Burundi Investment Guide 2017 by Safari Communications Ltd.

BURUNDI INVESTMENT GUIDEBOOK 2017

Ikaze Burundi! - Welcome to Burundi! My government and the hospitable people of the Republic of Burundi welcome you to Burundi â&#x20AC;&#x201C; the Beating Heart of Africa. Our country has faced numerous challenges in the recent past, however, that is now behind us as we embark on nation-building. We have a vision of transforming our economy as captured in the comprehensive Vision 2025 socio-economic blueprint. Under this vision, my government is committed to advancing and expanding our economy through both local and foreign direct investments. As a government, we see numerous opportunities to expand our economy and make it competitive. This investment guide gives an overview of what my administration has done to create a conducive environment for investments in Burundi and further shows the investment opportunities we have in different sectors across our growing economy. I pledge the full support of my administration to local and foreign investors coming to invest in Burundi. Burundi is open for Business; once again, welcome to Burundi.

Pierre NKURUNZIZA, President of the Republic of Burundi

A young boy walks on the shores of the Lake Tanganyika at sunrise Bujumbura, Burundi

TABLE OF CONTENTS

BURUNDI INVESTMENT GUIDE 2017 Published by: SAFARI COMMUNICATIONS LTD. P.O. BOX 13510, WESTLANDS 00800, NAIROBI, KENYA media@safari-communications.com www.safari-communications.com On behalf of: BURUNDI INVESTMENTS PROMOTION AUTHORITY (API) Mutanga North, 28 November Boulevard, Asharif Building, near the Military Hospital P.O. BOX: 7057, Bujumbura, Burundi Tel: +257 22 27 59 96/97 contact@investburundi.bi www.investburundi.bi

Presidential Foreword 3 Finance Minister on investing in Burundi 7 API CEO Foreword 9 Burundi Location Map 10 Overview of investment opportunities in Burundi 11 Burundi Facts & Figures 12 Executive Word: Head of Investmnets at API 16 Business registration process in Burundi 17 Interview with the President of the Burundi Federal Chamber of Commerce and Industry 19 Agriculture Development of Agri-business 24 The Coffee sector in Burundi 25 The tea sector in Burundi 26 Transport & Infrastructure Transport links in Burundi 34 Bujumbura International Airport statistics 35 Power for a growing economy 36 Wind power 37 Solar power 37 Hydropower 37 Potential in the mining industry 38 Banking & Financial Services Development of the banking & financial services sector 30 Adoption of mobile banking 31 Tourism & Hospitality Tourism development in Burundi Development of a Golf Resort Development of the Bujumbura Marina Development of a convention center

40 41 41 41

Pictorial 42 Healthcare & Education 43 Opportunities in the health sector 44 Private schools in Burundi 45

Photography: National Tourism Office of Burundi, Safari Communications Library, Shutterstock, Agencies, Burundi Investment Promotion Authority, Denis Gathanju and Stephan Doukhopelnikoff

Directory Government of Burundi 48 Burundi Embassies & Missions abroad 49 Sectoral Chambers 50

HON. DOMITIEN NDIHOKUBWAYO, MINISTER OF FINANCE, BUDGET AND PRIVATIZATION, REPUBLIC OF BURUNDI

Investors are welcome Would you please give us an overview of the economic condition of Burundi at the moment. We have known an up & down curve of trajectory over the past recent years. The economy continues to face a number of challenges, but it is such challenges that present opportunities for investors to take advantage of. Agriculture remains our biggest driver of economic activity with tea and coffee being our major exports. We see improvement of other sectors of the economy that are contributing to not only economic growth of our country, but also generating employment for our people. As a government, we have set up measures that encourage economic participation of our people and investors from outside. Give us the numbers, what are the current foreign direct investments (FDIâ&#x20AC;&#x2122;s) in Burundi at the moment and from where are some of these FDIâ&#x20AC;&#x2122;s coming from? FDIs inflows into Burundi are coming from the following top ten countries: Mauritius, Kenya, France, Italia, Belgium, Nigeria, Uganda, Tanzania, UK, Oman. Countries like India and Vietnam have lately shown substantial of FDI inflows. The overall amount of FDIs inflows amounted 177.6 billion BIF (Source: National Bureau of Statistics Institute, FDIs Report, 2013) Why is this the right moment to invest in Burundi? It is best to invest now in Burundi because we are still a

BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

developing economy that offers so much promise into the future. We have a young population, one of the youngest in the region and in addition to this, we have access to a wider regional market, again, with a huge young population in eastern Democratic Republic of the Congo and western Tanzania. From Burundi, investors have a market of more than 11 million people and a regional market of more than 20 million people. This also means that we have a large pool of affordable labour in Burundi. Aside from the local and regional markets, Burundi offers greater access to the markets of the entire East African Community and the wider common market for East and Southern Africa (COMESA), which combined give further access to a population block of more than 400 million people. Of importance, we have enacted laws and established regulatory institutions in various sectors of the economy to help investors coming into Burundi. This is a critical aspect that makes Burundi an attractive investment destination as investors need institutional and legal frameworks that secure their investments. We have also set-up a one-stop shop for business registrations in Burundi. This takes away the hustle of registering a business in Burundi and we offer investors all the necessary support that they need to start operations in Burundi. In addition to this, we have a number of incentives and concessions that we give investors coming into Burundi. Investors are free to live and invest anywhere in the country.

In addition to this we have favourable all-year weather, a breathtaking landscape; our people are known for their hospitality and we have a thriving cultural heritage. Burundi is a member of the EAC, what kind of advantages does this bring for the country and the investors? As a member of the East African Community, Burundi gives investors direct access to a population of more than 150 million consumers. As a member, goods and services from Burundi enjoy duty-free movement across the region. Investors are keen on investing in a country that is politically and economically stable. The political situation in Burundi has been a challenge over the last few years. What is the official position at the moment. Is it safe to invest in Burundi? Yes, I am adamant that it is safe to invest in Burundi. After the 2015 elections marked by political turmoil, Burundi is back to political and economic stability. Burundi has organized free and fair general elections and all institutions including the Government, Judiciary and the Lower and Upper houses of the Parliament are up and running in a very satisfactorily manner. Today, the whole of Burundi is peaceful. Corruption is cited as one of the biggest turn offs for investors in Burundi. What measures has the Government of Burundi put in place to address these?

These are in the energy, roads and railways transport sectors. Under the energy sector, we are developing, as part of the East Africa Power Pool a solar power farm. We are also investing in hydropower since Burundi receives a considerable amount of rainfall. We are developing an 80MW hydro power station at Rusumo Falls, a 147 MW Ruzizi III and 285 MW Ruzizi IV hydro power stations. The development of such infrastructure will ensure that Burundi has a sufficient and efficient power generation backbone. Under the roads infrastructure, we are developing the RuhwaNyamitanga-Bujumbura-Rumonge-Mabanda-Kigoma central transport corridor that links to western Tanzania and we are also doing the extension of the Kanyaru Haut-KayanzaBugarama-Bujumbura for the northern transport corridor that links to Rwanda.

Of importance, we have enacted laws and established regulatory institutions in various sectors of the economy to help investors coming into Burundi. This is a critical aspect that makes Burundi an attractive investment destination as investors need institutional and legal frameworks that secure their investments

As everyone may know, corruption practices are a nightmare to any country but we have to take on the challenge. While it is tough to eliminate corruption in any society, the Government of Burundi adopts a zero-tolerance policy to corruption and corrupt practices.

Further to this, the GoB has within the office of the General Prosecutor established an anti-corruption court. This is further enhanced by the establishment of a special anti-corruption police force that is mandated to investigate and bring to justice perpetrators of corruption incidents in Burundi. Infrastructure is a key element when it comes to making investment decisions. Burundi still lags behind its peers in the EAC, what kind of infrastructural investment programmes do we expect to see in Burundi? Yes, indeed, infrastructure development is a key component of growing an economy. We, as a nation and a government

realize this. We therefore have a number of investment programmes that are in the pipeline for development.

Currently, we do not have a rail infrastructure in Burundi. However, we are working with our regional partners in the East African Community to link Bujumbura to the existing and new rail infrastructure that is currently under development. In that respect, we are looking at linking Bujumbura to the central line corridor from Dar es Salaam through Keza-GitegaMusongati.

We are also looking at linking Bujumbura through the northern corridor transport infrastructure that runs from the port city of Mombasa in Kenya through Nairobi, Kampala, Uganda and Kigali, Rwanda. Such infrastructure will mean that imports and exports to and from Burundi will offer an easy connectivity and this will further extend into the eastern Democratic Republic of the Congo. As a government, what kind of concessions are you willing to give medium and large-scale investors coming into Burundi? We are in process of preparing a special economic zones policy in Burundi that is meant to attract medium and largescale investors. Under this programme, we give investors tax holidays under the corporation tax regime as well as income tax waivers. We are giving special emphasis on establishment of an agri-processing industry in Burundi. Other sectors that we are keen on attracting and are liable to such concessions are in energy production, mining and export-oriented manufacturing.

BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi

Burundi: Open for Business Welcome to this second edition of the Burundi Investment Guide. At the Burundi Investment Promotion Authority, we remain committed to enhancing investment options and opportunities for local, regional and international businesses and organizations keen on investing in one of the regionâ&#x20AC;&#x2122;s final investment frontiers. Burundi offers investors a number of investment opportunities that cut across the entire economy of Burundi. We are still a largely agricultural-based economy, but are keen on enhancing other sectors of the economy mainly the mining and services sectors. Burundi Investment Promotion Authority plays more of an interface role. We are here to take off the hustle of registering and opening a new business in Burundi. We facilitate new businesses by offering them a one-stop business registration process under one roof. This has greatly improved the ease of doing business in Burundi. Since Burundi joined the East African Community in 2007, we had to play a catch and have undertaken broad reforms to become an attractive destination for investments. With the 2017-2022 Strategic Plan that our Agency has set up last year, we hope to bridge the gap and be able to attract and bring in more FDIs.

Didace NGENDAKUMANA

Chief Executive Officer, Burundi Investment Promotion Authority

Burundi Investment Promotion Authority is an interface between the public and private sectors thus we are closely working together with the Burundi Federal Chamber of Commerce and Industry. We continue to see numerous investment opportunities in Burundi that local, regional and foreign investors can take advantage of. This Guide will give you an overall understanding of sectors looking for investment including the food processing; fisheries and aquaculture, energy and mines; road, maritime and air transport; microfinance and banking; tourism; ITCs; pharmaceuticals; etc. Burundi is a growing economy and is seeking to be an active player in the regional economic development. Burundi is open for business.

BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

Kibungo

Kabare

MAP OF BURUNDI

Lac Rweru

Lac Cohoha Sud

2°30'

Gahombo

3°00'

DE MOCRAT IC RE P UB L IC BUBANZA OF T HE Gihanga

Buhiga

Magara

yir

wit

Gisuru

Ruyigi

GITEGA

Nyabiraba

Lug

3°30'

Kibondo

Makebuko

Rump

Kayokwe

BUJUMBURA- Mwaro RURAL

onz

MWARO

CANKUZO

Cankuzo

RUYIGI

Gitega

Bujumbura

3°00'

Nyabikere

Bugendana

Isale

BUJUMBURAMAIRIE

Kigamba

KARUZI

MURAMVYA

Uvira

Bukeye

and

nga

TANZ ANIA

Muyinga

Karuzi

KAYANZA

Muramvya M u b a r a z i

Ru s i z i

ara

Muhanga

Bubanza

CO NG O

a mus w a g

Nya

Ngozi

Kayanza

Gasorwe

NGOZI

UNITED RE P UBLIC O F

MUYINGA

Nyamurenza

ung

Cibitoke w a t lan

Butihinda

Busiga

CIBITOKE

Rugombo

3°30'

KIRUNDO

Ruvu

Mabayi

RWANDA

Kanazi

Kirundo

Butare ya

Ruh

2°30'

Minago

RUMONGE e bw

BURURI

Rutana

Bururi

Rumonge

4°00'

Kifura

RUTANA yo

Mu l

Kitenge

BURUNDI

Gatete

4°00'

Makamba Biera

MAKAMBA

Mabanda

zir

National capital Province capital City, town Major airport International boundary Province boundary National road Major road

Nyanza-Lac

Lake Tanganyik

4°30'

Kasulu Buyonga

4°30'

30 km

BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi 0 10 20 mi

EASE OF DOING BUSINESS It is now easy to register a new business in Burundi. The Government of Burundi has setup a one-stop shop where businesses can be registered in under 2 hours

TRANSPORT & INFRASTRUCTURE

EDUCATION Burundi is thirsty for skills to help spur its economy forward. With a huge population of young adults, Burundi is in need of skilled manpower

INVESTMENT OPPORTUNITIES IN BURUNDI

Burundi is in need of modern transport and infrastructure projects such as roads, ports, railways and airports

MINING Burundi is known to have some of the worldâ&#x20AC;&#x2122;s largest deposits of nickel. Development of a mining industry around these minerals and others presents enormous opportunities

HEALTHCARE The healthcare sector continues to expand in Burundi. Setting up of private health institutions will enable Burundi to become a healthcare hub for populations within Burundi and the neighbouring eastern Democratic Republic of the Congo and western Tanzania

FINANCE & BANKING

ENERGY Burundi is an energy-hungry economy and has a huge untapped energy resources that include solar and wind farms and hydro power

ACCESS TO REGIONAL MARKETS Gain access to regional markets in eastern Democratic Republic of the Congo and western Tanzania

The financial services sector in Burundi remain largely untapped as the country has a huge population that does not have access to banking facilities

FACTS & FIGURES: EDUCATION PRIMARY EDUCATION (2014, %)

Republic of Burundi

The Republic of Burundi is a landlocked nation located in the Great Lakes Region in East Africa. Its neighbours Rwanda to the north, Tanzania to the east and south and the Democratic Republic of the Congo (DRC) to the west. The border with the DRC is covered by Lake Tanganyika, the second deepest lake in the world. It runs along the southweastern coast. It is a member of the Economic Community of Central African State s (ECCAS), the Economic Community of Great Lakes Countries (CEPGL), the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC). This gives Burundi access to more than 450 million consumers! Capital City: Government: Currency: Total Area: Water: Land: Population: Language: Religion: Time: Driving: Internet Country Code: Country Calling Code: Plug, Socket and Voltage: Currency:

Bujumbura Republic Burundi franc (BIF) 27,834 km² 2,184 km² 25,650 km² 11.2 M (UNDP 2015) Kirundi (official), French (official), Swahili (along Lake Tanganyika and in the Bujumbura area) Christian 67% (Roman Catholic 62%, Protestant 5%), indigenous beliefs 23%, Muslim 10% Central Africa Time (CAT) +0200 UTC Right Side .bi

Net Enrolment Rate, Primary, Both Sexes

95.36

Net Enrolment Rate, Primary, Female

96.24

Net Enrolment Rate, Primary, Male

94.47

SECONDARY EDUCATION (2014, %) Net Enrolment Rate, Primary, Both Sexes

24.95

Net Enrolment Rate, Primary, Female

24.82

Net Enrolment Rate, Primary, Male

25.08

TERTIARY EDUCATION (2012, %) Gross Graduation Ratio from First Degree Programmes, Both Sexes

3.54

Gross Graduation Ratio from First Degree Programmes, Female

2.12

Gross Graduation Ratio from First Degree Programmes, Male

5.07

EXPENDITURE ON EDUCATION (2013, %) Government Expenditure on Education as % of GDP

5.41

Education Expenditure as % of Total Government Expenditure

17.24

LABOUR LABOUR FORCE (2014, % OF AGES 15+) Labour Force Participation Rate, Total

82.7

Labour Force Participation Rate, Female

83.4

Labour Force Participation Rate, Male

82.1

+257 Labour Force, Total (number)

4,952,060

Type C and E - 220V/50Hz Burundi Franc (BIF) 12

BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi

BURUNDI PROVINCE

CAPITAL

AREA (KM2)

POPULATION

EASTERN BURUNDI Kirundo

KIRUNDO

Cankuzo

1,964.54

228,873

Gitega

1,978.96

725,223

Rutana

1,959.45

333,510

Ruyigi

2,338.88

400,530

MUYINGA CIBITOKE

NGOZI

Cibitoke

Ngozi

Kayanza Bubanza

Muyinga

BUBANZA

NORTHERN BURUNDI

Karuzi

KAYANZA Bukeye

CANKUZO

KARUZI

Muramvya

MURAMVYA Isale

BUJUMBURAMAIRIE

Bujumbura

MWARO

BUJUMBURA- Mwaro RURAL

Gitega

Karuzi

1,457.40

436,443

Kayanza

1,233.24

585,412

Kirundo

1,703.34

628,256

Muyinga

1,836.26

632,409

Ngozi

1,473.86

660,717

Cankuzo

RUYIGI Ruyigi

GITEGA

WESTERN BURUNDI RUMONGE

Bubanza

RUTANA

Bujumbura Mairie

BURURI

Bururi

Rutana

Rumonge

2030

Bujumbura Rural Cibitoke

Projected population

Makamba

MAKAMBA

Lake Tanganyik a

Current population

2017

17,400,000 11,500,000

BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

Muramvya Mwaro

1,089.04

338,023

86.52

497,166

Isale

1,059.84

464,818

Cibitoke

1,635.53

460,435

Muramvya

695.52

292,589

Mwaro

839.60

273,143

Bubanza Bujumbura

SOUTHERN BURUNDI Bururi

Bururi

1,644.68

313,102

Makamba

1,959.60

430,899

Rumonge

1,079.72

352,026

FACTS & FIGURES: ECONOMY

TRADE PROFILE IMPORT PARTNERS (THOUSANDS, USD)

OVERVIEW GROSS DOMESTIC PRODUCT

2010

2011

2012

2014

2013

GDP at Market Prices (current, billions of USD)

2.03

2.36

2.47

2.71

3.09

GDP Growth (annual %)

3.79

4.19

4.02

4.59

4.66

EXPORTERS

IMPORTED VALUE IN 2011

IMPORTED VALUE IN 2012

WORLD

1,127,650

CHINA

IMPORTED VALUE IN 2013

IMPORTED VALUE IN 2014

IMPORTED VALUE IN 2015

1,003,121

721,660

672,579

566,214

60,273

78,392

63,133

72,488

70,703

SAUDI ARABIA

270,007

82,317

87,322

73,452

49,564

Source: World Bank, World Development Indicators 2016

GDP BY SECTOR (% OF GDP AT CURRENT PRICES)

2009

2014

TANZANIA

161,165

53,119

58,841

56,298

48,079

39.9

42.3

INDIA

38,634

77,898

77,165

75,161

45,410

Fishing

0.5

0.7

KENYA

45,702

46,504

58,305

37,358

39,052

Mining and Quarrying

0.6

0.7

12.4

10.9

Electricity, Gas and Water

0.8

0.5

Construction

4.7

Wholesale and Retail Trade, Repair of Vehicles Household Goods, Restaurants and Hotels

EXPORTED VALUE IN 2013

EXPORTED VALUE IN 2014

EXPORTED VALUE IN 2015

6.6

7.1

4.6

14.6

13.8

7.5

5.1

8.2

10.6

100

Agriculture, Forestry, Fishing and Hunting

Oil Manufacturing

Hotels and Restaurants Transport, Storage and Communication Finance, Real Estate and Business Services Public Administration and Defence Other Services Gross Domestic Product at Basic Prices / Factor Cost

Source: African Development Bank, Organisation for Economic Cooperation and Development Centre, and United Nations Development Programme, African Economic Outlook, 2015

Source: International Trade Centre COMTRADE Statistics

EXPORT PARTNERS (THOUSANDS, USD)

IMPORTERS

EXPORTED VALUE IN 2011

WORLD

197,836

242,700

205,749

141,501

114,382

DEMOCRATIC REPUBLIC OF CONGO

10,434

141

12,014

28,400

24,776

UNITED ARAB EMIRATES

58,190

39,596

119,869

24,944

14,572

BELGIUM

18,317

213

4,375

5,863

13,429

KENYA

15,225

692

13,351

12,956

12,955

SWITZERLAND

33,866

605

15,315

23,471

12,932

EXPORTED VALUE IN 2012

Source: International Trade Centre COMTRADE Statistics

BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi

BURUNDI INVESTMENT PROFILE FDI INFLOWS (MILLIONS OF USD)

BURUNDI IMPORTS (THOUSANDS, USD)

CODE

PRODUCT LABEL

IMPORTED VALUE IN 2011

IMPORTED VALUE IN 2012

IMPORTED VALUE IN 2013

IMPORTED VALUE IN 2014

IMPORTED VALUE IN 2015

‘27

Mineral fuels, oils, distillation products,

343,061

170,150

167,165

164,731

117,454

‘85

Electrical, electronic equipment

63,311

63,747

45,131

49,488

53,978

‘30

Pharmaceutical products

50,042

56,508

54,004

49,208

50,483

‘84

Machinery, nuclear reactors, boilers, etc.

67,005

62,439

45,903

45,029

49,248

‘87

Vehicles other than railway, tramway

57,247

54,507

44,995

80,596

45,025

1,127,650

1,003,121

721,660

672,579

566,214

TOTAL

All Products

Source: International Trade Centre COMTRADE Statistics

CODE

‘09

Coffee, tea, mate and spices

‘71

Pearls, precious stones, metals, coins,

‘34

Soaps, lubricants, waxes, candles, modelling pastes

‘22 ‘11 TOTAL

EXPORTED VALUE IN 2011

2011

2012

2013

2014

0.78

3.35

0.60

6.72

32.04

FDI Inflows Main Source Countries (in terms of number of projects) Kenya, South Africa, Switzerland, Uganda, United States of America, Vietnam, Egypt, India, Netherlands, and Nigeria. Source: United Nations Conference on Trade and Development, World Investment Report 2015 Source: Financial Times, fDi Markets, 2016.

FDI OUTFLOWS (MILLIONS OF USD) 2010

2011

2012

2013

2014

0.00

0.27

0.03

Source: United Nations Conference on Trade and Development, World Investment Report 2015 Source: Financial Times, fDi Markets, 2016.

FDI INWARD STOCK (MILLIONS OF USD)

BURUNDI EXPORTS (THOUSANDS, USD)

PRODUCT LABEL

2010

EXPORTED VALUE IN 2012

EXPORTED VALUE IN 2013

EXPORTED VALUE IN 2014

EXPORTED VALUE IN 2015

2010

2011

2012

2013

2014

5.84

8.39

9.00

15.80

47.83

FDI Inflows Main Sectors (in terms of number of projects) Financial Services, Communications, Building & Construction Materials, Food and Tobacco, Healthcare, Metals, and Rubber

87,881

80,454

43,164

141,501

117,454

59,329

105,201

119,825

65,154

52,796

4,290

5,912

8,214

24,352

13,828

Beverages, spirits and vinegar

2,311

2,880

2,849

7,659

6,470

2010

2011

2012

2013

2014

Milling products, malt, starches, inulin,

268

2,929

5,653

6,234

1.41

1.27

1.30

197,836

242,700

205,749

141,501

114,382

All Products

Source: International Trade Centre COMTRADE Statistics

BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

Source: United Nations Conference on Trade and Development, World Investment Report 2015 Source: Financial Times, fDi Markets, 2016.

FDI OUTWARD STOCK (MILLIONS OF USD)

Source: United Nations Conference on Trade and Development, World Investment Report 2015 Source: Financial Times, fDi Markets, 2016.

Currently it takes under 2 hours and up to 24 hours for a business to be registered in Burundi, this depending on the compliance and the type of business or industry one is registering into. CONSOLIDATION OF BUSINESS REGISTRATION In setting up the one-stop shop for business registrations in Burundi, the GoB has consolidated at least five competent services involved in business registration in Burundi that were previously in different offices. These include:

Burundi Beckons Burundi is on a threshold of a socio-economic revival; one that seeks to embolden a nation through industry and new investments. The Burundi Investment Authority (known as API in its French acronym) is a one-stop shop meant to ease the processes taken to register a new business in Burundi. Previously, it was incredibly cumbersome to register a business in Burundi. The red tape meant that one would take up to 3 months or more to register a business in Burundi. Keen to expand private sector participation in the growth and development of the Burundian economy as well as to attract muchneeded foreign investments, the Government of Burundi (GoB), through a presidential decree No.

100/177 of October 2009 created the Agence burundaise de Promotion des Investissements (API) or the Burundi Investments Promotion Authority (API). Under this organization, the government consolidated some government functions and at the same time put some government institutions under one roof to ease the business registration process for investors. This eliminates the need to move from one office to another. Additionally, and more importantly, since the required government services are under one roof, it helps to expedite the business registration process.

• Tribunal of Commerce, a department in the Ministry of Justice in charge of registry of commercial activities in Burundi. • The National Institute of Social Security known as the Institut National de Securité Social (INSS) • The Burundi Revenue Authority or the Office Burundais de Recettes (OBR) • The Labour Inspection Unit • The Burundi Investment Authority (API) The establishment of the one-stop shop for registering businesses in Burundi also brought down the cost of business registrations in Burundi considerably. Previously, new businesses were required to pay about Burundi Francs (BIF) 300,000. Currently, it costs more than half that amount as business registration costs BIF 140,000 (US$ 75) only. Once a businessperson expresses his/ her intention to start a business in Burundi, it is required to submit the necessary documents to the One-StopShop. The requirements are dependant on the sector of the economy the business intends to operate. After fulfilling the requirements for business registration and paying the registration fees, the business is instantly issued with a registration certificate and a Tax Identification Number (TIN). Burundi is going further to enhance the business registration process and make it as hustle-free as possible, this will be

BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi

Business Registration

done by taking the process online and plans are on to have new businesses registered via an online portal by the first half of 2018.

GATHER IN ADVANCE ALL REQUIRED DOCUMENTS AND FEES

WHY INVEST IN BURUNDI

Step 1

Burundi is the last remaining investment frontier in the region. It boasts a young population and provides access to a huge domestic and regional market. It largely remains untapped economically and therefore offers business very little or no competition at all. Additionally, Burundi has one of the lowest labour costs in the region.

• Choose the Company name, • Information on the headquarters; • Identification of the activities to be undertaken; • Information on the capital to start running the company; • 1 color passport photo for a sole shareholder, • Identity card for nationals and passport for foreigners, proxy in a case of need and registration fees

TO BE PRESENT TO THE ONE-STOP-SHOP OF COMPANY REGISTRATION OR PROVIDE NOTARIZED POWER OF ATTORNEY

The city of Bujumbura, the capital city of Burundi, is being developed as a regional hub to serve the regional economies of eastern Democratic Republic of the Congo and western Tanzania, whose populations rely on Bujumbura for quicker and easier access to the outside world, especially through travel out of the Bujumbura International Airport (BIA).

• Complete the inquiry and information sheet • Verification of the company name • Statutes issuance • Signing of statutes; Signing of the certificate of incorporation • Payment of company registration fees, trough an API officer, at the counter of a commercial bank within the office;

Step 2

INCENTIVES

DOCUMENTS GIVEN AT THE END OF REGISTRATION PROCESS

There are a number of incentives and concessions that new businesses get to set up new businesses in Burundi. However, these are dependant on the industry that the new businesses are getting into. The GoB has set up a special taskforce that is comprised of the API and the Burundi Revenue Authority to review these incentives on a case-to-case basis as some of them include tax holidays.

Step 3 Registration Fees: • Fee: BIF 140,000 BIF (US$ 75) for any given company • Fee: BIF 10,000 BIF (US$ 5.3) for adding/modification to Trade Registry Common types of companies (i) Sole-Proprietorship Company (SP) The Sole-Proprietorship Company is a Limited Liability Company created by a physical or legal personality who only supports the debts of the Company to the extent of his contributions. Number of required shareholders is 1 single physical or legal person. (ii) Limited Company (LC)

Esaie NTIDENDEREZA Head of Division, Investment Promotion / Chef de Service Promotion des Investissements

The company has the capital divided into shares and is made of a minimum of three physical or moral persons who only support the debts of the company

• Statutes; • Trade registry certificate; • TIN (Tax Identification Number); • Fees payment slip; • Membership card of the INSS (National Institute of Social Security).

to the extent of their contributions. The minimum of required shareholders is 3 physical or legal persons. (iii) Company of People with Limited Liability (CPLL) The CPLL is made between at least 2 physical or legal persons and at more fifty who are liable only for the debts of the company to the extent of their contributions and whose rights are only transferable upon agreement of the shareholders. The minimum of persons is 2 and the maximum is 50. (iv) Partnership Company (PC) The PC is the one that is started by two or many physical or legal personas who all have the status of traders and respond with unlimited liability for social debts. The minimum of Shareholders is 2.

(v) The Cooperative Company (CC) The Cooperative is a company founded on the idea of union, solidarity and mutual aid, where members have voluntarily united for a common economic and social purpose and have agreed to take specific responsibilities for their quality of member. The minimum of required persons is: ten natural persons; three natural persons and one legal person; two legal persons (vi) Mixed company The Mixed Company is established by the State, Municipality, one or more legal public entities in association with one or more other physical or legal persons or entities under the private law. It is endowed of its own assets, financial and autonomy. In this case, the rules that govern the Limited Company are applicable.

Young girls selling fresh fruits Bujumbura, Burundi

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Investment prospects

“The fruits are hanging; ready for harvest” Audace NDAYIZEYE is the President of the Burundi Federal Chamber of Commerce and Industry (CFCIB). He was previously the Executive Director of Nile Basin Initiative, an intergovernmental partnership institution of 10 member countries,based in Entebbe, Uganda, and is the immediate former Chairman of the Arusha-based East African Business Council, a private sector-led lobby group. He spoke with Burundi Investment Guide Contributing Editor Denis GATHANJU on a wide range of issues. Excerpts:

Why investment in Burundi now? Burundi is still a virgin country. As a landlocked nation that has received limited investments over the recent years, and facing a myriad of challenges, opportunities are abundant. I say this because as the president of the chamber of commerce, we continue to receive numerous requests on investment opportunities in the country both from within and outside the continent.

Audace NDAYIZEYE President, Federal Chamber of Commerce & Industry of Burundi / Président, Chambre Federale de Commerce et d’industrie du Burundi

Within the East African Community (EAC), of which Burundi is a full member, Burundi remains the final frontier for new investments. Moreover, Burundi shares an expansive border with the eastern Democratic Republic of the Congo (DRC) that opens up another market of more than 17 million people in addition to the country’s 12 million people. Simply put, the fruits are hanging all over Burundi and we just need to start harvesting them and make a feast for both the local people and the investors. What industries are open for investors in Burundi?

BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

We have all sectors open for investment. These range from the agriculture, mining, transport and infrastructure, maritime trade and development of ports; investors just need to identify the sectors they want to pursue in Burundi and we as a chamber will be of whatever help they need to set up operations in Burundi. Agriculture is the mainstay of the Burundian economy; what kind of investments are you looking into this critical sector? Yes, indeed, the Burundian economy depends on on agriculture production, with tea and coffee being Burundi’s major exports that earn the country foreign exchange. While these sectors are still open for further investments, greater investment potential lies in the food processing sub-sector. Take note that Burundi has very rich soils with most of its land being arable. This means that our farmlands can produce high quality food that can be processed locally and exported both to regional and international markets. Setting up an efficient food-processing industry in Burundi would greatly tap into Burundi’s potential as a food-growing and food-exporting 19

nation. This is possible thanks to the rich soils we have, favourable climatic conditions that Burundi enjoys year-round, access to cheap and affordable labour resources across the country and access to regional and international markets through various transportation outlets that include roads, ports and airport links. Agri-business is the â&#x20AC;&#x153;in-thingâ&#x20AC;? with most regional economies, what other investments opportunities are available in Burundi? Aside from food processing, we see massive opportunities in the diary industry in Burundi. This is a sector that presents numerous opportunities due to the auxiliary industries that can be developed from the dairy industry products and by-products.

in such markets as Nigeria. We are in the negotiations with the Government in order to pass a law that will encourage local content in our food-processing sub-sector. We will also encourage regionalism within the agri-business sector in Burundi. This will entail growing different kinds of foods in various parts of the country, dependent on the location, climatic condition and type of soils in the said areas. This will create more jobs for our people and help advance our economy. I get it that Burundi is looking at carving a niche for itself by aggressively going for the food-processing sub-sector. With that being the case, quality of the food processing will be a key determinant. How does Burundi intend to cover this?

We are benchmarking with a country like Kenya that has a full-developed dairy industry and are Quality of the food products will be of utmost looking at helping our farmers gain importance. Food is a very sensitive product access to quality cattle for milk and needs to be handled under the production. With that, we hope most hygienic conditions and this We are in to put up cold-room facilities will be key to our food handling the negotiations in Bujumbura, preferably at processes. We have therefore with the Government the Bujumbura International established the National Center in order to pass a law that Airport to facilitate exports for Applied Technology in will encourage local content of the same. Agriculture. Still on agri-business, we have seen regional powers mainly Kenya, Tanzania, Ethiopia and now Rwanda jump onto the horticulture and floriculture sub-sectors. Do we see Burundi taking this path as well?

in our food-processing sub-sector. We will also encourage regionalism within the agri-business sector in Burundi.

Good question. While we continue to see opportunities in that, Burundi wants to do things differently. Kenya is much more developed in the floriculture and horticulture sub-sectors. For Burundi to venture into these sub-sectors, it would mean not only added competition, but would also see the flooding of the market and hence lower returns on investments. Burundi would like to, aside from venturing into food-processing sub-sector, venture into what we call local content usage. This calls for usage of some of our staple foods within the food processed in Burundi. What this does is that it lessens waste of the food resources we have. When the local farmers produce food for consumption, the surplus will be sold to the food-processing firms which will use these foods as part of the value-chain in the food processing process. This has happened with excellent results

With such an organization, we will be placing an emphasis on the quality of the foods coming from Burundi. We will be looking at consistency of the foods that we produce in Burundi so that we only take to the market on the best foods from Burundi. Other areas that we will be looking at will be the labelling and branding aspects of foods produced and processed from Burundi. You cannot talk of investment and only speak of external investors coming in. We also have to look internally. Burundi has a large population under 35 years of age. How do you intend to integrate some of these young people, many of whom are unemployed and lack skills to economically contribute to nation-building? Under the Burundi Federal Chamber of Commerce and Industry, we have established a programme known as a Matching Grant. This is a sort of investment vehicle that is available to young Burundians to help them access capital for local investments. Lack of access to capital is one of the biggest hindrances to economic growth and job creation.

BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi

BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

Under this programme, the local youth will be given an opportunity to present to the chamber a bankable business plan that can be financed through local banks and other financial institutions. This eliminates the need of collateral for these people, as most of them do not have any assets that can be used as collateral to enable them access capital. Tell me more … The special-purpose vehicle will start with a seed capital of about $8 million with local investors getting a maximum of $150,000. However, infrastructural plans will have a funding ceiling of $2.5 million. We are currently in the final stages of setting up the framework for the programme and we hope to launch it before the end of this year. Based on the success of the programme, we hope to gain access to more capital so as more Burundians can gain access to the same. What other sectors of the economy have an appetite for investments?

Over the past years the country has undergone social and political turmoil but today the situation has come back to normal hence conducive for business We might have failed in the past to create a proper definition of Burundi and were left at the mercies of outside forces defining Burundi, but our message is clear – Burundi is open for Business. The political situation in Burundi is now stable and I can assure you that the city of Bujumbura is one of the safest places to visit and invest in. It is very difficult to eliminate corrupt practices and individuals in any society in the world, even in the developed countries. However, the Government of Burundi has created special laws that are meant to address such issues and consequently enhance investor confidence.

Burundi also has a huge potential of becoming a fishexporting nation. We sit on the very shores of one of the world’s most fish-rich waterbodies – the Lake Tanganyika

Burundi has massive potential in the mining industry. It is now an open secret that Burundi has some of the world’s largest deposits of nickel. We lack skills in mining and this presents a wonderful opportunity for investors. Once the mineral is extracted from the earth, the knock-on effects to other sectors of the economy will be massive. Burundi is an energy-starved economy and therefore, the development of the energy sector presents good returns. This includes everything from development of green energy such as wind and solar farms to hydro electric plants.

Burundi also has a huge potential of becoming a fish-exporting nation. We sit on the very shores of one of the world’s most fish-rich water-bodies – the Lake Tanganyika. Therefore, commercializing the fishing industry and the add-on fishprocessing industry could be yet another large export-driven industry that we can develop in the country. Burundi has faced a number of challenges and

set-backs in recent history, this include the recent political upheaval, lack of security and allegations of corruption both in the public and private sectors. Should this be a concern for investors?

Is this to say that we have a legal framework that protects investors and their investments?

Yes, absolutely. Aside from the newly enacted laws, the said laws have created not only a legally sound framework, but have further created regulations vested in regulatory bodies meant to also streamline various sectors. (See seprate list of the new regulatory bodies established). On top of this, the Federal Chamber of Commerce and Industry of the Republic of Burundi has come up with a mechanism that helps with arbitration of matters between our members. Give us your parting shot and summarize your case for Burundi as an investment destination. Allow me to repeat myself and reiterate that Burundi has the fruits hanging on the trees; they are ripe and ready for harvesting. This is to say that Burundi is ready for investments, it is the final investment frontier in the East African region. Any businessperson will know that if you are not investing today, you are losing tomorrow. Invest in Burundi today for an eye-pleasing bottom-line tomorrow.

Regulatory Bodies Public Enterprises Authority in Charge of Privatization Insurance Regulation Authority Civil Aviation Authority of Burundi Public Tenders Regulation Authority Coffee Regulation Authority Mining & Energy Regulation Authority Anti-corruption Police Maritime & Rail Authority Telecommunications Regulation Board

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Agriculture

A tea plantation in the highlands against a backdrop of a natural rainforest cover Burundi

Growing Agri-business A Burundi offers numerous investment opportunities in agri-business

griculture is the mainstay of the Burundian economy. About 90 percent of the population in Burundi depends on agriculture for a living. Most agriculture consists of subsistence farming, whereby only about 15 percent of the total production is sold as surplus. There is an estimated 1,351,000 hectares (3,338,000 acres) of land, or about 52.6 percent of the total land area in Burundi that is arable or under permanent crops; about 5.5 percent of cropland is irrigated. Agriculture supports more than 70 per cent of the labour force in Burundi and accounts for more than 50 per cent of the country’s gross domestic product (GDP). Tea and coffee are the main exports. INVESTMENT OPPORTUNITIES IN AGRICULTURE AND RELATED SUB-SECTORS Investment opportunities are plentiful within the agricultural sector. These include both tea and coffee sub-sectors while other opportunities lie in other sub-sectors. Currently, the Burundian economy is in need of investments in the following agricultural related sub-sectors:

Agriculture supports more than 70 per cent of the labour force in Burundi and accounts for more than 50 per cent of the country’s gross domestic product (GDP)

• • • • • • •

• Investment in mechanized farming • Investment in producing fertilizers • Investment in large-scale farming and establishment of irrigation schemes • Investment in food processing industry • Investment in cold rooms for long term food conservation Investment in palm oil & derivative production Investment in fruits & vegetable production Investment in livestock Investment in the hides and skins industry for export Investment in dairy products Investment in slaughter-houses Investment in fisheries and aquaculture

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offee is Burundi’s major export. The country produces some of the best coffee in the world, thanks to the favourable climatic conditions and good soils. While Burundi is the world’s 29th largest exporter of coffee, many Burundians do not take coffee. Burundi therefore exports almost all its coffee. In 2015, Burundi produced 36,181,424lbs of coffee and exported 36,181,200 lbs. Most of the coffee varieties found in Burundi are Bourbon or Bourbon derivatives, which are responsible for giving Burundian coffee its intense body and sweetness. The high altitudes contribute to often a more nuanced acidity supporting the sweetness and body. Burundian coffee is a beautiful espresso and single-origin filter option. COFFEE GROWING REGION The province of Kayanza, in northern Burundi, is the main coffee-growing region in Burundi.

the Bourbon varietal —are being cultivated in Burundi on more than 60,000 hectares of land. The average farmer tends from 50-250 coffee plants. There are small quantities of Robusta produced, but the majority is Arabica. Most of Burundi’s coffee is grown between 1,250 meters and 2,000 meters above sea level and the primary coffee plant varietal grown is Bourbon and the coffee is wet processed. Burundi coffee is often compared to Rwanda coffee in its general cup character. COFFEE PROCESSING Traditional Burundian processing methods are used by the cooperatives/washing stations. The coffee is depulped and “dry fermented” for up to 12 hours before being fully washed with clean mountain water for between 12 to 24 hours.

Most of the coffee varieties found in Burundi are Bourbon or Bourbon derivatives, which are responsible for giving Burundian coffee its intense body and sweetness

The region has 21 washing stations, located at various altitudes: Kinyovu (1880m), Gatare (1680m), Buhorwa (1820m), Mutumba (1500m), Karehe (1580m), Kirema (1880m), Karinzi (1740m), Butezi (1660m), Muhanga (1580m), Kiririma (1700m), Mutsinda (1580m), Nyarurambi (1600m), Kiryama (1760m), Gitwenge (1580m), Gacokwe (1650m), Rama (1580m), Bwayi (1760m), Rugoza (1560m), Kavumu (1650m), Rubanga (1600m), Ruhinga (1640m).

Coffee cultivation in Burundi began in the 1930s when the Belgians brought Arabica coffee plants. Today more than 800,000 Burundi families are involved in coffee growing. These are mainly smallholders who grow an average of about 250 trees each. The farms are also used for growing other crops such as maize and beans as well as keeping livestock. Production in the country struggled for some time due to political instability, but exports are beginning to smooth out.

This initial water introduction stops the fermentation process if any sugars remain on the parchment after the dry fermentation. Coffee is then floated down water channels to separate beans by density, then finally the beans are soaked again for an additional 12 to 18 hours before being dried in parchment on raised beds.

BURUNDIAN COFFEE A fine Burundi single origin coffee exhibits a clean, delicate flavor with a rich body and acidity according to cupping notes. Coffee reviews indicate that Burundi coffees have a sweet berry tastes floral notes and berry-like aromas. Region: Growing Altitude: Variety: Harvest Period: Milling Process: Aroma: Flavour: Body: Acidity:

Kayanza 2,000 meters Bourbon March – June Fully Washed, Dried on Raised Beds Red Currant Red Fruit, Jasmine, Hibiscus, Dark Chocolate Rich, Creamy Winey

About 25 million coffee plants—mostly of BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

An investor’s cup of tea Burundi seeks large-scale tea producers; enhance quality of tea

ea is one of Burundi’s cash crops, second after coffee in terms of exports. Many Burundians also take tea as opposed to coffee that is a major export. Burudian tea is grown by small-scale farmers across the countryside representing a large share of the national production. Government owned tea factories fed by large tea plantations makes the rest of the share. The Burundi Tea Authority is a stateagency mandated to process, package and market Burundian tea both regionally and internationally. The Burundi Tea Authority is also charged in managing state tea plantations.

Tea gives a majority of the Burundian population in the rural areas a steady income as it is harvested throughout the year. There are more than 60,000 households in Burundi that are dependent on tea production as a regular income earner. More than 300,000 people are employed in the tea planting and production sub-sector in Burundi. It accounts for 16% of the country’s

exports and is therefore a major source of foreign exchange. In 2015, the turnover from tea exceeded $27.3 million. QUALITY TEA FROM BURUNDI The OTB currently operates five tea factories across the country. These include tea factories in Rwegura, Teza, Ijenda, Tora and Mabayi. There are plans to establish a sixth tea factory in Champazi. There is also a privately-run tea factory in Gisozi. According to the OTB, plans are in place to enhance tea production through enhanced tea production processes as well as to increase land under tea production so as to boost tea exports to about 22,000 metric tonnes within the next five years. The current total tea production in Burundi stands at 12,000 metric tonnes per annum. Aside from this, another major goal is to enhance the quality of tea produced in Burundi. Currently, Burundian tea has one of the best aroma aspects in the region. This is attributable to its rich soils and favourable climatic conditions. Investment opportunities in the tea subsector in Burundi lie in the establishment of large-scale tea plantations as well as the establishment of efficient tea processing centers. Currently, most of Burundian tea is sold through the Mombasa Tea Auction. However, the OTB is also doing direct exports to other markets such as to the UK, Egypt and the Sultanate of Oman.

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Banking & Financial Services

enterprises. One of the key goals of liberalizing the financial services sector in Burundi was to help correct market distortions while at the same time create a level playing field for all providers. It was also meant to help improve resource mobilization and achieve efficient allocation of resources across all sectors of the economy. On the positive side, liberalization succeeded in opening up the sector to entry of new banks. Prior to this, only three commercial banks and four non-banking financial institutions operated in Burundi. These were mainly state-owned enterprises. PLAYERS IN THE SECTOR There are ten commercial banks, two semi-governmental institutions, eleven insurance business and twenty-six micro-finance institutions (MFIs).

Banking on the future for growth The banking and financial services sector in Burundi remains largely under-developed. Burundi has in the recent past introduced reforms in the sector to help spur growth through uptake of existing financial services as well as encourage new investments The Burundian financial sector is dominated by commercial banks and includes a handful of formal nonbank financial institutions, mainly development banks and a growing microfinance network. The insurance and pension sector is underdeveloped, which is an impediment to resource mobilization. LIBERALIZATION OF THE FINANCIAL 30

SERVICES SECTOR EXPERIMENT To help improve efficiency in the financial services sector, the Government of Burundi embarked on a liberalization programme as part of the second phase of the Structural Adjustment Programme (SAP). The first phase of the SAP had mainly targeted trade and industrial sectors as well as included privationzation of state-run

KCB Burundi branch on Patrice Lumumba Avenue in central Bujumbura

Central Bank The Bank of the Republic of Burundi (BRB) is the central bank. It is headed by a governor and is mandated to regulate the banking and financial services sector. Commercial Banks in Burundi • Banque Commerciale du Burundi (Burundi Commercial Bank) (BANCOBU) • Banque de Gestion et de Financement (BGF) • Banque Burundaise pour le Commerce et l’Investissement (Burundi Bank of Commerce and Investment) (BBCI) • Banque de Credit de Bujumbura (Bujumbura Credit Bank) (BCB) A member of the Bank of Africa Group • CRDB Bank Burundi • Diamond Trust Bank Burundi • Ecobank Burundi • FinBank Burundi • Interbank Burundi (IBB) • KCB Burundi Insurance companies The insurance sector is small with private as well as partially governmentowned companies. The sector is regulated by the Insurance Regulation and Control Agency, which falls under

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the Ministry of Finance Budget and Privatization.

economic activity in Burundi. This is a very good indicator of the potential that lies in Burundi within the banking and financial services sector.

Other financial institutions include: • BNDE (Banque National de Développement Economique) • FPHU (Fond de Promotion de l’Habitat Urbain)

MOBILE BANKING As in other African countries, more savings could be mobilized and more financial services supplied by using innovative products that have proved to be better adapted to the needs of the rural population.

Capital markets Burundi does not have a stock market to mobilize savings for investment. However, the BRB issues 91-day treasury bills for purposes of managing the liquidity within the sector.

Mobile banking is a case in point. Although mobile telephony coverage and penetration in Burundi is still very low, it has grown very fast over the past few years.

Pension system The national pension system, known as the Institut National de Sécurité Sociale (INSS) in French covers a paltry five per cent of the people, and accounts for about five per cent of total financial assets in Burundi. Microfinance Microfinance institutions (MFIs) have experienced rapid growth over recent years. Today, more than four per cent of Burundians are members of microfinance institutions. There are currently twenty-six licensed microfinance institutions (MFIs) offering savings, deposits, and short-to medium-term credit services. There is also an umbrella organization for microfinance sector named RIM “ Réseau des Institutions des Microfinances”. TECHNOLOGY ADOPTION The banking sector in Burundi is currently going through one of its most transformative phases as it is now adopting the use of automated teller machines (ATMs). Additionally, the banking sector has also adopted the increased use of information communications technology (ICT) within banking operations. Moreover, new payment instruments such as mobile banking and internetbased payment systems have now been adopted in Burundi. With such changes happening within

the banking sector, it is expected that more people will join the mainstream banking system as well as create new savings instruments such as equity funds that are currently missing in the marketplace. THE CHALLENGE OF ACCESS TO CREDIT In spite of the recent positive strides made within the banking sector in Burundi, access to credit facilities remains the largest impediment to not only economic growth in Burundi, but also to lifting the majority of the population out of poverty. Small and medium-sized businesses are also struggling to get access to credit facilities that would allow them to expand. Burundi has an extremely low rate of bank penetration. There are currently less than two accounts held per 100 persons. The rural economy is not covered by financial institutions. This is in spite of the fact that the rural economy represents the largest part of

BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

Mobile banking is growing rapidly in Burundi and could help spread banking servinces to the rural areas where banking services are difficult to find

Regional integration will accelerate the rate of penetration of mobile telephony even further with the involvement of the dominant mobile networks in the region such as Safaricom. Mobile banking, which has just been introduced in Burundi, has demonstrated its remarkable power to expand access to finance in African countries such as Kenya and South Africa, which are are leading the digital revolution in the mobile banking services system in Africa. CHALLENGES FACING THE FINANCIAL SERVICES SECTOR • Lack of experienced local people to manage the sector • Lack of facilities offering capacity building • Reform of the sector in order to effectively serve the community • Lack of long term credit for investment OPPORTUNITIES WITHIN THE FINANCIAL SERVICES SECTOR Burundi has a very shallow banking and financial services sector. However, opportunities lie within the mobile banking spheres to reach as most people as possible. The agricultural and industrial sectors of the Burundian economy are also in dire need of better credit facilities.

The Karera Falls, Burundi

BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi

Transport & Infrastructure

Transport links in Burundi

ROADS Burundi does not have a functioning national airline, but is served through the Bujumbura International Airport by a host of airlines that include Kenya Airways, RwandAir, Ethiopian Airlines and SN Brussels

AIR RAILWAY

Burundi has marine transportation through the Port of Bujumbura on the Lake Tanganyika. This is mainly used for shipment of cargo between Burundi and the port of Kigoma in eastern Tanzania, port of Mpulungu in Zambia as well as the ports of Kalundu & Kalemie in the eastern Democratic Republic of the Congo 34

Most of the transportation of goods and services in Burundi is done overland. Burundi has road network that connects the towns and cities to the rural areas as well as to neighbouring countries. Most exports and imports are done via trucks through the ports of Mombasa in Kenya and Dar es Salaam in Tanzania

There are no railway services in Burundi as the country does not have a railway network. However, there are plans to connect the country to rail networks currently under development in Kenya and Tanzania

MARINE BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi

2000 2001 2002 2003 2004 2005 2006 2007 2008

38564 34383 37260 32832 43611 48916 59252 80791 57734

2009 2010 2011 2012 2013 2014 2015 2016 2017

63004 64785 78699 85971 93841 96533 76279 52277 25823*

Departures

2000 2001 2002 2003 2004 2005 2006 2007 2008

6757 8105 9297 13643 13543 32452 7190 7654 12139

2009 2010 2011 2012 2013 2014 2015 2016 2017

8940 22323 7898 26744 14763 21528 10506 5894 1871*

Aircraft Movement Freight (inbound) 2000 2001 2002 2003 2004 2005 2006 2007 2008

tonnes

2009 2010 2011 2012 2013 2014 2015 2016 2017

3680,24 2856,27 2221,92 2130,66 3025,12 3079,75 2589,99 2251,11 2184,56

tonnes

2416,68 3113,95 3372,82 2605,85 2149,94 2362,84 2245,43 1738,35 972,08*

Bujumbura International Airport is the largest and major airport in Burundi. It accounts for most of in-coming and out-going aircraft, passenger and cargo traffic. It has the capacity to handle scheduled and chartered passenger and cargo aircrafts.

Arrivals 2000 2001 2002 2003 2004 2005 2006 2007 2008

26908 27025 32610 36154 41473 47905 56514 78652 84721

2009 2010 2011 2012 2013 2014 2015 2016 2017

89060 102669 129194 144761 133371 123668 104889 92246 37728*

BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

Freight (Outbound)

tonnes

2000 2001 2002 2003 2004 2005 2006 2007 2008

225,1 237,3 293,5 244,54 212,33 194,29 212,11 278,15 364,76

tonnes

2009 2010 2011 2012 2013 2014 2015 2016 2017

255,22 330,97 341,49 365,38 336,09 341,49 293,44 266,97 42,39*

Source: Civil Aviation Authority of Burundi 35 *First quarter of 2017

Power-thirsty economy As a developing economy, Burundi is thirsty for electricity to power the economy forward. However, the country suffers a huge energy decifit and is in dire need of more investments in this sector. The Government of Burundi through the Ministry of Energy and Mines is keen on attracting investments in the energy sector, especially in the renewable energy. Burundi offers a huge potential for hydro electricity, solar and wind enegy.

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Wind power Wind power is completely unexploited in Burundi. There are only two mechanic wind machines installed on the Imbo plains in Burundi. Burundi’s varying altitudes, it’s close proximity to the Lake Tanganyika and diverse topography, could prove to be favourable conditions at certain locations to exploit wind power and consequently develop wind power parks.

Solar power Burundi has tremendous potential for solar power production as it sits close to the equator. Currently, the adoption of solar lighting technologies in Burundi are gaining speed. However, greater potential lies in the following five types of solar deployment that offer greater potential of addressing the nation’s immediate power needs: • Rural electrification by solar home systems • Solar pumps • Stand-alone photovoltaic generators • Hybrid photovoltaic plants for remote areas • Grid connected photovoltaic plants

Hydro power Being a mountainous country, Burundi has considerable potential of generating even more power through hydro power sources. The country currently has about 30 hydro power points that feed its current energy needs. However, the country can achieve more as it has the potential of generating more than 1,700 megawatts of power. Studies show that the country has another 150 suitable locations spread across the country that can be developed into hydro power stations. Aside from meeting its own energy needs, surplus power can be exported to neighbouring regions of western Tanzania, eastern Democratic Republic of the Congo and southern Rwanda.

Mining Industry Burundi has immense untapped potential in the mining industry. The country sits at the cross-roads of East and Central Africa, which has over the recent past been a big source of mineral wealth. Burundi is a producer of columbium (niobium) and tantalum ore, tin ore, and

tungsten ore, and some deposits of gold which are designated for export. Burundi has resources of copper, cobalt, nickel, feldspar, phosphate rock, quartzite, and rare reserves of uranium and vanadium. NICKEL DEPOSITS Burundi has some of the worldâ&#x20AC;&#x2122;s largest mineral finds of nickel. It is estimated that the country has more than 300 million tonnes of nickel. Currently the Musongati, Nyabikere and Waga sites are the biggest nickel mines in Burundi. Mining has commenced at the Musongati mine that is estimated to hold more than 150 million tonnes of nickel. Burundi is estimated to possess about six per cent of the worldâ&#x20AC;&#x2122;s known nickel reserves. To encourage investments in the mining sector, the Government of Burundi has enacted new laws under the Mining and Petroleum Act.

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Tourism & Hospitality

TION SI GRA N I M

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Tourism and hospitality development 05 N

AIR

CHA

2016 DEP A R SING TED APOR E

Burundi target high-end developments to attract business and high net-worth individuals

ourism development remains one of the key sectors of the Burundian economy that has great potential of transforming the nation due to its vast value and supply chain and the effects this could have on other sectors of the economy. Currently, Burundi has already developed a comprehensive tourism masterplan that is meant to guide current and future investors in the country, In addition to this, Burundi is banking on its membership of the East African Community which has tourism development as a key driver of regional economies. Within the tourism industry, Burundi has

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numerous opportunities that include development of high-end hotels. Under specific circumstances, investors coming to develop four and five-star hotels and lodges in Burundi qualify for incentives. As Burundi is working on growing its tourism product offering, the country is also looking at working with the private sector to develop some niche tourism products that will enhance its tourism potential to attract both business and leisure travellers into the country. Under its newly adopted tourism strategy master plan, Burundi is looking at attracting travellers and investors into three key subsectors namely, golf tourism, conference tourism and marine tourism.

BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi

Golf Resort The Government of Burundi is keen on attracting high-end tourists and high net-worth individuals to Burundi. One of the key methods of doing this is to create facilities that attract such kinds of people.

to investors suitable land to set up world-class golf course.

Golf, is a major sport and networking activity that the country intends to persue. The GoB therefore intends to extend

Currently, Burundi has only a nine-hole golf course in Burundi and is looking at tapping into the growing golf market.

Investors are expected to establish an 18-hole championship golf resort near the scenic lake region of Kirundo in northern Burundi.

Marina The Lake Tanganyika offers not only a livelihood to the many fishermen in Burundi, but offers a huge untapped tourism potential for the country. The Government of Burundi (GoB) under the tourism masterplan has created provision for the development of sports-related

Convention Center

activities on the Lake Tanganyika. These include sport-fishing and the development of the Bujumbura Marina - a world-class facility that will feature luxury apartments, resort and a club house.

Conference tourism is one of the biggest drivers of business and leisure tourism in any destination. Burundi is seeking to tap into this market segment under the main theme of: Meetings in the Great Lakes. Under this vision, the Government of Burundi is keen to develop the Bujumbura Convention Center (BCC). The GoB has already set aside a favourable land close to the Lake Tanganyika for the development of the same. The proposed BCC is expected to have a main conference hall with a capacity of hosting up to 2,000 delegates. It is also expected to have smaller meeting rooms and conference halls as well as a five-star resort.

BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

Education & Healthcare

REGIONAL MALARIA TREATMENT CENTER

SPENDS 9% OF IT’S GDP ON HEALTHCARE

One of Burundi’s major health challenges lies in the fight and prevention of malaria. Opportunities lie in the establishment of a research in malaria and its treatments in Burundi and the greater great lakes region which also suffer greatly from malaria-related deaths

Burundi spends a higher per centage of its annual GDP on healthcare, higher than a country like India which spends only four per cent. However, the healthcare system in Burundi needs more investments both from the public and private sectors

SET UP OF MEDICAL TRAINING INSTITUTES With a growing population and the need for skilled manpower in the healthcare sector, Burundi has opportunities setting up medical training institutes that will provide healthcare professionals not only for Burundi, but for the greater great lakes region

HEALTH SECTOR OPPORTUNITIES

SET UP A PHARMACEUTICAL INDUSTRY Burundi is keen on establishment of a thriving pharmaceutical industry in the country that will go a long way into addressing the cost of medication not only for Burundi, but for the wider great lakes region

SET UP OF PRIVATE MEDICAL FACILITIES Burundi’s healthcare system is in need of investments both in the public and private sectors. Greater potential remains in the establishment of well-equipped medical facilities

DEVELOP BUJUMBURA INTO A REGIONAL MEDICAL HUB Due to its central location in the greal lakes region, Burundi, especially its capital city of Bujumbura has potential of being developed into a regional medical center serving Burundi, southern Rwanda, western Tanzania and eastern Democratic Republic of the Congo

BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi

The main building of The Burundi American International Academy (BAIA) in Bujumbura, Burundi

Aiming Higher Like any other economy in the world, education plays a critical role in developing future talent and the required manpower to advance the economy forward. Burundi seeks to enhance its education sector, especially through private investments There are a number of private education institutions in Burundi. And there are opportunities to developing even more right from kindergarten to university level. The Burundi American International Academy (BAIA) is one such key institutions in Burundi. The school is modelled on a hybrid American-based education system that places a greater emphasis on the development of key subjects that include science, technology, engineering and mathematics (STEM). The insitutionâ&#x20AC;&#x2122;s founder is Burundian-

BURUNDI INVESTMENT GUIDE 2017 | An investment guide for Burundi

born, American based medical doctor Dr. Freddy Kaniki who started the school with his wife with a vision to giving Burundian students a headstart in the competitive fields of mathematics, science and technology. The academic foundation helps the students get at BAIA and helps prepare Burundian students and others attending the school, to take up leadership skills and be of service as global citizens. This is achieved through the creation of a conducive nurturing environment that builds confidence amongst the students. This leads in turn the students to growing intellectually, socially, morally and physically. 45

Good Governance A catalyst to economic growth and investor confidence

For nearly three decades, good governance has become a key concept of a large range of development institutions and other actors within the international arena. Like democracy, good governance does not have a known single definition; it must be defined in terms of historical-cultural context of each country. We use good Governance approach in our surveillance over macroeconomic policies, namely, the transparency of government accounts, the effectiveness of public resource management, and the stability and transparency of the economic and regulatory environment for business. In this context, Burundian authorities have taken significant measures to encourage private investors through reforms to improve business climate. This action was also reflected in the revision of Investment Code and the creation of key institutions to support investment, namely, The Burundi Investment Promotion Agency, Burundian Revenue Office, the Anti-Corruption Brigade as well as the Court and the Prosecutor General to control and fight against corruption. The Government is also committed to ensuring a conducive environment to business development by guaranteeing in particular foreign and domestic investors the protection of their capital.

Hon. Eng. Serges NDAYIRAGIJE Minister to the Office of the President Responsible for Good Governance and Planning

The growth prospects will have positive effects over medium-term on raising the average level of purchasing power of the population; this situation will bring an additional positive effect in a big market of East African Community, COMESA, and the integration of Burundi into multilateral trade. The present Investorâ&#x20AC;&#x2122;s Guide is intended to outline the main elements that may influence the attraction of foreign direct investment as well as local investment.

BURUNDI INVESTMENTS PROMOTION AUTHORITY | www.investburundi.bi