Burundi is a small landlocked country (27,830 km²) and one of the five poorest countries in the world. It is the second most densely populated country in Africa (approximately 11.2 million people and 470 inhabitants/km²). With close to 65% of its population living below the poverty line, Burundi ranks 180th out of 186 countries on the Human Development Index. Poverty overwhelmingly affects small rural farmers. Burundi’s economy is heavily reliant on the agricultural sector, which employs 90% of the population, despite the extreme paucity of arable land.
Most Burundians, especially those living in rural areas, remain afflicted by poverty. Food insecurity is alarming, as Burundi ranks last on the 2013 Global Hunger Index. Almost one in two households (around 4.6 million people) is food insecure, and more than half of the children are stunted (WFP, 2014 and 2016). There is very limited access to water and sanitation and less than 5% of the population has electricity (World Bank, 2016).
Burundi’s poverty reduction efforts are being constrained by myriad challenges such as a weak rural economy, heavy reliance on development aid, an economic policy that does not allow for equitable distribution of resources, vulnerability to adverse environmental events, and strong population growth with a fertility rate of 6.4 children per woman.
The recession continues to afflict Burundi in 2017, owing to the fragile political environment, low private consumption levels caused by declining food production related to climate shocks, forced migration (refugees and internally displaced persons). Inflation remains moderate at 6%, below the 8% convergence level agreed in the regional integration agreements of the East Africa Community (EAC).
Extremely low foreign currency reserves are significantly restricting imports, including fuel and medicines, which are deemed priorities by the Government. The authorities are endeavoring to boost domestic resources to offset the loss of external budget support.
Exchange rate pressures also persist. While Central Bank interventions in the foreign exchange market, including liquidity injections and restrictions on foreign exchange transactions, curtailed the depreciation of the official exchange rate to 5% in 2016, the parallel market premium soared from 25% in 2015 to 60% in 2016.