Located in Central Africa, Burundi is one of the seven member states of the East African Community (EAC). Burundi is one of the world’s most impoverished countries, with 87 percent of the population living below the World Bank’s poverty measure of $1.90 per day, 80-90 percent of the population reliant on agriculture (mostly subsistence farming) and a youth unemployment rate of about 65 percent. Economic growth is insufficient to create employment for Burundi’s rapidly growing population and President Ndayishimiye, in power since June 2020, has actively promoted good political and economic governance to improve the business environment by fighting corruption and promoting fiscal transparency. His administration is actively seeking to increase existing value chains to find new sources of employment and revenue and to find new revenue streams.
The Government of Burundi (GoB) is also seeking to attract more foreign direct investment (FDI). Since taking office President Ndayishimiye has made or hosted multiple state visits with potential trade and development partners. Given the importance of agriculture, the GoB is promoting initiatives to modernize and diversify agricultural production, seeking to increase production of crops beyond coffee and tea. To attract FDI, the GoB must address an array of longstanding challenges, including: poor governance and weak institutional capacity; pervasive corruption; an exchange rate gap between the official and parallel market rates that fluctuates between 50-70 percent; financial restrictions and capital controls that limit access to and expatriation of foreign exchange; a low-skilled workforce; only 12 percent electrification nationwide; poor internet connectivity; and limited availability of reliable economic statistics.
The GoB is working to develop infrastructure, including photovoltaic and hydroelectric power plants, roads construction, rehabilitation of Bujumbura Port and the construction of a railway joining Burundi, DRC and Tanzania to improve access to the country, reduce transportation costs and boost regional trade. The demand for electricity and water significantly exceeds capacity, and the transmission system is old and poorly maintained, leading to rolling blackouts and outages. In the mining sector, the GoB is introducing a new mining code and industry-wide regulations it says will promote greater transparency. As of March 2022, all foreign mining companies’ operations remain pending revision and renegotiation of new contracts/agreements based on a “win-win” principle and implementation of the new mining code.
The COVID-19 pandemic and associated border closures resulted in a sharp economic slowdown in 2020, and the IMF estimates GDP shrank by around 1 percent, before rebounding by 3.6 percent in 2021. Testing capacity is low and vaccination rates remain among the lowest in the world. Burundian authorities have prepared a COVID-19 response plan to limit the disease spread and cushion its macroeconomic and social impacts; however, its implementation has been constrained by limited financing and domestic resistance, including from some at high levels of government.
|TI Corruption Perceptions Index||2021||169 of 180||http://www.transparency.org/research/cpi/overview|
|Global Innovation Index||2020||N/A||https://www.globalinnovationindex.org/analysis-indicator|
|U.S. FDI in partner country ($M USD, historical stock positions)||2020||N/A||https://apps.bea.gov/international/factsheet/|
|World Bank GNI per capita||2020||USD 230||https://data.worldbank.org/indicator/NY.GNP.PCAP.CD|