Burundi

Economic Overview

The Republic of Burundi is a small, densely populated, and landlocked country in the Great Lakes region of Africa. Its economy is facing significant challenges as it works to recover from decades of political instability and conflict. The economic structure is overwhelmingly reliant on subsistence agriculture, making it highly vulnerable to climate shocks and fluctuations in global commodity prices. The 2025-2026 outlook is one of fragile recovery, heavily dependent on continued political stability, support from international development partners, and the government's efforts to implement economic reforms and improve the business climate.

GDP Size & Growth Trajectory

Burundi has one of the smallest economies in Africa, with a very low GDP per capita. After a period of stagnation, the economy is showing signs of a modest recovery. Real GDP growth was estimated at 2.7% in 2023. The African Development Bank (AfDB) forecasts growth to accelerate to 3.8% in 2025 and 4.5% in 2026. This recovery is supported by a gradual normalization of the political situation, increased investment in the agricultural sector, and public infrastructure projects.

Sector Composition

• Agriculture: This is the absolute foundation of the economy, contributing around 32% of GDP but, more critically, employing over 90% of the population. The sector is dominated by subsistence farming. The primary cash crops and sources of foreign exchange are coffee and tea.
• Services: The services sector accounts for approximately 46% of GDP and is driven by wholesale and retail trade and public administration. The sector's growth is constrained by the population's low purchasing power.
• Industry: The industrial sector is very small, contributing about 18% of GDP. It is focused on light manufacturing for the domestic market, mainly the processing of agricultural products.

Inflation Trends

High and volatile inflation has been a persistent challenge, driven primarily by high food and fuel import prices and supply chain disruptions. The Bank of the Republic of Burundi (BRB) has been working to contain these pressures, but inflation is expected to remain a concern, severely impacting the livelihoods of the population.

Fiscal & Monetary Policy Stance

• Monetary Policy: The BRB's ability to conduct monetary policy is constrained by the country's structural challenges and reliance on external financing. The currency is the Burundian Franc (BIF).
• Fiscal Policy: The government faces significant fiscal constraints, with a narrow tax base and high demand for public spending on security, social services, and infrastructure. It is heavily reliant on grants and concessional loans from international partners.

Debt Sustainability Indicators

Public debt levels are high, and the country is considered to be at a high risk of debt distress. The debt is primarily owed to multilateral creditors. Sound debt management and the mobilization of domestic revenue are critical priorities.

Table 1: Key Macroeconomic Indicators (2023-2026F)

Market Size & Demand Potential

The domestic market in Burundi is very small and characterized by low purchasing power.

Population Size and Demographics

With a population of over 13 million, Burundi is one of the most densely populated countries in Africa. The population is extremely young, with a median age of around 16 years, but this demographic potential is constrained by high rates of poverty and unemployment.

Urbanization and Consumer Hubs

The country has a low level of urbanization. The capital city, Bujumbura, located on the shores of Lake Tanganyika, is the primary economic and administrative center.

Business Environment

The business environment in Burundi is challenging, but the government has expressed a commitment to reform as it seeks to attract investment.

Ease of Doing Business & Regulatory Reforms

Burundi ranks low on global ease of doing business indices. Bureaucracy, corruption, and an underdeveloped legal framework are significant hurdles. However, with its reintegration into the international community, the government is working with partners like the World Bank to implement reforms. The Burundi Development Agency (ADB) is the national body for investment promotion.

Political Stability & Governance

Burundi has a history of political instability and conflict, which has been the primary impediment to its economic development.

Political Environment

The country is a presidential republic. The political situation has stabilized in recent years following a turbulent period, but it remains fragile. The government's ability to maintain peace and security is the most critical factor for economic recovery and investment.

Rule of Law & Investor Protection

The legal system is based on Belgian civil law. While legal frameworks for investment exist, their enforcement is weak. The country is a member of the East African Community (EAC), which provides a regional framework for trade and investment that could help improve standards over time.

Infrastructure Readiness

Infrastructure in Burundi is underdeveloped, a major constraint on economic activity.

Transport and Logistics

As a landlocked country, Burundi relies on transport corridors through its neighbors to access seaports. The primary route is via Tanzania to the Port of Dar es Salaam. The road network is poor, which increases transport costs and isolates rural areas.

Energy Sector

Access to electricity is very low, among the lowest in the world. The country is heavily reliant on hydropower, which makes it vulnerable to drought. There is significant untapped potential for renewable energy, including solar, hydro, and potentially geothermal.

Sector-Specific Opportunities

Given the high-risk environment, investment opportunities are limited and often targeted by development finance institutions.

1. Agriculture

This is the sector with the most potential for impact. Opportunities exist in modernizing the production of coffee and tea, improving yields, and enhancing quality for the export market. There is also a need for investment in food processing to reduce post-harvest losses and improve food security.

2. Mining

Burundi has significant, largely untapped deposits of minerals, most notably nickel. The development of a major nickel mine could be transformative for the economy, but it would require massive investment and a stable political and regulatory environment. There are also deposits of rare earth elements, gold, and other minerals.

3. Renewable Energy

There are opportunities for small- to medium-scale solar and hydro projects to increase energy access and provide power for businesses, particularly in off-grid areas.