2014 Index of Economic Freedom

Burundi

overall score51.4
world rank141
Rule of Law

Property Rights20.0

Freedom From Corruption15.9

Limited Government

Government Spending51.9

Fiscal Freedom73.5

Regulatory Efficiency

Business Freedom59.8

Labor Freedom63.1

Monetary Freedom68.2

Open Markets

Trade Freedom71.8

Investment Freedom60.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 8.8 million
  • GDP (PPP):
    • $5.5 billion
    • 4.0% growth
    • 4.1% 5-year compound annual growth
    • $625 per capita
  • Unemployment:
  • Inflation (CPI):
    • 11.8%
  • FDI Inflow:
    • $0.6 million
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Burundi’s economic freedom score is 51.4, making its economy the 141st freest in the 2014 Index. Its overall score is 2.4 points better than last year, mainly because of notable improvements in investment freedom and government spending that offset declines in trade freedom, labor freedom, and freedom from corruption. Burundi is ranked 31st out of 46 countries in the Sub-Saharan Africa region, and its score is lower than the world average.

Over the 20-year history of the Index, Burundi’s economic freedom score has improved by 6 points. Seven of the 10 economic freedoms, notably investment freedom and fiscal freedom, have advanced. However, the scores for property rights and government spending have declined significantly by 10 points and about 30 points, respectively.

Burundi has achieved its highest economic freedom score ever in the 2014 Index. Nonetheless, as a “mostly unfree” economy whose foundations of economic freedom remain fragile and uneven across the country, it continues to lack the broad-based economic dynamism that is necessary to ensure long-term economic development. Further reforms in rule of law and financial freedom are urgently needed to improve productivity and raise incomes.

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Background

The 1993 assassination of Burundi’s first Hutu president, Melchior Ndadaye, sparked a civil war between Hutus and Tutsis. The violence following the death of his successor, Cyprien Ntayamira (also a Hutu), and Rwandan President Juvenal Habyarimana in a 1994 plane crash led to the Rwandan genocide carried out by Hutus. Negotiations mediated by South Africa resulted in a power-sharing government in 2001. A new constitution was adopted in 2005, and the National Assembly elected Pierre Nkurunziza president. Together with Uganda, Burundi is active in the African Union’s AMISOM peacekeeping mission in Somalia. Agriculture accounts for over 30 percent of GDP and about 90 percent of employment. Political stability and participation in the East African Community have improved aid flows and economic activity, but a lack of political will to build independent institutions is holding back development.

Rule of LawView Methodology

Property Rights 20.0 Create a Graph using this measurement

Freedom From Corruption 15.9 Create a Graph using this measurement

One of the world’s poorest nations, Burundi remains the most corrupt country in sub-Saharan Africa. Government procurement is conducted non-transparently amid frequent allegations of cronyism. Customs officials are reportedly very corrupt, extorting bribes from exporters and importers. The judiciary is nominally independent, but judges are vulnerable to political pressure. Private property is subject to government expropriation and armed banditry.

Limited GovernmentView Methodology

The top individual income and corporate tax rates are 35 percent. Other taxes include a value-added tax (VAT). The overall tax burden is 14.3 percent of GDP. State spending has been falling and is now 40 percent of GDP. Public debt is equivalent to about 30 percent of the domestic economy. The government is still heavily reliant on foreign assistance for about half of its expenditures.

Regulatory EfficiencyView Methodology

Establishing a business has become less time-consuming and requires fewer than five procedures, but completing licensing requirements continues to be costly, taking more than 10 times the level of average annual income. A large informal economy remains the main source of employment. The state subsidizes fuel, rations subsidized electricity, and influences other prices through state-owned enterprises and agriculture-support programs.

Open MarketsView Methodology

Burundi’s average tariff rate is 6.6 percent. Importing is costly and time-consuming. Coffee is the country’s leading export, and Burundi has privatized the coffee industry. The financial sector remains dominated by banks, with high levels of non-performing loans and insufficient capitalization. With less than 1 percent of the population having access to bank loans, many rely on microfinancing.

Country's Score Over Time

Bar Graph of Burundi Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Burundi to other economic country groups

Regional Ranking

rank country overall change
1Mauritius76.5-0.4
2Botswana721.4
3Cape Verde66.12.4
4Rwanda64.70.6
5Ghana64.22.9
6South Africa62.50.7
7Madagascar61.7-0.3
8Swaziland61.24.0
9Zambia60.41.7
10Uganda59.9-1.2
11The Gambia59.50.7
12Namibia59.4-0.9
13Burkina Faso58.9-1.0
14Gabon57.80.0
15Tanzania57.8-0.1
16Côte d'Ivoire 57.73.6
17Kenya57.11.2
18Benin57.1-0.5
19Seychelles56.21.3
20Djibouti55.92.0
21Mali55.5-0.9
22Malawi55.40.1
23Senegal55.4-0.1
24Niger55.11.2
25Mozambique 550.0
26Nigeria54.3-0.8
27Guinea53.52.3
28Mauritania53.20.9
29Cameroon52.60.3
30Liberia52.43.1
31Burundi51.42.4
32Comoros51.43.9
33Guinea-Bissau51.30.2
34Sierra Leone50.52.2
35Ethiopia500.6
36Togo49.91.1
37Lesotho49.51.6
38São Tomé and Príncipe 48.80.8
39Angola47.70.4
40Central African Republic46.7-3.7
41Chad44.5-0.7
42Equatorial Guinea44.42.1
43Republic of Congo 43.70.2
44Democratic Republic of Congo40.61.0
45Eritrea38.52.2
46Zimbabwe35.56.9
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