2017 Index of Economic Freedom

Burundi

overall score53.2
world rank139
Rule of Law

Property Rights25.7

Government Integrity24.6

Judicial Effectiveness19.8

Government Size

Government Spending69.5

Tax Burden73.8

Fiscal Health69.6

Regulatory Efficiency

Business Freedom53.5

Labor Freedom67.4

Monetary Freedom75.2

Open Markets

Trade Freedom74.2

Investment Freedom55.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 9.4 million
  • GDP (PPP):
    • $7.7 billion
    • -4.1% growth
    • 2.7% 5-year compound annual growth
    • $819 per capita
  • Unemployment:
    • 1.5%
  • Inflation (CPI):
    • 5.6%
  • FDI Inflow:
    • $7.4 million
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Burundi’s economy, hampered by extensive state controls and structural problems, lags in productivity growth and lacks dynamism. Despite a significant attempt to improve the regulatory environment for business, the overall absence of economic freedom continues to undermine entrepreneurial activity. Reform is fragile and has progressed unevenly.

Long-standing structural problems include inefficient management of public finance and a poor legal framework that undermines regulatory efficiency. The lack of enforcement of property rights and the weak rule of law have driven many people and enterprises into the informal sector. State interference in the economy and failure to sustain open markets have undercut trade and investment.

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Background

Pierre Nkurunziza was reelected president in July 2015, using a technicality to sidestep a two-term constitutional limit. His presidential run sparked violence that killed more than 450 people in tit-for-tat killings, including assassinations of prominent opposition members and high-ranking regime officials. Several Western countries have imposed sanctions on government officials and leaders of a rebel group formed to fight the regime. The economy is dominated by subsistence agriculture, and well over half of the population lives below the poverty line. As Western countries have grown reluctant to engage, in June 2016, Burundi’s central bank signed an agreement with Russia’s Gazprombank to explore possibilities for Russian investment in Burundi.

Rule of LawView Methodology

Property Rights 25.7 Create a Graph using this measurement

Government Integrity 24.6 Create a Graph using this measurement

Judicial Effectiveness 19.8 Create a Graph using this measurement

Private property is vulnerable to government expropriation and armed banditry. The judiciary is nominally independent, but judges are subject to political pressure. One of the world’s poorest nations, landlocked Burundi remains one of sub-Saharan Africa’s most corrupt countries. Government procurement is conducted nontransparently amid frequent allegations of cronyism. Customs officials reportedly extort bribes.

Government SizeView Methodology

The top individual income and corporate tax rates are 35 percent. A value-added tax recently replaced the general sales tax. The overall tax burden equals 12.9 percent of total domestic income. Government spending has amounted to 31.9 percent of total output (GDP) over the past three years, and budget deficits have averaged 4.1 percent of GDP. Public debt is equivalent to 38.4 percent of GDP.

Regulatory EfficiencyView Methodology

The overall business environment remains severely constrained by burdensome regulations and inefficiency. Continuing instability and bureaucratic corruption impede entrepreneurial activity. In the absence of a modern labor market, the informal sector accounts for most employment. The state subsidizes fuel, rations subsidized electricity, and influences other prices through state-owned enterprises and agriculture-support programs.

Open MarketsView Methodology

Trade is moderately important to Burundi’s economy; the value of exports and imports taken together equals 40 percent of GDP. The average applied tariff rate is 5.4 percent. State-owned enterprises distort the economy. The underdeveloped financial sector provides a very limited range of services. The state dominates commercial banking, and many people still rely on microcredit or informal lending.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius74.70.0
2Botswana70.1-1.0
3Rwanda67.64.5
4Côte d'Ivoire 633.0
5Namibia62.50.6
6South Africa62.30.4
7Seychelles61.8-0.4
8Swaziland61.11.4
9Uganda60.91.6
10Burkina Faso59.60.5
11Benin59.2-0.1
12Mali58.62.1
13Gabon58.6-0.4
14Tanzania58.60.1
15Madagascar57.4-3.7
16Nigeria57.1-0.4
17Cabo Verde56.9-9.6
18Democratic Republic of Congo56.410.0
19Ghana56.2-6.8
20Guinea-Bissau56.14.3
21Senegal55.9-2.2
22Comoros55.83.4
23Zambia55.8-3.0
24São Tomé and Príncipe 55.4-1.3
25Mauritania54.4-0.4
26Lesotho53.93.3
27Kenya53.5-4.0
28The Gambia53.4-3.7
29Togo53.2-0.4
30Burundi53.2-0.7
31Ethiopia52.71.2
32Sierra Leone52.60.3
33Malawi52.20.4
34Cameroon51.8-2.4
35Central African Republic51.86.6
36Niger50.8-3.5
37Mozambique 49.9-3.3
38Liberia49.1-3.1
39Chad492.7
40Sudan48.8N/A
41Angola48.5-0.4
42Guinea47.6-5.7
43Djibouti46.7-9.3
44Equatorial Guinea451.3
45Zimbabwe445.8
46Eritrea42.2-0.5
47Republic of Congo 40-2.8
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