Overview

«

»

Context
Strategy
Results
Partners

Overview
Burundi is a small landlocked country (27,830 km²) and one of the five poorest countries in the world. It is the second most densely populated country in Africa (approximately 11.2 million people and 470 inhabitants/km²). With close to 65% of its population living below the poverty line, Burundi ranks 180^th out of 186 countries on the Human Development Index. Poverty overwhelmingly affects small rural farmers. Burundi’s economy is heavily reliant on the agricultural sector, which employs 90% of the population, despite the extreme paucity of arable land.
Political Context
Burundi’s history as an independent country has been plagued by high political instability and persistent violence. Since the Arusha Peace Agreement in 2000, Burundi has enjoyed relative stability, paving the way for economic recovery. However, the reelection of President Pierre Nkurunziza in 2015 triggered a political crisis that claimed hundreds of lives. UNHCR has registered 410,000 refugees and asylum seekers who have fled their homeland. Although violence fell sharply across the country in 2016, including in Bujumbura, targeted assassinations continue. Burundi opted to withdraw from the International Criminal Court (ICC) effective 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 the government. The Government rejected UN Resolution 2303 authorizing the deployment of 228 police officers in the country to monitor the security situation. The authorities have set up a committee to review the constitution. In April 2017, Michel Kafando, a former transitional president of Burkina Faso, was appointed the new special envoy of the United Nations Secretary General for Burundi. His first report, which was presented to the Security Council in July 2017, recommends more inclusive dialogue and compliance with the Arusha Agreement, and notes that the current review of the constitution risks radicalizing the positions of the various political players.
Social Context
Most Burundians, especially those living in rural areas, remain afflicted by poverty. Food insecurity is alarming, as Burundi ranks last on the 2013 Global Hunger Index. Almost one in two households (around 4.6 million people) is food insecure, and more than half of the children are stunted (WFP, 2014 and 2016). There is very limited access to water and sanitation and less than 5% of the population has electricity (World Bank, 2016).
Burundi’s poverty reduction efforts are being constrained by myriad challenges such as a weak rural economy, heavy reliance on development aid, an economic policy that does not allow for equitable distribution of resources, vulnerability to adverse environmental events, and strong population growth with a fertility rate of 6.4 children per woman.
Economic Context
The recession continues to afflict Burundi in 2017, owing to the fragile political environment, low private consumption levels caused by declining food production related to climate shocks, forced migration (refugees and internally displaced persons). Inflation remains moderate at 6%, below the 8% convergence level agreed in the regional integration agreements of the East Africa Community (EAC).
Extremely low foreign currency reserves are significantly restricting imports, including fuel and medicines, which are deemed priorities by the Government. The authorities are endeavoring to boost domestic resources to offset the loss of external budget support.
Exchange rate pressures also persist. While Central Bank interventions in the foreign exchange market, including liquidity injections and restrictions on foreign exchange transactions, curtailed the depreciation of the official exchange rate to 5% in 2016, the parallel market premium soared from 25% in 2015 to 60% in 2016.

Last Updated: Oct 31, 2017
World Bank Group Engagement in Burundi
The International Development Association (IDA) is supporting Burundi’s efforts to improve economic management, public sector performance, economic growth, agriculture, environmental protection, infrastructure, and electricity and health care services. current IDA commitments amount to $659 million under nine national projects ($414 million) and five regional projects ($245 million).
Based on its Performance and Learning Review (PLR) conducted in April 2015, the World Bank Group stepped up efforts to improve competitiveness, increase resilience, and strengthen governance in Burundi with a view to ending poverty and boosting shared prosperity. The World Bank is focusing its efforts on providing economic opportunities to Burundians, as the engine of poverty reduction and an important basis for peace and stability.
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.
In 2017, the World Bank conducted a new Systematic Country Diagnostic (SCD) of the economic and social situation in Burundi, with a view to preparing its new development assistance strategy.

Last Updated: Oct 31, 2017
Agriculture and rural development. Over the past decade, the World Bank has overseen donor support to Burundi’s agriculture and rural development sector. In place, for example, is the Agro-Pastoral and Markets Development Project (PRODEMA) ($43 million), which is increasing the productivity of small farmers, thereby paving the way for their access to markets in 10 of the country’s 18 provinces. An additional financing agreement in the amount of $25 million was signed on January 12 and later ratified on April 3, 2017. The $55 million Coffee Sector Competitiveness Project approved on June 19, 2016 is helping 300,000 small farmers increase coffee productivity and quality. Burundi is also participating in the $75 million Regional Great Lakes Integrated Agriculture Development Project. Approved on May 5, 2017, this project seeks to boost agricultural productivity through enhanced private sector investments and improved regional agricultural integration. A total of 129,000 persons, roughly 50% of whom are women, are direct beneficiaries, while 645,000 persons are benefiting indirectly.
Public sector management and governance. In a bid to support public financial management reforms and increase domestic revenues, IDA is currently providing technical assistance (US$ 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 (PER) 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. However, land degradation is the most critical environmental problem facing Burundi, with one third considered seriously degraded. Climate change is amplifying these adverse consequences. To address these multiple challenges, the Bank is currently helping the country implement a Global Environment Facility (GEF)-financed Sustainable Coffee Landscape Project that promotes sustainable land management practices – including shade grown coffee – to combat land degradation, and the Lake Victoria Environmental Management Project (LVEMP2), which aims to reduce pollution in this area. Development of a program designed to restore degraded landscapes in priority regions is also under way.
Access to finance. The Financial and Private Sector Development Project supported the modernization of the central bank 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 (SMEs). Approved on August 23, 2017, the Local Development for Jobs project 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 the road network and bridges damaged by the February 2014 flooding.
Energy. Under 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.
Health. IDA, the single largest source of financing for Burundi’s health sector, has allocated $25 million for a free maternal care program over the past five years. Burundi is also participing in two regional projects aimed at improved laboratory diagnostics, maternal health, and violence prevention. These programs will be supplemented by a $2.7 million pilot project designed to support child nutrition programs in two provinces.
Social protection. In 2017, IDA intends to provide US$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: Oct 31, 2017
Although the World Bank’s [ELQ1] 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: Oct 31, 2017