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.
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
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.
Figure 3: Ease of doing business ranking
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.
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
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.|
|ü Leather processing and tanning are areas where availability of livestock could be leveraged by progressive entrepreneurs.|
|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.|
|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.|
|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.|
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.
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 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  http://en.wikipedia.org/wiki/Burundi  https://www.cia.gov/library/publications/the-world-factbook/geos/by.html  Trade Map (or Market Access Map, Investment Map and Standards Map, respectively), International Trade Centre, www.intracen.org/marketanalysis  http://www.dmoz.org/Regional/Africa/Burundi/Business_and_Economy/Economic_Development/