2019 Index of Economic Freedom

Burundi

overall score48.9
world rank162
Rule of Law

Property Rights20.6

Government Integrity26.2

Judicial Effectiveness31.0

Government Size

Government Spending83.3

Tax Burden74.0

Fiscal Health23.3

Regulatory Efficiency

Business Freedom50.3

Labor Freedom67.5

Monetary Freedom62.2

Open Markets

Trade Freedom68.2

Investment Freedom50.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 10.9 million
  • GDP (PPP):
    • $8.0 billion
    • 0.0% growth
    • 1.1% 5-year compound annual growth
    • $735 per capita
  • Unemployment:
    • 1.6%
  • Inflation (CPI):
    • 16.6%
  • FDI Inflow:
    • $0.3 million

Burundi’s economic freedom score is 48.9, making its economy the 162nd freest in the 2019 Index. Its overall score has decreased by 2.0 points, with a plunge in fiscal health and lower monetary freedom and investment freedom scores overwhelming higher scores for judicial effectiveness and government spending. Burundi is ranked 39th among 47 countries in the Sub-Saharan Africa region, and its overall score is well below the regional and world averages.

As political repression persists and donors withhold funding, Burundi’s government has no development policy and no resources with which to counter pervasive poverty. Instead, it uses subsidies and higher public-sector salaries to solidify loyalty to the regime. Burundi’s economy, hampered by extensive state controls and structural problems, lags in productivity growth and lacks dynamism. The lack of enforcement of property rights and the weak rule of law have driven many people and enterprises into the informal sector.

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Background

Burundi has had a turbulent history since gaining independence from Belgium in 1962; its first democratically elected president was assassinated in 1993 after only 100 days in office. Sidestepping the two-term constitutional limit, President Pierre Nkurunziza was elected to a third term in 2015, sparking violence that killed hundreds. The government used violence and intimidation to ensure passage of a May 2018 referendum further centralizing presidential power. Western countries have suspended aid because of the government’s abuses of human rights and poor implementation of policy. Fuel shortages in 2017 due to a lack of hard currency brought many businesses to a standstill. Subsistence agriculture dominates the economy, and well over half of the population lives below the poverty line.

Rule of LawView Methodology

Property Rights 20.6 Create a Graph using this measurement

Government Integrity 26.2 Create a Graph using this measurement

Judicial Effectiveness 31.0 Create a Graph using this measurement

Burundi remains one of the world’s poorest nations and one of sub-Saharan Africa’s most corrupt. Private property is vulnerable to government expropriation and armed banditry, and property registration is difficult. The judiciary is nominally independent, but judges are subject to political pressure. 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 12.3 percent of total domestic income. Over the past three years, government spending has amounted to 23.6 percent of the country’s output (GDP), and budget deficits have averaged 6.6 percent of GDP. Public debt is equivalent to 56.7 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. Subsidies and rationing of fuel and electricity persist, and the state influences other prices through state-owned enterprises and agriculture-support programs.

Open MarketsView Methodology

The combined value of exports and imports is equal to 38.2 percent of GDP. The average applied tariff rate is 5.9 percent. As of June 30, 2018, according to the WTO, Burundi had three nontariff measures in force. Openness to foreign investment is below average. The underdeveloped financial sector provides a very limited range of services. About 8 percent of adult Burundians have an account with a formal banking institution.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Mauritius73-2.1
2Rwanda71.12.0
3Botswana69.5-0.4
4Cabo Verde63.13.1
5Côte d'Ivoire 62.40.4
6Seychelles61.4-0.2
7Tanzania60.20.3
8Uganda59.7-2.3
9Burkina Faso59.4-0.6
10Namibia58.70.2
11South Africa58.3-4.7
12Mali58.10.5
13Ghana57.51.5
14Nigeria57.3-1.2
15Madagascar56.6-0.2
16Senegal56.30.6
17Gabon56.3-1.7
18Mauritania55.71.7
19Guinea55.73.5
20Comoros55.4-0.8
21Benin55.3-1.4
22Kenya55.10.4
23Eswatini54.7-1.2
24São Tomé and Príncipe 540.4
25Guinea-Bissau54-2.9
26Ethiopia53.60.8
27Zambia53.6-0.7
28Lesotho53.1-0.8
29Cameroon52.40.5
30The Gambia52.40.1
31Niger51.62.1
32Malawi51.4-0.6
33Angola50.62.0
34Democratic Republic of Congo50.3-1.8
35Togo50.32.5
36Chad49.90.6
37Liberia49.7-1.2
38Central African Republic49.1-0.1
39Burundi48.9-2.0
40Mozambique 48.62.3
41Sudan47.7-1.7
42Sierra Leone47.5-4.3
43Djibouti47.12.0
44Equatorial Guinea41-1.0
45Zimbabwe40.4-3.6
46Republic of Congo 39.70.8
47Eritrea38.9-2.8
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