In the nation of Burundi, serious efforts are being made to make businesses more attractive to outside investors. Still, it ranks near the very bottom of global transparency rankings.
BUJUMBURA - Thanks to its recent regulatory reforms, Burundi has done a lot to facilitate business and job creation. So much so that it has been named as one of the World Bank Doing Business Report Top 10 most improved economies for the second straight year.
Unfortunately, it’s also one of the most corrupt countries in the World, ranked 12th in the 2012 Transparency International index. Corruption, which is particularly rife in the public tendering process, wipes out the government’s efforts to make the country attractive for investors.
“This is unacceptable, Transparency International must give Burundi a second chance by actually taking into account the efforts made by this country to win the fight against corruption,” said Burundi President Pierre Nkurunziza.
The 2012 Transparency International index ranked Burundi 165th out of 174 countries – behind its neighbors: the Democratic Republic of Congo (160th) and far from Rwanda (50th). This came as quite a slap in the government’s face, especially as it was celebrating its encouraging Doing Business rating.
Leonidas Havyarimana, an official with the good governance ministry, says that “instead of whining and blaming Transparency International, the government should deal with the problem head first and implement concrete measures against corruption – a crime whose victims are the investors and businessman who deal with the administration.”
Activist Illuminee Niyakire says: “This high-level corruption dealing with huge amounts of money; the tainted tendering process and cash bribes – that’s what’s undermining this country.”
“High-level officials are implicated in this corruption, especially for big public tenders, and particularly in key sectors such as mining or the privatization of public companies,” adds president of local NGO and devout defender of integrity in public affairs, Faustin Ndikumana, “The rules are broken very often.”
A perfect example of this is the fact that the Bujumbura port’s concession rights were just awarded – to everyone’s surprise – to a company that is still in the process of being created.
In the east of Burundi, gold and other minerals are being trafficked with alleged help from high-ranking police officials.
On the other hand, low-level corruption isn’t as widespread in Burundi as everywhere else in Eastern Africa. In this domain Burundi ranks second-less corrupted country behind Rwanda, according to the 2012 East African Bribery Index.
The police and the judiciary are the most corrupt, but there has been much improvement in this sector. “This is thanks to NGOs, community organizations, and news coverage targeting low-level bribery,” explains Severin Nahayo, a university professor. “When a policeman who asks $2 to let a reckless driver go is shamed in public, he will think twice next time. Same for the judge who is caught red-handed asking for a bribe.”
Meanwhile, the government has undertaken a number of reforms to attract investors to Burundi. “Now, you only need $30 to start your own company, and it only takes a day. This increases fiscal revenues and creates new jobs,” says second Vice-President Gervais Rufyikiri.
Despite recurring complaints from business owners regarding slow border trade, there have undeniably been major improvements.
In particular, there was the creation of a one-stop-shop for business registration; the electricity installation process was reduced from 188 to 30 days; a shortened waiting period was introduced for import-exports; and the national water company monopoly was cancelled. These measures have started attracting investors. “The legal environment is much better than it was, but we are still in a wait-and-see period,” says Opulent group CEO Ayaz Ali Jivrai, who has decided to build a luxury hotel in Bujumbura.
Insecurity is the other reason why investors are still reluctant to come to Burundi. According to economist Andre Muhimpundi, “for investors, nothing is worse than political or social tensions, which could turn into civil war at the drop of a hat.” Reforms are good but peace and transparency in transactions remains the sine qua non condition for healthy economic development.