Burundi is a small landlocked country (27,830 sq.km) which is one of the five poorest countries in the world. It is the second most densely populated country in Africa (approximately 11.18 million people- 470 inhabitants/sq. km). Burundi ranks 180th out of 186 countries in terms of the Human Development Index. Nearly 64.9% of the population live below the poverty line. Poverty is overwhelmingly rural and most of the country’s poor are small-scale farmers. Burundi economy is heavily reliant on agriculture which employs 90% of the population, though cultivable land is extremely scarce.
Burundi’s history as an independent country is characterized by high political instability and violence. Since the Arusha Peace Accord in 2000, Burundi enjoyed relative stability and economic recovery. President Nkurunziza’s reelection in 2015 triggered a political crisis that claimed over 500 lives and displaced 300,000 peoples (UNHCR). While violence has drastically decreased across the country including Bujumbura in 2016, targeted assassinations continue. In October 2016, Burundi's government has announced the country intends to pull out of the International Criminal Court (ICC). The ruling party CNDD-FDD has tightened its control over the key state positions. UN resolution 2303 to send 228 police force in Burundi is rejected by the Government backed by the Parliament. Following the recommendations of the preliminary report of the National Dialogue Commission, the Government of Burundi has set up a committee to review the constitution in view of aligning it with EAC member countries. Facilitator Mkapa has led a series of consultations in Bujumbura on 7-9 December 2016 with the authorities, leaders of political parties and leaders of Civil Society Organizations, Youth, Women and religious organizations.
Poverty still affects a major part of Burundi’s population. Food insecurity is alarming as the country ranks the lowest position in the 2013 Global Hunger Index. Almost one in two households (around 4.6 million people) are food insecure and over half of the children are stunted (WFP, 2014 and 2016). Access to water and sanitation is very low and less than 5 percent of the total population has access to electricity (World Bank, 2016).
Economic growth remains negative in 2016 due to a fragile political environment, private consumption likely weakened following a contraction in food production, due to climate shocks, a longer than expected lean season and forced migrations (refugees and IDPs).
Positive developments in the real sector included private investment growth improving in recent months as consumer agro-industries (soaps and edible oils, beverages, and cigarettes) and the cement industry found new domestic and external markets. These areas drove an increase in the average monthly industrial production index by 1.7 percent between 2015 and 2016. However, low execution of domestically financed public investments and a reduction in externally financed projects have altered prospects for a quicker growth rebound.
While headline inflation has remained moderate at 6.0 percent, standing below the 8-percent convergence level agreed within the East Africa Community’s regional integration arrangements, the dire situation of foreign exchange reserves contributed to raising inflation expectations observed over the past months.
The Government continued to find measures to partially offset the loss of external budget support, emphasizing domestic resources mobilization.
The Central Bank continued to implement a loosening monetary policy to finance the widening fiscal deficit. Currently, available estimations relying on Central Bank data suggest that the public debt ratio will soon exceed 45 percent of GDP.
Last Updated: Dec 27, 2016