Burundi has experienced four wars since independence in 1962. The country is small (about 8.5 million people) and landlocked. It has one of the highest population densities in Africa, about 300 people per square kilometer, and one of the world’s lowest per capita incomes—US$110 in 2007.
The most recent war began in 1993, causing over 300,000 deaths and displacing 1.2 million people—16 % of the population. The war and a four-year regional economic embargo devastated the economy, resulting in a ten-year period of economic decline.
Seventeen political organizations signed the Arusha Peace Agreement in August 2000; and Burundi made a successful transition to a multi-party system of government from 2000 to 2005. A transitional government, based on power sharing among the country’s two main ethnic groups, took office in January 2002 for a 36-month term. In February 2005, the country approved by referendum a new constitution emphasizing power sharing and protection of minority rights. Communal elections took place in June 2005, and Parliamentary elections took place in August 2005.
Security and political progress have been mixed since 2005. In September 2006, the government and the FNL-PALIPEHUTU, the one remaining active rebel movement, signed a cease-fire agreement, but it was not implemented and sporadic fighting has continued. Following armed skirmishes in mid-April 2008, the leadership of the FNL-PALIPEHUTU returned to Bujumbura in early June 2008 to negotiate the implementation of the cease-fire agreement. A breakthrough was made in December 2008, when the government and the FNL-PALIPEHUTU signed a power sharing agreement. In January 2009, major progress in the peace process was made when the rebel group removed of the ethnic connotation of its name - PALIPEHUTU - shortening it to FNL and making the group constitutionally eligible to register as a political party. The demobilization of FNL combatants is underway.
Economic Developments
Since 2000, the government of Burundi has implemented a program of financial and structural reforms to stabilize the economy and revive economic activity. These have included: prudent monetary policy implemented by a more independent central bank in the context of a liberalized foreign exchange regime, prudent fiscal policy with poverty-focused expenditure priorities, and steps to strengthen and improve the transparency of public financial management.
Economic performance has improved, but real gross domestic product (GDP) growth still averaged only about 3% from 2001-2008. Economic growth remains highly volatile due to its dependence on the widely fluctuating agricultural sector, whose volatility is largely due to climatic shocks in recent years. The 2005 drought led real GDP to grow by only 0.9% points, it bounced back strongly in 2006 to 5.1% and slightly decelerated to 3.6% in 2007. In 2008, despite the unprecedented increase in fuel and food prices, real GDP growth is estimated to be 4.5%.
Per capita income fell by almost 40 % during the war, from US$180 in 1993 to US$110 in 2007. Burundi’s annual population growth, at an estimated 3.8 % in 2007, is among the highest in Sub-Saharan Africa. This suggests that it will be difficult to increase living standards in coming years without a slow-down in population growth or a significant acceleration of the annual GDP growth rate. Although Burundi has made some progress in the past few years, GDP growth rates of 8 % over the next four years will be needed for the country to reach its pre-war level of gross national income per capita by 2012.
Successful implementation of the government’s economic reform program enabled Burundi to reach the Heavily Indebted Poor Country (HIPC) decision point in August 2005 and HIPC completion point in January 2009. Debt relief to Burundi under the enhanced HIPC Initiative will total about US$832 million in net present value (NPV) terms, with IDA contributing to more than half of it (US$425 million).
Social Developments
The recent war caused poverty to nearly double. The number of poor below the poverty line increased from 35 % in 1993 to 67 % in 2006. Rural poverty is estimated to be twice that of urban areas.
Burundi is not likely to reach many of the Millennium Development Goals (MDGs) by 2015. Nearly all social indicators have sharply deteriorated as a result of the civil war. Some human indicators have shown improvement since the end of the conflict. However, maternal mortality and child malnutrition rates are the second highest on the continent. HIV/AIDS is taking a heavy toll on communities and is the second most common cause of mortality among adults.
Burundi’s Poverty Reduction Strategy
The government of Burundi approved its first Poverty Reduction Strategy Paper (PRSP) in September 2006, following an extensive participatory process unprecedented in the country’s history. PRSP consultations took place in all 17 provinces and involved more than 145 civil society organizations and 14 sector and thematic groups. The first Annual Progress Report (APR) on the PRSP, which was prepared on the basis of the same broad participatory process as the 2006 PRSP, was received by the Bank and the International Monetary Fund (IMF) in November 2008.
The PRSP has four strategic priorities: (i) improve governance and security; (ii) promote sustainable and equitable economic growth, (iii) develop human capital, and (iv) prevent and control HIV/AIDS.
WorldBank Assistance to Burundi
In August 2008, the World Bank’s Executive Directors discussed a new Country Assistance Strategy (CAS) for Burundi. The CAS provides a framework for World Bank support, including budget support, financing for investment projects, studies, and technical assistance. The World Bank will provide an estimated US$309 million in IDA resources over the next four years (mid-2008 to mid-2012). Based on Burundi’s PRSP, the CAS aims to assist the country’s transition from a post-conflict economy to a developing economy. The CAS focuses on two strategic objectives: to promote sustainable and broad-based economic growth; and to improve access to social services and consolidate social stability. The CAS also focuses on improving governance as a cross-cutting objective.
The World Bank is currently providing financing for ten projects, with commitments of US$337.4 million, to provide budget support, assist economic reforms, and support improvements to agriculture, community development, education, electricity, healthcare, HIV/AIDS, transport, and water supply. There are also three regional IDA-financed projects that involve Burundi and one Global Environmental Facility (GEF)-financed project. In addition, in response the food and fuel crisis, the Bank supported Burundi with a US$10 million development policy grant from the Food Price Crisis Response Task Force facility in August 2008.
Recently approvedprojects include:
Health Project (US$15 million)
Emergency Demobilization and Transitional Reintegration Project (US$15 million)
Public Works and Urban Management Project (US$45 million)
Burundi joined the World Bank Group in 1963 and received its first credit from the World Bank's International Development Association (IDA) for water supply development in 1966. Since then, the Bank has made available more than US$995 million in IDA loans and credits and about US$457 million in IDA grants. In addition, the World Bank provided a US$10 million grant under the Global Food Crisis Response Program.
For more information on World Bank assistance to Burundi including lending breakdown and project reports, see All Projects .
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