Burundi’s economy is indisputably flailing. What are the root causes, and can the seemingly inevitable decline be prevented?
By: John Wawer
In 2016, the economic norm across Africa was steady, yet slower than expected GDP growth. Burundi has been bucking that trend and according to latest estimates, was on pace to reduce its overall GDP in 2016. According to the Observation for Fight against Corruption and Economic Embezzlement (OLUCOME), an organisation that tracks Burundi’s economic progress, GDP decreased from 4.7% in 2014 to -4% in 2016, an outright contraction.
Where is this crippling economic malaise coming from and what can be done about it? I aim to explain the underlying factors and what must be accomplished in the medium-term to see sustained economic growth. To understand the downturn, the political environment must be fully understood.
Pierre Nkurunziza, the president of Burundi since 2005, has led a regime resistant to criticism and averse to not having its way. Despite constitutional restraints, his party nominated him again for re-election in 2015, resulting in riots, protests, and extreme violence.
Pre-emptive arrests of journalists, opposition leaders, and human rights activists set the stage for the 2015 election, which Nkurunziza would eventually win. The violence that led up to the elections and continued for months afterwards, fuelled by outrage at Nkurunziza’s decision and the military/security forces backlash, would result in over 200,000 refugees, and hundreds dead. Opposition parties boycotted the election, citing impunity for the regime’s leaders and a rigged electoral process.
By all economic markers, this political crisis has induced economic disaster in Burundi. Since 2015, Burundi’s Doing Business ranking has dropped from 152nd to 157th in the world. This factional kind of political crisis is not a novel phenomenon in central Africa. However, it is distinctive in its longevity and lack of imminent, feasible solutions.
States experiencing minor unrest, such as the recent military mutiny in Cote d’Ivoire, will typically see private investors become wary but ultimately ride out the tensions if they observe a reasonable possibility of a resolution. Governments, likewise, will remain confident of an economic uptick if there is hope of closure. At the very least, governments will renew aid packages if it is warranted. In Burundi, this closure is far from certain under the current regime, meaning excessive risk for existing and prospective investment.
As could be predicted, Western governments pulled out their aid packages en masse, while private sector investments have followed suit. The European Union, which provides almost half of Burundi’s annual budget, has pulled out of all aid commitments aside from those critical to the population of Burundi and programmes providing humanitarian assistance.
The EU’s aid commitment from 2014-2020 is estimated at £338m, mainly for projects in energy, rural development, public finances, health, and justice reform. These vital projects must now be put on hold, further stagnating Burundi’s economy and development potential.
The only on-going projects currently being funded are those developed by the African Development Bank, European Union and World Bank. These organisations have long-standing commitments to development in Burundi, while the more reactive investment sources have dried up. Private sector actors in particular will refrain from committing any further investment until the geopolitical crisis has stabilised.
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Short of undergoing a complete regime change before the next scheduled elections in 2020, Burundi’s current regime can undertake several steps in the interim to ensure greater economic confidence, for the sake of the Burundian people and the sustainable development of the nation. The economic response to the political crisis is, unsurprisingly, due to politics.
To combat the uncertainty surrounding its political stability, Burundi’s regime must facilitate relations with opposition leaders, who have legitimate qualms about Nkurunziza’s eligibility under the current constitution.
The recent Arusha mediation talks have been unabashedly pro-Nkurunziza, despite international involvement from former Tanzanian president, Benjamain Mkapa. Opposition leaders were invited as individuals, not as members of the unified CNARED opposition coalition. This was a clear attempt to “split the opposition” according to the Institute for Security Studies. The talks have been ineffective and have stalled any progress.
Gabriel Rufyire, the chairman of OLUCOME, said in a statement in November 2016 that there is an “urgent need for all parties to be honest about the origins of the crisis.”
New negotiations must be initiated that will include opposition leaders, and provide recognition of a uniform CNARED opposition. Further attention must be given towards development of an independent judiciary that will hold those who engage in the sectarian violence accountable for their actions. Stronger institutions and commitment to the rule of law will discourage impunity, and provide confidence to public and private donors that there is cause for optimism.
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In the midst of this crisis, Burundi’s regime hasn’t been able to adequately provide basic goods to its people. According to the World Food Programme, over 600,000 people are short of food, and this number may rise to 700,000 in 2017. The Food and Agriculture Organization of the United Nations estimates the current number of people threatened could be as high as 2.1 million.
The crisis is so severe that the Burundian government has instituted an export ban on foodstuffs and other goods necessary for domestic consumption, to its neighbour and most significant trading partner, Rwanda. Particularly as 90% of the population relies on subsistence farming, and the subsequent trade, for their livelihoods, this ban is a harmful quick fix rather than the inclusive reform necessary. Dr. Akinwumi A. Adesina of the African Development Bank notes, a landlocked country like Burundi depends on their regional neighbors for access to outside markets.
Burundi’s regime has accused of Rwanda’s government of violating its sovereignty and intentionally destabilising the nation. If trade relations, economic prosperity, and regional stability are to return, repairing the relationship with Paul Kagame, who doesn’t look like leaving anytime soon, is imperative. The relationship with Rwanda is particularly important to reconcile, though the surrounding nations in the Great Lakes region must all be engaged on Burundi’s continued stability.
One must only view Rwanda’s exponential growth over the past two decades, since its horrific genocide in 1994, to realise the economic potential of Burundi. With a similarly ethnically divided population, Rwanda has experienced fantastic growth with the aid of IMF and World Bank funds, due in large part to its political environment of stability (a recent constitutional reform would eliminate term limits, potentially allowing Kagame to serve as president until 2034). A return to friendly relations between Rwanda and Burundi’s regime and regional cooperation would also provide a hint of assurance for prospective donors or investors.
As seen in Gambia’s recent election with ECOWAS military aid, regional solidarity and action can provide much-needed respite to domestic unrest. The East African Community (EAC), and Burundi’s major trading partners, EU and the UK included, can further support Burundi through economic agreements contingent on inclusive political reform.
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President Nkurunziza has hinted he may stand for re-election again in 2020. This may be the worst possible political development for the stability of Burundi, and until he has assured there will be a democratic transfer of power without his involvement, governments and private sector actors will remain wary.
Regional leadership and continental interest must exist to suspend the impending human rights disaster. Minus this pressure, Burundi’s situation will regress and risks repetition of the genocides that have occurred twice since its independence in 1962. This is unacceptable.
To correct the shaky economic atmosphere, which is intrinsically linked to politics, it behoves the regime to engage with the CNARED opposition, which holds considerable popular weight. Rather than concentrate on retaining power, the Nkurunziza regime must combat the political crisis with political solutions, by responding to the demands of its people, in what is supposedly a democracy.
John Wawer is the Communications & Campaigns Officer/Research Assistant at NIAS, as well as a postgraduate law student in Human Rights at Birkbeck, University of London, focused on rule of law and development. Find his tweets @johnjwawer.
john@africanstudies.org.uk