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- GDP (PPP):
- $8.4 billion
- 4.7% growth
- 4.5% 5-year compound annual growth
- $911 per capita
- Inflation (CPI):
- FDI Inflow:
Burundi remains excessively dependent on its widely fluctuating agricultural sector, the principal source of jobs for over 80 percent of the population. The policy environment makes it difficult for the private sector to generate employment opportunities and lasting economic growth.
Economic Freedom Snapshot
- 2016 Economic Freedom Score: 53.9 (up 0.2 point)
- Economic Freedom Status: Mostly Unfree
- Global Ranking: 133rd
- Regional Ranking: 28th in Sub-Saharan Africa
- Notable Successes: Trade Freedom
- Concerns: Property Rights, Corruption, Regulatory Efficiency, and Financial Freedom
- Overall Score Change Since 2012: +5.8
Pierre Nkurunziza was elected president by the National Assembly in 2005 and reelected in 2010 in a disputed vote. In June 2015, his party won a majority in tainted parliamentary elections, and he was reelected in July 2015 by relying on a technicality to sidestep a two-term constitutional limit. The opposition boycotted both elections, and several countries and Burundi’s influential Catholic Church withdrew their support. Nkurunziza’s decision to run and subsequent election sparked months of unrest that as of September 2015 had resulted in approximately 100 deaths, including assassinations of prominent opposition members and high-ranking regime officials. The economy is dominated by subsistence agriculture, and well over half of the population lives below the poverty line.
One of the world’s poorest nations, land-locked Burundi remains one of Sub-Saharan Africa’s most corrupt countries. Government procurement is conducted non-transparently amid frequent allegations of cronyism. Customs officials reportedly extort bribes. The judiciary is nominally independent but subject to political pressure. Private property is vulnerable to government expropriation and armed banditry.
The top individual income and corporate tax rates are 35 percent. Other taxes include a value-added tax that recently replaced the general sales tax. The overall tax burden equals 13.1 percent of total domestic income. Government spending amounts to 31.4 percent of total domestic output. Foreign aid makes up about 50 percent of the government budget, and public debt equals 30 percent of GDP.
Burdensome regulations continue to constrain the business environment. Rigid employment regulations and an underdeveloped labor market hinder productivity and job creation. The non-salary cost of employing a worker is low, but enforcement of labor regulations is ineffective. The state subsidizes fuel, rations subsidized electricity, and influences other prices through state-owned enterprises and agriculture-support programs.
Burundi’s average tariff rate is 5.4 percent. Importation of goods is costly and time-consuming. State-owned enterprises in industries like telecommunications, sugar production, and real estate distort the economy. The small financial sector is dominated by banks, two of which are majority-owned by the state. With about 2 percent of the population holding bank accounts, many rely on informal lending.