Uganda Rwanda Burundi

COUNTRY REPORT

4th quarter 1996

The Economist Intelligence Unit 15 Regent Street, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 40 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through subscription products ranging from newsletters to annual reference works; through specific research reports, whether for general release or for particular clients; through electronic publishing; and by organising conferences and roundtables. The firm is a member of The Economist Group.

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Contents

3 Summary

Uganda 4 Political structure 5 Economic structure 6 Outlook for 1997-98 7 Review 7 The political scene 13 The economy 15 Agriculture 17 Energy and construction 18 East African Cooperation 18 Foreign trade and payments

Rwanda 20 Political structure 21 Economic structure 22 Outlook for 1997-98 24 Review 24 The political scene 29 The economy

Burundi 31 Political structure 32 Economic structure 33 Outlook for 1997-98 34 Review 34 The political scene 38 The economy

40 Quarterly indicators and trade data

List of tables 7 Uganda: forecast summary 19 Uganda: debt, aid and budget spending 40 Uganda: quarterly indicators of economic activity 40 Rwanda: quarterly indicators of economic activity 41 Burundi: quarterly indicators of economic activity 41 Uganda: foreign trade 42 Rwanda: foreign trade 43 Burundi: foreign trade

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List of figures 7 Uganda: gross domestic product 7 Uganda: new Ugandan shilling real exchange rate 13 Uganda: consumer prices 16 Uganda: ICO coffee prices 33 Burundi: gross domestic product

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November 14, 1996 Summary

4th quarter 1996

Uganda Outlook for 1997-98: The northern problem will concentrate government efforts and resources. Economic activity looks set for further growth, despite forecast price falls for coffee. Donor money is expected to continue flowing, funding rising imports. Uganda may benefit from an international debt relief effort.

Review: Iran has brokered a rapprochement with Sudan, but this is unlikely to lead to a lasting peace. The northern rebels have caused chaos and embarrassed the government forces. The conflagration in Zaire has serious implications for Uganda. Profligate ministerial spending has been bad public relations for the government. Welfare indicators have shown up urban-rural contrasts. Inflation has crept up, but only in food crop prices. Traders have gone on strike in protest against the effects of VAT on business, but the government has stood its ground. The Uganda Grain Millers Corporation has prepared for flotation on the new stock exchange. Coffee production has reached record levels, but revenue has fallen. There is a serious power deficit, and the electricity board has expressed its intention to raise charges for exports to Kenya. East African Cooperation momentum has gathered pace.

Rwanda Outlook for 1997-98: An international intervention force may have to enter into combat. With Hutu militias dispersed, the Rwandan government will be less worried about larger-scale incursions. Rwanda genocide trials are likely to start soon. New tax rules will increase evasion.

Review: The RPA has supported Zairean militias in their fight against the Zairean army and Hutu forces. Zaire has alleged aggression by its neighbours. South Africa has warmed to the RPF. Domestic and international genocide trials have been postponed again. More Rwandan exiles in Kenya have been assassinated. Good rains have benefited farmers. Kigali retailers have gone on strike over tax changes.

Burundi Outlook for 1997-98: Mr Buyoya will be buying time, waiting for developments in Zaire to unfold. As he is unlikely to negotiate with the Hutu militias, regional sanctions will be upheld and the civil war will drag on, without a winner emerging. Mr Nyangoma’s faction will strengthen its hold on Frodebu. Government activity is likely to shrink to a minimum.

Review: The crisis in Zaire has drawn international attention away from Burundi, although regional neighbours have kept up their efforts at bringing about negotiations. Frodebu has split into two factions. The war has continued unabated, but thousands of Burundian refugees have returned from Zaire. Sanctions have lost their bite, although government cuts and redundancies have been made. Tea and coffee has been smuggled out. Electricity cuts have remained a problem.

Editors: Kristina Quattek; Gregory Kronsten All queries: Tel: (44.171) 830 1007 Fax: (44.171) 830 1023

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 4 Uganda

Uganda

Political structure

Official name Republic of Uganda

Form of state Unitary republic

Legal system Based on English common law and the 1995 constitution

National legislature Parliament of Uganda; 276 members, 214 elected by universal suffrage, with the remainder selected by electoral colleges. All serve five years

National elections May 1996 (presidential); June 1996 (legislative); next elections due by 2001 (presidential and legislative)

Head of state President, Yoweri Museveni, confirmed as head of state in the presidential election of May 1996

National government The president and his appointed cabinet; last reshuffle July 1996

Main political parties The National Resistance Movement (NRM) is the ruling authority; the Democratic Party (DP), the Uganda People’s Congress (UPC), the Uganda Patriotic Movement (UPM) and the Conservative Party (CP) are all registered political parties but election candidates stand as independents

President & commander in chief Yoweri Museveni Vice-president & minister of agriculture, animal industry & fisheries Specioza Kazibwe Prime minister Kintu Musoke First deputy prime minister & minister of foreign affairs Eriya Kategaya Second deputy prime minister & minister of tourism & the environment Moses Ali Third deputy prime minister & minister of labour & social services Paul Etiang

Key ministers Education & sports Amanya Mushega Finance Jehoash Mayanja-Nkangi Gender & community development Janet Mukwaya Health Crispus Kiyonga Information Ruhakana Rugunda Internal affairs Tom Butime Justice & attorney-general Bart Katureebe Lands & urban development Francis Ayume Local government Jabeli Bidandi Ssali Natural resources Gerald Ssendaula Planning & economic development Richard Kaijuka Public service Apollo Nsibambi Trade & industry Henry Kajura Works, transport & communications John Nasasira Without portfolio Kirunda Kivejinja

Central bank governor Charles Nyonyintoho Kikonyogo

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Economic structure

Latest available figures

Economic indicators 1991 1992 1993 1994 1995 GDP at factor costa NUSh bn 2,588 3,626 4,036 4,828 5,521 Real GDP growtha % 3.1 8.4 5.3 10.6 8.5 Consumer price inflation % 27.7 54.5 5.1 10.0 6.6 Populationb m 16.7 17.5 18.1 18.7 19.3 Exports foba $ m 172.1 169.3 253.9 577.3 555.3c Imports cifa $ m 450.6 622.4 671.9 1,085.5 1,179.8c Current accounta $ m –131.6 –141.7 –66.9 –164.3 –114.0c Reserves excl gold $ m 58.9 94.4 146.4 321.2 458.9 Total external debt $ m 2,857 3,023 3,131 3,473 n/a External debt-service ratio % 75.5 59.6 68.4 44.0 n/a Coffee exports ’000 tons 125 119 114 194 169 Manufacturing output index 1987=100 178.2 191.2 215.6 260.3 330.7 Exchange rate (av) NUSh:$ 734.0 1,133.8 1,195.0 979.4 968.9

November 8, 1996 NUSh1,087.0:$1

Origins of gross domestic product 1995a % of total Components of gross domestic product 1995a % of total Monetary agriculture 25.4 Private consumption 84.0 Manufacturing 7.2 Government consumption 9.7 Commerce 11.6 Gross fixed capital formation 17.3 Government & community services 17.7 Change in stocks –0.8 Other monetary sectors 13.8 Exports of goods & services 12.0 Non-monetary agriculture 20.2 Imports of goods & services –22.2 Other non-monetary sectors 4.0 GDP at market prices 100.0 GDP at factor cost 100.0

Principal exports 1995 $ m Principal imports 1992 $ m Coffee 384.1 Machinery & transport equipment 169.0 Gold 23.2 Manufactures 114.7 Maize 19.3 Mineral fuels 70.4 Fish & fish products 17.5

Main destinations of exports 1995d % of total Main origins of imports 1995d % of total Spain 22.8 Kenya 26.2 France 14.1 UK 12.1 Germany 13.9 Japan 8.0 Italy 9.5 Germany 8.0 Netherlands 8.3 India 5.5 a Fiscal years starting July 1; all other figures are for calendar years. b National sources. c Provisional. d Based on partners’ trade returns; subject to a wide margin of error.

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Outlook for 1997-98

The northern problem With elections out of the way the political scene will be dominated by events will intensify— near and beyond Uganda’s borders. The most serious problem is the instability of the northern region caused by the rebels of the Lord’s Resistance Army (LRA) and the West Nile Bank Front (WNBF), and the stand-off with Sudan (which supports the rebels). Despite the efforts of Iran (acting on its own behalf, rather than for the African parties involved), the dispute with Sudan is not yet likely to be settled conclusively, and the situation could deteriorate if Sudanese provoc- ation continues to test Uganda’s patience. The government has geared itself up for a big effort in the north, but the outcome is uncertain, as the rebels are gaining strength and the government forces are getting increasingly dispirited.

—while the Zairean crisis The situation is just as uncertain in the south-west, with a growing risk of unsettles security in the Uganda being drawn into the ethnic chaos of Zaire, Rwanda and Burundi. east However, with the increasing need for mutual support among the partners of the East African Cooperation (EAC), Uganda is less likely to be prompted into independent action than it was a few years ago. Nevertheless, the insecurity is bound to affect its remote border regions, not least because of an influx of Zairean refugees, causing disruption and making unwelcome extra demands on the security services. However, international humanitarian or military intervention is likely to operate at least partly through Uganda, creating some windfall economic gains for the country.

Economic activity will The economy will continue to produce strong growth rates, although a repet- remain buoyant— ition of last year’s 8.5% real GDP expansion appears unlikely. There have been reports of poor harvests in some regions, with periods of drought. However, the momentum of economic recovery will not be lost. The construction industry is booming, and the coffee crop in 1995/96 has been excellent. But coffee prices are set to fall further over the forecast period and little value added is expected from the subsector. Some of the loss from coffee’s contribution should be made up, however, by a gradually recovering manufacturing sector, expanding horti- cultural production and some inward investment.

—but inflationary On the domestic front, inflation has been edging up in recent months, but this pressures may edge up is the result of higher food crop prices. With underlying inflation (manufac- tured goods and services) continuing to fall, the headline rate is forecast to remain at an annual average of below 10%. However, inflationary pressures may well pick up if reported government overspending during the election period proves to be more than a temporary aberration, and politicians find themselves unable to accept the budget straitjackets.

Uganda may benefit from With the economy still largely driven by coffee production and exports, Uganda debt relief remains highly dependent on foreign grants and loans. Donors have rewarded the government generously for its economic reform programme in recent years. They are likely to continue to do, although some concern may emerge over fiscal slippages. Donor funds will be particularly needed to support import growth, as export earnings are expected to fall from $555m in 1995/96 to $500m in 1996/97 and $490m in 1997/98 in response to weaker international coffee

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prices. Additionally, some government resources may be freed next year, if Uganda is declared eligible for debt relief under the international community’s Debt Initiative for Heavily Indebted Poor Countries (HIPCs).

Uganda: forecast summarya ($ m unless otherwise indicated) 1994b 1995b 1996c 1997c Real GDP growth (%) 10.6 8.5 6.0 6.0 Consumer price inflation (%) 6.1 7.4 8.0 7.0 Merchandise exports fob 577 555d 500 490 of which: coffee 442 393d 330 300 Merchandise imports cif 1,086 1,180d 1,250 1,330 Current-account balance –164 –114d –200 –250 Average exchange rate (NUSh:$) 930 1,013 1,100 1,170

a Fiscal years starting July 1. b Actual. c EIU forecasts. d Provisional.

Uganda: gross domestic product Uganda: new Ugandan shilling real % change, year on year exchange rate (c) 12 1990=100 Uganda (a) 110 10 Africa

100 8

90 6 NUSh:$

4 80 NUSh:DM

2 70 NUSh:¥ 0 1992 93 94 95 96(b) 97(b) 60 (a) Fiscal years starting July 1. (b) EIU forecasts. (c) Nominal exchange rates adjusted for changes in relative consumer prices. Sources: EIU; IMF, International Financial Statistics; World Economic 1990 91 92 93 94 95 Outlook.

Review

The political scene

Iran mediates a The possibility of a resumption of diplomatic relations with Sudan emerged in rapprochement with September, following a tour of key African countries by the Iranian president, Sudan— Ali Akbar Hashemi Rafsanjani. The tour was seen as a diplomatic and commercial offensive to counter attempts by the USA to isolate the Tehran regime in Africa. One step towards forging closer ties between the two countries was taken when it was agreed to launch regular flights from Tehran to Uganda. Mr Rafsan- jani also offered to mediate between Uganda and Sudan when he met the Ugandan president, Yoweri Museveni, in Kampala on September 7, and events thereafter moved with extraordinary rapidity. The announcement of an agreement between Uganda and Sudan was made on the following day, even before Mr Rafsanjani had left for Khartoum, and the document was signed only one day later, in Khartoum, by the foreign ministers of Uganda, Sudan and Iran.

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—but it is unlikely to lead The agreement consisted, essentially, of a list of general principles accepted by to a lasting peace Uganda and Sudan which stipulated that tension be reduced, no support be given for each other’s opponents, neither side provide a base for the other’s opponents, diplomatic ties (suspended since April 1995) be resumed, embassies reopened, and a supervising group of countries be formed to oversee the implementation of the agreement. Both sides also agreed to meet at the UN in New York, and subsequently every six months. Malawi joined the supervising group, and a meeting was held in Tehran afterwards. It remains to be seen whether these developments will lead to any concrete improvements in security in northern Uganda. Subsequent events suggest that they will not (see below).

Desperate to find a solution to the crisis in the north and to cut off Sudanese support for Ugandan rebels, the government appears to have made a half- hearted attempt to back up its military efforts in the region with diplomatic rapprochement with Sudan. According to reports, Uganda became so frustrated at its inability to defeat the northern rebels, the Lord’s Resistance Army (LRA, backed by the Sudanese government) and the West Nile Bank Front (WNBF), that in August it was poised to invade Sudan in order to establish a buffer zone controlled by the Sudan People’s Liberation Army (SPLA, which is fighting a civil war against the Khartoum government) and thereby isolate the rebel forces from their Sudanese supporters. Tanzanian soldiers and military advisers reportedly arrived in Uganda to provide logistical help, and the government was hoping to employ new equipment from the USA for use in the Burundi crisis. When it became clear that these military supplies would not be forthcoming, the Uganda government is thought to have drawn back from its invasion plans.

Donor countries doubt Uganda’s involvement with Iran was always likely to be a potential source of Iran’s motives— conflict with the USA which has made no secret of its deep suspicions of the intentions of the Tehran regime in promoting its own brand of Islamic extrem- ism in Africa through its support for the Islamist government in Khartoum. On internal matters, Uganda has usually managed to maintain an independent line against the preferences of the powerful donor countries which control the flow of development assistance, but it would be risky to do so in external affairs. When Mr Museveni said, during Mr Rafsanjani’s visit, that the enemies of the USA were not necessarily Uganda’s enemies, he was treading on thin ice. At the time the Ugandan government probably had little choice but to go along with the persistent Iranian president, but it has been soft-pedalling ever since. De- spite the attempts of the Iranians to position the September agreement as a real breakthrough, the Ugandans have pointed out that it did not constitute a formal restoration of relations with Sudan but presented a list of steps which could eventually lead to it. In a press conference held on October 14, Mr Museveni publicly expressed his doubts about the commitment of the Sudanese government to the accord.

—while the conditions of It is unlikely that the September agreement, hastily drawn up and pushed the agreement would be through, will prove to be of any more lasting importance than the Libyan- hard to satisfy brokered agreement of 1995 which was followed immediately by the breaking of diplomatic ties. The main reason for scepticism is the difficulty surrounding the implementation of the conditions of the agreement. It is questionable, for

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example, whether the SPLA and LRA forces could be physically separated by a distance of 100 km (as put forward in the initial agreement) in a region where neither the Sudanese nor the Ugandan army can claim to exercise any real control. The momentum of events in the conflict zone is too great. Such scepticism seemed to be justified by Uganda’s claims, only two weeks after the signing of the agreement, that Sudanese MIGs had bombed the army barracks at Moyo, a town about 16 km from the border. Sudan at first denied the accusation but later said that the raid was an accident. The Ugandan defence ministry is thought to have pressed hard for a military retaliation, but the foreign ministry advocated a more cautious, diplomatic response. This stance has prevailed, at least for the time being. The situation remains uncertain, however, and there are those who believe that Uganda is using the diplomatic initiative as a diversion before returning to its earlier plan for military action (3rd quarter 1996, pages 12-13).

The northern rebels cause Certainly, the Ugandan government cannot allow the rebel activity in the chaos north to continue indefinitely. The government has a fresh five-year mandate for economic and social development priorities, and it cannot afford to waste funds and energy on a military operation which is unwinnable as long as its adversaries receive crossborder support. The security situation in northern Uganda remains poor. Units from the LRA and the WNBF continue to disrupt normal life and business, with civilian killings sometimes numbering more than 100 a week. The scale of the problem took Mr Museveni to Gulu barracks in mid-October to map out a strategy with his field commanders after two weeks during which rebels of both the WNBF and the LRA had rampaged through the region, freely attacking refugee camps, abducting civilians and ambushing vehicles. The region was virtually paralysed while the Uganda Popular Defence Force (UPDF, the government army) was made to look inept. The LRA even attacked the army barracks in Gulu, and closed the Gulu- Kampala road only a few hours after the president himself had passed along it. The WNBF caused chaos by hooking into the police radio and jamming the system nationwide. In some places road travel is only possible in convoys, with army protection, and even then it is not always safe. In what has been seen as a sign of desperation, the army has resorted to rounding up civilian popul- ations for questioning in the early mornings, a method made infamous under Milton Obote’s second presidency.

Mr Museveni sets his face Local leaders have made fresh appeals to the government to end the conflict by against dialogue engaging in a dialogue with the rebel leaders, but Mr Museveni appears to have set his face against this and is determined to press for a military solution. According to reports, the LRA is well equipped with normal combat weapons and also has machine guns and rocket launchers. Its strength has been estimated at three brigades (about 10,000 men) with one operational and two in reserve. The UPDF also has new weapons, but lacks the helicopters it believes would give it an advantage. There are worrying rumours of desertions from the UPDF, suggesting that the government forces are having a tough time, and of large numbers of new rebel recruits. The president’s half-brother, Major- General Salim Saleh, who is in overall charge of the northern operations, has recalled 7,000 veterans to boost his forces. The government is in danger of

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losing credibility over its failure to defeat the rebels and, following pressure from MPs, a parliamentary committee has been established to enquire into the conduct of the war. A number of witnesses to the committee have testified to the collusion between the Uganda government forces and the SPLA, a contact always denied by the authorities but widely known to exist.

The conflagration in Zaire The spread of the ethnic crisis which has affected Rwanda and Burundi and destabilises the region now eastern Zaire (see Rwanda) threatens a wider conflagration in the entire Great Lakes region. So long as the problem, bad as it was, was confined to Rwanda and Burundi, containment remained a possibility. The disintegration of Zaire is another matter. For example, attempts by its regional neighbours to put pressure on the Burundian government, which came to power in a military coup in July, into reinstating the constitution and, most importantly, into negotiating with opposition forces and fighting militias through the impos- ition of sanctions, have been seriously undermined by events in eastern Zaire. Initially quite remarkable, discipline has been fading with regard to the up- holding of sanctions, and Burundi’s borders with Zaire and Rwanda have become rather porous. However, Uganda’s self-interest requires the support of, in particular, Kenya and Tanzania, both in the development of the East African Cooperation and in its confrontation with Sudan, and the government has thus been careful not to diverge from its partners’ approach to the Burundi crisis, which is based on efforts to bring about peace talks.

With regard to Rwanda, the picture is more complicated. Much has been made of the connections of Uganda’s president with the Rwandan Patriotic Front (RPF). It is clear that the present regime in Rwanda owes its existence to backing, covert or otherwise, from Uganda. In the current crisis in eastern Zaire, where the Rwandan government supports the Zairean rebels in their fight against the Zairean army and the exiled Rwandan Hutu militias, Uganda will find it difficult to remain neutral. Its sympathy for the RPF causes friction with the Kenyan government, which is suspicious of the Kampala-Kigali connec- tion. At another level, too, the conflict in Zaire is likely to affect Uganda: an international intervention force, as agreed in early November, if it materialises will probably operate to some extent through Kampala and south-western Uganda. There will no doubt be a windfall economic gain for Uganda (as there was during the Rwanda crisis of 1994), although this may be outweighed by the costs of disruption of Uganda’s commercial links into Central Africa and of the possible destabilisation of its western border with Zaire.

A new status is required The government is faced with a constitutional anomaly in that the National for the NRM Resistance Movement (NRM), which ruled Uganda for ten years, ceased to exist legally on July 8, when the newly elected parliament took over as the legislature. The NRM system was an effort to promote grass-roots democracy through the establishment of elected local resistance councils, which were the foundation of a hierarchy of district and regional resistance councils culminating in the National Resistance Council, the then legislature. Despite the election of a parliament earlier this year, however, the NRM secretariat continues to operate and to receive government funding. Opposition MPs have called for an end to this funding and for the cessation of all NRM government operations. The government accepts that the anomaly exists, but says that the problem is being

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addressed and that the scrapping of the system during the current transitional period would not be in the best interests of the country.

The NRM secretariat lost status during the presidential election campaign, when Mr Museveni sidelined its members by appointing a special election taskforce. The strength of NRM membership in parliament is great enough to secure the acceptance of any new structure for the movement which might be proposed, although it is difficult to envisage what this could be without contra- vening the constitutional proscription against a one-party system. A referendum in 1999 will decide whether or not a multiparty system should be reintroduced.

The old parties are in The old political parties, meanwhile, remain in a parlous condition. The leader danger of fading away of the Democratic Party (DP), Paul Ssemogerere, has virtually disappeared from the public scene. Following his poor showing in the presidential election he might have been expected to resign, but that would have meant losing control of the party’s funds. The DP has lost a number of its younger leaders over the years to the NRM, and without any parliamentary representation the party will be hard put to make an impact. The Uganda People’s Congress (UPC) is in better shape, with several members elected to parliament, including Cecilia Ogwal. However, Mrs Ogwal has been dismissed as the party’s secretary-general by the UPC’s leader-in-exile, Mr Obote, and her faction of the UPC has no money. It is difficult to see how the old parties can make a significant comeback. Serious opposition will thus probably only come from factions within the NRM.

There are signs that the new legislature is beginning to flex its muscles and starting to function as a genuine check on the executive. When the new parliament first met, many among the public at large were disappointed at the speed with which it complied with presidential requests, endorsing the expansion of the cabinet and the choice of vice-president. During the months following, however, MPs have evinced a new toughness, especially in the standing and select committees, which have considerable powers, and have already exposed instances of government mismanagement. This new-found independence is expected to continue to motivate the members, now that most of the executive appointments to government positions and official offices have been made and individuals can expect little in the way of promotion.

Profligate ministerial The government has been receiving bad publicity concerning ministerial ex- spending makes for bad penditure. The expanded cabinet’s 61 ministers all expect to have two official public relations cars (with the preferred status model costing the equivalent of $50,000), and there has even been a suggestion (unlikely to be accepted) that ordinary MPs should have cars, too. The government also wants approval to spend $1m on an official residence for the vice-president, Specioza Kazibwe, who currently lives in her own house. Ministers also get a monthly housing allowance of $500. These extravagant spending plans contrast sharply with the squalor of much government-funded accommodation in places like prisons and police stations. In some instances, reportedly, officials have diverted funds from de- partmental budgets in order to buy ministers’ cars. Such luxury purchases, together with election overspending and the real and rising cost of financing the military efforts in the north are thought to have seriously strained the

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budget and to have put at risk election promises, such as free primary schooling for up to four children per family.

Uganda’s parliament Uganda’s parliament has been re-admitted to the 53-member Commonwealth rejoins the Parliamentary Association. Membership was suspended after the military coup Commonwealth club of June 1985, and efforts to regain admission were blocked because the former National Resistance Council (NRC) did not operate a system of universal adult suffrage. The decision to readmit Uganda was taken at a Commonwealth meeting in Malaysia, in August, and follows the recent elections held under the rules of the new constitution.

Welfare indicators point The social contrast between urban and rural Uganda is sharply drawn in the to urban-rural contrasts household welfare indicators produced from the 1993 Integrated Household Survey. In urban areas only 16% of people fell below the relative poverty line, compared with 46% in rural areas, and the average household expenditure in urban centres was double that in rural areas. With respect to amenities, 35% of households in urban areas had access to piped water, compared with only 2% in rural areas; and 95% of urban households had access to sanitation, compared with 75% of rural households. The figures also reveal the marked difference between the fuel base of urban and rural families, with 62% of urban families using charcoal, compared with 4% of rural families, and 27% of urban families using firewood, compared with 94% of rural families. In the field of education, urban literacy rates (56%) were much higher than those in rural areas (21%); and in towns, school enrolment rates were 57% at primary school level and 24% at secondary school level compared with 37% (primary) and 6% (secondary). The absolute extent of disadvantage in rural areas is greater than these percentages suggest, as it encompasses almost 90% of the population.

Survey data suggest that The latest information gives no cause for complacency about the fight against AIDS remains as prevalent AIDS. A study by the Joint Clinical Research Centre, Kampala, of two large as ever groups of men recruited into the army since 1994 produced HIV-positive rates of 28.1% and 26.5%. According to the study’s authors, the main lesson is that HIV rates remain high in Uganda, with no decrease over time. This runs contrary to the conclusions of a study completed earlier this year which found that the rate of new infections was on a downwards trend. On a more optimistic note, Uganda’s AIDS Information Centre reported that the proportion of HIV-positive people who refrained from sexual activity rose from 40% to 70% after counsel- ling. A study of the demographic impact of AIDS suggests that it could be highly localised and might not show up to its full extent in national statistics.

The economy

Inflation creeps up, but In September the year-on-year rate of headline inflation (all items) rose to 8.8% only in food crop prices from 7.3% in August. The monthly increase of 3.2% in September was the biggest since April 1994 although it is too soon to conclude that these figures presage a more sustained bout of price increases. In fact, the level of underlying inflation (not counting food crops) fell from 6.8% to 6% in September (year on year), maintaining a fairly steady and continuous decline since it peaked at 13.8% in September 1995.

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Uganda: consumer prices The recent increase in headline inflation from 5.3% in June to 8.8% in Septem- % change, month on month ber was caused entirely by higher price rises for food crops, reaching 16.5% year 15 Food crops All items on year in September. In the past, food crop prices have been subject to quite 10 dramatic fluctuations, monthly and yearly, although they have been generally low (sometimes even falling) for most of the time during the last two years. It 5 seems likely, therefore, that inflation in the short term will remain below 10%;

0 but it is difficult to share the authorities’ optimism that the 1996/97 target of an annual average 5% will be achieved. -5 The Bank of Uganda (BoU, the central bank) is planning to issue new coins in -10 denominations of NUSh10, NUSh50, NUSh100 and NUSh200. These will eventually replace bank notes of the same denominations currently in circulation.

Jan.....Jul.....Jan.....Jul.. It is hoped that the coins will facilitate business transactions; at present, clean 1995 96 Source: Uganda Statistics Department. notes are not always available, subject as they are to considerable wear and tear. Ugandans have resented the use of coins in the past, because their bulk became an increasing problem when inflation was high. Coins ceased to be used following the currency conversion of 1987, and reactions to their planned rein- troduction have been mixed.

Traders strike in protest Business activity was severely disrupted at the beginning of September by a against VAT— week-long strike of more than 250 traders, belonging to the Uganda Traders, Importers and Exporters Association (UGIETA), in protest at the impact of the recently imposed value-added tax (VAT). The new tax was introduced at the beginning of the current financial year and replaces the former sales tax and commercial transactions levy. After the first few weeks of the financial year the Uganda Revenue Authority (URA) reported, enthusiastically, that the yield from VAT could well exceed its expectations. By October, however, the authorities were conceding that there were problems with the system which would need rectifying. According to reports, the 17% VAT rate had been demanded by the donor countries, overriding the local preference for 15%. The main complaint of the commercial community was that traders not registered for VAT, those with an annual turnover of less than NUSh20m ($18,400), were able to charge lower prices and were attracting more business. About 13,000 businesses are registered for VAT, with 9,000 in Kampala and 1,000 in Jinja. Other complaints concerned technical matters to do with VAT collection and the conduct of URA officials.

—but the government The VAT strike ended following an intervention by the president, Yoweri stands its ground Museveni, in which he made it clear that VAT was there to stay and that traders who persisted in remaining closed would lose their licences. In a broadcast, the president listed the advantages of having VAT: it made exports more competitive; it encouraged manufacturing by eliminating double taxation; it reduced the working capital needed by companies by spreading the tax burden more widely; and it helped the fight against corruption and tax evasion. On the last point, the president promised to take action against those URA officials who had campaigned against VAT (presumably on the grounds that it made it more difficult for them to continue with their corrupt practices). The traders were persuaded to end the strike following the setting up of a private-sector foundation committee charged with presenting proposals to the government. It was subsequently reported that the government had set up a secret task-force to

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 14 Uganda

defuse the VAT crisis, headed by the former minister for Karamoja affairs, David Pulkol.

However, only three weeks after the traders were persuaded to return to work, university students and teachers from the polytechnic went on strike over cost sharing measures and wages. Health workers also stopped work for a number of days in support of higher wage demands. In the meantime, MPs threatened to strike over unpaid salaries and allowances. This wave of social protest is an indication that the population is running out of patience with the government and is expecting to see more tangible economic benefits.

UGMC prepares for The privatisation of Uganda Grain Millers Corporation (UGMC) will mark a flotation on the new stock historic development in the privatisation programme. A core investor is being exchange selected to buy 51% of the shares; the remainder will be offered for sale by public flotation. The public flotation will constitute the first step in the establishment of a capital market in Uganda, effectively opening the Kampala Stock Exchange. UGMC manufactures food products and animal foodstuffs. It is one of the few public enterprises with a good history of profitability (reportedly making annual pre-tax profits of around $500,000) and would seem to have an assured future. According to reports, bids for the majority control were submit- ted by Unga and Premier Group (both Kenyan), Greenland Investments and Caleb’s International (both Ugandan) and Anglo-Universal. This two-stage approach to privatisation is expected to become the model for the sale of other big parastatals, such as the Uganda Commercial Bank (UCB) and Uganda Posts and Telecommunications. The system goes some way to meeting criticism that the public have not been given enough opportunities to share in the privatisation process. Legislation creating the stock exchange has been passed, and Leo Kiberango, former governor of the BoU and currently chairman of Sembule Bank, has been appointed chairman of the newly established Stock Exchange Commission.

The UCB non-performing The Non-Performing Assets Recovery Trust (NPART), launched in 1994 as a assets recovery fund is vehicle to rehabilitate the state-owned UCB and prepare it for privatisation, facing trouble complained in October to the IMF and the World Bank that its work is being hampered at official levels. Trust administrators urged the multilateral institutions to use their leverage and pressure the government into renewing its commitment to debt recovery. Of the NUSh67bn owed to the UCB, the trust has recovered only NUSh10bn. Many of the UCB debtors were senior managers of the bank itself, MPs and high-level civil servants who are seeking political backing in their payments difficulties. In fact, during the presidential campaign earlier this year, the government ordered the trust to reduce its efforts in order to escape political setbacks. In order to avoid further obstruction and to attempt to complete its tasks within the set three-year time frame, the trust is seeking a change in legislation which allows it to auction debtors’ property more quickly.

Asian confidence is Uganda’s Asian community has expressed its considerable relief at the election boosted by Mr Museveni’s of Mr Museveni and feels that it can look to the future with more confidence. election success The number of Asian returnees has grown steadily during the past few years, and the community now encompasses about 8,000. Asians have also been

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 Uganda 15

responsible for a reported $625m of inward investment during the last five years and have been especially active in the privatisation process. Mr Museveni has been a stout supporter of the community, recognising their commercial importance to the national economy. There is still a fair amount of resentment against Asians among the population at large, and especially among those who benefited from the confiscation of Asian property (who have had to give it back). The job of the Departed Asians’ Property Custodian Board, originally set up by the former president, Milton Obote, is being wound up. Part of its work was to sell off some 923 properties which were unclaimed and were valued at $12m. The terms of sale called for a 10% deposit from the purchasers with the remainder to be paid within 60 days, but with the August 31, 1996, deadline for completion approaching only 182 had been fully paid up.

Agriculture

Food strategy will cash in The government has formulated a national food strategy aimed at ensuring food on natural advantage security and expanding production for export, especially in the wider East Africa region. Food production is one of the few economic sectors in which Uganda has a comparative advantage over its neighbours, thanks to its good soils and mostly reliable climate. Furthermore, much cultivable land remains unused and the potential for expansion of production is good. The chronic food deficits of the eastern and southern African regions provide a huge potential for Ugandan exports, especially for maize and beans. Kenya, for example, needs to import about 1m tons of grains per year on average; the countries of the Southern Africa Development Community (SADC) had a total cereals deficit of 2.5m tons in 1994, and the total food deficit of the Inter-Governmental Authority on Devel- opment (IGAD) group was about 3.5m tons in January 1994.

Food prices surge in A combination of economic and climatic circumstances, exacerbated by Kampala markets traders’ strike action, produced a surge in food prices in October, with the cost of beans and maize both sharply up in the main Kampala markets. One explanation given was the demoralisation of farmers who, threatened with the loss of their lands to the Non-Performing Assets Recovery Trust (NPART) for failing to repay loans, decided not to plant crops. In the Mbale region low harvests were caused by unseasonable weather, and maize prices rose from NUSh80/kg (7 US cents) to NUSh300/kg in October.

Coffee prices are expected There is still no prospect of any improvement in world coffee prices as the to fall market continues to move into surplus. Average prices in 1996 are expected to be 25% below their 1995 level (robusta prices are projected to drop by as much as 32%) and are predicted to fall by a further 10% in 1997. Global coffee consumption is rising slowly, encouraged by lower prices, but roasters are less anxious about stock levels nowadays and purchases are likely to be restrained. Exportable world coffee production during the 1995/96 crop year (October- September) is estimated by the EIU at 65.8m 60-kg bags, representing a 3.9% fall compared with 1994/95, and is expected to rise by about 16% in 1996/97 to 76.1m bags. The voluntary export quota scheme of the Association of Coffee Producing Countries (ACPC) will continue to have a negligible effect on supply if its performance in 1995/96 is any guide. Its aim was to limit global exports of

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 16 Uganda

green and soluble coffee to about 65m bags, but preliminary figures from the International Coffee organisation (ICO) suggest that shipments actually reached about 70m bags.

Coffee production reaches In Uganda physical exports did well during the 1995/96 coffee year, reaching record levels, but revenue 4.1m bags, the highest level for more than 20 years. However, lower world falls prices will reduce export values to well below those of the previous year. The value of exports during 1995/96 has been put at $388.9m, down from the $432.6m attained in 1994/95. Production is reaching record levels, partly as a result of the introduction of the new clonal variety (which produces more than twice the yield and already covers one-quarter of plantings), and partly because of smuggled coffee from Burundi, but also because the liberalisation of marketing operations has produced higher prices which have encouraged better hus- bandry. Farmers now receive about 60% of the world price, compared with a maximum of 20% only a few years ago. The high prices of the 1994/95 coffee boom also provided a timely boost, encouraging farmers and halting the trend away from coffee into food crops.

The Coffee Marketing The government will shortly announce the name of the new core investor in the Board will move to privatisation of the Coffee Marketing Board (CMB), the former state monopoly. foreign ownership According to a detailed assessment of the situation by the London-based news- letter Africa Analysis, the new core shareholder will get 51% of the equity, with the remainder held back for offer through the new Kampala Stock Exchange, Uganda: ICO coffee prices when it opens. The government may, however, decide to keep some of the ICO indicators cents/lb 250 shares following public demands that the state should retain an interest in such Arabica a key economic sector. The assets of the board were assessed for privatisation at Robusta $36.7m. They include the central processing and storage unit at Bugolobi in 200 Kampala’s industrial area (which has the capacity to handle 4m bags per year), together with numerous other purchasing and primary processing plants up and

150 down the country. The reason for local caution is the significant drop in CMB’s market share since liberalisation in 1991. There are now some 167 licensed private traders. When the board held its monopoly, the financing of coffee 100 purchases was a perennial problem and farmers were invariably paid late and sometimes not at all. Under the privatised system more than 80% of crop finance is foreign based and farmers are getting their money promptly. The new 1994...95...96...97...98... owners will have to work hard if CMB is to win back any of its lost trade in what Sources: ICO; EIU. is a very competitive business, at a time when market prospects are not good.

The deadline for the tender for the processing facility and storage unit at Bugolobi was September 26. Investor interest was limited to only one bid, from the Swiss company Sucafina. Disappointed by this outturn, the director of the privatisation unit, Michael Opagi, said that the Divestiture and Reform Implementation Committee would make a final decision on the offer. The facility, which produced a loss of $7m in 1994/95, is valued at $8.5m.

Energy and construction

A serious power deficit It looks as if Uganda is stuck with a serious power deficit for the foreseeable emerges— future. The Uganda Electricity Board (UEB) is to begin thermal power generation

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 Uganda 17

in an attempt to end the blackouts which have disrupted industry and incon- venienced the public for years. Big industrial users are to be offered 50% dis- counts in return for not using electricity during the peak period of 6.30-10.30 pm. The UEB says that it is producing 162 mw today, compared with 60 mw in 1986, but this is not nearly enough, with demand at about 228 mw and growing at an estimated 2% per month. The decision to buy thermal generators was prompted by the delays in the completion of the Owen Falls Dam extension caused by the financial problems of SIETCO, a Chinese company which won the contract in 1993. After a period of uncertainty, SIETCO’s contract was cancelled following pressure from donor countries funding the project. Whoever picks up the pieces, it is most unlikely that the scheme, which will raise the generating capacity at Owen Falls from 160 mw to 180 mw, will be completed before 1998. Uganda’s total hydroelectric potential is put at a massive 2,700 mw and a new plant with a capacity of 200-300 mw is to be built on the Nile just north of Owen Falls. However, work on this project will not begin until 1997.

—and prompts higher The current power crisis has put a spotlight on Uganda’s export of electricity to charges for exports to Kenya which absorbs about 25% of all the power generated. Under the terms of Kenya an agreement dating back to 1954, Uganda is obliged to provide power at the equivalent of only 7 US cents/unit, well below the market price. Uganda wants to charge at the rate of 7 US cents/unit which, it says, is still 15% less than the price paid by domestic consumers in Uganda. This would improve UEB’s revenue, but it would not solve the basic shortage. UEB is also to begin an operation to collect the $50m owed to it by bill defaulters and is to move to a “pay first” system of charging its customers.

Construction is a driving According to local press reports, the construction industry is growing by almost force 45% per year, supporting the perception of healthy economic activity. As a result, Ugandan cement firms have been making moves to expand production in an attempt to substitute the imported material from Kenya and Tanzania with locally produced cement. Hima Cement in western Uganda has started working on a second line of production, aiming to increase output from the current 500 tons per day to 1,500 tons. Ongoing upgrading and renovation at Tororo Cement Factory have led to monthly production increases from 2,094 tons in June to 10,425 tons in September. The factory, which used to be a subsidiary of the Uganda Development Corporation and Hima Cement, was privatised in 1995, one year after the sale of Hima. An expanded capacity at both factories is expected to lead to noticeable price reductions for cement.

East African Cooperation

The momentum gains pace Progress with the East African Cooperation (EAC) has continued to gain momentum as the three member countries have pressed ahead with establishing institutions and working procedures. In August a meeting of the permanent commission was able to record a number of important achievements, including the convertibility of the three currencies and the modalities for synchronising standards of industrial goods. The commission also agreed the procedures for setting up a regional digital telecommunications system and decided to

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 18 Uganda

promote a regional road network. A budget of $2m was agreed for the EAC secretariat, for the 16 months from March 1996 to June 1997. In September the three attorney-generals met in Kampala and agreed to harmonise and update traffic laws within the three countries. The three revenue authorities are to set up a technical committee to advise on matters of tax revenue. A spokesman for the Uganda Revenue Authority (URA), Jack Bigirwa, said that specific areas of study would be the standardisation of taxation thresholds, taxation treaties, the harmonisation of customs/transit declarations, customs bills of entry and the customs common bond guarantee system. One problem which will have to be addressed is the disparity between value-added tax (VAT) rates, currently 17% in Uganda, but only 8-10% in Kenya.

Integration promises A conference on the EAC in London on November 6, organised by the Financial advantages, but not for all Times and sponsored by Standard Chartered Bank, the only international bank with operations in all three EAC countries, was a sign that regional cooperation is taken seriously. However, alongside the enthusiasm for cooperation there is awareness of the difficulties which lie ahead for some groups. The trade imbalances which led to compensation measures for Uganda and Tanzania in the former East African Community are still present today, but the executive secretary of the EAC secretariat, Francis Muthaura, insisted in a recent inter- view that a free market would operate and that imbalances would disappear in the long term.

Uganda’s manufacturers are probably right to be apprehensive about losing out to their more powerful Kenyan neighbours, but Uganda’s manufacturing sector represents just over 7% of the GDP, and there are significant potential gains in agricultural exports, agro-processing (especially of food crops and cotton), power supply and tourism. The merging of the three economies is also bound to improve the climate for inward investment, not only because of scale economies, but also because each member country will gain from the easing of ideological tensions as they all pursue similar paths of structural adjustment. This advantage is already apparent in the recent involvement of the Dutch Airline KLM in Kenya Airways and the rash of interest shown by South African companies throughout the region.

Foreign trade and payments

Uganda is praised by A press release from the IMF in September painted a supportive picture of the the IMF Ugandan economy and explained how the country had become potentially eligible for exceptional assistance under the international community’s Debt Initiative for Heavily Indebted Poor Countries (HIPCs). The IMF drew attention to the success of the economic reforms since the late 1980s, which had laid a critical foundation for the future. The Ugandan authorities were praised for their commitment and consistency of policy implementation. As a result of these policies, and with the assistance of the donor community (the Paris Club of bilateral creditors wrote off a proportion of Uganda’s debt stock in early 1995), the debt service fell to 22% of exports in fiscal 1995/96 and is expected to fall below 20% in the next few years. Inflows of foreign assistance in 1995/96 amounted to $622m, more than four times the total debt service due.

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 Uganda 19

Uganda: debt, aid and budget spending ($ m, unless otherwise indicated) 1995/96 1996/97 Total debt service due 154 163 of which: multilateral 82 92 Foreign assistance 622 720 Project-related grants and loans 423 444 Import support 198 276 of which: grants 89 121 loans (IDA)a 50 85 ESAF b 60 70 Budget expenditure 973 1,061 Current expenditure and locally financed development expenditure 616 688 of which: education and health (budgeted) 175 – defence 116 – Foreign-financed development expenditure 357 373

a International Development Association, the World Bank’s soft-loan arm. b Enhanced Structural Adjustment Facility.

Source: IMF.

Despite slippages on the budget this year, creditors are likely to remain bullish about Uganda, an attitude that will probably be reflected in a meeting of the Consultative Group of donors in mid-November. The crisis in Zaire and the escalating fighting in the north will probably be accepted as justification for bloated government spending. A working group is currently putting together a paper assessing Uganda’s eligibility for debt relief under the HIPC which could grant up to 80% relief on eligible debt. If passed, as is likely, the exact amount of debt to be forgiven will be determined; in the light of Uganda’s current robust economic performance, the actual amount forgiven is unlikely to be massive.

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 20 Rwanda

Rwanda

Political structure

Official name République Rwandaise

Form of state Unitary republic

Legal system Based on Belgian law, the June 1991 constitution and the Arusha accords of August 1993

National legislature Assemblée nationale, with 70 members, appointed by the government in consultation with party leaders

National elections December 1988 (presidential and legislative); next elections: no date has yet been set

Head of state President, Pasteur Bizimungu, appointed by the RPF on July 17, 1994

National government Self-appointed in July 1994, and consisting of ministers from the RPF, MDR, PSD, PL and PCD; last reshuffle August 1995

Main political parties Rwandan Patriotic Front (RPF); Mouvement démocratique républicain (MDR); Rassemblement pour le retour des réfugiés et la démocratie au Rwanda (RDR); Coalition pour la défense de la république (CDR); Parti chrétien démocrate (PCD); Parti libéral (PL); Parti social démocrate (PSD)

President Pasteur Bizimungu (RPF) Prime minister Pierre-Célestin Rwigyema (MDR) Vice-president & minister of defence Paul Kagame (RPF) Vice-prime minister & minister of interior & community development Alexis Kanyarengwe (RPF)

Key ministers Agriculture, livestock & forestry Augustine Iyamuremye (PSD) Civil service Abdulkarim Habimana (RPF) Commerce, industry & crafts Prosper Higiro (PL) Environment & tourism Jean Nepomuscene Nayinzira (PCD) Family & women’s affairs Aloyise Inyumba (RPF) Finance Marc Rugenera (PSD) Foreign affairs Anastase Gasana (MDR) Health Joseph Karamera (RPF) Higher education, research & culture Joseph Nsengimana (PL) Information Jean-Pierre Bizimana (MDR) Justice Faustin Nteziryayo Labour & social affairs Pie Mugabo (PL) Planning Jean-Berchmans Birara (independent) Primary & secondary education Laurien Ngirabanzi (MDR) Public works & energy Charles Ntakirutinka (PSD) Rehabilitation Patrick Mazimpaka (RPF) Transport & communications Charles Muligande (RPF) Youth & sports Jacques Bihozagara (RPF)

Central bank governor François Mutemberezi

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 Rwanda 21

Economic structure

Latest available figures

Economic indicators 1991 1992 1993 1994 1995 GDP at market prices Rwfr bn 214.0 218.6 208.9 165.1 323.7 Real GDP growth % –5.9 –3.2a –10.0a –50.0b 25.0a Consumer price inflation % 19.6 9.5 12.4 n/a 22.0a Population m 7.17 7.36 7.55 6.80c n/a Exports fob $ m 95.6 68.5 67.5a n/a n/a Imports fob $ m 228.1 240.4 294.5a n/a n/a Current account $ m –34.1 –84.6 –111.5a n/a n/a Reserves excl gold $ m 110.1 78.7 39.0 32.0 125.8 Total external debt $ m 833 874 913 954 n/a External debt-service ratio % 17.3 20.1 18.7 12.5 n/a Green coffee productiond ’000 tons 34.2 38.8 29.2 1.8b 20.0b Exchange rate (av) Rwfr:$ 125.1 133.4 168.2 n/a n/a

November 8, 1996 Rwfr323.85:$1

Origins of gross domestic product 1993a % of total Components of gross domestic product 1993a % of total Agriculture 40.5 Private consumption 82.5 Industry 21.5 Public consumption 22.6 Services 38.0 Gross fixed capital formation 16.0 GDP at factor cost 100.0 Exports of goods & services 9.5 Imports of goods & services –30.7 GDP at market prices 100.0

Principal exports 1992 $ m Principal imports 1992 $ m Coffee 35 Capital goods 50 Tea 21 Fuel & energy 37 Cassiterite (tin ore) 3 Other intermediate goods 120

Main destinations of exports 1995e % of total Main origins of imports 1995e % of total Brazil 45.5 Belgium-Luxembourg 15.4 Belgium-Luxembourg 14.3 USA 12.9 Germany 7.8 Tanzania 12.3 Netherlands 7.8 Kenya 11.7 UK 1.9 France 4.6 a World Bank estimate. b Official estimate. c Includes refugee population. d Crop years (April-March) starting in calendar years. e Based on partners’ trade returns; subject to a wide margin of error.

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 22 Rwanda

Outlook for 1997-98

An intervention force will The coalition of Zairean militias, the Alliance of Democratic Forces for the find it hard to stick to Liberation of Congo-Zaire (ADFL), have taken the three major eastern Zairean humanitarian operations towns of Uvira, Bukavu and Goma, and the Zairean army is ill-placed to reverse these gains. However, as the humanitarian crisis mounts, there is growing international demand for action.

Canada has agreed to lead an international force, and the USA, the UK, France and a number of other countries have agreed in principle to contribute a total of up to 15,000 troops. The aim seems to be to secure Goma airport and create a humanitarian corridor between Zaire and Rwanda. However, it is not clear how far they are willing to go. Given the complexities of the situation, much is at stake and the negotiations over the modalities of the intervention may drag on for some time. Although Rwanda has agreed to a “neutral” international force (ie with a subordinate role for the French), the ADFL still has to do so. Without their backing, the forces cannot peacefully move into the region. Additionally, most refugees have retreated further into Zaire, and it will be difficult to feed them from a small base near Goma. To some extent, they are still being controlled by the Rwandan Hutu militias and violently prevented from going back to Rwanda.

If repatriation is an aim of the international community, the intervention forces would have to take on the Hutu militias and disarm them before they could persuade the refugees to return to Rwanda. However, commitment to such military involvement is unlikely to be forthcoming, and the more probable scenario is the establishment again of large refugee camps. It is this scenario that the ADFL will find hard to accept, as it undermines the coalition’s position, undoing its work of dismantling the breeding grounds for Hutu ex- tremism. Direct ADFL attacks on the refugees may prove more effective in driving them back home; but the international community will probably try to stop this happening.

Rwanda has less to fear With a buffer zone established along its borders with Zaire by the ADFL, the from Hutu militias Rwandan government has less to fear from the Hutu militias. But the militias are making every effort to regroup; some are trying to get to Tanzania and continue operating from there. If raids continue to occur in the border region, some militia forces will have established bases in Rwanda; there is also a danger of incursions from northern Burundi, controlled by Burundian Hutu rebels, and possibly from south-western Uganda. There is a remote possibility that Rwanda will declare war on Zaire. The most likely official explanation would be the continued harassment of baTutsi living in the Zairean capital Kinshasa, but the most probable reason would be military setbacks for the ADFL. The only Zairean force capable of inflicting this are the presidential units. However, their deployment depends on how willing or capable the ailing Zairean president, Mobutu Sese Seko, is to defend his empire. Mr Mobutu, whose true state of health is still unknown, has consented to an international humanitarian intervention, which means that he is unlikely to allow his troops to get embroiled in fighting. He will probably court the international community, and let their forces do the fighting if the ADFL becomes non-compliant.

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South Africa will be a The Rwandan Patriotic Front (RPF) is consolidating its network of African useful friend alliances. Uganda is the mainstay, but an ADFL-controlled eastern Zaire will prove useful, too. Now, the Kigali government has unexpectedly acquired South Africa as a friend. Nelson Mandela’s initial defence in early November of his government’s decision to sell military equipment to Rwanda, although subsequently revoked, revealed considerable sympathy for the Rwandan administration, which will stand it in good stead. South Africa has a good name abroad, and plenty of commodities that Rwanda wants.

Rwanda genocide trials The EIU has been predicting for some time that Rwandan genocide trials might start soon should start soon, and this quarter it is no different. They should indeed start soon, but there is no clear indication that they will do so. The delay is losing the Rwandan legal system credibility, but not as much as the international tribunal in Arusha (Tanzania) has lost through its efforts so far. Truthful plead- ing by the tribunal that it has been crippled by inadequate support from above will not restore its credibility. Stirring testimony from witnesses, that remind the world of the evil of events in 1994, is what is needed initially for its standing to improve. Prosecutors are hard at work with potential witnesses in Rwanda, but will struggle to convince many that it is worth the risk of coming to Arusha and testifying.

Some Burundian coffee Rwanda will not benefit vastly from the tea and coffee that is currently being will find its way to smuggled out of Burundi. Although the prices its parastatals have set for pro- Rwanda ducers are better than those paid in Burundi, those offered in Uganda, Tanzania, and Kenya are higher still. Nonetheless, coffee production for the 1996/97 crop year may be officially recorded as above the 21,000 tons predicted last quarter. The World Food Programme (WFP)’s projections of a 181,000-ton cereal and pulse harvest in January remain plausible.

New commercial tax rules Rwanda’s change in its commercial taxation system, from one based on profit will increase evasion and to one based on turnover, will alienate many who are otherwise natural sup- resentment porters of the government. Expatriate traders are inclined to go with the flow and simply improve their tax-evasion techniques, but baTutsi, particularly those who were previously refugees in Burundi, are feeling aggrieved. Already resentful that so many civil service jobs have gone to baTutsi who were previously refugees in Uganda, they do not appreciate transferring more of their money to the government so that it can pay them.

Late note Attacks on remaining camps by the Zairean rebels prompted Hutu militiamen to flee further into Zaire and at least 500,000 refugees to return home. Plans for international intervention were questioned, as the USA scaled down its commitment and the Rwandan government said that the foreign troops were no longer needed in Zaire. However,as many as 700,000 refugees are reported to remain dispersed in Zaire. Many are said to be heading towards the Rwandan border, too. The Rwandan government faces a tremendous challenge in reinte- grating peacefully the returning refugees, many of whom are finding that their homes are occupied.

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 24 Rwanda

Review

The political scene

The RPA is helping The Rwandan Patriotic Army (RPA) has been assisting a coalition of Zairean Zairean militias— militias, the Alliance of Democratic Forces for the Liberation of Congo-Zaire (ADFL), in their fight against the Zairean army and Hutu militias in eastern Zaire. In light of the fact that the Zairean president, Mobutu Sese Seko, is out of the country, convalescing from a prostate cancer operation, and given the uncertainty over his recovery and the inability of the prime minister, Kengo wa Dondo, to fill his position and present clear leadership, the ADFL has judged that now is an opportune moment to chase the Zairean army from the eastern part of the country.

—just as it was supported The RPA’s assistance has parallels with the Uganda National Resistance Army by Uganda’s NRA (NRA)’s support to the Rwandan Patriotic Front (RPF) in 1990 (the soldiers of the RPF constitute the vast majority of the RPA). At that time many NRA soldiers were Rwandan refugees. They formed the RPF clandestinely while still members of the NRA, and when they invaded Rwanda in 1990, they took NRA weapons with them. The Ugandan government denied any knowledge of the RPF and its invasion plans, and subsequently repeatedly rejected claims that there were any RPF bases on its soil. The RPF to this day maintains the same.

At least several hundred Banyamulenge, Zaireans of Rwandan Tutsi origin, who have lived in Zaire’s Mulenge mountains for 200 years, have gone to Rwanda as refugees, many of them serving in the RPA. They have crossed over the border this year, with RPA weapons, in order to participate in the Banyamulenge’s resistance to attempts by local authorities, the Zairean army and Rwandan Hutu refugees to murder some and drive the rest into Rwanda. It is possible that some non-Banyamulenge RPA soldiers have gone with them. According to men alleged to be RPA soldiers captured in Zaire in early November, RPA units crossed into Zaire from northern Burundi in August. They claimed that they were largely left to their own devices after leaving Rwanda. Their use of this route adds weight to allegations that the Tutsi-dominated Rwandan and Burundian armies have been cooperating recently, not least in the removal of Rwandan refugees from Burundi (3rd quarter 1996, page 24).

Further evidence of the Rwandan government’s support for the Banyamulenge militias was the ruling of the president, Pasteur Bizimungu, on October 10 that only Banyamulenge women and children would be allowed to enter Rwanda as refugees, implying that Banyamulenge men should stay and fight.

Zaire alleges neighbouring The Zairean government has been claiming since July that both the Rwandan aggression and Burundian governments have been sending soldiers into Zaire in order to capture territory. Both countries have vehemently denied this, although the Rwandan government has admitted that its troops crossed from Gisenyi in the north-west, to Goma (Zaire), in late October. This move followed several days of shelling across the border by both the Rwandan and Zairean armies. The Rwandan government claims that the troops have now left, but the Zairean

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government and many journalists in Goma disagree. Embarrassingly for the Rwandan government, its ambassador to Zaire, Antoine Nyilinkindi, resigned on November 2, stating that he opposed his government’s position regarding Zaire, and adding that Zaire was a victim of Rwanda’s aggression.

This time French troops A big difference between what is happening now and what happened in 1990 are absent— is that the Rwandan state in 1990 had the support of French troops while the Zairean state today does not—at least not so far. French soldiers halted the RPF advance twice, in 1990 and 1992. They left in November 1993, and the RPF took Rwanda in July 1994. With the eruption of the current crisis, France has been calling for a military intervention in eastern Zaire. Its government has said that it wishes to concentrate on UN coordinated humanitarian action, but it has denounced Rwanda’s backing for the Zairean militias.

—and it shows The Rwandan army at the time was in bad shape, but the Zairean troops are worse. Apart from better trained and usually paid presidential troops, Zaire’s forces are skilled only in the harassment of the unarmed, and in looting. Both talents have been abundantly in evidence in eastern Zaire this year, but fighting proficiency has not. As a result, the Zairean army was fairly easily removed from Uvira, Bukavu and Goma by November 4.

The government has good The Rwandan government has plenty of reasons to welcome these develop- reason to support the ments. The area captured by the ADFL has been home for two years to more ADF— than 1 million Rwandan (mostly Hutu) refugees, some of whom have formed militias that have made violent incursions into Rwanda ever since, targeting genocide survivors in particular. The incursions have proved popular with thousands of western Rwandans, and the RPA has responded increasingly viciously, embittering itself and its victims in the process (3rd quarter 1996, page 24). The UN Human Rights Field Operation in Rwanda (HRFOR) reported the killing of at least another 111 people by the RPA in Ruhengeri in western Rwanda between August 6 and 8, and the disappearance of 52 more that month.

Now, however, nearly every camp these refugees lived in has been broken up. Most of their inhabitants, and thousands of Zaireans, are wandering the region looking for somewhere else to go. As aid agencies have been evacuated from the area, most have no access to medical assistance, many have no food, and some are starving. This dislocation has dealt a heavy blow to the Rwandan militias in eastern Zaire. In addition, ADFL control of the Zairean side of the Rwanda-Zaire border creates a buffer zone for the Rwandan government, pro- tecting its territory from incursion. It is also likely to mean that there will be no new arrivals of Banyamulenge or Banyarwanda refugees from Zaire, and that the 15,000-20,000 who are in Rwanda may feel able to go home. Finally, in case Mr Mobutu’s condition worsens, the Rwandan government wants to be able to take advantage during the seemingly inevitable fallout. Being firm allies of the ADFL puts it in a good position to do so.

—but refugees in Zaire Elements within the Rwandan government may have been hoping that these still are not returning developments would finally force the bulk of the Rwandan refugees to admit defeat and return home. However, they have not done so. Ten thousand at the most have crossed the border since hostilities intensified in August, and the

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rest are still wandering or congregating in new camps west and north of Goma. Many are believed to be in the jungle, where they cannot be detected by air. Where possible the Hutu militias are still controlling the refugees, violently preventing them from going back home.

The international As with previous crises in the region, the international community has been community eventually unsure about how to handle the situation. Even though numerous special agrees to act envoys flitted from capital to capital, holding important talks and speaking to the press, and the UN Security Council imperiously told all the parties to stop fighting, neither of these had noticeable impact on events. Far more significant has been the withdrawal of foreign aid agencies and journalists, after repeated and escalating harassment. Also significant, at least in the ways in which it has shaped the options and actions of the combatants, has been the non-presence of a military force so far.

One diplomatic initiative was a regional conference of heads of state, held in Nairobi on November 5. Failure was in this case guaranteed by Burundi’s lack of an invitation, and Zaire’s boycott of the conference because of the alleged presence of Rwandan troops on its soil. Mr Bizimungu, however, did accept a declaration of support for Zaire’s territorial integrity, and an appeal for an end to armed incursions. Normally, this would be unremarkable, but in the current charged climate, the declaration almost seemed like a concession.

The French and Spanish governments have been arguing for a military force to ensure the distribution of humanitarian assistance through “safe corridors” that might enable refugees to go home. This idea appears to be taking shape under Canadian leadership. On November 13 the USA and the UK, in principle, com- mitted troops to such an effort. And a day later, other states, including a number of African ones, agreed to follow suit, bringing the number of troops pledged to a total of about 10,000. What has emerged so far is that the aim is to feed people through the establishment of a humanitarian corridor. The USA has declared its intention only to be involved in the logistics of getting food to the refugees, not in any fighting. It has limited its commitment to four months. Canada takes a similar stance, while France pushes for a more active policy, raising fears among the non-Hutu parties to the conflict that it is pursuing its own agenda. Questions remain, however, over how far the international force is willing to defend those corridors and separate the militias from the refugees. With a number of modalities still to be thrashed out, the intervention may take some time to take shape.

The South African Rwanda’s vice-president and minister of defence, Paul Kagame, visited South government warms to Africa in late September and appeared to have impressed the deputy president, the RPF Thabo Mbeki, and the defence minister, Joe Modise. Even though their pitch is often obscured by the ethnicised nature of Rwandan politics, and the international media’s portrayal of it as such, Mr Kagame and the RPF like to present themselves as modernisers, the vanguard of African opposition to outdated and thuggish military dictatorships. Mr Mbeki and the ruling African National Congress (ANC) see themselves in much the same way, sharing the RPF’s distaste for the likes of Mr Mobutu and the Nigerian president, Sani Abacha. At any rate, the South African government evidently accepted Mr Kagame’s

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contention that Rwanda needed the means to defend itself from outside aggression, because it quickly agreed to $17m in sales of military equipment. These were apparently for armoured personnel carriers and spare parts, and not weapons.

However, the exposure of the RPA’s incursions into Goma in early November prompted South Africa to announce that it was shelving the deal, although some of the personnel carriers had already been delivered. South Africa’s president, Nelson Mandela, has since said that he will allow himself to be guided by regional leaders on the issue. The Kenyan president, Daniel arap Moi, had already voiced his disapproval of the arms deal; and South Africa requested observer status at the Nairobi regional summit.

Burundi’s Rwandan There are only a few hundred Rwandan refugees left in Burundi. The expulsion refugees have gone home of 15,000 in late July brought their number down to around 70,000. These have either been expelled, or have fled the war between Burundian militias and the army. The HRFOR has attempted to monitor them since their arrival, and has not reported high arrest rates. It found, however, that 7% returned to find their houses occupied, and 10% their lands.

The domestic genocide Legislation with which to try genocide suspects was adopted by the Assemblée judiciary is in place— nationale (parliament) on August 9 (3rd quarter 1996, page 25). On September 28, 20 Supreme Court judges, 29 appeal court judges, and 200 public prosecutors and magistrates were sworn in to use it. Most have had around six months legal training. Defence lawyers are rare, and there is no sign that their numbers will increase. Trials have still not begun, although these judicial appointments removed the last official reasons for postponing them. The resig- nation/sacking of the justice minister, Marthe Mukamurenzi, on September 10 may have slowed the process down. Her crime was stated as being the embez- zlement of Rwafr27m ($82,000); but because she is apparently sorry for what she has done, and has returned most of the money, she has received a presidential pardon, and will not be prosecuted. She replaced Alphonse Nkubito in the government’s last major reshuffle of August 1995. Her position is now taken over by Faustin Nteziryayo, a university professor and former consultant to the IMF. He is supposed to lead the government’s campaign to explain the new genocide legislation to Rwandans.

—while international The trials of three people suspected of genocide by the Arusha (Tanzania)-based trials are mired in international tribunal for Rwanda began, only to be postponed again. The trial postponements— of Jean Paul Akayesu was the first, on September 26. He was bourgmestre of Taba commune in Gitarama at the time of the genocide and is accused of having been a driving force in Taba, checking for baTutsi everywhere and having hundreds slaughtered outside his offices. He is also alleged to have been particularly insistent that baHutu murder their Tutsi relatives. He denies the charges. His Belgian lawyer, John Scheers, protested at the trial that he had yet to see 800 pages of testimony by witnesses, and that he is owed expenses. The case was postponed for a month, although Mr Scheers believed that it would take him at least two months to track down defence witnesses. Mr Akayesu has since sacked Mr Scheers, but a replacement defence lawyer has not yet been found.

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Georges Rutaganda is accused of being a senior member of the interahamwe militia, and committing genocide in this capacity. He is being defended by another Belgian, Luc de Temmerman, who has been the lawyer for the family of the former president, Juvénal Habyarimana, for many years. Mr de Temmerman has variously denied the genocide or asserted that it was directed by the RPF against baHutu. His appeal for the release of his client, who is dying of AIDS, on humanitarian grounds, was rejected. The trial was, however, postponed until March, by which time Mr Rutaganda may have died. The South African trial judge, Navanethem Pillay, accepted a prosecution motion for the protection of the identity of witnesses. This issue of witness identification could cripple the trials, because of the danger witnesses place themselves in by participating in the Arusha trials (3rd quarter 1996, page 25).

—and the tribunal comes Both defence lawyers have been intensely critical of the tribunal, as has André under attack Ferran, the French lawyer for the third defendant, the former Kibuye préfet, Clément Kayishema. People working for the tribunal have added their voices, too. The chief prosecutor, Judge Richard Goldstone, used his final press conference before bowing out at the end of September to criticise funding problems and the bureaucratic nightmare of having responsibility for proceedings divided between the Hague, Arusha and Kigali (where the prosecution office is based). He insisted, however, that the trials represented a major step forward in international law.

Evidence has subsequently come to light of serious disagreements between senior staff members, which is further paralysing proceedings. One result of the general mess is that the Rwandan government and media have lost interest in the trials. No Rwandan journalists turned up for Mr Akayesu’s trial, and Mr Kagame has said that the lack of funding for the tribunal, compared with the money available for the trials for alleged genocide perpetrators from the former Yugoslavia, was evidence of racism. All this makes it even more unlikely that many Rwandan people will end up believing that justice has been done.

More Rwandan exiles are The Kenyan authorities arrested a genocide suspect living in Nairobi in late assassinated— September which provided some comfort to the tribunal’s understandably dispirited staff. The suspect was indicted in December 1995. Although Kenya re- scinded its official refusal to cooperate with the tribunal several months ago, this is the first time that its authorities have shown that they meant it. The arrest has not contributed to the sense of security of those who remain, nor have high- profile assassinations of two Rwandan exiles in Nairobi on October 8. One of them was Colonel Théoneste Lizinde. He was a colonel in the former Rwandan army, and his defection to the RPA in 1994 was considered a major coup at the time; however, he defected from Rwanda in December 1995.

The Forces de résistance pour la démocratie (FRD, the opposition party formed by the former prime minister, Faustin Twagiramungu, and partly based in Nairobi) lost no time in blaming the Rwandan government for the assassinations. If the FRD is right, it means that the closure of the Rwandan embassy in Kenya in June will not have achieved its objective, and that government secret agents can operate without it. It is possible, however, that Colonel Lizinde, who had large numbers of enemies from the old regime as well as from the new one for defecting, was killed by someone else.

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—and an ambassador On October 1 Rwanda’s ambassador to France, Christophe Mfizi, resigned and defects is reportedly seeking asylum. He claims to have been harassed by the Rwandan government for months. Rwanda’s ambassador to Switzerland was recalled shortly beforehand.

The USA reconsiders Rwanda has long been cursed by its lack of strategic significance to anyone, but Rwanda’s strategic this could change. The US government has neither denied nor confirmed importance reports that it is considering using Kigali as a strategic airbase for its operations in East Africa and the Indian Ocean. Rwandan enthusiasm for this development may seem odd to those around the world desperate to shake off the US military, but Rwanda’s strategic irrelevance helped the international community to ignore its plight in 1994, and only the telegenic mortality rate generated by the genocide that year forced it to change its mind.

The economy

More farmers take The rains began roughly on time this year, in mid-October, and have been advantage of the rains plentiful so far. While this has only compounded the nightmare facing those on this year the move, it has been good news for Rwandan farmers. The World Food Programme (WFP) has still targeted around 75,000 farming households it considers vulnerable, mainly in Butare, Gikongoro, and Kibuye. It has provided them with food aid, and bean seed specially adapted to Rwanda’s high altitudes.

The rains have also been good news for the cultivators of extensive cannabis plantations in the Nyungwe forest, near the Burundi border. These plantations became famous during the presidency of Juvénal Habyarimana. Proceeds from sales were used to generate slush funds, which were then utilised for arms purchases and for payments to militias like the interahamwe. The opposition Forces de résistance pour la démocratie (FRD) rightly claimed in September that the government, dominated by the Rwandan Patriotic Front (RPF), has pre- served the plantations. It also alleged that the government is using the sales to help finance a slush fund, although this one is for the elimination of opponents abroad.

Kigali retailers go on Retailers went on strike in Kigali at the end of July to protest against the imposi- strike tion of a new tax. It replaces the previous conventional tax on company profits with a 3% levy on monthly turnover. Businesspeople already face high import tariffs, export duties, licence and communal taxes, and many complained that the new tax would ruin them. Their strike was poorly received by the government, which demanded that they reopen their businesses or face dire, but unspecified, consequences. The Ministry of Finance justified the new measures by saying that the government needed the money to pay salaries, and that the change had come out of discussions with the IMF about reforming the tax base. It had emerged that many businesses were finding it easy to declare either no profit, or actual losses, and thus evade taxation. However, the ministry did promise to set up a commission with representatives from retailers to look into the changes in more detail. Most shops reopened after three days of closure.

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Belgians come parastatal A Brussels-based lawyer has organised a visit to Rwanda by Belgian business- shopping men interested in buying some of the parastatals that the government is planning to privatise. The minister of planning, Jean-Berchmans Birara, has also been involved in preparations for the visit, which is due to take place in mid-November.

Aid news • The Belgian minister of cooperation visited Rwanda on September 9-12, and pledged Bfr1bn ($30m) in aid for social sectors over the next three years.

• China is to continue building a 74-km road linking Gitarama in central Rwanda with Kibuye in the west. Construction began in 1993, but was aban- doned in 1994. Expressing his gratitude, Rwanda’s president, Pasteur Bizimungu, went out of his way to point out that Rwanda considers Taiwan to be part of the People’s Republic of China.

• Strengthening its government’s attempts to distance itself strategically from Central Africa and align itself with East Africa, Rwanda was included in a meeting in Kampala (Uganda) on October 14 between East African foreign ministers and EU representatives. They were discussing regional projects suit- able for funding by the European Development Fund (EDF)’s eighth five-year programme. Under the seventh EDF which ended in 1995 Ecu194m ($250m) were originally pledged to the region, but only Ecu60m actually disbursed.

Burundi

Political structure

Official name République du Burundi

Form of state Unitary republic

Legal system Based on Belgian law and the new constitution approved by referendum in March 1992

National legislature Assemblée nationale, with 81 members elected by universal suffrage on June 29, 1993. Suspended since July 25, 1996

National elections June 1993 (presidential and legislative); next election: date not yet set

Head of state President, Major Pierre Buyoya

National government Appointed by Mr Buyoya on August 2, 1996

Main political parties Front pour la démocratie au Burundi (Frodebu); Union pour le progrès national (Uprona, formerly the sole legal party); Parti du peuple (PP); Rassemblement pour la démocratie et le développement économique et social (Raddes); Rassemblement du peuple burundais (RPB); Parti pour le redressement national (Parena). All parties have been suspended in the aftermath of the coup on July 25, 1996

Prime minister Pascal Firmin Ndimira

Key ministers Agriculture Damas Ntiranyibagira Basic education Nicéphore Ndimurukundo Civil service Monique Ndakoze Commerce, industry & tourism Frédéric Nzabampema Communal development Pierre Bambasi Communications Pierre-Claver Ndayicariye Defence Major Firmin Sinzoyiheba Development planning & reconstruction Evarisite Minani Energy & mines Idi Buhanga Procede Finance Gérard Nibigira Foreign affairs & cooperation Luc Rukingama Health Juma Kariburyo Human rights & women’s affairs Christine Ruhaza Institutional reforms Eugène Nindorera Interior & public security Epitace Bayaganakandi Justice Gervais Rubashamuheto Labour Barnabé Muteragiranwa Public works Pascal Nkurunziza Resettlement of refugees Anne Bariyuntura Secondary & higher education Samuel Bigawa Territorial management & environment Bernard Barandereka Transport Leonce Nsinzinkayo Youth, sport & culture Bonaventure Gasutwa

Economic structure

Latest available figures

Economic indicators 1991 1992 1993 1994 1995 GDP at market prices Bufr bn 205.0 258.4 262.0 286.5 308.3 Real GDP growth % 5.0 2.3 –5.5 –18.0 –3.0 Consumer price inflationa % 9.0 4.5 9.7 14.9 19.2 Populationb m 5.62 5.78 5.96 6.13 6.31 Exports fobc $ m 90.7 79.3 75.0 125.4 n/a Imports fobc $ m 195.9 181.8 172.8 174.5 n/a Current account $ m –35.5 –57.3 –28.1 32.7 n/a Reserves excl gold $ m 141.4 174.2 163.0 204.7 209.5 Total external debt $ m 964 1,022 1,061 1,126 n/a External debt-service ratio % 31.0 35.9 36.0 25.2 n/a Green coffee productiond ’000 tons 41.9 46.1 28.6 50.9 31.7e Exchange rate (av) Bfr:$ 181.5 208.3 242.8 252.7 249.8

November 9, 1996 Bufr316.3:$1

Origins of gross domestic product 1993 % of total Components of gross domestic product 1995 % of total Agriculture 51.9 Private consumption 84.1 Industry 21.1 Public consumption 18.2 Services 27.0 Gross domestic investment 8.7 GDP at factor cost 100.0 Exports of goods & services 9.3 Imports of goods & services –20.3 GDP at market prices 100.0

Principal exports 1995 $ m Principal imports 1995 $ m Coffee 80.8 Mechanical goods 17.1 Tea 9.6 Malt 12.7 Manufactures 7.0 Electrical appliances 12.5

Main destinations of exports 1995f % of total Main origins of imports 1995 % of total Belgium-Luxembourg 25.2 Belgium-Luxembourg 15.4 Germany 21.5 France 10.1 USA 7.9 Germany 8.1 Rwanda 4.1 Japan 5.7 a Consumer price index for Bujumbura only; index changed in 1991. b Mid-year estimates. c Balance-of-payments basis. d Crop years (April-March) starting in calendar years. e April-January. f Based on partners’ trade returns; subject to a wide margin of error.

Outlook for 1997-98

Sanctions will be The Burundian president, Major Pierre Buyoya, will want to see what effect the maintained destruction of Burundian refugee camps in eastern Zaire has on the fighting capacity of Hutu militias, before he will seriously contemplate negotiating with Burundi: gross domestic product them. This will probably lead him to continue ignoring calls by his regional % change, year on year neighbours for negotiations at least until the end of the year. 5 The regional heads of state will maintain sanctions until then, as to reverse

0 policy now would be to make a mockery of their firm stand against the coup to date. Nonetheless, the UN Security Council’s permanent members will try to -5 make them change their minds, using both humanitarian arguments and the position that Mr Buyoya needs support in case he is replaced by someone worse. -10 Unless the former Tanzanian president, Julius Nyerere, is removed, or steps Burundi Africa down, from his position as mediator, the heads of state will not be publicly -15 convinced. But Mr Nyerere will need to be careful. Death threats have already been issued against him by Tutsi militias in Bujumbura, and if Mr Buyoya starts -20 1991 92 93 94 95 denouncing him, too, he will appear less attractive to the regional heads of state

Sources: EIU; IMF, World Economic Outlook. than he has so far.

If negotiations do start, If the improbable happens and sanctions are relaxed or Mr Buyoya decides to early collapses are likely negotiate anyway, talks will be a difficult business. The strongest militia, the Forces pour la défense de la démocratie (FDD), are in no mood to make life easy for him and will demand a much shorter time frame for his stepping down than the three years he has offered so far. Major concessions from Mr Buyoya would thus probably be his undoing and a return to hostilities, if they ever stop in the first place, would be likely.

No victory or defeat is in The next quarter is unlikely to see any decisive developments in the war, sight in the civil war although the FDD will have to develop its bases in Tanzania to make up for those lost in Zaire. Nonetheless, the army seems incapable of dislodging it from its strongholds in northern Burundi, and it will continue to operate from there.

Mr Nyangoma’s faction Léonard Nyangoma, a Hutu hardliner, heads the FDD, and his faction is the will strengthen its hold strongest of the Front pour la démocratie au Burundi (Frodebu) at the moment. on Frodebu Jean Minani, who maintains that he remains the party’s president, is able to offer little to Frodebu supporters. He is so unpopular with Bujumbura’s baTutsi that Mr Buyoya will not help him with concessions over Frodebu’s role in the new regime. With Mr Nyangoma gaining the upper hand in the power struggle within Frodebu, the Tutsi nightmare of a Hutu opposition entirely controlled by blatant ethnic-supremacists will finally come into being, largely because of their attempts to prevent this.

Aid agencies will exploit Exemptions for humanitarian aid created in late September by the regional exemptions to feed the sanctions coordinating committee will have shown tangible benefits to most displaced Burundians by the end of the year. Aid agencies are becoming better organised, and have become increasingly skilled at using the opportunities afforded them by the belligerents to deliver food aid. Medical assistance will take longer, and serious epidemics could break out in the northern provinces.

Redundancies and no pay Continued redundancies will reduce Burundi’s industrial and agro-industrial will shrink the state capacity to a tiny fraction of its pre-war capabilities by the end of the year, further unless sanctions are lifted. Consequently, civil servants are prepared to work for little pay but this is unlikely to last. Government will diminish further after that point as they spend more time trying to earn a living elsewhere. Military capacity will be the last state function to go.

Review

The political scene

The turmoil in Zaire is Burundi’s new regime, although still politically isolated in the region, is bene- benefiting the Burundian fiting from the turmoil across its borders in eastern Zaire. Attacks by regime— Banyamulenge (Zaireans of Rwandan Tutsi origin, who live in Zaire’s Mulenge mountains) and other Zairean militia forces around Uvira, Zaire (see Rwanda) have displaced all the Burundian refugees living there, and damaged the capacity of the Hutu-dominated Forces pour la défense de la démocratie (FDD) to wage war against the Burundian army from Zaire.

The economic embargo against Burundi, imposed in August by its regional neighbours (3rd quarter 1996, page 36) was never particularly well enforced in Zaire. Opportunities for easy money generally assumed more importance in the minds of Zairean customs officials and soldiers than the decisions of regional heads of state, but now there is not even a pretence of enforcing the embargo. This has not made much difference, as Burundi usually exports consumer goods into Zaire, in return for gold, ivory, weapons and sometimes food.

—by distracting the Another advantage of the latest Zairean disaster is that it has distracted the UN world— Security Council and, to a lesser extent, the regional heads of state, from their aim of trying to force negotiations between the new Burundian regime and the political masters of the FDD, the Conseil national pour la défense de la démocra- tie (CNDD), headed by the former interior minister, Léonard Nyangoma.

—except for the regional The governments of the region, spurred on by the regional mediator and heads of state former Tanzanian president, Julius Nyerere, have persisted with sanctions against Burundi, although they have become progressively less enforced as the weeks have gone by (see The economy).

The new Burundian head of state, Major Pierrre Buyoya, visited Mr Nyerere in Tanzania on August 28. By all accounts, it was an interesting meeting. Mr Buyoya explained to Mr Nyerere that the coup which brought him to power was the best Burundi could do to stop further implosion of the state and civil war. Mr Nyerere explained to him that African history was against him. Coups were no longer acceptable, and, furthermore, they did not work. In fact, in Burundi’s case, the coup exacerbated the problem, by making those Hutu politicians who do advocate genocide more convincing to their constituency. More prosaically, Mr Nyerere also blocked Mr Buyoya’s apparent attempt to negotiate directly with the Rwandan and Ugandan presidents, whom he judges

to be more amenable alone than when making common cause with the rest of the regional heads of state.

Despite concessions on On September 6 the regional sanctions coordinating committee (RSCC) met for sanctions— the first time in Arusha, Tanzania. In response to the concerns of Western governments and international aid organisations, the RSCC eased restrictions on the import of emergency relief and fuel, but refused to lift the bulk of the sanctions until three conditions were met. These were the restoration of the Assemblée nationale (parliament), the unbanning of political parties, and the immediate and unconditional negotiation with the militias with whom the Burundian army is at war.

—the regional players Although Mr Nyerere made it clear soon after that the third condition was the insist on unconditional most important and the real reason for the sanctions, Mr Buyoya chose to take negotiations action on the first two only. On September 12 political parties were unbanned and the imminent restoration of the Assemblée nationale was announced. The parties were only unbanned on the condition that they contribute “positively” to political life in Burundi, with Mr Buyoya claiming the right to decide whether they are doing so. The assembly was to be restored within the limits set by the Government Convention of 1994, which removed its rights to dis- miss the government. The institutional reforms minister, Eugène Nindorera, also revealed that the government would consider adding to its membership if it was unable to reach a quorum. With many deputies from the formerly ruling Front pour la démocratie au Burundi (Frodebu) refusing to return to Burundi to resume their seats (see below), this is quite likely.

The RSCC was not impressed. At its next meeting, in Kigali on September 25, it refused to extend exemptions. Because of Mr Buyoya’s two concessions, however, it said it was prepared to invite Mr Buyoya to the next meeting of the regional heads of state. This would not be in his capacity as head of state, but as a faction leader. Other faction leaders would also be invited.

Both Mr Buyoya and the Mr Buyoya and his team denounced the position of the regional heads of state, regional heads of state dig and announced that he would only go to the Arusha meeting as head of state. in their heels Thus the third regional summit went ahead on October 10 without him, and without Mr Nyangoma or any other faction leader. Also absent was the Zairean president, Mobutu Sese Seko. At this meeting, no further concessions were made, and the sanctions were maintained. A deadline of October 31 was imposed on the regime to begin negotiations with the leaders of the Hutu militias.

Mr Buyoya then said that he would not begin negotiations with Hutu militia leaders until sanctions were relaxed. On October 24 the RSCC extended the scope of humanitarian exemptions, although it stressed that this was in response to the concerns of international aid organisations. The exemptions were, and still are: food, bean seeds, water purification agents, blankets, plastic sheeting, jerry cans and buckets, cooking utensils, sanitary facilities and mats. However, the October 31 deadline has passed and negotiations have not begun. Mr Buyoya is still calling for sanctions to be removed, and the regional heads are still demanding talks.

Mr Buyoya has taken this stance partly because he thinks that it might work. There is a chance that sanctions will be relaxed before he talks to Mr Nyangoma and others, and he will then be in a stronger position. He has also taken it to retain credibility with his constituency, to try to increase the divergence between the regional heads and the UN Security Council, and to give Frodebu more time to tear itself apart.

Mr Buyoya wants to His constituents are, first, the army, second, the remaining inhabitants of maintain his constituency Bujumbura, who are mostly Tutsi, and, third, Burundian baTutsi in general. All three are of the opinion that if Hutu militias take power, or share it, sooner or later they will attempt the genocide of baTutsi. The coup, particularly in the eyes of the army commanders who instigated it, was designed to forestall this. Mr Buyoya’s constituency believes that sanctions hurt them and help the militias. Mr Buyoya has good grounds for fearing that they would not welcome negotiations with the militias while they have this advantage. Mr Nyerere thinks that this argument can be used in another way, by making sure that negotiations begin before sanctions really tilt the balance against baTutsi.

The leader of the Union pour le progrès national (Uprona), Charles Mukasi, strongly disagrees. Uprona was the main opposition party before the coup, and the ruling party before the elections of 1993. It is Tutsi-dominated, although Mr Mukasi is a Hutu. Mr Mukasi has said several times that Mr Buyoya should not talk to militia leaders who are instigating genocide, adding darkly that he did not think that the president could survive politically if he did. He may be right. Having Uprona publicly oppose him would isolate Mr Buyoya and lose him any leverage he has with the armed forces, on whom he would be com- pletely reliant. There is the risk that once he takes Burundi into negotiations, the armed forces will abandon him and cast around for someone more uncom- promising. This could be Jean-Baptiste Bagaza. He is Mr Buyoya’s cousin and was his predecessor when he first took power in 1987. Mr Bagaza is apparently now under house arrest. Were he to come to power, it is unlikely that Mr Buyoya would get off so lightly.

Western governments are On August 30 the UN Security Council decided to support sanctions and called divided over the sanctions for unconditional negotiations, also by October 31. Belgium sent an envoy to issue Bujumbura on September 18, who backed Mr Buyoya and said that the sanctions were premature. The Security Council was unmoved, but is prepared to reward Mr Buyoya for the concessions he has made thus far. During his brief pre-electoral visit to Africa, on October 12 the US secretary of state for foreign affairs, Warren Christopher, stopped off in Arusha, in time for the regional summit. After having lectured the leaders present on the need for African solutions to African problems, he argued that they should change their Burundi policy and relax sanctions. It has become clear that the French government thinks the same. Since Russia and China are not interested, the only permanent member still to change its mind is the UK. The Security Council has yet to object, or even comment, on the fact that its deadline for negotiations is being ignored by Mr Buyoya.

Frodebu has split into two Finally, there is the question of the future of Frodebu, which won power from factions Mr Buyoya and Uprona in 1993. On September 3 some 22 Frodebu deputies

who crossed to Tanzania after the coup and three who went to Kenya announced that they were now backing Mr Nyangoma. On September 6 Mr Nyangoma and other leading members of the CNDD announced that they had taken over Frodebu’s leadership. Unsurprisingly, they confirmed Mr Nyangoma as its new president on September 20 although on September 8 Jean Minani, also based in Tanzania, insisted that he was still the Frodebu president. On September 10 another 16 Frodebu deputies living in Zaire proclaimed their support for Mr Nyangoma, bringing the total number of defec- tions to 41, and leaving 24 in Mr Minani’s camp. Responding to Mr Buyoya’s decision to restore the Assemblée nationale, several prominent Frodebu members, including former ministers, left the German embassy in Bujumbura on September 23, and immediately proclaimed their support for Mr Minani. On October 2 the former national assembly speaker, Leonce Ngendakumana, also left the embassy and gave his backing to Mr Minani.

The Minani faction then decided to participate in the assembly, but only to the extent of attending its inaugural session in order to demand the restoration of the constitution. However, its pleas for the return of the Frodebu deputies in exile went unheeded, undermining its position. Mr Buyoya risks forcing the Minani faction into Mr Nyangoma’s arms if he delays moves towards negotiations for too long, but for the moment he can be content in the knowledge that the split between the two men and factions is bad, and still deteriorating.

The war drags on— Mr Buyoya was partly installed to prevent genocide, but also to stop the war. The war, however, shows no signs of receding. Most of the fighting has been in the northern provinces, and particularly those with the N1 and N2 highways, which go to Rwanda, running through them: Bujumbura rural, Bubanza, Cibitoke, Muramvya and Kayanza. Ambushes on these roads are common, and so are armed clashes. As usual, the local peasantry are the main victims. Often, after their food has been taken by the Hutu militias, they are chased from their homes by the army for being militia sympathisers. Thousands more people have become displaced, at the very time they need to be planting crops for the next harvest. International aid agencies have done their best to respond, but their efforts have been hampered by the sanctions. Medicines are in short supply and fuel shortages are a major constraint. Nonetheless, the agencies have done an impressive job in distributing food, and those displaced are in better shape than those in neighbouring Zaire. Their conditions are nonetheless generally desperate, although hidden from the television cameras of the world for now.

—but no one is winning Insufficient information is available to judge who, if anyone, is gaining the upper hand in this war. Militias went outside their northern strongholds and attacked the traditionally Tutsi-controlled southern province of Bururi between October 12 and 13. The ensuing fighting caused more than 35,000 people to flee. This suggests that the militias are not losing. They have not, however, dared to risk an assault on Bujumbura. The fact that Mr Buyoya is counten- ancing negotiations at all suggests that the armed forces are not winning either, but events in eastern Zaire have tilted the balance a little in their favour. Also, one effect of sanctions has been to enable the regime to exonerate itself of any social sector responsibilities, as all deficiencies can be blamed on its neighbours. This has freed up resources to conduct the war.

Thousands of Burundian The Zairean government has accused the Burundian military of being involved refugees return home in the conflict in eastern Zaire. This is certainly possible, but no convincing evidence has emerged to date. There is some evidence, however, that Rwandan troops have crossed into Zaire via Burundi, suggesting collusion at the least (see Rwanda). Whatever the case, the fighting in Zaire has driven at least 25,000 Burundian refugees based around Uvira back into Burundi this quarter, most of them crossing in early November. It has also caused a number of Zaireans, including at least 1,000 Banyamulenge, to flee to Burundi, although their preferred destination is, understandably, Tanzania. Those arriving in Burundi have done so in terrible shape. Many, particularly the children, are malnourished. Further arrivals of Zairean refugees are not expected. Most of the Burundians who fled to Rwanda after the coup have also returned. The Rwandan Patriotic Army (RPA) chased back several thousand in early October. Almost all the rest took the “hint”, and left of their own accord. But in early November, UN human rights envoys alleged massacres of Hutu refugees fleeing Zaire by the Banyamulenge forces and the Burundian army.

The economy

Sanctions are losing their The sanctions imposed on Burundi by its regional neighbours are not working bite— as well as they did when first declared. The Zairean border is effectively open to commercial traffic, and the Rwandan and Tanzanian borders are becoming increasingly porous. The key barometer is the price of petrol. Rationing was introduced in August in an attempt to control stocks. The official price for rationed petrol was Bufr190/litre (60 US cents/litre) in Bujumbura in early September, and Bufr500-700/litre for parallel economy supplies. The price rose to Bufr1000/litre by early October, but rationing was scrapped at the end of the month, and prices fell to Bufr300-400/litre. Most of the fuel stocks are coming from Rwanda and Tanzania. The salt shortages widely commented on at the start of sanctions have also eased off, again because of supplies from Tanzania.

—although drastic Goods will keep flowing into Burundi for as long as people have hard currency government cuts and to pay for them, and, so far, plenty do; but prices are usually high. The govern- redundancies are made ment estimated year-on-year inflation in late September at 40%. None of the imports earn the government revenue and it is, as predicted, going bankrupt. Its first savings have been directed at institutions built up by Frodebu, particularly the president’s office and the Assemblée nationale (parliament), where many staff have been sacked. Most other civil servants have been spared so far, but the majority receive their salaries late. In the parastatal and private sector, however, there have been mass redundancies. Even Brarudi, the brewery which is famous for its ability to continue production and sales despite impossible trading conditions, has finally been affected. It suspended distribution outside the capital in September after two of its trucks were ambushed, and is considering stopping production altogether, because of fuel and spare parts shortages. Sanctions, rather than the president, Major Pierre Buyoya, have so far been blamed for these woes in Bujumbura.

Medicines and The prime minister, Pascal Firmin Ndimira, said in mid-October that sanctions agricultural inputs are would produce a balance-of-payments deficit of Bufr25bn ($79m) by the end of most affected the year, and that they had already cost the country $162m. The figure was peculiarly precise, as was his sectoral breakdown of the impact of sanctions. Livestock production, for example, is reckoned to have declined by 24%, and food production by 30%, despite the state’s inability to monitor these with any precision.

Among imports, sanctions have had most impact on medicines and agricultural inputs. Hardly any have got through, destroying the achievements of years of vaccination campaigns and increasing the risks of epidemics as the rainy season progresses. The lack of agricultural inputs has meant that not enough has been planted this year, which will lead to food shortages in January, regardless of whether aid agencies are able to operate freely or not. The UN’s Food and Agriculture Organisation (FAO) predicts a 6% fall in pulse production, mainly because of the lack of fertiliser.

Tea and coffee is being Sanctions have had a devastating effect on tea and coffee exports. Nothing has smuggled out to earn been exported officially since they were imposed, and orders worth billions of foreign exchange Burundian francs have already been cancelled. Large quantities of tea and coffee are leaving Burundi, however, some bound for Rwanda, but most for Tanzania, Kenya and Uganda. The government is earning some foreign exchange from these illicit sales, but not much. The resultant revenue collapse is compounded by the continuing effects of the war on tea and coffee production. The Teza tea factory, destroyed by the militia Forces pour la défense de la démocratie (FDD) on July 3, will cost Bufr500m to repair; but work has apparently already begun. Fighting has effectively halted coffee production in Cibitoke, Bubanza and Gitega.

Cotton production is down The war has hit cotton production, too. In 1994/95 about 21,000 farmers working 6,000 ha produced around 4,500 tons of cotton. For the 1995/96 season, the hectarage was down to 4,000 ha and production was generously estimated by the cotton parastatal Cotebu at 4,000 tons. The true figure is likely to be 3,000 tons, with even less forecast for 1996/97. However, data collection has been another casualty of the war, and it will be a while before reasonably accurate figures on this, and most other economic activity, emerge.

The militias keep cutting Another persistent victim of the armed conflict is Bujumbura’s electricity sup- Bujumbura’s electricity ply. An Israeli company called Air Defence Consult was employed in late August to protect the electricity cables between the Rwegura north hydroelectric station and Bujumbura, but the city’s supply was cut repeatedly in August and September, and again on October 1, although it has remained reasonably constant since then.

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 40 Quarterly indicators and trade data

Quarterly indicators and trade data

Uganda: quarterly indicators of economic activity

1994 1995 1996 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr Production Annual totals Coffee ’000 tons ( 198 ) ( 220a ) ( n/a ) Cotton, lint “ ( 12 ) ( 12 ) ( n/a ) Prices Monthly av Consumer prices, Kampala: 1990=100 224 232 223 229 241 245 244 256 258 261 change year on year % 11.4 14.9 6.2 6.5 7.6 5.6 9.4 11.8 7.1 6.5 Money End-Qtr M1 NUSh bn 281.24 299.33 325.43 363.35 374.93 361.23 375.21 419.15 428.55 n/a change year on year % 21.9 28.2 36.8 34.6 33.3 20.6 15.3 15.4 14.3 n/a Foreign trade Qtrly totals Exports fob NUSh m 74,634 81,010 122,820 115,496 124,025 100,051 88,676 133,334 176,960 137,407 Imports cifb “ 195,619 208,702 224,372 221,718 267,408 210,673 253,407 292,829 305,120 280,318 Exchange holdings Foreign exchange $ m 212.1 219.3 283.2 318.3 342.0 388.2 382.5 458.4 466.7 478.9c Exchange rate End-Qtr Market rate NUSh:$ 1,030.6 969.6 920.5 926.8 927.1 965.9 969.4 1,009.5 1,018.6 1,058.8

Note. Annual figures of most of the series shown above will be found in the Country Profile. a Estimate. b Cash basis. c End-May.

Rwanda: quarterly indicators of economic activity

1994 1995 1996 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr Prices Monthly av Consumer prices: 1990=100 n/a n/a n/a n/a 266.0 304.4 308.5 304.9 305.6 n/a change year on year % n/a n/a n/a n/a n/a n/a n/a n/a 14.9 n/a Money End-Qtr M1, seasonally adj: Rwfr bn 24.77a n/a n/a n/a n/a n/a n/a n/a n/a n/a change year on year % 10.6a n/a n/a n/a n/a n/a n/a n/a n/a n/a Foreign trade Qtrly totals Exports fob Rwfr m n/a 343 1,420 620 1,549 5,597 5,373 5,996 n/a n/a Imports cif ” 328 285 4,749 10,175 14,586 17,790 19,014 16,657 n/a n/a Exchange holdings End-Qtr National Bank: foreign exchange $ m 6.8 52.0 15.1 3.1 2.0 54.3 105.5 109.5 113.3 115.9b Exchange rate Official rate Rwfr:$ 452.2 313.9 138.3 247.7 291.1 313.9 299.8 304.3 309.6 305.2b

Note. Annual figures of most of the series shown above will be found in the Country Profile. a End-4 Qtr 1993. b End-August.

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 Quarterly indicators and trade data 41

Burundi: quarterly indicators of economic activity

1994 1995 1996 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr Prices Monthly av Consumer prices: 1990=100 140.1 148.9 150.6 159.7 169.9 176.1 178.8 193.3 n/a n/a change year on year % 12.6 22.0 14.3 18.9 21.3 18.3 18.7 21.0 n/a n/a Money End-Qtr M1, seasonally adj: Bufr bn 33.57 39.46 39.87 44.56 39.69 n/a n/a n/a n/a n/a change year on year % 14.3 41.4 28.0 41.6 18.2 n/a n/a n/a n/a n/a Foreign trade Qtrly totals Exports fob Bufr m 2,401 13,314 10,811 10,767 6,638 3,840 4,737 6,534 n/a n/a coffee “ 480 10,160 7,148 7,523 4,293 1,778 3,713 1,164a n/a n/a Imports cif ” 12,922 16,691 14,201 14,486 14,751 15,510 13,454 12,877 n/a n/a Exchange holdings End-Qtr Central bank: goldb $ m 4.86 4.92 4.91 4.83 4.95 4.90 4.91 5.10 4.97 4.89c foreign exchange “ 162.12 178.34 195.94 219.43 209.19 201.82 200.67 179.69 161.27 157.41c Exchange rate Market rate Bufr:$ 249.1 245.1 246.9 234.6 241.2 259.9 277.9 281.6 318.6d 222.3d

Note. Annual figures of most of the series shown above will be found in the Country Profile. a January only. b End-quarter holdings at quarter’s average of London daily price less 25%. c End-July. d Source FT.

Uganda: foreign trade $ ’000 $ ’000 Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Imports cifa 1990 1991 1992 Exports foba 1990 1991 1992 Food 19,812 18,667 21,195 Coffee 140,384 117,641 95,140 of which: Tea 3,566 6,780 7,721 cereals & preparations 4,394 6,134 8,182 Oil seeds 5,234 11,106 22,305 sugar & preparations 8,380 5,203 6,343 Raw cotton 5,795 10,951 8,200 Textile fibres 5,954 8,965 12,689 Total incl others 190,102 196,009 171,353 Crude fertilisers & minerals 4,196 3,456 8,017 Petroleum & products 98,745 81,223 69,965 Animal & vegetable oils & fats 15,241 10,145 30,362 Chemicals 38,806 37,655 43,770 Non-metallic mineral manufactures 14,181 15,984 19,595 Iron & steel 18,445 27,286 34,315 Metal manufactures 18,304 18,710 20,737 Machinery & transport equipment 217,913 198,898 168,994 Total incl others 551,095 522,689 524,433

$ m $ m Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan Dec Jan-Dec Imports cifb 1992 1993 1994 1995 Exports fobb 1992 1993 1994 1995 Kenya 79 127 151 186 Spain 20 17 60 110 UK 52 50 69 86 France 21 17 56 68 Japan 34 32 51 57 Germany 17 13 47 67 India 21 31 36 39 Italy 9 9 30 46 Germany 28 32 23 39 Netherlands 28 10 14 40 USA 17 23 31 24 Poland 1 1 18 25 Italy 14 14 20 22 UK 15 10 22 16 Total incl others 398 457 536 710 Total incl others 178 157 369 469 a Source: UN. b Source: DOTS, derived.

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 42 Quarterly indicators and trade data

Rwanda: foreign trade ($ m) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Imports cif 1985 1986 1987 1988 1989 1990 Food, drink & tobacco 44.9 38.1 28.7 21.6 29.3 35.7 of which: cereals & products 23.3 18.1 11.0 9.9 13.4 17.2 sugar & products 4.7 6.9 3.0 3.1 4.7 6.0 Textile fibres & waste 10.4 7.9 7.9 16.5 6.3 5.0 Petroleum & products 44.2 48.4 49.9 47.7 44.3 44.6 Animal & vegetable oils & fats 15.3 12.1 9.5 n/a 11.0 11.4 Chemicals 18.2 18.6 21.7 10.2 28.8 29.6 Textile yarn, fabrics & manufactures 18.6 19.5 19.6 12.4 23.4 15.5 Non-metallic mineral manufactures 10.2 7.3 9.0 6.9 4.2 5.1 Iron & steel 16.9 22.9 22.0 35.8 20.1 0.0 Metal manufactures 12.1 14.9 18.0 8.6 13.8 5.0 Machinery incl electric 30.2 56.9 63.8 64.9 51.3 32.7 Transport equipment 33.6 47.3 47.2 46.2 27.5 14.1 Total incl others 295.7 352.0 356.5 368.8 333.2 291.1

Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Domestic exports fob 1986 1987 1988 1989 1990 1991 Coffee 151.1 92.3 85.6 58.7 73.9 57.6 Tea 19.5 12.2 14.2 19.5 24.6 22.4 Tin 1.8 0.6 0.0 4.8 3.5 2.6 Total incl others 187.9 112.3 108.4 95.4 111.7 92.7

Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Exports fobab 1992 1993 1994 1995 Imports cif 1992 1993b 1994b 1995b Brazil n/a n/a n/a 70 Belgium-Luxembourg 49 37 42 50 Belgium-Luxembourg 17 16 18 22 USA 5 8 38 42 Germany 24 31 12 12 Tanzania 23 27 33 40 Netherlands 14 10 7 12 Kenya 28 26 31 38 Italy 5 3 2 3 Japan 24 26 7 19 UK 4 3 2 3 France 20 25 19 15 Total incl others 197 100 75 154 Total incl others 288 276 272 325 a Source: DOTS. b Derived.

EIU Country Report 4th quarter 1996 © The Economist Intelligence Unit Limited 1996 Quarterly indicators and trade data 43

Burundi: foreign trade (Bufr m) Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Imports cif 1991 1992 1993 1994 1995 Food, drink & tobacco 4,294 4,174 5,174 8,731 9,471 of which: cereals & preparations 2,602 2,501 3,234 4,229 5,116 Petroleum & products 5,688 5,621 6,158 7,404 6,758 Chemicals 6,193 6,543 6,997 8,242 7,394 Rubber manufactures 1,226 1,076 1,710 1,002 1,158 Paper & manufactures 1,102 1,156 1,374 1,115 1,281 Iron & steel & manufactures 3,661 3,328 3,511 3,116 2,550 Machinery excl electric 5,516 4,744 5,030 3,997 4,340 Electric machinery 2,765 3,131 3,020 3,808 4,419 Road vehicles 4,484 4,818 4,495 4,271 5,465 Scientific instruments etc 1,219 2,039 1,023 2,214 1,548 Total incl others 46,154 46,106 47,434 56,468 58,200

Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Exports fob 1991 1992 1993 1994 1995 Coffee 13,519 10,033 8,838 23,710 20,175 Tea 1,514 1,899 2,146 2,741 2,217 Beer 11 43 98 177 803 Tobacco & manufactures 341 549 749 431 3 Hides, undressed 434 339 206 597 525 Cotton, raw 0 0 794 880 425 Minerals & ores 35 115 204 199 275 Cotton fabrics 244 359 597 255 2 Total incl others 16,698 15,355 15,019 30,034 25,799

Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Exports foba 1992 1993 1994 Imports cif 1994 1995 EU 4,791 22,579 26,024 EU 24,099 29,347b of which: of which: Germany 2,291 8,012c 7074c Belgium-Luxembourg 7,869 8,963 Belgium-Luxembourg 417 10,682c 12,380c France 6,415 5,851 Rwanda 1,250 1,699c 2,021c Germany 2,937 4,738 USA 1,250 728c 1,769c Japan 4,448 3,345 Total incl others 15,414 36,903 44,216 USA 2,112 2,856 Kenya 2,481 2,399 China 2,323 2,343 Zambia 1,836 1,932 Zimbabwe 1,256 1,035 Total incl others 56,468 58,200 a Source: DOTS. b Excluding Finland. c Derived.