FATF Status

Burundi is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

Burundi has not yet undertaken a Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards.

US Department of State Money Laundering assessment (INCSR)

Burundi was deemed a ‘Monitored’ Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

Burundi is not considered a significant center for money laundering or terrorist financing. Although the Government of Burundi enacted AML/CFT legislation and became a party to relevant conventions, it has yet to commit funding, provide training, implement policies, or demonstrate the political will to counter money laundering in practice. Corruption is well- established among the political and financial elite, and corrupt Burundian politicians are adept at devising methods of laundering stolen Burundian assets both in-country and abroad, enjoying near impunity.

Approximately two-thirds of the people of Burundi live on approximately $190 per year. Overseas remittances from the Burundi diaspora are vital to the economy and well-being of the people, contributing as much as 22 percent of the country’s total GDP. It is estimated only 7 percent of the population has access to traditional bank accounts. Burundians are increasingly able to receive remittances digitally via a mobile wallet linked to their mobile phone.

Executive Order 13712, issued on November 22, 2015, imposes a travel ban and freezes any assets held in the United States of Burundi’s Minister of Public Security Alain Guillaume Bunyoni, former Defense Minister Cyrille Ndayirukiye, Major General and former chief of Burundi Intelligence Service Godefroid Niyombare, and Deputy Director-General of the National Police Godefroid Bizimana for human rights violations, inciting violence, and undermining the democratic processes and institutions in Burundi.

On October 1, 2015, the EU imposed similar travel bans and freeze orders against Mr. Bizimana; Gervais Ndirakobuca, Head of Cabinet of the Presidential Administration; Mathias/Joseph Niyonzima, officer of the National Intelligence Service; and former army general Leonard Ngendakumana.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           20

World Governance Indicator – Control of Corruption               4

Located in Central Africa, Burundi is one of the seven member states of the East African Community (EAC). Burundi is one of the world’s most impoverished countries, with 87 percent of the population living below the World Bank’s poverty measure of $1.90 per day, 80-90 percent of the population reliant on agriculture (mostly subsistence farming) and a youth unemployment rate of about 65 percent. Economic growth is insufficient to create employment for Burundi’s rapidly growing population. President Ndayishimiye, in power since June 2020, has taken some steps to promote good political and economic governance to improve the business environment, fight corruption, promote fiscal transparency and, most recently, enact needed banking and currency reforms. His administration seeks to increase existing value chains to find new sources of employment and revenue and to find new revenue streams. Despite these efforts, corruption, an ill-equipped bureaucracy, and rule-of-law deficiencies remain endemic.

The Government of Burundi (GoB) continues to try to attract more foreign direct investment (FDI). Since taking office, President Ndayishimiye has made or hosted multiple state visits with potential trade and development partners. 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. To attract FDI, the GoB must address an array of longstanding challenges, including: poor governance and weak institutional capacity; pervasive corruption; a low-skilled workforce; only 12 percent electrification nationwide; poor internet connectivity; and limited availability of reliable economic statistics.

The GoB is working to develop infrastructure, including photovoltaic and hydroelectric power plants, roads construction projects, the rehabilitation of Bujumbura Port, upgrading Bujumbura’s international airport, and the construction of a railway joining Burundi, DRC and Tanzania to improve access to the country, reduce transportation costs, and boost regional trade. The demand for electricity and water significantly exceeds capacity, and the transmission system is old and poorly maintained, leading to frequent outages. In June 2021, the government suspended all mining activities of the main foreign companies operating in the country, pending revision of the mining code and renegotiations of mining contracts. A new draft code was approved by the Council of Ministers in February 2022, but has not yet been adopted by the legislature or signed into law and the mining sector remains closed to private companies.

In April 2023, the GoB and the IMF reached a staff-level agreement on a 40-month arrangement under the Extended Credit Facility (ECF) with access of SDR 200.2 million (or about $261.7 million), the first Upper Credit Tranche-quality program for Burundi supported by the Fund since 2015. The program aims to restore external sustainability and strengthen debt sustainability, while supporting economic recovery from shocks and creating fiscal space for accelerated and inclusive growth.

Burundi’s economy has been hit by several shocks internally and externally, halting its recovery from the negative effects of the COVID-19 pandemic and heightening its macroeconomic imbalances. These include delayed rainfall in 2022, which affected crops and heightened food insecurity, limited availability of fertilizer due to limited foreign exchange (FX) for imports, supply disruptions linked to Russia’s invasion of Ukraine, and outbreaks of Rift Valley Fever and porcine fevers that hampered livestock production. IMF estimated that real GDP growth slowed to 1.8 percent in 2022 (down from 3.1 percent in 2021) but projected a rebound to 3.3 percent in 2023. Nevertheless, delayed harvests and lower crop productivity in 2022 will likely impact agricultural production in 2023.

Inflation pressures have not receded. Inflation averaged 18.9 percent in 2022 and has continued to accelerate (28.6 percent at the end of January 2023), driven mainly by high prices for staples. Inflation is projected to remain high at around 18 percent in 2023. Higher import prices have pushed up inflation, widened the fiscal deficit, and heightened current account pressures.

The GoB indicates it plans to return to fiscal consolidation FY2023/24 (July-June), strengthening revenue collection efforts and restraining spending while preserving social spending and scaling up investment under the country’s Public Investment Plan (PIP). The GoB projects that public debt will decline over the medium term under the PIP through external rebalancing and unwinding of monetary financing. The central bank (BRB) indicates it is committed to recalibrating monetary and external policies to address below-adequate foreign exchange reserves (1.5 months of imports at the end of 2022) and in May took steps to address the large parallel FX market premium. To that end, the BRB initiated FX market liberalization, reauthorizing commercial banks to accept and distribute foreign currencies and looking to the Interbank Currency Market (composed of commercial banks and exchange bureaus) for market-based FX rates rather than the BRB setting official exchange rates based on non-market factors. Governance and structural reforms will be at the core of the authorities’ medium-term program to create a business environment conducive to private-led diversified and inclusive growth and job creation.

Country Links

Bank of the Republic of Burundi