Get more Mail & Guardian
Subscribe or Login

Burundi is on the brink of economic collapse

During Monday’s truce in anti-government protests, Renovat Ndayizeye was quick to try to reopen his stall in Jabe market in Burundi’s capital. He has scarcely sold a single pair of shoes since demonstrations began weeks ago, and he is getting desperate.

“I haven’t worked since the protests began, we are living on our savings, and now I have nothing,” said the 26-year old salesman, surrounded by others who had taken advantage of a pause in the protests to reopen their small wooden shack shops.

Some customers did turn up to shop, but only for basic necessities like rice, meat, vegetables and soap.

Across the Burundian capital, business has been paralysed since demonstrators opposed to President Pierre Nkurunziza’s third term bid began street protests, leading to almost daily, violent clashes with police. For over a month, customers have deserted the market and traders have left their goods locked up in the once teeming alleys.

The consequences of the political crisis in Burundi, and the protests primarily in its capital, are dramatic for traders like Ndayizeye, but also potentially disastrous for the country’s already faltering economy.

The tiny Great Lakes nation was ravaged by a 13-year civil war that ended in 2006 and today is one of the poorest countries on the planet: gross national income per capita is $260, 58% of the population suffers chronic malnutrition, it exports very little, produces too little to feed itself and is riddled with corruption.

Many of the demonstrations have taken place on the outskirts of Bujumbura, fuelled by poverty and unemployment. This does not prevent them from playing the economic card, erecting barricades to prevent people from reaching their workplaces in order to hit the economy and force the president to abandon a third term bid they believe is unconstitutional.

Protesters are seeking to “turn Bujumbura into a dead city”, fumed a senior official in the ruling CNDD-FDD party. “The impact of the demonstrations on the economy is real. It is a terrible weapon.”

Painful times ahead
Even before the announcement of Nkurunziza’s third term bid at the end of April, and the start of protests, the economy was suffering from a pre-election depression.

Fears of a return to large-scale violence in a country – which has a bitter history of inter-ethnic massacres – has driven people to change their Burundian francs for dollars or euros, and shelter their savings in their homes or in neighbouring Rwanda.

April tax revenues, collected mainly in Bujumbura, dropped 18%. The shortfall was worse in May, which saw the closing of shops and banks, the blocking of roads into key areas of the capital and the fearful exodus of tens of thousands of Burundians to neighbouring countries.

The dire economic situation is compounded by the effect of the political crisis on vital foreign aid, which accounts for half the national budget. Insecurity directly affects projects financed by donors such as the World Bank, whose experts were evacuated amid the violence leading to a reduction in disbursements.

Hard currency is already missing for the import of fuel, for hops used in production of the popular local beer, for medicines and for products such as charcoal used for cooking, which has tripled in price. A leading local economist, speaking on condition of anonymity, has warned of looming hyperinflation.

The ruling party official has said the salaries of civil servants will be paid in May, June and July. But that might come at a price, the economist said, with increased pressure on the Burundian franc, and therefore on prices, if the government were to print money or default on debt repayments.

Like the small scale traders in Jabe, the private sector lacks room to manoeuvre: the crisis and insecurity has hit private hotels hard and forced them to lay off staff.

An end to violence, however, may not be enough to revive the economy, especially if the election re-instates the president, analysts said.

Ignoring international warnings, Nkurunziza is preparing for five hard years at the head of an isolated country. Belgium, the former colonial power and a key donor to the country, has notably already suspended direct aid.

“After the elections it will be painful,” said the CNDD-FDD official. – AFP

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

‘The children cannot cope any more’: Suicide in Calvinia highlights...

How Covid-19 has intensified the physical and emotional burdens placed on children’s shoulders.

Capitec Bank flies high above Viceroy’s arrow

The bank took a knock after being labelled a loan shark by the short seller, but this has not stymied its growth

More top stories

Covid-19: No vaccine booster shots needed yet

Scientists agree it is important to get most of the population vaccinated before giving booster jabs

The convenient myth of an Africa spared from Covid-19

There are few, if any, studies to support Pfizer chief executive’s assertion that the global south would be more vaccine-hesitant than the north

Council wants Hawks, SIU probe into BAT’s Zimbabwe scandal

The cigarette maker has been accused of giving up to $500 000 in bribes and spying on competitors
Advertising

press releases

Loading latest Press Releases…
×