Burkina Faso


By Richard (Rick) Mills
Ahead of the herd

As a general rule, the most successful man in life is the man who has the best information

 

Burkina Faso is a landlocked country in West Africa. It is surrounded by six countries: Mali to the north, Niger to the east, Benin to the southeast, Togo and Ghana to the south, and Côte d'Ivoire to the southwest.

 

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focusonforests.org

 

Burkina is 274,000 km² with a population of plus 15 million it’s people belong to one of two major West African cultural groups - the Voltaic and the Mande.

 

Formerly called the Republic of Upper Volta (The country owes its former name of Upper Volta to three rivers which cross it: the Black Volta (or Mouhoun), the White Volta (Nakambé) and the Red Volta (Nazinon). It was renamed Burkina Faso in August 1984 - meaning "the land of upright people" in Mòoré and Dioula, the two major native languages of the country. Figuratively Burkina may be translated as "men of integrity" from the Mòoré language and "Faso" means "father's house" in Dioula.

 

After gaining independence from France in 1960 the country is now a semi-presidential republic. The parliament consists of one chamber known as the National Assembly, it has 111 seats with members elected to serve five year terms. There is a constitutional chamber with ten members and an economic and social council whose roles are purely consultative. Burkina Faso is divided into thirteen regions, forty-five provinces, and 301 departments.

 

Burkina Faso's capital is Ouagadougou. It is a member of the African Union, Community of Sahel-Saharan States, La Francophonie, Organization of the Islamic Conference and Economic Community of West African States.

 

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Burkina Faso is made up of two major types of terrane. The larger part of the country is covered by a peneplain (land worn down by erosion almost to a level plain - a nearly flat land surface) which forms a gently undulating landscape with a few isolated hills. The southwest of the country is a sandstone massif, where the highest peak, Ténakourou, is 749 meters tall. The average altitude of Burkina Faso is 400 meters - the difference between the highest and lowest terrain is only 600 meters.

 

Burkina Faso has a tropical climate with two seasons – wet and dry. During the rainy season the country receives 600 to 900 millimeters of rainfall, the rainy season lasts four or five months, starting in May/June and it rains, off and on, till September. In the dry season, the harmattan – a hot dry wind coming from the Sahara desert – blows.

 

Burkina Faso's natural resources include manganese, limestone, marble, phosphates, pumice, salt and gold, there are currently operating copper, iron, manganese and gold mines in the country.

 

Burkina Facts:

  • The inhabitants of Burkina Faso are known as Burkinabè.
  • Agriculture represents 32% of its gross domestic product
  • A large part of the economic activity of the country is funded by international aid
  • Burkina Faso is one of the poorest countries in the world - per capita gross domestic product (GDP) = $440
  • More than 80% of the population relies on subsistence agriculture
  • Drought, poor soil, lack of adequate communications and other infrastructure, a low literacy rate, and an economy vulnerable to external shocks are all longstanding and ongoing problems
  • Many Burkinabe migrate to neighboring countries for work sending substantial amounts of money back home - these remittances provide a contribution to the economy's balance of payments that is second only to cotton as a source of foreign exchange earnings
  • The currency of Burkina Faso is the CFA franc
  • Burkina Faso is one of the few West African countries that's not predominantly Muslim
  • A railway connects Burkina with the port of Abidjan, Cote d'Ivoire, 1,150 kilometers (712 mi.) away
  • Primary roads between main towns in Burkina Faso are paved
  • Phones and Internet service providers are relatively reliable, but the cost of utilities is very high

Burkina is attempting to improve its economy by:

  • developing its mineral resources
  • Improving its infrastructure
  • Making its agricultural and livestock sectors more productive and competitive
  • Stabilizing the supplies and prices of food grains
  • Implementing a fairly widespread privatization program
  • Adhering to strict policy rules set out by the International Monetary Fund (IMF) and the World Bank (WB)

Economic growth has averaged around 6% per year for the last 15 years.

 

Burkina Faso also has a new investment code that is helping to promote foreign investment. Reforms include:

  • The adoption of a labor code in May 2008
  • Improving the process to transfer property
  • The elimination of commune authorization requirements
  • The creation of a one-stop shop to facilitate construction permits
  • A decrease of the corporate tax rate from 35% to 30%
  • A decrease on dividend taxes from 15% to 12%
  • Implementing major changes to the tax system
  • Creating a number of ‘mining friendly’ programs with the specific aim of attracting new mining and development companies
  • Announcing their intention to set up a ‘mining development fund’ with Groupement des Professionnels Miniers (GPMB) behind the move, specific details have yet to be released
  • Building a higher education institute for mining engineers and other executives

“Gold production in Burkina Faso more than doubled from 2008 to 2009. The entire mining sector in the country is booming. The strongest increase in any sector during 2009 has been in gold production. Thanks to a strongly growing price of precious metals on the world market during recent years the mining and extractive industries are experiencing a real boom in Burkina Faso. The number of permits and authorizations issued rose from 537 in 2008 to 599 in 2009, an increase of 11.6 percent. The industrial production of gold has risen from about 5,000 kg in 2008 to 11,642 kg in 2009, representing more than a doubling of production. These development should be helping to strengthen the position of our country as a mining country.”Condensed from Prime Minister Tertius Zongo’s state-of-the-nation speech to the Ouagadougou parliament

 

Burkina Faso is now at the start of a mining boom. Looking to take advantage of the countries abundant natural resources, the number of ‘mining friendly’ programs the country has to offer and hoping to benefit by being a “first mover” a number of mining and exploration companies have decided to develop assets in Burkina Faso.

 

Richard (Rick) Mills
rick@aheadoftheherd.com
www.aheadoftheherd.com

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***

Richard is host of www.aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 300 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, Resource Investor, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor, FNArena, MetalsNews and Financial Sense.

***

Legal Notice / Disclaimer

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified.

 Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

Richard Mills does not own shares of any companies mentioned in this report



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