Commercial Guide

V - Leading Sectors For U.S. Export And Investment

The modest but increasing share of the Burkinabe import market captured by U.S. firms is proof of the country’s receptive attitude toward U.S. products.

The 1994 devaluation of the CFAF offers new opportunities for U.S. and other foreign firms as the prices of some products have become competitive with French products, which dominate the Burkinabe market. These opportunities include the sale of pharmaceuticals and reactives, medical equipment (used) and supplies, heavy works contracts, and consultant services. The telecommunications, used clothing, and computer market continue to offer opportunities to U.S. vendors.

Best Prospects for Non-agricultural Goods and Services

The best prospects for non-agricultural goods and services include:

Telecommunications equipment: The telecommunications field remains perhaps the best trade prospect for U.S. firms. Since the late 1980s, U.S. firms have supplied Burkina Faso’s national telephone company (ONATEL) with telecommunications equipment. ONATEL manages projects aimed at increasing Burkina’s telephone network. The U.S. ranked as Burkina’s first telecommunications equipment supplier in 1996 and 1997. In 1997, the U.S. supplied 48% (representing 1.1 million USD) of the total telecommunication imports, while France supplied 39%. France, however, used to rank first because of its historic ties to the region and the flexibility and diversity of French financing sources, notably their concessionary credits to ONATEL through the Burkinabe government. Other principal competitors include Canada, Japan, Finland, Germany, Malaysia, and Taiwan. U.S. firms interested in entering this market should consider possible credit financing arrangements and appoint a local partner/representative. Recently, the government has announced the partial privatization of ONATEL, which will deregulate the sector.

Pharmaceuticals, reactives, and other medications: There is a market for competitively priced pharmaceuticals (including generic), reactives, vaccines, and other human and animal medicines in Burkina Faso. France traditionally has been by far the major supplier of these products. In 1997, Burkina’s imports of pharmaceuticals and medicines amounted to 12.5 billion CFAF (about 21.5 million USD), of which France had 79% and the U.S. only 2%. Other European suppliers also have small shares.

Despite French dominance, Post believes that U.S. firms could control up to 50% of this market if they use the established procedure that permits the selling and promotion of their medicines in Burkina. Post can help U.S. firms acquire an accurate understanding of this procedure, which is used to register products in the official nomenclature. Once registration is completed, U.S. firms should develop advertising and sales channels, and assure French-language labels and packaging. U.S. firms might consider targeting a group of countries (e.g. Mali, Niger, Burkina Faso) for sale of their products. Recently, South African and Asian laboratories and firms showed interest in Burkina’s pharmaceuticals market.

Personal computers, accessories, and supplies: Because of price advantages, good opportunities exist for U.S. suppliers of computer hardware, software, and related products. The market remains small, but it is beginning to show signs of expansion. For suppliers who can sell in small quantities, it is definitely a good prospect.

France was the largest exporter of these goods in 1997, with 48% of the market while the U.S. had 12%. Fifty percent of the French share consisted of reexported U.S.-made equipment. Thus, direct sales of U.S. equipment by U.S. firms to Burkina Faso are encouraged since French firms generally mark up the price of reexported U.S. equipment. Considering the fact that about 2,000 computers in Burkina are connected to the Internet and that the communication sector is becoming liberalized, information technology products and services have become an area of opportunity.

Fertilizers and chemicals: There is high demand and strong sales in this market. In 1997, Burkina’s total imports amounted to USD 32 million (18.6 billion CFAF). Côte d’Ivoire supplied 45% (USD 13.4 million), France supplied 8.5% (USD 2.6 million), and the U.S. supplied 3.6% (USD 1.1 million). Other suppliers were Belgium, Luxembourg, Germany, Nigeria, and the United Kingdom. Post encourages U.S. suppliers already established in the West Africa sub-region (notably in Côte d’Ivoire, Nigeria, and Ghana) to consider exploring this lucrative market.

Heavy works contracts (roads, dam construction, electrical projects): The value of the road rehabilitation market is estimated at 5 billion CFAF per year (about USD 9.7 million). Heavy works projects financed bilaterally or multilaterally exist (dam construction, valley parcelling, electricity interconnection, solar energy lighting). Local companies generally contract assistance from foreign companies. Contacts are made through government tenders.

Used clothing and shoes: In 1997, Burkina imported USD 3.2 million of used clothing and shoes. Belgium and Luxembourg supplied 49% (USD 1.6 million); the U.S. ranked second with 23% (USD 717,931). France supplied 8%, and Italy 5%. U.S. suppliers can increase their share by visiting local importers at least once a year.

Consultant services: The demand for consultant services can be expected to rise as the structural adjustment of Burkina’s economy welcomes foreign investment, and as multilateral aid agencies such as the World Bank become more disposed to projects in Burkina. (See Chapter VII - Trade and Project Financing.) These services involve projects ranging from natural resource development studies to rural development issues and mining sector strategies.French, Dutch, and Canadian consulting firms are operating in this market through direct local branches and local-affiliated consultant firm/individual consultants.

Best Prospects for Agricultural Products

Excellent opportunities exist for U.S. firms to expand their market share in the following commodities: wheat, wheat flour, yellow cornmeal, and rice.

Rice: Each year, the Burkinabe consume 120,000 tons of rice, of which 30,000 tons are locally cultivated and 90,000 tons (valued at about USD 24 million) are imported, mostly from Thailand, Pakistan, and Taiwan. U.S. firms that can supply rice for popular consumption at competitive prices may seek to tap this market. Burkina’s state monopoly on rice imports theoretically ended in October 1996. Authorized local importers still have to be screened by the government.

Wheat and wheat flour: Burkina Faso imports a large quantity of U.S. wheat flour from European wholesalers, so the direct sale of wheat by U.S. suppliers represents another option to be pursued. The importation of unprocessed wheat has been liberalized with an 11% tariff, but a prohibitive 56% tariff on processed wheat flour remains. Bakers buy much of their wheat flour from the national milling company, Grands Moulins du Burkina. In 1997, imports of wheat flour amounted to USD 377,854, of which 90% originated from Côte d’Ivoire.

Other cereals: Catholic Relief Services distributes U.S.-donated (P.L. 480 Title II) yellow cornmeal as part of a nationwide school lunch program. This product is popular in Burkina Faso, suggesting room for establishing a private market.

Dairy products (milk, butter, and cheese): The Netherlands and France dominated this market, controlling 50% (about USD 6.2 million) and 34% (about USD 4.1 million) respectively in 1997. Figures do not indicate that the U.S. sold milk to Burkina in 1997. Other small suppliers are Spain, the United Kingdom, and Germany. However, relatively few brands of butter or milk products are marketed. U.S. brands may be able to gain market share by increasing the variety of products available to consumers, and above all, U.S. firms may have a competitive edge in the supply of powdered milk. Market penetration by U.S. firms depends on whether they can identify and conform to local consumer preferences. Burkina's total imports amounted to USD 12.2 million (7.1 billion CFAF) in 1997.

Burkina has a program to develop private agrobusiness using fertilized grounds in two big hydro-agricultural valleys, Bagré and Sourou. Implementation of this program will generate a need for irrigation equipment, tractors, and parcels preparation equipment. The World Bank has funds to finance private irrigation. Parcels can be distributed in lots of 10 acres to any private agrobusinessman who satisfies requirements.