Building capacity to help Africa trade better

Burundi

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Burundi

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Burundi

Key Facts

  • Capital: Bujumbura
  • Region: East Africa
  • Official languages: Kirundi, French, English
  • Independence Day: July 01, 1962
  • Area: 27,830 sq km
  • Population (2018): 11.2 million
  • REC membership: EAC, COMESA, ECCAS
  • WTO membership: July 23, 1995
  • GDP (2018): US$ 3.037 billion
  • GNI per capita (2018): US$ 280
  • Currency: Burundi franc

Economic overview

The economic recovery strengthened in 2019 (3.3% growth in real GDP) on the back of higher coffee exports, a slight increase in public investment, and a particularly good year for agricultural production.

The fiscal deficit rose to 4.2% for 2019, after 3.3% in 2018, mainly due to an increase in recurrent expenditures that was not offset by good performance in tax collection. The deficit has been financed through increased recourse to central bank advances and the accumulation of domestic payment arrears. The risk of debt distress remains high (63.5% of GDP in 2019 compared with 58.4% in 2018) because of increased domestic debt. In inflation, the fall starting in 2018 (from 16.1% in 2017) continued in 2019, with a rate of -3.1% (food prices dropped almost 11%).

The country’s external position remains fragile. The current account deficit inched lower to 10% in 2019, financed primarily by government borrowing from the banking sector through the issuance of treasury bills. In 2019, official reserves did not cover one month of imports, whereas in 2018 they stood at 1.1 months. In June 2019, the official exchange rate was 1,842.4 francs to the dollar, depreciating 11% since 2016.

Almost two-thirds of the population lives below the poverty line (2017 estimate), and the youth unemployment rate is particularly high (65%).

The economy is projected to grow 3.7% in 2020 and 4.3% in 2021 on the back of higher coffee exports, a slight increase in public investment, average growth of 6% in food production, and steady, prudent monetary policy. The central bank has initiated significant regulatory reforms in exchange rate policy, which could relieve pressure on the country’s foreign reserves.

Various initiatives are under way to modernize and diversify agricultural production, build the Jiji and Mulembwe power plants, improve access to the country (rehabilitating the port of Bujumbura), increase regional trade by strengthening the transport network, and improve the quality of human resources.

With a small export base (coffee and tea) and an agricultural sector highly vulnerable to weather shocks, Burundi’s current account is in deficit (10% in 2019). The fiscal deficit (4.2% in 2019) could increase further in 2020 (4.9% of GDP) and 2021 (5.2% of GDP).

The risks of natural disasters are real (70% of internal displacement is due to natural disasters). The overall level of human capital is low due to an underperforming education system and persistent mismatches between skills and labor market needs. The agricultural sector is predominant, accounting for 40.7% of GDP in 2018 and employing around 80% of labor. But it faces significant agronomic, technological, and institutional constraints. Energy infrastructure development is inadequate, with low electricity access (1.2% in rural areas and 58.5% in urban areas in 2016).

Last updated: April 2020

Contact

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