Economical overview
Burundi's economy is dominated by
agriculture, especially the export of coffee. This means
that the income is severely affected by the weather and
the demand in the outside world. The poor country is in
fact dependent on support from the outside world to
bring the economy together. When President Nkurunzizia's
contested reelection in 2015 led to political chaos,
many donors withdrew their aid and Burundi ended up in a
severe economic downturn.
The Burundian economy is fragile for several reasons.
Unilateral dependence on coffee production causes food
prices and inflation to fall during years with favorable
weather and good harvests. Bad weather gives the
opposite effect. The development is also hampered by
overpopulation, high Population growth, poor
infrastructure and the country's closed position.
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Countryaah.com:
Major imports by Burundi, covering a full list of top products imported by the country and trade value for each product category.
During the 1990s, the civil war and its relocations,
as well as the economic blockade of neighboring
countries between 1996 and 1999, had catastrophic
consequences. During most of the 1990s, GDP fell by
several percent per year. Only through extensive
smuggling did Burundi survive the blockade.
From the middle of the first decade of the 2000s, an
improvement took place. Transport became safer and
cheaper after the fighting subsided. The construction
sector flourished, at least in the capital Bujumbura.
GDP increased from 2006 by an average of around 4
percent per year.
Acute economic crisis
A new breaking point came in 2015 when the unrest in
the summer elections led to political chaos. Important
donors such as the IMF, the EU and several Western
countries fully or partially withheld their financial
support to the government due to growing corruption and
reports of serious human rights violations. The
aid-dependent Burundian economy plunged rapidly; GDP
shrank by almost 4 percent in 2015 and remained low,
often close to zero, during the second half of the
2010s.
Internal power struggles in Parliament and in
government led to uncertainty and declining foreign
investment. The country's small emerging tourism
industry, which began to develop during the latter part
of the 2000s, is now basically completely eliminated.
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Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including BDI which represents the country of Burundi.
The Nkurunzizia government tried to get revenue from
elsewhere. Taxes were increased from 2017 on both basic
and import goods. When the country could no longer
afford to pay for all imports, inflation began to rise
and food shortages arose among poor residents. In 2018,
new austerity packages were issued and there is
information that the government demanded donations to
the Treasury from public servants and other citizens.
The government also sought financial support
elsewhere. In 2017, China promised direct budget
support, and agreements in the mining and energy sector
were signed with Russia. An agreement was made with
Turkey on increased trade. However, none of this
compensated for the loss of assistance from the old
donors.
At the end of the 2010, there was a serious shortage
of food and fuel in the country. Foreign currency
reserves were very small. The smuggling graced. A
slaying of the poor came when the government in October
2018 drove almost all international aid organizations
out of the country.
The Government has been repeatedly criticized by the
Auditor General for overly optimistic forecasts of
foreign aid and increased government revenue. Another
problem is the widespread corruption, which the
government has not shown greater interest in doing
something about. In addition, wages have eroded so much
of inflation that corruption has quickly become a
condition of survival among civil servants and soldiers.
A majority of the residents are forced to try to survive
on a few kronor a day.
Help from the World Bank
Before the crisis erupted in 2015, Burundi received a
lot of aid from donor countries in the western world
such as the USA, France, Belgium and the Netherlands.
Other major donors have been the EU, the World Bank, the
IMF and a number of UN agencies. A large part of the
state budget has been covered by foreign aid.
In 2009, Burundi qualified for the World Bank and IMF
debt-relief program for heavily indebted poor countries
(HIPC). The two institutions paid off a debt of $ 833
million. Previously, the external debt had at most
accounted for more than 220 percent of GDP in 2003, but
was now reduced rapidly and was down to a record low of
14 percent in 2014. Foreign debt has since remained at
a relatively moderate level.
The World Bank has chosen to keep its most important
projects in Burundi on the grounds that the population
needs the support. The projects mainly help small
farmers with agricultural equipment, fertilizers or
irrigation.
Burundi has a constant deficit in foreign trade, ie
imports exceed exports. The value of the few export
goods does not cover the cost of importing food, fuel
and capital goods. In addition, the construction
industry has had major import needs during the
reconstruction after the civil war. Fuel imports are
subject to high taxes, which has led to extensive
smuggling.
The only major export goods are coffee and tea, which
together account for about half the export value. This
makes the trade balance strongly dependent on the
international price situation for these two goods. The
state is trying to increase exports of other goods by
attracting manufacturers with duty-free import of raw
materials and tax exemptions. Gold and precious stones
are also exported.
FACTS - FINANCE
GDP per person
US $ 275 (2018)
Total GDP
US $ 3,078 million (2018)
GDP growth
1.6 percent (2018)
Agriculture's share of GDP
30.6 percent (2016)
Manufacturing industry's share of GDP
9.4 percent (2016)
The service sector's share of GDP
49.1 percent (2016)
Inflation
7.3 percent (2019)
Government debt's share of GDP
58.4 percent (2018)
External debt
US $ 613 million (2017)
Currency
Burundian Franc
Merchandise exports
US $ 173 million (2017)
Imports
US $ 626 million (2017)
Current account
- US $ 360 million (2017)
Commodity trade's share of GDP
32 percent (2018)
Main export goods
Coffee, Tea, Sugarcane, Gold, Gemstones (2017)
Largest trading partner
India, China, Kenya, United Arab Emirates,
Congo-Kinshasa, Switzerland (2017)
2005
August
Nkurunziza becomes new president
The newly elected parliament appoints CNDD-FDD leader
Pierre Nkurunziza as president.
July
CNDD-FDD wins the parliamentary election
The hut-dominated party CNDD-FDD surprisingly wins
big in the parliamentary elections. The party was
formerly a Hutu extremist militia, but now, like all
parties, must stand with both Hutu and Tutsi candidates.
March
New constitution
A new constitution comes into force after being
approved in a referendum the month before. The
constitution guarantees that the Tutsi minority will
have influence over politics, the defense and the police
power.
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