Burundi A. Definitions and sources of data Burundi Investment Code (Décret-loi No. 1/8 d avril 1979 portant Code des investissements du Burundi and Law No 1/001/1986 of 10 July 1986) govern all foreign investment in the country. The Codes do not provide specific definition of foreign direct investment (FDI). Data on the annual inflows of FDI are gathered by the National Bank of the Republic of Burundi. Data are also collected by the International Monetary Fund in its balance-ofpayments statistics. The Government treats domestic and foreign firms equally and actively seeks FDI. In the country, residents may hold foreign exchange accounts, but documentation must be submitted to the central bank, some withdrawals require supporting documentation, and an approval from the central bank is required to hold them abroad. Non-residents may hold foreign exchange accounts and withdraw funds up to a set limit upon presentation of documentation. All payments for invisibles require an approval and are often subject to limitations and bona fide tests. Capital transfers out of Burundi by residents are approved on an individual basis. Capital transactions such as credit operations, direct investment, and personal capital movements are subject to restrictions or authorization requirements. In 2005, the Government of Burundi had declared its commitment to draw up a privatization strategy for the Coffee industry. Burundi has signed bilateral treaties with many countries including Comoros, Germany, Belgium and Luxembourg, Mauritius and the United Kingdom. Burundi is also signatory to a number of regional integration agreements, including the African Union, New Partnership for Africa's Development, the Community Investment Code of the Economic Community of the Great Lakes Countries, the Cotonou Agreement for the renegotiation of the partnership agreement between the Africa, Caribbean and Pacific and the European countries, the Economic Community of Central African States, the Common Market for Eastern and Southern African. The country belongs to a set of multilateral agreements including the Convention establishing the Multilateral Investment Guarantee Agency, Convention on the Settlement of Investment Disputes between States and Nationals of other States, the Paris Convention for the protection of Industrial Property and the World Trade Organization. Posting date: November 2006
B. Statistics on FDI and the operations of TNCs
UNCTAD WID Country Profile: BURUNDI Page 3 of 11 Table 1. Summary of FDI (Millions of dollars) Variable Inward Outward 1. FDI flows, 2002-2005 (annual average) -0.7-2. FDI flows as a percentage of GFCF, 2002-2005 (annual average) -0.9-3. FDI stock, 2005 44.9 2.3 4. FDI stock as a percentage of GDP, 2005 5.6 0.3 Source: Based on tables 3a, 4a and UNCTAD, FDI/TNC database.
UNCTAD WID Country Profile: BURUNDI Page 4 of 11 Year Equity Table 3a. FDI flows, by type of investment, 1980-2005 (Millions of dollars) Inward investment Intracompany Reinvested earnings loans Total Equity Outward investment Intracompany Reinvested earnings loans 1980...... 4.6........ 1981...... 11.1........ 1982...... 0.9........ 1983...... 3.0........ 1984...... 1.2........ 1985 0.5.... 1.6...... -1.1 1986 1.5.... 1.5...... 0.1 1987 1.4.... 1.4...... 0.1 1988 1.2.... 1.2...... 0.1 1989 0.6.... 0.5 0.1.... 0.1 1990...... 1.3...... - 1991...... 0.8...... - 1992...... 0.5...... - 1993...... 0.4...... 0.1 1994...... -...... 0.1 1995...... 1.8...... 0.5 1996...... -...... 0.04 1997...... -...... 0.1 1998...... 2.0...... 0.4 1999...... 0.2...... 0.8 2000...... 11.7...... - 2001...... 0.01...... - 2002...... -...... - 2003...... -...... 0.01 2004...... -2.0........ 2005...... -0.7........ Source : UNCTAD, FDI/TNC database. Note: FDI inflows: OECD for 1980-1984 and 2004, Bank of Burundi for 1985-2003, and estimate for 2005. FDI outflows: Proxy based on investments reported by Belgium and Luxembourg for 1985-1988, IMF for 1989, and Bank of Burundi for 1990-2003. Total
UNCTAD WID Country Profile: BURUNDI Page 5 of 11 Year Equity Table 4a. FDI stock, by type of investment, 1980-2005 (Millions of dollars) Inward Investment Reinvested earnings Intracompany loans Total Equity Outward Investment Intracompany Reinvested earnings loans 1980...... 6.5........ 1981...... 17.6........ 1982...... 18.5........ 1983...... 21.5........ 1984...... 22.7........ 1985...... 24.3........ 1986...... 25.8...... 0.1 1987...... 27.2...... 0.2 1988...... 28.4...... 0.3 1989...... 28.9...... 0.3 1990...... 30.2...... - 1991...... 31.0...... - 1992...... 31.5...... - 1993...... 31.9...... 0.4 1994...... 31.9...... 0.5 1995...... 33.7...... 1.0 1996...... 33.7...... 1.1 1997...... 33.7...... 1.1 1998...... 35.7...... 1.5 1999...... 35.9...... 2.3 2000...... 47.6...... - 2001...... 47.6...... - 2002...... 47.6...... - 2003...... 47.6...... 2.3 2004...... 45.6...... 2.3 2005...... 44.9...... 2.3 Source : UNCTAD, FDI/TNC database. Note : FDI inward stock: Estimated by accumulating inflows since 1970. FDI outward stock: Estimated by accumulating inflows since 1986. Total
UNCTAD WID Country Profile: BURUNDI Page 6 of 11 Table 6. FDI flows in the host economy, by geographical origin, 1988-1999 (Millions of dollars) Economy 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Belgium / Luxembourg 0.9-0.1-0.3 0.2 0.4-0.7-2.2-2.. 0.3 0.2.. France.. 0.2 0.2.......... 0.4 0.2.... Germany.... -1.2.......... -5.2.. 3.3.. Portugal........................ Source : UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above. Table 9. FDI flows abroad, by geographical destination, 1990-2001 (Millions of dollars) Economy 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Belgium / Luxembourg -0.1 0.2-0.2-0.2-0.1 0.2 0.5 0.3 0.1.... 0.9 France.. 0.4........ 0.2.......... Germany.............. 1.1........ Source : UNCTAD, FDI/TNC database. Note: Data are based on information reported by the economies listed above.
UNCTAD WID Country Profile: BURUNDI Page 7 of 11 Table 88. Largest affiliates of foreign TNCs in the host economy, 2004 (Millions of dollars and number) Company Home economy Industry Sales Employees A. Industrial Brasseries et Limonaderies du Burundi Netherlands Food products, beverages and tabacco 63 650 B. Tertiary Chanic Burundi Belgium Wholesale trade 0.5 20 a C. Finance and insurance Assets Employees Banque de Crédit de Bujumbura Belgium Finance 51 218 a Banque Commerciale du Burundi Belgium Finance 40 258 a Banque Nationale Développement Economique Société Belgium/Germany Finance 19 63 a Sources: The Banker's Almanac, 2003 (London, Reed Information Services Ltd, 2003); Thomson Analytics (http://analytics.thomsonib.com/); Who Owns Whom database (https://solutions.dnb.com/wow). a 2001.
UNCTAD WID Country Profile: BURUNDI Page 8 of 11 C. Legal frameworks for transnational corporations A number of legal instruments exist in Burundi to facilitate as well as regulate the activities of foreign investors. Some of these instruments remit from its association in international organizations and laws enacted at national level. Some of the instruments include: I. National framework Décret-loi No. 1/8 d avril 1979 portant Code des investissements du Burundi. Investment Incentives Law No 1/001/1986 of 10 July 1986 - The Investment Code of 1986; together with the implementation Decree No 120/284 of 23 July 1986; as amended by Law No. 1-005 of 14 January 1987, Decree-Law No. 1-021 of 30 June 1990 and No. 1-025 of 30 September 1991. Source: Centre Francais du Commerce Exterieur - Paris - DAMEX-Africa and Middle East Publications, 1993. Law No. 1/30 on the Creation of a Free Zone in Burundi, of 31 August 1992 Source: Centre Francais du Commerce Exterieur - Paris - DAMEX-Africa and Middle East Publications, 1993. Decree No. 1/21 on Privatization of States-Owned Enterprises of 12 August 1991. Source: World Bank, Technical Paper No. 186, "Divestiture of State Enterprises". An overview of legal framework. Ordinance No. 120/321, setting Modalities for Competitive Bidding for the Privatization of State- Owned Enterprises, 4 October 1991. Source: World Bank, Technical Paper No. 186. "Divestiture of State Enterprises". An overview of legal framework. Patent Law, August 1964. Arrêté ministériel No. 040/750 de juillet 1965 portant mesures d exécution de la Loi d août 1964 sur les brevets. Trademark Law, August 1964. Legislative Decree No. 1/169, July 1968 amending the Law. Arrêté ministériel No. 040/523 de septembre 1964 portant mesures d exécution de la Loi d août 1964 sur les marques de fabrique et de commerce. Industrial Designs Law, August 1964. Décret-loi No 1/171 de juillet 1968 portant modification de la Loi d août 1964 sur les dessins et modèles industriels. Legislative Decree No. 1/171, July 1968 amending the Law.
UNCTAD WID Country Profile: BURUNDI Page 9 of 11 Arrêté ministériel No. 040/120 de juin 1966 portant mesures d exécution de la Loi d août 1964 sur les dessins et modèles industriels. Copyright Legislative Decree, May 1978. II. International Framework A. Burundi is a party to the following multilateral and regional instruments: Paris Convention for the Protection of Industrial Property of 1883 (Revised at Brussels in 1900, Washington in 1911, The Hague in 1925, London in 1934, Lisbon in 1958 and Stockholm in 1967, and as amended in 1979). Signed in 1994. Convention on the Settlement of Investment Disputes between States and Nationals of other States of 1965. Entered into force on 14 October 1966 Convention Establishing the Multilateral Investment Guarantee Agency of 1985, entered into force on 12 April 1988. Marrakesh Agreement Establishing the World Trade Organisation of 15 April 1994. Entered into force on 1 January 1995. Agreement on Trade-Related Investment Measures. General Agreement on Trade in Services. Agreement on Trade Related Aspects of Intellectual Property Rights. Treaty Establishing the Common Market for Eastern and Southern Africa (COMESA) of 5 November 1993 (entered into force on 8 December 1994). Treaty for the Establishment of the Economic Community of Central African States of 18 October 1983; entered into force in December 1984. Community Investment Code of the Economic Community of the Great Lakes Countries of 31 January 1982; entered into force on: 4 October 1987. Partnership Agreement between the Members of The African, Caribbean and Pacific Group of States, of the one part and the European Community and its member states, of the other part signed in Cotonou, Benin on 23 June 2000. B. Bilateral treaties 1. Bilateral investment treaties for the protection and promotion of investments: Germany 1984, Belgium/Luxembourg 1989, United Kingdom 1990, Comoros 2001, Mauritius 2001. 2. Bilateral treaties for the avoidance of double taxation:
UNCTAD WID Country Profile: BURUNDI Page 10 of 11 D. Sources of information Official National Bank of Burundi. Secondary Bennell, Paul (1997). "Privatization in Sub-Saharan Africa: progress and prospects during the 1990s", World Development, vol. 25, no. 11, pp. 1785-1803. Boocock, Colin N. (2002). "Lesson from FDI in mining in Sub-Saharan Africa", power point presentation, OECD Paris, February. Broll, U. (2003). "Foreign direct investment, credible policy: the role of risk sharing". International trade journal, vol. XVII, No. 2., pp. 165 176. Economist Intelligence Unit (EIU) (2002a). Country Profile: Burundi (London: EIU Ltd.). (2002b). Country Report: Burundi (London: EIU Ltd.), April. (2005a). Country Profile: Burundi (London: EIU Ltd.). (2005b). Country Report: Burundi (London: EIU Ltd.), April. International Finance Corporation (IFC) (1997). "Foreign direct investment", IFC: Lessons of Experience Series No. 5 (Washington, D.C.: World Bank). International Monetary Fund (IMF) (2006). IMF's Sub-Saharan Africa Regional Economic Outlook, March 10, 2006. (Washington D.C.: IMF). Pigato, Miria (1999). "Foreign direct investment in Africa: old tales and new evidence" (Washington D.C.: World Bank), Mimeo. Rogoff, Kenneth and Reinhart, Carmen (2002). "FDI to Africa: the role of price stability and currency instability", IMF Working Paper, 41 (Washington D.C.: IMF). Soderbom, M. and F. Teal (2004). "Size and Efficiency in Africa Manufacturing firms: Evidence from Firm-Level Panel Data." Journal of Development Economics, 73. pp 369-394. United Nations Conference on Trade and Development (UNCTAD) (2000). Capital Flows and Growth in Africa (Geneva: UNCTAD/GDS/MDPB/7), July. (2003). FDI in Landlocked Developing Countries at a Glance 2002 (Geneva: UNCTAD/ITE/IIA/2003/5). (2005a). Investor-Disputes Arising from Investment Treaties: A Review. UNCTAD Series of International Investment Policies for Development (UNCTAD/ITE/IIT/2005/4).
UNCTAD WID Country Profile: BURUNDI Page 11 of 11 (2005b). A Survey of Support by Investment Promotion Agencies to Linkages, Advisory Studies No. 18 (UNCTAD/ITE/IPC/2005/12). (2005c). FDI in least developed countries at a glance: 2005/2006 (UNCTAD/ITE/IIA/2005/17). United States Trade Representative (2006). 2006 Comprehensive Report on U.S. Trade and Investment Policy Toward Sub-Saharan Africa and Implementation of the Africa Growth and Opportunity Act: The Sixth of Eight Annual Reports, May 2006. (Washington D.C.: US Government).