Landlocked between Rwanda, Tanzania, and the Democratic Republic of Congo (DRC), Burundi is easily overshadowed by (and forgotten among) its politically larger neighbors. Burundi is rated as one of the world’s poorest nations, struggling to move forward after many years of civil war. The recent fire in the Bujumbura Marche Central (“Central Market”) destroyed the thriving symbol of Burundi’s slowly emerging economy.
Some observers speculate that Bujumbura lost one third of its economy within seconds. Whether this is an exaggeration or not is irrelevant. This observation underscores the instability Burundi’s many informal markets, especially that of Bujumbura, and the overall need for investment in the country. Locals typically consider civil service as the best prospect for employment, despite many civil servants working other jobs to supplement their incomes, because many sectors in the economy are under-performing.
The Burundi economy accordingly offers many opportunities for investors with different investment appetites and strategies.
Information and Communications Technology (ICT)
The privatization of the state-owned company Onatel, which provides mobile, land line, and internet services, and the launch of the national fiber optic network (BBS) set the foundation for great advancements in this sector. There is a major untapped market for high speed internet with a current penetration rate of less than two percent. The Common Market of Eastern and Southern Africa Countries (COMESA) has authorized the Regional Network Program for Communication Infrastructure, which has the directive of laying more cable to ensure stronger coverage across the region. All these factors open opportunities for e-banking, e-technology, and call centers. Challenges will definitely arise with educating the Burundian population about this sector and its opportunities, but the Burundian government has made its interest in this sector’s growth evident to the public.
Agriculture in Burundi
More than 90 percent of the Burundian population depends on the agriculture, which represents more than 50 percent of GDP. Coffee, tea, and cotton are the primary agricultural exports, especially to the European Union and the United States of America. Investment in modern processing facilities for coffee and tea would move the value chain online and create value for Burundian smallholder farmers. The privatization of the Office du The du Burundi (OTB) and la Societe Sucriere du Burundi (SOSUMO) offers investors direct access to rapidly opening markets in Burundi.
Burundi’s capacity utilization and crop yield rates have been subpar for years due to a lack of human capital and expertise. The country’s cotton production currently hovers around 3,000 tons per year which is about one-fourth of the country’s capacity and only a small change from production 20 years ago. Other potential growth crops include rice, bananas, corn, sweet potatoes, cassava (manioc), sorghum, and beans. Rice, for example, currently yields about 2.7 tons per hectare but has a potential to yield nearly 10 tons per hectare.
Burundi offers a noticeably small consumer market but its proximity to other markets presents scaling opportunities for investors, especially under regional cooperation agreements. Proximity to the eastern parts of the DRC, including North and South Kivu Province as well as Katanga Province, gives Burundian companies access to more than 16 million potential consumers. Western Tanzania offers another 10 to 12 million consumers while Rwanda offers an approximate 11 million additional consumers.
A short stop in Burundi resulted in at least 3 power outages per day. Energy is needed for domestic consumption and manufacturing. Burundi currently produces less than 70 percent of its energy consumption. Agreements to construct dams in Eastern Congo offer hope, but private investment in the energy sector, including wind, gas, and possibly waste-to-energy, will be necessary to compliment hydropower and meet the growing consumption levels in the country.
As the above sectors grow and mature, other opportunities will arise. The privatization of Air Burundi will be interesting over time as more cross-border business takes root in Burundi. Port expansion with Lake Tanganyika will also become more attractive and necessary under the same circumstances.
Cement production will increasingly become necessary as the economy grows and demand further outstrips production. Currently, Burundi produces 100,000 tons annually while consuming more than 375,000 tons annually. Mining, especially of nickel, gold and platinum reserves, will offer Burundi an opportunity to build foreign reserves for a post-humanitarian aid life.
Burundi is a country overall that sees many missionaries and military but it could definitely use many investors. When I landed in Bujumbura, yours truly tweeted “missionaries and military…everywhere in Africa.” Let’s hope next time I land in Bujumbura, I tweet “investors, investors….here like everywhere in Africa.”