What's Happening?
Burkina Faso's military government has introduced a decree requiring large companies, including mobile network operators, to build headquarters in the country. This mandate targets companies with annual revenues of at least XOF5 billion (approximately
US$9 million) and includes a scale of construction standards based on company size. For instance, companies like Moov Africa and Orange, which fall under the highest revenue category, must construct a minimum seven-storey building. The decree is part of a broader economic strategy to enhance national control over strategic economic activities. However, these new obligations may affect operators' ability to invest in digital infrastructure, potentially hindering the government's goals to expand broadband access and telecom infrastructure.
Why It's Important?
The decree could have significant implications for Burkina Faso's telecom sector. By diverting resources towards real estate investments, operators may find it challenging to allocate funds for expanding digital infrastructure, which is crucial for improving broadband access and deploying advanced technologies like 4G and 5G. This could slow down the country's digital transformation and deter foreign investment, as companies may view the new requirements as a financial burden. The policy reflects a shift towards economic sovereignty but risks undermining the telecom sector's growth and the broader digital economy.
What's Next?
Operators have six months to submit construction plans and 36 months to complete the buildings. The government may offer tax exemptions on construction materials and support in acquiring land, which could mitigate some financial burdens. However, the long-term impact on digital infrastructure investment remains uncertain. Stakeholders, including telecom companies and potential foreign investors, will likely monitor the situation closely to assess the decree's impact on the business environment and investment climate.
