BUJUMBURA, February 8th (ABP) – The National Assembly of Burundi met on Friday February 2, 2024, at the Kigobe hemicycle, to ratify the bill relating to grant agreement number E2650-BI for the financing of the project employment and economic transformation in Burundi between the Republic of Burundi and the International Development Association (IDA).
The Minister of Finance, Budget and Economic Planning, Audace Niyonzima, was the guest of the day. In his explanatory memorandum, Minister Niyonzima recalled that Burundi is committed to making the private sector the main engine of development and the acceleration of economic growth, as indicated in the National Development Plan (PND 2018-2027) and the new “Vision of Burundi, emerging country in 2040 and developed country in 2060”.
According to him, the government of Burundi has priority growth objectives based on the development of the private sector. However, although Burundian micro, small and medium enterprises (MSMEs) report a positive trend in income growth, continued progress is undermined by constraints that affect market access and competitiveness.
He said the formal private sector is still small and uncompetitive and operates in a weak business environment. The formal private sector has fewer than 3,000 companies, which employ less than 2% of the active population (around 37,000 people, including more than 80% in Bujumbura). He also clarified that Burundian companies are not or only marginally profitable due to a lack of innovation, high cost of inputs, lack of growth capital, insufficient infrastructure and limited access to markets.
According to Minister Niyonzima, to consolidate its development trajectory, Burundi is in the process of adopting a new growth model which will benefit the development of the private sector. He added that by improving conditions for private sector competitiveness and value chain development, Burundi could deepen its trade with the rest of East Africa and beyond.
He also noted that the integration of MSMEs into international value chains could have significant benefits in the country. Although the number of jobs in agriculture may decline during this transformation, more and better jobs would be created in agribusiness, where productivity is expected to increase through the adoption of technologies, resilience to climate change, improving access to capital and improving workforce skills.
The project for employment and economic transformation (PRETE) will support the development of a responsible, dynamic and income-generating private sector, to create added value and economic growth as well as jobs in MSMEs, which is one of the five pillars of the PND’s operational strategy, announced the minister in charge of finance.
The project’s focus on empowering women entrepreneurs will also contribute to Burundi’s national gender policy, as will the inclusion of refugees and host communities. This further demonstrates the commitment of the government of Burundi to strengthen the integration of refugees and returnees into national systems and to continue the actions undertaken in favor of their economic and social integration, as set out in the national support strategy for host communities and refugees, he noted.
According to Mr. Niyonzima, the development objective of the project is to improve access to financing for MSMEs, particularly MSMEs owned by women and refugees, and to increase job creation by MSMEs, in targeted value chains. The Minister of Finance indicated that the total amount of funding proposed for this agreement is $100 million, of which 20 million comes from the window for host communities and refugees. The said agreement will allow the government to build 6 health centers, 8 modern markets, to grow 2,700,000 fruit trees, to rehabilitate roads and bridges and to develop the milk sector through the distribution of 2,998 cows, he stressed.
He did not fail to point out that the beneficiaries of the project are micro, small and medium enterprises including those owned by women and refugees, suppliers of productive infrastructure, large companies and main buyers, financial institutions, government institutions and private sector organizations. The project will also be beneficial for other institutions and associations.
During the question session, MPs asked whether refugees are entitled to implement development projects in the same way as Burundian citizens. The minister responded refugees with refugee status are entitled to embark on development projects. Refugees who are in refugee camps do not have this right because they benefit from aid from the UNHCR. After analysis, the MPs unanimously passed the said bill.