BURUNDI

RISK RATING
High
Default High Risk Score 6.00
Normal Average 4.60
Weighted Average 4.05
RISK RATING HISTORY
RISK RATING SCALE

Risk Rating Scale

Severe: 8.0 to 10
High: 6.0 to 7.9
Elevated: 4.0 to 5.9
Moderate: 2.0 to 3.9
Low: 0.0 to 1.9
EXCHANGE RATE
Country Outlook

Initial optimism over new President √Čvariste Ndayishimiye following a peaceful transition of power earlier in 2020 has wavered due to reports of continued insecurity and corruption. Reports of human rights violations and the militarisation of the government also pose reputational risks for donors, investors, and trade partners with Burundi. With the ascendance of a military faction that openly embraces Hutu nationalism and is subject to even weaker checks on power, the recipe for further instability in Burundi and the region has been heightened. These trends are also likely to raise concern in neighbouring countries, especially Rwanda and the Democratic Republic of Congo (DRC), which both have a history of cross-border military incursions and political interventions in the restive Burundian state.

  • President Evariste Ndayishimiye consolidated his authority at the 2020 elections which he won with 69 percent of votes cast and an 88 percent turnout. Opposition parties and rights groups criticised the electoral process, undermining the credibility and legitimacy of the vote, while accusing the government and affiliated militia of extrajudicial violence and other abuses. The government is dominated by military figures, some of whom are under sanctions. The military‚Äôs emergence as the central power broker gives many Burundians cause for concern and raises a host of political, security, and business/reputational risks for entities operating in the country. Regardless, the relatively peaceful political transition does offer an opportunity for the country to seek new relations with foreign investors and donors following a deterioration in international relations since 2015.
  • Ethnic violence often flares, while the government has moved to suppress all dissenting voices. Serious human rights violations ‚Äď including crimes against humanity ‚Äď have continued to take place, while the government has also sought to double down on eliminating freedom of expression. The continued targeting of political opponents, including the Tutsi minority, by Nkurunziza‚Äôs government and specifically the Imbonerakure militia, is also likely to result in a continued risk of anti-government militancy, reportedly backed by Rwanda. Burundi has had several serious security incidents over the last year attributed to or at least believed to be attributed to the Red Tabara rebel group. While Red Tabara has been based in South Kivu, DRC since around 2011, it has staged periodic attacks on Burundian soil over the past nine years.
  • The Burundian economy dropped into a deep recession due to depressed demand for the country‚Äôs exports. Previously, the economy had shown moderate growth primarily as a result of mining and continued favourable weather conditions that have boosted agricultural production, namely coffee. Burundi‚Äôs coffee industry may take a knock because of declining global coffee prices and the looming threat of sector nationalisation. Coffee generates more than 80 percent of the country‚Äôs foreign-exchange income, forewarning that any decline in the industry will bring heavy consequences for the country‚Äôs economy and its people. Burundi has been approved for debt relief under the IMF Catastrophe Containment and Relief Trust to the value of USD 7.63 million in the short term, and potentially up to USD 24.97 million.
CUMULATIVE AND DAILY COVID-19 INFECTIONS AND DEATH RATE
INTERNATIONAL MONETARY FUND | DATAMAPPER
Risk Perils
Political Instability
3.0
Expropriation, Nationalisation, Confiscation & Deprivation
4.0
Contract Frustration & Breach
5.0
Taxation
4.0
Bribery & Corruption
6.0
Regulatory Burden
5.0
Strikes, Riots & Civil Commotion
3.0
Security
5.0
Sovereign Default
5.0
Economic Volatiliy
6.0

Risk Rating Scale (small)

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