Burundi Trade and Trade balance

Burundi Trade and Trade balance

Trade and trade balance

Burundi has a high import surplus in its trade balance. Machines, capital goods and vehicles are imported. Exports are mainly coffee and tea, which are also subject to the world market price volatility. Gold and beer are also exported. The inland location of Central Africa is a very limiting factor for Burundi’s competitive trade with the global market. Transports are mainly carried out with trucks on the road to Dar-Es-Salaam in Tanzania. Burundi typically imports six to eight times as much as it exports – a trade imbalance that is extremely high even in the African context. Imports are falling sharply due to the ongoing tense political, economic and financial situation.

Important customer countries with 60% are the United Arab Emirates, in Asia Pakistan and China, in Africa the DRC, Rwanda and Kenya, in Europe Germany, Sweden, France, Belgium-Luxembourg. Overall, relatively little is exported to the USA. Due to the political tensions, trade relations with Rwanda are now likely to be much lower. Imports are mainly from Africa (Rwanda, Tanzania, Uganda), Asia (China, India) and Europe (Belgium, Netherlands, France, Germany).

According to franciscogardening, the logistical efficiency, which is important for a national economy, in Burundi after Angola and Afghanistan is worse than anywhere else in the world. The Logistic Performance Index is low for many other East African countries, but Burundi has to struggle above all with the transport problem for imports and exports. When calculating retail prices, transportation costs make up almost half of the bulk of the costs. It is not foreseeable that transit costs will decrease in the future.

Burundi is a member of various multilateral and international organizations such as the African Union, the WTO, the World Bank, the African Development Bank, the COMESA – Common Market for Eastern and Southern Africa, the EAC – East African Community (since July 1, 2007), the CPGL (Economic Community of Great Lakes Countries) and the EU-AKP. The regional cooperation is almost as important for Burundi as its international integration into global trade. Since radical market-economy reforms that could improve the economic and social prospects for Burundi have so far only started hesitantly, the trade balance remains negative. There were projects for joint improvements, for example in infrastructure, but in the course of the political conflict, for example, contacts with Rwanda have deteriorated significantly. Outside of the East African community, Burundi also wants to trade with the DR Congo and Congo-Brazzaville Remove. Due to the regional conflicts in the Great Lakes region, political relations with the DRC (Democratic Republic of the Congo) are difficult, which also affects economic cooperation. There are good trade relations with the United Arab Emirates, Saudi Arabia, Kenya, Uganda, (still) the EU – including France, Belgium and Germany – as well as Canada and China.

Burundi coffee and tea

Development and development policy

Like all member states of the United Nations, Burundi had committed itself to achieving the Millennium Development Goals by 2015. The poverty reduction strategy (including several updates) was the instrument of implementation. However, this strategy did not provide a central framework for the policy of the Burundian government. And so it was difficult to implement. Even sub-goals have been achieved only to a limited extent. Unfortunately, Burundi did not manage to achieve the overall goals; the deficits were too great in most areas. The main problems were eradicating extreme poverty and hunger as well as in education and environmental protection. At the same time, for example, population dynamics seemed to have been forgotten as a topic of development policy: the population in Burundi will have almost doubled to around 15 million by 2050 with unchecked growth. Little progress has been made in the health sector either. The HIV-AIDS rate has decreased, but malaria cases, child and infant mortality and maternal mortality (MDGs 4 and 5) barely decreased compared to 2000 and 2005. The introduction of free health care for pregnant women and children under five years of age will only be able to show positive effects if, at the same time, efforts are made to improve the quality and quantity of health care. In order to make more progress on the MDGs, further, more inclusive growth is required in Burundi. National strategies are supported by various initiatives by national NGOs. The improvement of water and sanitation is a focus of state and international development goals, but here too there is a lack of sustainable progress. Only a little over half of the population has access to clean drinking water.

Also the SDGs (Sustainable Development Goals) show a bad ranking for Burundi, for example in the poverty record, which is the worst in all of East Africa. The political situation since 2015 has had a very negative impact on developments. However, the government under Nkurunziza was willing to take steps towards realizing the SDGs and to raise funds for them. Vision 2025 was replaced by the updated 2018-2027 development plan in June 2018. Of the theoretical goals contained therein, however, economic reforms and infrastructure goals, for example, have been postponed. In 2019, Burundi was only ranked 145th out of 162 countries in the Bertelsmann SDG Report and had thus slipped further (2017: 132/157, 2016: 128/149).

Peacebuilding

Peace and stability in Burundi are fragile to this day, but they are of crucial importance for the country’s economic development. Despite positive developments such as the peace negotiations in 2002, the elections in 2005 and the conclusion of peace with the last rebel group, the FNL, in 2009, the country remains affected by the long-term consequences of the long-term civil war and political instability. The fragmentation of the party landscape, the willingness to use violence and images of the enemy remain major problems for the peace perspective. The PeacebuildingVarious international organizations have made it their business to support the peace process, as the economic development of Burundi and the entire Central African region can only be secured through lasting peace and stability. Peace in Burundi is heavily dependent on regional understanding with neighboring countries – such as the Democratic Republic of the Congo or Rwanda. The problem of the instrumentalisation of conflicts, the recruitment of child soldiers and the widespread possession of weapons and the arms trade are still very worrying. The peace that was hopefully awaited at the beginning of the millennium has not yet come true.