Burundi Economics and Business

Business

Abbreviated as BDI by abbreviationfinder.org, Burundi is one of Africa’s most densely populated and poorest countries. The economy is dominated by agriculture with coffee and tea as the main export goods. The dependence on favorable weather and high world market prices on export crops make the country’s economy vulnerable. Also, poorly developed infrastructure and the fact that Burundi is a inland state (lacking coast to sea) seems to hamper economic development.

Burundi GDP (Nominal, $USD) 2003-2017

The country’s trade deficit is large because exports never covered the cost of importing food and capital goods.

The country has since been marked by contradictions between the hutu and Tutsi people groups, which have repeatedly led to bloody violence that has cost hundreds of thousands of people their lives. By the mid-1990s, they managed to create a fragile peace and economic growth has since been around 4 percent annually. However, population growth means that per capita GDP does not increase at the same rate. About 90 percent of the population lives in poverty (under US $ 2 per day).

Note: the capital city of Burundi is Gitega with a population of 42,000 (census 2008). Other major cities include Bujumbura with a population of 1,000,000 (UN estimate 2020); Ngozi.

The dependency on aid is great, partly for direct development projects and partly for covering the budget and trade deficits. In 2009, Burundi qualified for the World Bank and International Monetary Fund’s (IMF) debt-cancellation program for high-indebted poor countries (HIPC), thereby reducing the country’s foreign debt significantly.

Agriculture employs more than 90 percent of the working population. However, a large proportion of farmers grow for housing needs and the sector accounts for about 1/3 of GDP. Agriculture is still of great importance to the country’s economy, mainly coffee, but also tea, sugar and cotton account for practically all exports.

The main food crops are cassava, sweet potatoes, bananas, corn and vegetables, but to meet the food needs Burundi has to import food. Livestock management is traditionally important for the Tutsis and the country also exports hides.

Burundi has large deposits of nickel, but although these have been known since the 1970s, large-scale mining was not started until 2014. The only other mineral that is mined to any great extent is tantalum. In addition, smaller amounts of gold, limestone, niobium, tin and scheelite (tungsten) are extracted. Oil has been discovered under Lake Tanganyika and in the Ruzizi Valley, but no recovery has begun.

  • COUNTRYAAH: Find major trading partners of Burundi, including major exports and major imports with latest trade value and market share as well as growth rate.

The industry is dominated by the process industry for agricultural products, primarily coffee but also tea and cotton. The brewery industry is significant, and in addition, soap, shoes, textiles and cement are manufactured for the extensive new construction that takes place mainly in the capital Bujumbura. Some composition of imported components also exists. The problems of the industrial sector are conditioned by a limited local market and large distances to export ports.

The poor supply of electricity is another limiting factor affecting both industry and private individuals. Domestic electricity generation comes from hydropower plants, but a large part of the country’s energy consumption consists of imported petroleum products. Households must rely mainly on wood and peat fires. Felling for fuel and new agricultural land has led to a rapid decline in the country’s forest stock.

Exports are dominated by coffee, followed by tea. Imports consist of components for the composite industry, capital goods, oil products and foodstuffs. Dominant export recipients are Congo (Kinshasa), Switzerland and the United Arab Emirates. Imports are dominated by India, China and Kenya.

Burundi Economics and Business

Economic conditions

The consequences of this difficult situation of crisis have also been dramatic on the economic level, as demonstrated by the decline in GDP per resident, already negligible, in recent years: the only considerable resource of Burundi, moreover, remains coffee (20. 000 t in 1997, production also down compared to previous years, regardless of the 1994 vintage, exceptionally positive), which guarantees almost half the value of exports, but is always subject to variations in international prices; exports, in any case, are seriously in deficit, even if a slight improvement has been noted in recent years. Processing activities remain very modest, limited to the area of ​​the capital and exclusively aimed at satisfying local consumption (food, textiles).

Not even the temporary influx of humanitarian aid and international development investments, resumed at the end of the 1980s (but suspended again in 1996), was not enough to curb the economic degradation of Burundi, whose global GDP fell by 12 %. between 1993 and 1994, despite the exceptional coffee harvest, and again between 1995 and 1996. Only after the mid-nineties can we see some signs of settlement: first of all, thanks to the solidity of the subsistence agricultural system, whose stability has prevented (in conditions of almost no external aid) that a food famine is added to the ” list of current emergencies; secondly, because the army and the government resumed material control of the territory between 1996 and 1997, even at the cost of deporting and concentrating at least half a million peasants under surveillance.

The situation of the Burundi and its possibilities of economic and socio-political development are increasingly being framed in the regional geopolitical context, as well as in the perspective of a strengthening of the ties between the various ethnic groups (Tutsi in the first place, as currently predominant force), beyond political borders: in this sense, the Tutsi-dominated Burundi would find in Uganda and Congo-Kinshasa (but also in Rwanda) important political and economic partners and probably decisive for at least getting out of the crisis economic.

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