FATF Status

Burkina Faso is on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement  -  23 February 2024

Since February 2021, when Burkina Faso made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime, Burkina Faso has taken steps towards improving its AML/CFT regime, including by increasing TF investigations and prosecutions in line with its risk profile. Burkina Faso should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) strengthening resource capacities of all AML/CFT supervisory authorities and implementing risk based supervision of FIs and DNFBPs; (2) maintaining comprehensive and updated basic and beneficial ownership information of legal persons and strengthening the system of sanctions for violations of transparency obligations; (3) increasing the diversity of suspicious transactions reporting; (4) establishing procedures for effective implementation of declaration of cross-border transportation of currencies and bearer negotiable instruments; and (5) implementing an effective TFS regime related to TF and PF as well as risk-based monitoring and supervision of NPOs.

The FATF notes Burkina Faso’s continued progress across its action plan, however all deadlines have expired and work remains. The FATF urges Burkina Faso to swiftly implement its action plan to address the above-mentioned strategic deficiencies as soon as possible as all deadlines expired in December 2022.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Burkina Faso was undertaken in 2019. According to that Evaluation, Burkina Faso was deemed Compliant for 9 and Largely Compliant for 19 of the FATF 40 Recommendations. It was also deemed Highly Effective for 0 and Substantially Effective for 0 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

US Department of State Money Laundering assessment (INCSR) 

Burkina Faso was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

Burkina Faso is not a regional financial center. Its economy is primarily cash-based, and most economic activity takes place in the informal sector. Only an estimated 13 percent of the population had bank accounts as of 2015. Burkina Faso lacks the resources necessary to monitor adequately the movement of goods and people across its porous borders. Narcotics trafficking, smuggling, contraband sales, and black market currency transfers occur within the country.

Corruption, a lack of resources, and overburdened and weak judicial and law enforcement systems are major challenges to the government’s ability to counter these activities. Burkina Faso continues to struggle with corruption in its customs service and, to a lesser degree, in the National Police, increasing the country’s vulnerability to smuggling and money laundering.

Following the abrupt resignation of former President Blaise Compaore in October 2014 due to a popular uprising, the country was under a transitional government until elections were held in November 2015. This hampered administrative and judicial functions. It also has increased the country’s susceptibility to illicit activities, including smuggling and money laundering.

While there is no significant domestic market for illicit or smuggled goods in Burkina Faso, there is evidence that goods have been smuggled across the country’s borders and through the airport in Ouagadougou, specifically narcotics, cigarettes, and endangered animal species. Those involved in smuggling are generally not producers, organizers, or financiers; they are generally low-level couriers serving criminal and trafficking networks based in neighboring countries.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           41

World Governance Indicator – Control of Corruption             52

Corruption is a widespread problem in Burkina Faso and presents business operating or planning to invest in the country with very high risks. Corruption is pervasive in all sectors of the economy and government. Burkina Faso belongs to the category of the world's poorest and least developed countries, and is largely dependent on foreign donors for its economic development. The latter factor has thus pushed the government to pass new anti-corruption legislation in 2015, further broadening the anti-corruption legal framework of the country. Active and passive bribery, abuse of office, embezzlement and other forms of corruption are criminalized under the Penal Code. However, weak enforcement of these laws, coupled with poor access to information, a culture of impunity, weak institutions, have made the fight against corruption all the more difficult. Gifts and facilitation payments are forbidden practices in Burkina Faso. For further information - GAN Integrity Business Anti-Corruption Portal

Since September 2022, Burkina Faso is led by a Transition Government headed by Captain Ibrahim Traoré, who came to power in a putsch that overthrew Lieutenant Colonel Paul-Henri Damiba. Former Transition President Damiba had himself assumed power after carrying out a successful coup d’etat and deposed the democratically elected government of former President Roch Marc Christian Kabore on January 24, 2022. In addition to the Transition presidency, Burkina Faso now has the Transition Legislative Assembly and a Transition Charter and has a fully restored constitution. Shortly after taking over, the Transition Authorities unveiled their guiding document, the Action Plan for Development and Stabilization (PASD, 2023-2025). The PASD priorities—which were aspects of the strategic vision charted by the Kabore government—are: (1) fight against terrorism and restore territorial integrity, (2) respond to the humanitarian crisis, (3) and rebuild (or “refound”) the state and improve governance. On January 25, 2023, Burkina Faso validated its budget for the PASD, which is expected to cost US$12.4 billion, or US$4.1 billion annually. The PASD will be financed using domestic resources (40.9%), loans (32.2%), and grants (19%), but still faces a financing gap of US$3.34 billion (27%). Confronted with a deteriorating security environment, where terrorists reportedly control 40% of the national territory, the Transition Authorities led by Traoré are prioritizing the war effort and have introduced new taxes to generate revenue to acquire the requisite military resources.

Burkina Faso is a landlocked country and among the world’s poorest countries according to the UN Development Program (UNDP) Human Development Index, ranked 184 out of 189 countries in 2022. Burkina Faso has an estimated population of 22 million inhabitants (as of June 2022), and the IMF estimates Burkina’s 2022 growth domestic product (GDP) at US$ 21.8 billion. Burkina Faso’s economy rebounded in 2022 and grew at an estimated 2.7%, slowed partly by insecurity and an unusually weak year of gold exports. The economy is forecasted to grow at 4.9% in 2023. The fiscal deficit rose steadily from 5.5% in 2022 to 6.9% of GDP in 2023, partly as a result of a multitude of challenges, including security, humanitarian, food, and social, among others. Over 40% of the Burkinabe population live below the poverty line, and the country ranks 144th out of 157 countries in the World Bank’s Human Capital Index. Some 80 percent of the country’s population is engaged in agriculture—mostly subsistence—with only a small fraction directly involved in agribusiness. In 2022, in response to the food and energy crisis caused by the Ukraine crisis, the government rolled out a series of measures, including spending approximately US$ 126 million on fertilizers, to prop up agricultural production. Earlier, in a series of actions to address COVID-19, the Burkinabe government announced US$ 656 million worth of socio-economic measures ranging from tax breaks to subsidies and food support to low-income families.

Overall, Burkina Faso welcomes foreign investment and actively seeks to attract foreign partners to aid in its development. It has partially put in place the legal and regulatory framework necessary to ensure that foreign investors are treated fairly, including setting up a venue for commercial disputes and streamlining the issuance of permits and company registration requirements. However, there is room for more re progress to facilitate more competition, especially in sectors where SOEs are dominant, and to enforce intellectual property protections.

Burkina Faso ranked 111th out of 177 countries in the Heritage Foundation’s Economic Freedom Index in 2023. Burkina Faso’s rank in the Corruption Perception Index improved slightly from 78th in 2021 to 77th in 2022 (out of 180 countries).

The gold mining industry has boomed in the last decade, and the bulk of foreign investment is in the mining sector, mostly by firms from Canada, Australia, United Kingdom, South Africa, and Russia. Moroccan, French and UAE companies control local subsidiaries in the telecommunications industry, while foreign investors are also active in sectors such as banking and financial technology, agriculture, transport and logistics, energy, and telecommunications. There is a growing foreign investment interest in the security sector. In June 2015, a new mining code was approved to standardize contract terms and better regulate the sector. As of early 2023, the government has indicated its plans to revise the mining code. In 2018, the parliament adopted a new investment code that offers many advantages to foreign investors. This code offers a range of tax breaks and incentives to lure foreign investors, including exemptions from value-added tax (VAT) on certain equipment. Effective tax rates as a result are lower than the regional average, though the tax system is complex, and compliance can be burdensome. Opportunities for U.S. firms exist across many sectors, including agriculture, energy, banking and finance, telecommunications, manufacturing, and aviation.

Burkina Faso remains committed to a market-based economy without barriers to trade. Over the last 15 years, the national power utility’s Société Nationale de l’Eléctricité du Burkina (SONABEL) customer base and energy demand ballooned, growing by 64% between 2015 and 2021. However, supply can only meet the demand in non-peak periods. Burkina Faso imports nearly 70 percent of its electricity from neighboring Ghana and Cote d’Ivoire and faces electricity reliability and affordability challenges. It also imports other energy products such as gasoline and gas through a network of foreign companies to meet local demand. In September 2022, the Millennium Challenge Corporation (MCC) terminated its US$ 500 million compact with Burkina Faso as a result of the unconstitutional transfer of power that year. The Compact aimed to unlock economic growth by strengthening electricity sector effectiveness, energy reliability cost-effectiveness, and grid development and access, creating a more favorable investment environment for firms in the energy sector and the wider economy and spurring further foreign direct investment in Burkina Faso.

Country Links

Central Bank of Burkina Faso