Trade Facilitation At Burkina Faso Essay

Question:

Brief overview of your underdeveloped nation’s trade history (exports, imports).

Answer:

Introduction

With the emergence of globalization during the 1990s, international boundaries started to blur especially in regards to trade. Countries around the globe began importing and exporting goods on a large scale. However, many countries specifically those that are under developed had a tough time managing their economic stability. Burkina Faso, a small nation in West Africa is an example of this.

The report discusses Burkina Faso’s trade history along with its economic hardships, present capabilities and future opportunities. The report mainly focuses on Burkina Faso’s trade relations with Canada, a developed nation and the trade facilitation roadmap.

Burkina Faso’s trade history: An overview

Burkina Faso achieved independence in the year 1960 as Upper Volta and prior to that, it was a French colony with huge reserves of gold. In spite of it, the country continues to be under developed and considered poor even by the standards of West Africa (Bbc.com). The post-independent era witnessed political turmoil in the country that led to further deterioration of the economy. Import and export suffered in particular with lack of proper trade facilitation. The country’s economy is largely dependent on subsistence agriculture or livestock farming. The small market size and absence of a direct outlet to the sea further dampened the country’s economy. It was not until the 90s that the country actually took steps to encourage import and export.

The results of the revolutionary steps taken in regards to economy during the 90s yielded results in the 21st century. The major exports during this time included gold, cotton, livestock, fruit and sugar. Apart from exports such as cotton and minerals that are sent to European countries, China and Singapore, some are also exported to other African countries. Exports in Burkina Faso witnessed steady increase with close to 114 CFA Franc billion in 2016.

Imports in Burkina Faso also saw major transformation post 20th century when the country began to import on a large scale. The major imports included chemical products, petroleum, food items, machine parts and such. China and France were the countries that contributed mainly to the import along with other African countries.

Overview of the social, political and economic environment

Social

With a population of 17.4 million, this small West African under developed country has French as its major language. Apart from French, other indigenous languages are also spoken by the people. The average life expectancy of men is 55 years while women have life expectancy of 57 years. Islam and Christianity are the major religions followed by the people (Unicef.org). The country suffers from extreme poverty and half of its population is below the poverty line. It ranks 134th in the Development Index out of 137 countries.

Political

As mentioned earlier, Burkina Faso became a free country in 1960 after which the new constitution came into force. Many executives led the country since then but could not contribute much to its development. However, with the appointment of Captain Thomas Sankara as the head of state in 1983, the country’s socio-economic and political scenario began to transform positively. After reigning for 27 years however, he was ousted in 2014 and replaced by Blaise Compaore. Compaore’s rule did not last long and in 2015, the former Prime Minister Marc Kabore attained the president’s chair. These political uprisings and turmoil largely damaged the country’s economic condition that led to instability.

Economic

The country’s economy depends majorly on agriculture with almost 80 percent citizens engaged in this profession. The recent decades have seen an improved economic condition in Burkina Faso owing to the establishment of industrial mines. The credit for the economic uprising can also be attributed to the recovering in gold and cotton values and increasing grain production. In 2016, the GDP figure was 5.9 percent, almost two percent better than the previous year and close to the GDP figure achieved during the period of 2003 to 2013 (Hoekman and Dominique ii21). However, these positive figures did not seem to contribute to the country’s overall growth. More than half the population still lives in extreme poverty.

Orography of Burkina Faso

Burkina Faso is a landlocked country that refers to its complex geographic location. Located in a broad plateau, it is surrounded by Mali, Niger, Benin, Cote d’Ivoire, Ghana and Togo in the north, west, and northeast, southeast and south respectively. The extensive plateau covers close to three quarters; the elevation is between 250 to 400 meters (Mande et al.5525). Koutiala Plateau is Burkina Faso’s highest plateau and the most uneven as well. Volta, Comoe, Niger is the three main rivers of Burkina Faso. The Oti is one of the tributaries that flow from the northeastern part of the country.

The country is further surrounded by Liptako Saheli, Gourma Malien, and the Gondo-Mondoro belonging to the Sahelian Region (Cadilhon 179). These constitute the northern eco regions with the dominance of shrub savannah and steppe. To the south, Samo, Gourmantche and Nord Plateau Mossi (NPM) surround Burkina Faso. Rainfall in the country occurs during the daytime and is short in length and intense. This is chiefly because of the region’s convective activities (Ibrahim et al. 1370).

Road, maritime and rail infrastructure

Burkina Faso has a poorly developed transport system that has resulted in poor connectivity and stagnant economy. The road, rail and maritime transport are in a vulnerable condition and have been in similar conditions for years. However, recent announcements by the present government to improve transport infrastructure is commendable. In a recent report published by the World Bank, Burkina Faso’s development in the areas of maintenance of road and water transport has been appreciated (Worldbank.org). The report also mentioned that although the country is making significant developments in these areas, the gap in infrastructure funding remains a concern.

The country boasts of a railway line from Ouagadougou to Abidjan, a port in Cote d’Ivoire. It connects Burkina to Cote d’Ivoire and contributes a lot towards flourishing trade in the country. The 1100 kilometers line runs from east to west and serves Koudougou, Bobo Dioulasso and Banfora with about 500 kilometers running through Burkina Faso. The country has some international airports as well. However, the chief concern is its poorly developed road.

With support from the World Bank and the United Nations, many large-scale operations are being undertaken to improve the infrastructure of Burkina Faso. Funds are being utilized to strike deals with other developing African nations to set up rail lines and improve road condition.

Export and import value

Burkina Faso’s export and import value has significantly increased as already mentioned in the previous sections. During the period of 2013 to 2016 in particular, the export sector has flourished as evident from various data published in different reports (Ustr.gov). In 2015, the export value of gold was worth USD 1.3M whereas cotton export value was USD 285, 000 approximately. Sesamum seeds were exported at a value of USD 170, 000. Cashew nuts and zinc also held great export value with an estimated USD 86, 000 and USD 55, 000 respectively.

The import value on the other hand reveals Burkina Faso’s inconsistency in trade with petroleum holding the highest import value of USD 720, 000 million followed by packaged medicaments at a value of USD 132 million, helicopters, planes and cement amongst others. However, the figures depict the country’s improvement in the export and import sector where the deficit has been reduced largely.

Import value for the year 2016 was 199.80 CFA franc billion, which is close to the all time high record of 208.30 CFA franc billion registered in 2013 (Elibrary.worldbank.org). The lowest value was recorded in the year 1999 when import went down to 14.20 CFA franc billion.

Transportation for goods export and import

Transportation in Burkina Faso is not as smooth as in other African countries and this act as a barrier to trade. Nonetheless, the presence of Ouagadougou international airport assists traders from different countries to carry out business (Button et al. 85). Traders cannot rely on public transportation, as these are run-down. Freight train to Cote d’Ivoire from Burkina Faso runs daily carrying goods. Poor road condition further hampers the exchange of goods to other regions.

The major transport system for import and export of goods is the airline. Being a landlocked country, it is difficult for Burkina Faso to manage export and import. A study on the transport system of Burkina Faso revealed that transportation costs much higher while exporting and importing goods via Tema port (Usaid.gov). This exposes the poor transportation of the country that is further hampered by the growing corruption at customs department and others as well.

The time frame for Burkina Faso import export

In order to take into account about the time frame of import and export, it is necessary to consider that Burkina Faso is predominantly landlocked country. Burkina Faso mainly deals with India, Switzerland, South Africa, and Cote D’ivoire in exporting Brazil Nuts, Cashews, Raw Zinc, Coconuts, Raw cotton and various kinds of oily seeds (Boyce, et al.). On the other hand, Burkina Faso imports refined petroleum, rice, cement, helicopters, spacecraft, planes, packaged medicaments and foodstuffs from Cote D’Ivoire, France, China, the United States and Netherlands (Boyce, et al.). Food stuffs, chemical products, oil seeds are perishable goods. Hence, it is seen that Burkina Faso has to consider a huge amount loss due to a prolong duration of transportation. The Air Transportation of Burkina Faso is enough developed. However, highways and rail transportation of Burkina Faso still needs to be developed more. The main highway of Burkina Faso is 12,506 kilometers long (Decreux, Yvan, and Spies). Out of 12,506 kilometers, 2,001 kilometers of the highway is paved (Decreux, Yvan, and Spies). However, the World Bank has found the transportation of Burkina Faso comparatively better than the other Sub Saharan countries. As per the scrutiny of the World Bank in 2014, the exporters of the Burkina Faso have to stay for 31 waiting days long (Tekin and Bar??). In order to export materials in Sub Saharan countries, the Burkinabe exporters have to spend $2,108 in average (Hermann, Sebastian et al., 36). In importing materials in Burkina Faso, it takes 38 days and $2,793 (Dabat, et al.). However, for importing material from Madagascar, 49 days and 44,430 are spent (Decreux, Yvan, and Spies). Hence, for the perishable goods, these time frame is too long. Hence, Burkina Faso has to concentrate on developing their road network, road condition and rail link in order to shorten this time frame.

The transport constraints of Burkina Faso

Trade efficiency of Burkina Faso is restricted by a number transport challenges. Being a landlocked country, internationally Burkina Faso is well connected. Therefore, among the entire Sub Saharan country of low-income group, trade facilitation of Burkina Faso is better. However, the larger portion of the highways in Burkina Faso is not paved. Hence, transportation cost via road in Burkina Faso is high. In addition, the raid network of Burkina Faso needs more development in terms of high and speedy transportation (Soriano, B?rbara, and Garrido). Moreover, road maintenance is also essential to consider in this context. It is because the paved roads in Burkina Faso lies with deadly potholes, missing barriers, missing signage, no pavement plotting, no guardrails (Decreux, Yvan, and Spies). It is one of the major transport constraints in Burkina Faso. Ouagadougou and Bobo-Dioulasso are the international airports in Burkina Faso. However, as per the government plan in Burkina Faso, Ouagadougou is going to be closed due to the construction of Ouagadougou-Donsin Airport (Decreux, Yvan, and Spies). In addition, in Burkina Faso, terrorist attack is extremely active. A major terrorist attack has been happened in Ouagadougou in january 2016 (Boyce, James, and Ndikumana). Hence, considering the risk of hijacking, through air transportation Burkina Faso export and import is avoided. Port transportation in Burkina Faso is also not reliable for export and import due to lack of trained port personnel. On the other hand, corruption at customs department is also a major constraint of Burkina Faso transportation (Chauvin, Mulangu, and Porto). Railway link of Burkina Faso is also necessary to be promoted a lot in terms of easy communication at international context. Railway line of Burkina Faso has a lot of break of gauges, which needs to be recovered. All of these are considered as the transport constraints in Burkina Faso.

Required documentation for export and import in Burkina Faso

As opined by Konat?, et al., the documentations, which are required in dealing export and import in Burkina Faso, are -

  • A filled up application form addressing to the Minister of Trade in Burkina Faso
  • A declaration copy of trade registration
  • Any certificate of tax status
  • Verified photocopy of a national identity proof for every individual traders
  • Verified photocopy of national identity card of managers in case of bodies corporate
  • An identification certificate approved by the Institut National des Statistiques et de la D?mographie (INSD)
  • A receipt copy of the trade certificate approved by the Chamber of Commerce
  • A legal copy of business articles resembling bodies corporate
  • Two individual photocopies of identity proof for private personnel and the manager of bodies corporate respectively
  • A blank professional Trader Card for sale at the Centre de Promotion des Enterprises (CPE) at the cost of CFA F 2 300
  • A special licensing for the non- nationals individuals.

For executing all these documentation, total CFA F 15 000 amount is spent.

The documentation procedure of Burkina Faso in terms of export and import is standardized. However, this documentation procedure is too long and a little expensive. As terrorists are too active in Burkina Faso, the verifying procedure of documentation in terms of export and import is strict. However obtaining all the documents is not difficult in Burkina Faso. In Burkina Faso, the main spoken language is French. Hence, non-nationals exporters and importers have to face a little problem in order to go between the procedures of all the documentation. In this situation, it can be considered that documentation for import and export in Burkina Faso is a little complex.

Trade Facilitation roadmap for Burkina Faso

Trade Facilitation Roadmap is a document, which defines strategy and tools in order to promote the overall trade of a particular geographical location. As per the scrutiny of the World Trade Organization, the major challenges of Burkina Faso are poor condition of the road network, political turmoil, terrorist activities, miscommunication of Burkina Faso Railways, and deadlocking situation of Ouagadougou airport and requirements of a number of documents and high transportation cost and corruption in custom department (Goff, Ma?lan, and Singh). Hence, trade facilitation roadmap of Burkina Faso is mainly focused in modernizing Burkina Faso transportation system. The document of Burkina Faso Roadmap proposed a number of railway links in terms of international communication (Decreux, Yvan, and Spies). In the document of Burkina Faso trade facilitation, the break of gauges in railway line is proposed to recover. The establishment of Ouagadougou-Donsin Airport has been proposed (Goff, Ma?lan, and Singh). Documentation procedure of Burkina Faso for export and import is announced to simplify in the trade facilitation road map. Burkina Faso National road network is also notified in the trade facilitation document for the further development. The trade facilitation roadmap of Burkina Faso is focused

  • In strengthening Ministry of Transport
  • Supporting public as well as private sector participants in the transport sector
  • Developing the scheme of cargo truck renewal
  • Building the capacity of custom department
  • Ensuring effective interconnection in the system of customs management and
  • Road safety on the Burkinabe section of the corridor (Chauvin, Mulangu and Porto)

All these considered project in Burkina Faso Roadmap is hoped to be completed within 2020 (Goff, Ma?lan, and Singh). Effective project management system has been prioritised in the roadmap. Decisions of Organization for Economic Co-operation and Development (OECD) play a major role in road mapping trade facilitation (Hermann, Sebastian et al.).

Personal opinion regarding trade facilitation roadmap

According to me, the initiatives of Burkina Faso trade facilitation roadmap are justified. I found that the national highways of Burkina Faso are in pathetic condition. The highways are plagued with a number of big potholes. As per my vision, in the Burkina Faso safety of the road is necessary to be ensured at the first. The good maintenance of the road is vital to take into account in this reference. The road network in Burkina Faso is necessary to make completely even and paved at the first. Hence, the export and import transportation via road can make faster. I have seen that custom department in Burkina Faso is too filled with corruption (Islam, et al.). Therefore, terrorist activities are getting difficult to control in Burkina Faso. Hence, against the corruption of custom department, strict jurisdiction is necessary to be adopted. A number of railway links need to be immediately developed in order to facilitate export and import transportation. Removing the break of gauges from the railways lines of Burkina Faso is urgently required. Documentation procedure needs to be minimum and digital in Burkina Faso in terms of soothing trade. In order to prioritize every area of development, individual project managers require to consider strict time management, budget management and quality management. I support the Burkina Faso trade facilitation roadmap, which has been proposed.

Facilitation Trade agreement draft between Burkina Faso and Canada

Burkina Faso belongs to the countries of low-income group. In addition, Burkina Faso does not have adequate resources in order to be developed. Facilitation Trade Agreement draft between poor nation and wealthier nation is highly beneficial for a poor nation. The World Trade Organization approves facilitation Trade Agreement in order to energize free trade. In this case, the wealthier nations will be free from worrying about tariff rate in dealing with Burkina Faso. Trade facilitation plays a crucial role in the sustainable economic development of a country. Hence, facilitation trade agreement draft between Burkina Faso and any European country will be highly reliable reasonable in ensuring the growth of capitalization of Burkina Faso (Tekin, Bar??). On the other hand, Burkina Faso will get relieved from bearing high cost in terms of importing product from the developed cities like Canada. Canada is one of the premium hubs of gold mining industry (Andriamasinoro, Fenintsoa, and Angel). Therefore, trade facilitation agreement between Burkina Faso and Canada will be highly effective. Through this agreement, Burkina Faso can draw attention of the foreign investors (Tatsidjodoung, et al.). In this case, the country will able to arrange the required money in terms of implementing Burkina Faso trade Facilitation Roadmap.

Conclusion

It thus can be concluded from the above discussion that Burkina Faso has the ability to improve its trade facilitation through improved relations with countries like Canada. The report has provided insights into the country’s trade history, its social, political and economic condition and its trading capability. In addition, the report focuses on the transportation of the country that assists and troubles trade. Recent trends indicate that progress has been made in the economic sector especially in the export area with gold and cotton being the largest exports. Further reading is required to understand the intricacies of trading in the country

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