HomeReportsBureau of Economic and Business Affairs2019 Investment Climate Statements...Burundi

# 					2019 Investment Climate Statements: Burundi			

 In this section										/

													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. OPIC and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

Burundi is a landlocked country located in Central Africa and is one of the six member states of the East African Community (EAC).  A socio-political and economic crisis associated with the 2015 national elections, followed by a severe economic downturn, exacerbated the poor fundamentals of an already difficult investment climate.  Although a modest recovery is underway, economic growth remains insufficient to create employment for Burundi’s rapidly growing population. Burundi remains one of the world’s most impoverished countries, with approximately 90 percent of the population reliant on subsistence farming.

- Burundi’s landlocked location and infrastructure constraints limit transportation of goods and services.  Electricity demand significantly exceeds capacity and the transmission system is poorly maintained, leading to rolling blackouts.  Although activity has increased in the mining sector, the scale of the commercially exploitable resources remains unclear. Scarcity of skilled labor and low labor productivity limit growth in all sectors.
- The Government of Burundi (GoB) seeks to attract more foreign investment, but poor governance, de facto capital controls that limit the expatriation of foreign currency, corruption,  poor infrastructure, and  a  low-skilled workforce limit foreign direct investment (FDI) .  Economic statistics are often limited, unreliable, or irregularly published.
- Since 2008, members of the executive branch have granted large discretionary exemptions to private foreign companies by presidential decree or ministerial ordinance in order to attract FDI.  These direct government-to-company agreements undermine the Burundian tax law and the investment code. In addition to reducing revenues for the state, these exemptions injure private companies already operating in Burundi by granting advantages to select competitors.  The corporate tax rate is 30 percent, with reductions for companies that employ certain numbers of Burundian nationals.

*Table 1: Key Metrics and Rankings*

							1. Openness To, and Restrictions Upon, Foreign Investment					

**Policies Towards Foreign Direct Investment**

The Government of Burundi (GoB) is generally favorable to FDI and seeks investment as a means to restore economic growth.  Uneven implementation of laws and regulations, however, limits the predictability of the environment for Burundian and foreign investors alike.  The GoB has not implemented laws, regulations, or economic or industrial strategies that limit market access or discriminate against foreign investors.  There is a minimum foreign initial investment of USD 50,000, which does not apply to domestic investors. An overview of the legal framework for foreign investment can be found at http://www.eatradehub.org/burundi_investment_policy_assessment_2018_presentation  

Based on the Burundi Investment Code enacted in 2008, the government established the Burundi Investment Promotion Agency (API) in 2009.  API’s main objective is to boost local investment and attract foreign investment, especially for projects serving long-term development goals and improving competitiveness.  API provides investors with information on investment and export promotion, assists them with legal formalities, including obtaining the required documents, and intervenes when laws and regulations are not properly applied.API also designs reforms required for the improvement and the ease of doing business environment and ensures that the impact of investments on development is beneficial and sustainable.

The GoB conducts dialogues with national and foreign investors to promote investment.  API is the initial and primary point of entry for investors, but government ministries meet regularly with private investors to discuss regulatory and legal issues.  For example, in 2018, API organized a press conference to reassure investors of the GoB’s commitment to creating a conducive business climate.

**Limits on Foreign Control and Right to Private Ownership and Establishment**

Foreign and domestic companies have the same rights to establish and own businesses in the country and engage in all forms of activities.  However, there are restrictions on foreign investments in weaponry, ammunition, and any sort of military or para-military enterprises. There is no other restriction nor are there any sectors in which foreign investors are denied the same treatment as domestic firms.  There are no general limits on foreign ownership or control.

Article 63 of the 2013 mining code stipulates that the GoB must own at least 10 percent of shares in any foreign company with an industrial mining license and state participation cannot be diluted in the event of an increase in the share capital.

Burundi does not maintain an investment screening mechanism for inbound foreign investment.

**Other Investment Policy Reviews**

No investment policy review from a multilateral organization has taken place in the last three years.  The most recent review was performed in 2010 by UNCTAD.

**Business Facilitation**

In addition to fiscal advantages provided in the investment code, Burundi has implemented reforms, including reinforcing its single window for starting a business, simplifying tax procedures for small and medium enterprises, launching an electronic single window for business transactions, and harmonizing commercial laws with those of the East African Community.

The Investment Promotion Agency (API) is a government authority in charge of promoting investment, improving the business climate and facilitating market entry for investors in Burundi.  API offers a range of services to potential investors, including assistance in acquiring the licenses, certificates, approvals, authorizations, and permits required by law to set up and operate a business enterprise in Burundi.  API has set up a one-stop shop to facilitate and simplify business registration in Burundi. For now, investors must be physically present in country to register with API.

The business registration takes approximately four days and costs BIF130,000 (around USD 73).  For more details and information on registration procedures, time and costs, investors may visit API’s website on https://www.investburundi.bi/  .

There is no specific mechanism for ensuring equitable treatment of women and underrepresented minorities.

**Outward Investment**

The host government does not have mechanisms for promoting or incentivizing outward investment.  The host government does not restrict domestic investors from investing abroad.

							2. Bilateral Investment Agreements and Taxation Treaties					

Burundi has Bilateral Investment Treaties signed and in force with the Belgium-Luxembourg Economic Union, Germany, Kenya, Mauritius, Netherlands, and the United Kingdom.  It also has BITs signed but not in force with Turkey, Comoros, and Egypt. The United States suspended Burundi’s eligibility for the African Growth and Opportunity Act (AGOA) in 2015. 

Burundi does not have a bilateral taxation treaty with the United States.  It does have taxation agreements with the member states of the East African Community (EAC) and Common Market for Eastern and Southern Africa (COMESA) regional economic organizations.

							3. Legal Regime					

**Transparency of the Regulatory System**

Although parts of the government are working to create more transparent policies for fostering competition, Burundi lacks clear rules of the game.  Many policies for foreign investment are not transparent, and laws or regulations on the books are often ineffective or unenforced. Burundi’s regulatory and accounting systems are generally transparent and consistent with international norms on paper, but a lack of capacity or training for the staff and political constraints sometimes limit the regularity and transparency of their implementation.

Rule-making and regulatory authority is exercised exclusively at the national level.  Relevant ministries and the Council of Ministers exercise regulatory and rule-making authority, based on laws passed by the Senate and National Assembly.  In practice, government officials sometimes exercise influence over the application and interpretation of rules and regulations outside of formal structures.  The government sometimes discusses proposed legislation and rule-making with private sector interlocutors and civil society, but does not have a formal public comment process.  There are no informal regulatory processes managed by non-governmental organizations (NGOs) or private sector associations.

Accounting, legal, and regulatory procedures are generally transparent or consistent with international norms on paper but are unevenly implemented in practice.

Draft bills or regulations are not subject to public consultation process.  There are no conferences that involves citizens in consultation process to give them an opportunity to make their comments or contributions, especially at the time of project development, and, even if this was the case, the public does not have access to the detailed information needed to participate in this process.

Burundi does not have a centralized online location where key regulatory actions are published; however, regulatory actions are sometimes posted on the websites of the GoB institutions (typically that of the Office of the President or ministries).

Burundi has sectoral regulatory agencies covering taxes and revenues, mining and energy, water, and agriculture.  Regulatory actions are reviewable by courts. There have been no recent reforms to the regulatory enforcement system.

The government generally issues terms of reference and recruits private consultants who prepare a study on the draft legislation for review and comment by the private sector.  The government analyzes these comments and takes them into consideration while drafting new regulations. New regulations can be issued by a presidential decree or submitted to the parliament when they have become a law.  This mechanism applies to laws and regulations on investment.

Information on public finances and debt obligations (including explicit and contingent liabilities) are published in the Burundi Central Bank’s Reports and on its website: https://www.brb.bi/  ;  however, publications are usually not up-to-date.

**International Regulatory Considerations**

Burundi is a part of the East African Community (EAC), a regional economic bloc composed by six member states, the republics of Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda.  The EAC Integration process is anchored on four pillars: Customs Union, Common Market, Monetary Union, and Political Federation. Each member state must harmonize its national regulatory system with that of the EAC.  At the moment, several milestones have been realized under the EAC Pillars; some countries are ahead of others, but the process of harmonization of regulatory systems (national and regional) continues to progress as does the regional integration (progress of the East African Customs Union, the creation of the Common Market and the implementation of the Monetary Union Protocol, etc.).

Burundian law and regulations reference a number of standards, including the East African Standards, Codex Alimentarius Standards, the International Organization for Standardization (ISO), and its own standards.  ISO remains the main reference.

The country joined the WTO member on July 23, 1995.  According to the Ministry of Commerce, Industry, and Tourism, Burundi has not notified the WTO Committee on TBT of all draft technical regulations.

**Legal System and Judicial Independence**

The country’s legal system is civil (Roman), based on German and French civil codes.  For local civil matters, customary law also applies. Burundi’s legal system contains standard provisions guaranteeing the right to private property and the enforcement of contracts.  The country has a written commercial law and a commercial court. The investment code offers plaintiffs recourse in the national court system and to international arbitration.

The judicial system is not effectively independent of the executive branch.  A lack of capacity hinders judicial effectiveness, and judicial procedures are not rigorously observed.

The investment code offers plaintiffs recourse in the national court system and to international arbitration when necessary.

**Laws and Regulations on Foreign Direct Investment**

There were no major laws, regulations, or judicial decisions pertaining to foreign investment in the past year.  In 2009, the GoB created an Investment Promotion Authority (API) in charge of promoting investment and facilitating market entry for investors in Burundi.  API offers a range of services to potential investors, including assistance in acquiring the licenses, certificates, approvals, authorizations, and permits required by law to set up and operate a business enterprise in Burundi.  In 2014, API created a follow-up mechanism to make sure that investors are implementing projects for which they received tax exemptions and other advantages provided in the investment code.

In 2018, the Council of Ministers reviewed draft legislation updating the investment code and then referred to a technical committee for review and improvement; it remains a work in progress.  Among other changes, the draft contains new measures to ensure the protection of the property of foreign investors and penalties for malfeasance by foreign investors.

**Competition and Anti-Trust Laws**

There is no Burundian agency in charge of reviewing transactions for competition-related concerns.

**Expropriation and Compensation**

Burundian law allows the GoB to expropriate property for exceptional and state-approved reasons, but the GoB is then committed to provide a legal prior fair compensation allowance based on the fair market value.

There are no recent cases involving expropriation of foreign investments nor do any foreign firms have active pending complaints regarding compensation in Burundian courts.

**Dispute Settlement**

*ICSID Convention and New York Convention*

Burundi is a full member of ICSID Convention since 1969 and became the 150th country to sign the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention).  Burundi’s commercial law allows enforcement of judgments in foreign courts by local courts.

*Investor-State Dispute Settlement*

Burundi is a signatory of International Centre for Settlement of Investment Disputes (ICSID) and Multilateral Investment Guarantee Agency (MIGA) in which international arbitration of investment disputes is recognized.  Burundi has no bilateral investment treaty with the United States.

There have been limited instances of foreign investors seeking restitution from the GoB over allegations of breach of contract and corruption.

In cases involving international elements, the GoB accepts international arbitration and recognizes and enforces foreign arbitral awards.  There is no history of extrajudicial action against foreign investors.

*International Commercial Arbitration and Foreign Courts*

In rare cases involving international elements, the GoB accepts international arbitration and recognizes and enforces foreign arbitral awards.  In investment disputes between private parties, international arbitration is accepted as a means of settlement provided one of the parties is an extra-national.  In 2007, the GoB created a Center for Arbitration and Mediation (CEBAC) to handle such disputes, but it is not very active.

There is no operational commercial arbitration body in the country besides CEBAC.  Foreign arbitral awards are recognized, but local courts are not legally equipped to enforce them.  No Burundian private entity has been involved in a foreign arbitration. In the past, one registered case involved the GoB and a private gold refining company (Affimet).  The ICSID ruling was enforced by GoB, which lost the case.

Although there are complaints about the discriminatory and opaque nature of Burundian court processes in general, there are no known cases involving State-Owned Enterprises (SOEs) in investment disputes.

*Bankruptcy Regulations*

Burundi has two laws governing or pertaining to bankruptcy:  Law N°1/07 of March 15, 2006, on bankruptcy and Law N°1/08 of March 15, 2006, on legal settlement of insolvent companies.  Under Burundian law, creditors have the right to file for liquidation and the right to request information from the legal bankruptcy agent.  The bankruptcy framework does not require that creditors approve the selection of the bankruptcy agent and does not provide creditors the right to object to decisions accepting or rejecting creditors’ claims.

							4. Industrial Policies					

**Investment Incentives**

The current Investment Code grants various potential fiscal and customs benefits to investors including:  three or more years of tax-free operation; exemption of charges on property transfer; exemptions from duties on raw materials, capital goods, and specialized vehicles; tax exemptions for goods used to establish new businesses; exemptions from customs duties if investment goods are made within the EAC or COMESA; a corporate tax rate of 30 percent with a reduction to 28 percent if 50-200 Burundians are employed and to 25 percent if more than 200 are employed; and free transfer of foreign assets and income after payment of taxes due.

The GoB does not issue guarantees, but does co-finance foreign direct investment projects, albeit typically on an in-kind basis, such as by granting land for facilities.

**Foreign Trade Zones/Free Ports/Trade Facilitation**

The government has passed a free trade zone law; however the enabling regulation has not been developed and Burundi does not yet have trade zones, free ports, or special tax treatment areas. While the government has discussed the possibility of free trade zones in the future, no sufficient legal framework for them currently exists.

**Performance and Data Localization Requirements**

The current government policy for both domestic and foreign companies is mandatory employment of local workers unless it is not possible to find a local candidate with the required skills or expertise.  The number of expatriate employees is limited to 20 percent of the total workforce. There is no policy mandating foreign companies to appoint local personnel to senior management or boards of directors.

Burundian visa requirements are not excessively onerous and do not generally inhibit the mobility of foreign investors and their employees.  Since 2015, Burundi has removed the possibility for visitors to apply for a visa upon arrival at the airport unless authorized by the PAFE (immigration authority).  Travelers to Burundi must apply for visas in one of the Burundian missions abroad. A foreigner holding a residency visa is permitted to work in Burundi. A two-year residency visa costs USD 500.  There are no government/authority-imposed conditions on permission to invest except for a minimum investment requirement of USD 50,000 applicable to foreign investors.

There are no requirements that investors purchase from local sources.  However, the mining law requires a commitment from the investor to recruit staff or subcontractors of Burundian nationality as a precondition for granting a mining license.  The GoB imposes no performance requirements on investors as a condition for establishing, maintaining, or expanding their investments or for access to tax and investment incentives.

There are no laws requiring foreign IT providers to turn over source code and/or provide access to encryption except for a law requiring that companies share user information with law enforcement authorities during terrorism investigations; this law applies equally to Burundian and foreign companies.  There are no laws that prevent companies from transmitting data outside the country.

							5. Protection of Property Rights					

**Real Property**

Secured interests in both real and movable property are nominally recognized under Burundian law.  The legal system in general and the investment code in particular claim to protect and facilitate the acquisition and disposition of all property rights.  The Land Titles Service registers real estate and security instruments, such as mortgages. Property titles are accepted as a guarantee by commercial banks for mortgages, but documents for properties located outside the capital city of Bujumbura are less easily accepted.

The legal system and the investment code do not differentiate local and foreign investors regarding land acquisition or lease.  However, land acquisition is subject to reciprocity between Burundi and the investor’s home country.

Properties in urban areas have to be registered.  However, according to estimates, more than 90 percent of houses and land in rural areas are not registered.  When the property has been legally purchased, it cannot legally be reverted unless it undergoes an expropriation procedure in compliance with legal and regulatory procedures.

**Intellectual Property Rights**

Burundi has adopted the 1995 World Trade Organization (WTO) Agreement on Trade-Related Aspects of International Property Rights (TRIPS), which introduced global minimum standards for the protection and enforcement of virtually all intellectual property rights (IPR).  The legal system in general and the investment code in particular aim to protect and facilitate the acquisition and disposition of all property rights, including IPR. The law also guarantees protection for patents, copyrights, and trademarks. However, there is no record of enforcement action on IPR violations.  No IPR-related law has been enacted during the past year and no bills are pending.

The Burundi Bureau of Standardization (BBN) is the state authority responsible the monitoring of the quality of consumer products on the market; however, this Bureau lacks the necessary expertise and resources to be effective.  Counterfeiters who are apprehended are fined and their products are seized. There are no statistics available on seizures of counterfeit goods. Burundi is not listed in the United States Trade Representative (USTR) Special 301 Report or the Notorious Market List.

							6. Financial Sector					

**Capital Markets and Portfolio Investment**

Although there are no regulatory restrictions on foreign portfolio investment, Burundi does not have capital markets that would enable it.  Capital allocation within Burundi is entirely dependent on commercial banks.

The country does not have its own stock market.  There is no regulatory system to encourage and facilitate portfolio investment.  There is insufficient liquidity in the markets to enter and exit sizeable positions.  Existing policies do not actively facilitate nor impede the free flow of financial resources into product and factor markets.

There is no regulation restricting international transactions.  In practice, however, the government restricts payments and transfers for international transactions due to a shortage of access to foreign currency.

In theory, foreign investors have access to all existing credit instruments and on market terms.  In practice, available credit is extremely limited.

**Money and Banking System**

Burundi has very limited banking services penetration according to the most recent national survey on financial inclusion conducted by the central bank, the Bank of the Republic of Burundi (BRB), in 2016, which found a penetration level of approximately 22 percent.  Several local commercial banks have branches in urban centers and micro-finance institutions mostly serve rural areas. The Burundian government is a minority shareholder in three banks.

Generally, the banking sector has maintained its financial solidity and remained capitalized under prudential measures taken by the BRB; however, the sector has struggled with non-performing loans (NPLs).  According BRB’s reports, NPLs made up approximately 14.5 percent of outstanding loans in 2017 (five percent is the benchmark rate among East African Community states); a private sector assessment put the proportion of NPLs at over 17 percent.  The sector also suffered from shortages of foreign currency following the Central Bank’s establishment of de facto capital controls in 2016.

Total banking sector assets were 2.16 trillion Burundian francs (approximately USD 1.2 billion at the official exchange rate) in 2017.  The banking market is dominated by the three largest and systemically important banks: Credit Bank of Bujumbura (BCB), Burundi Commercial Bank (BANCOBU), and Interbank Burundi (IBB).

Foreign banks are allowed to establish operations in the country.  Foreign banks operating in the country include ECOBANK, CRDB Bank, and Kenya Commercial Bank.  The central bank directs banking regulatory policy, including prudential measures for the banking system.  The country has kept all its foreign corresponding banks during the last three years. Foreigners and locals are subject to the same conditions when opening a bank account; the only requirement is the presentation of identification.

**Foreign Exchange and Remittances**

*Foreign Exchange*

According to the law, there are no restrictions on transferring funds associated with investment after paying taxes.  In practice, foreign investors have encountered difficulties in converting funds associated with investments into foreign currency due to de facto capital controls implemented by the BRB in 2016.

According to the GoB, funds associated with an investment can be converted into a freely usable currency at a legal market rate, pending their availability.  Due to a shortage of foreign currency, the central bank prioritizes companies in specific strategic industries for access to foreign exchange accommodation. In practice, the Burundian franc is not freely convertible at the official government rate.

The BRB publishes on its website the daily rate each morning.  In practice, the national currency (BIF) fluctuates, and the government has imposed de facto capital controls to prevent abrupt exchange rate movements; there is a gap between the official rate and a floating parallel market rate.

*Remittance Policies*

The government has not passed any new laws regarding a change to investment remittances policies.  The average delay for remitting investment returns (once all taxes have been paid) is three months due to general inefficiency in the banking sector and the rarity of such transactions in an environment with very little foreign direct investment.

**Sovereign Wealth Funds**

Burundi does not have a sovereign wealth fund.

							7. State-Owned Enterprises					

There are five SOEs in Burundi with 100 percent government ownership:  Regideso (public utility company), Onatel (telecom), Sosumo (sugar), OTB (tea), and Cogerco (cotton).  No statistics on assets are available for these companies as their reports are not available to the public.  Board members for SOEs are appointed by the GoB and report to its ministries. The GoB has a minority (40 percent) share in Brarudi, a branch of the Heineken Group, and in three banking companies.

There is no published list of SOEs.

SOEs have no market-based advantages and compete with other investors under the same terms and conditions; however, Burundi does not adhere to the OECD guidelines on corporate governance for SOEs.

**Privatization Program**

Burundi’s program for privatizing some SOEs in the agribusiness industry (coffee, tea, sugar) and telecommunications sector has been suspended since 2015 with no clear indication of when it may resume.

The privatization program was open to all potential buyers, including foreigners, and there was no explicit discrimination against foreign investors at any stage of the investment process.  Public bidding was mandatory. The process is transparent and non-discriminatory. When the government intends to sell a business or shares in a business, offers are published in local newspapers.

							8. Responsible Business Conduct					

According to the investment code, any new enterprise is required to take into account environmental issues and employee rights in its investment and business plan.  The government has taken no comprehensive measures to implement policies or international standards regarding responsible business practices. The government routinely engages investors about including public and community benefits in investment projects, but has no clearly defined standards.

There have not been any high-profile or controversial instances of private sector impact on human rights in the recent past.  No reliable information is available on the maintenance and enforcement of domestic laws with respect to labor and employment rights, consumer protections, and environmental protections.  In January 2019, the BRB issued a regulation relating to the protection of consumers of financial products and services in view of the complexity and growing diversity of the range of the services and products offered in Burundi.

There are no corporate governance, accounting, or executive compensation standards in place to protect the interests of shareholders.  There are no organizations focused specifically on RBC in the country.

As a member of the International Conference on the Great Lakes Region (ICGLR), the government has acceded to the OECD due diligence mechanism and the regional system for certification and traceability of certain minerals extracted from national mines (tin, tantalum and tungsten), as well as against conflict minerals that can be smuggled from the neighboring Democratic Republic of Congo (DRC).  In May 2014, Burundi became the third country in the Great Lakes region of Africa to implement an internationally accepted system of due diligence and mineral traceability system. However, some civil society organizations report a noticeable lack of transparency in the Burundian mining sector (involvement of some senior GoB officials in the trafficking of gold from the DRC).

The government does not participate in the EITI yet.  There are no domestic transparency measures/policies that require the disclosure of payments made to the government.

							9. Corruption					

The government has an anti-corruption law and an enforcement organization, the Anti-Corruption Brigade, responsible for enforcing this legislation.  Cabinet members, parliamentarians, and officials appointed by presidential decree have immunity from prosecution on corruption charges, insulating them from accountability.  Laws designed to combat corruption do not extend to family members of officials or to political parties.

Article 60 of the April 2016 law “Bearing Measures for the Prevention and Punishment of Corruption and Related Offenses” regulates conflicts of interest, including in awarding government procurement.  Burundian legislation criminalizes bribery of public officials, but there is no specific requirement for private companies to establish internal codes of conduct.

Burundi is a signatory to the UN Anti-Corruption Convention and the OECD Convention on Combating Bribery.  Burundi has also been a member of the East African Anti-Corruption Authority since joining the EAC in 2007.  The country does not provide protections to NGOs involved in investigating corruption.

A number of U.S. firms have specifically noted corruption as an obstacle to direct investment in Burundi.  Corruption is most pervasive in the award of licenses and concessions, which takes place in a non-transparent environment with frequent allegations of bribery and cronyism.  Customs officials are also reportedly corrupt, regularly extorting bribes from exporters and importers.

*Resources to Report Corruption*

Contact at the government agency or agencies that are responsible for combating corruption:

Jean Damascène NKESHIMANACommissaire GénéralAnti-Corruption BrigadePO Box 890 Bujumbura (+257) 22 25 62 37Email: brigadeanticorruption@yahoo.fr

Contact at a “watchdog” organization (international, regional, local, or nongovernmental organization operating in the country/economy that monitors corruption, such as Transparency International):

Gabriel RufyiriPresidentOLUCOMEChaussée Prince Louis Rwagasore, n°47, 1er Etage(+257) 22 25 20 20 /22 25 89 00Email: rufyirig@gmail.com / olucome2003@gmail.com

							10. Political and Security Environment					

Burundi has experienced cycles of ethnic and political violence since its independence in 1962.  Periods before and after national elections have often been marked by political violence and civil disturbance.  During the reporting period, the political turmoil associated with the 2015 elections and failed coup has ceased, but tensions and uncertainties remain.

							11. Labor Policies and Practices					

Unskilled local labor is widely available, while there are shortages for skilled workers in some sectors; no statistics are available on the shortage of specialized labor skills.  According to government policy, the hiring of nationals should be prioritized except in cases in which no local expertise is available. Formal sector employment is limited, and official figures for unemployment are unreliable.  Observers believe that there is widespread youth unemployment on the order of 65 percent.

According to the investment code, any new enterprise is required to take into account environmental issues and employee rights in its investment and business plan.  The government has taken no comprehensive measures to implement policies or international standards regarding responsible business practices. The government routinely engages investors about including public and community benefits in investment projects, but has no clearly defined standards.

There have not been any high-profile or controversial instances of private sector impact on human rights in the recent past.  No reliable information is available on the maintenance and enforcement of domestic laws with respect to labor and employment rights, consumer protections, and environmental protections.  There are no known examples of labor laws being waived in order to attract or retain investment. There are no special economic zones in the country.

The labor code allows for employers to respond to fluctuating market conditions with layoffs of workers.  Labor laws do not differentiate between layoffs and firing for severance. The government has a social insurance program that provides limited coverage to workers laid off for economic reasons.

Burundi is a member of the International Labor Organization (ILO) and its domestic labor law is in compliance with international labor standards.  Workers’ unions are legally authorized, and there are laws and regulations that prohibit child and forced labor and any kind of discrimination. In practice, child labor occurs, and some union activity is restricted.  Burundi has ratified all of the ILO fundamental conventions protecting workers’ rights, however, protection of core labor rights continues to be inadequate. Although the Labor Code prohibits acts of anti-union discrimination, it does not prescribe adequate penalties sufficient to deter such acts.  In the private sector, labor-management relations are usually conducted according to international standards that allow for collective bargaining. Burundi’s Labor Inspectorate has the authority to settle disputes between workers and employers, which can also be managed through civil judicial procedures.  No strikes that posed an investment risk occurred during the past year. No new labor laws were enacted or drafted during the reporting period, however, the Labor Inspectorate is currently working on revising the Labor Code.

							12. OPIC and Other Investment Insurance Programs					

OPIC has approved political risk insurance to one current project in Burundi.  Burundi is a member of the Multilateral Investment Guarantee Agency and in 2006 signed an agreement with the Overseas Private Investment Corporation (OPIC).

							13. Foreign Direct Investment and Foreign Portfolio Investment Statistics					

*Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy*