Background

Burundi is a landlocked country in the Great Lakes region of Eastern Africa, bordered by Rwanda to the north, Tanzania to the east and south and the Democratic Republic of the Congo to the west. Its capital is Bujumbura and much of southwestern border is adjacent to Lake Tanganyika and rest landlocked. The natives of the country are Twa, Tutsi and Hutu. Burundi was ruled as a Kingdom for over two hundred years and at the beginning of the twentieth century, Germany and Belgium occupied the region and Burundi and Rwanda became a European colony known as Ruanda-Urundi. Social differences between the Tutsi and Hutu have since contributed to political unrest in the region, leading to civil war in the middle of the twentieth century. Presently, Burundi is governed as a presidential representative democratic republic.

The country claimed independence on July 1, 1962, and changed its name from Ruanda-Urundi to Burundi. Mwami Mwambutsa IV was named king. On September 18, 1962, Burundi joined the United Nations.  After bloody wars for years, the country made its first move towards democracy. A democratic election was conducted in June 1993. This was followed by innumerable murders, coups and rebellions, the country stuttered towards peace and democracy through combined effort of representatives of various ethnic groups.

Reconstruction efforts in Burundi started to practically take effect after 2006. The UN shut down its peacekeeping mission and re-focused on helping with reconstruction. Toward achieving economic reconstruction, Rwanda, D.R.Congo and Burundi relaunched the regional economic bloc: The Great Lakes Countries Economic Community. In addition, Burundi, along with Rwanda, joined the East African Community in 2007.

Through 2007 to 2011, Burundi had to negotiate various other challenges to the peace and integrity of the country. Burundi now participates in African Union peackeeping missions. Now the country is taking baby steps in redeeming itself from its bloody past and making the effort to gain a better future. However, according to Wikipedia, Burundi is one of the five poorest countries in the world. It has one of the lowest per capita GDPs of any nation in the worldand a low gross domestic product largely due to warfare, corruption, poor access to education and the effects of HIV/AIDS. Burundi is densely populated and experiences substantial emigration. According to a 2012 DHL Global Connectedness Index, Burundi is the least globalized of 140 surveyed countries.

It is hightime that the country realizes its vast potential, in its natural resources as well as the human resources. With increasing exports; access to investments and humanitarian funds, Burundi is becoming more dynamic and enterprising. Its government, citizens and business community are making a concerted effort to create wealth and raise the standard of living in the country. Here is an overview of the encouraging developments in Burundi.

The beginning of a change

It does sound depressing reading that piece of information. However, the intention of this article is not to highlight the limitations of Burundi. Rather, it is about the efforts this country is making to turn around the situation. According to “Doing Business 2013 – Smarter Regulations for Small and Medium-Size Enterprises” published by “Doing Business” in October 23, 2012, Burundi has been recognized as one of the few countries having the most improved ease of doing business across several areas of regulation as measured by the report.

Prasad Ram - Burundi Image 1

Figure 1: How far has Burundi come in the areas measured by Doing Business?

Doing Business with Burundi

The Doing Business Project provides objective measures of business regulations and their enforcement across 185 economies and selected cities at the subnational and regional level based on the following parameters:

  • Starting a Business
  • Dealing with Construction Permits
  • Getting Electricity
  • Registering Property
  • Getting Credit
  • Protecting Investors
  • Paying Taxes
  • Trading Across Borders
  • Enforcing Contracts
  • Resolving Insolvency

The overall score of Burundi is low. However, as compared to the recent past, it has made giant leaps in improving in all the parameters. Fig. 2 represents the overall score of Burundi

Prasad Ram - Burundi Image 2

Figure 2: Scores of various topics for Burundi

An Indicator of Progress

The improvement of Burundi as an improving destination for conducting business is apparent in its comparisons to other countries. Here is a comparison of how Burundi fares in the ease of doing business, as compared to other countries.

Prasad Ram - Burundi Image 3

Figure 3: Ease of doing business ranking

Economic Opportunities

Burundi’s negative trade balance is a major challenge. The mainstay of the Burundian economy is agriculture which accounted for 54% of GDP in 1997. It also supports more than 70% of the labor force, the majority of who are subsistence farmers. Although Burundi is potentially self-sufficient in food production, various issues like civil war, overpopulation, and soil erosion have contributed to the contraction of the subsistence economy by 25% in recent years.  Its vast areas of unexplored country hold some potential for mining for precious stones, Oil & Gas; metals etc., Also, improvement of Industrial environment could provide opportunities for self-employment and exports. Food processing, Leather processing and other related business pertaining to Agriculture and Livestock could be explored. Infrastructure development is another area of interest and so is Information and communication Technologies. Providing Microfinance to small startups could help in breathing life into a self-sustaining economy. The sections below discuss in detail about the enormous opportunities and associated challenges.

Ride the wave

Burundi’s exports in 2008 have nearly doubled as compared to 2010. The table below shows the top exported products and the percentage of increase over the past years. This is a good indicator of the areas where opportunities are available for the enterprising business owners to focus.

Prasad Ram - Burundi Image 4

Table 2: Top Exported Products

 

When compared across years, the increase in export of various products may be attributed to the improved regulatory environment, improvement of services of local entrepreneurs and global demand for the good and services is apparent. This can further be improved by consciously introducing a performance based system that will incentivize improved business performance and empower the entrepreneurs to explore new avenues of business. The ability of the country to project itself as a reliable supplier would go a long way in establishing long term partnerships with assured returns. This can also be a vehicle to attract foreign investment by project the country’s potential. This is a challenge as well as an opportunity for entrepreneurs. Table 2 compiles the challenges and the potential opportunities it holds for business:

Table 1: Challenges And Opportunities at Burundi

Challenge

Opportunities

Unrealized potential of Agriculture

ü  Since Agriculture is the highest contributing domain to GDP, the food processing and Packaging opportunities could be leveraged by entrepreneurs. This will also enable them to charge a premium with export customers.

Huge Livestock

ü  Leather processing and tanning are areas where availability of livestock could be leveraged by progressive entrepreneurs.

Landlocked Country

ü  Being a landlocked country, Transportation and Logistics offers enormous opportunities. Transportation of goods to ports of export in other countries could be explored.

Unexploited Natural Resources

ü  Availability of Pearls, Precious Stones, Petroleum, Nickel, Copper and other resources provides openings to begin mining and exploration related activities.

Lack of Industry Expertise

ü  Machine Tooling and related trades could be a driver for setting up industrial units and create a sustainable industrial environment.

Lack of Capital

ü  Micro-finance to small business owners could energize the overall economy of the country. Access to capital encourages entrepreneurs to be more dynamic and innovative.

Inadequate Infrastructure

ü  Infrastructure Development by building Roads and other related construction activities may be a gold mine worth exploring for enterprising companies.

Increasing Energy needs

ü  Energy needs would increase with population and Industrial activities. Entrepreneurs could explore traditional as well as other innovative means to profit.

Information & Communication Technology (ICT)

ü  Considering the complete lack of credible Information and Communication Technology, entrepreneurs can look at innovative technology solutions for various challenges listed.

Absence of social support system

ü  Corporate Social Responsibility programs that ensure that the benefits are taken to the people instead of being lost in the corruption.

Uneducated Masses

ü  As everywhere else in the world, Education has it tangible as well as intangible benefits. Using ICT to bridge the digital divide and also empowering the citizens with Education is an enormous opportunity on its own.

 

Conclusion

For a country ravaged by wars and various other factors that has impeded its growth, Burundi is making a few right moves that would set the developmental ball rolling. It is time for the small and medium enterprises to leverage the business opportunities to create an environment that can support and sustain itself in the long run. It is imperative that Burundi government and its citizens create a competitive and healthy business environment that will help their country realize its potential. With its natural resources, it is time for Burundi to rise and announce itself proudly to the world that it has finally arrived.

 

Useful Links

Here is a list of sources for more information about Burundi:

Institution URL & Details
African Development Bank Group http://www.afdb.org/en/countries/east-africa/burundi/

Provides current status of loans and grants, latest Project Appraisal Reports (PAR), Country Strategy Papers and press releases.IFADhttp://operations.ifad.org/web/ifad/operations/country/home/tags/burundi

Information on the projects of the UN agency dedicated to eradicating rural poverty in developing countries by increasing rural poor peoples’ access to financial services, markets, technology, land and other natural resources.IMFhttp://www.imf.org/external/country/BDI/

Provides news, statistics, Public Information Notices and other reports, financial position in the Fund and transactions.MBendihttp://www.mbendi.com/land/af/bu/p0005.htm

Country profile from a business and economic perspective plus a map, a business directory, and industry sector and investment information.UK DFIDhttp://www.dfid.gov.uk/Where-we-work/Africa-West–Central/Burundi/

News, programmes, case studies and publications about the country from the Department for International Development in the UK.US Energy Information Administrationhttp://www.eia.gov/countries/country-data.cfm?fips=BY

US EIA provides data, forecasts, country analysis brief and other analyses, focusing on the energy industry including oil, natural gas and electricity.World Trade Organizationhttp://www.wto.org/english/thewto_e/countries_e/burundi_e.htm

WTO provides trade statistics, goods schedules, Services schedules and MFN exemptions, trade policy reviews, dispute cases, and notifications.

 

Reference

[1]     World Bank. 2013. Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises. Washington, DC: World Bank Group. DOI: 10.1596/978-0-8213-9615-5. License: Creative Commons Attribution CC BY 3.0

[2]     http://en.wikipedia.org/wiki/Burundi

[3]     https://www.cia.gov/library/publications/the-world-factbook/geos/by.html

[4]     Trade Map (or Market Access Map, Investment Map and Standards Map, respectively), International Trade Centre, www.intracen.org/marketanalysis

[5]     http://www.dmoz.org/Regional/Africa/Burundi/Business_and_Economy/Economic_Development/

 

 

 

 

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About Author: prasadha
Prasad Ram blogs at http://prasadha.blogspot.com and gets email at prasadha@gmail.com Prasad Ramachandran is the General Manager of Marketing in an IT organization. He has 16 years of experience Marketing & Sales, Account Management, Project Management and Technology consulting. He has lived and worked in 8 countries across Asia pacific. He has Masters degree in Business Administration, Psychology and Journalism & Mass Communication. He is also a behavioral trainer, having trained professionals from many countries. He has a passion for sharing his experiences with Students and empowering them to develop life skills and employability traits. He has self-published two books and is shares his thoughts through his blog. He has been volunteering for various social initiatives to bring about a change in the world he lives in!!!