HomeReportsBureau of Economic and Business Affairs2021 Investment Climate Statements…Burundi

# 					2021 Investment Climate Statements: Burundi			

 In this section										/

													EXECUTIVE SUMMARY											

                -  EXECUTIVE SUMMARY 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment 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. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## EXECUTIVE SUMMARY

Burundi is located in Central Africa and is one of the six member states of the East African Community (EAC). Burundi is one of the world’s most impoverished countries, with almost two-thirds of the population living below the poverty line, approximately 90 percent of the population reliant on subsistence farming, and a youth unemployment rate of about 65 percent. Economic growth is insufficient to create employment for Burundi’s rapidly growing population and the new administration of President Ndayishimiye, in power since June 2020, is actively seeking to increase existing value chains and find new sources of employment and revenue.

The government of Burundi (GoB) is also seeking to attract more foreign direct investment (FDI). In sharp contrast with the isolationist tendencies of the last administration, since taking office President Ndayishimiye has made or hosted multiple state visits with potential trade and development partners in the region, including Tanzania, Equatorial Guinea, Gabon, Central African Republic, Ethiopia, and Egypt. Given the importance of agriculture, the GoB is promoting initiatives to modernize and diversify agricultural production, seeking to increase production of crops beyond coffee and tea. In order to attract FDI, the GoB must address longstanding issues of poor governance and weak institutional capacity, corruption, instability of the local currency, financial restrictions and capital controls that limit access to and expatriation of foreign exchange, a low-skilled workforce, poor internet connectivity, and limited/unreliable economic statistics. Since 2008, members of the executive branch have granted large discretionary tax or related exemptions to private foreign companies by presidential decree or ministerial 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 disadvantage 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.

The GoB is also working to develop infrastructure, including photovoltaic and hydroelectric power plants, road construction to improve access to the country and projects that will contribute to regional trade, such as the rehabilitation of Bujumbura Port and the construction of a railway joining Burundi and Tanzania. Burundi’s landlocked location and infrastructure constraints severely limit transportation of goods. Demand for electricity and water significantly exceeds capacity, and the transmission system is old and poorly maintained, leading to rolling blackouts and outages. In the mining sector, which some industry players believe has great potential for development, activity has increased but overall yields remain low, and infrastructure needed to support an expansion of mining, including electricity and transportation, are insufficient.

							1. Openness To, and Restrictions Upon, Foreign Investment					

**Policies Towards Foreign Direct Investment**

The Government of Burundi (GoB) is generally supportive of FDI and seeks investment as a means to promote 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 initial foreign investment of $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 is the 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. 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 dialogue 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.

****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 are no other restrictions nor are there any other 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 the capabilities of the one-stop shop at API, 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.

Business registration takes approximately four hours and costs 40,000 Burundian francs (around $21). For more details and information on registration procedures, time and costs, investors may visit API’s website at 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 and Taxation Treaties					

Burundi has bilateral investment treaties (BIT) 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, Egypt, and the United Arab Emirates. The United States suspended Burundi’s eligibility for the African Growth and Opportunity Act (AGOA) in 2016.

Burundi does not have a bilateral taxation treaty with the United States. The United States signed Trade and Investment Framework Agreements (TIFA) with the East African Community in 2008, and with the Common Market for Eastern and Southern Africa (COMESA) in 2001. Burundi is a member of both regional 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 much necessary regulatory framework. 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 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.

Draft bills or regulations are not subject to a public consultation process. There are no conferences that involve citizens in a consultative process to give them an opportunity to make comments or contributions, especially at the time of project development, and, even if this were 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 GoB institutions (typically that of the Office of the President or respective 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 when drafting new regulations. New regulations can be issued by a presidential decree or Parliament can make them into a law. This mechanism applies to laws and regulations on investment.

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

****International Regulatory Considerations****

Burundi is a member 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: a customs union, a common market, a monetary union, and political federation. Each member state must harmonize its national regulatory system with that of the EAC.

Burundian law and regulations reference several standards, including the East African Standards, Codex Alimentarius Standards, the International Organization for Standardization (ISO), and Burundi’s own standards. ISO remains the main standard of reference.

The country joined the WTO on July 23, 1995. According to the Ministry of Trade, Transport, Industry and Tourism, Burundi has not notified the WTO Committee on Technical Barriers to Trade of all its 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.

****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 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 it 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 Antitrust 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 compensation based on the fair market value prior to expropriation.

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 the 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 parties, 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 a non-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. The GoB lost the case, but enforced the ICSID’s against the GoB.

**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 personal or financial information about the debtors 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****

Burundi already belongs to the trading blocs of the EAC, the CEPGL (Economic Community of the Great Lakes Countries), COMESA, and the Economic Community of the States of Central Africa (CEEAC). In 2020, GoB adopted new laws to accelerate its integration into other trading blocs such as the African Continental Free Trade Area (AfCFTA), and the Tripartite Free Trade Area (TFTA) between COMESA, EAC and SADC (Southern Africa Development Community). GoB also began harmonizing its policies and legal framework with those of regional entities to advance regional integration, improve its competitiveness, and take better advantage of external economic potentials. However, as the enabling regulations do not yet exist, Burundi does not yet have operational free economic zones.

One of the objectives on Burundi’s agenda is urgent integration into AfCTA, one of the largest free trade areas in the world since the formation of the World Trade Organization with a total of 55 member states. The AfCFTA aims to stimulate intra-African trade (BIAT) and Burundi wants to share in these gains. Burundi and Tanzania are the only countries within the East African Community that have not yet ratified the agreement. The GoB has already set up an ad hoc committee to accelerate the process of integration within AfCTA, and negotiations are underway with a view to ratifying the instruments of this agreement in the very near future. Burundi expects tangible benefits from this large continental market (1.2 billion people with a GDP of over USD 2.5 trillion and a purchasing power of more than USD 4 trillion) due to its strategic location and natural resources.

In addition, the GoB is working to establish its first Special Economic Zone (ZESB) in order to enhance growth and development after the breakdown of cooperation with several European countries. ZESB is still under construction on the Warubondo site (a strategic location of 5.43 square km area located between Burundi and neighboring DRC with easy access to Bujumbura city, Bujumbura International Airport, Bujumbura Port and Lake Tanganyika). ZESB is a result of a business partnership between GoB and private foreign investors and its main objective is to revive the industrial sector and to promote exports. The economic model behind this partnership is that the zone will be a window for foreign investors, but all the products produced within the zone will bear the label “Made in Burundi.”

**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 residence visa (renewable) costs USD500 and it can only be issued after making a refundable deposit of USD1,500 in a local bank (BANCOBU). There are no government/authority-imposed conditions to invest except for a minimum investment requirement of USD50,000 applicable to foreign investors only.

The 2000 Arusha Agreements for peace and reconciliation for Burundi and the Constitution recommend ethnic and gender quotas for new hires (60 percent from the Hutu ethnic group, 40 percent from the Tutsi ethnic group and 30 percent women) in state and security institutions. However, neither the Constitution nor the Arusha Agreements mention ethnic or gender quotas for the private sector. In 2017, a law was passed obliging International Non-Governmental Organizations (INGOs) to recruit local staff while respecting the ethnic and gender quotas that apply to state institutions. Between December 2018 and April 2019, several INGOs decided to close their doors rather than submit to the requirements, arguing that the practices based on ethnicity were against their principles and values and the only recruitment criteria should be competency-based.

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, with mandatory quotas currently in place. 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 Burundi land code, adopted in 2011, recognizes the right to property and protection for Burundians and for foreigners. Foreigners enjoy the same rights and protection as nationals, subject to the principle of reciprocity (which means that the foreign country must in return recognize the same rights for Burundians). The state can give property to foreigners for industrial, commercial, cultural use, and can rent them out, but full ownership is reserved for Burundians. The legal system and the investment code are designed 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, but documents for properties located outside the capital city of Bujumbura are less easily accepted because of multiple conflicts and crimes related to the land in rural areas (more than 80 percent of the litigations in courts and tribunals are related to conflicts over land).

Land titling in Burundi has historically been a lengthy, opaque and centralized process although the Burundian land code appears simple. As a result, some applicants, especially those with limited financial resources or contacts, fail to title their land while others with resources and good contacts sometimes bribe land titling agents to speed up the procedure. To address these issues, in December 2019, the GoB implemented several initiatives aimed at: (1) informing the population on the procedure for registering land and obtaining title deeds; (2) establishing in all provinces of the country one-stop windows where persons interested in titling land have access to all necessary government offices to carry out the titling, and; (3) combating, in accordance with the law, all forms of corruption related to the property’s registration process. The GoB has been slow to decentralize land titling for financial reasons and it is likely that the government will still need assistance to make its initiatives a reality.

The legal system and the investment code do not differentiate between local and foreign investors regarding land acquisition or lease. However, land acquisition is based on reciprocity between Burundi and the investor’s home country, obliging a foreign country to recognize the same rights for Burundians in the foreign country as the foreigners of their country enjoy in Burundi.

Properties in urban and rural areas must be registered. However, according to estimates, more than 90 percent of houses and land in rural areas are not registered and around 80 percent of the litigations in the Burundian courts and tribunals are conflicts over land. When a property has been legally purchased, it cannot be legally confiscated by the state except when it is the subject of an expropriation procedure in accordance 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 and the investment code aim to protect and facilitate the acquisition and disposition of all property rights, including intellectual property rights IPR. The law also guarantees protection for patents, copyrights, and trademarks. However, there is no record of enforcement action on intellectual property IPR infringement violations. No IPR-related law has been enacted during the past year and no bills are pending.

Agents of Burundian institutions in charge of the fight against piracy and counterfeiting (Burundian Revenue Office, Ministries of Trade and Public Health) have already benefited from various sources of support in terms of capacity building on industrial property rights and the fight against piracy and counterfeiting on the part of multilateral partners, but these institutions lack modern tools for detecting counterfeits. Although these institutions have already committed themselves to carry out reforms in this sector (a multisectoral committee responsible for promoting procedures to combat counterfeiting and piracy and monitoring has been set up), they still need to set up a database of recognized trademarks, in which all the information on trademarks registered at customs is compiled and to require this procedure for all companies or representatives of multinationals to be effective.For now, the Burundi Bureau of Standardization (BBN) is the state authority responsible for monitoring 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. For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.

							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. 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 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. In this 2016 survey, the Bank of the Republic of Burundi (BRB) found a penetration level of approximately 22 percent.  Several local commercial banks have branches in urban centers. Micro-finance institutions mostly serve rural areas. The Burundian government is a minority shareholder in three banks.The banking sector’s soundness has improved with capitalization and liquidity ratios above regulatory standards and profitability indicators on the rise. However, bank portfolio quality remains a concern, with the level of non-performing loans (NPLs) reaching six percent when five percent is the benchmark rate among East African Community states. The sector also suffered from shortages of foreign currency following the Central Bank’s establishment of de facto capital controls in 2019.

The financial sector includes 14 credit institutions (Banks) including a new youth investment bank and an agricultural bank, 40 microfinance institutions, 16 insurance companies, three social security institutions and three payment institutions. A bank for women is also under development. All these institutions aim at reducing unemployment by creating job opportunities, particularly small and medium-scale entrepreneurship. 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 can establish operations in the country.  Foreign banks operating in the country include ECOBANK (Pan African Bank-West Africa), CRDB (Tanzanian Bank), DTB and KCB (both Kenyan Banks).  The central bank directs banking regulatory policy, including prudential measures for the banking system.  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, after paying taxes, there are no restrictions on expatriating funds associated with an investment. 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 2019.

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 (BIF) is not freely convertible at the official government rate.

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

In 2002, Burundi entered an active phase of political stabilization, national reconciliation and economic reform. In 2004, it received an emergency post-conflict program from the IMF and the World Bank, paving the way for the development of the Strategic Framework for Growth and Poverty Alleviation (PRSP). After the 2005 elections, the GoB made the decision to open several state-owned enterprises in different sectors of the economy to private investment, including foreign investment. The Burundian government, considering coffee a strategic sector of its economy, decided to opt for the privatization of the coffee sector first in an effort to modernize it. However, following the crisis of 2015, the GoB decided to suspend immediately the privatization program. At that time, it had not yet privatized other sectors such as tea or sugar. In late 2019, the GoB regained control of the coffee sector, citing as its rationale perceived mismanagement on the part of the privatized companies during the 2015-2019. It is unclear if or when the privatization program will continue.

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 consider 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 violations 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.

***Additional Resources***

Department of State

- Country Reports on Human Rights Practices ( https://www.state.gov/reports-bureau-of-democracy-human-rights-and-labor/country-reports-on-human-rights-practices/ );
- Trafficking in Persons Report ( https://www.state.gov/trafficking-in-persons-report/ );
- Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ( https://www.state.gov/key-topics-bureau-of-democracy-human-rights-and-labor/due-diligence-guidance/ ) and;
- North Korea Sanctions & Enforcement Actions Advisory ( https://home.treasury.gov/system/files/126/dprk_supplychain_advisory_07232018.pdf ).

Department of Labor

- Findings on the Worst forms of Child Labor Report ( https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings  );
- List of Goods Produced by Child Labor or Forced Labor ( https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods );
- Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World ( https://www.dol.gov/general/apps/ilab ) and;
- Comply Chain ( https://www.dol.gov/ilab/complychain/ ).

							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. Many customs officials are also reportedly corrupt, regularly extorting bribes from exporters and importers.

President Ndayishimiye has prioritized anti-corruption and efficiency efforts, particularly in state-owned enterprises, firing 40 director-level public employees and promising more punitive actions against corrupt or underperforming employees.

**Resources to Report Corruption**

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

Name: Roger NdikumanaTitle: Commissaire GénéralOrganization: Anti-Corruption BrigadeAddress: PO Box 890 BujumburaTelephone Number: (+257) 22 25 62 37Email Address: 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):

Name: Gabriel RufyiriTitle: PresidentOrganization: OLUCOMEAddress: 47, Chaussée Prince Louis Rwagasore, n°47, 1st FloorTelephone Number: (+257) 79 30 82 97Email Address: 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. The May 2020 elections were largely peaceful, and the GoB has since consolidated power and security gains. Political tensions between the ruling party and opposition remain. The new administration has made efforts to reduce tensions with neighboring countries, including Rwanda, and to increase participation in regional security cooperation.

							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. Youth unemployment is estimated at approximately 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.

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.

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. 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. Since November 2020, a new labor code to replace the 1993 code was adopted with the main objective of complying with the various conventions that the country has since ratified, and above all responding to criteria for regional and international integration. This new code includes protections for employees and more flexibility and surety of contracts.

							12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs					

DFC is active in Burundi, investing in an INGO that provides support to many small farmers based in hard-to-reach, remote areas. The INGO works with people in the community to provide seed and fertilizer on credit, together with training on best practices on growing and storing food, in order to increase value to the farmers. DFC also provides political risk insurance and debt financing for a significant solar energy project and is considering other investment opportunities.

							13. Foreign Direct Investment and Foreign Portfolio Investment Statistics					

							14. Contact for More Information					

NAME: Andrew PartinTITLE: Economic Affairs OfficerADDRESS OF MISSION/AIT: Embassy of the United States of America in BujumburaTELEPHONE NUMBER: (+257) 22 20 73 10EMAIL ADDRESS: partinaj@state.gov

NAME: Tresor NtandikiyeTITLE: Economic SpecialistADDRESS OF MISSION/AIT: Embassy of the United States of America in BujumburaTELEPHONE NUMBER: (+257) 22 20 74 26EMAIL ADDRESS: BujumburaEcon@state.gov

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### On This Page

                    -  EXECUTIVE SUMMARY 
                    -  1. Openness To, and Restrictions Upon, Foreign Investment   
                    -  2. Bilateral Investment 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. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs   
                    -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                    -  14. Contact for More Information   

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