Overview

  • Overview

    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.

    Political Context

    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.

    Social Context

    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 Overview        

    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

  • World Bank Group Engagement in Burundi

    • The International Development Association (IDA) has supported Burundi’s efforts to improve economic management, public sector performance, economic growth, agriculture, environment protection, infrastructure, and core basic service delivery in energy, and health.  The current IDA commitments amount to $493.2 million under 8 national IDA projects ($324.8 million) and 4 regional IDA projects ($168.4 million);
    • The Performance and Learning Review (Board date April 3, 2015) proposes a focused WBG effort on increasing opportunities for average Burundians as the engine of poverty reduction and as an important basis for peace and stability;
    • The enhanced WBG efforts are in line with the objectives of the Country Assistance Strategy (CAS) to improve competitiveness, increase resilience, and strengthen governance aimed at ending poverty and boosting shared prosperity.
    • As the political risks do materialize with the outbreak of the political crisis, the WBG adjusts its engagement consistently with the Performance and Learning Review (PLR) especially its Development Policy Operation (DPO) series and also scale up activities under the second pillar of the CAS (Improving Resilience by Consolidating Social Stability) including for health and social protection programs.
    • On June 7, 2016 World Bank Management presented an informal briefing to the Executive Directors who endorsed the engagement plan based on informed fragility and risks assessment.
    • MIGA has offered a pre-claim assistance to settle the arrears of payment incurred on the sole covered investment (COTECNA).

    Last Updated: Dec 27, 2016

    • Agriculture and Rural development. Over the past decade, the World Bank has led donor support to Burundi’s agriculture and rural development sector through an array of analysis and projects including the active Agro-Pastoral and Markets Development Project – PRODEMA of $43M grant to increase the productivity and access to markets for small farmers in 10 out of 18 provinces. Coffee Sector Competitiveness Project ($55 million) approved on June 19 aims to increase coffee productivity and improve its quality among 300.000 small-scale coffee producers. Burundi also participates in the Regional Great Lakes Integrated Agriculture Development Project ($75 million) to sustainably increase agricultural productivity through enhanced private sector investments and improved agricultural regional integration. This project is expected to be delivered in May 2017.
      The total number of beneficiaries is 129,000 people (about 50 percent are women), with indirect beneficiaries estimated to be 645,000 people.
      1,386 hectares of marshlands were rehabilitated. In addition, 43 km of feeder roads have been restored and 11,898 ha of hillside areas were protected. Rice production increased from 2.5 t/ha to 4.1 t/ha, bananas production increased from 9 t/ha to 22.90 t/ha; and milk production increased from 360 l/year to 1,260 l/year.
    • Public sector management and good governance. Currently IDA is providing technical assistance (US$22 million) to strengthen, modernize, and reform the Ministries of Finance, Mining and the Revenues Authority (OBR) to improve their effectiveness to implement public finance management reforms and increase domestic revenues mobilization.
    • Environment. Burundi’s endowment in natural resources are key to its socio-economic development. Land degradation is the most critical environmental problem faced by Burundi, with 1/3 considered seriously degraded. Climate change is amplifying these adverse consequences. To respond to these multiple challenges, the Bank is currently assisting the country to implement a Global Environment Facility (GEF)-financed Sustainable Coffee Landscape Project that pilots sustainable land management practices – including shade grown coffee – to address land degradation, and the IDA-financed Lake Victoria Environmental Management Project, which works to reduce pollution. Building on this work, the GP is now preparing a Landscape Restoration Project to restore degraded landscapes in priority regions.
    • Access to Finance. Burundi’s financial system developed consistently during the last five years up to 2016. The Financial and Private Sector Development Projectmainly supported the modernization of the Central Bank and the establishment of payments systems.
    • Resilient Local Development. The Local Development for Jobs  Project aims to address the need for immediate and medium term job creation, in particular for youth and women, and growing needs for provision of services.
    • Roads. Under an Infrastructures Emergency project of $25M, WB support to Burundi’s transport sector program to rehabilitate sections of the national road network and bridges damaged by the February 2014 flooding. 
    • Energy: Under Jiji & Mulembwe hydropower project, WB is supporting the Government to increase access to energy with the production and distribution of 49.5 MW of environmental-friendly and cheap energy.
    • Health. IDA has been the single largest source of the Performance-Based Financing for the health sector with a current commitment of $25 million for free maternal care over the past five years to be followed by a second $50 million project under implementation.
    • Social Protection. With the support of a US$40 million IDA project under preparation for in FY2017, the government of Burundi will start the implementation of the national safety net system and extend cash transfers to 40,000 household in 4 provinces.

    Last Updated: Dec 27, 2016

  • Since the outbreak of the political crisis, the aid coordination platform between the Government and Donors is put on hold. Efforts by the Bank and the United Nations agencies are underway to revamp consultations with multilateral development institutions to promote dialogue or support programs in critical socio-economic sectors.

    At project level, the Bank partners with specialized NGOs and development agencies to design, prepare and support the implementation of investment programs in health, rural development, social protection, and energy.

    Although the budget support series in on hold and IMF program is off-track, the Bank works closely with the IMF on monitoring the macro-economic impact of the current crisis.

    Last Updated: Dec 27, 2016

Api


LENDING

Burundi: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

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Additional Resources

Country Office Contacts

Bujumbura-Burundi
Innocent Nsabimana
Communications Associate
Main Office Contact
+257-22-20-6200
3 Blvd. de l'Aviation
257-79-744-944
insabimana@worldbank.org
Washington, USA
Preeti Arora
Country program Coordinator
Headquarter
1818 H Street NW
DC 20433
+1-202-458-4097
parora@worldbank.org