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Economic Overview of Burundi: Agricultural productivity, key to greater growth

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Bujumbura: Despite the challenges that has affected Burundi, its economy has been relatively resilient for the last past two years, after the recession of 2015. Nevertheless, the country’s growth is still weak, due to the low productivity of the agriculture, the mainstay of most the population.

This analysis was presented in Bujumbura, at the launch and discussions of Burundi the country profile produced by the UN Economic Commission for Africa (ECA), which analysed the country’s economic and social performance, with emphasis on recent developments following the socio-political crisis of 2015.

Speaking at the event, Ms Giovanie Biha, ECA Deputy Executive Secretary, stressed that the ECA country profiles provide periodic economic and social assessments with a view to making recommendations to governments and regional organizations and achieve structural transformation.

According to the estimates made by the national authorities, Burundi's growth rate was -3.9 percent in 2015 but is expected to rise to 2% by 2017, confirming a timid recovery. This relative resilience of the Burundian economy is due to fact that the economy relies mainly on subsistence agriculture, which is less vulnerable to external shocks. The sectors such as construction, trade and tourism were the most affected by the crisis.

The Under-performance of the agricultural sector, on the other hand, is a long-term phenomenon, linked to low agricultural productivity and the impact of climate change.

More than 50,000 people have been displaced in the country due to the 2016 flooding. The events of 2015 also affected international aid, which contracted sharply as a result the withdrawal of donor support. This decision impacted the stock of international reserves, which reached its lowest level at the end of 2016 (1.4 months of imports) and forced Burundi to significantly increase its level of indebtedness.

Mr. Andrew Mold, the acting Director of the ECA Sub-Regional Office for Eastern Africa, said that Burundi's major challenge is the lack of structural transformation. The agricultural sector still accounts for nearly 40% of GDP and the rate of urbanization is the lowest in Africa (12 percent). At the same time, investment levels and inflows of foreign direct investment (less than 2 percent of GDP) are much lower than those in neighbouring countries.

On the social front, the consequences of the of 2015 crisis are likely to be felt in the longer term, like it was the case for Madagascar crisis. The achievements of the previous decade marked by moderate but stable growth (4.5% on average), where poverty began to decline could be reversed.

The analysis of Demographic and Health Survey shows an improvement in terms of infant mortality and contraceptive prevalence between 2010 and 2016. nonetheless, the nutritional situation seems to be deteriorating. For example, the share of the population with poor nutrition has increased from 5 percent in April 2013 to 13 percent in March 2017. Burundi is also facing a severe malaria epidemic, with 3 million cases since the beginning of 2017.

Burundi’s country profile focuses on analysing the causes of low agricultural productivity. Agricultural production per capita has decreased by 28% since 1982 while the population increased. Yields are 20 to 40% lower than in neighbouring countries. Erosion, heavy land pressure, the impact of climate change, land conflicts and the lack of access to modern farming inputs are the main obstacles to agricultural modernization. According to ECA, this modernization is necessary to reduce poverty and accelerate structural transformation. (End)

 

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