BUJUMBURA December 27th (ABP) – As part of the “FUNGUA NJIA” (open the borders) project, which aims to promote border trade in Burundi, the competitiveness of Burundi businesses as well as free trade education, the Center for Development and Enterprises (CDE), organized on Thursday, December 23, 2021 in Bujumbura, a workshop to present an analysis entitled “Trade openness: factor of attractiveness of foreign direct investments in Burundi” made to order by an expert.
In a special address, the Executive Director of the CDE, Mr. Aimable Manirakiza, said that the Burundian economy is mainly based on the primary sector. Indeed, according to the National Development Plan of Burundi (PND 2018-2027), agriculture contributes 39.6% to the Gross Domestic Product (GDP) and provides 84% of jobs. Livestock, meanwhile, accounts for 19% of agricultural GDP and 4% of total GDP with the rest going to the secondary and tertiary sectors, he added. According to Mr. Manirakiza, if Burundi has designed and implemented socio-economic development strategies since its independence, it is clear that challenges remain at the level of development such as the crucial problem of unemployment, low household income, a less diversified and less competitive economy and a lack of infrastructure capable of supporting production, and so on. That is why Burundi’s place in the various world rankings remains less brilliant.
Mr. Manirakiza indicated that at the level of business, Burundi occupied the 166th place out of 190 economies (countries) in 2012. In terms of economic freedom, it occupied the 157th place out of 180 in 2018 and the 165th place out of 180 in 2019, he added. As for the human development index, Burundi was in 185th place out of 189 economies assessed by Doing business in 2018, he continued to say.
According to him, the negative impact of all those reports on the national economy is observed with the decline of foreign direct investments in the country. Faced with such obstacles and in order to find local solutions to those challenges, he suggested that the various development actors in Burundi and public opinion should constantly sit down together to identify appropriate economic reforms but also be informed on proposals for effective and measurable long-term reforms.
During the actual presentation of the analysis, Mr. Kelvin Ndihokubwayo, an expert who presented it, indicated that the trade opening of a country reflects the intensity of its relations with the rest of the world, and by extension, only attracts foreign direct investment. To achieve this, a good legal environment (investment code), liberal economic policies, the reduction of tariff and non-tariff barriers, without forgetting the most attractive production conditions which are essential, are required.
According to the expert, Burundi is not left out, hence, through bilateral agreements and businessmen on investment, the country is taking more and more targeted measures in order to attract foreign capitals, and this, for several reasons, in this case, the reduction of the unemployment rate by the creation of jobs, to lower the deficit of the trade balance by strengthening exports. There is also the increase in foreign exchange reserves, the contribution to industrial development but also and above all the strengthening of the country’s territorial attractiveness, and the spillover effects they generate on businesses.
Returning to the state of play of Foreign Direct Investments in Burundi (FDI), the expert said that in 2020, FDI inflows into Burundi were quite limited, amounting to USD 1 million respectively in 2018 and USD 1 million in 2019. In 2020, FDI inflows to Burundi saw a slight increase, from USD 1 million in 2019 to USD 6 million, despite the global economic crisis triggered by the Covid-19 pandemic. The total stock of FDI stood at 231 million in 2017, 226.7 million in 2018, 227.7 million USD in 2019 and 233.8 million USD in 2020.
Mr. Ndihokubwayo believes that with those figures, Burundi records the lowest rate of foreign direct investment flows compared to other countries in the sub-region.