Doing Business in Burundi

Business and Economic Overview

In addition to negligible growth rates, Burundi’s inflation rate is severely unstable, at 18% and forecast to increase to 23.5% in 2019. Overall the economy is in turmoil as two thirds of the population live below the poverty line and the value of the Burundian Franc to US Dollar has continued its inexorable trend downwards: the country ranks 184 of 188 in the UN’s Human Development Report.

Economic reforms have not been implemented, meaning that there is an overwhelming reliance on agriculture and particularly subsistence farming. Tea and coffee form almost 50% of export earnings and are an important source of foreign currency, but these are highly susceptible to global demand and the economy’s overall is vulnerable to external shocks. 

Also, the nation is geographically isolated, and its domestic infrastructure is lacking. Bribery, embezzlement, nepotism and clientelism are all rife in Burundi and is most pervasive in government procurement, land procurement and customs.

The ongoing political unrest, over President Nkurunziza’s third term and the proposed constitutional changes, and agricultural land shortages threaten a resurgence of ethnic violence, whilst a climate of lawlessness may discourage investment. Thus, Burundi is ranked 164 of 190 in the World Bank’s Doing Business Index but is ranked 42 of 190 in the Starting a Business Index.

Despite this, some opportunities do exist. Burundi’s government actively seeks foreign investment and has no laws or strategies that discriminate against foreign investors, save in the defence sector. Indeed, amendments to the Investment Code grant substantial tax benefits to foreign business that hire Burundian workers. 

Burundi’s Investment Promotion Authority outlines its key sectors and opportunities for investment and development. Given the importance of tea and coffee to the economy, significant opportunities exist in the sector particularly in initialising commercial farming schemes, which have been supported by EU and World Bank finances in the past. 

Burundi’s location between trading blocs and entry into the EAC have created a market for educational services, particularly capacity-building centres for government officials. Burundi also seeks major investment into its transport infrastructure, both onshore and maritime.

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