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AFRICAN DEVELOPMENT BANK GROUP
REPUBLIC OF BURUNDI
Country Strategy Paper 2019-2023
(CSP 2019-2023)
Management
Gabriel NEGATU Director General RDGE
Yero BALDEH Director RDTS
Ferdinand BAKOUP Lead Economist ECCE
Stefan MULLER Lead Country Programme
Coordinator
RDVP
Daniel NDOYE Country Manager COBI
Marcellin NDONG-NTAH Lead Economist ECCE
Drafting Team
Abdoulaye KONATE, Principal Country Economist ECCE
Abdoulaye M. TANDINA Country Programme Officer COBI
John NDIKUMWAMI Transport Engineer COBI
Rakia BEN GHANEM Transport Specialist COBI
Mamadou DIOMANDE Financial Management Specialist RDGE
Souweye MAIGA Procurement Specialist RDGE
Maimouna DIOP LY Health and Social Protection
Specialist
AHHD
Gilberte DOGBEVI-FALY Financial and Operations Analyst RDTS
Jean Claude NSABIMANA Social Development Specialist COBI
Moussa KONE Principal Energy Specialist RDGE
Abdelmajid JEMAI Energy Specialist (Consultant) COBI
Hamadi LAM Agricultural Specialist (Consultant) AHAI
Cyrille EKOUMOU Environmental Specialist PEGC2
Serge RABIER Gender Specialist AHGC0
Christelle S. HAZOUME Technical Assistance Officer PINS
Peer Reviewers
Toussaint HOUENINVO Principal Country Economist ECCE
Tankien DAYO Principal Country Economist ECCE
Hercule YAMUREMYE Principal Operations Officer COCF
AFRICAN DEVELOPMENT BANK GROUP
REPUBLIC OF BURUNDI
Country Strategy Paper 2019-2023
(CSP 2019-2023)
COUNTRY ECONOMICS DEPARTMENT - ECCE
EAST AFRICA REGIONAL DEVELOPMENT AND BUSINESS DELIVERY OFFICE – RDGE
June 2019
Translated document
TABLE OF CONTENTS
CURRENCY EQUIVALENTS .................................................................................................................................. i
ABBREVIATIONS AND ACRONYMS ................................................................................................................... ii
map OF BURUNDI ............................................................................................................................................ iii
EXECUTIVE SUMMARY .................................................................................................................................... iv
1 INTRODUCTION........................................................................................................................................ 1
2 NATIONAL CONTEXT AND OUTLOOK........................................................................................................ 1
2.1 POLITICAL AND SECURITY CONTEXT ................................................................................................................ 1
2.2 ECONOMIC CONTEXT ................................................................................................................................... 2
2.3 SECTOR CONTEXT ....................................................................................................................................... 6
2.4 SOCIAL CONTEXT AND CROSSCUTTING THEMES ................................................................................................ 7
3 STRATEGIC OPTIONS, PORTFOLIO PERFORMANCE AND LESSONS ............................................................ 8
3.1 COUNTRY STRATEGY FRAMEWORK ................................................................................................................ 8
3.2 AID COORDINATION AND HARMONISATION .................................................................................................... 9
3.3 WEAKNESSES AND OPPORTUNITIES.............................................................................................................. 10
3.4 COUNTRY PORTFOLIO PERFORMANCE REVIEW ............................................................................................... 11
3.5 LESSONS FROM THE CSP 2012-2018 COMPLETION REPORT AND THE CPPR 2018 ............................................. 12
4 BANK GROUP STRATEGY 2019-2023....................................................................................................... 12
4.1 RATIONALE .............................................................................................................................................. 12
4.2 CSP OBJECTIVES AND STRATEGIC PILLARS ..................................................................................................... 13
4.3 EXPECTED OUTCOMES AND TARGETS ........................................................................................................... 17
4.4 INDICATIVE OPERATIONAL PROGRAMME (IOP) AND KNOWLEDGE MANAGEMENT ............................................... 16
4.5 CSP FINANCING ....................................................................................................................................... 18
4.6 CSP MONITORING AND EVALUATION........................................................................................................... 18
4.7 COUNTRY DIALOGUE ................................................................................................................................. 18
4.8 RISKS AND MITIGATION MEASURES ............................................................................................................. 18
5 CONCLUSION AND RECOMMENDATIONS ............................................................................................... 20
6 ANNEXES....................................................................................................................................................
ANNEX 1: CSP OUTCOMES FRAMEWORK ..................................................................................................................... I
ANNEX 2: INDICATIVE PROGRAMME - LOANS AND NON-LENDING OPERATIONS .............................................................. VIII
ANNEX 3: ALIGNMENT OF PIPELINE AND HIGH-5 PROJECTS ........................................................................................... IX
ANNEX 4: TECHNICAL AND FINANCIAL PARTNERS (TFP) INTERVENTION MATRIX ................................................................ X
ANNEX 5: MACROECONOMIC INDICATORS .................................................................................................................. XI
ANNEX 6: IMPLEMENTATION OF THE CPIP 2018 ........................................................................................................ XII
ANNEX 7: KEY PERFORMANCE INDICATORS FOR THE CURRENT PORTFOLIO ...................................................................... XV
ANNEX 8: ONGOING PORTFOLIO (29 MARCH 2019) ................................................................................................. XVI
ANNEX 9: CPIA RATINGS 2013-2016 ................................................................................................................... XVII
ANNEX 10: ANNEX ON THE MACROECONOMIC FRAMEWORK ..................................................................................... XVIII
ANNEX 11: CODE RECOMMENDATIONS ON THE CSP 2012-2018 COMPLETION REPORT ................................................ XIX
ANNEX 12: SUMMARY OF EXCHANGES OF VIEWS WITH STAKEHOLDERS .......................................................................... XX
ANNEX 13: ALIGNMENT OF DSP PILLARS TO PND 2018-2026 AND THE HIGH 5S ........................................................ XXIII
ANNEX 14: FIDUCIARY RISK ASSESSMENT ............................................................................................................... XXIV
ANNEX 15: COUNTRY RISK ASSESSMENT .............................................................................................................. XXVIII
ANNEX 16: CLIMATE CHANGE AND GREEN GROWTH IN BURUNDI ............................................................................... XXXI
ANNEX 17 - NON-SOVEREIGN OPERATIONS IN BURUNDI .................................................................................... XXXIV
ANNEX 18 - 2018 CRFA'S MAIN RESULTS ……………………………………………………………..…………………………………XXXV
ANNEX 19 - RISK MITIGATION MEASURES ….......................………………………………………………………………..XXXVI
Figures and boxes
Figure 1 – Political Context 2017 ............................................................................................................................ 2
Figure 2 - Growth rate of real GDP (%) …………………………………………………………………………...3
Figure 3 - Fiscal balance (% of GDP) …………………………………………………………………………………………………………………. 4 Figure 4 - External current balance (% of GDP) …………………………………………………………………. 5
Figure 5 - Breakdown of Active Portfolio by Sector ............................................................................................. 11
Figure 6 - Breakdown of Active Portfolio by High 5s........................................................................................... 11
Box 1 - Country Resilience and Fragility Assessment (CRFA) .............................................................................. 8
Box 2 – Pillar 1 and CRFA .................................................................................................................................... 14
Box 3 – Pillar 2 and CRFA .................................................................................................................................... 13
Box 4 –Selectivity Criteria .................................................................................................................................... 17
i
CURRENCY EQUIVALENTS
FISCAL YEAR
1 July – 30 June
MONETARY EQUIVALENTS OF THE UNIT OF ACCOUNT
(April 2019)
Currency = Burundian Franc (BIF) UA 1 = BIF 2,537.77
EUR 1 = BIF 2,053.79
USD 1 = 1,828.03
WEIGHTS AND MEASURES
1 metric tonne = 2,204 pounds 1 kilogramme (kg) = 2.200 pounds 1 metre (m) = 3.28 feet 1 millimetre (mm) = 0.03937 inch 1 kilometre (km) = 0.62 mile 1 hectare (ha) = 2.471 acres
ii
ABBREVIATIONS AND ACRONYMS
ADF African Development Fund
BIF Burundian Franc
BRB Bank of the Republic of Burundi
CNARED National Council for the Respect of the Arusha Peace and Reconciliation Agreement for Burundi and the Restoration of the Rule of Law
CNCA National Aid Coordination Committee
CNDD-FDD National Council for the Defence of Democracy - Democracy Defence Forces
COBI Burundi Country Office
CODE Committee on Operations and Development Effectiveness
COMESA Common Market for Eastern and Southern Africa
CPIA Country Policy and Institutional Assessment
CPPIP Country Portfolio Performance Improvement Plan
CPPR Country Portfolio Performance Review
CRS CSP Results Monitoring Framework
CSP Country Strategy Paper
CRFA Country Resilence and Fragility Assessment
DSA Debt Sustainability Analysis
EAC East African Community
EC European Commission
ECCAS Economic Community of Central African States
ECF Extended Credit Facility
ECGLC Economic Community of the Great Lakes Countries
ECVMB Household Living Conditions Survey
FSF Fragile States Facility
GBS General Budget Support
GDP Gross Domestic Product
GPRSF Growth and Poverty Reduction Strategy Framework
HDI Human Development Index
IDEV Independent Development Evaluation (IDEV) Department of the Bank
IMF International Monetary Fund
ISTEEBU Institute of Statistics and Economic Studies of Burundi
LTA Lake Tanganyika Authority
MDGs Millennium Development Goals
MFPDE Ministry of Finance and Promotion of Economic Development
MTR Mid-Term Review
NBI Nile Basin Initiative
OECD Organisation for Economic Cooperation and Development
PAR Project-at-Risk
PCG Partners’ Coordination Group
PEFA Public Expenditure and Financial Accountability
PND National Development Plan
PPP Potentially Problematic Project
RDGE East Africa Regional Development and Business Delivery Office
RISP Regional Integration Strategy Paper
TFP Technical and Financial Partners
TSF Transition Support Facility
UA Unit of Account
WDR World Development Report
iii
MAP OF BURUNDI
Administrative Map of Burundi
This map was drawn by the staff of the African Development Bank exclusively for the use of readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the Bank Group and its members any judgement concerning the legal status of a territory or any approval or acceptance of its borders.
iv
EXECUTIVE SUMMARY
1. This report presents a strategy for the Bank Group's intervention in Burundi for the period 2019-2023. This Country Strategy Paper (CSP) is intended to support Burundi in implementing its National Development Plan (PND) 2018-2027, adopted in August 2018. CSP 2019-2023 is based on the combined completion report of CSP 2012-2016, extended in December 2018, and the Country Portfolio Performance Review (CPPR), which was presented to the Committee on Operations and Development Effectiveness (CODE) on 13 May 2019. It takes into account the drivers of the country's fragility to support it towards greater resilience. The CSP is aligned with: (i) the country's strategic vision (PND 2018-2027); (ii) the Bank's High 5s and its Ten-Year Strategy 2013-2022; (iii) the Bank's Strategy for Addressing Fragility and Building Resilience in Africa over the 2014-2019 period; (iv) the Eastern Africa Regional Integration Strategy Paper (RISP) (2018-2022); (v) the Second Climate Change Action Plan of the African Development Bank Group (2016-2020); (vi) the Jobs for Youth in Africa Strategy (2016-2025); and (vii) the Strategy for Agricultural Transformation in Africa (2016-2025).
2. Burundi continues to be marked by situations of fragility resulting from its conflict-ridden socio-political history. It is characterised by a low score on the human development index, weak institutional capacity and various forms of social inequality, an inadequate infrastructure network and high vulnerability to external shocks. These factors, aggravated by the socio-political crisis that the country experienced in 2015, have prevented the country from achieving its full potential, particularly agricultural, mining and hydro-ecological. At the political level, facilitation efforts under the auspices of the East African Community have been ongoing since 2016 through inter-Burundian dialogue sessions. However, these initiatives have not yet resulted in major progress on substantive issues.
3. The crisis has led to a decline in activity in the main productive sectors. Real GDP growth was estimated
at -0.2% in 2017, compared with an average of 4.6% between 2010 and 2014. The year 2018 was marked by
a slight economic recovery with a real GDP growth rate estimated at 1.4%. Therefore, the country faces
many challenges that it must address in order to lay the groundwork for sustained economic growth that
creates jobs and helps to improve the people’s living conditions over the long haul. Part of the international
community that has condemned human rights violations has decided to suspend direct support to the
Government, leading to a reduction in external aid. On the social context, food insecurity continues to be a
problem and the phenomenon of poverty seems to be gaining momentum.
4. To address the major challenges that it continues to face, the Government of Burundi in August 2018 prepared a National Development Plan for Burundi for the decade 2018-2027. The aim of the PND was, among others, to generate multiplier and lasting effects on improving economic growth and average per capita income, and to foster poverty reduction, development of human capital, environmental sustainability and social equity. The PND is built on eleven (11) pillars and its Priority Action Plan (PAP) comprises five strategic thrusts, estimated to cost BIF 20,385 billion over the period 2018-2027 (around USD 11.1 billions)
5. As at end-March 2019, the Bank's active portfolio in Burundi comprised 16 public sector operations,
totalling about UA 247.56 million. Operations are concentrated in the following sectors: transport (60.6%),
energy (32.9%), agriculture (4.8%), multi-sector (1.2%) and social (0.4%). The portfolio performance
analysis shows a disbursement rate of around 34.3%, for an overall average age of about three (3.8) years.
Some 10% of the national projects portfolio was posted on the dashboard due to the slow rate of procurement
and disbursements as at 28 March 2019, compared with 22% of the portfolio as at 31 December 2018.
Concerning the multinational portfolio, three of the six projects were posted.
6. Drawing lessons from CSP 2012-2018 implementation and taking into account the Bank's High 5s,
Burundi’s National Development Plan (PND) 2018-2027, the country context and consultations with the
Government and stakeholders, the proposed strategic objective for CSP 2019-2023 is to support the
Government in addressing the drivers of fragility and building resilience in Burundi. Two pillars have been
identified to achieve these objectives: (i) support agricultural development and transformation; and (ii)
v
improve transport and energy infrastructure. They have been approved by CODE on 13 May 2019 together
with the CSP 2012-2018 Completion Report. The first pillar has three operational objectives: (i) promote
agricultural entrepreneurship for young people and women with a view to their empowerment; (ii) support
agricultural development hubs and increase private investment for processing; and (iii) build institutional
and climate change adaptation capacity. The second pillar has two operational objectives: (i) help close the
infrastructure gap in the transport and energy sectors to foster inclusion; and (ii) promote equitable access to
basic infrastructure to foster social inclusion.
7. The Bank will strive throughout the implementation of CSP 2019-2023 to: (i) support governance
improvement, and climate change and gender mainstreaming in CSP focal sectors - agriculture, transport and
energy -; and (iii) promote private sector involvement in these focal sectors.
8. The resources that can be mobilised to finance the 2019-2023 strategy could reach UA 148 million,
drawn mainly from ADF-14 and ADF 15: (i) UA 52 million for a performance-based allocation; (ii) UA 43
million under the Transition Support Facility; (iii) UA 39 million that can be mobilised at the regional level;
and (iv) UA 14 million in non-sovereign resources. The Bank will also continue its efforts to mobilise co-
financing from other technical and financial partners. In particular, it will use the co-financing partnership
agreements signed with various partners, and will strive to mobilise other sources of financing, including the
Nigeria Trust Fund, the Global Environment Facility (GEF) Trust Fund, the Global Agriculture and Food
Security Programme (GAFSP) Trust Fund and climate funds. An estimated UA 70 million in co-financing
is expected to be added to the Bank’s resources.
9. The Bank identified the main risks in the country based on a thorough analysis of the current
political and security context, and then identified mitigation measures: the instability of the political situation
constitutes a significant risk for CSP implementation. In particular, the security situation could be tested in
2019 and in 2020, in view of the timing of the presidential elections. The Bank will join forces with the
authorities and the international community to limit that risk.
10. Burundi has good opportunities to succeed in its strategy to transform its economy by 2027. The
reforms envisaged must be supported by dialogue with development actors, including technical and financial
partners, with a view to restoring the groundwork for economic growth and improving governance and the
business climate. The potential offered by the agriculture and mining sectors and the ongoing investment in
agricultural, transport and energy infrastructure would help to diversify sources of growth and improve
people’s living conditions. The Bank should continue to provide financial and technical support to Burundi
under CSP 2019-2023 to help it achieve that objective. Therefore, the Board of Directors is requested to
review and approve the Bank Group's Country Strategy Paper (CSP) 2019-2023 for Burundi.
1
1 INTRODUCTION
11. This report lays out a strategy for the Bank Group’s intervention in Burundi for the period 2019-2023. It is presented with a view to supporting Burundi in implementing its National Development Plan (PND) 2018-2027, adopted in August 2018, which calls for development based on further transformation of economic, demographic and social structures. This includes generating multiplier and lasting effects on improvement of economic growth and average per capita income, and fostering the satisfaction of basic needs, poverty reduction, development of human capital, social equity and environmental sustainability, including the promotion of development resilient to the adverse effects of climate change.
12. CSP 2019-2023 is based on the combined completion report of CSP 2012-2016 (extended to December 2018), and the Country Portfolio Performance Review (CPPR), which was presented to the Committee on Operations and Development Effectiveness (CODE) on 13 May 2019. It takes into account the drivers of the country's fragility to support Burundi in enhancing its resilience. The CSP is aligned with: (i) The National Development Plan (PND 2018-2027); (ii) the Bank’s High 5s and its Ten-Year Strategy 2013-2022; (iii) the Bank's Strategy for Addressing Fragility and Building Resilience in Africa over the 2014-2019 period; (iv) the Eastern Africa Regional Integration Strategy Paper (RISP) (2018-2022); (v) the second climate change action plan of the African Development Bank Group (2016-2020); (vi) the Jobs for Youth in Africa strategy (2016-2025); and (vii) the Strategy for Agricultural Transformation in Africa (2016-2025). As the Bank’s main programming tool in Burundi for the period 2019-2023, the CSP provides an opportunity for the Bank to strengthen its short- and medium-term cooperation with Burundi, support the Government in addressing the drivers of fragility and build resilience in Burundi, through agricultural development and transformation and the improvement of agriculture and infrastructure (energy and transport).
13. In addition to this introduction, this report contains an analysis of the country context (section 2) and the country's strategic thrusts for the period 2018-2027, a presentation of lessons from the 2018 review of the portfolio of Bank-financed projects (section 3), the Bank's strategic thrusts for the period 2019-2023 (section 4) and the recommendations submitted for Board approval (section 5).
2 NATIONAL CONTEXT AND OUTLOOK
2.1 Political and Security Context
14. The political context is marked by challenges related to the episodes of instability that the country has experienced, as indicated by the Country Resilience and Fragility Assessment (CRFA)1 conducted by the Bank on Burundi in 2018. The political environment has gradually stabilised since the socio-political crisis of 2015. However, the political climate remains tense. Efforts to calm the situation must continue in order to consolidate the socio-political dialogue.
15. Progress in the inter-Burundian dialogue initiated under the auspices of the East African Community has been relatively modest. According to the report submitted by the Facilitator2 of inter-burundian dialoge, to the EAC Mediator on 19 November 2018, the various
1 The Country Resilience and Fragility Assessment (CRFA) was designed in 2016 to provide a new quantitative
tool in assessing capacities and pressures in regional member countries. It complements the Country Policy and
Institutional Assessment (CPIA), with a more holistic focus on resilience and fragility factors, including regional
impacts, the environment, policy / governance, and security. Resilience capacities are measured through seven
dimensions, namely: policy inclusivity, security, justice, economic and social inclusion, social cohesion and
climate and environmental impacts. The exercise was conducted on Burundi in 2018 and the results indicate that
the country's capacities in the seven dimensions are not strong enough compared to the relatively high "pressure"
noted. 2 The mediation for a way out of crisis was given by the heads of state of the sub-region to the Ugandan President
(in June 2015) and former Tanzanian President, Benjamin Mkapa (in March 2016), to relaunch the inter-Burundian
dialogue
2
sessions of the inter-Burundian dialogue did not lead to major progress on issues such as the status and implementation of the Arusha Peace and Reconciliation Agreement, the security situation, the political and democratic space, and the state of the economy. While noting the efforts of various stakeholders and the adoption of a roadmap for the organisation of presidential elections in 2020, the authors of the report indicate that players in the dialogue seemed entrenched in their positions. At their February 2019 summit, the EAC Heads of State took note of the report, but postponed the discussion on issues related to the situation in Burundi. However, on the security front, the United Nations Security Council issued a statement on 22 August 2018 in which it noted that the security situation in Burundi had improved overall.
16. The issue of human rights in the country is a point of disagreement between the international community and the Government. The CFRA shows that freedom of expression and civil society empowerment are relatively limited in Burundi, as illustrated by its 159th position out of 180 countries on the 2019 Reporters Without Borders (RWB) ranking. On 28 September 2018, based on the report of its Commission of Inquiry on Burundi published on 5 September 2018, the United Nations Human Rights Council condemned “in the strongest terms all acts of violence committed in Burundi by all parties or individuals”. The Government rejected the report. In February 2019, the Government decided to close the United Nations human rights office in Burundi, asserting that the national mechanisms and arrangements were sufficient to uphold human rights. Owing to these developments, certain technical and financial partners have firmed up their position of not providing direct support to Burundi’s budget, opting instead for direct support to communities, in particular through NGOs. It should also be noted that in September 2018, the Government decided to suspend the activities of NGOs in the country for three months, beginning 1 October 2018, to cause them to come into compliance with the provisions of the law governing NGOs in Burundi and in particular with a provision concerning local staffing quotas. That helped to deepen the disagreements with technical and financial partners. However, by January 2019, more than 80% of the NGOs concerned had resumed their activities, after the government decided that they had complied with its requirements.
17. The holding of presidential elections in 2020 is an important issue in the political context. Although they had expressed their reservations about the revision of the Constitution, international organisations welcomed the President’s decision not to seek another term of office. They welcomed the Government’s acceptance in February 2019 of the request for official recognition of a new opposition party (the National Congress for Freedom). The United Nations has encouraged the Government to continue in this direction in the run-up to the 2020 presidential elections, while urging it to be more inclusive, particularly in the context of the adoption of a new electoral code.
18. In terms of democratic governance (see figure 1), Burundi is one of the 12 African countries where the situation deteriorated between 2007 and 2016 (-6.5 points), according to the Mo Ibrahim Index of African Governance (2018), which shows modest progress between 2016 and 2018 (Burundi rose one spot from the 44th to the 43rd position out of 54 countries between 2017 and 2018). According to the Index, Burundi will need to make greater efforts in the areas of security, rule of law, participation and human rights.
2.2 Economic Context
19. Burundi is a small landlocked country with a limited
productive base. The economy is undiversified and is based mainly on agriculture. The
country’s export base is quite small and is dominated by primary products (coffee and tea
account for about 70% of export revenue). The agricultural sector is dominated by small farms
-2,5 -2,0 -1,5 -1,0 -0,5 0,0
Stabilité politique
Etat de droit
Ecoute et responsabilité
Source: AfDB Statistics Department
(2018 WEF Data)
Score -4.0 (Worst) to 2.5 (Best)
Afrique Afrique Centrale BurundiCentral Africa
Figure 1 – Political context 2017
Voice and
Accountability
Rule of Law
Political Stability
3
and employs more than 80% of the workforce, the majority of whom are women. Agriculture
is dependent on rainfall and climate. Between 1971 and 2015 the country experienced a period
of climatic variability that led to a contraction of agricultural production, as well episods of
political crisis that seriously affected non-agricultural production. During the years of violent
political crises (1972, 1993-1995, 2000 and 2003), economic activity declined in both rural and
urban areas and these shocks brought more vulnerability in the country, with the contribution
of the primary sector declining over time. Between 2000 and 2006, agriculture accounted for
about 45.8% of GDP with, however, growth in the ups and downs. Since 2007, the tertiary
sector has been driving the economy following a sharp increase of nearly 20%. In 2018, the
primary sector accounted for 40.7% of GDP against 44.58% for the tertiary sector and 14.97%
for the secondary sector.
20. Burundi has been badly affected by the 2015 crisis. This has been confirmed by the
Country resilience and fragility assessment exercise conducted in Burundi in 2018 (see Box 1).
In addition, the Country Policy and Institutional Assessment (CPIA) for 2018 confirms
Burundi's weak institutional capacity, with an overall score of 3.1 against 3.2 in 2016. This is
noticeable in economic management (fiscal policy and monetary policy), sector policies (the
financial sector in particular) and governance. On the contrary, in terms of trade policy and
regional integration, progress is encouraging (see Annex 9). Because of political turmoil, real
GDP growth had fallen sharply to -0.3% in
2015 from 4.2% in 2014 and 4.5% in 2013 (see
Figure 2). It has been on the ups and downs
since (1.7% in 2016, -0.2 in 2017 and 1.4% in
2018). The crisis had led to a decrease in
activities in the secondary sector (-18.1% in
2015), which could not be offset by the 5.6%
rise in the tertiary sector. On the demand side,
the deterioration in relations with the
community of technical and financial partners
led to a decrease in financial support to the public sector (-41% in 2017 compared to 2014),
dragging down public investment (-18% in 2015 and -12% in 2016). The slight economic
recovery in 2018, is due to the good coffee and tea production, the recovery in the secondary
sector (+7.4%) owing to the good performance of agri-food and manufacturing activities, and
a recovery in the tertiary sector (+3.2%). The recovery is expected to continue in 2019 and
2020, albeit only modestly, with projections of 0.4% and 1.2% in 2019 and 2020, respectively,
assuming that the political situation does not deteriorate any further with the presidential
elections scheduled for 2020. The economic recovery could then be driven by an increase in
coffee and tea exports, and a slight uptick in public investment.
21. Budgetary indicators have deteriorated with the crisis, despite increased efforts in domestic resource mobilisation (see Annex 10). Between 2012 and 2015, budgetary policy was marked by real efforts to control public spending in the face of falling domestic revenue and budget support (see figure 3). Unfortunately, the decline in economic activity in 2015 led to a sharp downturn in the value of Government revenue. At the same time, the Government’s response to the deteriorating security situation resulted in a higher-than-expected level of current expenditure. The budget balance actually deteriorated (-7.7% of GDP in 2015 compared to -3.8% in 2014 and -1.8% in 2013). Although the fiscal deficit contracted in 2016 and 2017 thanks to the progresses in improving domestic resource mobilisation, it remains high (estimated at 6.5% of GDP in 2017 and 8.8% of GDP in 2018). Public finance management is
-2
0
2
4
6
8
2011 2012 2013 2014 2015 2016 2017 2018 2019Burundi Afrique Centrale Afrique
Figure 2 – Taux de croissance du PIB réel (%)
-10
-8
-6
-4
-2
0
2011 2012 2013 2014 2015 2016 2017 2018 2019Burundi Afrique Centrale Afrique
Figure 3 – Solde budgétaire (% du PIB) Figure 4 – Fiscal balance (% of GDP)
4
constrained by the sharp decrease in external financing of the budget. Given the continuing uncertainties concerning external financing, the budget deficit is expected to remain at 8.8% of GDP in 2019 and could rise to 10.3% of GDP in 2020.
22. The risk of over-indebtedness remains high. Based on the most recent debt sustainability analysis done by the IMF in March 2015, the risk of over-indebtedness for Burundi remains high. This risk is noticeable through the ratio of the net present value of the external debt to exports estimated at 152% in 2015 compared to the reference of 100%. However, it had decreased compared to 2012 (187%) thanks to the budgetary reforms put in place and the increase in exports observed between 2009-2014. Burundi's public debt represented nearly 50% of GDP in 2016 (including about 17% of external debt) compared to 36% in 2012. The estimates of the Central Bank of Burundi3 (BRB) indicate an increase in debt in 2017 (nearly 50% of GDP) driven by domestic debt. Between June 2015 and June 2018, the outstanding public debt rose sharply year-on-year by +54%, due to a 79% increase in domestic debt and a +15% jump in external debt. The rise in State debt to the entire banking system alone represented 90% of the stock of domestic debt at the end of December 2018.4 The share of external debt as a percentage of GDP has been declining since 2011 (24% compared to 15.3 in 2017 and 14.9% in 2018) 5. According to the Bank's data (ECST), debt service is estimated at USD 70 million against USD 5 million in 2011. They could exceed USD 100 million by 2020. With regard to the sustainability framework of the Bank, the status of Burundi is "red" in 2019; which reinforces the country's risk of high debt levels. Therefore, all Bank financing under ADF-14 is in the form of grants. 23. The deterioration of public finances since 2015 has affected the Central Bank’s performance, due to the extensive use of statutory advances to finance the budget deficit. Official foreign exchange reserves were down by almost 8% between 2014 and 2018, from 3.5 months in 2014 to 3.2 months in 2018. As a result, the official exchange rate of the currency depreciated by about 15% over the period. In 2018, the Central Bank of Burundi continued to implement the relatively expansionary monetary policy that has prevailed since the onset of the socio-political crisis in 2015. Thus, it has continued to facilitate the refinancing of commercial banks to support productive investments, especially in view of the decline in bank liquidity. The official exchange rate was around BIF 1808 to USD 1 in December 2018, compared to BIF 1617 for the same period in 2015, down 12%. Nevertheless, the parallel market is exerting increasing pressure on the exchange rate: USD 1 for BIF 2710 in October 2018 and USD 1 for BIF 2780 in January 2019. The inflation rate, which exceeded 10% in 2017 (14.6%), fell sharply in 2018 (-2.6%). It could increase in 2019 and 2020 owing especially to the election period.
24. Burundi’s external position remains fragile due to its huge trade deficit and the low level of foreign investment. Between 2011 and 2018, the current account deficit remained above 10% with a record of 14.5% of GDP in 2015 (see Figure 4). The country’s export base remains poorly diversified and is built essentially around coffee and tea, which account for more than 80% of exports. For their part, imports largely comprise manufactured goods, reflecting weakness of the national industry. In 2016 and 2018, the good performance of coffee exports combined with a decline in imports of goods and services led to a two-year consecutive reduction in the current account deficit (11.6% of GDP in 2017 and 10.4% of GDP in 2018). This decrease is expected to continue in 2019 with forecasts of 9.4% of GDP.
3 Burundi has no program with the IMF since 2016. The last debt sustainability analysis dates from 2015. 4 Source: Bank of the Republic of Burundi (BRB Central Bank). 5 Source : Bank of the Republic of Burundi (BRB Central Bank).
-20
-15
-10
-5
0
5
2011 2012 2013 2014 2015 2016 2017 2018 2019Burundi Afrique Centrale Afrique
Figure 5 – External current balance (% of GDP)
5
25. In terms of regional integration, Burundi has made significant strides towards the establishment of a common market as part of the East African Community (EAC). The measures taken include the establishment of a common external tariff, harmonisation of immigration and labour laws, removal of non-tariff barriers and finalisation of the Protocol on Good Governance. Burundi also signed the Agreement for the Continental Free Trade Area in March 2018. Therefore, the country must tackle the challenge related notably to its landlocked status, in order to take advantage of the opportunities offered by integration in the East African region and the rest of the continent. The country's score on the Africa Visa Openness Index6 (0.113 on a scale of 0 à 1) also requires further efforts on its part to facilitate the movement of people and trade with the outside world. Strengthening the road network (80% of the trade in goods) and developing the transport by lake are a priority for the country (Lake Tanganyika).
26. In terms of overall governance, the situation remains worrying, although progress in public finance management puts the country in the average risk category. Regarding corruption, the 2018 Corruption Perception Index, which measures countries in terms of the least corrupt, ranks Burundi 170th out of 180 countries (compared to 157th in 2017). However, on public finance management, the country has made progress since the 2009 and 2012 PEFAs, and the country risk is deemed average as indicated in the country risk assessment in Annex 15. Although the challenges remain significant, real progress has been achieved in reducing the stock of payment arrears on expenditures, reducing extra-budgetary funding, consolidating accounts into a single State account, predicting cash flow and improving the oversight capacity of the General State Inspectorate. On the fiduciary front, based on the analysis of the legislative and regulatory framework, the institutional framework, procurement practices and the integrity and transparency of the procurement system, the overall risk entailed in the use of this procurement system for Bank-financed projects is deemed substantial (see Annex 14).
27. Overall, the business environment in Burundi has been deteriorating in recent years, despite the progress in facilitating business creation. Between 2012 and 2018, the country slipped 12 spots in the Doing Business ranking7. In the 2019 ranking, Burundi went from 164th place in 2017 to 168th in 2018. In this ranking, the country slipped in several aspects, including getting electricity (lost one spot at 183rd), registering property (lost two spots at 97th), obtaining credit (lost one spot at 177th), trading across borders which lost five spots and enforcing contracts which lost up to eight spots (at 158th). Although the overall rating was unfavourable, there were some positive aspects: (i) in terms of starting a business, Burundi currently ranks 17th, thanks in particular to the reduction in the cost of registering a business; (ii) with regard to dealing with construction permits, the country rose from 168th to 162nd following the improved transparency of building permit processing.
28. Burundi’s private sector is underdeveloped. The private sector is dominated by informal sector micro-enterprises oriented primarily towards the local market. Its development is faced with: (i) poor access to finance ; (ii) a crucial lack of foreign exchange in the country; (iii) poor national transport infrastructure; (iv) the weakness of the energy sector; and (v) difficulty in obtaining certification for agri-food products. The share of private investment in GDP remains low (barely 15%), and is below the average for countries of the East African Community. In terms of competitiveness, the Global Competitiveness Report 2018 ranks Burundi 125th out of 135 countries, with a score of 3.21 over 7, and points out that factors such as market size, access to technology, acquisition of technical skills and development of the financial sector are among the major obstacles to the competitiveness of Burundian businesses.
29. The banking sector is the main component of the financial sector, which also comprises insurance companies, microfinance and social welfare institutions. On average, over the past five years, the banking sector (banking and financial institutions) has held 84.4% of total assets, ahead of microfinance institutions and insurance companies which accounted for
6 According to the 2018 report, the country's score is 0.113 on a scale of 0 to 1 (with 1 being the most open country), ranking
it 46th out of 54 countries.
7 World Bank Group (2018), Doing Business
6
11.4% and 4.3%, respectively. Banking sector credit to the economy represented 14.7% of GDP in 2017. Credit is concentrated in the trade and equipment sectors, which attract more than 61.1% of the whole. Credit is generally short-term (53.5% of the total). The banking market is dominated by three banks of systemic importance, which share 63.7% of sector assets, 60.7% of the credit portfolio and 66.2% of deposits. The low savings mobilisation capacity explains why only 9% of the deposits are for a two-year period or longer. The lending rate charged by the banks was 15.7% in 2018, compared with a credit rate of nearly 5.5%. As regards the stability of the financial system, the level of non-performing loans was relatively high at 14.5% in 2017, compared with the benchmark of 5%. In 2018, a law was passed aimed at laying the groundwork for the integration of the financial sector within the East African Community (EAC) and enhancing the efficiency and resource mobilisation capacity of the financial sector. The Bank will support the Government in setting up this secondary capital market.
2.3 Sectoral Context
30. Burundi is facing major economic and social development difficulties largely related to poor economic infrastructure.
31. Burundi's agricultural sector is an essential source of growth (40.7% of the GDP
in 2018, more than 80% of the workforce and about 70% of export revenue), but it is faced with significant constraints. The constraints are agronomic, technological and institutional. Agronomic constraints relate to: (i) low soil fertility that limits productivity; (ii) low input use; (iii) land fragmentation; (iv) inadequate supervision of the agricultural sector; (v) poor water management, processing and product conservation problems, and low agricultural mechanisation. Technological constraints include: (i) inadequate technological innovations; (ii) insufficient water resource management techniques for irrigation; (iii) insufficient technology for the processing and conservation of agricultural products, and the inadequate rural electrification. Socio-economic constraints comprise: (i) land issues and demographic pressure that make access to land difficult; and (ii) poor access to agricultural credit and inputs. Institutional constraints include: (i) difficulty in carrying out structural reforms and inadequate involvement of the private sector in financing the sector. With respect to agri-food valorisation, processing capacity is limited by various factors, including: lack of power supply, lack of product certification, technical weaknesses relating to processing procedures, and low storage capacity.
32. The energy infrastructure development level is inadequate. The energy access rate is limited (around 58.5% in the city, 1.2% in the rural areas en 2016) due to the inadequate development of energy infrastructure. Transmission and distribution networks are obsolete, with losses (estimated at 32.1% in 2016). Energy production is insufficient, leading to significant load shedding. The peak demand in 2016 was 53 MW for an energy output of 287.4 GWh. The total installed power capacity is 62.85 MW, half of which is thermal diesel. Electricity is still expensive in Burundi at an average rate of USD 0.20/kWh. The main challenges in Burundi's power sector relate to universal access to modern energy services, energy efficiency and sustainable development.
33. The transport sector has gained strength as shown by the steady improvement in the
transport composite index of the African Infrastructure Development Index (AIDI)8. Government's efforts in this regard received strong support from the Bank. However, there are still challenges that must be addressed to increase and diversify transport, namely: (i) reducing transport costs, which in Burundi - as in most landlocked African countries- represent between 15 to 20% of import costs (that is, three to four times higher than in most developed countries); and (ii) improving the transportation of people and goods, which is a key challenge for any development in the country as well as in the major cities, including Bujumbura.
Burundi ranks 3rd in the EAC in 2019 and 20th in the continent in the transport composite index of the Africa
Infrastructure Development Index (AIDI)
7
2.4 Social Context and Crosscutting Themes
34. Burundi is confronted with significant and persistent drivers of fragility as indicated by the results of the 2018 CFRA. The 2015 crisis severely affected Burundi's economic management and business environment. This situation, coupled with decreased access to public services, does not allow for social autonomy. The high poverty rates among the population and the lack of economic opportunities continue to generate relatively strong pressure against economic and social inclusion. The community labour introduced by the Government is one of the initiatives that could help improve access to basic services through a participatory approach.
35. Overall, the 2018 Country Resilience and Fragility Assessment (CRFA) suggests low capacity and average pressures for Burundi. In all seven aspects of the CRFA, the manifestation of pressure exceeds the country's capacity: (i) the areas of political inclusion, security and justice are characterised by strong pressures (particularly for political inclusion), with weak justice and security capabilities; and (ii) the areas of social cohesion, economic and social inclusion and externalities are characterised by low capacity (especially as regards justice) and low pressures (for economic inclusion and social cohesion). To mitigate the drivers of fragility and build resilience in Burundi, it is imperative: (i) that efforts be pursued in the short term to improve the political and security situation as well as overall country governance; and (ii) that interventions be accelerated and sustained in order to strengthen the country's economic base and create income-generating opportunities for the poorest segments. It is against this backdrop that PND 2018-2027 was developed. The ambition is to consolidate the resilience of Burundi’s economy and address the constraints impeding the transformation of the economy into that of an emerging country.
36. The majority of the Burundian
population lives in poverty, especially in rural areas9. Nearly two out of three Burundians are unable to meet their basic food and non-food needs on a daily basis (data from the ECMVB-2013/2014 Household Living Conditions Survey). Estimates from the Burundian Institute of Statistics and the United Nations indicate that the phenomenon worsened in 2017 with the poverty rate reaching almost 66% from 64.6% in 2013. Burundi ranks 185th out of
189 countries according to the 201810 edition of the UNDP Human Development Index, with a human development index of 0.404. Food security is a major challenge. In 2016, Burundi ranked last in the Global Food Security Index, with nearly one in two households suffering from food insecurity. More than half of children (six out of ten) were stunted in 2017. Health indicators are also low: (i) life expectancy, which was 57 years in 2014, dropped to 52.6 in 2017; (ii) the under-five mortality rate is 42,511 per 1000 live births; (iii) the incidence of malaria is 156.2 per 1,000 people at risk and that of tuberculosis is 114per 100,000 people; (iv) HIV prevalence stands at 1.1%.
37. Burundi has a high unemployment rate, particularly among young people. In the strict ILO sense, Burundi has a 79% unemployment rate (ECVMB-2013/2014). However, more
9 The last ECMVB household living conditions survey was conducted in 2013/2014 with results made public in 2016. Currently, no further
surveys are planned due to lack of funding 10 UNDP, Human Development Report 2018 11 Childmortality, 2017
Box 1- Country Resilience and Fragility
Assessment
Pressure drivers of fragility : (i) Land fragmentation
and land conflicts often generate conflicts with a high
potential for instability; (ii) Youth unemployment (low
youth empowerment rates and lack of a strategy for
enabling to them to gain access to employment) is a
threat to the country's security balance; (iii) Low
institutional capacity resulting in difficulties in
implementing economic policies; (iv) High production
costs and low skills of the labour force, lack of
financing and the business environment undermine the
development of the private sector; (v) regional
disparities in the availability of infrastructure create
spatial inequities; (vi) The predominance of
subsistence agriculture and low agricultural
productivity make it impossible to ensure food
security; and (vii) Cross-border effects (presence of
Burundian refugees in neighbouring countries and of
foreign refugees on Burundian soil) are a constant
source of threat to the country’s political stability.
Box 1 – Pillar 1 and Box 2- Pressure Drivers of
Fragility
(i) Land fragmentation and land conflicts often
generate conflicts with a high potential for instability;
(ii) Youth unemployment (low youth empowerment
rates and lack of a strategy for enabling to them to gain
access to employment) is a threat to the country's
security balance; (iii) Low institutional capacity
resulting in difficulties in implementing economic
policies; (iv) High production costs and low skills of
the labour force, lack of financing and the business
environment undermine the development of the private
sector; (v) regional disparities in the availability of
infrastructure create spatial inequities; (iv) The
predominance of subsistence agriculture and low
agricultural productivity make it impossible to ensure
food security; and (v) Cross-border effects (presence
8
than 40% of those who claim to be employed are actually underemployment because of the duration of their work. With a rate estimated at 65% in December 2017, youth unemployment is a cause for concern. The phenomenon may be due, among other causes, to the limited development of the private sector, the difficulty faced by young entrepreneurs in gaining access to finance, the poor performance of the education system, the persistent mismatch between skills and labour market needs owing to the lack of an appropriate policy for the development of technical and vocational education. Initiatives in support of job creation for young people (project incubators, setting up young people in livestock and agricultural projects, in particular) have been launched by the authorities in recent years, but are poorly coordinated and inadequate, given the magnitude of the needs.
38. Burundi has made progress in women’s empowerment with the implementation of
the National Gender Policy adopted in 2004, but there are still challenges to be addressed. The CFRA notes the improvement achieved with the introduction of quotas for women in the Constitution (at least 30%). That paved the way for women’s entry into the Senate and the National Assembly, where they make up 42% and 36.4% of the members, respectively, according to the latest estimates of the Inter-Parliamentary Union. However, the quota has not been achieved at the local level and is not applied to technical positions. At the institutional level, the existence of the Ministry of Social Affairs, Human Rights and Gender, which established a National Gender Equality Policy in 2012 with its four-year Action Plan, and the designation of Sector Units in the various ministries, represent a major institutional breakthrough. Despite this progress, gender inequalities remain significant in Burundi. The country is ranked 108th on the gender inequality index. Women’s participation rate in Burundi is high in low-skilled jobs (mostly in agriculture) and in the informal sector. This problem needs to be addressed if economic parity is to become a driver for growth and integration. Access to resources and factors of production, especially land, is one of the main sources of inequality. This situation is difficult to change due, among others, to the law on inheritance and land tenure that is still governed by customary law whereby divorced women, single mothers and widows have no right to property. Women continue to be among the main victims of conflicts, and mechanisms for providing care to victims and fighting sexual and gender-based violence are extremely limited, although provided for by law.
39. The country is increasingly vulnerable to climate change and the degradation of the natural environment (see Annex 17). The 2018 CFRA indicates that Burundi’s policies for the protection and sustainable use of natural resources is relatively weak. The implementation of policies and conventions on climate change is slow. In addition, pressures related to access to food remain relatively high. Climatic events such as El Niño and La Nina continue to have a negative impact on agricultural production and food security. Natural disaster risks are real and when compounded by political and security crises, they become the grounds for population displacements (70% of internal displacements are due to natural disasters). Challenges related to the environment and natural resource management comprise: (i) population growth; (ii) land conflicts; (iii) conservation of biodiversity; (iv) use of biodegradable material; (v) protection of the waters of the tributaries of Lake Tanganyika; (vi) protection and rational use of land; and (vii) management of chemicals and other wastes. The challenges of climate change include: (i) climate resilience and management capacity; (ii) forest exploitation and protection of natural ecosystems; (iii) greenhouse gas (GHG) mitigation and sequestration capacity; (iv) research/development and technology transfer capacity; (v) gender mainstreaming in the fight against climate change; and (vi) the reliability of weather forecasts. Faced with these challenges, the Government is working to mainstream climate change issues into the development programmes.
3 STRATEGIC OPTIONS, PORTFOLIO PERFORMANCE AND LESSONS
3.1 Country Strategy Framework
40. To address the challenges it continues to face, and as a follow-up to the 2012-2016 Poverty Reduction Strategy, the Government of Burundi in August 2018 prepared a National
9
Development Plan for Burundi for the decade 2018-2027 (Burundi PND 2018-2027). The PND is designed to be part of a development approach based on a new drive for the transformation of economic, demographic and social structures. The PND was intended, among others, to generate multiplier and lasting effects to improve economic growth and average per capita income, address the basic needs of the people, reduce poverty, develop human capital, and foster environmental sustainability and social equity.
41. The PND is structured around 11 thematics: (i) modernise agriculture; (ii) increase energy production; (iii) improve knowledge based on technology and expertise; (iv) develop the natural resources sector; (v) diversify and promote a competitive and healthy economy; (vi) create an enabling environment for industrialisation; (vii) develop human capital; (viii) strengthen transport, trade and ICT infrastructure; (ix) promote tourism; (x) public-private partnerships; and (xi) regional integration and international cooperation. Based on the challenges identified at sector level and the community consultations that were held, a Priority Action Plan (PAP) was developed. It identifies five strategic thrusts and puts the total cost of the PND at FBU 20,385 billion (around USD 11.1 billions) over the 2018-2027 period. Thus: (i) 76.6% of the resources will be allocated to the development of growth sectors for the structural transformation of the economy; (ii) 17.6% to human capital; (iii) 2.9% to the environment, climate change and land-use planning; (iv) 2.1% to governance, security and the protection of national sovereignty; and (v) 0.8% to the mobilisation of innovative resources.
42. The challenges facing the Government in the PND implementation include: (i) initiating the development of the main national sector strategies in line with the major objectives set; (ii) adopting measures to mobilise the external financing required for the implementation of programmes; iii) to put in place an adequate mechanism for monitoring/evaluation mechanism of the PND; and iv) not to be challenged and substantially revised in the aftermath of the 2020 presidential elections. Addressing these challenges is extremely important, given the ambitious nature of the PND economic growth forecasts (an average growth of 10.7% of GDP over the period and a GDP per capita expected to reach USD 810 by 2027, compared with USD 274 in 2017) and considering that these projections are based on ambitiuous assumptions (GDP growth of 10.7% over the period and increase of the GDP per capita from 274$ in 2017 to 810$ en 202712).
3.2 Aid Coordination and Harmonisation
43. The formal mechanism for consultation and dialogue between the Government and the various development partners is barely functional in Burundi. The mechanism comprised: (i) a strategic forum chaired by the Minister of Finance, which was supposed to meet monthly; and (ii) a political forum that was supposed to be held quarterly and chaired by the Second Vice-President of the Republic. The management of the period following the events of 2015 was not conducive to the continuation of dialogue between the Government and the technical and financial partners within the partnership framework defined, even though bilateral dialogue was maintained. Moreover, it is worth noting that a number of Government-headed consultation frameworks are operating, especially in the health sector. In contrast, in the area of structural reforms for instance, the deficit in coordination worsened with the January 2016 interruption of the reform programme supported by the IMF Extended Credit Facility (ECF) 13. In 2018, the technical and financial partners relaunched a consultation and internal coordination framework. They set up a mechanism comprising a three-tier coordination framework bringing together: (i) heads of diplomatic missions and heads of agencies; (ii) heads of cooperation; and (iii) sector groups.
12 Data and objectives of the PND. 13 In 2018, the dialogue between the Government and the IMF on the re-engagement in the country was initiated.
The Bank attended the technical mission carried out by the Fund's. The discussions are ongoing without a clear
visibility on the terms of re-engagement. At this stage, the issue under discussion is the consultations the Article
IV the IMF's Status.
10
44. For its part, the Bank is playing an active role in facilitating dialogue and aid coordination mechanisms. It did not suspend its operations in Burundi despite the socio-political crisis of 2015. It assumes the role of leader of TFPs in the transport sector where it is a key player for road financing and regional integration. Moreover, given that the Bank maintains effective dialogue at bilateral level with other partners to address the numerous challenges and mobilise resources for project co-financing, it is well placed to play an advocacy role in the country. As far as financial support is concerned, the Bank is among Burundi’s three main development partners in terms of aid volume (along with the World Bank and the European Union).
3.3 Weaknesses and Opportunities
3.3.1 Challenges and Weaknesses
45. The main challenges are akin to the drivers of fragility (see previous section). The episodes of political instability experienced by Burundi were not conducive to laying the groundwork for sustained economic growth. The major constraints identified as hindering the structural transformation of the economy may be summarised as follows: (i) low agricultural productivity; (ii) high vulnerability to external shocks; (iii) inadequate power supply; (iv) rapid population growth; (v) space management; (vi) insufficient and weak quality of transport infrastructure; (vii) low human capital; (viii) inadequate ICT infrastructure; and (x) failure to mainstream climate change into all social and economic development sectors.
3.3.2 Strengths and Opportunities
46. Despite these constraints, Burundi has several advantages/opportunities which, if
properly harnessed, could have a real impact on growth and job creation:
The agricultural sector has considerable advantages: (i) the availability of a hard-working agricultural workforce; (ii) the possibility of having several crop cycles per year, given the rainfall patterns; (iii) the existence of varied ecosystems, allowing for a widely diversified agricultural system (food and cash crops, and the development of plant, animal and fisheries production value chains); (iv) the availability of 120,000 ha of marshland, irrigable plains (Mosso and Imbo), a large network of rivers, and abundant rainfall for at least 6 months a year (which can be enhanced by adopting appropriate irrigation techniques).
The country’s mining potential is huge with significant reserves of minerals such as nickel, coltan, vanadium, phosphate and limestone. Burundi has the world’s second-largest nickel reserve, accounting for 6% of the global reserve estimated at nearly 200 million tonnes. However, all this mining potential remains under-exploited.
Lake Tanganyika offers the country significant opportunities: This lake serves about 10 ports. The development of port activities could make Burundi an inter-regional trade hub. The renovation of the Bujumbura Port will increase trade, especially the transit of goods to and from various countries of the sub-region (Rwanda, Tanzania, DRC, Zambia, etc.), thereby reducing transport costs,
The exploitable hydropower potential is 1,300 Megawatts: Currently, less than 40 MW are actually exploited.
The country is characterised by up to five ecological zones (the Imbo plain, the Mumirwa western escarpment, the Congo Nile crest, the central plateau and the Moso lowlands (in the east). These ecological zones offer a series of protected areas and biodiversity-rich aquatic environments that could positively affect the development of a healthy natural environment, natural resource conservation and management, and climate change mitigation.
11
3.4 Country Portfolio Performance Review
3.4.1 Composition
47. The Bank’s active portfolio in Burundi as at end-March 2019 comprised 16 public sector operations, totalling approximately UA 247.56 million (see Annex 8). The focal sectors of operation are: transport (60.6%), energy (32.9%), agriculture (4.8%), multisector (1.2%), social sector (0.4%). This situation reflects the strategic choices defined by the Bank's assistance strategy for the country for the period 2012-2016, which was extended to 2018, and focused on governance and infrastructure improvement (figures 5 and 6).
3.4.2 Analysis of Performance Indicators
48. The portfolio performance analysis shows a relatively satisfactory disbursement rate of around 34.3%, for an overall average age of about three (3.8) years. The decrease in the disbursement rate in 2018 and the first quarter of 2019 was due to the fact that a number of projects, such as PABVARC and two road projects (RN5 and RN13), were closed in 2018, while the portfolio was rejuvenated with the entry of two new projects in November and December 2018 for which funding has yet to be disbursed.
49. As at 29 March 2019, none of the current projects was deemed at risk. However, 10% of the national project portfolio (the Jiji Mulembwe Hydropower Project) appeared on the dashboard due to the slow procurement and disbursements rate as at 28 March 2019, compared with 22% of the portfolio as at 31 December 2018. Concerning the multinational public portfolio, three of the six projects were flagged. These are: (i) BURUNDI-DRC NELSAP Interconnection; (ii) RUSUMO-BURUNDI Regional Project; and (iii) RIZIZI III. These multinational projects mainly comprise energy sector projects characterised by slow implementation and low disbursement rates. In addition to the lack of national capacity in the sector, the multinational nature of these operations call for constant consultation between various stakeholders to ensure progress in implementing the activities programmed. Furthermore, since a number of these operations are implemented under a public-private partnership arrangement, they take more time to design. To improve the monitoring and status of energy sector projects, the Bank's Country Office in Burundi has been strengthened with an energy specialist. Thus, the Bank is giving itself additional resources to support capacity building for the public corporation in charge of energy (REGIDESO). As a result, significant progress has been made, especially with the acceptance of the use of English law by the three countries (Rwanda, DRC and Burundi), which resolves the main point hindering the RIZIZI III Project, and the release of the first disbursement for the Jiji Mulembwe Hydropower Project.
50. The Bank will continue its efforts to consolidate the Burundi portfolio, in light of Presidential Directive No. 02/2015 Concerning the Design, Implementation and Cancellation of Bank Group Sovereign Operations. The dialogue on performance will be strengthened, especially with the implementation of the Country Portfolio Performance Improvement Plan (CPPIP) 2018 (see Annex 6), formally approved by the Government and the Bank. A focus will be put on technical assistance in the energy sector to strengthen skills and mastery of procedures for faster implementation of ongoing programs. Capacity building will also focus on the
Feed Africa, 4,8% Light up
and power Africa , 23,1%
Industrialise Africa; 9,4%
Integrate Africa, 42,4%
Improve the Quality
of Life in
Africa, 20,3%
Figure 5 – Breakdown of the Active Portfolio by Sector Figure 6 - Breakdown of the Active Portfolio by the High 5s
4,8%
32,9%
60,6%
0,4%
1,2%
Répartition portefeuille public /secteur
Agriculture Energie Transport
Social Multisecteur
Energy
Multisector
12
management of regional operations that are the bulk of the portfolio, and the coordination among states will be improved.
3.5 Lessons from the CSP 2012-2018 Completion Report and the CPPR 2018
51. Although part of the implementation period of CSP 2012-2018 was affected by the political crisis, this strategy enabled the achievement of outcomes aligned with the original objectives14. Lessons from implementing CSP 2012-2018 helped to shape several aspects of CSP 2019-2023.
The need to multiply the sources of CSP funding: Given that ADF and TSF
allocations are low compared to the country’s needs, the Bank will continue to
mobilise additional sources of financing to leverage resources, especially
through the private sector window, trust funds and co-financing;
The need to address fragility issues in order to build the country's resilience:
The Bank should better address fragility issues as part of its new assistance
strategy with a view to building resilience in Burundi (better integrating the
fragility diagnostic in Burundi);
The need to support the development of the private sector in Burundi: Given
the magnitude of unemployment, especially among young people and women,
the Bank will need to strengthen dialogue with the private sector (identification
of ways to support its development);
The need for the Government to focus its efforts on the development and/or
updating of national sector policies in order to operationalise and effectively
implement the National Development Plan 2018-2027 (the lack of updated
sector strategies and frameworks for coordination with technical and financial
partners was one of the weaknesses that characterised the CSP implementation);
and
The need to integrate lessons from the 2018 portfolio review into the
preparation of future Bank operations: These include, for the Bank: (i)
ensuring that the project baseline study is of very good quality; (ii) ensuring the
mastery of national procedures and those of the Bank by project teams; (iii)
building implementation capacity in the energy sector; and (iv) holding regular
meetings with the Government to monitor the portfolio improvement action
plan.
4 BANK GROUP STRATEGY 2019-2023
4.1 Rationale
52. Despite the progress achieved in stabilising the country since the 2015 crisis, Burundi continues to face huge development challenges. The constraints were presented in the section on the economic context and drivers of fragility. However, there are opportunities and real potential in Burundi that could be leveraged to build the country’s overall resilience.
53. The CSP drew on outcomes and lessons from implementing CSP 2012-2018, the
diagnostic of the drivers of fragility and a dialogue and consultation process involving the authorities, civil society, the private sector and development partners. Missions were fielded and dialogue sessions held in November and December 2018 and in May 2019 (the dialogue workshop). The CSP preparation is also based on the conclusions of the mission of the AfDB Executive Directors to Burundi in February 2019 and their discussions with senior officials. Thanks to these consultations, an agreement was reached with stakeholders on the need to strengthen the opening up of the country internally and externally, the need to introduce reforms that would transform the country’s agriculture into one that is market-oriented, and the need to improve the quality and availability of services in the power sector. Discussions also
14 Cf. CSP 2012-2018 Completion Report and the 2018 Portfolio Performance Review considered by CODE on 7 May 2019
13
underscored the importance of developing the private sector to enable it to serve as a driver of inclusive and job-creating growth. Access to finance and technical assistance for the private sector were also identified as support areas to be considered by the Bank (see Annex 12 on consultations).
4.2 CSP Objectives and Strategic Pillars
54. Based on these considerations (analysis of the PND 2018-2027 and the in-depth discussions with the Government and development actors), the Bank’s comparative advantage, the outcomes of the CSP 2012-2018 and CFRA implementation, the proposed strategic thrust of the new CSP for Burundi is to support the Government in addressing drivers of fragility and building resilience in Burundi. This strategic objective is in line with the Bank's Strategy for Addressing Fragility and Building Resilience. CSP 2019-2023 will support measures aimed at removing impediments to the development of the country's potential, in an effort to achieve inclusive growth and build economic resilience, while ensuring the transition to a green economy. It is aligned with the Bank's High 5s and Ten-Year Strategy 2013-2022
4.2.1 Intervention Pillars Proposed for the 2019-2023 Period
55. To achieve this general objective, two complementary and mutually reinforcing pillars are proposed.
56. Pillar 1 relates to agricultural
development and transformation. Its objective is to
modernize agriculture with a view to diversifying
production and improving the income of rural
populations. Under this pillar, the Bank will help to
improve the living conditions and the resilience of
rural communities, through an integrated land
management approach involving the optimal use of
natural resources adapted to the increasing
population pressure. The agricultural sector is a
significant driver for poverty reduction and job
creation in Burundi. This pillar is part of the
“Economic and Social Inclusion” dimension of the
CRFA 2018 because it addresses issues of extreme
poverty and contributes to capacity building in the
direction of creating economic opportunities (see
Box 2)
57. This will involve: (i) improving the standard of living of the populations in the
targetted zones; (ii) developing the entrepreneurial skills of young people and women with a
view to their empowerment; (iii) supporting agricultural development hubs (agropoles) and
increasing private investment in processing; (iv) developing lands subject to management
resilient to climate changes. The Bank will lay special emphasis on supporting the Government
in creating an agro-industrial processing area in Burundi aimed at encouraging the
establishment of processing plants in areas of high agricultural production (for processing
commodities and minimising post-harvest losses). Efforts will also be made to support the
development of technical and research capacity in agri-food processing and food fortification
through the introduction of a university training course (the establishment of a centre of
excellence in nutrition sciences will help to reduce malnutrition). Agricultural transformation
as part of implementing the Technology for African Agricultural Transformation (TAAT)
programme, will target communities that are not only economically, socially and
environmentally weak as well as vulnerable to the adverse effects of climate change, but also
have agricultural and fish-farming potential that, if sustainably exploited, could help improve
food and nutrition security, increase the income of vulnerable small producers and mitigate the
impact of poverty on rural households.
Pillar 1 has been defined in relation to the
CRFA to:
(i) Contribute to the reduction of the
relatively high pressure the country is
experiencing due to extreme poverty and
lack of economic opportunities: increased
agricultural production, effects on the
income of the beneficiary population, job
creation, etc.;
(ii) Build capacity (currently below average)
in economic and social inclusion:
agricultural productivity, industrial
processing areas, etc.; and
(iii) Build capacity (currently extremely low)
in social cohesion while reducing pressure:
land management.
Box 2 – Pillar 1 and CFRA
14
58. Pillar 2 concerns the improvement of transport and energy infrastructure. It aims to remove the bottlenecks restricting the productive sectors and hindering access to domestic, regional and international markets. It takes into consideration the CRFA’s diagnostic to build capacity for economic and social inclusion and social cohesion (see Box 3). The transport sector is a significant driver for strengthening regional integration and trade in East Africa, and the current state of the energy sector is a major constraint to the reduction of input costs, the processing of primary commodities and the achievement of the people’s welfare. Therefore, this pillar will: (i) contribute, as a factor of inclusion, to bridging the infrastructure gap in the transport and energy sectors; and (ii) promote equitable access to basic infrastructure. In the transport sector, the Bank will support the development of multimodal transport (roads and ports) to enable Burundi to take advantage of its geographic position. It will continue operations to open up agricultural production areas and create closer links between production areas and outlets (lake transport will be prioritised by rehabilitating the Bujumbura Port).
59. In the energy sector, the Bank will focus on the construction, rehabilitation and/or extension of energy infrastructure as a prerequisite for the sustainable structural transformation of the Burundian economy. Better access to energy services by households and businesses (including in the agricultural and agro-industrial sectors) is a factor in reducing production costs. This will encourage agro-processing and agribusiness. The Bank will continue to strengthen its interventions to facilitate access to energy for the poorest people and resolve structural problems in the energy sector by prioritising green energy and supporting off-grid solutions. It will also focus on capacity building to accelerate the implementation of projects in this sector. The Bank will support private sector involvement for greater participation in sector investments, as well as ensure greater synergy with other development partners for the conduct of joint operations at both the national and regional level. The Bank will strengthen its activities aimed at accelerating regional interconnection projects with a view to establishing a regional electricity market.
4.2.2 Crosscutting Areas
60. To maximise the impact of implementing these two pillars, the Bank will strive throughout the implementation of CSP 2019-2023 to: (i) support the improvement of governance and build capacity; (ii) mainstream climate change and gender in CSP focal sectors; and (iii) promote private sector involvement in these focal sectors (see Annex 17).
61. In terms of capacity building, the Bank’s action will be at the macroeconomic and institutional levels and in the key sectors of the national program, taking into account the challenges noted above. Actions and areas of focus will include public financial management, especially internal and external resource mobilization, debt analysis and public policy management, financial sector regulation, etc. The Bank will foster knowledge exchange among peers though high-level seminars, training coupled with internships enabling beneficiaries to develop the necessary skills than can be transferred to others The capacities for diagnosis, development and implementation of policies and reforms will be strengthened at the central and decentralized levels (provision of tools, knowledge and good practices for real transformation).Stakeholder capacity building for participation in regional operations is also critical, given that regional energy projects require coordination with several countries in key areas. Bank operations will include technical assistance to address the challenges of low human capital in Burundi. In the energy sector, for instance, the Bank's technical assistance will help to identify current skills gaps, develop appropriate training programmes, and provide the skills needed to grow the sector. It will support capacity-building initiatives for actors through hands-on training programmes for technicians, on-the-job training for engineers, and training and
Pillar 2 builds on the CRFA to:
(i) Build capacity (currently below average)
in economic and social inclusion: transport,
energy, internal and external access,
reduction of input costs; and
(ii) Build social cohesion capacity (now
extremely weak), while reducing pressure:
private sector development, improved access
to electricity services.
Box 3 – Pillar 2 and CFRA
15
certification programmes for electricians. The Bank will also explore opportunities for capacity building in the mining sector, including through the Bank’s Natural Resources.
62. Private sector developmentand job creation. Under Pillar 1, the Bank will support agricultural entrepreneurship particularly by strengthening human capital for all segments of agricultural value chains and providing support funds for agricultural initiatives. Under Pillar 2, and particularly with regard to energy, the Bank will focus on strengthening the electricity value chain and technical assistance activities that can forge ties with local SMEs for the construction and maintenance of facilities that require semi-skilled and unskilled labour. Three areas of intervention will be prioritised, given their income-generating and job-creation potential: (i) rehabilitation of the existing network and production facilities; (ii) extension of the transmission and distribution network to increase electricity access for businesses and individuals in under-served areas of the country; and (iii) support for off-grid development (rural electrification) to help private sector enterprises to invest in technologies that would reduce their reliance on the domestic power supply. The Bank will also consider the possibility of providing the African Legal Support Facility with technical and financial assistance in connection with the conclusion of PPP contracts, particularly in the energy and mining sectors.
63. Governance: The successful implementation of development programmes hinges on the stabilisation of the overall macroeconomic framework. Unfortunately, it was not possible to consolidate the progress achieved in this area between 2012 and 2014 because of the 2015 crisis. Thus, in general terms and in the absence of budget support operations, the Bank will provide targeted institutional support required to strengthen the public financial management institutional framework, and particularly mobilise and secure domestic fiscal revenue. The improvement of sector governance will be included in the two pillars: energy sector management, streamlining public spending in the three focal sectors, results-based management (implementation of medium-term programming tools for financing the agriculture, energy and transport sectors); (ii) advisory support informed by policy briefs aimed at improving economic governance and (iii) support for reforms aimed at improving the overall business environment.
64. Gender: Gender mainstreaming will remain a priority in all Bank operations. High
female representation will be ensured in: (i) the selection of beneficiaries of agricultural projects
such as members of agricultural groups and cooperatives, (ii) the recruitment for jobs on
road/port and energy projects; and (iii) the selection of beneficiaries of private sector support
funding.
16
4.2.3 Selectivity
65. The strategic thrusts take into
account the need to generate the greatest
possible impact through the interventions.
Therefore, the Bank worked with the
Government during the consultations to
remain within limited areas of intervention, in
the spirit of complementarity with other
technical and financial partners, all with a
view to having a real impact.
4.2.4 Alignment
66. The proposed pillars are aligned
with the Bank's High 5s, namely "Light up and
Power Africa", "Integrate Africa", "Feed
Africa", "Industrialise Africa", and "Improve
the quality of life for the people of Africa"
"(See Annex 13). They are in line with the
Bank's East Africa Regional Integration
Strategy for 2018-2023, and the Strategy for
Addressing Fragility and Building Resilience
for the 2015-2019 period. They are also
aligned with the Jobs for Youth in Africa Strategy (2016-2025) and the Strategy for Agricultural
Transformation in Africa (2016-2025). Moreover, the pillars are based on the vision laid out in
the country's National Development Plan.
4.2.5 Complementarity with other PTFs
67. The Bank's interventions will continue to be complementary with those of other TFPs through periodic consultations and discussions at various stages of the Bank's project cycle. The PTF intervention matrix in Annex 4 reflects good division of labour and coverage of all sectors. Therefore, the Bank's operations complement those of TFPs in other resilience-building areas, where the partners do not have comparative advantage, particularly in the areas of political governance, justice and security. The Bank will continue to play a leading role in donor coordination, especially as concerns infrastructure development and the strengthening of regional integration, and to support the revival of the framework for dialogue between the Government and TFPs.
4.3 Expected Outcomes and Targets
68. The main CSP outcomes and targets are developed according to the two pillars, and will be achieved through new operations as well as those already in progress. Annex 1 presents the expected outputs and outcomes of each pillar.
4.3.1 Pillar I: Support Agricultural Development and Transformation
69. The objective of this pillar in this pillar is to modernize agriculture with a view to
diversifying production and improving the incomes of rural populations. This will reduce
inequalities and mitigate the factors of fragility through improved income (rural populations,
young people and women in particular).
70. Regarding the improvement of the standard of living of the populations, the targeted
results include: (i) the reduction of the poverty rate from 61% to 55% by 2023; (ii) the increase
of the productivity of maize and cassava by 1 to 2.5 t / ha and 4.5 to 12 / ha and (iii) the reduction
of the rate of chronic malnutrition from 55% to 40%. As part of the promotion of agricultural
entrepreneurship of young people and women, the interventions aim to create 5,000 jobs,
Box 4 – Selectivity Criteria
The definition of the intervention pillars of the new
CSP was based on various selectivity criteria,
including:
Alignment: The need for interventions to be aligned
with both the country's development priorities (PND
and sector strategies) and the Bank's priorities;
Available and mobilisable resources: Consideration
of country resource allocations (performance-based
allocations, TSF), trust funds, resources meant for
the private sector, possibilities of co-financing with
other partners;
Complementarity: The need not to duplicate existing
interventions (which are funded either by other
partners or by the Government) and to maximise the
impact of past or ongoing interventions;
The Bank’s comparative advantage: The need to rely
on the resources and expertise of the Bank in the
choice of areas of intervention, based on its
experience at the continental level and its recognised
positioning in Burundi;
Impact of interventions: The need to take resource
availability into account when deciding the number
and size of operations to maximise their impact.
17
including 4,000 directly in the agricultural sector. Concerning the development of agricultural
hubs and the increasing of private investments in processing, the targeted results are: (i) the
transformation of the agricultural sector through the structuring of agricultural hubs to enable
them to serve as industrial plantations with surplus that can be used by the agri-food industry;
and; (ii) attracting private investment trough capacity building for stakeholders to boost their
ability to attract private investors and negotiate concessions and Public Private Partenerships
(PPP) contracts. Regarding institutional capacity building and adaptation to climate change, it
is expected, among others: (i) the management of 60,000 ha of land resilient to climate change;
(ii) the improvement of climate forecasts for rapid alert; (iii) popularization of improved
techniques for wood utilization and renewable energies.
4.3.2 Pillar 2: Improvement of Transport and Energy Infrastructure
71. The objective of this pillar is to remove the bottlenecks restricting the productive sectors and hindering access to domestic, regional and international markets.
72. With respect to support for the development of multimodal transport in Burundi, the expected outcomes comprise: (i) increasing in regional trade from 26% to 35%; improving trade between the South, Southeast and the rest of the country; (ii) positionning Burundi at the center of regional trade between South, North and East Africa; (iii) increasing trade between two fertile agricultural areas (eastern Burundi and western Tanzania); (iv) easing of the traffic between the centre of the country and the Mosso agricultural production areas to the south and the east; (v) lowering the transportation and supply costs for the country's sugar company; (vi) improving access to tourist sites in Rutana (Karera Falls, Germans Cliffs) and Burundi provinces (Source of the Nile); (iv) to lower the costs of evacuation and supply of the country's sugar company,; (v) improve accessibility to tourist areas in the Rutana (Kareraa Falls, Germans' Rift) and Burundi (Nile Source) provinces; and (vi) improving access to the Musonganti (nickel, iron, copper, cobalt and platinum) and Mukanda (vanadium) mining areas. 73. In an effort to help address the structural problems in the energy sector and increase access to energy for the poorest, the Bank will accelerate the implementation of major ongoing energy sector projects in its portfolio, in line with the new Energy Partnership for Africa, comprising: the Burundi-Rwanda Power Grid Interconnection Project that is being implemented as part of the Nile Equatorial Lakes Subsidiary Action Programme (NELSAP), the Jiji and Mulembwe Hydropower Plant Development Project, the Regional Rusumo Falls Hydropower Project, and the Ruzizi III Regional Hydropower Plant Project. The outcomes expected by 2023 are: (i) improving of the electricity coverage rate from 10% to 14.9%; (ii) increasing the energy production by 74.7 MW; and (iii) decreasing the electricity cost (generation and transmission) from USD 0.20 to USD 0.10.
4.4 Indicative Operational Programme (IOP) and Knowledge Management
74. The Bank's indicative operational programme (IOP) for CSP 2019-2023 (see Annex 2) was guided by consultations with the Government and other stakeholders based on: (i) activities that are required to address the drivers of fragility and build the resilience; and (ii) available and mobilisable resources. Ten (10) operations are planned for the 2019-2023 period: (i) three operations will focus on supporting agricultural transformation; (ii) three will be implemented in the energy sector; and (iii) three will enable the improvement of the transport sector. In addition to being considered under both pillars, crosscutting themes such as governance, capacity building and gender will be supported by operations funded mainly from TSF Pillar III.
75. Non-lending activities will focus on providing strategic advice to ensure complementarity with the lending programme, thereby strengthening the Bank's position as a knowledge-generating and development institution. These activities will include: (i) the preparation of policy briefs intended to inform dialogue with and support the Government in taking concrete policy action in the focus areas; and (ii) the conduct of economic and sector work aimed at deepening the Bank's knowledge of the country and throwing more light on investment operations envisaged in the provisional operational programme.
18
4.5 CSP Financing
76. The mobilisable resources for financing the 2019-2023 strategy could reach UA 148 million, drawn mainly from ADF-14 and ADF-15: (i) UA 52 million for a performance-based allocation; (ii) UA 43 million under the Transition Support Facility; (iii) UA 39 million mobilisable at the regional level; and (iv) UA 14 million in non-sovereign resources. The Bank will also continue its efforts to mobilise co-financing from other technical and financial partners (estimated at about UA 70 million). It will use the co-financing partnership agreements signed with various partners such as the European Union, the World Bank, the Japan International Cooperation Agency (JICA) and the International Fund for Agricultural Development (IFAD), and will strive to seek funding from other sources, including the Nigeria Trust Fund, the Global Environment Facility (GEF) Trust Fund, the Global Agriculture and Food Security Programme (GAFSP) Trust Fund and climate funds.
4.6 CSP Monitoring and Evaluation
77. The results-based logical framework will serve as a basis for the monitoring and evaluation of outcomes. It is based on the PND national monitoring system. Annual portfolio performance reviews (APPRs) will be used to assess the progress achieved in implementing the operations. A mid-term review will be conducted in 2021 to assess progress towards achieving the CSP outcomes, and to propose necessary adjustments. The completion report will be prepared at the end of the strategy period in 2023. Burundi's statistical system contains inadequacies as regards the indicators needed to monitor key sectors of the PND and the High 5s. Support will be provided to build its capacity (update of the National Statistics Development Strategy).
4.7 Country Dialogue
78. The Bank's physical presence through the strengthening of the team at the Burundi Country Office (COBI) will facilitate permanent effective dialogue and close portfolio monitoring. The country dialogue will focus on: (i) mitigating drivers of fragility and building the country's resilience; (ii) developing the private sector as a driver of growth and factor for alleviating unemployment; (iii) mobilising domestic resources and external assistance, notably through improved dialogue with TFPs; (iv) regional integration; (v) women's empowerment; and (vi) youth employment, which will be a key focus. While remaining within its remit, the Bank may consider the use of Pillar 3 of the Transition15 Support Facility for initiatives that are part of the strengthening of the social and political dialogue. The dissemination of CRFA could also be an additional tool for analyzing and diagnosing the context, in particular socio-political. At the operational level, the dialogue will focus mainly on issues related to project implementation and portfolio quality improvement, in line with the principles set out in Presidential Directive 02/2015. To ensure the success of this dialogue, the strengthening of the Burundi Country Office should continue with the recruitment of sector experts and assistants for project implementation.
4.8 Risks and Mitigation Measures
79. The Bank identified the main risks in the country based on a thorough analysis of the current political and security context, and identified mitigation measures (See Annex 19). The instability of the political situation constitutes a significant risk for implementing the CSP. In particular, the security situation could be tested in 2019 and in 2020, in view of the timing of the presidential elections. The Bank will join forces with the authorities and the international community to limit that risk. However, in accordance with its policy, the Bank will have to reconsider the terms and conditions of its intervention in the country in the event of a significant deterioration of the security situation. Given the planning of presidential elections in 2020, the
15 The Bank has in prospect to support a stronger involvement of the diaspora in the country's development and
youth employment (jointly with the IOM),
19
mid-term review of the DSP scheduled for 2021 will be the main tool to make any adjustments that may be necessary due to the implications of the results of the presidential elections (changes in priorities in particular)
5 CONCLUSION AND RECOMMENDATIONS
80. Burundi has real opportunities to succeed in its strategy to transform its economy by
2027. The reforms envisaged must be supported by dialogue with development actors, with a
view to restoring the groundwork for economic growth and improving governance and the
business climate. Continued investment in agricultural, transport and energy infrastructure
would help to diversify sources of growth, build the country’s resilience and improve the
people's livelihoods. The collaboration between the Bank and Burundi was fruitful during the
CSP 2012-2018 implementation period. The Bank's strategy for 2019-2023 is aligned with the
Government's key strategic and operational priorities.
81. Recommendations: In view of the foregoing, the Bank's Boards of Directors are
requested to consider and approve the AfDB Group’s Country Strategy Paper (CSP) 2019-2023,
the strategic pillars of which are: (i) agricultural development and transformation; and (ii)
improvement of transport and energy infrastructure.
I
Annex 1: CSP Resuls Framework
Country
Development
Objectives (PND)
Obstacles to
Achieving the
Country’s
Development
Final Indicators (end-2023) Midterm Indicators (end-2021) African Development
Bank Group
Interventions over the
CSP Period
Final Outcomes Final Outputs Midterm Outcomes Midterm Outputs
Pillar 1 - Agricultural Development and Transformation Support
Improve the living
standards of the
project area population
Low agricultural
product production,
storage and processing
capacity
Increased average
productivity of rice and
sorghum (T/ha <2 and
0.8 to <10 and 2)
100 agri-food
processing units
established and
supported
Increased average
productivity of rice and
sorghum (T/ha <2 and
0.8 to <5 and 1.2)
40 agri-food
processing units
established and
supported
Project to Intensify
Agricultural
Production and Reduce
Vulnerability in
Burundi
Bugesera Region
Agricultural
Transformation
Support Project
Increased average
productivity of maize
and cassava T/ha (<1
and 4.5 to <2.5 and 12)
10 stores and
warehouses
constructed
Increased average
productivity of maize
and cassava T/ha (<1
and 4.5 to <1.5 and 7)
5 stores and
warehouses
constructed
1,000,000 producers
with access to
improved advice,
technologies and seeds
400,000 producers with
access to improved
advice, technologies
and seeds
Agricultural land area
with water
infrastructure (2,500
ha)
Agricultural land area
with water
infrastructure (1000
ha)
Increased average
production of market
garden crops T/Ha (<2
to 10)
30 km of post harvest
tracks built
Increased average
production of market
garden crops T/Ha (<2
to 10)
13 km of post-harvest
tracks built
Low income of the
project area population
Reduction of the
poverty rate from 61%
to 55% in the project
area
6,777 jobs created in
the sectors (40%
women)
Reduction of the
poverty rate from 61%
to 58% in the project
area
3,000 jobs created in
the sectors (40%
women)
All interventions in the
agricultural, transport,
energy and private
sector development
Increase in
revenue/year and per
market vegetable farm
M/W (90,000/171,000
to
1,905,000/2,175,000)
Increase in
revenue/year and per
market vegetable farm
M/W (90,000/171,000
to 100,000/350,000)
II
Low competence in
malnutrition
management and food
diversification
Reduction of the
chronic malnutrition
rate from 55% to 40%
100 Master's degrees in
nutrition and food
security
Reduction of the
chronic malnutrition
rate from 55% to 50%
50 Master's degrees in
nutrition and food
security
Centre of Excellence in
Nutrition Project
Increase by 30% of
FOSA staff trained in
nutrition
Increase by 15% of
FOSA staff trained in
nutrition
40 agri-food businesses
that have adopted
quality standards
20 agri-food businesses
adopt quality standards
High level of
household
vulnerability in project
areas
Reduction of food
insecurity from 12% to
5% in the project area
1,500 vulnerable
households benefiting
from social security
support
Reduction of food
insecurity from 12% to
11% in the project area
500 vulnerable
households benefit
from social security
support
Project to Intensify
Agricultural
Production and Reduce
Vulnerability in
Burundi
Bugesera Region
Agricultural
Transformation
Support Project
7,000 vulnerable
households benefit
from agricultural
inputs in the project
area
2000 vulnerable
households benefit
from agricultural
inputs in the project
area
50 women's FOs
reinforced in
processing
20 Women's FOs
reinforced in
processing
Promote the
agricultural
entrepreneurship of
young people and
women with a view to
their empowerment
Entrepreneurial skills
development and
product certification
Certification according
to defined norms and
standards of 20% of
food processing
products
BBIN upgrade for
product certification
Certification according
to defined norms and
standards of 5% of
food processing
products
BBIN upgrade for
product certification
Centre of Excellence in
Nutrition Project
Youth and Women
Entrepreneurship
Support Project
Certification of
products from food
processing
Skills of 40
certification experts
enhanced
Certification of
products from food
processing
Skills of 20
certification experts
reinforced
50 Master's degrees in
food technology
15 Master's degrees in
food technology
Cretaion of 5,000 jobs
(including 4,000 in the
agricultural sector and
1,000 in other trades)
1,000 youths trained to
improve the
employability of young
people (40% women)
Creation of 2,000 jobs
in (1,500 in the
agricultural sector and
500 in other trades)
100 youths trained to
improve the
employability of young
people (40% women)
III
300 young
entrepreneurs benefit
from activity launch
kits (40% women)
100 young
entrepreneurs benefit
from activity launch
kits (40% women)
Support agricultural
development poles and
the improvement of
the input supply
system.
Identification and
technical assistance for
feasibility studies on
the establishment of
agricultural
development hubs
Identification of 3
agricultural
development hubs
One (1) feasibility
study for the
establishment of the
three agricultural
hubs
Contribution to better
mainstreaming of
climate change
Increased growth of
the country's
vulnerability to
climate change
Resilient climate
management applied
for 60,000 ha of land
Resilient climate
management applied
for 30,000 ha of land
Project to Intensify
Agricultural
Production and Reduce
Vulnerability in
Burundi
Bugesera Region
Agricultural
Transformation
Support Project
Pillar 2 - Improvement of Transport and Energy Infrastructure.
Improvement of the
movement of goods
and services by land
(port and road)
Over-pricing of goods
and factors of
production
Increase in inter-
regional trade from
26% to 35%
Rehabilitation of
Bujumbura ports
(Burundi) at 100%
NS NS Multinational Project
for the Rehabilitation
of Bujumbura and
Mpulungu Ports Decrease of
transportation costs by
40% -25%
Rehabilitation of
Bujumbura ports
(Burundi) at 100%
NS NS
Improvement of living
conditions of the urban
population of
Bujumbura
Municipality (poverty
rate from 25% -20%)
Rehabilitation of
Bujumbura ports
(Burundi) at 100%
NS NS
Increased income for
informal traders around
the port by 20%
Grouping of traders
into cooperatives or
women's associations
NS NS
IV
Contribution to
providing internal and
external access
Improvement of
regional integration
Burundi-Tanzania
Cankuzo-Gahuma (RN
13 phase III) /
Murusagamba -
Nyakahura
Multinational Road
asphalted -RN3
Rumonge-Gitaza and
Bujumbura City
Bypass
Multinational Burundi-
Tanzania: Cankuzo-
Gahuma (RN 13 Phase
III) / Murusagamba-
Nyakahura Road
Development and
Asphalting Project
RN3 Rumonge-Gitaza
and Bujumbura City
Bypass (80%)
Cankuzo-Gahuma (RN
13 phase III) /
Murusagamba-
Nyakahura and RN3-
Rumonge-Gitaza Road
Development and
Asphalting Project
Improvement of trade
between the South-
South-eastern regions
and the rest of the
country (SOSUMO
and agricultural
products)
Rehabilitation of the
Gitega -Rutana-
Bukemba Road (RN
18) at 50%
Reduction of the travel
time in the project area
Improvement of the
access to socio-
economic
infrastructure
The Gitega -Rutana-
Bukemba Road (RN
18) rehabilitated
Rehabilitation of the
Gitega -Rutana-
Bukemba Road (RN
18) at 50%
The Gitega -Rutana-
Bukemba Road
rehabilitated (RN 18)
at 50%
Gitega -Rutana-
Bukemba Road
Rehabilitation Project
(RN 18)
Contribute to bridging
the infrastructure gap
in the energy sector
Low access to
electricity
Improvement of
electricity access rate,
from 10 to 14.9%
Additional number of
connections to the
power grid (273,844)
Improvement of
electricity access rate
from 10 to 12.7%
Additional number of
connections to the
power grid (119,275)
Burundi and Rwanda
power Grids
Interconnection Project
under NELSAP:
Financing: ADF =
UAM 2.51; TAF =
UAM 3.17; EU =
EURM 15
- Jiji and Mulembwe
Hydropower Project.
- Rusumo Falls
Regional Hydropower
Project - Transmission
Energy production is
in deficit
Increase of the energy
production by 74.7
MW
3 hydropower plants
built
Increase of the energy
production by 26.7
MW
One (1) hydropower
plant built
Old or non-existent
electrical installations
Electrical installations
built
Electrical installations
built
Additional HT line
(239.2 km)
Additional HT line
(160 km)
Additional MV line (10
km)
Additional MV line (0
km)
Additional LV line
(207.7 km)
Additional LV line (0
km)
V
High price of
electricity
Reducction of the cost
of electricity from
USD 20 to 14 cents
3 hydropower plants
built
Reducction of the cost
of electricity from
USD 20 to 19 cents
3 hydropower plants
built
line component. -
Ruzizi III Regional
Hydropower Project.
- NELSAP Burundi-
DRC Interconnection
New projects:
- Energy Access
Programme Phase I..
- Energy Access
Programme Phase II.
Crosscutting Areas
Promote private sector
involvement in these
focal sectors
Weak regulatory
framework and
incentives for private
sector involvement
Establishment of a
regulatory framework
to encourage private
sector investment in
the energy and
agriculture sectors
Resource Mobilisation
and Business Climate
Improvement Support
Project
Support the
development of the
export promotion
strategy
Support the
development of the
export promotion
strategy
Traning of 10 officers
in PPP
Training of 10 IPA
officers in
monitoring/evaluation
and investor support
Contribution to better
mainstreaming of
climate change
Increased growth of
the country's
vulnerability to
climate change
Resilient climate
management applied
for 60,000 ha of land
Resilient climate
management applied
for 30,000 ha of land
Project to Intensify
Agricultural
Production and Reduce
Vulnerability in
Burundi
Bugesera Region
Agricultural
Transformation
Support Project
Developpment of
30/20 ha of hilly pilot
area for M/W
Developpment of
30/20 ha of hilly pilot
area for M/W
Reduction of gender
inequalities
Improved
employability of girls
Girls constitute 40% of
young people trained in
industrial technologies
and entrepreneurship
Girls constitute 30% of
youth trained in
industrial technologies
and entrepreneurship
Project to Intensify
Agricultural
Production and Reduce
VI
Girls constitute 50% of
young engineers
integrated in the road
and port works control
and supervision
missions
Girls constitute 50% of
young engineers
integrated in the road
and port works control
and supervision
missions
Vulnerability in
Burundi
Bugesera Region
Agricultural
Transformation
Support Project
Youth and Women
Entrepreneurship
Support Project
Project to Reduce
Youth Unemployment
through Capacity
Building and Diaspora
Engagement
Girls constitute 40% of
youths given micro-
enterprise start up kits
Girls constitute 40% of
young people who
have received micro-
enterprise start up kits
Support governance
enhancement in the
CSP focal sectors -
agriculture, transport
and energy
Decrease in the tax
burden
Increase in the tax
burden rate from
13.7% to 15%
Operationalisation of
the standardised
invoice
Increase in the tax
burden rate from
13.7% to 14.2%
15 officers trained in
specialised audits, 10
in tax tools and
regulations, 80 in
customs regulatory
tools, 15 in inquiry and
investigation
techniques
Burundian Revenue
Agency Capacity
Building Support
Project - Resource
Mobilisation and
Business Climate
Improvement Support
Project
30 officers trained in
specialised audits, 15
in tax tools and
regulations, 150 in
customs regulatory
tools, 30 in inquiry and
investigation
techniques
Ineffective public
expenditure and weak
policy planning,
programming and
monitoring/evaluation
skills especially in the
focal sectors
Improvement of the
public expenditure
effectiveness
2 public expenditure
reviews in the energy
sector
Improvement of the
public expenditure
effectiveness
One (1) public
expenditure review in
the energy sector
2 public expenditure
reviews in the transport
sector
One (1) public
expenditure review in
the transport sector
2 public expenditure
reviews in the
agriculture sector
One (1) public
expenditure review in
the agriculture sector
VII
Adoption of the
Performance
management
3 sector strategies
developed
2 monitoring and
evaluation mechanisms
available
30 BSE officers trained
in monitoring and
evaluation
Operationalisation of
the PND
Document to support
operationalisation of
the PND in the three
focal sectors available
30 BSE officers trained
in monitoring and
evaluation
Resource Mobilisation
and Business Climate
Improvement Support
Project
- Development
Strategy Preparation
Support Project
VIII
Annex 2: Indicative Programme
Indicative Operational Programme – Grants (UA Million)
Year Projects Bank
Financing
Source Co-financing
Pillar 1: Agricultural Development and Transformation Support
2019 Centre of Excellence in Nutrition Project 6 TAF
2019 Project to Intensify Agricultural Production and Reduce
Vulnerability
7 ADF IFAD (USDM 20)
2020 Project to Support the Promotion of Youth and Women’s Entrepreneurship and Micro-enterprises
15 ADF
Pillar II: Improvement of Transport and Energy Infrastructure
2019 Rehabilitation of Bujumbura (Burundi) and Mpulungu
(Zambia) Ports
15 TAF grant (UAM 6)
+RO (UAM 9)
EU (EURM 12)
JICA (USDM 28)
2020 Kirasa hydropower plant project 14 Non-sovereign loan Sponsor Kira and
commercial banks
2021 Energy Access Programme - Phase I. 10 TAF GEF (UAM 3)
2021 Multinational Burundi-Tanzania: Cankuzo-Gahuma (RN 13 Phase III) / Murusagamba-Nyakahura Road Development
and Asphalting Project
50 ADF grant (UAM 5) +RO (UAM 30)
2022 Gitega -Rutana-Bukemba Road (RN 18) Rehabilitation 15 ADF Co-financing UAM 25
2023 Energy Access Programme - Phase II. 15 TAF
Crosscutting domains
2019 Support project on improving resource mobilisation and business climate
1 TAF
Analytical work
2019 2020 2021 2022 2023
Policy
Paper
Lifting of
constraints on
the private
sector in
Burundi
Financing of the
National
Development
Plan 2018-2027
The issue of
road
maintenance in
Burundi
Transformation
of the
agriculture
sector: towards
the
establishment of
agropoles
Strategic
planning in the
transport sector
Performance
management in
the transport,
energy and
agriculture
sectors
Strategic
planning in the
transport sector
Economic
and sector
work
Economic
report on
Burundi (with
focus on the
energy,
transport and
agriculture
sectors)
Multimodal
transport and
trade facilitation
Public
expenditure
review in the
agriculture
sector
Public
expenditure
review in the
transport sector
Public
expenditure
review in the
energy sector
IX
Annex 3: Alignment of Pipeline and High-5 Projects
Centre of Excellence in Nutrition Project
Resource Mobilisation and Business Climate Improvement
Support Project
Electricity Access Scale-Up: Programme III
Rehabilitation of the Gitega -Rutana-Bukemba Road (RN
18)
Multinational Burundi-Tanzania: Cankuzo-Gahuma (RN
13 Phase III) / Murusagamba-Nyakahura Road
Development and Asphalting Project
Scaling Up Energy Access 1 - On-grid and Off-grid
Kirasa Hydropower Plant Project
Project to Support the Promotion of Youth and Women’s
Entrepreneurship and Micro-enterprises
Rehabilitation of Bujumbura (Burundi) and Mpulungu
(Zambia) Ports
Light up and
Power Africa
Light up Africa
Integrate Africa
Integrate Africa
Feed Africa
Improve the
Quality of Life
for the People
of Africa
X
Annex 4: Technical and Financial Partners (TFP) Intervention Matrix
Health
Education
and
Vocational
Training
Nutrition
Agriculture,
Livestock,
Fisheries,
Food
security
Land IssuesWater and
sanitationEnergy Transport
Private
Sector
Development
Local
Governance Justice
Institutional
Development
Public
FinancesGender
Environment
- Risk of
Natural
disasters
1 France 1 1
2 Belgium 1 1 1 1
3 Switzerland 1 1 1 1
4 Great Britain 1 1
5 Japan 1 1
6 Norway 1
7 Germany 1 1 1 1 1 1 1
8 The Netherlands 1 1 1 1 1 1 1
9 The United States 1 1 1 1 1 1
10 European Union
11 Canada
12 UNDP
13 WFP
14 FAO
15 UNICEF
16 UNFPA
17 UNHCR
18 IFAD
19 WHO
20 UN Women
21 UNESCO
22 UNCDF
23 IOM
24 UNAIDS
25 Global Fund
26 World Bank
27 China
28 Arab Fund
29 UNIDO
30 Trade Mark
31 BADEA
32 OPEC
33 Kuwait Fund
34 Saudi Fund
35 AfDB
XI
Annex 5: Macroeconomic Indicators
Indicators Unit 2000 2013 2014 2015 2016 2017 (e) 2018 (p)
National Accounts
GNI at Current Prices Million US $ 880 2,930 3,137 3,130 3,235 ... ...
GNI per Capita US$ 130 280 290 280 280 ... ...
GDP at Current Prices Million US $ 709 2,452 2,706 2,814 2,874 3,053 3,406
GDP at 2000 Constant prices Million US $ 709 1,127 1,174 1,170 1,191 1,188 1,205
Real GDP Growth Rate % -0.9 4.9 4.2 -0.3 1.7 -0.2 1.4
Real per Capita GDP Growth Rate % -3.0 1.5 0.9 -3.6 -1.6 -3.4 -1.8
Gross Domestic Investment % GDP 7.5 14.3 15.2 11.7 9.6 10.0 11.7
Public Investment % GDP 6.4 5.2 4.9 3.3 3.1 3.4 3.7
Private Investment % GDP 1.2 9.1 10.3 8.5 6.5 6.6 8.1
Gross National Savings % GDP -4.2 -4.3 -3.4 -6.7 -4.1 -5.7 -7.2
Prices and Money
Inflation (CPI) % 24.3 7.9 4.4 5.6 5.5 14.5 15.4
Exchange Rate (Annual Average) local currency/US$ 720.7 1,555.1 1,546.7 1,571.9 1,654.6 1,735.2 1,820.5
Monetary Growth (M2) % 34.8 11.1 14.6 5.5 1.5 10.6 ...
Money and Quasi Money as % of GDP % 24.6 30.7 32.0 32.0 30.2 29.9 ...
Government Finance
Total Revenue and Grants % GDP 22.3 26.6 19.8 16.7 15.9 20.4 20.2
Total Expenditure and Net Lending % GDP 24.7 28.5 23.6 24.4 23.0 26.9 29.0
Overall Deficit (-) / Surplus (+) % GDP -2.3 -1.8 -3.8 -7.7 -7.1 -6.5 -8.8
External Sector
Exports Volume Growth (Goods) % 4.7 -19.8 23.1 5.6 14.8 -4.8 1.8
Imports Volume Growth (Goods) % 1.7 -0.5 10.3 -35.9 -2.2 -1.9 5.1
Terms of Trade Growth % -22.0 -9.6 25.4 -42.7 28.0 -2.8 -7.2
Current Account Balance Million US $ -61 -254 -394 -374 -355 -354 -353
Current Account Balance % GDP -8.6 -10.4 -14.5 -13.3 -12.3 -11.6 -10.4
External Reserves months of imports 2.9 3.6 3.5 1.7 1.7 2.9 3.1
Debt and Financial Flows
Debt Service % exports 70.1 14.5 14.4 20.7 22.4 27.5 36.7
External Debt % GDP 126.3 21.0 18.9 18.2 16.7 25.9 35.2
Net Total Financial Flows Million US $ 79 589 539 260 734 ... ...
Net Official Development Assistance Million US $ 93 559 515 367 742 ... ...
Net Foreign Direct Investment Million US $ 12 7 47 7 0 ... ...
Source : AfDB Statistics Department; IMF: World Economic Outlook,April 2018 and International Financial Statistics, April 2018;
AfDB Statistics Department: Development Data Portal Database, April 2018. United Nations: OECD, Reporting System Division.
Notes: … Data Not Available ( e ) Estimations ( p ) Projections Last Update: May 2018
BurundiSelected Macroeconomic Indicators
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
%
Real GDP Growth Rate, 2006-2018
0
5
10
15
20
25
30
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Inflation (CPI),
2006-2018
-18.0
-16.0
-14.0
-12.0
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2,006
2,007
2,008
2,009
2,010
2,011
2,012
2,013
2,014
2,015
2,016
2,017
2,018
Current Account Balance as % of GDP,
2006-2018
XII
Annex 6: Implementation of the CPIP 2018
Key
Issues/Challenges/
Constraints Actions Considered Outcomes Indicators Responsibility Target/Timelines
Implementation
Progress
Quality at Entry
Poor quality at
entry of projects
Systematically update technical studies before approval by the AfDB Board of Directors
Good quality studies available on time
100% of projects are executed according to expected costs
GoB AfDB
Continued
Dec 2019 for IOP projects 2019
Partially
New projects take the quality of technical studies into account.
Significant delays
in starting projects
Working sessions to discuss the content of documents
Ownership of the content of documents (appraisal report, etc.) by the national party
Effective involvement of the national technical team
GoB/ AfDB
Continued
Partially
The Bank team conducts consultations in ministries involved in projects to establish inventories and needs in preparation of projects
Acceleration of project implementation procedures
Projects are executed according to initial schedules
Implementation deadlines shortened very significantly (less than three months)
GoB/ AfDB
50% in 2019,
Continued
Achieved
Projects approved between November 2018 and March 2019 were signed on average less than 3 months after approval
project implementation
Mastery of
procedures/
gradual reduction
of procurement
deadlines
Training and
appropriate
coaching of project
teams at the launch
of projects
(Tanzania-Burundi
Road, TAAT and
Biomedical Centre);
and
once a year at fiduciary clinics (SNFI1, SNFI2, COBI, RDGE)
Improved skills
3-day
training/coaching
session for
management teams
in charge of new
operations
At least 80% of
PIU members have
received training
Number of fiduciary clinics
GoB/ AfDB
Continued
Achieved
Training sessions are organised regularly for staff of project implementation units.
Not Achieved
Fiduciary clinics not yet organised
Avoid setting up parallel execution units for new projects by entrusting their management to existing administrative structures and open key positions to competition
Effective management units
PIU experts are efficient
GoB/ AfDB
Continued
Partially
AfDB-financed projects are executed only by autonomous project implementation units. Key positions are not open to competition
Poor performance
of PIUs Initiate performance contracts for project managers in general, and project finance managers in particular
High performance of management units
Project managers evaluated
GoB 50% in Nov. 2020
Continued
Achieved
Project managers sign performance contracts. Annual assessments are planned
XIII
disbursement performance
Disbursement
delays
Payment of bills outstanding for more than 3 months
All disbursement requests are paid in less than 15 days
Requests are processed quickly
Number of bills outstanding for more than 3 months
PIUs/AfDB
AfDB
Continued
Partially
Improve the quality of requests; mastery of AfDB rules and procedures through training and working sessions
PIUs are trained by the Bank on AfDB disbursement procedures
Meetings at the COBI Office and by VC with the FIFC are organised
Number of projects disbursing more than eight months after approval (last 12 months)
AfDB/PIUs
Continued
Partially
A disbursement expert at the Country Office
Disbursement requests are processed promptly
% of DPs going through the AfDB Office
AfDB/PIUs June 2020
Partially
No disbursement expert at the Country Office, but a mechanism has been put in place and all Disbursement Requests go through the AfDB Office
Financial Management
Financial management does not respect rules and good practices / preparation and timely submission of audit reports
Delay in
submission of
audit reports
within deadlines
Share experiences with successful projects in this domain
Projects submitting audit reports within the deadline
Number of projects
submitting audit
reports late
(current year)
participating in
sharing of
experiences
PIUs/AfDB June 2020 Not achieved
Absence of
procedures
manual at project
start up
Make the procedures manual available at project launch
Procedures manual validated before launch
Percentage of new projects with a
procedures manual available
PIUs/AfDB 50% in June 2020
Continued
Not achieved
Delay in
transmitting the
audit report
Recruit auditors on
time, in accordance
with the rules to
avoid rejection.
Prepare the project closure audit report
Auditor recruited according to PPM
% of projects submitting closing audit reports on time (9 months after disbursement deadline)
Audit report submitted latest 30 June N + 1
PIUs/AfDB 100% in Dec 2019
Continued Not achieved
Monitoring and coordination
Lack of an
effective project
monitoring and
evaluation system
Organise portfolio monitoring meetings with PIUs and AfDB
Better coordination between different project stakeholders.
At least one portfolio coordination and monitoring meeting is organised quarterly
PIU/MFBCD/ AfDB
Continued
Partially
An AfDB portfolio review meeting was held in November 2018 and another on 28 February 2019.
Regular supervision of projects by AfDB
Decrease in implementation delays
Number of supervisions per project in the calendar year
AfDB/GoB Continued Partially
Regular transmission of a physical and financial progress
More effective monitoring of operations progress by MFBP.
A quarterly progress report is sent regularly by the PIUs to MFBP.
PIU 45 days after the quarter
Partially
XIV
report of projects to MFBP
The complexity of
regional energy
operations delays
their
implementation
Strengthen consultation by PIUs of regional projects
Take into account the regional dimension of projects
At least 2 annual meetings organised
GoB/ AfDB
Continued
Partially
Meetings between PIUs of regional projects are organised as needed
Provide technical assistance in project management to REGIDESO
Provide the Country Office with an energy expert
Decrease in implementation delays for energy projects
An energy expert
available
AfDB Continued
Partially
An energy specialist (consultant) has been recruited and is based at the AfDB Country Office.
Project
implementation
weaknesses
Follow-up of recommendations of the Bank’s Internal Audit from 5 to 24 November 2018
Project management has improved
Number and
percentage of
recommendations
implemented
PIU/ GoB/ AfDB
100% in June 2020
Continued
Partially
Reimbursement
and/or rationale of
special account
balances for closed
projects
Review the audit submitted by AfDB in September 2018, provide the available justifications and refund unjustified balances
Projects are well closed Number of closed
projects that did
not justify or
refund account
balances
PIU/ GoB/ AfDB
March 2020
Continued
Partially
Systematically reimburse special account balances after project closure
Projects are well closed Not achieved
Lack of some key
skills at the Bank's
office in Burundi /
reaction time
Hold regular meetings between Nairobi-based project teams and project managers by video conference
Meetings were held during field missions by Nairobi-based experts
Number of
meetings by VC
between the AfDB
and Government
AfDB/PIUs Dec. 2019
Continued Partially
Experts to be placed in the Office: energy, agriculture, procurement and disbursement
Strengthen close dialogue with PIUs and the Government
Number of new
experts AfDB
Dec 2020
Continued
Partially
Two consultants, an energy and a transport expert, have been assigned to the Office
Insufficiency/delay
in payment of the
counterpart
contribution
Properly analyse the feasibility of the counterpart contribution and the effective involvement of the national budget department during preparation
Reminder of annual commitments before the finalisation of the Finance Law
Counterpart funds are registered in the FL
Percentage of projects facing difficulties in paying the counterpart contribution
100% of counterpart funds are disbursed on time
PIU/AfDB
60% in Dec 2020
Continued Not achieved
XV
Annex 7: Key Performance Indicators for the Current Portfolio
Table 1 - Key Portfolio Performance Indicators
2012 2013 2016 2017 2018
Number of projects 14 19 15 17 17
Managed in the field (%) 14 26 47 59 76
Total commitments (UAM) 245 240 265.3 263.64 305.287
Projects at risk (%) 9 11 0 0 0
Commitments at risk (%) 9 5 0 0 0
Problematic projects (#) 0 1 2 5 1
Disbursement rate (%) 36.5 44.0 41.9 54.10 45.2
Average age of projects (year) 3.5 3.0 3.5 4.4 4.1
Deadline of first disbursement
(month) 16.2 2 21.4
9.3 17.2
Portfolio performance 3.40 3.46 3.70 3.50 3.40
Implementation progress (IP) 3.28 3.30 3.80 3.50 3.40
Development objective (DO) 3.74 3.77 3.60 3.50 3.30
XVI
Annex 8: Ongoing Portfolio (29 March 2019)
PROJECT NAME Approval Date Completion
Date Grant
Amount (UA) Disbursement
Rate
1 2 3 4 5
1 Project to Support the Development Strategy Preparation Process
17/05/2017 30/09/2020 877,000 40.40%
2 Youth and Women's Socio-economic Reintegration Support Project - PARSEJF
25/05/2016 31/12/2020 770,000 35.93%
3 Youth and Women's Socio-economic Reintegration Support Project - PARSEJF (CIRGL)
25/05/2016 31/12/2020 380,000 32.73%
4 OBR Capacity Building Support Project 02/01/2019 31/12/2021 1,000,000 0%
5 RN-3: MUGINA-MABANDA-NYANZA-LAC Road Development and Asphalting Project
27/06/2012 31/12/2019 27,500,000 83.53%
6 RMUNGE-GITEZA AND KABINGO-KASULU-MANYOVU Road Rehabilitation Project
22/11/2018 31/12/2024 47,250,000 0.00%
7 RN-15: GITEGA-NYANGUNGU-NGOZI Development and Asphalting Project Phase II
29/06/2011 31/12/2019 10,000,000 41.34%
29/06/2011 31/12/2019 32,000,000 98.65%
8 RN-18: NYAKARARO-MWARO -GITEGA KIBUMBU-GITEGA (MWEYA) Phase II
01/02/2017 31/12/2020 9,720,000 15.41%
01/02/2017 31/12/2020 4,080,000 16.01%
9 RN-18: NYAKARARO-MWARO-GITEGA Road Development and Asphalting Project Phase I
24/09/2014 30/06/2019 19,420,000 86.70%
10 Support Project for Agricultural Transformation in the Bugesera Natural Region
15/12/2017 30/06/2023 12,000,000 2.80%
11 Project to Support the Supply of Cooking Energy and Environmental Restoration in Four Refugee Camps
02/05/2018 30/06/2019 1,000,000 51.07%
12 JIJI-MULEMBWE Hydropower Project 23/06/2014 31/12/2019 14,340,000 0.00%
13 NELSAP Interconnection Project - BURUNDI (KAMANYOLA Power Transmission Line (DRC) - BUJUMBURA
27/11/2008 31/12/2025 15,150,000 30.20%
14 RUZIZI III Hydropower Project (BURUNDI) 16/12/2015 30/12/2021 19,290,000 0.00%
15 RUSUMO Regional Hydropower Project - BURUNDI
27/11/2013 31/08/2021 16,700,000 1.37%
21/11/2013 31/08/2021 10,810,215 7.29%
16 Burundi and Rwanda Power Grids Interconnection Project under NELSAP
14/12/2018 30/06/2025 2,510,000 0.00%
14/12/2018 30/06/2025 3,170,000 0.00%
Total (16 Operations) 246,967,215
PP = Problematic Project
Non-PP = Non-Problematic Project
PPP = Potentially Problematic Project Non PPP = Non-Potentially Problematic Project
XVII
Annex 9: CPIA Ratings 2013-2016
2013 2014 2015 2016
Economic management (Cluster A) 3.5 3.5 3.2 2.8
Budget policy 3.5 3.5 3.0 2.5
Monetary policy 3.5 3.5 3.0 2.5
Debt policy 3.5 3.5 3.5 3.5
Structural policies (Cluster B) 3.4 3.4 3.4 3.3
Finance sector development 4.0 3.0 3.0 2.8
Trade policy 3.0 4.0 4.0 4.0
Regulation of the business environment 3.3 3.3 3.2 3.2
Inclusion/social equity (Cluster C) 3.4 3.4 3.4 3.4
Gender equality 3.2 3.3 3.2 3.2
Equity in the use of public resources 3.5 3.5 3.3 3.2
Strengthening human resources 4.0 3.8 3.8 3.8
Social protection and labour 3.0 3.0 3.1 3.1
Environmental policies and regulation 3.5 3.5 3.5 3.5
Governance (Cluster D) 3.3 3.1 3.0 2.9
Property rights and governance based on the
rule of law
3.3 3.1 2.9 2.9
Quality of public administration 4.0 3.6 3.4 3.3
Quality of budgetary and financial management 3.8 2.6 2.5 2.4
Effectiveness of revenue mobilisation 2.6 3.8 3.5 3.5
Transparency, accountability and corruption in
the public sector
2.7 2.5 2.7 2.7
Infrastructure and regional integration
(Cluster E)
3.6 3.6 3.6 3.6
Infrastructure development 3.6 3.6 3.5 3.5
Regional integration 3.5 3.5 3.8 3.8
Overall CPIA 3.44 3.41 3.30 3.21
XVIII
Annex 10: Annex on the Macroeconomic Framework
-5
0
5
10
2011 2012 2013 2014 2015 2016 2017 2018 2019
Chart 2: Real GDP growth rate (%)
Burundi Afrique Centrale Afrique
14,8
35,9
0,0
-8,3
36,5
25,7
2,1
37,7
11,3
-20,0-10,0 0,0 10,0 20,0 30,0 40,0
Croissance annuelle desexportations (%)
Aide par habitant ($ EU)
IDE en % de la FBCF
Chart 8: Main growth drivers, 2016
Afrique Afrique Centrale Burundi
-10
-5
0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Chart 5: Budget balance
(% of GDP)
Burundi Afrique Centrale Afrique
0
10
20
30
2011 2012 2013 2014 2015 2016 2017 2018 2019
Chart 3: Consumer price index, inflation (average) (%)
Burundi Afrique Centrale Afrique
0
10
20
30
2011 2012 2013 2014 2015 2016 2017 2018 2019
Chart 4: Revenue and grants (% of GDP)
Burundi: dons (% du PIB)
Burundi: Total revenue (dons exclus) en % du PIB
-20
-10
0
10
2011 2012 2013 2014 2015 2016 2017 2018 2019
Chart 6: Current account balance
(% of GDP)
Burundi Afrique Centrale Afrique
40,7
0,311,8
0,8 3,2
17,5
4,6 5,4 7,4 3,2
0,010,020,030,040,050,0
Agricu
lture,…
Min
es et…
Man
ufactu
res
Electricité,…
Co
nstru
ction
Co
mm
erce…
Transp
ort,…
Finan
ce,…
Ad
min
istrati…
Au
tres services
Chart 7: GDP by sector (%), 2016
XIX
Annex 11: CODE Recommendations on the CSP 2012-2018 Completion Report
(Takeaways from the Team)
The Committee on Operations and Development Effectiveness (CODE), which reviewed the
CSP 2012-2018 completion report for Burundi as well as the proposed pillars for CSP 2019-
2023, met at Bank Headquarters in Abidjan on 13 May 2019. This meeting was presided by
Ms. CUDRE-MAUROUX, the CODE Chairperson.
1. CODE members noted the CSP 2012-2018 Completion Report and the Proposed Pillars
for CSP 2019-2023
2. CODE members expressed support for the two pillars proposed for the new CSP,
namely: (i) support for agricultural development and transformation; and (ii)
development of transport and energy infrastructure.
3. CODE members agreed to the preparation of a full CSP for Burundi for 2019-2023
because the country has to date fulfilled the required criteria in this regard. However,
they recommended that depending on the evolution of the country’s socio-economic
situation (including presidential elections planned for 2020), the CSP team may need to
adjust the strategy during the mid-term review planned for 2021.
4. CODE members recommended that special emphasis be laid on the analysis of socio-
political and economic contexts, taking into account fragility in the new CSP. Outcomes
of the "Country Resilience and Fragility Assessment (CRFA)" carried out in December
2018 should be fully integrated into the analysis and should guide the new strategy and
operations.
5. CODE members recommended that Pillar I of the new CSP should integrate the TAAT
initiative and that crosscutting themes (governance, private sector development, and
gender equality) be explicitly reflected in the new CSP.
6. CODE members recommended that the new CSP highlight the Bank’s role in political
dialogue.
7. CODE members instructed the Bank to encourage the IMF’s re-engagement in the
country.
XX
Annex 12: Summary of Exchanges of Views with Stakeholders
1. Following the mission conducted as part of the CSP 2012-2016 update in March 2018,
a Bank mission visited Bujumbura from 5 to 9 November 2018 with the following objectives:
(i) collect information necessary for the preparation of the combined Country Strategy Paper
2012-2016 (CSP 2012-2016) completion report extended to December 2018; (ii) review the
2018 performance portfolio; and (ii) prepare the Bank's Intervention Strategy in Burundi 2019-
2023.
2. The mission held a political dialogue session with the Government of Burundi on 18
December 2018 with the objective to validate the technical working sessions held between 5
and 9 November with central and local public administrative authorities, Burundi’s private
sector and technical and financial partners involved in Burundi. The policy session was chaired
by the Minister of Finance (Governor of the Bank) with the participation of ministers in charge
of transport, energy and agriculture.
3. All the mission outcomes reached during technical discussions were validated by the
ministerial session of 18 December 2018. The policy session covered the following areas: (i)
Burundi’s economic context and National Development Plan for 2018-2027; (ii) outcomes of
the implementation of CSP 2012-2018; (iii) the performance of Bank-financed portfolio
projects in Burundi; (iv) strategic orientations of the Bank's CSP 2019-2023.
4. With regard to Burundi’s economic context and the National Development Plan
2018-2027:
The session discussed Burundi’s slight economic recovery observed in 2018; the
mission welcomed the Government's ongoing economic stabilisation efforts in
the context of heavy external financing constraints; it encouraged the authorities
to pursue an open policy with the community of technical and financial partners,
particularly with regard to financing the National Development Plan, which has
ambitious objectives involving the deep structural transformation of Burundi’s
economy.
The discussions noted and welcomed some progress made with regard to
Burundi’s resilience capacity, given that the economy has faced numerous
constraints since the 2015 crisis. However, they recognised that the current
difficulties could only be overcome in a context of expanding the sources of
economic financing.
The ministerial session underscored the need for further private sector
development to better impact job creation especially for young people in
Burundi. In this regard, it recommended Bank support to enhance private sector
access to investment financing. It acknowledged that the Bank's interventions in
CSP 2012-2018 continue to contribute to reducing factors of production costs
(through transport infrastructure, making the country accessible internally and
externally, and improving the energy supply). However, it recommended more
direct involvement to support the private sector.
5. With Regard to the CSP 2012-2018 implementation outcomes:
Overall, discussions highlighted the positive outcomes achieved in
implementing CSP 2012-2018: (i) in terms of strengthening governance (Pillar
XXI
1), the session noted the major economic reforms carried out between 2012 and
2014 through budget support operations funded by the Bank (PARE-V, PARGE
and PRECA), in addition to the stabilisation of the economic situation at the
time; (ii) with regard to infrastructure improvement, the ministerial session
highlighted Burundi’s progress in opening up rural areas to link production areas
to consumption areas, and ensuring access to basic services such as markets,
thanks to the Bank’s support.
6. Regarding the performance of the portfolio of projects financed by the Bank in
Burundi:
Portfolio of Bank projects - The session recognised the problem of delays in
implementing Bank-financed projects in Burundi and recommended that
mechanisms be established to remedy the weaknesses observed. It highlighted
the Government’s establishment of a monitoring sheet for projects financed by
technical and financial partners in general. The actions should include the
restoration of monthly meetings between the Bank and project monitoring
structures, reduction/simplification of procedures and the introduction of some
degree of flexibility in project management since the agricultural cycle is
strongly dependent on seasons in Burundi. For the transport sector, the session
noted with satisfaction the existence of a framework for dialogue and functional
exchanges that significantly contribute to solutions for improving road project
disbursements. In the energy sector, the session acknowledged that the
disbursement rates were very low, while noting that longer or shorter approval
procedures may affect project performance;
7. Regarding strategic orientations of the Bank's CSP 2019-2023:
The ministerial session endorsed the technical discussions on the strategic
directions for the new CSP 2019-203. It underscored the dimension of selectivity
owing to Burundi's current resource allocation levels, and validated the proposal
that CSP 2019-2023 be structured around two main pillars which, when
implemented should: (i) strengthen economic resilience; and (ii) develop
infrastructure to support economic recovery. It should be noted that working
sessions with technical and financial partners had highlighted the synergies and
complementarities that could be developed in these two key areas. Hence:
Under the pillar on build resilience, it was decided that the Bank should
provide support to improve the income of rural people, especially the youth
and women, through a stronger presence in the following areas: (i)
agriculture (support agricultural transformation by targeting fragile,
socially and environmentally disadvantaged communities, and implement
the Technology for African Agricultural Transformation programme in
Burundi); and (ii) private sector development to enable the embryonic
private sector to play a greater role in stimulating distributive economic
growth in the country, and create internal dynamics to absorb the large
number of young unemployed graduates in the country with particular
focus on reducing women's unemployment.
In the area of infrastructure development, the ministerial session decided
to target two sectors, although it regretted not taking into account the water
and sanitation sector. They are: (i) transport, through the continuation of
operations undertaken to make the country accessible and create closer
connections between production areas and markets (maritime transport
XXII
will be particularly highlighted through the rehabilitation of Bujumbura
Port) in order to contribute to lowering transaction costs in the country;
and (ii) energy, to respond to PND 2018-2027 that emphasizes the
construction, rehabilitation and/or extension of energy infrastructure as a
prerequisite for the sustainable structural transformation of Burundi’s
economy. Therefore, the Bank should continue to strengthen its
involvement by prioritising green energy.
XXIII
Annex 13: Alignment of DSP Pillars to PND 2018-2026 and the High 5s
Light up Africa
Natural
resources
Public-
Private
Partnerships
Agriculture
Human capital
Increase in energy
production
Industrialization
Diversification and
competitive economy
Technology
and know-
how
Transport, trade and ICT
infrastructure
Tourism
Regional integration and
international Cooperation
PND
2018-2027
Pillar 1 – Support
Agricultural
Development and
Transformation Support
Support agricultural development hubs
and increase private investment for
transformation
Promote youth and women’s
agricultural entrepreneurship with a
view to their empowerment
Build institutional capacity to adapt
to climate change.
Contribute to bridging the infrastructure
gap in the transport and energy sectors
as a factor of inclusion Pillar 2 - Improve
Transport and Energy
Infrastructure
Promote equitable
access to basic
infrastructure. Integrate Africa
Feed Africa
Improve the Quality
of Life for the People
of Africa
Improve the Quality
of Life for the People
of Africa
XXIV
Annex 14: Fiduciary Risk Assessment
Legislative and Regulatory Framework
The legislative and regulatory framework for procurement comprises Law No. 1/01 of 4
February 2008 on the Public Procurement Code (CMP) of Burundi amended by Law No. 1/04
of 29 January 2018, decrees on the establishment, organisation and functioning of the Public
Procurement Regulatory Authority (ARMP), the National Directorate of Public Procurement
Control (DNCMP) and Public Procurement Management Units (CGMP) as well as ordinances
setting thresholds for the award, control and publication of procurement. The CMP scope covers
all procurement by Contracting Authorities and all types of public procurement without waiver,
except for secret contracts that are incompatible with any form of competition or advertising,
or where fundamental interests of national security require such secrecy. To date, most public
procurement legislation is available on the ARMP website, which is the Public Procurement
Portal.
Overall, arrangements for the preparation, award and execution of contracts are broadly in line
with international standards and best procurement practices. Procurement by bid invitation is
the default procurement method. The use of other procurement methods must be justified by
the Contracting Authority and previously authorised by the DNCMP. Contract splitting is
prohibited and directly negotiated contracts and amendments are subject to strict controls. In
addition, bidders may appeal to the ARMP Dispute Resolution Commission (CRD) if they feel
aggrieved during the procurement process.
However, in practice, it is also important to mention the extremely negative assessment of the
June 2011 World Bank Public Expenditure Review. The review finds that public investment is
hampered by inadequate selection, poor public procurement and lack of reporting and other
instruments to monitor project implementation. Among the factors that impede the procurement
process, it cites the overestimation of costs of certain goods and services, the inconsistency of
these estimates, corruption and fraud. It is not certain that these practices have ended or
improved positively.
Institutional Framework and Management Capabilities
The institutional framework provides for the separation of the functions of procurement, ex-
ante control and regulation of public procurement. However, the institutional framework faces
risks that may affect its viability. These include: (i) the ARMP lacks financial autonomy to
ensure its proper functioning; (ii) internal control is weak at the level of the Contracting
Authorities (problem of the independence of CGMPs); (iii) DNCMP control is weak; (iv) the
ARMP, DNCMP and CGMPs lack sufficient qualified human resources; and (v) there is a lack
of strategy to build the capacity of various stakeholders involved in public procurement.
Decree No. 100/119 of 7 July 2008 on the Establishment, Organisation and Functioning of the
Public Procurement Regulatory Authority ARMP confers on the latter the status of an
Independent Administrative Authority, with a legal personality and administrative and financial
autonomy. ARMP consists of four bodies, namely the Regulatory Board, the Dispute
Resolution Committee (CRD), the Disciplinary Commission and the General Directorate. The
Regulatory Council of the ARMP is designed as a tripartite body with equal representation
(Public Sector, Civil Society and Private Sector). Instead of financial and management
autonomy, the ARMP receives only budgetary subsidies from the State, which are otherwise
XXV
insufficient to meet the operational needs necessary for carrying out its missions. Financial and
human resource constraints significantly limit the institution's ambitions.
ARMP statistics on the award, execution and control of public contracts is not exhaustive
because the contracting authorities do not communicate documents, data and statistics on time
to update the public procurement information system. Lastly, it should be noted that annual
external audits of public procurement are not carried out on time (inadequate financial
resources).
The National Directorate for Controlling Public Procurement (DNCMP) should play a
fundamental role in the proper management of the procurement system through ex-ante and ex
post controls. In practice, the DNCMP has little material, human and financial resources to
control the execution of services rendered. In addition, this Directorate faces major skills
problems caused by frequent staff departures and lack of qualified human resources. Besides,
all contracts that are initially verified by the DNCMP are not systematically published on the
public procurement website, in violation of the CMP. Moreover, convincing reasons are not
given for the use of directly negotiated contracts, and the DNCMP is obliged to accept requests
by the Contracting Authorities, sometimes due to prevailing circumstances (urgency for
example). Reliable information on contract award and compliance outside the information
compiled by the DNCMP is scarce, but this information has not been subject to external control.
The lack of a manual for archiving and filing procurement and contract monitoring documents
is also noted.
The ex-post control exercised by the DNCMP is used to check conformity of procurement
procedures for contracts awarded below the a priori control thresholds. In 2016, the ex-post
audit involved seven (7) Contracting Authorities for contracts under thresholds awarded during
the 2013 and 2014 financial years. It was noted among other things that: (i) all 7 Contracting
Authorities awarded numerous very high value contracts, sometimes exceeding the annual
budget allocated to each Contracting Authority; (ii) all the Contracting Authorities controlled
do not strictly comply with the public procurement law especially with respect to compliance
with regulatory thresholds; (iii) most Contracting Authorities practised market fragmentation
or fractioning, which is prohibited by law; (iv) the procurement of sub-threshold contracts
lacked transparency for the Contracting Authorities controlled.
The Public Procurement Management Units (CGMP) are in charge of planning, preparing
bidding documents (DAO) and conducting the procurement procedure at the level of the
Contracting Authorities. Under the law, the CGMP must be updated every year, but this is not
systematic. It should be underscored that some Contracting Authorities appoint or renew their
CGMPs but the appointment instruments are not transmitted to the ARMP. At the level of
Contracting Authorities, the independence of CGMPs carries a risk because significant powers
are entrusted on the Public Procurement Officer (PRMP), which is not offset by any internal
control body within the Contracting Authority. The PRMP chairs the CGMP, proposes the
appointment of CGMP members to the minister and appoints members to the bid
opening/evaluation and contract award committees.
In view of the Public Expenditure Review and Financial Accountability Report (PEFA 2012),
there has been a general improvement in the procurement system with indicator PI-19 "Call for
competition, optimal use of resources and control of public procurement” rated C + in 2012,
against D + in 2009. However, much remains to be done in terms of transparency and capacity
building to improve the effectiveness of the government’s procurement management
XXVI
framework (ARMP, DNCMP, CGMP). It should be noted that updating public procurement
information remains problematic at the level of the ARMP portal.
Procurement Operations and Market Practises
To enhance the efficiency of the procurement process, the CMP provides various stakeholders
with deadlines for implementing various stages of the procurement process: from the
preparation of bidding documents to the signing of contracts.
In addition, Contracting Authorities are required to develop provisional procurement plans
(PPMs) based on their annual programme of activities and allocated budget.
Although the law requires the publication of contract award notices, it should be noted that this
requirement is not currently being met as only letters are sent to unsuccessful bidders.
It is also worth noting that some bidders are heavily involved in donor markets, but much less
(or not at all) in public procurement financed from the State budget because the public
procurement environment is often discouraging for honest potential professional bidders. There
is indeed a perception of insufficient transparency and integrity during the following stages:
BD preparation and provision; receipt of bids (rejection of bids with distinguishing marks);
opening (rejection of bids not properly initialled); assessment (few specific skills per contract);
low guarantee of payment on time, which entails risks for the bidders. As such, bidders tend to
overstate the costs because they are likely to be paid with a huge delay. The public procurement
system is likely to attract only bidders who are well positioned to engage in a circuit of contacts
to be paid on time. This does not contribute to a climate of integrity and healthy competition
(see Assessment Study of the Institutional and Organisational Capacity of ARMP, DNCMP and
CGMPs of Sector Ministries and Capacity Building Plans - CTB).
ARMP (through its Regulatory Board) should engage in partnership with the private sector,
through the establishment of constructive dialogue with potential bidders to work together to
improve the public procurement system, and more specifically, to obtain best value for money.
Integrity and Transparency of the Procurement System
Legal provisions, including those relating to institutions responsible for combating prohibited
practices (bribery, fraud, conflict of interest and unethical behaviour) in public procurement,
and those defining responsibilities, accountability and penalties applicable to prohibited
practices were reviewed. It appears that: (i) the CMP provides the ethical rules applicable to
public authorities, candidates and bidders as well as the attendant specific sanctions (without
prejudice to other criminal sanctions); and (ii) in addition, Burundi has set up a legal and
institutional framework to fight corruption that overall is close to international standards.
The Government has: (i) developed a national strategy of good governance and the fight against
corruption for 2011-2015; (ii) enacted specific laws (Law No. 1/12 of 18 April 2006 against
corruption, Law No. 1/27 of 3 August 2006 establishing an anti-corruption brigade with the
mission to moralise public life, deter and repress corruption and related offences; Law No. 1/36
of 13/12 2006 establishing the anti-corruption court within the judiciary). In addition, actors in
the procurement chain are required to observe standards of ethics and transparency, under pain
of sanctions and expulsions when found guilty of acts of fraud and corruption.
In principle, this framework should deter fraud and corruption practises overall. However, the
level of corruption remains quite alarming as shown by Transparency International’s corruption
XXVII
perception index (CPI). Hence, the CMP provides for specific sanctions (without prejudice to
other criminal sanctions) for public authorities and officials who fail to comply with CMP
provisions and bidders guilty of acts of fraud and corruption. It is noted that as part of its actions,
the ARMP Disciplinary Commission has sanctioned structures for violating the public
procurement law and published the list of sanctioned entities on the public procurement website.
The existing complaint system has been reviewed to ensure that it provides for specific
conditions that take into account the requirements of impartiality, independence and due
process. Procurement decisions are published on the public procurement portal.
Public procurement audits are not conducted regularly due to inadequate financial resources.
Audits for the 2011, 2012 and 2013 financial years have already been carried out and were
mainly financed by external resources. However, there is a significant delay in conducting
external audits. For example, it was expected that the public procurement compliance audit
mission for FY 2017 take place in 2018, but to date the report has not yet been published.
Conclusions
Based on the elements noted above concerning Burundi’s national public procurement system,
the overall risk for its use in Bank-financed projects is considered substantial. Pending the
implementation of reform actions to correct these weaknesses, measures recommended to
mitigate the risks that might result are: (i) ensure the financial autonomy of the ARMP in
accordance with Law No. 1/01 of 4 February 2008 concerning the CMP amended by law No.
1/04 of 29 January 2018 to enable it to properly carry out its missions ; (ii) significantly build
DNCMP's capacity (financial, material and human) to enable it to fully fulfil its duties and
responsibilities; (iii) build the capacity of CGMPs and make the appropriate arrangements to
ensure the independence of CGMPs from the Public Procurement Officer (PRMP); (v) ensure
good publicity and ownership of the legal framework governing procurement with public
contract actors; (vi) systematically perform internal and ex-post control of procurement
operations in accordance with regulations; (vii) secure financing for public procurement audit
operations; and (viii) build the capacity of bidders involved in public procurement
(administration, private sector and civil society) through a targeted training programme.
XXVIII
Annex 15: Country Risk Assessment
I. Introduction
The fiduciary risk assessment of Burundi's Public Financial Management (PFM) system was
conducted as part of the mid-term review of the Country Strategy Paper for Burundi by the Bank's
Fiduciary Services Department. This assessment is made in accordance with the Financial Management
Policy for operations financed by the African Development Bank Group and the Directive on the
Promotion of the Use of National PFM Systems of February 2014. This report on Burundi’s Fiduciary
Risk Assessment focuses on three main points: (i) introduction; (ii) executive summary; and (iii)
assessment outcome.
II. Executive Summary.
2.1 The objective of the fiduciary risk assessment is to respond to the Bank's commitment under
the Paris Declaration to maximise the use of national public financial management systems for the
financial management of Bank-financed projects and programmes. It is also to evaluate the current
financial management system in Burundi and determine its adequacy in producing exhaustive and
reliable financial information in real time on the management of projects and programmes financed by
development partners, including the Bank, and to identify capacity-building needs for the gradual use
of the national PFM system.
2.2 The assessment took into account the PEFA assessment for 2012 and information collected
as a result of assessments carried out at the Directorate of the Budget, Directorate of the Treasury,
General Inspectorate of Finance, General State Inspectorate, Court of Auditors and Anti-Corruption
Brigade.
III. Assessment Outcome
Regarding the management of public finances, the mission notes an improvement in the
management of public finances in Burundi since the 2009 and 2012 PEFAs, including: (i) a new budget
nomenclature; (ii) a reduction of the stock of payment arrears on expenditures; (iii) the actual reduction
of extra-budgetary funds by the closure of bank accounts, the reduction in the number of funds and the
establishment of management systems for administrative public enterprises; (iv) a precise and respected
budget preparation timetable and expenditure ceilings contained in the framework letter approved by
the Council of Ministers before their dissemination; (v) clear and exhaustive tax and customs obligations
with the adoption of customs regulations of the Community of West African States and the adoption of
a very simple law on value added tax; (v) shorter deadlines for the repayment of revenue to the Treasury
and the frequency of bank reconciliations; (vi) a change in the predictability of cash flows, reliability
and frequency of periodic information provided; (vii) investment expenditure that anticipates the
execution of externally financed project expenditure; (viii) the establishment of a single treasury account
and the provision of reliable information by ministries on expenditure commitment ceilings at least one
quarter in advance; (ix) significant progress in the consolidation of account balances into a single State
account; (x) the control capacity and audit scope of the General State Inspectorate (IGE) were strongly
enhanced; and (xi) significant progress in establishing an Anti-Corruption Commission.
Overall country risk is medium given some weaknesses noted, including: (i) the difficulty of
tracking the stock of payment arrears on expenditure; (ii) the lack of budgets and accounts monitoring
in municipalities by the Ministry of Finance; (iii) the absence of auditing for services and works by the
Directorate General of the Budget; (iv) the absence from the Directorate of the Treasury of a
nomenclature of supporting documentation, a manual of updated accounting procedures and an updated
chart of accounts; (v) the Court of Auditors, which is insufficiently staffed, lacks a permanent file and
working files; (vi) the absence of an opinion of the Court of Auditors on State accounts; (vii) the delay
in auditing the Budget Act by the Court of Auditors; the last audit concerns the 2015 Budget Act; (viii)
the absence of a procedures manual, formalised reports and working files at the General Inspectorate of
XXIX
Finance; and (ix) the limited competence of the Anti-Corruption Brigade because it is not authorised to
interrogate ministers.
The Government of Burundi needs to correct the weaknesses listed above to make the systems
satisfactorily compliant with the Paris Declaration.
Detailed Risk Assessment
FACTORS RATINGS INITIAL
RISK
MITIGATION
MEASURES
RESIDUAL
RISKS
Budget
Credibility of the budget 2.5 Average Average
Difficulty of tracking the stock of
payment arrears on expenditure
Track the stock of
payment arrears on
expenditure.
Completeness and transparency 2.5
Average
Average
Budgets and accounts of
municipalities are not monitored by
the Ministry of Finance.
Forward the budgets
and accounts of
municipalities to the
Ministry of Finance.
Budgeting based on national policies 2.7 Weak Weak
Predictability and control of budget
execution
2.5 Average Average
The Directorate General of Budget
does not audit services and works
carried out
Get the Directorate
General of Budget to
audit services and
works carried out.
Accounting, recording of information
and financial reports
2.5 Average Average
The Directorate of Public Treasury
does not have a nomenclature of
supporting documents and an
accounting procedures manual
There is now a Single Treasury
Account, which facilitates
reconciliations
Have a nomenclature
of supporting
documents and manual
of accounting
procedures prepared.
.
Internal audit 2.5 Average Average
Reports are regularly prepared for the
majority of government entities
Central, but the managers track major
issues with delay
Accelerate follow-up
of major issues in the
report.
External audit 0.75 Substantial Substantial
The Court of Auditors has insufficient
staff, does not have a permanent file
and working files. It certifies the
accounts of the State and draws up a
report on the budget execution.
However, it does not provide an
opinion. Moreover, there is a delay in
auditing the Budget Act by the Court
of Auditors. The last audit is on the
2015 Budget Act
Strengthen the staff.
Establish a permanent
file and working files.
Provide an opinion in
the report. Join
INTOSAI.
Accelerate the audit of
the Budget Acts
The mission also notes that the Court
of Auditors is not affiliated to the
International Organisation of Supreme
Audit Institutions (INTOSAI).
Public contracts 2.5 Average Average
XXX
For procurement methods that involve
competition. The administration does
not systematically make available to
the public all the information relevant
to the award of public contracts.
For procurement
methods that involve
competition.
Systematically make
available to the public
all information relevant
to public procurement.
Fight corruption 2.5 Average Average
Jurisdiction is limited because it is
not authorised to interrogate
ministers.
Expand jurisdiction by
allowing interrogation
of ministers.
Average Rating: 2.32: Average
Weak: 2.5 to 3 Average: 1.5 to 2.5 Substantial: 0 to 1.5
XXXI
Annex 16: Climate Change and Green Growth in Burundi
Burundi is a landlocked country in the heart of the Great Lakes region of Africa and lies between
meridian 29 °00’ - 30°25 East and parallel 2°20° - 4°25’ South. It covers an area of 27834 km²
and belongs to two major river basins: the Nile Basin with an area of 13,800 km² and the Congo
River Basin with an area of 14,034 km². The current structure of economic production,
dominated by subsistence agriculture, makes the economy highly vulnerable and fragile
because it is dependent on vagaries of the weather. Burundi's electricity consumption of 25
kWh/inhabitant/year accounts for only 4% of the energy balance.
In 2015, the forest area was estimated at 1,542.2 km², or 5.5% of the national territory.
However, the country is experiencing a dizzying deforestation rate when compared to the
national area covered by forests. Although the forested area accounted for about 11.3% of the
national territory in 1990, it represented only 6.7% in 2010, and dropped to barely 5.5% in
2015, at the current rate of 64.54 km² of annual loss of forest cover (i.e. above 2% on annual
average). The high demographic pressure on land for agriculture, the absence or lack of access
to fuel wood substitutes, recurrent bush fires in some parts of the country, limited reforestation,
etc. are all factors that contribute to the continued depletion of this resource. The deficit in the
consumption of wood products in relation to sustainable production is about 4.3 million tonnes
per year. Although the government reforestation programme helped to increase the forest cover
rate from 6.7% 2010 to 12% in 2015, the intensive use of firewood as the main energy source
remains a major concern (the deforestation rate was estimated at 2% per year in 2017). This is
attributable to the fact that the household electrification rate does not exceed 5% compared to
16% in sub-Saharan Africa.
Burundi has abundant water resources thanks to relatively good rainfall, a good network of
rivers and the retention of water by marshes and lakes, particularly Lake Tanganyika: 31,900
million m³ of rainfall and 8,170 m³/year (259m³/s) brought by rivers. The country has significant
potential for irrigable land in marshes, plains and hills but less than 10% of the land is irrigated.
The use of irrigation could enhance crop intensification, increase yields and reduce losses
caused by irregular rainfall. With regard to groundwater, Burundi has more than 6,600 litres
per second of the resource (574,000 m3/d solely from springs). Groundwater resources vary by
natural region. The Imbo, Mosso and Bugesera natural regions have the weakest sources, with
98.3%, 96.6% and 100% of their respective areas falling under the category below 0.3 l/s*km².
The average specific resources are 0.05, 0.08 and 0.11 l/s*km² for these three natural regions.
In contrast, the Mugamba, Mumirwa and Bututsi natural regions have the most abundant water
resources, at respectively 86.6% and 61.9% of their area. They have specific flows above 0.3
l/s*km².).
Burundi’s topography comes with a climate variation depending on the altitude, hence a broad
geo-climatic diversity. The climate of Burundi is humid tropical influenced by the altitude that
varies between 773 m and 2670 m. It is characterised by an alternating rainy season that usually
extends from October to May and a dry season that runs from June to September. Overall,
precipitation increases with altitude. The minimum rainfall is about 500 mm observable in the
Rusizi Plain, while maximum precipitation reaches 2,200 mm in high altitude regions. The
average rainfall for Burundi is 1,274 mm. The greatest number of rainy days is observable in
April (16 to 26) (Sinarinzi, 2005). Average annual air temperature decreases as the altitude
increases. The highest annual average is 24.1° C (Imbo Plain) while the lowest is 15.6° C
(Rwegura). The mean monthly maximum temperatures are highest at the end of the dry season
(September-October) while the mean monthly minimum temperatures are lowest during the dry
season. The country has relatively diversified geomorphological features and is divided into 5
agro-ecological zones: (i) the western plain corresponding to the Imbo natural region that
XXXII
occupies 7% of the country’s land area; (ii) the western Mumirwa escarpment that covers 10%
of the country's area. The annual rainfall ranges from 1,100 to 1,800 mm, and temperatures
vary between 23 and 17° C depending on the altitude; (iii) the Congo-Nile ridge, which includes
the Mugamba and Bututsi natural regions with about 15% of the country's area and
characterised by annual rainfall between 1,500 and 2,000 mm, and an equatorial mountain
climate with average annual temperatures of 12 to 16° C; and (iv) the central plateau
encompassing the Buyenzi natural areas.
In Burundi, climate disruption is manifested by exceptional rainfall and prolonged drought. In
the case of exceptional rainfall, erosion increases, the rivers carry fertile alluvium, raising
riverbeds by a few centimetres. In turn, this floods the plains and marshes, and pollutes the
water. Land loss is very high in the Mumirwa region and at the origin of the pollution of Lake
Tanganyika. These losses are estimated at 100 tonnes/ha/year. The effects of rainfall deficit are
the causes of the water deficit in some parts of the country, particularly in the Bugesera and
Kumoso depressions, and in the Imbo Nord plain. During long periods of drought, cases of bush
fires increase, non-irrigated lowlands dry out and are degraded. Thus, aridity obliges agri-
pastoralists to invade marsh ecosystems in search of wet lands.
The simulation of climate change within the 2000-2050 timeframe has shown an increase in
rainfall ranging from 3 to 10%, while rainfall amounts from May to October will decrease by 4
to 15%. The analysis of average temperature change showed a temperature increase of 0.4º C
every 10 years to reach 1.9º C in 2050, corresponding to the high emission of greenhouse gases.
In the same vein, studies carried out as part of the first national communication on climate
change and climate change parameters in Burundi by 2050 based on the general circulation
model, show that the average annual temperature will rise by 1° C to 3° C. Rainfall will increase
by + or - 10% and the rainfall regime will be disturbed to the point of having only two major
seasons of six months each: a rainy season from November to April and a dry season. These
climate changes will engender several risks related to the following phenomena: (i) change of
seasons; (ii) flooding of swamps and wetlands; (iii) land degradation and loss of soil fertility;
(iv) scarcity of groundwater resources; (v) occurrence of extreme climatic events (hail, violent
showers, strong winds, etc.); (vi) changes in the vegetative cycles of cultivated plants and other
woodlands; and (vii) other phenomena.
Although environmental management in Burundi is governed by legal texts, some of which are
older than the Ministry of Environment, these texts are seldom or never implemented. The
application of these texts is incumbent on various ministries, depending on the sector
(MEEATU, MINEAGRIE, MININTER, etc.). They are listed below: the Land Code (Decree-
Law No. 1/008 of 1 September 1986 on the Land Code); Decree-Law No. 1/032 of 30 June
1993 on the Production and Marketing of Plant Seeds in Burundi; Decree-Law No. 1/033 of 30
June 1993 on the Protection of Plants in Burundi; Law No. 1/010 of 30 June 2000 on the
Environment Code in Burundi; Decree-Law No. 1/6 of 3 March 1980 on the Establishment of
National Parks and Nature Reserves; Law No. 1/02 of 25 March 1985 on the Forest Code;
Decree-Law No. 1/41 of 26 November 1992 on the Institution and Organization of the Public
Water Domain. The recent merger of the Ministry of Water, Environment, Regional and Urban
Planning (MEEATU) and the Ministry of Agriculture and Livestock (MINEAGRIE) to become
the Ministry of Environment, Agriculture and Livestock (MINEAGRIE) attests to the
importance that the government attaches to an interdependent vision of natural resource
management as critical to the fight against food insecurity.
In terms of forward and strategic management of climate change, the country has a significant
arsenal, including: (i) the plan to combat land degradation (2013); (ii) the action plan to build
national capacity on risk reduction and emergency preparedness and response (2013-2016); (iii)
the national climate change adaptation action plan (PANA) (March 2013); (iv) national policy
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on climate change (2013); (v) nationally determined contribution (CPDN) (2015); (vi) national
communication on climate change adaptation and prediction of extreme weather events (2014-
2018); and (vii) proposal to prepare for REDD (2014).
Moreover, although the green economy is not yet a reality in practice, Burundi's resolve to move
towards the green economy is enshrined in the country’s Vision 2025 and in its objective on
low-carbon photovoltaic development mentioned in the CDN. Besides, Burundi’s National
Development Plan 2018-2027 provides that its operationalisation will be translated into sector
policies based on the most relevant development issues with a real potential for catalytic effects
involving an in-depth approach to sustainable development, by strengthening environmental
governance and integrating the green and blue economy perspective into development policies.
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Annex 17 - Non-Sovereign Operations in Burundi
1. Technical Assistance (TA) to Support Agricultural Development
Agriculture is the mainstay of Burundi’s economy and practically employs the entire rural
labour force. Burundi has several factors to its advantage for the development of a more
efficient agricultural sector: favourable climate and geographic conditions for agricultural
production, and a strong and growing domestic demand for agri-food products.
The major constraints to the sector identified are as follows:
- lack of reliable statistics and information systems;
- access to financing;
- problematic land management for private investment although many
government initiatives have been initiated;
- weak infrastructure and transport services that hinder links between the various
actors in the chain;
- embryonic sanitary and phytosanitary system;
- significant soil degradation due to deforestation and expansion of cultivation to
marginal areas.
These constraints have a negative impact on the development of agri-food chains.
The input segment remains largely underdeveloped and informal (individual producers and
cooperatives). Moreover, the supply of agricultural equipment is virtually non-existent.
Overall, Burundi imports a lot more agricultural products than it exports. Smallholders produce
the majority of staple food crops (fresh fruits and vegetables, rice, maize, sorghum and wheat,
as well as cassava and sweet potatoes). Thus, they provide the largest share of production in the
country.
The packaging and transformation segment is not well developed. Processing of agricultural
products remains artisanal and is carried out by individual producers, cooperatives or women's
associations.
Distribution and marketing channels are generally not coordinated, and Burundi's agricultural
research and development sector has been severely disrupted by years of conflict.
In the current context of fragility, improving Burundi's competitiveness in agri-food value
chains must, in the short and medium term, focus on national and regional markets and on
improving livelihoods through food security and increased income for the population. For the
promotion of youth and women's agricultural entrepreneurship and support for agricultural
development poles, private sector development operations can focus on the following areas of
intervention:
- upgrading processes for sustainable intensification of agriculture:
improving inputs and soil quality (land preparation, private irrigation projects,
improvement of production methods on sloping-valley lands);
- upgrading basic crop processing capacity to reduce post-harvest losses;
- upgrading storage, processing and packaging capacity in the food products
sector.
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Only a long-term strategy can help to achieve the objective of diversification of agri-food
exports. This will require the consolidation of essential infrastructure and basic services
(transport, value chain coordination framework, suitable human capital, quality standards,
access to credit and reduction of market distortions resulting from subsidy programmes).
The Bank's technical assistance (TA) needs to help address human capital challenges for all
segments of agricultural value chains. It must take into account the fragmentation of production
at national level to reach a significant number of actors. Low literacy rates will also be taken
into account to ensure effective impact of capacity building actions.
TA will be targeted at young people in the sector, including entrepreneurship initiatives. It will
take into consideration the need to match skills to real private sector needs. Furthermore, the
TA will seek to create links between researchers, educational programmes and the private
sector, through the establishment of incentive and common frameworks.
2. Technical Assistance for the Improvement of Energy Infrastructure
Burundi has significant potential for energy production. Several large rivers along its borders
and all over the country offer opportunities for hydropower generation, while clear skies allow
for the efficient use of solar energy. Ninety percent (90%) of the country's energy needs are
currently covered by the burning of biomass, mainly wood, for cooking and heat, which
contributes to deforestation and health problems.
Since the end of the crisis, Burundi is unable to meet domestic demand and uses energy imports
to fill the gap. In addition, owing to stronger economic growth in recent years, energy demand
will exert additional pressure on the country's energy supply, particularly for upgrading agri-
food value chains.
The main objectives for upgrading the energy value chain in Burundi today are to increase
production, transmission and distribution capacity in order to increase access to electricity and
facilitate access to a more reliable power source for industrial growth.
The Bank's private sector operations will aim at responding to domestic energy demand and
focus on strengthening the electricity value chain, which comprises five major segments: fuel
supply, power generation, transmission, distribution and the final consumer.
Burundi's power generation is dominated by hydropower. As a result, power supply is
dependent on seasonal rainfall; drought years are characterised by significant shortages, while
high rainfall contributes to increased supply. Off-grid electricity generation currently includes
various energy sources - small hydropower plants (some are not operational), diesel generators
and solar panels used by various private and public sector players.
Burundi's transmission network relies on outdated technology and lacks maintenance. In
addition, the network is concentrated in the country’s northwestern and central areas and around
Bujumbura, leaving a large part of the country abandoned. Electricity is distributed mainly in
the country’s urban areas, with only 2% of rural households connected to the grid; rural
electrification is almost non-existent.
Several constraints hinder the improvement of power supply in the country: weak ministerial
capacity, operational inefficiencies resulting from REGIDESO’s structure (lack of autonomy
from the government, mismatch between rates and costs associated to the company structure),
access to finance and limited information systems.
In the current context of fragility, three areas of intervention are prioritised because of their
feasibility and potential to contribute to improving people's livelihoods, job creation and private
sector participation:
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- rehabilitation of existing generation network and facilities, including the
renovation of existing hydropower plants and the national grid to improve
generation capacity and reduce transmission and distribution losses (process
upgrading by integration of more sophisticated technologies or processes);
- expansion of the transmission and distribution network to increase access to
electricity for businesses and individuals in under-served areas of the country,
facilitate interconnection with other countries and improve ROI for production
from power plants (upgrading processes);
- support off-grid development for rural electrification and help private sector
companies and other actors invest in technologies that reduce reliance on
domestic supply, freeing up resources for other users (upgrade processes and
develop renewable energies).
In this context, technical assistance activities could create links with local MSMEs for the
construction and maintenance of facilities that require semi-skilled and unskilled labour.
The Bank's technical assistance (TA) will also help to address human capital challenges in the
electricity value chain. The sector faces a number of significant challenges. These include
weaknesses in human resource management practices, dysfunctional promotion policies within
REGIDESO, a geographic gap between the demand and supply of labour, gaps in the formal
education system and the lack of reliable labour market data.
Technical and vocational schools lack adequate facilities, equipment and teaching staff. As a
result, they re-orientate teaching towards the provision of theoretical knowledge at the expense
of practical training. Hiring in rural areas is difficult and requires the establishment of regional
education and training centres. In addition, pressures will be exerted on the existing workforce
with the arrival of new technologies such as prepaid meters and computer systems for
monitoring transmission and distribution networks of the power grid.
TA will help to identify current skills gaps, develop appropriate training programmes, and
provide the skills needed to grow the sector. Based on this needs assessment, a recruitment
strategy can be developed.
TA will also aim to support stakeholder capacity building through hands-on training
programmes for technicians, on-the-job training for engineers, and training and certification
programmes for electricians.
Stakeholder capacity building for participation in regional operations is also critical, since
regional energy projects require coordination with several countries in key areas. The ability of
public actors to attract private investors, negotiate concessions and PPP contracts will also be
supported.
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Annexe 18 – Burundi : 2018 CRFA’s Main Results.
CRFA Dimension Scores
Capacity Pressure
Inclusive Politics 3.62 5.63
Security 2.34 4.68
Justice 1.92 5.56
Economic & Social Inclusiveness 2.82 3.33
Social Cohesion 2.03 3.34
Externalities/Regional Spillover Effects 2.97 2.70
Climate/Environmental Impacts 3.19 3.79
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Annex 19 – Riskmitigations measures
Risks Assessment Mitigation Measures
Political instability and the risks posed by the 2020 elections.
High Efforts by the international community to restore inter-Burundian dialogue could help mitigate these risks.
Weak institutional and human capacity could adversely affect programme implementation.
Moderate
The Bank should intensify its capacity-building efforts and support Burundi through technical assistance. This assistance will focus on strengthening project monitoring and evaluation capacity, and technical capacity in sectors of Bank involvement.
Poor knowledge and/or ignorance of "climate vulnerability hotspots" could be a risk for the performance of the portfolio.
Moderate Support appropriate institutions in defining adaptation and mitigation priorities across socio-economic sectors, and promote the mainstreaming of climate change into Bank investments.
The lingering effects of the crisis could be a risk for the performance of the portfolio, especially the new operations.
Moderate
New operations will be systematically subject to economic and political analysis to identify "special measures" for the successful implementation of projects. Portfolio performance in Burundi has remained comparable to the Bank average despite the crisis. The Bank will keep up its close monitoring efforts.