8 november 2022

Aan het eind van het jaar is het goed om weer eens een overzicht te hebben van de Burundese economie. The Exchange Africa voorzag recent in een overzichtsartikel over Burundi business governance, dat we gespreid over drie dagen overnemen. Het is geschreven door June Njoroge.

Deel 1: Historie
Deel 2: Status quo, landbouw en klimaat
Deel 3: ICT, industrie, energie, toerisme

Burundi: New Dawn – Reforms Chart Fresh Economic Path for Burundi

Vandaag Deel 2

Burundi’s Economic Status quo

According to the 2022 African Economic Outlook (AEO) published by the African Development Bank (AfDB), Burundi’s economic outlook is favourable, with projected GDP growth rates of 3.6 per cent in 2022 and 4.6 per cent in 2023, owing to the continuing recovery of agriculture and public investment. Global inflationary pressure intensified by the Russia-Ukraine conflict is expected to increase the inflation rate to 9.3 per cent in 2022.

Furthermore, economic growth is projected at 2.1 per cent in 2022, supported by gains across all sectors, an increase from 1.8 per cent in 2021 and 0.3 per cent in 2020. The report additionally indicates that inflation will remain high at around 12 per cent in 2022, particularly following the impact of the war in Ukraine on food and oil prices worldwide; as opposed to 8.3 per cent in 2021 and 7.5 per cent in 2020. Moreover, the rising value of oil product imports will increase the commercial deficit and aggravate the current account deficit which will increase from 15.4 per cent of GDP in 2021 to 15.9 per cent in 2022, before narrowing to 14.8 per cent in 2023. Public debt is projected to fall to 70.2 per cent of GDP in 2022 and 66.5 per cent in 2023, from 71.9 per cent in 2021, on budget consolidation.

Burundi formulated the National Development Plan (NDP) 2018-2027, in order to provide a socio-economic diagnosis of the country to structurally transform the Burundian economy for robust, sustainable, resilient, inclusive growth, creating decent jobs for all and leading to improved social welfare.

By the same token, the National Peacebuilding Program was developed in 2020 to operationalize the NDP. This program serves as a reference for all intervention strategies and actions aimed at promoting economic growth, community recovery, reintegration and sustainable and inclusive resettlement in Burundi.

Late September marked the launch of an economic memorandum report of Burundi supported by the World Bank. This was aimed at identifying opportunities to accelerate economic growth. Prepared with perspective to the successive external shocks of both the pandemic and the Russia-Ukraine conflict, some of the proposed solutions included increasing agricultural productivity, boosting trade, and managing natural capital, investing in infrastructure, restoring macroeconomic stability and strengthening infrastructure governance.

For trade facilitation, Burundi is a member of the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA), and the African Free Trade Area Agreement (AfCFTA). Economic diversification is a path Burundi needs to tread, in order to expand its narrow export base. This will be beneficial in the long run, not only to cushion the country from external shocks, but also to boost both revenue generation and job creation. For Burundi to get back on its feet again, it needs international backing, mobilization of internal forces and proper management of existing resources in order to attract the right investors.

Key priority sectors include:

Climate-smart Agriculture
Being a mainstay in Burundi, agriculture is a key economic sector that will aid the country’s economic revival. Farming is integral to ensure the country’s food security especially due to its rapid population growth rate, estimated to be at 3 percent in 2021.Two-thirds of the country’s 10.6 million people live below the poverty line and more than 90 per cent derive their livelihoods from agriculture. The vast majority of the country’s poor people are small-scale subsistence farmers. Agricultural production covers an average area of 0.50 ha per household, but only translates into 65 per cent of the food requirements, resulting in the country’s dependence on food imports. However, this vital sector suffers from low public and private investment, weak capacity, overexploitation of natural resources and vulnerability to climate change such as floods and droughts, as well as soil degradation, diseases and pests, and barriers to market access.

Burundi’s agricultural products include palm oil, cassava, beans, sweet potatoes, maize, rice, taro, tea, coffee, sugarcane, sorghum and vegetables. Burundi’s approach in the formulation of agricultural production is based on a long-term Burundi Vision 2025, a national Poverty Reduction Strategy Plan (CSLP), a National Agriculture Strategy (2008), the National Agricultural Investment Plan 2012-2017, and a Comprehensive Africa Agriculture Development Programme.

In addition, the Agriculture and Livestock Value Chains Sustainable Development Support Project (PADCAE-B) by the AfDB, aims to promote intensive and modernized agriculture to ensure food security and foster market agriculture. Upon full implementation, the project will help to fight food and nutrition insecurity, promote youth employment and gender, and boost agricultural output through resilient and sustainable agriculture. In addition, Country Strategic Opportunities Programme (COSOP) for Burundi was approved by the International Fund for Agricultural Development (IFAD) in 2016, to generate economic opportunities and improving food and income security for rural households, particularly for the poorest households.

Given that agriculture in Burundi is also threatened by climate change, Burundi farmers need to adopt climate smart agriculture to guarantee food security. The government is promoting initiatives to modernize and diversify agricultural production. The country needs better technologies to increase productivity in order to generate higher yields. With perspective to the country’s massive potential for irrigation, the government should look into attracting investments in this sector to further bolster food security.

Lees morgen verder over de andere key priority sectors.