Last week, the Burundi Investment Promotion Agency (API in the French acronym) presented the achievements of the 1st quarter of fiscal year 2020/2021. The agency announced that among achievements, 15 certificates of eligibility for the benefits of the Investment Code were granted against 10 certificates granted during the last quarter of 2019/2020.
These fifteen certificates correspond to a forecast capital of 710,756,647,229 FBU with a projection of 2,078 jobs. These certificates are granted as part of the monitoring of the destination of exempt goods.
24 temporary certificates of compliance with commitments under the Investment Code were issued in the same period. It was highlighted that 196,506,555,546 BIF has been invested compared to the forecast amount of 153,534,582,436 BIF, or nearly 128%.
During the previous quarter, the API facilitated the registration of 1,296 companies and 500 individuals. Out of 1,459 jobs planned, 1,317 jobs have already been created.
The Burundi Investment Promotion Agency (API) was created in 2008. Among its agenda: to stimulate investment through the Investment Code which grants privileged customs and tax regimes to local or foreign economic actors who want to get into “priority sectors of the country”
Up to 2018, data shows that 375 companies have benefited from the benefits of the Investment Code in exchange for substantial investments (over 1.5 billion BIF) and decent jobs (nearly 20,000).
Impact of COVID-19 on foreign trade in Burundi
A recent report published by Burundi Institute for Statistics and Economic Studies reveal new data on the impact of COVID-19 in Burundi from January to June 2020, among key finding, are:
- The effects of COVID-19 on formal exports and imports were deeply felt in May 2020 with a profound decrease in the entry or exit of goods in the national territory. Exports and imports in value decreased by 51.6% and 22.4% respectively in May 2020 compared to January 2020 (month without COVID-19). However, a resumption in due form of exchanges was recorded in June 2020.
- Gold was not exported in the first half of 2020 while the average monthly exports in the last half of 2019 are around BIF 11.6 billion.
- The COVID-19 pandemic affected the coffee sector in May and June 2020. Indeed, coffee buyers and sellers lacked ways to reach markets. Coffee exports in value in May 2020 are zero and in June 2020 are down 85.0% from the monthly average for the first quarter of 2020.
- Imports of petroleum products reached low levels in April and May 2020 during the first half of 2020. Imports in value terms stood at 19.2 billion and 20.0 billion respectively in April and May 2020 against monthly average imports of 27.7 billion during the first quarter of 2020. A resumption of imports of petroleum products is recorded in June 2020.
- The tax sector has been affected by the COVID-19 pandemic. The month of May was most affected by the COVID-19. Taxes on domestic trade in May 2020 are 26.1 billion and those on foreign trade are 4.2 billion against respective monthly averages of 48.4 billion and 7.8 billion in the first quarter of 2020.
According to the World Bank, in 2018, foreign trade represented 38% of the GDP of Burundi. This share has been diminishing in recent years. For instance, in 2014, foreign trade amounted to 42% of the country’s GDP. Gold and coffee represent the main export products (30% and 24.2%), followed by tea (15.4%), while the key imports are refined petroleum (19.4%), and pharmaceutical products (5.2%).
In 2018, Burundi’s main suppliers were Saudi Arabia (17.2%), China (13%), United Arab Emirates (8.8%), India (7.1%), and Tanzania (6.3%), with exports directed chiefly towards the UAE (29.7%), the Democratic Republic of Congo (11.2%), Pakistan (7.8%), Belgium (7.2%) and Switzerland (5.6%).
Burundi is a member of the following trade organizations: the WTO, COMESA (Eastern and Southern Africa), and ECCAS (Central Africa) and the East African Community (Uganda, Kenya, Rwanda, South Sudan, and Tanzania).
