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WORLD TRADE

ORGANIZATION

RESTRICTED

WT/TPR/G/1135 March 2003

(03-1169)

Trade Policy Review Body Original: French

TRADE POLICY REVIEW

BURUNDI

Report by the Government

Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), the policy statement by the Government of Burundi is attached.

Note: This report is subject to restricted circulation and press embargo until the end of the meeting of the Trade Policy Review Body on Burundi.

Burundi WT/TPR/G/113Page 3

CONTENTSPage

I. GENERAL COMMENTS ON THE MAIN SOCIO-ECONOMIC INDICATORS 5

II. OVERVIEW OF BURUNDI'S ECONOMY 5

III. MAJOR REFORMS OF THE BUSINESS ENVIRONMENT 6

(1) REFORM OF THE LEGAL AND INSTITUTIONAL FRAMEWORK OF TRADE POLICY 6

(2) ECONOMIC LIBERALIZATION PROCESS 6

(3) SECTORAL REFORMS 7

(i) Banking 7

(ii) Insurance 7

(iii) Foreign exchange policy 7

(iv) Tax and customs reform 8

(v) Agriculture 9

(vi) Mining and energy sector 9

(vii) Telecommunications 9

(viii) Transport 10

(ix) Postal sector 11

(x) Forestry and the environment 11

(xi) Tourism 11

IV. BURUNDI AND BILATERAL AND SUBREGIONAL TRADE AGREEMENTS 12

V. BURUNDI AND THE WTO AGREEMENTS 12

(1) IMPLEMENTATION OF THE DOHA AGREEMENT 13

(2) SERVICES 13

(3) AGRICULTURE 13

(4) AGREEMENT ON SANITARY AND PHYTOSANITARY MEASURES 14

(5) SPECIAL AND DIFFERENTIAL TREATMENT 14

(6) INTELLECTUAL PROPERTY RIGHTS 14

(7) INTEGRATED FRAMEWORK FOR TECHNICAL ASSISTANCE 15

VI. OUTLOOK AND ORIENTATION 15

ANNEX I STRUCTURE OF EXPORTS 16

ANNEX II EXPORTS BY DESTINATION 16

ANNEX III IMPORTS BY ORIGIN 17

ANNEX IV BALANCE-OF-PAYMENTS 17


I. GENERAL COMMENTS ON THE MAIN SOCIO-ECONOMIC INDICATORS

1. The Government of Burundi has decided to submit its report on trade policy in order to explain its aims and to foster intensive and frank discussions that will reassure all its partners.

2. The various reforms implemented since 1986 under the Structural Adjustment Programme have yielded extremely encouraging results at the economic level.

3. In the socio-political sphere, since 1993 there has been a serious crisis that plunged the country into a war that caused considerable human and material damage.

4. The signature of the Arusha Agreements in August 2000 gave the people of Burundi renewed hope of a return to peace and economic growth.

5. On the basis of the reforms already put into effect and its people's determination to restore peace, Burundi should soon improve the competitiveness of its economy by developing key sectors deemed priorities, for example, food crops for food security, exports, services and industry.

6. The Republic of Burundi covers an area of around 27,834 km2 and it has mineral deposits, including nickel, vanadium, cassiterite, colombo-tantalite, gold, iron and nickel-type metals (copper, cobalt), etc. Burundi is in Central Africa and is land-locked, the neighbouring countries being Rwanda to the north, the United Republic of Tanzania to the east and south and the Democratic Republic of the Congo to the west.

7. In 2000, the population was estimated at 6.8 million, with a population density of 247 inhabitants/km2, and the annual rate of population growth is 2 per cent, with life expectancy at birth of 40.6 years.

8. The major activity is food crops, which include livestock, fisheries and forestry. The agricultural sector accounts for a large share of the GDP and employs 90 per cent of the labour force.

9. Burundi's economy is mainly based on the export of coffee and tea which, together, account for almost 90 per cent of exports.

10. In the trade sector, Burundi's geostrategic position should make it a hub for the whole subregion.

11. The national currency is the Burundi Franc. The major objective of the Government's monetary policy is to control broad monetary growth so as to combat inflation.

II. OVERVIEW OF BURUNDI'S ECONOMY

12. The downward trend in exports has continued because of the decrease in coffee prices on the global market. Imports are also decreasing due to the lack of foreign exchange caused by the crisis that has prevailed since 1993.

13. Coffee is the most important export, followed by tea.

14. Burundi's major trade partners in order of importance are the European Union, Saudi Arabia, Japan, China, India, Kenya and Zambia.

15. In the tourism sector, Burundi has several tourist sites.

WT/TPR/G/113 Trade Policy ReviewPage 6

16. It has two hotels of international standing in Bujumbura and several other hotels and restaurants in the towns or countryside. In some towns such as Gitega and Ngozi, hotels are being developed and this is an encouraging sign.

17. The road network is well maintained and it is easy to move between the larger towns.

18. The fixed and mobile telephone system is well developed throughout Burundi, which facilitates trade.

III. MAJOR REFORMS OF THE BUSINESS ENVIRONMENT

(1) REFORM OF THE LEGAL AND INSTITUTIONAL FRAMEWORK OF TRADE POLICY

19. In order to create an environment favourable to business and attract foreign direct investment, the Government will continue to reform the legal and judicial system.

20. The business-related legal and judicial framework will be reformed and harmonized by revising or adapting new texts on business law: the Commercial Code, the Code of Obligations and Contracts, the Arbitration Code, the Code of Civil, Commercial and Administrative Procedure, the Investment Code, the General Tax Code, the Customs Code, etc.

21. All price controls have been abolished and the scope of competition extended.

22. The Ministry of Trade and Industry continues to ensure that there is fair and transparent competition.

23. Efforts will continue to be made to restore the principal macroeconomic and financial balances, maintain a sustainable rate of growth, control inflation, and mitigate the impact of poverty.

(2) ECONOMIC LIBERALIZATION PROCESS

1. In order to establish an effective and competitive market economy, the Government has taken action to reform its trade policy, further liberalize economic activities, strengthen dialogue and partnership with the private sector through joint management of the economy, and establish a competitive environment in various sectors. As part of the economic liberalization process, action has been taken in the following areas:

- Elimination of non-tariff barriers, particularly the abolition of quantitative import restrictions;

- liberalization of the general price regime, by establishing in particular:

freedom to fix prices and trade margins according to market forces;

prevention and monitoring of anti-competitive practices;

application of measures to ensure fair trade transactions, particularly by eliminating discriminatory sales, refusal to sell, conditional sales and the holding of stocks for speculative purposes;


- revision of the tax and customs regimes in order to bring them into conformity with the legislative programme of the Common Market for Eastern and Southern Africa (COMESA);

- liberalization of the mining sector;

- liberalization of the coffee, tea, cotton sectors, etc;

- privatization of the management of the port and international airport in Bujumbura;

- reduced State involvement in trade-related sectors of the economy.

1. All of these liberalization measures have led to sectoral reforms in the monetary, tax, customs, foreign exchange, insurance, labour, telecommunications, and transport sectors.

(3) SECTORAL REFORMS

(i) Banking

2. Action has been taken to stabilize and strengthen the banking sector. For this purpose, the State has already drawn up a programme to reduce its holding in the capital of banks and this has been discussed and finalized by the State Enterprises Service, which is responsible for the follow-up. In addition, the requirements for the establishment and operation of banks have been liberalized. A regulatory framework that encourages security and professionalism in the area of microfinance is being prepared.

(i) Insurance

3. Pursuant to Decree Law No. 100/120 of 2 November 1982, the State abolished the monopoly for all insurance transactions previously given to the Burundi Insurance Company (SOCABU).

4. Burundi's insurance sector comprises seven insurance companies, two of a social character and five other commercial companies. The two social insurance companies are 100 per cent State-owned and four of the five commercial insurance companies are wholly private. The fifth is a semi-public company that is currently being privatized. In 1995, Burundi acceded to the Multilateral Investment Guarantee Agency (MIGA) and in 2000 to the African Trade Insurance Agency (ATIA), which insure foreign direct investment and trade transactions respectively against political risks. Burundi is also a member of the COMESA's PTA-Reinsurance Company (ZEP-RE).

5. A programme to reform the insurance sector is under way. The 1997 legislation has been updated and adopted by the National Assembly and the Senate. An Insurance Regulation and Control Agency will be set up during 2003.

(ii) Foreign exchange policy

6. Since the unification of the official exchange market in June 2000, the Bank of the Republic of Burundi has allocated foreign exchange on an ad hoc basis through currency auctions. As resources available were not sufficient to meet demand, the Central Bank had to impose administrative measures temporarily in order to attenuate the pressure on exchange rates.

7. On 2 January 2003, amended regulations for the currency auctions came into effect.


8. The aim of these amendments is to make the mechanism more flexible and the market more competitive, the ultimate objective being to bring about convergence between the official and parallel exchange rates. The new regulations on currency auctions also set out the requirements for access to foreign exchange bureaux.

(iii) Tax and customs reform

9. Regarding taxes, the Tax Department is designed to meet a number of needs:

- Broadening the tax base by trying to identify and register all taxpayers and thus tax the population as a whole, not only in order to strengthen the economy but also for reasons of fairness and social justice;

- the establishment of tax bureaux or authorized taxation centres, which act as an intermediary between the taxpayer and the tax administration so that tax declarations are not completed by the taxpayers themselves;

- the establishment of a code of tax procedure, a tax legislation service, taxation principles and case-law, and the training of judges specializing in tax matters.

10. In 2003, several reforms are planned both as regards structures and procedures.

11. As far as structures are concerned, the Tax Department in the Ministry of Finance, with the support of the IMF consultant, has recently set up a Large Enterprises Division to collect the income tax and other taxes payable by large enterprises.

12. The enterprises in question are those whose turnover exceeds FBu 100 million and enterprises in certain sectors such as petroleum, coffee, etc.

13. As regards procedures, the measures planned include the imposition of VAT, the establishment of a single tax number in order to control the tax base, taxation in areas not hitherto taxed, immediate taxation of property capital gains, revision of some provisions of the tax law in order to make them easier to understand, the preparation of a tax procedures guide, improved procedures both as regards the tax base, control and payment, for example, by abolishing assessment notices (avertissement extrait de rôle) and replacing them by tax enforcement notices (avis de mise en recouvrement). Measures for the payment of taxes will be introduced in order to diffuse the voluntary payment procedure, simplify payment through banks, create a registration card, introduce desk inspection, including formal inspection and inspection of documents before controlling the taxpayer, computerizing procedures by choosing equipment and software and developing applications.

14. In the customs sector, the reforms being implemented are aimed at enhancing the efficiency of the customs administration and increasing its productivity. For this purpose, Burundi plans to lower the rates of import duty to four rates (10, 12, 15 and 40), adopt the common tariff nomenclature of the COMESA based on the 1996 HS version and generalized preferences for all products imported from COMESA member countries (reduction of 80 per cent and 100 per cent respectively for the 2003 and 2004 financial years). Other measures will also be taken, among the most important of which are the elimination of the 100 per cent customs tariff on luxury products and its replacement by more modest rates and the capping of import duties at 40 per cent, limiting the average time taken for customs procedures (from entry to issue of the authorization to remove the goods) to 48 hours, upgrading from version 2.7 of the ASYCUDA to ASYCUDA++, and revision of the customs tariff taking into account developments in negotiations on the common external tariff within the COMESA free-trade zone.


(iv) Agriculture

15. Burundi's economy is highly dependent on agriculture which, alone, is the major source of income for 90 per cent of the population. It provides 95 per cent of food and over 90 per cent of foreign exchange earnings. Consequently, the agricultural sector has always been and remains the guarantee of food security, the backbone of the economy and the catalyst for growth in other sectors in Burundi. The agricultural sector is composed of three subsectors: food crops, livestock, and agro-industry.

16. In its efforts to boost the economy, the Government's major objective is to enhance the productivity and profitability of the agricultural sector so as to move from subsistence agriculture to market-oriented agriculture.

17. With a view to increasing the production of food crops and ensuring food security for all, Burundi will rely on the development of agricultural research, training, increased use of agricultural inputs, promoting the processing and conservation of agricultural products.

18. Measures to develop the livestock subsector include the replacement of livestock and the initiation of a programme to integrate stock breeding and forestry into agriculture, while at the same time boosting fishing and aquaculture.

19. In order to reduce rural poverty, it is essential to undertake properly prepared activities to give renewed impetus to the production support structures, assist those working in the agricultural sector to obtain financing, notably by means of rational policies on access to credit, and to promote and diversify cash crops (traditional and non-traditional exportable crops, wheat, maize, sunflower, etc.).

(v) Mining and energy

20. This sector is vital to Burundi's economy. Government investment programmes have always given priority to the energy subsector for the building of hydroelectric power stations, with adequate supplies of water, and for electrification by installing power lines.

21. With regard to mining and quarrying, geological and mining surveys are carried out by the specialized services of the Directorate General of Geology and Mining.

22. In order to promote commercial activities in the water and energy subsectors, under Law No. 1/014 of 11 August 2000, the Government took important measures to liberalize the public supply of drinking water and electricity by involving the private sector in the management and financing of some of Regideso's activities.

23. To make the sector more attractive, the Government is considering important reforms such as revising the Mining and Petroleum Code, and drafting a policy to involve grassroots communities and the private sector in the marketing, installation and maintenance of equipment.

(vi) Telecommunications

24. In view of the importance of this sector, the Government is fully committed to using new information and communications technologies in general and introducing the Internet in order to enhance the information capacity of commercial and financial structures both in the national and international context.


25. The increase in the number of cybercafés and the remarkable rise in the number of mobile telephone subscribers are a reflection of the growing dynamism of this sector.

26. The aim of the telecommunications reforms under consideration is to support new information and communications technologies so as to give social, economic and administrative sectors an indispensable tool for economic and social development.

27. In the telecommunications sector, an independent regulatory authority, the Telecommunications Regulation and Control Agency (ARCT) has been established for the purpose of granting licences. The ARCT conducts a technical and financial analysis of the applications made by economic operators wishing to engage in activities in this sector and recommends to the Government that an operator that meets the required criteria be given a licence.

(vii) Transport

28. In order to foster the development of a service of quality, international goods transport is carried out by both domestic and foreign private operators.

29. The passenger transport subsector is operated by private entities and the Public Transport Board (OTRACO) so as to ensure better dispersion of transport services around the country to meet the needs of the economy. OTRACO regulates urban fares.

30. Transport services were liberalized in 1989 as part of the Structural Adjustment Programme (SAP). Domestic goods transport is operated solely by private entities and has been fully liberalized.

31. On the lakes, goods are transported on Lake Tanganyika from the lakeside ports, namely, Kigoma in the United Republic of Tanzania, Mpulungu in Zambia, Kalemia in the Democratic Republic of the Congo. The vessels are wholly owned by private entities which, grouped together in an association, fix the rates for transport. In order to facilitate transport on Lake Tanganyika, assist the building of new vessels and repairs in dry docks, a project to build a shipyard has been adopted under the New Partnership for African Development (NEPAD).

32. With regard to the airports subsector, air transport is the safest and most rapid way of opening up Burundi. Perishable goods can only be exported and imported by air. The Government is considering the installation of an adequate infrastructure for the conservation and transport of perishable goods. The national airline "Air Burundi" is at present identifying the foreign airlines with which it intends to enter into strategic alliances in order to resolve the problems of transporting imports and exports.

33. As far as rail transport is concerned, a study is under way for the building of a Great Lakes railway to link Southern and Eastern Africa. This project is part of the regional integration framework under the COMESA.

34. Likewise, the Subregional Development Centre for East Africa, based in Kigali, is holding consultations on the establishment of a master plan for transport. This plan gives priority to maintaining the transport infrastructure (roads, railways) and the rapid transport of goods along various corridors (northern, central and southern).

35. Subregional transport organizations such as the coordinating authority for transit traffic through the northern corridor, hold regular meetings with a view to the definitive elimination of tariff and non-tariff barriers so as to facilitate the rapid circulation of goods.


(viii) Postal sector

1. The Ministry of Transport, Post and Telecommunications is drafting a policy to rehabilitate the postal sector for consideration by the Council of Ministers in February 2003 before being implemented.

2. Post offices in Bujumbura will be computerized at the beginning of 2003.

3. The National Postal Authority (RNP) will become a Board in order to improve its management and serve clients better.

(ix) Forestry and the environment

1. Integrating issues relating to national resource management and the conservation of ecological balances into development is a new and essential dimension of any action to be undertaken.

2. In developing countries, warnings have already been given regarding soil degradation, water pollution, deforestation, the deterioration of ecosystems and the population's living standards.

3. In Burundi, government authorities have only very recently recognized the need to integrate the "environmental" dimension in planning and development schemes.

4. The creation of the Ministry of Land Use Planning, Environment and Tourism in October 1998 was the practical expression of this political determination to institutionalize the rational management of natural resources and the environment.

5. The bases of an environmental policy must be perceived in terms of preserving production potential and maintaining the environmental balance. The major objective of this policy is to ensure the sustainability of production potential and the ecosystem.

6. The agricultural sector is the driving force of the economy and the basis for Burundi's development. It employs over 90 per cent of the labour force and accounts for over 90 per cent of export earnings.

7. It is nevertheless affected by the continuous downward trend in productivity, caused by erosion and overexploitation of land inter alia.

8. Proper management of natural resources and the environment through joint coordinated action by all development actors would allow the ecological balance to be restored and preserved and ensure rational use of land, water, forests and air.

(x) Tourism

(a) Hotels

9. Before it reduced its holding in favour of private initiatives (1986), the State had participated in the capital formation for three international-standard hotels, including the Société Hôtelière Nouvelle (SHNB/NOVOTEL), managed by the ACCOR group since 1984. All three hotels are currently being privatized. In Bujumbura, hotels have a capacity of one thousand and sixty-seven (1,067) beds.

10. There is a hotel capacity of at least twenty (20) beds in each province in Burundi.


(b) Leisure and sports facilities

11. There are many more recreational facilities than museums or cinemas. There are facilities for golf, tennis and horse riding. Leisure activities are in the form of dance halls or nightclubs. There are occasional musical events in a number of places, particularly Bujumbura.

12. A casino has recently been established in Burundi and is becoming increasingly popular.

(c) Tourism services

13. Tourism services are provided by local travel agencies, whose number has increased considerably over the past five years. Burundi has several tourism sites, the most important of which are the beaches on Lake Tanganyika, thermal springs at Akarava, the bird lakes, Ruvubu Park, the Royal Palace in Gitega, the Nyakazu rifts, Karera waterfalls, Rusizi Park, etc.

(d) Government action to promote tourism

14. Burundi considers tourism enterprises to be priorities. It fosters their development through action to promote and encourage private initiatives. Such enterprises are granted special facilities to allow them to inform foreign tour operators of Burundi's tourism potential.

15. Regulations on hotels are currently being drafted in order to promote and upgrade the sector.

IV. BURUNDI AND BILATERAL AND SUBREGIONAL TRADE AGREEMENTS

1. Burundi has signed many trade, economic and technical cooperation agreements with various partners in Africa, Europe, Asia, and North America.

2. The structure and content of these agreements highlight the common political will to promote trade. They provide for the establishment of a preferential customs regime based on a list of products and rules of origin. Under these agreements, a number of measures to encourage the establishment of semi-public companies have been adopted.

3. The provisions in these agreements take into account and are always in accordance with the WTO rules, including the most-favoured-nation clause (MFN) and national treatment.

4. In addition to bilateral cooperation to promote investment and trade, Burundi is a member of subregional organizations such as the COMESA, the Economic Community of the Great Lakes Countries, the Kagera Basin Organization, and the Economic Community of Central African States. The promotion and development of trade are among the objectives of this bilateral cooperation.

V. BURUNDI AND THE WTO AGREEMENTS

82. Burundi attaches great importance to the objectives of the Doha Development Agenda, whose aim is to remedy the imbalance in the multilateral trading system and allow developing countries to receive their fair share of the positive effects of globalization.

16. In this framework, Burundi's major concerns relate principally to issues such as the implementation of the Doha Agreement, services, agriculture, TRIPS, special and differential treatment, and technical assistance.


(1) IMPLEMENTATION OF THE DOHA AGREEMENT

17. Implementing this Agreement is a major concern for all developing countries but particularly for the least developed. Burundi is facing problems in implementing the WTO Agreements. The inadequacy of its human, technical and institutional resources naturally affects observance of the commitments undertaken and Burundi's participation in the current negotiations.

(1) SERVICES

18. Burundi deems the services sector to be a priority and has liberalized trade in services. The positive effects have had a marked impact on the domestic economy. The share of the services sector in GDP formation has increased to the detriment of the primary sector. In 2001, the sector grew at a rate of 4.1 per cent for tradeable services (transport, post and telecommunications, trade and other private services) and non-tradeable services.

(2) AGRICULTURE

19. The Agreement on Agriculture has three components:

- Domestic support,

- market access,

- export competition.

20. Domestic support is contested by those in favour of the free reign of the law of supply and demand. Developed countries continue to subsidize their agriculture to the detriment of developing countries, where the majority of support measures have been dismantled under Structural Adjustment Programmes.

21. For Burundi's agricultural products, access to the markets of developed countries is an essential criterion for the restoration of certain macroeconomic balances. The many constraints imposed on entry into the markets of developed countries such as tariff peaks, tariff escalation (where tariffs increase according to the level of processing), as well as increasingly stringent technical and phytosanitary standards (maximum level of pesticide residues) constitute an obstacle to the development of exports by LDCs.

22. The Cotonou Agreements will lead to the dismantling of preferences and the establishment of regional economic partnership agreements by 2008. These will replace the Lomé Agreements, which guaranteed preferential access to products from countries in Africa, the Caribbean and the Pacific (ACP). The immediate effect has been the erosion of preferential margins due to the increased competition faced by all agricultural exports.

23. Agricultural policy therefore needs to be reviewed so as to improve the competitiveness of exportable agricultural products. This policy should be supported by appropriate technical assistance.

24. Burundi does not subsidize its agricultural exports, whereas developed countries grant subsidies in support of their agriculture and to guarantee competitiveness on foreign markets. The result is to remove developing countries' products from the markets of developing countries and discourage production. In the long term, this is a real threat to those weak economies that are mainly based on agriculture.


25. Burundi hopes that the agricultural sector will receive special attention because of its importance. It is a prerequisite for developing Burundi by disposing of surpluses, ensuring food security and thus preventing the mass exodus of the rural population, which would remain totally without resources.

(3) AGREEMENT ON SANITARY AND PHYTOSANITARY MEASURES

26. Some developed countries continue to apply sanitary and phytosanitary measures for restrictive purposes. Burundi, as an LDC, nevertheless benefits from an exemption.

27. There is still a problem of access to foreign markets for Burundi's products because of the inadequacy of the domestic production structures and the stringency of the sanitary and phytosanitary measures and quality standards imposed by some trading partners.

28. In order to overcome these disguised trade barriers, the Government of Burundi would like to receive technical assistance in order to improve the quality of its industrial products, traditional and non-traditional agricultural exports, livestock products, fisheries products, and handicrafts, in order to take full advantage of the liberalization of trade.

(4) SPECIAL AND DIFFERENTIAL TREATMENT

29. Special and differential treatment is a fundamental principle enshrined in the WTO Agreements. It is also an appropriate tool that allows the disparities in the economies of the various Member States to be overcome.

30. As the provisions are not yet applied, Burundi, like other countries, supports the development of a binding framework agreement that encompasses horizontal and sectoral issues and criteria for technical assistance.

(5) INTELLECTUAL PROPERTY RIGHTS

31. The principle underlying the TRIPS Agreement is to integrate intellectual property – which is the subject of special national or international provisions – into the framework of global trade regulations. It contains minimum rules on intellectual property which all WTO Members must undertake to observe.

32. Like the other least-developed countries, Burundi was given a transitional period of ten years in which to apply the Agreement. It is planned that it should enter into force on 1 January 2006. This transitional period was granted in order to allow LDCs to take the necessary steps and bring their laws and regulations into line with the TRIPS Agreement.

33. As part of the preparations for the implementation of the TRIPS Agreement, two laws are currently being revised, namely, the national legislation on industrial property and the copyright law. The draft industrial property law has been sent to the WIPO (Geneva) for finalization. The two draft laws being finalized will be submitted to the Council of Ministers for approval during the first half of 2003. Consideration is also being given to the possibility of acceding to the Patent Cooperation Treaty and the Madrid Agreement Concerning the international Registration of Marks; and joining one of the African regional intellectual property organizations (OAPI or ARIPO). It has also been decided to accede to the Berne Convention and to set up a national copyright bureau. Nevertheless, in view of Burundi's needs and constraints (war, economic, financial and administrative constraints), the Government will request the TRIPS Council to agree to defer the date of implementation of the Agreement.


34. During the intervening period, joint technical and financial assistance from the WTO and WIPO will be needed to allow Burundi set up to establish a more solid and viable technological basis.

(6) INTEGRATED FRAMEWORK FOR TECHNICAL ASSISTANCE

35. Burundi was selected as part of the second group of LDCs recommended for the pilot programme under the Integrated Framework for Technical Assistance. The process was initiated in January 2001 when Burundi was included in the list of the second group of pilot countries. Some of the studies identified as priorities have been conducted and their results widely disseminated.

36. As part of the pilot phase and under the supervision of the World Bank, a diagnostic study on competitiveness and trade integration will be undertaken in order to obtain more detailed information on the possibilities for developing exports and other potential sources of growth. The study will take into account all the studies already undertaken. A strategy document on the development of trade and the private sector will then be drawn up to serve as a basis for all the programmes on integrating trade into development.

37. On the basis of the results of the study, the Government will draw up a plan of action whose priority measures will be integrated into the Poverty Reduction Strategy Paper. These results should lead to practical action, which is eagerly awaited by the private sector in order to boost the economy.

VI. OUTLOOK AND ORIENTATION

38. Burundi intends to pursue structural reform with a view to long-term growth of the economy. The action to be undertaken relates primarily to the following:

- Containing the inflation rate;

- gradually bringing the budget deficit down to 1 per cent of GDP;

- increasing foreign exchange reserves to a level corresponding to at least three months of imports of goods and services.

39. In order to boost confidence in the private sector, the Government will revise the Commercial Code, the tax legislation, the Investment Code and the general requirements applicable to government procurement. The reform should allow the quality–price ratio in public spending to be improved, shorten the time taken to examine projects, and ensure that they are better monitored.

40. As far as public finance is concerned, the Government will continue to apply a stringent and transparent financial policy, in parallel with a dynamic policy to reduce debt and a controlled monetary policy. This should lead to the following:

- The accumulation of public savings so as to ensure Burundi's financial viability;

- the application of a monetary policy that aims to control inflation and strengthen foreign exchange reserves;

- monitoring of the monetary supply, which should increase at a rate similar to that of the GDP.


ANNEX ISTRUCTURE OF EXPORTS

1997 1998 1999 2000 2001Q V Q V Q V Q V Q V

Primary products 38,781 30,590.2 28,689 28,233.3 30,789 30,374.6 32,084 33,655.0 28,495 28,717.0Coffee, not roasted 31,870 26,981.7 22,303 22,857.9 23,685 23,643.2 24,719 24,419.9 18,663 16,326.3Raw hides and skins 179 44.8 132 32.1 313 76.8 483 88.8 479 47.4Tea 6,330 3,176.3 5,785 4,912.0 6,396 6,133.1 6,474 8,694.6 8,454 8,760.4Live animals … 1.6 1 0.4 … 6.1 … 2.0 … 5.8Live fish … 61.0 44 84.2 4 85.9 … 85.6 … 120.6Live plants 43 9.9 41 6.9 47 16.4 16 22.2 68 144.3Rice 10 1.2 - - - - - - - -Cinchona bark 51 21.6 100 38.3 50 26.0 70 82.3 137 58.5Leaf tobacco - - 119 54.0 - - - - 409 203.1Products used in animal feed

- - 8 0.4 - - - - - -

Other 298 292.1 156 247.1 294 387.1 322 259.6 285 3,050.6Manufactures 836 177.0 1,946 401.5 1,895 596.2 5,497 1,568.0 9,194 3,261.1

Fibro-cement sheets and articles

16 3.5 140 36.0 41 17.4 112 52.3 69 31.7

Soft drinks and aerated waters

3 0.5 2 0.5 - - - - - -

Bottles of dark-coloured glass

108 21.0 - - - - - - … 0.4

Beer 53 11.5 552 77.6 18 5.7 4 2.0 5,555 114.7Cigarettes - - - 1.3 11 36.6 14 51.9 117 443.8Articles of base metal - - - - - - - - … 13.8Woven fabrics of cotton 11 37.5 - - 2 7.1 4 21.3 - -Granulated sugar 300 65.0 932 249.0 1,675 441.2 5,213 1,419.7 2,910 949.1Household soaps 15 4.5 - - - - 139 2.1 … 0.4Other 330 33.5 320 37.1 148 88.2 11 18.7 543 1,821.9

Total 39,617 30,767.2 30,635 28,634.8 32,684 30,970.8 37,581 35,223.0 37,689 31,978.1

Note: Q: Quantity in tonnes (net weight).V: Value in millions of Burundi francs.

Source: Annual Report of the Bank of the Republic of Burundi, 2001.

ANNEX IIEXPORTS BY DESTINATION

1997 1998 1999 2000 2001Q V Q V Q V Q V Q V

Europe 30,244 24,084.2 16,077 17,059.4 26,453 25,303.6 28,097 28,804.0 25,937 26,353.4Asia 1,053 388.9 118 103.2 112 147.0 137 163.7 161 54.2Africa 2,427 822.8 2,250 868.3 1,935 652.9 8,536 5,979.2 11,002 4,961.0America 351 288.4 392 526.9 1,314 1,140.0 234 249.4 - 30.8Oceania - - - - - - - - - -Other 5,542 5,182.9 11,798 10,077.0 2,870 3,727.3 577 26.7 589 578.7Total 39,617 30,767.2 30,635 28,634.8 32,684 30,970.8 37,581 35,223.0 37,689 31,978.1




ANNEX IIIIMPORTS BY ORIGIN

1997 1998 1999 2000 2001Q V Q V Q V Q V Q V

EuropeAsiaAfricaAmericaOceaniaOther

23,04031,99451,658

820132

20,867.611,867.69,566.6

918.628.40.5

31,96757,24182,5491,755

120572

32,448.219,817.116,417.21,387.9

160.144.1

19,96056,89883,7361,183

165336

25,373.919,585.117,982.31,685.7

103.81,576.5

25,63652,303

102,6311,913

205,066

41,049.932,399.427,506.53,967.8

75.41,060.3

28,24651,07592,1564,000

3211,328

43,809.938,293.127,801.04,257.1

141.6951.6

Total 107,527 43,249.3 174,204 70,274.6 162,278 66,307.3 187,569 106,059.3 177,126 115,254.3



ANNEX IVBALANCE-OF-PAYMENTS(in Millions of Burundi Francs)

1996 1997 1998 1999 2000(p)

Trade balance -18,044.0 -3,029.0 -26,621.2 -23,846.3 -42,380.0 Exports 12,235.0 30,821.0 28,670.8 30,986.5 35,350.9 Imports -30,279.0 -33,850.0 -55,292.0 -54,832.8 -77,730.9

Services -12,344.0 -17,100.0 -22,252.1 -19,691.8 -35,157.9 Non-factor services -8,121.0 -12,684.0 -18,553.6 -14,377.1 -26,460.2 Factor services -4,223.0 -4,416.0 -3,698.5 -5,314.7 -8,697.7

Private transfers 3,405.0 2,022.0 2,721.5 3,102.4 3,344.7

Current account balance (excluding official transfers) -26,983.0 -18,107.0 -46,151.8 -40,435.7 -74,193.2

Official transfers 15,080.0 17,951.0 22,331.7 25,677.8 39,433.5

Current account balance (including official transfers) -11,903.0 -156.0 -23,820.1 -14,757.9 -34,759.7

Capital account balance -7,028.7 3,578.6 10,917.4 8,205.6 28,755.2 Direct investment - - - -322.7 8,419.8 Medium- and long-term capital 2,224.0 -2,811.0 6,831.4 98.6 23,210.9 Drawings 13,981.0 9,169.0 16,393.6 13,285.2 49,045.7 Amortization -11,757.0 -11,980.0 -9,562.2 -13,186.6 -25,834.8 Other capital and errors and omissions -9,252.7 6,389.6 4,086.0 8,429.7 -2,875.5

Overall balance -18,931.7 3,422.6 -12,902.7 -6,552.3 -6,004.5

Financing 18,931.7 -3,422.6 12,902.7 6,552.3 6,004.5 Change in net foreign assets 14,336.0 -3,917.0 10,999.2 2,634.4 -942.2 Total change in net foreign assets (1) 11,836.0 -2,079.0 11,661.2 2,625.3 -1,090.0 Valuation adjustments 2,500.0 -1,838.0 -662.0 9.1 147.8 Change in arrears 4,595.7 494.4 1,903.5 3,917.9 6,946.7


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WORLD TRADE · Web viewWorld Trade Organization RESTRICTED WT/TPR/G/113 5 March 2003 (03-1169)...

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