Burundi: A potential investment destination

COMESA 2018 Special Report, By Léonard Sentore*

COMESA 2018 Special Report

Strong measures have been taken to combat and eradicate corruption, including the setting up of the General Prosecutor’s office at the anti-corruption court

The Republic of Burundi is a nation located in the Great Lakes Region in East Africa. It neighbours Rwanda to the north, Tanzania to the east and south and the Democratic Republic of the Congo (DRC) to the west. The border with the DRC is covered by Lake Tanganyika, the second deepest lake in the world. It runs along the southwestern coast. It is a member of the Economic Community of Central African States (ECCAS), the Economic Community of Great Lakes Countries (CEPGL), the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC). This gives Burundi access to more than 450 million consumers!

Investment opportunities

Mining: Burundi is known to have some of the world’s largest deposits of nickel. Development of a mining industry around these minerals and others presents enormous opportunities.

Energy: Burundi is an energy-hungry economy and has huge untapped energy resources that include solar and wind farms and hydropower.

Manufacturing Industries: Almost all manufactured consumer goods are imported, thus providing full opportunities in almost every industry. There is need for a domestic food products processing industry; industrial production of building materials such as glasses, profiles, metal sheets, tiles, cement, etc. There is need to establish a chemical industry, and manufacture fertilisers for agriculture. Additionally, there is only one textile industry with very limited technology.

Healthcare: The healthcare sector continues to expand in Burundi. Setting up of private health institutions will enable Burundi to become a healthcare hub for populations within Burundi and the neighbouring Democratic Republic of the Congo and Tanzania.

Education: Burundi is thirsty for skills to help spur its economy forward. With a huge population of young adults, Burundi is in need of skilled manpower.

Finance & Banking: The financial services sector in Burundi remains largely untapped as the country has a huge population that does not have access to banking facilities.

Legal Framework for FDI in Burundi

• Creation of the Burundi Revenue Authority for better tax payment services and tax collection performance.

• Non-discriminatory and attractive Investment Code ensuring the protection of investors and investments.

• Freedom of establishment and investment of capital.

• The granting of visas and the freedom to apply for residence visas for investors and expatriates.

• Guarantees the right of ownership to any natural or legal person, without any discrimination.

• Guarantees free transfer of foreign capital and their income, after payment of taxes and duties.

• Strong measures have been taken to combat and eradicate corruption, including the setting up of the General Prosecutor’s office at the anti-corruption court, and the establishment of the Special Anti-Corruption Police, the institution in charge of fighting corruption.

Tax Benefits

Acquisition of buildings and land, essential to the realisation of business opportunities, is exempt from the purview of transfer duties.

The investor also benefits from a reduction in the tax rate on profits as follows:

• 2 percent, if it employs a number of Burundian workers between 50 and 200;

• 5 percent, if it employs more than 200 Burundian workers.

The staff counted is the one benefiting from remuneration subject to the taxation of wages and registered to the National Institute of Social Security insurance.

There is also ongoing implementation of bold reforms and simplified administrative procedures to make it easier to do business in the country.

VAT exemption for investment projects identified and approved by a special board as part of priority sectors which are strategic to the growth of the national economy has also been introduced.

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Diplomatist Magazine was launched in October of 1996 as the signature magazine of L.B. Associates (Pvt) Ltd, a contract publishing house based in Noida, a satellite town of New Delhi, India, the National Capital.

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