Burundi’s Economy Struggles to Break Through the 6% Mark

Despite efforts to revitalize its economy, Burundi has failed to achieve sustained economic growth, with GDP growth rates remaining stuck below 6% for most of the past three decades.

A History of Low Economic Growth

According to World Bank data, Burundi’s GDP growth rate averaged a mere 2.5% between 1980 and 2010, with negative growth recorded in several years, including:

• 1994
• 2003
• 2009
• 2011
• 2018

Low Investment Rates

Burundi’s economic woes are further compounded by its low investment rates, which have remained below 15% of GDP for most of the post-independence period. In fact:

• Gross capital formation has dropped to as low as 5% of GDP during the war period between 1994 and 2003.
• This is significantly lower than the sub-Saharan African average and even its peers in the East African Community.

Dependence on Official Development Assistance (ODA)

The country’s dependence on ODA has also hindered its economic growth, with Burundi receiving around $450 million in aid per year from all sources. While this support is crucial for the country’s development:

• It is not sufficient to stimulate private investment and drive long-term economic growth.

Untapped Mineral Resources

Burundi’s mineral resources, including nickel, cassiterite, and coltan, have also remained largely untapped due to the lack of infrastructure investments. The African Development Bank estimates that the country needs an additional $4.6 billion for infrastructure development to fully exploit its mineral resources.

Patronage Policies

Patronage policies that allocate economic resources based on political considerations rather than efficiency have contributed to the erosion of Burundi’s productivity, leading to negative productivity growth between 1960 and 1997.

Path Forward

To achieve sustained economic growth, Burundi needs to implement a comprehensive natural resource development plan, which includes:

• Scaling up energy supply
• Investing in infrastructure

According to the African Development Bank, implementing an infrastructure investment program could lead to real GDP growth rates of around 7.4% over the 2010-2030 period.

Progress Made

Despite its challenges, Burundi has made progress in recent years, with its GDP growth rate averaging around 5% between 2000 and 2010. However:

• More needs to be done to break through the 6% mark and achieve sustained economic growth and poverty reduction.