Overview

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Context
Strategy
Results
Partners

Burundi is a small, landlocked country (27,830 km²), one of the five poorest countries in the world. It is the second most densely populated country in Africa with about 470 inhabitants/km², and a population of about 11.2 million in all. With close to 72.9% of its population live below the poverty line, Burundi ranks 184^th out of 188 countries on the Human Development Index. Its economy is heavily reliant on the agricultural sector, which employs 80% of the population, despite the extreme paucity of arable land. Poverty overwhelmingly affects small rural farmers.
Political Context
Burundi’s history as an independent country has been characterized by political instability and persistent violence, although since the Arusha Peace Agreement, signed by rival political groups from 2000 onward, restored Burundi has enjoyed relative stability, paving the way for economic recovery. The reelection of President Pierre Nkurunziza in 2015, however, triggered a political crisis that claimed hundreds of lives. The United Nations High Commissioner for Refugees (UNHCR) has registered almost 275,000 Burundian refugees and asylum seekers in other countries since. In March 2018, UNHCR and Burundi’s Ministry of Interior and UNHCR reported a slight trend in reverse, with over 20,000 Burundian refugees returned homing since September 2017.
The years 2017 and 2018 have seen the Government of Burundi asserting its authority, opting to withdraw from the International Criminal Court (ICC) from October 27, 2017. The ruling party, the National Council for the Defense of Democracy–Forces for the Defense of Democracy (CNDD-FDD), has tightened its grip on government, rejecting the UN Resolution that would have authorized the deployment of 228 police officers to monitor the security situation in the country. The authorities have set up a committee to review the constitution. The UN’s Special Envoy, Michel Kafando, presented his report to the Security Council in July 2017, recommending more inclusive dialogue in Burundi and compliance with the Arusha Agreement. Another report in January 2018 highlighted both Burundi’s adoption of recommendations by the National Commission for the Inter-Burundi Dialogue and continued allegations of serious human rights violations, primarily by the State and actors affiliated to it. Burundi has refuted the findings of this report. A peacebuilding session was also held in late January, but the political situation remained uncertain as Burundi prepared for a referendum on the constitution, scheduled for May 17, 2018.
Social Context
Most Burundians, especially those living in rural areas, remain afflicted by poverty. At nearly double the Sub-Sahara Africa average, the level of food insecurity is alarming: Burundi ranks last on food insecurity, according to the Global Hunger Index. About 1.76 million people are food insecure, and more than half (6 in 10) of children are stunted (Consumer Price Index, March 2017)—the highest globally. Although agriculture employs around 80% of the population, the sector contributes only about 40% to GDP. There is very limited access to water and sanitation, and less than 5% of the population has electricity (World Bank, 2016). The fertility rate has, however, decreased from 6.4 to 5.5 children per woman on average between 2010 and 2017.
Economic Context
Recession continued to afflict Burundi in 2017, owing to the fragile political environment as well as low private consumption levels caused by declining food production related to climate shocks, and forced migration (creating refugees and internally displaced persons). Inflation remains moderate at 6%—below the 8% convergence level agreed on by the East Africa Community (EAC). Extremely low foreign currency reserves are significantly restricting imports, including fuel and medicine, even though these are deemed government priorities. External sector vulnerabilities persist: the structurally high current account deficit eased slightly from 13.2% of GDP in 2015 to 12.6% in 2016, due to improvements in net exports. Overall terms of trade improved in 2017, although foreign exchange market pressures continued. Central Bank interventions in the foreign exchange market limited the amount of depreciation in the official exchange rate to 5% in 2016 and to 4.6% in 2017. However, the parallel market premium soared, from 25% in 2015 to 60% in 2016.

Last Updated: Jun 01, 2018
World Bank Group Engagement in Burundi
The International Development Association (IDA) is supporting Burundi’s efforts to improve its economic management, public sector performance, economic growth, agriculture, environmental protection strategies, infrastructure, electricity, and health care. Current IDA commitments amount to $661.41 million in ten national projects ($416.96 million) and five regional projects ($244.45 million).
In response to the current political crisis in Burundi, the World Bank Group has adjusted its engagement, in particular its development policy operations. It is also scaling up support for health and social protection programs.
Preparation of the Burundi Systematic Country Diagnostic started in FY16 and was delivered in FY17. The Completion and Learning Review of the FY13–16 Country Assistance Strategy was completed by June 30, 2017, and is informing the Country Partnership Framework (CPF) FY18–FY22. The CPF supports the government’s Vision 2025, which seeks to address the negative trends in per capita Gross Domestic Product (GDP) that Burundi has experienced since 1993, and to halve the rate of poverty of 73 percent. The overarching objective of the CPF is to build social and economic resilience through: (i) improving human capital and promoting social inclusion, and (ii) unlocking economic growth potential.

Last Updated: Jun 01, 2018
Agriculture and rural development. Over the past decade, the World Bank has overseen donor support to Burundi’s agriculture and rural development sector. The Agri-Pastoral and Markets Development Project, worth $43 million, is an example of this. An additional financing agreement for$25 million was signed and ratified in 2017. The $55 million Coffee Sector Competitiveness Project, approved in 2016, is helping 300,000 small farmers increase the productivity and quality of their coffee. Burundi is also participating in the $75 million Regional Great Lakes Integrated Agriculture Development Project, approved in 2017: about 129,000 persons, roughly 50% of whom are women, are direct beneficiaries of this, with 645,000 persons benefiting indirectly. Under IDA 18, the sector is preparing the Eastern and Central Africa Agriculture Transformation Project worth $45m.
Public sector management and governance. In a bid to support public financial management reforms and increase domestic revenues, IDA is currently providing technical assistance ($22 million) to strengthen, modernize, and reorganize the Ministries of Finance and Mining, as well as the Revenue Authority. The Bank is preparing a Public Expenditure Review to assess the impact of macroeconomic imbalances on public spending, budget management, and the delivery of public health services.
Environment. Burundi’s natural resources are key to its socioeconomic development. Land degradation is the most critical environmental problem facing Burundi, with one third of its land considered seriously degraded. The Bank is helping the country implement a Global Environment Facility-financed Sustainable Coffee Landscape Project, which promotes sustainable land management practices, including coffee grown in the shade,, to combat land degradation, and the Lake Victoria Environmental Management Project (LVEMP2), which aims to reduce pollution in this area.
The development of a program designed to restore degraded landscapes in priority regions is also under way. Two new projects exist under the IDA 18 pipeline: (i) LVEMP3 ($30million) aims to improve environmental and natural resource management, and (ii) Landscape Restoration and Resilience ($30 million), approved by the Bank in April 2018, aims to restore land productivity and, in the event of an eligible crisis or emergency, provide immediate and effective response.
Access to finance. The Financial and Private Sector Development Project supported the modernization of the Central Cank and the introduction of payment systems. Bank-supported reforms are helping increase access to financial services through the development of national payment systems, credit bureaus, guarantees, and registers.
Local development and employment. The political crisis has severely hampered the delivery of essential public services in rural and urban areas, and further inhibited the development of the private sector, especially small and medium enterprises. The Local Development for Jobs project, approved in 2017, aims to promote short- and medium-term job creation, particularly in urban areas.
Roads. Under the Infrastructure Resilience Emergency Project for Burundi ($25 million), the World Bank is supporting Burundi’s efforts to rehabilitate both the road network and bridges that were damaged by the severe February 2014 flooding.
Energy. Through the Jiji and Mulembwe Hydropower Project, the Bank is helping Burundi increase access to energy by generating and distributing 49.5 MW of cheap, environmentally friendly energy. Another power generation project is the regional Rusumo Falls Hydroelectric Project.
Health. IDA, the single largest source of financing for Burundi’s health sector, allocated $25 million for a free maternal care program for the past five years. Burundi is participating in two regional projects aimed at improved laboratory diagnostics, maternal health, and violence prevention. These programs are supplemented by a $2.73 million pilot project designed to support child nutrition programs in two provinces.
Social protection. IDA has provided $40 million to support Burundi’s efforts to implement a national safety net and cash transfer system targeting 40,000 households in four provinces.

Last Updated: Jun 01, 2018
Although the World Bank’s budget support series and the IMF’s economic and financial program are on hold, both international institutions are working closely together to assess the macroeconomic impact of the current crisis.
Efforts by the World Bank and UN agencies are under way to revamp consultations with multilateral development institutions to foster dialogue and support programs that promote socioeconomic progress in the country. The Geneva Initiative gave fresh impetus to donor coordination in a bid to share information and promote joint development and aid approaches, including at the regional level.
The World Bank partners with specialized NGOs and development agencies to design and support investment programs in health, rural development, social protection, and energy.

Last Updated: Jun 01, 2018