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Political Crisis Takes Toll on Economy

Burundi’s nine-month political crisis has spurred an economic contraction in the East African nation, hitting revenue collection, tourism and industrial activity, an official said.

The country collected 590.6 billion Burundian francs ($376.2 million) in taxes in 2015, compared with a target of 720 billion francs, Domitien Ndihokubwayo, general commissioner of Burundi’s revenue authority, told reporters Tuesday in the capital, Bujumbura. The target this year is 678 billion francs, he said.

“Burundi’s security situation impacted a lot on our economy,” Ndihokubwayo said. “ That is why our collection targets were not met. The economy fell very rapidly, but is rising slowly.” Revenue has begun to increase again “ due to the restoration of security,” he said.

Landlocked Burundi, home to 6 percent of the world’s nickel reserves, has been hit by unrest that’ skilled about 440 people since President Pierre Nkurunziza decided to stand for re-election in April. It’s a member of the East African Community, a five-nation bloc with a combined gross domestic product of $147.5 billion, and a coffee-exporter.

“ Until September 2015, economic growth was under zero,” Finance Ministry Spokesman Desire Musharitse told reporters at the same briefing. He said a full-year figure would be available “soon” and that the country forecasts 3.5 percent growth for 2016. The International Monetary Fund in October said Burundi’s economy could contract 7.2 percent in 2015.

“In terms of industry, I think the sector will rise, but for tourism we have realized that people are scared to come to Burundi because of the crisis,” Musharitse said in an interview.

The Twa, Hutu and Tutsi peoples have lived in Burundi for at least 500 years. For more than 200 of those years, Burundi was an independent kingdom, until the beginning of the twentieth century, when Germany colonized the region. After the First World War and Germany's defeat, it ceded the territory to Belgium. Both Germans and Belgians ruled Burundi and Rwanda as a European colony known as Ruanda-Urundi. Despite common misconceptions, Burundi and Rwanda have never been under a common rule before European colonization. The European intervention exacerbated social differences between the Tutsi and Hutu, and contributed to political unrest in the region. Burundi gained independence in 1962 and initially had a monarchy, but a series of assassinations, coups, and a general climate of regional instability culminated in the establishment of a republic and one-party state in 1966. Bouts of ethnic cleansing and ultimately two civil wars and genocides during the 1970s and again in the 1990s left the country undeveloped and its population as one of the world's poorest. 2015 witnessed large-scale political strife as President Pierre Nkurunziza opted to run for a third term in office, a coup attempt failed and the country's parliamentary and presidential elections were broadly criticized by members of the international community.

In addition to poverty, Burundians often have to deal with corruption, weak infrastructure, poor access to health and education services, and hunger. Burundi is densely populated and has had substantial emigration as young people seek opportunities elsewhere. The World Happiness Report 2016 Update ranked Burundi as the world's least happy nation.

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The franc (ISO 4217 code is BIF) is the currency of Burundi. It is nominally subdivided into 100 centimes, although coins have never been issued in centimes since Burundi began issuing its own currency. Only during the period when Burundi used the Belgian Congo franc were centime coins issued.

The franc became the currency of Burundi in 1916 when Belgium occupied the former German colony and replaced the German East African rupie with the Belgian Congo franc. Burundi used the currency of Belgian Congo until 1960 when the Rwanda and Burundi franc was introduced. Burundi began issuing its own francs in 1964.

There are plans to introduce a common currency, a new East African shilling, for the five member states of the East African Community by the end of 2015.

In 1965, the Bank of the Kingdom of Burundi issued brass 1 franc coins. In 1968, Bank of the Republic of Burundi took over the issuance of coins and introduced aluminum 1 and 5 francs and cupro-nickel 10 francs. The 5 and 10 francs have continuous milled edges. Second types of the 1 and 5 franc coins were introduced in 1976, featuring the coat of arms. In 2011 new 10 and 50 franc coins were introduced.

In 1966, notes for 20 francs and above were overprinted by the Bank of the Republic of Burundi, replacing the word "Kingdom" with "Republic". Regular issues of this bank began in denominations of 10, 20, 50, 100, 500, 1,000 and 5,000 francs. 10 francs were replaced by coins in 1968. 2,000 franc notes were introduced in 2001, followed by 10,000 francs in 2004. Photographer Kelly Fajack's image of school kids in Burundi was used on the back of the Burundian 10,000 franc note.