Traditionnal partners of Burundi, USA and EU decided in 2016 economic sanctions over top personnalities, trade advantages and freezed direct financing of gouvernment instutions as a soft policy pressure to bring Burundi governement to engage in human rights protection and inclusive political negotiations with its opposition ,following 2015 elections disputes.
Preferential trade regime under AGOA allowed Burundi to export its coffee on US market and bilateral programs funded by EU and its members (France,Belgium, Nederland, Germany) made the larger part of the 52% incomes outsources by Burundi each year to fund the national budget. The only choice left for Burundi was to mobilize domestic incomes and value few remaining bilateral donnors to fund crisis recovery.
Using domestic incomes to fund governement programs was for Burundi a hard task. Actually, Burundi is avoiding acknolegding that its economy is near collapse, as sanctions have put institutions in limited capacities to achieve tangible results and keep on track the 4% GDP growth registered in 2014.It blames EU for unfair sanctions and speak of normalcy, putting forward regular civil servant payment and good performances of Burundi revenues authority as showcase.
Can we see normalcy? It is clear that many projects and committements made by multilateral partners like World bank, IFAD and AfDB continued despite 2015 political turmoil. Also, Burundi businesses restarted and great efforts are being put in promotionnal and visibility activities(hosting regionnal conferences,beauty pageant, forum and exhibitions) but many gouvernement sectoral structures, which benefitted of instutionnal support from bilateral cooperation are now lacking means to deliver basic services due to budget contraints. At global level,national budget was reduced by 33 billions BIF(20 millions US $) and the part of outsourced incomes shrank from 52% to 29%. Domestic resources allowed Burundi to continue financing prioriy sectors like agriculture, education,health and security but infrastructures invenstment and other key structural transformation sectors like housing, transportation and tourism.
Among challenges that arose from economic recession are scarcicty of foreign currecy (US dollar and euro) which trigerred low importation and scarcity of fuel, sugar, medicines and food commodities. Also, energy crisis brought the public water and energy group(REGIDESO) to rationnalize power and water distribution, measure that plagued small scale businesses which were surviving by welding, hairstyle,carpentry ,diary and other small ventures.
Impact in rural area is less perceivable, especially because of the low monetarization of remoted area where people can survive with their own agricultural production with limited cash spendings. However, a rise in foodstuff prices documented in summer 2016 due saison A and B failure and transborder trade blockades with Rwanda and Tanzania hit rural area and brought some vulnerable households on exile routes heading to refugee camps to seek protection and assistance.
To mitigate the fall of its capacities to bear investement projects, the governement transfered responsabilities to communes with a start up amount allowance and continued population mobilization throught the community works . This strategy resulted in many basic infrastructures constructed all across the country with minimum state participation. Infrastructures include markets, schools, health centers and civil servants housing. Also, Burundi has engaged in its partners diversification, with a special target to new allies represented by Russia, China , Turkey and many latin american countries,providing both political support and opening a possible investment and funding space for Burundi collapsing economy.