What’s happening? In the wake of the political and security crisis ongoing in Burundi since 2015, the economy has suffered a sharp decline. The economic and social progress achieved since the end of the civil war in the 2000s risks being swept away. Burundians’ living conditions and access to services are deteriorating.
Why does it matter? Worsening unemployment and poverty increase the likelihood of instability and exacerbate the risk of violence, while the “yes” vote in Burundi’s 17 May 2018 constitutional referendum could lead to the demise of Hutu-Tutsi power-sharing agreements in public institutions.
What should be done? The European Union and its member states, who suspended direct aid to the government, should step up their assistance to the population, including by strengthening the capabilities of their partners in the non-governmental sector, while minimising risks that external aid aggravates local conflict dynamics.
If the “yes” vote in Burundi’s 17 May 2018 constitutional referendum has deepened the country’s political and security crisis, its economic woes also increase risks of violence. With an economy in recession since 2015, Burundians’ living conditions and access to services are deteriorating. Worsening unemployment and poverty, combined with the potential demise of power sharing between Hutu and Tutsi in public institutions, make instability in the medium to long term likely. The European Union (EU) and its member states, who have suspended direct aid to the government, should nonetheless step up their support to Burundi’s people by increasing aid for basic services, strengthening the non-governmental organisations (NGOs) through which they channel aid, while doing everything possible to ensure that their aid does not aggravate conflict dynamics, especially at the local level.
With donor support, Burundi had been making modest economic and social progress since the end of the civil war in the 2000s. But its current economic woes cast a shadow over this progress. The annual growth rate has fallen from an average of 4.2 per cent between 2004 and 2014 to −3.9 per cent in 2015 and −0.6 per cent in 2016. People across society are paying the price. Farmers and traders are struggling because internal demand for their products has declined; civil servants’ purchasing power has fallen; and shopkeepers report giving ever more customers credit. Many Burundians must find a second job, indulge in petty corruption or eliminate non-essential spending to survive. A decade of progress in health and education has been swept away. Many doctors have left the country. Teachers are often paid in arrears. University education is under threat as student grants are cut.
Following consultations under Article 96 of the Cotonou Agreement, which provides for the suspension or change in terms of EU aid if one of the parties does not respect human rights, democratic principles and the rule of law, the EU and its member states – until then Burundi’s main donors – withdrew direct budgetary support in 2016. They also redirected aid from Burundian ministries to international NGOs, UN agencies and member states’ development arms. Some European donors now work directly with local NGOs or plan to do so, though many of the latter have limited capacity and are under close government scrutiny. In early 2018, the EU decided to reduce its overall aid to Burundi, though basic sectors (including health, nutrition and access to electricity in rural areas) still receive funds.
The government blames speculators and donors for its own economic mismanagement and is clamping down on signs of protest.
In contrast, the World Bank and the African Development Bank continue to provide budgetary support and work with ministries. The Burundian government has established new partnerships with China, Turkey and Russia. But these countries’ aid remains largely symbolic, does not aim to strengthen government capacities and has limited impact on the population.
The government blames speculators and donors for its own economic mismanagement and is clamping down on signs of protest. Desperate to increase state revenue, it has introduced new taxes and obligatory public “contributions”, forcing civil servants and ordinary Burundians to donate extra money to state coffers. Under government pressure, banks that are partly state owned have made loans to the government, putting their solvency at risk. With no resolution of the country’s political crisis in sight, the population is slipping deeper into poverty. The gloomy prospects for development, collapse of social services, rising unemployment and deepening repression have pushed many young Burundians into exile.
Burundi’s European partners have only limited room for manoeuvre. In 2019 or 2020, they will adopt new five- or ten-year aid programs. Even while budgetary support remains suspended, European donors should increase aid for the population. It is vital to minimise risks that the provision of external assistance, which may be coveted by many Burundian actors (including the population, the authorities and NGOs), exacerbate conflict dynamics at the local level. If they plan to channel aid through local NGOs, European donors should help those organisations build the capacity to manage funds in a tense security and political environment. This could include, for instance, measures to increase support for organisations facing government pressure, or diplomatic assistance in cases of authorities’ harassment of NGO employees.
Brussels/Nairobi, 31 August 2018
The crisis triggered in 2015 by President Pierre Nkurunziza’s decision to run for a third term is ongoing. According to human rights organisation Ligue Iteka, 456 people were killed, 283 tortured and 2,338 subjected to arbitrary detention in 2017, the vast majority of them at the hands of the authorities.[fn]“Rapport annuel de la Ligue burundaise des droits de l’homme ‘ITEKA’ janvier-décembre 2017”, Ligue Iteka, Bujumbura, December 2017.Hide Footnote The East African Community’s mediation has become bogged down and the government has revised the constitution with the apparent goal of allowing Nkurunziza to remain in power until 2034.[fn]Crisis Group Africa Report N°235, Burundi: A Dangerous Third Term, 20 May 2016; and Richard Moncrieff and Elissa Jobson, “AU must re-engage in Burundi to push for inclusivity as a way out of violence”, The East African, 21 May 2018.Hide Footnote
In the wake of this political and security crisis, the country’s economy has shrunk at an alarming rate and socio-economic progress made after the end of the civil war in the 2000s has been derailed. Although poverty remained widespread, it was gradually retreating, from 67.1 per cent of the population in 2006 to 64.6 per cent in 2014, thanks to macroeconomic stability and an important inflow of development funds.[fn]“Burundi: profil et déterminants de la pauvreté. Rapport de l’enquête modulaire sur les conditions de vie des ménages 2013/2014”, Institut de statistiques et d’études économiques du Burundi (Isteebu), May 2015.Hide Footnote
In 2015, a number of donors including the European Union (EU), the country’s largest donor, suspended part of their funding. Instead of seeking a compromise, the government chose a policy of confrontation. Burundi has also suffered from a flight of private capital and a brain drain, with skilled labour leaving the country. The annual growth rate of real gross domestic product (GDP), having reached an average of 4.2 per cent between 2004 and 2014, fell to −3.9 per cent in 2015 and −0.6 per cent in 2016.[fn]For GDP figures, see the World Bank’s website (https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=BI). See also “Burundi Fact Sheet”, World Bank, October 2017; “Indice des prix à la consommation des ménages au Burundi”, Isteebu, December 2017; and “Economic and Social Impacts of the Turmoil in Burundi: An Overview”, United Nations Development Programme (UNDP), April 2016.Hide Footnote
Pour les chiffres du PIB, voir le site internet de la Banque mondiale (https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=BI). Voir aussi « Burundi Fact Sheet », Banque mondiale, octobre 2017 ; « Indice des prix à la consommation des ménages au Burundi », Isteebu, décembre 2017 ; et « Economic and Social Impacts of the Turmoil in Burundi: An Overview », Programme des Nations unies pour le développement (PNUD), avril 2016.Hide Footnote
The figures reveal the calamitous effect of the crisis, and the Burundian economy’s extreme sensitivity to the political situation.
The figures reveal the calamitous effect of the crisis, and the Burundian economy’s extreme sensitivity to the political situation. Over the past three years, as the country has descended into crisis, the economy has stalled. This report investigates how socio-economic woes affect people’s everyday lives, government actions and, consequently, the country’s stability and future prospects; it analyses the dilemmas facing donors and ways in which they could reduce the risk of violent conflict in Burundi. In addition to input from economic experts and business people, it is based on interviews with Burundians of various backgrounds who are locked in a daily struggle to ensure they support their families in one of the world’s poorest countries.[fn]Traders, motorcycle taxi drivers, bar owners, teachers, civil servants, etc.Hide Footnote Our findings are largely based on data from 2017; some figures have not been updated due to restricted access to Burundi.
The Burundian economy is being progressively impacted by limited supply, and the government is struggling more than ever to fund its social policies, particularly in the health and education sectors.
A. Supply Constraints
The lack of basic necessities such as the sugar produced by the Moso Sugar Company (Sosumo), fuel and electricity, have now become part of Burundians’ everyday lives. Supplies of beer from the brewer and soft beverage company Brarudi are also becoming scarce. While these shortages are not entirely new, they have become more frequent and severe over the past two years.
The lack of foreign exchange reserves is the main cause of this situation.[fn]“Crise actuelle des devises: la situation s’améliore-t-elle?”, Parole et Action pour le Réveil des Consciences et l’Evolution des Mentalités (PARCEM), 13 September 2017; “Le manque de devises handicape l’économie du Burundi”, Burundi Eco, 19 September 2017.Hide Footnote The Burundian economy is structurally dependent on imports and international financial aid; before 2015, total export earnings barely covered the cost of oil imports. For years, overseas funding – through development aid, particularly budgetary support, as well as foreign direct investment (FDI) – compensated for the lack of national resources, thus allowing the Burundian state to acquire the dollars it needed to import essential products.[fn]“Economic and Social Impacts of the Turmoil in Burundi: An Overview”, op. cit.Hide Footnote However, the political crisis has prompted donors and economic actors from the private sector to withdraw. Foreign aid, which previously accounted for more than 50 per cent of development project funding, has plummeted; FDI has fallen from $46 million in 2014 to $7 million in 2015; and the decision by Burundian businessmen to delay investments has created an opportunity cost.[fn]Ibid.Hide Footnote
Forced to ration the supply of dollars held by the Central Bank, of which the total amount is equivalent to just one and a half months of imports,[fn]Crisis Group interviews, development agency executives, Washington DC, November 2017.Hide Footnote the Burundian authorities have prioritised the financing of three vital commodities: fuel, medicines and fertilisers. But the priority allocation of hard currency to pay for these three products remains insufficient, and they have become less available since 2015, with regular disruptions in supplies.
The dwindling availability of essential products is contributing to the spiralling cost of food products.
The lack of fuel has become a chronic problem. Every other week, fuel stations run short of stock.[fn]Crisis Group interviews, economic actors, Bujumbura, May and September 2017. “La pénurie de carburant déstabilise la capitale”, Iwacu, 27 April 2017; “Gitega: le manque criant du carburant de type essence limite la circulation”, Radio Isanganiro, 14 September 2017.Hide Footnote As a result, the price of a bus ticket from Kayanza to Bujumbura, which was Fbu 5,000 ($2.9) before the crisis, has since doubled. Fishermen have passed on the higher cost of diesel they use for their boats by tripling the price of fish.[fn]“Rumonge: la pénurie du carburant affecte la pêche”, Iwacu, 24 May 2017; “Pénurie de carburant: beaucoup de secteurs affectés”, Burundi Eco, 2 June 2017.Hide Footnote Mobile telephone companies, whose networks rely on generators, are demanding reductions to their bills or priority energy supplies.
Agriculture still represents 40 per cent of the country’s GDP and provides a livelihood for more than 70 per cent of the active population, but fertiliser deliveries were frequently delayed in 2016 and 2017.[fn]“Economic and Social Impacts of the Turmoil in Burundi: An Overview”, op. cit., p. 3. “Retard de l’engrais pour la saison culturale B à Cankuzo”, Infos Grands Lacs, 19 February 2016. “Café: des fertilisants et insecticides bientôt disponibles”, Iwacu, 2 February 2017.Hide Footnote Businesses have trouble importing supplies when their foreign suppliers become unwilling to offer them credit. This is affecting Burundian fuel importers and the Brarudi, the country’s only brewery. Its unpaid bills to its suppliers are piling up, and the Central Bank is not making enough dollars available to the company.[fn]Crisis Group interview, Brarudi executive, Bujumbura, September 2017.Hide Footnote
The dwindling availability of essential products is contributing to the spiralling cost of food products (which rose by 21.9 per cent from September 2016 to September 2017).[fn]“Indice des prix à la consommation des ménages au Burundi”, Isteebu, September 2017.Hide Footnote In a country where food represented 20 per cent of total imports in 2014, currency shortages have a direct impact on the food market.[fn]“Economic and Social Impacts of the Turmoil in Burundi: An Overview”, op. cit., p. 4.Hide Footnote A parliamentary report described how “sugar and fuel are essential products. Their rising price has a knock-on effect on other products …. This combines to make the Burundian people’s already difficult living conditions more precarious than ever”.[fn]“Rapport des réalisations du groupe parlementaire chargé de la bonne gouvernance, de la privatisation des biens de l’Etat lors de sa descente dans différentes provinces du pays pour s’enquérir de la gestion de la vente du sucre et du carburant”, National Assembly, April 2017.Hide Footnote
The lack of both hard currency and fuel has led to a flourishing black market, which drives up prices even further. Faced with the growth of the parallel exchange market, the authorities have attempted to regain control by closing several bureaux de change and outlawing money exchangers on the street.[fn]Press release, Bank of the Republic of Burundi (Banque de la République du Burundi – BRB), 12 July 2017.Hide Footnote Nevertheless, this activity continues and even appears tolerated: the black market exchange rate is even published in several newspapers.[fn]Burundi Eco publishes both the official and black market exchange rate.Hide Footnote
Burundi Eco publie le taux de change sur le marché officiel et sur le marché parallèle.Hide Footnote
B. Deteriorating Social Services
After the end of the civil war, some progress was made in health and education, thanks to a combination of investments from donors and the government. But these social services have now deteriorated under budgetary constraints. They are already failing to meet the population’s growing needs, and the government’s two flagship social policies since 2005 – free primary school education and health care for under-fives and pregnant women – are under threat.
1. Education
From the early 2000s, remarkable advances were made at primary level as a result of the introduction of free education, initiatives to take in more pupils and measures to reduce failure rates.
The budgets allocated to government ministries with education in their portfolios were cut from Fbu 346 billion to Fbu 243 billion ($198 to $139 million) from 2015 to 2016, exacerbating structural problems within the sector, namely the lack of equipment, understaffing, and overcrowded classrooms.[fn]“Le système éducatif burundais: une opération de sauvetage s’impose”, Parole et action pour le réveil des consciences et l’évolution des mentalités (PARCEM), 27 September 2016. “La crise politique affecte gravement le secteur éducatif burundais – l’impact de la crise politique et économique sur l’enseignement au Burundi”, special report, Forum pour le renforcement de la société civile, March 2017.Hide Footnote Rising food prices have forced a number of schools to make drastic cuts to food provided for pupils; in February 2016, the University of Burundi stopped providing breakfast.[fn]“Burundi: les élèves des écoles à régime d’internat souffrent de la crise alimentaire”, Xinhua, 5 March 2017.Hide Footnote
« Burundi : les élèves des écoles à régime d’internat souffrent de la crise alimentaire », Xinhua, 5 mars 2017.Hide Footnote
Following government cutbacks, school directors are resorting to ad hoc solutions.
Following government cutbacks, school directors are resorting to ad hoc solutions. Even though free primary school education is enshrined in law, they are now demanding contributions from parents to bridge the gap in their operating budgets and buy essential items (paper, chalk). It is increasingly common to find parents doubling up as unofficial, part-time teachers known as “abakutsakivi”. As a result, the national federation of associations defending children’s rights (Fenadeb) observed an increase in school dropout rates in 2016.[fn]“Burundi: plus de 115 000 abandons scolaires entre septembre 2015 et avril 2016”, Xinhua, 13 July 2017.Hide Footnote
The university system has also been hit by the budgetary restrictions, which triggered a mini political and social crisis at the University of Burundi (UB) in April 2017. Students are struggling to cover costs with their monthly 30,000 Fbu ($17) grant,[fn]Crisis Group interview, student, Bujumbura, February 2017.Hide Footnote given the mounting cost of attending university in the 2016-2017 academic year. These rising prices are affecting everything from board and lodging to the cost of graduating.[fn]The cost of a bachelor’s degree diploma has risen from Fbu 4,000 to Fbu 20,000 ($2.3 to $11.4); the certificate of higher education from Fbu 450 to Fbu 2,000 ($0.3 to $1.1).Hide Footnote In light of the 1 February 2017 decree, reorganising the system of grants awarded for studies and internships has come as a blow. Grants have been replaced by a system of repayable loans, unavailable to students who repeat years. These restrictive measures threaten the government’s generous policy of offering grants. Most of the 19,066 students who benefitted from it during the 2015-2016 university year could not have afforded to attend university without it.[fn]Figure obtained from the education ministry’s agency for student and internship grants.Hide Footnote
Between March and April 2017, students at the UB and the Ecole nationale supérieure tried to organise a protest movement against the decree, but were faced with a police crackdown. In an open letter published on 9 March 2017, they warned President Nkurunziza that they would call an indefinite strike unless the measure was suspended. Over the course of the following weeks, many of those involved were arrested and accused of involvement in insurrectionist movements.[fn]“Université du Burundi: un représentant des étudiants porté disparu, quatre autres arrêtés”, Jeune Afrique, 30 March 2017.Hide Footnote The chancellor’s office, directed by a member of the ruling party, the National Council for the Defence of Democracy-Forces for the Defence of Democracy (CNDD-FDD), also made repeated attempts to divide the students as a means of breaking up the movement. Since April 2017, a relative level of calm has returned to campuses, but simmering tensions remain.
2. Health
From the early 2000s, the Burundian population’s health indicators showed signs of improvement – though overall performance remained low – thanks to free health care for children under five and pregnant women, the construction of hundreds of health centres and the decentralisation of health care.[fn]For example, 74 per cent of births currently take place in health-care facilities, the mortality rate for under-fives dropped from 184 per 1,000 to 142 per 1,000 between 1990 and 2010, 85 per cent of children between twelve and 23 months’ old have vaccination coverage and more than 80 per cent of the population has access to a health-care facility within a radius of less than 5km. The number of health centres increased from 573 in 2005 to 897 in 2014, and the number of hospitals from 44 in 2005 to 69 in 2014. “Politique nationale de santé 2016-2025”, Republic of Burundi, January 2016 and “Troisième enquête démographique et de santé au Burundi 2016-2017”, Isteebu, May 2017.Hide Footnote Investments by donors played a critical role. In 2013, they funded 62 per cent of the sector – the remainder was split between household contributions (19 per cent), government funding (13 per cent) and contributions from the civil service cooperative insurance scheme (5 per cent).[fn]“Burundi: Delivering Health Services under Fiscal Stress”, World Bank, 8 June 2017.Hide Footnote
The combined effects of the economic crisis are leading to a contraction in health-care services and a weakening governance of the sector.[fn]Ibid.Hide Footnote The need for health infrastructure remains acute, but development financing has dried up.[fn]Some health-care centres are half-finished, do not have drinking water and lack qualified personnel. “Plus que l’ombre d’un centre de santé”, Iwacu, 26 May 2016; “Cibitoke: un centre de santé sans locaux pour les malades”, Iwacu, 12 August 2017; and “Rumonge: des défis pour certains centres de santé”, Iwacu, 19 October 2017.Hide Footnote The problem has been compounded by the flight of human capital in a sector which already suffered from a severe lack of qualified personnel. Following the spate of violence in 2015, 101 doctors left the country while only 25 doctors were hired in 2016.[fn]“Burundi: Delivering Health Services under Fiscal Stress”, op. cit., p. 43.Hide Footnote In 2017, Burundi only had around 500 doctors in active employment. Of the current 18,570 health-care professionals, doctors and nurses represent 3 and 37 per cent respectively, with the remaining 40 per cent consisting of unqualified personnel.[fn]Ibid.Hide Footnote
The availability of medicines has been disrupted as the national medicine procurement agency can no longer adequately supply health centres, leading to a disruption in the supply of medication. The national health policy’s objectives – in particular universal health coverage by 2025 – now appear completely unrealistic.[fn]“Politique nationale de santé 2016-2025”, op. cit.Hide Footnote
« Politique nationale de santé 2016-2025 », op. cit.Hide Footnote
C. The Burundian People: Coping and Deprivation
International organisations have lauded the Burundians’ resilience during the current crisis.[fn]The United Nations Population Fund (UNFPA) organised a conference called “La résilience des jeunes face aux conflits sociopolitiques au Burundi” on 12 April 2017. The EU launched a call for expressions of interest, “Mesure d’appui à la résilience des populations du Burundi”, in November 2017.Hide Footnote For the vast majority of the population, both in Bujumbura and elsewhere in the country, daily life is a permanent struggle to get by.
Burundi has figured among the poorest countries in the world for many years, but poverty is deepening further with its per capita GDP slipping from $790 to $702 between 2013 and 2017.[fn]Expressed in terms of purchasing power parity. World Bank figures (https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.KD?locations=BI).Hide Footnote Some 56 per cent of children suffer from chronic malnutrition and the prevalence rate of malaria among children has reached 38 per cent.[fn]“Troisième enquête démographique et de santé au Burundi 2016-17”, Isteebu, May 2017.Hide Footnote The socio-economic crisis has intensified every structural vulnerability of the Burundian population.
There has been widespread practice of siphoning off fuel from official vehicles and reselling it on the black market.
People are trying to boost their household finances through alternate means in order to cope with rising prices and falling incomes. Women without employment are selling small products; government employees abscond from work to do second jobs while their superiors find it hard to reprimand them (official government drivers work as taxi drivers during their working hours, for example);[fn]“The law is in place, but it’s hard to punish a man who says he was absent from work because he didn’t have enough to eat”. Crisis Group interview, head of department in a ministry, Bujumbura, December 2017.Hide Footnote loans are taken out from microloan companies or relatives, and people run up debts with shopkeepers, especially public officials who are paid in arrears. The diaspora is increasingly called upon to give financial support to family members remaining in Burundi.
These coping mechanisms lead some people to indulge in petty corruption and theft, as some public sector workers admit. A school teacher who has been struggling to make ends meet said, “under these circumstances, it’s hard to stop some of us accepting bribes from parents of pupils to get by each month”.[fn]Crisis Group interview, Gitega province, July 2017.Hide Footnote A driver in a public office in Ngozi referred to the widespread practice of siphoning off fuel from official vehicles and reselling it on the black market.[fn]Crisis Group interview, Ngozi, August 2017.Hide Footnote Policemen are increasingly seeking bribes. Several motorcycle taxi drivers referred to making monthly payments to the local police chief, and paying between 2,000 and 5,000 Fbu ($1.1 and $2.9) in bribes to traffic police every day.[fn]Crisis Group interviews, Bujumbura, June and September 2017.Hide Footnote
Another form of resilience is through privations. Households that used to set aside a little money each month are no longer able to do so; many are forced to cut out non-essential spending, starting with recreational activities, visits to families in other parts of the country for those living in Bujumbura, and so on. A bar owner referred to dwindling customers: “Two years ago, I could sometimes sell about four jerrycans of banana wine a day, but now I’m lucky if I can sell two”.[fn]Crisis Group interview, Muyinga province, August 2017.Hide Footnote Many household members are also forced by necessity to skip meals and skimp on medications. And when coping mechanisms and privations are not enough, even more drastic actions are taken to reduce expenses. Some rural people, having moved to the capital in the hope of finding more opportunities, have no choice but to return to the rural provinces.
Those interviewed (bicycle taxi drivers living on $2 a day, shopkeepers, government employees, etc.) blame the deterioration of their living conditions on two things: increasing food costs and decreasing income in real terms.[fn]Crisis Group interviews, civil servants, traders, bicycle taxi drivers, Bujumbura, December 2017.Hide Footnote Civil servants’ salaries are failing to keep up with inflation (a teacher’s minimum basic monthly salary is 17,722 Fbu, or about $10) and are paid late.[fn]Crisis Group interview, civil servant, Bujumbura, December 2017.Hide Footnote The increasing hardships experienced by public sector employees, who enjoyed comfortable positions before the crisis, have had an impact on society as a whole.
Following the withdrawal of its main donor (the EU) and with increasing security costs, the government has become ever more desperate for money. It has introduced taxes on the whole population, developed a wide array of alternative revenue sources (of varying degrees of legitimacy) and sought new donors. The government leadership’s stranglehold on the state allows those in power to enjoy comfortable lifestyles and protect themselves from the socio-economic hardships endured by the populace. The government has responded to the country’s serious social issues and economic recession in the same way as with human rights’ violations: by denying a problem exists at all.
When the country’s social and economic reality means that denial is no longer possible, the government then shifts responsibility onto “speculators” and donors, or refers to circumstantial causes. It blames the shortages of sugar and fuel on the speculations of businesses; the energy minister has also tussled with fuel importers, accusing them of having been behind fuel shortage in Burundi in order to “speculate and sabotage the economy”.[fn]“Certains pétroliers veulent créer une pénurie de carburant”, energy ministry statement (www.energie-mines.gov.bi/spip.php?article95), 5 May 2016. “Burundi: quand Bujumbura tente de justifier la pénurie d’essence”, Jeune Afrique, 20 June 2017. As a result of this showdown, the authorities drastically reduced the number of importers to two companies: Delta Burundi and Interpetrol. This goes against the recommendations of the parliamentary report of April 2017 (op. cit.) which advocated an increase in the number of importers and measures to provide them enough hard currency. “Pas de pénurie de carburant mais un retard d’approvisionnement”, Iwacu, 24 April 2017.Hide Footnote European and U.S. donors are regularly blamed for the country’s economic and social woes, or even for starting “a humanitarian war”.[fn]“Burundi: 50 000 Imbonerakure marchent contre la guerre humanitaire à Karusi”, Burundi AG News, 15 February 2017; “Le Burundi accuse l’Union européenne de déstabilisation”, Radio France Internationale (RFI), 6 June 2017.Hide Footnote
« Burundi : 50 000 Imbonerakure marchent contre la guerre humanitaire à Karusi », Burundi AG News, 15 février 2017 ; « Le Burundi accuse l’Union européenne de déstabilisation », Radio France Internationale (RFI), 6 juin 2017.Hide Footnote
A. Weakening Public Governance
Since the start of the crisis, reforms to the management of public finances have all effectively been put on hold. This is affecting public governance in every sector, particularly in health care, as evidenced by the malaria crisis in 2016. Though this disease is Burundi’s most serious public health issue, the health ministry delayed releasing the official statement on the epidemic by several months. Eventually, the World Health Organization (WHO) sounded the alarm in early 2017.[fn]The WHO figures are telling: in 2014, more than four million cases of malaria were recorded; in 2015, more than five million; and in 2016, more than seven million, which means more than 50 per cent of Burundi’s population. “Paludisme: l’OMS sort un rapport alarmant”, Iwacu, 1 March 2017.Hide Footnote
Public sector mismanagement is nothing new, but the situation has worsened so much that public policies have been undermined.[fn]Crisis Group Africa Report N°185, Burundi: A Deepening Corruption Crisis, 21 March 2012.Hide Footnote In October 2017, the Global Fund to Fight AIDS, Malaria and Tuberculosis sanctioned the health ministry by withdrawing its subsidies for the 2018-2020 period, the equivalent of $72 million, and instead channelling it through the United Nations Development Program. It cited poor use of the funds and mismanagement among the reasons for its decision.[fn]In a statement on 18 October 2017, Gabriel Rufyiri, chairman of the Observatory for the Fight against Corruption and Graft (Olucome), called on the government to dismiss the second vice president, the health minister and members of the national committee in charge of monitoring the use of funds, with immediate effect, due to gross negligence for their management of the global fund’s aid. “La ministre de la santé sur la sellette”, Iwacu, 20 October 2017; “Sida: le Burundi sanctionné par le fonds mondial contre le sida”, RFI, 16 October 2017.Hide Footnote
Public sector management has further suffered as checks on the running of public bodies have all but stopped: according to the regulatory authority on public spending, the budgets of 2009, 2014, 2015 and 2016 were not independently audited; some Burundian officials blame this omission on the lack of international funding.[fn]Crisis Group interview, senior official from the regulatory authority on public markets, Bujumbura, September 2017.Hide Footnote
Entretien de Crisis Group, cadre de l’Autorité de régulation des marchés publics, Bujumbura, septembre 2017.Hide Footnote
B. Increasing Taxes, Duties and Public “Contributions”
The government is passing onto citizens the cost of the breakdown in its relationships with the country’s donors and of the economic slump.
Faced with budgetary constraints, the government is looking to increase its revenues and reduce spending by shifting the burden onto others. Therefore, while the country is experiencing severe shortages, a raft of taxes and duties are being introduced on a range of goods and services.[fn]For a list of these new taxes and increased duties, see “Communiqué de presse portant sur le projet de budget général de l’Etat exercice 2017”, Olucome, 22 December 2016. “Burundi: les taxes explosent, la ménagère trinque”, La Tribune Afrique, 26 December 2016.Hide Footnote The official explanation refers to the need for a better domestic resource mobilisation, in line with the International Monetary Fund (IMF)’s recommendations, whereas in fact it is driven by the need to reduce the deficits of public bodies. In this way, the government is passing onto citizens the cost of the breakdown in its relationships with the country’s donors and of the economic slump.
The most high-profile example of this transfer in Burundi has been the call for public donations to fund the next general elections in 2020 (elections having traditionally been funded by foreign donors, essentially the EU) that has now become a mandatory contribution. The president himself launched a public campaign appealing to Burundians to contribute to the electoral budget. After this initiative failed, however, the government eventually opted for more coercive measures. A new law entered into force in 2017 making popular contributions for the elections obligatory according to a sliding scale, with a plan to make corresponding deductions from public salaries from early 2018 – a move criticised by the unions and the Catholic Church.[fn]Crisis Group interviews, civil servants, Bujumbura, December 2017. “Contributions pour les élections de 2020: l’Eglise dénonce un forcing”, Iwacu, 16 April 2018.Hide Footnote
Although the water and electricity company (Regideso) barely meets the country’s needs, the Ministry of Energy and Mining has raised the cost of electricity in 2017. This decision (which penalises private businesses, the main water and electricity consumers; only 2 per cent of the population has access to electricity) was motivated by Regideso’s urgent need to replenish its coffers and to attract foreign investors in the sector.[fn]Press conference, energy and mining minister, Bujumbura, 31 July 2017. “Hausse des prix de l’électricité au Burundi, une décision qui fait des étincelles”, Deutsche Welle, 18 August 2017.Hide Footnote
Conférence de presse du ministre de l’Energie et des Mines, Bujumbura, 31 juillet 2017. « Hausse des prix de l’électricité au Burundi, une décision qui fait des étincelles », Deutsche Welle, 18 août 2017.Hide Footnote
Shopkeepers, households and bicycle taxi drivers have been subjected to a raft of new taxes. After having charged street traders to be registered in March 2017, local officials in the capital made them pay for their identification cards in June (at a cost of Fbu 20,000, or $11.4 per card) even though, according to the trade ministry, these documents should be free.[fn]“Les commerçants ambulants doublement saignés”, Iwacu, 19 October 2017.Hide Footnote Households have been forced to pay 2,000 Fbu ($1.1) to acquire the mandatory household record book (cahier de ménage), and bicycle taxi drivers have been charged Fbu 40,000 ($22.8) to wear a now-obligatory jacket.[fn]Crisis Group interview, motorcycle taxi driver, Bujumbura, February 2017.Hide Footnote
Traditionally, the banking sector in Burundi has been controlled by the state.[fn]Janvier D. Nkurunziza, Léonce Ndikumana, Prime Nyamoya, “The Financial Sector in Burundi: An Investigation of Its Efficiency in Resource Mobilization and Allocation”, African Successes, vol. 3, National Bureau of Economic Research, University of Chicago Press, 2016.Hide Footnote The ruling party CNDD-FDD has been no exception in continuing the state’s shareholding in banks, and overseeing the appointment of board members. Government control of the sector has allowed it to both bend financial rules in its favour and to benefit those within the inner circle of power. Public and partly state-owned banks are forced to grant loans to the government.[fn]The debt owed by the state to banks has risen considerably: in 2017, 23 per cent of loans were granted to the government, as opposed to 5 per cent in 2012. Crisis Group interview, development agency executive, Nairobi, December 2017.Hide Footnote Public debt has grown while the solvency of the banks has diminished.
In another sign of government pressure on banks, at the end of 2017 the finance minister required the Burundi Commercial Bank (Banque commerciale du Burundi – Bancobu), the Burundi Bank of Commerce and Investment (Banque burundaise pour le commerce et l’investissement – BBCI), the Bujumbura Credit Bank (Banque de crédit de Bujumbura – BCB), the National Bank of Economic Development (Banque nationale de développement économique – BNDE), as well as the Urban Habitat Fund (Fonds de promotion de l’habitat urbain) to pay their end-of-year dividends to the state rather than to their staff.[fn]“Des banques interdites d’octroyer des avantages à leur personnel”, Infos Grands Lacs, 18 December 2017.Hide Footnote
After the CNDD-FDD came into power in 2006, it placed the development of social sectors in the hands of donors in conjunction with technocrats in government ministries. The withdrawal of European donors has now rendered the government helpless in the face of the social crisis. The leaders’ main concern is to secure enough funds to support their political and security networks. They reject any responsibility for shortages and worsening public services and instead put the blame on external players.
A. Traditional Donors
Before the 2015 political crisis, Burundi was one of the world’s most aid dependent countries, with donor funds consistently above 50 per cent of the government budget. Diplomatic support for this notoriously fragile state began to fade after the electoral crisis of 2010. Since then, Western donors started to send conflicting messages; they shared with the government their concerns about human rights violations, while still supporting sector-specific policies with an aid program that remained significant.[fn]Nadia Molenaers, Gervais Rufyikiri and Stef Vandeginste, “Burundi and its Development Partners: Navigating the Turbulent Tides of Governance Setbacks”, Institute of Development Policy, University of Antwerp, working paper, December 2017.Hide Footnote However, budgetary support was called into question during discussions between donors and the government, partly as a result of the worsening governance.[fn]Interviews by a Crisis Group analyst in a former capacity, EU officials and Burundian ministers, Bujumbura, February 2012.Hide Footnote
Entretiens d’un analyste de Crisis Group dans des fonctions antérieures, responsables européens et ministres burundais, Bujumbura, février 2012.Hide Footnote
Belgium became the first country to suspend its aid to the government and to start channelling it through international and local NGOs.
The 2015 political crisis caused this relationship to sour, particularly in terms of aid from the EU and its member states. Tensions emerged between Burundi on the one hand and the European institutions and member states on the other. In summer 2015, Belgium became the first country to suspend its aid to the government and to start channelling it through international and local NGOs. The consultation process under Article 96 of the Cotonou Agreement, which provides for a suspension of cooperation if one of the parties does not respect human rights, democratic principles and the rule of law, began in October 2015. In March 2016, the EU decided to suspend its support to the Burundian government after concluding that it was no longer respecting these fundamental principles.[fn]Council Decision (EU) 2016/394 of 14 March 2016 concerning the conclusion of consultations with the Republic of Burundi under Article 96 of the Cotonou Agreement, https://publications.europa.eu/en/publication-detail/-/publication/7f702329-ecd6-11e5-8a81-01aa75ed71a1.Hide Footnote
This has led to a reorientation of all European aid and a prolonged dispute on the funding of Burundian troops within the African Union’s peacekeeping mission in Somalia.[fn]Crisis Group Africa Report N°247, Burundi: The Army in Crisis, 5 April 2017.Hide Footnote Although the European Commission continues to spend large amounts on health, food security, energy and rural development in Burundi, its cooperation with the ministries, like that of EU member states, has become very limited, and much of the existing aid for capacity building and technical support has been suspended.[fn]“Mesure d’appui à la résilience des populations du Burundi”, decision FED/2017/040-082, EU delegation to the Republic of Burundi, 2017.Hide Footnote Contact continues with counterparts in the ministries, but funds are increasingly funnelled through member states’ development agencies or international NGOs, and the European Commission is now exploring the possibility of using local NGOs. However, whether local or international, some NGOs lack the capacity to absorb the funds.[fn]Crisis Group interviews, senior officials in the aid sector, Europe, Bujumbura, January 2018.Hide Footnote
But the intense government pressure on local NGOs is proving to be the main problem:[fn]IbidHide Footnote the government has attempted to recoup the money that used to pass through the ministries;[fn]The health minister reportedly required local clinics to make financial contributions to the CNDD-FDD. “La cherté de la vie, la famine et la maladie au Burundi”, Forum for the Strengthening of Civil Society (FORSC), March 2017.Hide Footnote it has prevented local NGOs from meeting donors without the presence of state representatives;[fn]“Kayanza: distribution de cartes d’identité aux Batwa suspendue”, Iwacu, 31 January 2018.Hide Footnote and on at least one occasion it has made false accusations in order to intimidate and imprison heads of NGOs.[fn]“Burundi: des experts de l’ONU appellent à la libération du défenseur des droits de l’homme Germain Rukuki”, press release, Office of the United Nations High Commissioner for Human Rights, 25 August 2017.Hide Footnote
More pernicious still, the government has tried to increase its control over NGO recruitment, notably by monitoring the ethnic background of new staff.[fn]Crisis Group interviews, senior officials in the aid sector, Brussels, January 2018.Hide Footnote Although ethnic quotas, one of the principles of the Arusha Agreement in 2000 which helped bring an end to the civil war, have helped re-establish a certain balance within state sectors such as the army, previously dominated by the Tutsi, this recent initiative has deeply troubled NGO personnel and their supporters given the current climate of fear and encroaching political control.[fn]On the Arusha Agreement, read Laurent-Désiré Sahinguvu and Thierry Vircoulon, “Requiem pour un accord de paix, réflexions sur l’actualité de l’accord d’Arusha et la révision constitutionnelle”, Institut français des relations internationales, 2017.Hide Footnote
The World Bank – Burundi’s largest non-European donor – only marginally adjusted its current commitments of around $650 million in national and regional programs. The direct budgetary support has been suspended due to worries about the lack of financial data, but support for specific sectors continues, including through government ministries. Officials at the World Bank do not consider that the political crisis has a direct bearing on their work, except in so far as it affects the balance of payments and the government’s capacity to administer the allocated funds.[fn]Crisis Group interviews, senior executives in the aid sector, Washington, December 2017, and Europe, January 2018. “Burundi Fact Sheet”, 2017, op. cit.Hide Footnote The African Development Bank also continues to work with line ministries and the finance ministry as it did prior to the 2015 crisis.[fn]Crisis Group interviews, senior executives in the aid sector, Brussels, January 2018.Hide Footnote
Entretiens de Crisis Group, responsables du secteur de l’aide, Bruxelles, janvier 2018.Hide Footnote
The government has accused the EU of starting a “humanitarian war” against Burundi.
In response to the suspensions and changes in the form of granting aid, the government has veered from being aggressive to imploring, especially in its dealings with the European Union following the suspension of budgetary support. It has accused the EU of starting a “humanitarian war” against Burundi and has readily attributed the country’s ills to the suspension of European aid, while at the same time demanding its resumption.[fn]Besides the many statements made by the Burundian foreign affairs minister, the Senate has passed a resolution on this same issue, and the presidents of Uganda and Tanzania have also lobbied the EU to resume its cooperation with Burundi’s government. Resolution adopted by the Senate of the Republic of Burundi on 1 August 2017. “Museveni et Magufuli plaident pour la levée des sanctions de l’UE contre le Burundi”, Voice of America, 20 May 2017.Hide Footnote This reaction has complicated the work of donors on the ground, who still wish to maintain the necessary technical and diplomatic relations with the government and line ministries that are vital for their work, while preventing any actual money passing through the ministries.
Aid programs have five- or ten-year cycles. The current expenditure of the EU and member states mainly represent commitments made before 2015 and later adjusted following the crisis. For example, the European Development Fund’s indicative program was set up in 2014 and runs until 2020. In early 2018, the EU decided to cut the budget allocated for Burundi by €100 million, but the specifics terms have not yet been officially released.[fn]Crisis Group interview, EU official, August 2018.Hide Footnote
No representative of the EU or member state consulted by Crisis Group believes that Burundi will be able to respect the criteria of the Cotonou Agreement in the medium term (which in any case are subject to a general review as part of the reform of the Cotonou Agreement by 2020; the adoption of a new EU budget for the 2021-2027 period will probably see a reduction in the number of recipient countries benefitting from the EU Development Fund, or its replacement).[fn]Crisis Group Africa Report N°255, Nouveau départ pour les relations entre l’Union africaine et l’Union européenne, 17 October 2017.Hide Footnote It is therefore highly likely that after the 2014-2020 funding period the EU will scale back its aid for development from 2021 onward, although its humanitarian assistance and support for the intermediate category of “resilience” (health, food security, nutrition, and energy) will remain in place. Bilateral donors such as the Netherlands and Belgium will probably move in a similar direction over the next few years.
B. Searching for Substitute Donors
In a move to offset the decreasing aid from traditional donors, the government is on seeking new private and public sector donors. Its efforts to build on its relationships with China have been the most fruitful. The Chinese are building the new presidential palace and plan to construct a hydroelectric plant. In 2017 they already provided $30 million in budgetary support and a humanitarian donation of 5,000 tonnes of rice, in addition to the 5,200 tonnes sent at the end of 2016.[fn]“La Chine au chevet du Burundi”, Iwacu, 22 May 2017.Hide Footnote
Apart from China, the government is approaching donors such as Turkey, Egypt, the Saudi Fund for Development, and Russian parastatal companies.[fn]“Burundi signs deal with Russian banks on foreign investment”, Reuters, 17 June 2016.Hide Footnote In 2017, Burundi opened an embassy in Ankara and signed an economic and trade cooperation agreement with Turkey.[fn]“En crise avec l’UE, le Burundi se tourne vers la Turquie”, La Tribune Afrique, 28 July 2017. “Burundi: les amis de la criminelle milice Imbonerakure”, afrique.lalibre.be, 4 September 2017.Hide Footnote
For these replacement donors, development is less important than their political objective of garnering diplomatic support. Moreover, their aid does not counterbalance the reduction in funds from traditional donors: only China has agreed to provide budgetary support, and these new partners provide assistance for specific projects instead of structural support to the government administration and key development sectors (health, education, agriculture). Given their lack of expertise and/or interest in social sectors and administrative support, they limit their role to providing emergency relief (supplies of rice) and infrastructure projects on a modest scale.
The Burundian government – seeking to emulate Zimbabwe where the discovery of a diamond deposit in 2008 shored up Robert Mugabe in the face of sanctions – is banking on a mining bonanza. It has granted permits for mining companies to prospect and extract rare metals, gold and other minerals, and the president inaugurated several mines in 2017.[fn]“Lancement officiel des travaux d’exploitation des gisements d’or et de minerais à Mabayi”, government press release, 2 November 2017; “Le site minier de Mabayi a été inauguré par son excellence Pierre Nkurunziza”, statement by the presidential office of the Republic of Burundi, 2 November 2017; “L’exploitation des terres rares: une source de devises importante pour le Burundi”, Burundi Eco, 16 October 2017; “Rainbow ships first rare earths from Burundi mine”, Financial Times, 5 December 2017; and “La stratégie de Tanganyika Gold pour obtenir le permis de Mabayi”, Africa Mining Intelligence, 20 December 2016.Hide Footnote The state has become a shareholder in at least two joint mining ventures, at least one of which is in partnership with a Russian company.[fn]See the contract: http://rainbowrareearths.com/wp-content/uploads/2017/10/FinalSignedRB_GvtBdi_ML_Convention_27_3_2015.pdf. “Communiqué de presse portant sur l’octroi en cascade de permis d’exploration et d’exploitation des ressources minières au Burundi à des firmes étrangères …’’, Olucome, 15 November 2017. On corruption in the mining sector, “Gervais Rufyikiri: petit à petit la corruption a conquis les âmes”, Iwacu, 7 December 2016.Hide Footnote But private investments in the mining sector are unlikely to make any significant impact on the economy, at least in the short term.
Three years after the onset of the political crisis linked to Nkurunziza’s third term, and with the recent “yes” vote in the constitutional referendum, the government in Bujumbura is politically strong despite the country’s fragile economy. The opposition has been silenced or exiled, and armed opposition groups do not pose a serious threat. Efforts to mediate between the government and opposition parties in exile have ground to a halt, due to the hardline approach of Bujumbura and the lack of any real commitment shown by other African presidents to exert coordinated pressure on the government. Under these circumstances, the ruling party will probably continue to dismantle the Arusha Agreement and control the country with an iron fist, and civil unrest will remain a constant risk.[fn]Crisis Group Africa Report, Burundi: A Dangerous Third Term, op. cit. See also “AU must re-engage in Burundi to push for inclusivity as a way out of violence”, op. cit.Hide Footnote
The economic crisis, however, is eroding the resources available to maintain the networks of cronyism around those in power, increasing the risk of rifts within the government. The struggle to maintain these networks could translate into internal squabbles and then disputes between ethnic groups, as has happened in the past, and this could ultimately lead to an outbreak of violence. Although the dire economic situation increases the risk of violence, it does not determine how it would play out, nor whether it would follow political or ethnic divisions at any given moment. But as shown in various other countries – particularly in Zimbabwe, where Robert Mugabe clung onto power for years despite the country’s economic collapse – a struggling economy offers no guarantee of political change. Therefore, the suspension of European aid to Burundi’s government has not fundamentally changed the strategy of the leaders in Bujumbura, probably because they intend to stay in power whatever the consequences on the population.
The EU and its member states should pursue their program of direct cooperation with local NGOs.
In any case, since EU officials are powerless to change the dynamic with Article 96, they must now carefully consider their next steps, as many of them are already doing. After having suspended its aid to the government in 2016, the EU must redouble its efforts to ensure that its support benefits the Burundian people. Burundi’s European partners will agree new five- or ten-year aid programs in 2019 or 2020.It is vital to minimise risks that the provision of this assistance, which may be coveted by many Burundian actors (including inhabitants, the authorities, NGOs and other local players) and thus may fuel competition among them, increase the risk of local conflict.[fn]Crisis Group interview, senior official in the aid sector, Brussels, February 2018.Hide Footnote
In addition to the aid being channelled through international NGOs, the EU and its member states should pursue their program of direct cooperation with local NGOs, taking particular care to avoid putting them at risk and to allow them to withstand government pressure. To achieve this, they could increase support for those under legal pressure from the government, or provide diplomatic support in cases where staff are being harassed by the authorities. The EU must also strengthen its delegation in Bujumbura and reinforce its monitoring of the use of funds by its partners to avoid any misappropriation. Some donors are already moving in this direction, in an approach which needs flexibility in the choice of partners and projects.
Two years before the next scheduled general elections in 2020, the Burundian people are still facing uncertainty and a protracted crisis. Aid reductions are exacerbating the economic impact of this unpredictable situation and daily life is becoming increasingly difficult for the general population. Given this, external donors should work to ensure that their aid genuinely benefits Burundians, at the same time as making diplomatic progress for greater political openness ahead of 2020.
Brussels/Nairobi, 31 August 2018
Source link : https://www.crisisgroup.org/africa/central-africa/burundi/264-soutenir-la-population-burundaise-face-la-crise-economique
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Publish date : 2018-08-31 07:00:00
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