Prospects
If the sad story of Burundi’s history were not enough to warn one away from the country, then the sad state of its economy just might. Burundi is one of the five poorest countries in the world and according to the Global Hunger Index, a measure of food security put out by the International Food Policy Research Institute, is the hungriest country on the planet. Civil war, corruption, and years of authoritarian rule have destroyed what little infrastructure existed in the country at independence and the country’s landlocked status has helped to make it the least globalized country in not just all of Africa, but the entire world.
Burundi is thus a hard place – perhaps the hardest in all of Africa to do business given its isolation and history. Even next-door Rwanda, which was the locus of war and genocide in the 1990s, is a better place to do business due to the legal reforms put in place there by Paul Kagame. What’s more, the infamy of the genocide puts more of a spotlight on that country and, as a result, means Rwanda gets more attention and aid money, too. Burundi, in so many ways Rwanda’s twin, gets much less attention, support, and investment as a consequence.
Figure 3:
Burundi Economic Growth,
Percent Increase, 2003 – 2013
This does not mean all is lost when looking for business opportunities in the country, though. As the chart above shows the economy – underdeveloped and based totally on subsistence agriculture as it may be – has nonetheless been growing.
Setbacks to growth have, since the return of political stability and the cessation of ethnic war, have mostly been due to bad weather impacting agricultural output than any policy failure per se given such grim business conditions as noted above. Being such a poor, hungry, and desperate place, Burundi has almost no place to go but up.
So where are the opportunities in Burundi? Here, the country has abundant natural resources, especially minerals. Tanzania Nickel belt, for instance, extends across the border into Burundi and estimates peg the country’s known reserves of that mineral at six percent of the world’s total.
Other commercial possibilities when it comes mineral extraction include uranium, tin, cobalt, copper, and platinum-group metals, columbium, tantalum, gold, tungsten, chromium, and vanadium. Oil, too, possibly exists in Burundi in some quantity. Oil sips, for example, have been sighted on the Rusizi basin along the border with the Democratic Republic of Congo and petroleum firms have expressed interest in exploring the area more fully.
Another opportunity exists in hydroelectric power potential, most especially in the long-stalled but now World Bank approved Regional Rusumo Falls Hydroelectric Project, an 80MW project which aims to benefit people in Burundi, Rwanda and Tanzania. While technically located along Tanzania and Rwanda’s mutual border, the scheme if completed, will add significant amounts of hydroelectric power to all three countries. Electrification of course would be a boon to development in Burundi, but could especially be transformative for the country’s primitive mining sector, which is as of yet is mostly comprised of small-scale, subsistence mines and miners. So far, the Bank has said it will approve $340 million for the project.
Separately, the bank has also approved two additional hydroelectric projects in Burundi itself that will produce a combined 48 megawatts at a cost of about $100 million. Another project, located on the River Kaburantwa in the north-western part of the country and funded by India, will add another 20 MW to this tiny country. All this is party of the Burundian government’s plan to develop small power stations on the five big rivers of the country for a total of 97 megawatts.
Then, of course, there are traditional opportunities in agriculture, another highly underdeveloped sector begging for capital injections and foreign expertise. Coffee and tea are the primary cash crops with coffee alone accounting for 39-percent of the country’s foreign receipts in the mid-2000s. Cotton and Palm oil are also possible cash crops that can grow well in Burundi.
Thus, when considering Burundi one should think of potential, not necessarily problems. If political stability can be maintained after the vast slaughter of previous years then it, like neighboring Rwanda, is well positioned to take advantage of the growing economies to its east. Likewise, if Eastern Congo can ever be stabilized, Burundi, like Rwanda, is well positioned to be a transport hub for regional trade. Given all the region has gone through in the last several decades, one would think the sun is finally about the shine in this once darkest part of Africa.
Jeffrey Cavanaugh holds a Ph.D. in political science with a specialization in international relations from the University of Illinois at Urbana-Champaign. Formerly an assistant professor of political science and public administration at Mississippi State University, he writes on global affairs and international economics for AFK Insider, Mint Press News and BAM South.
