 75% of such investments must 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 statistical 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 exchange account in CFA francs, it cannot be executed until after the period agreed to by the parties.
Controls on personal capital transactions
LoansThe regulations governing securities and investments apply.
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 assetsThese transfers are subject to the prior authorization of the MOF.
Transfer of gambling and prize earningsYes.
Provisions specific to commercial banks and other credit institutionsThe regulations governing lending to nonresidents apply.
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 accounts 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)No controls apply if these operations involve commercial credits. Prior authorization from the MOF is required for financial credits.
Lending locally in foreign exchangeNo regulations 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 regulations governing foreign investments apply.
Abroad by banksYes.
In banks by nonresidentsYes.
Open foreign exchange position limitsNo prudential ratios apply. Open positions result from special dispensations.
Provisions specific to institutional investorsControls are imposed by the Insurance Code of the Inter-African Conference on Insurance Markets.
Other controls imposed by securities lawsNo.
Changes During 2003
No significant changes occurred in the exchange and trade system.

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