Free of sanctions, Burundi can start to recover and rebuild

Since 2015, crippling sanctions imposed by the European Union (EU) and the US have held back the economy of Burundi, a landlocked country of 12.5 million people in east Africa. The sanctions were imposed in response to the government’s violation of human rights as well as violence. We asked professor of international studies David Kiwuwa to weigh up Burundi’s prospects now that the sanctions have been lifted.

Why did the European Union and US impose sanctions?

In 2015, Burundi’s then president Pierre Nkurunziza sought to change the constitution to hand him a third term. He faced significant internal and external political opposition, including a failed coup attempt.

His government responded by unleashing a wave of political violence, persecution and gross human rights violations against real and perceived opponents. Burundi was sent into a tailspin of violent clashes, and political and economic uncertainty.

The European Union and US first imposed visa restrictions on the perpetrators of the violence. Wide-ranging economic sanctions soon followed in response to Nkurunziza’s destructive actions.

Through Article 96 of the Cotonou Agreement, the European Union, among other things, froze Euro 432 million in funding. Individual countries, like Belgium and the US, also froze financial support for Burundi’s budget.

These actions denied the country access to substantial financial budgetary support that had made up about 50% of its budget. They also constrained Burundi’s access to the International Monetary Fund and World Bank.

What was the impact of the sanctions?

For one of the poorest countries in the world, these sanctions were punishing. The country was already struggling with economic recovery after years of civil war and political instability.

The sanctions had a knock-on effect on regional projects where Burundi was an integral player. These included a regional oil pipeline with Kenya, Uganda and Rwanda, and an electricity extension initiative with Rwanda.

With already dwindling foreign direct investment and aid flow, the country’s agricultural production dropped significantly.

The country eventually experienced a recession in 2020. This was partly because of the effects of COVID-19, but also due to the ongoing financial choke-hold of sanctions. The economy was sent into acute distress. A fall in exports resulted in dwindling foreign exchange, with government employees facing irregular salary payments and increased food insecurity. Economic growth went from 4.2% in 2015 to a 3.3% contraction in 2020.

What changed?

In June 2020, an opportunity for change emerged following the death of Nkurunziza. Évariste Ndayishimiye, who had won the presidential election a month earlier, was sworn in.

The new president was thought of as more pragmatic and less of a hardliner than Nkurunziza, who had planned to stay on in power as Burundi’s “Supreme Guide of Patriotism”. The international community saw in Ndayishimiye an opportunity to resume harmonious relations with the country.

The new president abandoned Nkurunziza’s excesses. The systemic persecution of the opposition, arrests, murders, muzzling of the press and widespread gross human rights violations became less apparent.

This is not to argue that these violations are non-existent – various NGOs, among them Human Rights Watch, have reported that killings and the torture of citizens believed to oppose the government still persist.

When lifting sanctions in November 2021, the US said it was a result of changed circumstances in Burundi, as well as Ndayishimiye’s “pursuit of reforms”. On its part, the EU highlighted Bujumbura’s progress in protecting human rights. In a statement in February 2022, the 27-member bloc cited, “the progress made by the Burundian government with respect to human rights, good governance and the rule of law.”

What difference will the lifting of sanctions make?

It’s a significant move for an economy that has been in distress for a long time. It will provide the country with the opportunity to rebuild.

The return of budgetary support and financial inflows from foreign direct investment or aid support packages will go a long way towards jump-starting economic recovery. Foreign investments tend to be risk averse to sanctions. The government also gets the opportunity to invest financial aid in key growth areas, such as manufacturing, youth employment and rebalancing its public debt.

Already, Burundi has reported an aid agreement with the US of $400 million aimed at supporting Ndayishimiye’s development efforts.

The financial relief will also help stimulate agricultural production and domestic industrial output. Burundi’s main exports of minerals, coffee and tea account for approximately 80% of export revenue. Increasing production, with better access to inputs, will help the country improve its trade and current account balance sheet.

The improved flow of cash will also bring the country back into regional infrastructural initiatives. Given the thawing of tensions, specifically with Rwanda, Burundi’s re-admission into the fold will allow progress in strategic projects, including energy security and addressing electricity deficits.

While some critics argue that not enough transformation has been realised, it is nevertheless strategic to motivate positive behaviour. Ndayishimiye’s regime understands that Burundi needs international partners for its development. The lifting of sanctions encourages international re-engagement through which Burundi can be encouraged to institute further reforms.

The country is already acknowledging the role of constructive dialogue – something the international community pushed for before Burundi’s 2015 implosion. Speaking on the EU’s recent decision, Burundi’s Foreign Affairs Minister Albert Shingiro noted that: “the lifting of sanctions is a victory shared between Burundi and the European Union and its member states at the end of a long process of frank and sincere dialogue … marked by the spirit of openness, compromise and mutual trust between the two parties.”

These developments point at a pragmatic approach to Burundi’s tentative steps towards political reforms. Looking ahead, the country needs to institutionalise democratic norms and build strong institutions that safeguard good governance. Constitutionalism, the rule of law, basic adherence to the principles of human rights, peace and prosperity are the least that Burundians deserve.