Overview

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Context
Strategy
Results
Partners

Small and landlocked, Burundi is one of the poorest countries in the world: close to 74.7% of its population of 10.8 million (2017) live below the poverty line. It is also the second most densely populated country in Africa with about 470 inhabitants per square kilometer. Burundi’s economy is heavily reliant on the agricultural sector which, despite the extreme paucity of arable land, employs 80% of the population. Poverty overwhelmingly affects small rural farmers.
Political Context.
Burundi’s history is marked by instability and violence. The reelection of President Pierre Nkurunziza in 2015, however, triggered a political crisis that claimed hundreds of lives and sent tens of thousands of Burundians into exile. The UNHCR says there are more than 400,000 Burundian refugees and asylum seekers in Tanzania, Rwanda, Uganda, and the Democratic Republic of the Congo (DRC) and other countries.
Otherwise, the past few years have seen Burundi withdrawing from international engagement: it opted out of the International Criminal Court in October 2017, and rejected UN Resolution 2303, which authorized the deployment of 228 UN police officers. In his January 2018 report, the UN’s Special Envoy highlighted allegations of human rights abuses and the continued deterioration of the socioeconomic and humanitarian situation. The government refuted the findings of his report.
A referendum for a revision in Burundi’s constitution took place in May 2018. The amended constitution extended the duration of Burundi’s presidential term of office from five to seven years, though Nkurunziza has said he will step down in the 2020 election.
Social Context
Most Burundians, especially those living in rural areas, remain afflicted by poverty. Food insecurity is alarmingly high: almost one in two households (around 4.6 million people) are food insecure (WFP, 2014 and 2016). About 56% of children suffer from chronic malnutrition. Burundi suffers from low agricultural productivity: though agriculture employs about 80% of the population, the sector contributes only about 40% of GDP. There is very limited access to water and sanitation, and less than 5% of the population has electricity (World Bank, 2016).
Burundi’s efforts at poverty reduction are constrained by myriad challenges, such as a weak rural economy; a heavy reliance on development aid; economic policy that does not allow for the equitable distribution of resources; vulnerability to environmental events; and strong population growth. The only positive trend is the fertility rate, which decreased from an average of 6.4 to 5.5 children per woman between 2010 and 2017.
Economic Context
After three years of contraction, Burundi’s economy continues to recover slowly. These pushed annual growth to 0.5% in 2017 from 0.6% in 2016. Based on estimates from the World Bank, Burundi’s growth rate is at 1.9% for 2018. Headline inflation averaged 16.1% in 2017 but began declining in 2018, with the latest estimate much lower at 6.5% in June 2018, thanks to a good agricultural harvest and the decline of food prices.
The current account deficit was high but stable in 2017 (11.3% of GDP in 2017 against 12% of GDP in 2015). The good performance of exports in 2017 and the increase in international transfers to NGOs helped contain the deficit in 2017.
Foreign exchange pressures have continued, with shortages constraining the import of essential goods. The decline in external support after 2015 has resulted in the depletion of international reserves with limited other sources of foreign exchange (exports, foreign direct investment, and remittances).
Central Bank interventions, including liquidity injections and restrictions on foreign exchange transactions, limited the depreciation of the official exchange rate to 5% in 2016 and to 4.6% 2017. Nonetheless, the parallel market premium soared from 25% in 2015, to 60% in 2016 and 2017, and was at 50% by end-October 2018.

Last Updated: Nov 27, 2018
World Bank Group Engagement in Burundi
The International Development Association (IDA) is supporting Burundi’s efforts to improve education, health care services, social protection, public sector performance, agriculture, environmental protection, infrastructure, jobs creation, and energy. IDA commitments total $727.48 million in 12 national ($499.03 million) and four regional ($228.45 million) projects.
The Country Partnership Framework (CPF) FY18–FY22 will support the Burundian government’s ambitious 10-year National Development Plan. The CPF acknowledges the proposition of peacebuilding and adopts a citizen-centered approach that focuses on inclusion and boosting investments in human capital; and restoring economic and social resilience for the most vulnerable members of society at a time of economic difficulty.

Last Updated: Nov 27, 2018
Agriculture and rural development. Over the past decade, the World Bank has overseen donor support to agriculture and rural development. The Agro-Pastoral and Markets Development Project ($43 million) is increasing the productivity of small farmers, paving the way for their access to markets in 10 of the country’s 18 provinces. An additional financing agreement of $25 million was ratified in April 2017. The $55 million Coffee Sector Competitiveness Project is helping 300,000 small farmers, and Burundi participates in the $75 million Regional Great Lakes Integrated Agriculture Development Project to boost agricultural productivity through private sector investment and regional integration; a total of 129,000 persons, about 50% of them women, are direct beneficiaries, while 645,000 persons benefit indirectly. By vaccinating about 3.1 million small ruminants, the project’s emergency response was key to containing the Peste des Petits Ruminants epidemic in late 2017/early 2018. Under IDA18, the sector is preparing the Eastern and Central Africa Agriculture Transformation Project ($45m) that aims to increase productivity and access to markets.
Public sector management and governance. IDA is providing technical assistance ($22 million) to modernize the ministries of Finance and Mining, and the Revenue Authority. The Bank is preparing a Public Expenditure Review to assess the impact of macroeconomic imbalances on public spending, budget management, and public health services.
Environment. Burundi’s natural resources are key to its development but one third of its land is considered seriously degraded, with climate change amplifying this. The Bank is helping implement a Global Environment Facility-financed Sustainable Coffee Landscape Project and the Lake Victoria Environmental Management Project. The Landscape Restoration and Resilience Project ($30 million) will tackle land certification for the first time, as well as land degradation, productivity, and management to restore ecosystems and decrease soil erosion.
Access to finance. The Financial and Private Sector Development Project supported the modernization of the Central Bank and introduction of payment systems. Reforms are helping increase access to financial services through 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 inhibited the development of the private sector, especially small and medium enterprises (SMEs). The $50m IDA Local Development for Jobs Project is to foster opportunities for job creation (targeting vulnerable members of the population, including youth and women), and address the growing and unmet demand for basic services. Supporting Burundi’s economic and social resilience, its approach is structured in an innovative, integrated way, particularly in urban areas.
Roads. With the Infrastructure Resilience Emergency Project for Burundi ($25 million), the Bank is supporting Burundi’s efforts to rehabilitate bridges damaged by February 2014 flooding, and other aspects of the road network. The Lake Tanganyika Transport Program ($50m) is being prepared to facilitate the movement of goods and people across Lake Tanganyika while strengthening navigation and maritime safety through physical infrastructure and national and regional institutional frameworks for transport on the lake.
Energy. Under the Jiji and Mulembwe Hydropower Project, the Bank is helping Burundi generate and distribute 49.5 MW of cheap, environmentally friendly energy. Another power generation project is the regional Rusumo Falls Hydroelectric Project, and the Bank plans to support a new Off Grid Energy Access Project to give people in the cash transfer program, Merankabandi, solar lanterns. This project will also benefit schools, technical training centers, and hospitals, and population centers identified by the rural electrification agency.
Health. IDA, the single largest source of financing for Burundi’s health sector, has allocated $25 million over the past five years for free maternal care. Burundi is participating in two regional projects aimed at laboratory diagnostics, maternal health, and violence prevention, supplemented by a $2.73 million pilot project to support child nutrition in two provinces. The two regional projects are the East Africa Public Health Laboratory Networking Project ($25 million) and the Great Lakes Emergency Sexual and Gender Based Violence & Women's Health Project. A planned multi-sectoral project on Investing in (the) Early Years and Fertility ($30m) will support activities to tackle chronic malnutrition and address demographic issues.
Social protection. IDA has provided $40 million through Merankabandi, starting a national safety net system extending cash transfers to 48,000 household in four provinces.
Education. The Bank is re-engaging in education, with two new projects to support sector reforms and strengthen service delivery as the country deals with the post-2015 withdrawal of donors from the funding basket. The Early Grade Learning Project ($40 million) focuses on learning and progression in the early years to ensure most children acquire the basic literacy and numeracy needed to continue education. The Burundi Youth Skills and Employment Project will focus on employability by strengthening skills development opportunities for 15 to 24-year-olds both for those who have completed basic education and out-of-school youth. This will help develop links to private sector employment.

Last Updated: Nov 27, 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: Nov 27, 2018