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Burundi / Enhanced Integrated Framework (EIF) Republic of Burundi / Enhanced Integrated Framework (EIF) Burundi Diagnostic Trade Integration Study (DTIS) Update Volume 1 – Main report July 2012 Acknowledgements At the request of the Government of Burundi, the World Bank took the leading role in the preparation of this DTIS Update. The core members of the team were: Ferdinand Bararuzunza (local networks and stakeholder consultations); Olivier Cadot (non-tariff measures); Antoine Coste (trade performance analysis, sectoral case studies); Charles Kunaka and Philippe Lambrecht (trade facilitation and logistics), and Smita Wagh (financial services). The task team leader of the report is Nora Dihel. Background papers and other inputs were also provided by Aurélien Beko (informal sector); Joseph Butoyi (horticultural sector survey); Matthew Harber (trade data analysis); Jean-Pascal Nganou and Calvin Zebaze Djiofack (NTBs); Kabemba Lusinde Wa Lusangi (investment climate and tourism), and Jumaine Hussein (coffee), Ian Mills (regional integration), Ana Margarida Fernandes and Ingo Borchert (data on Burundi’s services trade barriers). Moreover, the analysis in the report greatly benefited from very helpful comments and feedback provided by Paul Brenton, Hannah Messerli, Jacques Morisset, Jean- Pascal Nganou and Barbara Rippel, among others. The DTIS update was elaborated in close cooperation with counterparts in the Burundian government, including the EIF Coordinator Léonard Ntibagirirwa and Youssouf Kone at the Ministry of Trade and Industry, who prepared an evaluation of the implementation of the first Action Matrix, administered the regulatory survey on professional services and provided comments on the results of the DEC Survey on services barriers. The DTIS update team would also like to thank the numerous stakeholders from the public and private sectors who provided helpful insights during the team missions undertaken in 2011 and early 2012, the workshop on preliminary results organized in November 2011 and the validation workshop organized in July 2012 in Bujumbura. The team gratefully acknowledges the logistical and editing support provided by Martin Buchara, Senait Yifru, Aurore Simbananiye, Dodeline Niyongere, Clarette Rwagatore, Rosalie Minani Kigeme, and Pacifique Kwizera. 2 / 153 Currency equivalent (Exchange rate as of June 4, 2012) Currency unit = Burundi Franc (BIF) US$ 1.00 = BIF 1,415 Weight and measures Metric System Acronyms ANR Attestation de non-redevabilité API Agence Burundaise de Promotion des Investissements BBN Bureau Burundais de Normalisation BIF Burundi Franc BRB Banque de la République du Burundi (central bank) CBT Cross-Border Trade CCTTFA Central Corridor Transit Transport Facilitation Agency CET Common External Tariff COMESA Common Market for Eastern and Southern Africa CWS Coffee Washing Station DTIS Diagnostic Trade Integration Study EAC East African Community EBA Everything But Arms EIF Enhanced Integrated Framework EPA Economic Partnership Agreement FDI Foreign Direct Investment IFC International Finance Corporation LDC Least-Developed Countries LPI Logistics Performance Index MEAC Ministry for the East African Community NCTA Northern Corridor Transit Agreement NCTTCA Northern Corridor Transit Transport Coordination Authority NTB Non-Tariff Barrier NTM Non-Tariff Measure OBR Office Burundais des Recettes (revenue authority) PPD Public-Private Dialogue PSI Pre-Shipment Inspection RADDEx Revenue Authorities Digital Data Exchange RCS Régime de Commerce Simplifié (simplified trade regime) REC Regional Economic Community ROO Rules of Origin SADC Southern African Development Community SCEP Services Chargé des Entreprises Publiques (State enterprise service) SPS Sanitary and Phytosanitary Standards SSA Sub-Saharan Africa TBT Technical Barriers to Trade VAT Value Added Tax 3 / 153 Contents Executive summary ................................................................................................................................................ 5 CHAPTER 1– Taking stock of developments since 2004: Burundi’s trade performances, trade policy and DTIS implementation ........................................................................................................................................... 16 1. Setting the stage: Burundi's trade performances since 2004 .................................................................... 16 2. What explains Burundi’s poor trade performance in the last decade? ..................................................... 26 3. Implementation of the 2004 Action Matrix.............................................................................................. 36 4. Conclusion ............................................................................................................................................... 40 CHAPTER 2 – Regional integration: opportunities and challenges for Burundi .......................................... 41 1. The EAC – A Dynamic Economic Community ....................................................................................... 42 2. Burundi’s EAC Membership: Benefits and Challenges ........................................................................... 43 3. Regional Challenges for Advancing the EAC Integration Agenda .......................................................... 46 4. Leveraging regional integration to accelerate Burundi’s trade and regulatory reforms ........................... 51 5. Conclusion ............................................................................................................................................... 53 CHAPTER 3 – Export diversification ................................................................................................................ 55 1. Burundi’s poor export performance during the last decade ..................................................................... 55 2. Factors that explain Burundi’s unsatisfactory export performance .......................................................... 58 3. Expanding Burundi’s exports of specialty coffee .................................................................................... 59 4. Overcoming supply-side constraints and trade barriers to increase Burundi’s horticulture exports ........ 65 CHAPTER 4 – Non-tariff Measures: The Way Forward ................................................................................. 73 1. Introduction .............................................................................................................................................. 73 2. Non-tariff measures in Burundi: What do we know? ............................................................................... 74 3. Streamlining NTMs in Burundi: An agenda for action ............................................................................ 85 CHAPTER 5 – Strengthening Trade Facilitation and Logistics in Burundi .................................................. 89 1. Introduction .............................................................................................................................................. 89 2. Review of the DTIS implementation and state of trade facilitation and logistics .................................... 90 3. Size of Shipments .................................................................................................................................... 93 4. Traffic imbalance ..................................................................................................................................... 93 5. Domestic logistics .................................................................................................................................... 94 6. Regional and international connectivity ................................................................................................... 97 7. Core logistics services ........................................................................................................................... 105 8. Recommendations .................................................................................................................................. 111 CHAPTER 6 – The critical role of services for growth and export diversification ...................................... 114 1. Burundi’s services performance and services trade policies .................................................................. 114 2. Financial services ................................................................................................................................... 119 3. Professional Services ............................................................................................................................. 123 4. Conclusion ............................................................................................................................................. 130 CHAPTER 7 – Lifting the Constraints to Tourism Development in Burundi .............................................. 132 1. Introduction ............................................................................................................................................ 132 2. Tourism as a catalyst for development ................................................................................................... 133 3. Presentation of the Burundian tourism sector ........................................................................................ 134 4. The challenges facing tourism in Burundi ............................................................................................
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