History Country Brief last updated March 2008 
After independence in 1962, Burundi was one of the best performers in the economic and social areas in Sub-Saharan Africa, although progress was marred by periods of ethnic violence. In 1993, civil conflict erupted sending the country into a cycle of conflict and impoverishment. As a result of the conflict, over 300,000 people lost their lives and about 1.2 million (16 percent of the population) have been internally displaced or made refugees. The effects of a regional economic embargo in 1996-1999 and the negative consequences of the war on the economy resulted in a ten-year period of economic decline. By 2003, GDP per capita had fallen from US$180 in 1993 to US$83, one of the lowest in Africa. In August 2000, a peace and reconciliation accord was signed and in accordance with its stipulations, a transitional government was established in 2002. The political transition ended successfully in 2005 with the approval of a new Constitution by national referendum in February 2005, the success of communal elections in June 2005, and parliamentary elections in July 2005. Mr. Pierre Nkurunziza, leader of the former rebel movement, CNDD-FDD, was elected as the new president by the parliament and sworn into office on August 26, 2005. Despite these developments, the Hutu FNL remained at war with the Burundian armed forces until September 2006 when a cease-fire accord was finally reached ending 16 years of civil war. Economy Since 2000, the Government has implemented a program of financial and structural reforms to stabilize the economy and revive economic activity. These have included: (i) a prudent monetary policy implemented by a more independent central bank in the context of a liberalized foreign exchange regime; (ii) prudent fiscal policy with poverty-focused expenditure priorities; (iii) computerization of public financial management to improve transparency; (iv) reforms of cash crop sectors (coffee, tea, and cotton) and public enterprises. This program, supported by IDA and the IMF, has been implemented in a satisfactory manner, despite very adverse circumstances, and reflects the Government’s commitment to recovery and reform. Between 2001 and 2006, GDP grew by a somewhat disappointing 2.7 percent per annum, while inflation was maintained in the single digits. With the exception of 2003 and 2005—during which bad weather in the north severely impacted agriculture production—the past few years have seen annual growth rates between 2 and 6 percent. Reforms and parallel political progress have resulted in an increase in agricultural production and construction, as private confidence has returned and donors have re-engaged. However, the poor rains of 2003 and 2005 which hit the agriculture sector hard (GDP growth was -1.3 percent and 0.9 percent, respectively) highlighted the need to develop a more diversified economy and sources of growth. Successful implementation of the IMF and IDA supported economic program opened the way for Burundi to reach the HIPC decision point in August 2005. In total, the debt relief to Burundi under the enhanced HIPC Initiative will be approximately US$826 million in NPV terms, equivalent to 91.5% of the NPV of Burundi's debt after traditional debt relief. Real GDP growth was about 5% in 2006, despite supply and oil shocks that were offset, in part, by recovery in coffee production and in the services sector, as well as reconstruction activities. Governance The government has engaged in an ambitious program to improve economic governance and fiscal management, and to strengthen the implementation capacity for pro-poor programs. Improving governance is an important element of the Poverty Reduction and Growth Facility (PRGF). A Country Financial Accountability Assessment (CFAA) was conducted in June 2004, the recommendations of which helped outline a detailed plan of action for implementation by the Government. The Bank-funded Economic Management Support Credit is vital in implementing the CFAA recommendations. In addition, the WBI is organizing a customized leadership training to enhance the Government’s capacity in implementing policies and programs to achieve measurable results. At the regional level, Burundi is working towards more active engagement regionally; it was recently admitted to the East African Community. Social developments and key issues Poverty is widespread and has increased significantly since 1993, in both rural and urban areas. There has been a sharp deterioration in all social indicators which have become among the worst in Africa. The odds of Burundi reaching the Millennium Development Goals (MDGs) by 2015 are slim. The poverty index is now 67 percent (compared to the 2015 MDG target of 30 percent). The spread of HIV/AIDS is taking a heavy toll on communities, with an overall rate of infection rate of 11.2 percent, leaving many households vulnerable. Infant mortality rates are as high as 114 (2004) per 1,000 (compared to African averages of 103.1 per 1,000, and to the MDG target of 36 per 1,000), and maternal mortality rates average 990 (2000) per 100,000 (compared to African averages of 916.8 per 100,000, and to the MDG target of 202 per 100,000 by 2015).1 Major causes of morbidity and mortality include malaria, acute respiratory infections, diarrhea, tuberculosis, and malnutrition. As a consequence of the long civil strife, child immunizations for under-five and contraceptive prevalence rates dropped dramatically during the 1990s. The deterioration of living conditions, including sanitation, drainage, and housing facilities is a major potential threat to the consolidation of peace and needs to be reversed. Less than half of the population is literate. Primary school enrollments are now restored to the pre-crisis long-term trend level, with a net primary enrollment ratio of 57 percent in 2002 (compared to the MDG target of 100 percent by 2015). However, only an estimated 37 percent of the official primary school age cohort (7-12 year olds) is in school. At the secondary level, the gross enrollment ratio of 12 percent (2004) is below the average for Sub-Saharan Africa. In the non-formal education system, approximately 300,000 people are enrolled for basic literacy and numeracy instruction. However, the quality of this type of education is very low. Another challenge for the country is the issue of refugees and internally displaced persons (IDPs) and their return. Although international organizations have been helping Burundians who volunteer to return they have not launched yet a formal repatriation program. The Bank is providing support to war-affected populations, notably through the public works and employment generation, demobilization and reintegration, and multi-sector HIV/AIDS projects. In addition, the ongoing agricultural rehabilitation project is an important part of the implementation of the National Program for the Rehabilitation of Affected People (NPRAP). World Bank support and portfolio Recent Bank support has been within the framework of the Transitional Support Strategy (TSS) which covered 2003 – 2005. An Interim Strategy Note ( ISN) was approved by the Board in May 2005 to cover FY06 and FY07. Its strategic elements are (a) security and social service delivery; (b) economic growth and diversification, and (c) governance and institutional strengthening. The preparation of the full PRSP was launched in May 2004 and published in September 2006. It benefited from broad and inclusive consultations with all stakeholders at the national, provincial, and communal levels. Its strategic objectives are (i) i mproving governance and security, (ii) promoting sustainable and equitable economic growth, (iii) developing human capital, and (iv) combating HIV/AIDS. The Bank and the IMF have conducted a Joint Staff Assessment Note of the PRSP which was completed in March 2007. The Bank team will start preparation of the new Bank strategy under the FY08 – FY12 CAS with the aim of delivering it to the Board by mid-FY08. The CAS will be fully aligned with the strategic objectives of the country’s full PRSP. The government of Burundi is currently implementing eleven operations funded by IDA, totaling about US$347 million of commitments. They are: 
| A US$35 million Agricultural Rehabilitation and Sustainable Land Management Project (approved in July 2004, effective in September 2004) to restore the productive capacity of rural areas, through investments in production and sustainable land management, and through capacity building for producer organizations, and local communities, including war-distressed returnees and internally displaced persons. | 
| A US$33 million Emergency Demobilization Reinsertion and Reintegration Program (approved in March 2004, effective in September 2004) to help consolidate peace in Burundi and the Great Lakes region by demobilizing soldiers and ex-combatants and providing targeted support to facilitate their return to civilian life; and contributing to the reallocation of government expenditures from military to social and economic sectors. | 
| A US$51.4 million Road Sector Development Project (approved in March 2004, effective in September 2004) to contribute to Burundi's post-war revival by restoring part of the priority road network, generating employment for the rural poor, and improving institutional capacity in the road sector. | 
| A US$26 million Economic Management Support Project (approved in January 2004, effective in April 2004) to increase the efficiency of Burundi's macroeconomic, financial, and administrative management by strengthening accountability and transparency through improved procedures and controls. | 
| A US$36 million Grant Multisectoral HIV/AIDS Control and Orphans Project (approved in June 2002, effective in October 2002) to support the national program as set forth in its Action Plan for the Struggle against HIV/AIDS for the period 2002-2006 through actions involving line ministries, civil society, private enterprises, labor unions, in addition to women, youth and nongovernmental organizations (NGOs). | 
| A US$70.6 million Public Works and Employment Creation Project (approved in January 2001, effective in June 2001; with an additional grant of US$ 30.6 million approved in December 2005), to contribute to the peace process and reconstruction of Burundi through generation of productive and labor-intensive employment. | 
| A US$15 million Regional Trade Facilitation Project (approved in April 2001, effective in February 2002) to contribute to poverty alleviation through private sector led growth by improving access to financing for productive transactions and cross-border trade. It also aims to bring together a group of countries in the Southern and Eastern African region that are willing to address the market’s perception of risk in Africa by setting up a credible insurance mechanism. | 
| A US$20 million Education Sector Reconstruction Project (approved in February 2007, not yet effective) to improve the capacity of schools to educate a rapidly increasing number of primary-level students; and of the government of Burundi to carry out policy analysis, strategic planning and program implementation. | 
| A US$60 million Economic Reform Support Grant (approved in August 2006, effective in November 2006) to help implement the Government's economic reform program during 2006, and Burundi's Interim Poverty Reduction Strategy Paper (I-PRSP) by supporting key policy measures. | 
| A US$40 million Community and Social Development Project (approved in March 2007, effective in August 2007) to establish and operationalize a decentralized, participatory and transparent financing mechanism that empowers local governments and communities for better and equitable local service delivery. | 
| A US$20 million Education Sector Reconstruction Project (approved in February, effective in May 2007) (a) to improve the capacity of schools to educate a rapidly increasing number of primary-level students; and (b) for the Government of Burundi to carry out policy analysis, strategic planning and program implementation. |
ContactsJohn Murray McIntire
Country Director for Tanzania, Uganda and Burundi
Dar es Salaam, Tanzania
Office Phone (255 22) 216-3237
East Africa Mobile (255) 0784-411137 Mr. Alassane Sow
Country Manager
Avenue du 18 Septembre
Bujumbura, Burundi
Tel: (257-2) 22443
Fax: (257-2) 26005
E-mail: asow@worldbank.org Mr. Jean Pascal Nganou
Economist
1818 H Street NW
Washington DC 20433 , USA
Tel : (202) 458-8054
Fax: (202) 473-8466
E-mail: Jnganou@worldbank.org |
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