According to Trading Economics global macro models and analysts, Burundi’s GDP is anticipated to reach $3.10 billion by the end of 2021. According to our econometric models, Burundi’s GDP will trend around 3.00 USD billion in 2022.
What accounts for Burundi’s low GDP?
Burundi entered a recession in 2020, owing partly to the COVID19 pandemic’s consequences. After expanding at a rate of 4.1 percent in 2019, real GDP shrank by 3.3 percent. The pandemic had the greatest impact on industry, which witnessed a 4.5 percent drop in output, and services, which saw a 1.8 percent drop in output compared to 2019. Investment declined by around 3% on the demand side. A drop in agricultural production combined with rising import prices resulted in a significant price increase. Inflation increased by 8.5 percentage points to 7.6% in 2020, up from 0.7% in 2019. As current expenditures increased by around 4%, the budget deficit quadrupled to 8.7% of GDP in 2020, up from 4.2 percent in 2019. Trade and current account deficits worsened as a result of sluggish global demand, which resulted in a 4.4 percent drop in coffee export prices and a 10.4 percent drop in tea export prices. In 2019, the current account deficit was 19.1 percent of GDP, up from 17.8 percent in 2019. As a result, foreign exchange reserves have shrunk to the point where they may only cover 30 days of imports by the end of 2020. Between May 2019 and May 2020, the exchange rate between the Burundian Franc and the US dollar declined by 3.8 percent.
If the pandemic is contained by the second half of 2021, the economy is expected to rebound, with growth rates of 3.5 percent in 2021 and 2.1 percent in 2022. Inflation would drop from 7.6% in 2020 to 5.4 percent in 2021 and 3.2 percent in 2022. The overall budget deficit is predicted to shrink to 7.9% of GDP in 2021 from 8.7% in 2020, thanks to provisions in the 202021 Finance Law to enhance tax income and the potential of a reduction in current spending. However, due to the pressure on agricultural raw material prices and the resumption of imports connected to the economic recovery, the current account will continue to run a substantial deficit. A projected drop in worldwide demand, which would impact coffee and tea exports, as well as a reduction in international aid contributions from donors, are risk factors that could derail this scenario. Furthermore, due to the formal sector’s small size, there are dangers associated with increasing tax income.
Burundi’s state debt is 70% domestic and has risen dramatically since 2015, when civil instability cut off outside funding. The national debt is expected to be around 63.7 percent of GDP in 2020. Burundi’s external debt is 18.4% of GDP in 2020, down from 36% in 2012, when it met the criteria for receiving the full amount of debt relief possible under the Heavily Indebted Poor Countries initiative (HIPC). Burundi’s risk of debt distress is high due to the structural trade deficit and the continuous increase in domestic debt connected to persistent budget deficits. A significant objective for public debt sustainability is the adoption of a comprehensive public finance reform aiming at attaining a balanced budget over time.
Is Burundi wealthy?
Burundi is a small East African country in close proximity to Rwanda. Unfortunately, chronic malnutrition affects 58 percent of the population. Only 28% of the population is food secure. It is the world’s third poorest country, with a GDP per capita of $818. Why is Burundi impoverished, and why is this country one of the world’s poorest? Burundi is poor and hungry for a variety of reasons. Here are four of them.
1. Dissension
Since gaining independence from Belgium in 1962, Burundi has been engulfed in a series of civil wars. Five civil wars have erupted in the country, resulting in the deaths of over 500,000 people and the displacement of over a million people. As a result, the political situation has become exceedingly unstable as a result of this cycle of war. Furthermore, Burundi’s economy was severely harmed by the country’s most recent two civil conflicts, one from 1993 to 2005 and the other in 2015, following President Pierre Nkurunziza’s questionable reelection for a third term on a technicality.
Agriculture, which is the backbone of Burundi’s economy, is hampered by conflict. In fact, agriculture is the primary source of income for 90% of the people. Between 1994 and 2006, poverty in Burundi climbed from 48 to 67 percent of the population due to the country’s civil war. Food prices are rising, with a 28 percent increase in 2007-08, affecting families’ incomes and making them more vulnerable to natural disasters. Flooding, droughts, landslides, and the effects of climate change are among the threats.
Manufacturing has also been hampered by the war. For example, between 1993 and 1997, manufacturing production fell by an average of 13% per year due to the civil war, which lasted from 1993 to 2005.
Finally, conflict economies are focused on the short term. Even when a war is finished, post-war economies must contend with a ruined infrastructure, a decimated productive sector, a lack of cash, and a lack of moral standards as a result of devoting resources to fund the conflict. These reasons help explain why the rate of investment in the Burundian economy fell during the civil war years of 1993 to 2005. From 17.5 percent in 1990 to 5.6 percent in 1998, total investment fell dramatically.
Why is Burundi so impoverished? Burundi’s economy has suffered greatly as a result of the country’s constant cycle of violence and war, which has increased the number of people living in poverty.
2. The government’s inefficient management of public finances and resources
Burundi’s government interferes in the economy on a frequent basis. Fuel is subsidized, while subsidized electricity is rationed. Other prices are influenced by the government through state-owned corporations and agriculture-aid programs. Entrepreneurial activity suffers as a result of the lack of economic freedom. Citizens’ private property is also taken away by the state.
Why is Burundi so impoverished? Economic progress is hampered by the government’s poor economic planning and administration.
3. There is insufficient land to support the growing population.
Burundi is a landlocked country with a rapidly growing population. Burundi’s biggest source of strife is land. Land is valued because it provides a source of agriculture in an overpopulated and rural area. Land is both a source of life and a cause of death. Indeed, 89 percent of the population is a subsistence farmer, relying on the land to feed their families.
“Why Has Burundi Grown So Slowly?” he asks in his study. According to Janvier D. Nkurunziza, a 1998 research by the Entequete Prioritaire (EP 1998) found that the average farmer in rural Burundi walked one hour to reach the nearest marketplace and 30 minutes to reach the nearest store. Furthermore, many rural regions only have one market day each week, and there are no storage facilities for perishable food. Farmers have little motivation to produce surplus as a result of this. Burundian producers consume 64 percent of their own food supply, according to EP1998 data. Farmers farm to make a living, not to amass fortune.
Why is Burundi so impoverished? With a rapidly rising population and insufficient territory to accommodate everyone, resources and livelihoods are becoming more difficult to obtain and enhance.
Droughts and other natural disasters are number four.
Burundi has had a disproportionately high number of natural catastrophes. In recent years, droughts, severe rain, floods, and hailstorms have been extremely damaging. Communities have been displaced, homes have been destroyed, livelihoods have been disrupted, and food and nutrition security has deteriorated further as a result of disasters.
Reduced land productivity and an increase in crop pests are two further repercussions of the disasters. Recent natural catastrophes have put regions at danger of long-term food instability and nutritional deficiency. Overcrowding (about 270 inhabitants per km2 in the most densely inhabited areas, and up to 400 inhabitants per km2 in the most densely populated areas) has also contributed to increased food and resource scarcity in the afflicted areas.
Why is Burundi so impoverished? Natural calamities plunge an already destitute country into chaos, resulting in food shortages and displaced people.
Burundi’s history of violence and leadership has had long-term effects for the country’s current level of poverty. Several western countries’ recent decision to cut off funding to Burundi in order to force the country’s government to address fundamental issues that contribute to war isn’t improving poverty in the meantime. Humanitarian aid organizations such as the World Food Programme (WFP) and UNICEF, on the other hand, offer hope that the Burundian people may one day be able to break free from the cycle of poverty through compassion and assistance from their fellow man. Burundi still has a long way to go on the road to reform. Understanding Burundi’s history can assist address the question of why the country is so poor.
What causes Burundi’s poverty?
Burundi’s economy is primarily reliant on agriculture, which contributed 32.9 percent of GDP in 2008. Burundi is a landlocked country with limited resources and an underdeveloped manufacturing sector. Agriculture employs more than 70% of the workforce, with the bulk comprising subsistence farmers.
Despite the fact that Burundi has the ability to be self-sufficient in food production, persistent civil strife, overpopulation, and soil erosion have all led to the subsistence economy contracting by 25% in recent years. Large numbers of internally displaced people are unable to generate their own food and rely heavily on foreign humanitarian aid. In 1997, food accounted for 17 percent of Burundi’s imports, making it a net food importer.
Burundi is classified as a low-income country.
Burundi is a landlocked country in East Africa with a low-income economy where agriculture employs 80 percent of the people. It is bordered on the north by Rwanda, Tanzania on the east by the Democratic Republic of the Congo, and on the west by Lake Tanganyika. It is one of the most densely inhabited countries in the Great Lakes region, with a population of 11.8 million people, 50.4 percent of which are women (2019).
Burundi has achieved great improvements in terms of educational quality and access. Since 2005, when free primary education was introduced, the Gross Enrollment Rate (GER) in primary education has increased to 112.7 percent in the 2019/2020 school year, with no notable differences between provinces, gender, or wealth levels. For 6-year-olds, the net intake rate climbed from 36.4 percent in 2018/2019 to 37.4 percent in 2019/2020.
Burundi is a constitutional republic with Gitega, the country’s second largest city, as its political capital in 2019. The Presidency of the Republic and the Senate are based in Gitega, although the primary official institutions remain in Bujumbura, the economic hub.
The new Burundi constitution establishes the offices of Vice-President and Prime Minister, as well as a renewable term of seven years for the President of the Republic. These three bodies are the highest authority in the country.
President Evariste Ndayishimiye, who was elected in May 2020, stated the following priorities for his administration: combating the coronavirus (COVID-19); strengthening health services; combating corruption; revitalizing the agricultural sector; youth employability; and support for state pensioners.
Burundi has been in a severe economic situation for the past six years, causing both fiscal and balance-of-payments problems. The government has mobilized internal resources to compensate for the loss of foreign resources, but this has not been enough to meet an ever-increasing social demand fueled by continued population increase.
The shock from the COVID-19 outbreak halted an already shaky economic recovery and exacerbated macroeconomic imbalances.
Economic growth is expected to reach 2% in 2021, up from 0.3 percent in 2020, thanks to a relaxation of COVID-19-related constraints, such as the removal of quarantine procedures and the reopening of portions of the borders. Inflation is expected to continue high in 2021, at roughly 7%, compared to 7.5 percent in 2020, due to growing food prices and the monetization of the budget deficit.
The persistent rise in the poverty rate, which is anticipated to reach 87.1 percent in 2021 (measured at the US$1.90 per day threshold), is due to weak economic development in relation to population growth.
In March 2020, Burundi confirmed its first COVID-19 positive patients. To combat the pandemic, the government has implemented a number of steps, including: I the closure of some land borders; (ii) the organization of mass COVID-19 screening campaigns; and (iii) the implementation of COVID-19 barrier measures.
A national COVID-19 response plan has been produced, and a national multi-sectoral COVID-19 steering committee led by the Minister of the Interior has been established to oversee the national response’s overall coordination and implementation. Every six months, this response strategy is revised.
What is Mohammed Dewji’s net worth?
Tanzanian millionaire and former Member of Parliament Mohammed Dewji, also known as Mo Dewji, is still the country’s richest man and ranks among Africa’s wealthiest people.
Dewji, the CEO of MeTL Group, is rated 15th on Forbes’ list of Africa’s dollar billionaires in 2022, with a net worth of $1.5 billion.
The list includes 18 billionaires with a collective net worth of $84.9 billion, up 15% from a year ago and the most since 2014, when there were 28 African billionaires; the average net worth is higher this year due to the lesser number of list members, according to Forbes.
Nigerian business magnate Aliko Dangote leads the list of African billionaires with a net worth of $13.9 billion, followed by South Africa’s Johann Rupert and Family with a net worth of $11 billion and Nicky Oppenheimer & Family in third place with a $8.7 billion net worth, Egypt’s Nassef Sawiris in fourth place with a $8.6 billion net worth, and Abdulsalmad Rabiu rounding out the top five with $7 billion.
The net worths were calculated using stock prices and currency exchange rates as of January 19, 2022.
The list included billionaires from seven African countries. With five billionaires each, South Africa and Egypt are the most numerous, followed by Nigeria with three billionaires.
Who in Tanzania is the wealthiest?
Tanzania’s Wealthiest Person Forbes Africa’s Man Of The Year Is Mohammed Dewji – Forbes Mohammed Dewji, who is ranked second in the Choiseul 100 Africa, has been voted ‘Person Of The Year’ by Forbes Africa.
Is Rwanda the same size as Burundi?
Burundi is almost the same size as Rwanda. Burundi is 27,830 square kilometers, while Rwanda is 26,338 square kilometers, making Rwanda 94.64 percent the size of Burundi. Burundi’s population is currently 11.9% of the country’s total (846,610 more people live in Rwanda).
What is the poverty rate in Burundi?
Burundi, a landlocked and densely populated country in East Africa, is one of the world’s poorest countries, with over 70% of the population living in poverty. Food insecurity is alarmingly high, with 52 percent of children under the age of five stunted and considerably greater levels of malnutrition in rural areas.
Poverty, rapid population increase, sensitivity to climate-related shocks, low access to clean water, and worsening access to essential services such as health and education are all factors that contribute to food insecurity in Burundi. The issue is made worse by a high prevalence of infectious diseases, a lack of variety in foods, and inadequate hygiene.